EXHIBIT 4.2
WARRANT AGREEMENT
AGREEMENT, dated as of this ____ day of
__________, 199_, by and among ILLUMINATED MEDIA,
INC. a Minnesota corporation (the "Company"), NORWEST
BANK MINNESOTA, N.A., as Warrant Agent (the "Warrant
Agent"), and TUSCHNER & COMPANY, INC., a Minnesota
corporation ("Tuschner").
W I T N E S S E T H
WHEREAS, in connection with a public offering (the
"Offering") of up to 1,500,000 units ("Units"), each unit
consisting of one share of the Company's Common Stock, no
par value, and one Redeemable Common Stock Purchase
Warrant pursuant to an underwriting agreement (the
"Underwriting Agreement") dated __________, 199_, between
the Company and Tuschner, and the issuance to Tuschner or
its designees of a Unit Purchase Option to purchase additional
Units, dated as of ____________, 199_ (the "Unit Purchase
Option"), the Company will issue up to ______________
Redeemable Common Stock Purchase Warrants ("Warrants");
and
WHEREAS, the Company desires the Warrant Agent
to act on behalf of the Company, and the Warrant Agent is
willing to so act, in connection with the issuance, registration,
transfer exchange and redemption of the Warrants, the issuance
of certificates representing the Warrants, the exercise of the
Warrants, and the rights of the holders thereof;
NOW, THEREFORE, in consideration of the premises
and the mutual agreements hereinafter set forth and for the
purpose of defining the terms and provisions of the Warrants
and the certificates representing the Warrants and the
respective rights and obligations thereunder of the Company,
the holders of certificates representing the Warrants, and the
Warrant Agent, the parties hereto agree as follows:
SECTION 1. Definitions. As used herein, the following
terms shall have the following meanings, unless the context
shall otherwise require:
(a) "Tuschner Certificate" shall mean a certificate executed on behalf of
Tuschner by its Chairman of the Board,
President or a Vice President, and by its Secretary or an
Assistant Secretary, duplicate originals of which are delivered
to the Company and the Warrant Agent.
(b) "Common Stock" shall mean stock of the Company
of any class, whether now or hereafter authorized, which has
the right to participate in the distribution of earnings and assets
of the Company without limit as to amount or percentage,
which at the date hereof (including the shares of Common
Stock to be issued pursuant to the Underwriting Agreement)
consists of ______________ shares of Common Stock, no par
value.
(c) "Corporate Office" shall mean the office of the
Warrant Agent (or its successor) at which at any particular
time its principal business shall be administered, which office is
located at the date hereof at 90 South Seventh Street,
Minneapolis, Minnesota 55402.
(d) "Exercise Date" shall mean, as to any Warrant, the
date on which the Warrant Agent shall have received both (a)
the Warrant Certificate representing such Warrant, with the
exercise form thereon duly executed by the Registered Holder
thereof or his attorney duly authorized in writing, and (b)
payment in cash, or by official bank or certified check made
payable to the Company, of an amount in lawful money of the
United States of America equal to the applicable Purchase
Price.
(e) "Initial Warrant Exercise Date" shall mean
______________, 199_.
(f) "Purchase Price" shall mean the purchase price to be
paid upon exercise of each Warrant in accordance with the
terms hereof, which price shall be $2.75 per share, subject to
adjustment from time to time pursuant to the provisions of
Section 9 hereof.
(g) "Redemption Price" shall mean the price at which
the Company may, at its option, redeem the Warrants, in
accordance with the terms hereof, which price shall be $0.01
per Warrant, subject to adjustment from time to time pursuant
to the provisions of Section 9 hereof.
(h) "Registered Holder" shall mean the person in whose
name any certificate representing Warrants shall be registered
on the books maintained by the Warrant Agent pursuant to
Section 6.
(i) "Transfer Agent" shall mean American Securities
Transfer, Inc., as the Company's transfer agent, or its
authorized successor, as such.
(j) "Warrant Expiration Date" shall mean 5:00 P.M.
(Minneapolis time) on ________________, 2001, or the
Redemption Date as defined in Section 8, whichever is earlier;
provided that if such date shall in the State of Minnesota be a
holiday or a day on which banks are authorized to close, then
5:00 P.M. (Minnesota time) on the next following day which in
the State of Minnesota is not a holiday or a day on which
banks are authorized to close. Notwithstanding the foregoing,
as to the Warrants subject to the Unit Purchase Option, the
Warrant Expiration Date shall instead be five years after the
date of exercise of the portion of the Unit Purchase Option to
which the Warrants relate.
SECTION 2. Warrants and Issuance of Warrant
certificates.
(a) A Warrant shall initially entitle the Registered
Holder of the Warrant Certificate representing such Warrant
to purchase two shares of Common Stock upon the exercise
thereof, in accordance with the terms hereof, subject to
modification and adjustment as provided in Section 9.
(b) Upon execution of this Agreement, Warrant
Certificates representing the number of Warrants sold pursuant
to the Underwriting Agreement shall be executed by the
Company and delivered to the Warrant Agent. Upon written
order of the Company signed by its Chairman of the Board,
President or a Vice President, and by its Secretary or an
Assistant Secretary, the Warrant Certificates shall be
countersigned, issued and delivered by the Warrant Agent as
part of the Units.
(c) From time to time, up to the Warrant Expiration
Date, the Transfer Agent shall countersign and deliver stock
certificates in required whole number denominations
representing up to an aggregate of ______________ shares of
Common Stock, subject to adjustment as described herein,
upon the exercise of Warrants in accordance with this
Agreement.
(d) From time to time, up to the applicable Warrant
Expiration date, the Warrant Agent shall deliver Warrant
Certificates in required whole number denominations to the
persons entitled thereto in connection with any transfer or
exchange permitted under this Agreement; provided that no
warrant certificates shall be issued except: (i) those initially
issued hereunder, (ii) those issued on or after the Initial
Warrant Exercise Date, upon the exercise of fewer than all
Warrants represented by any Warrant Certificate to represent
any unexercised Warrants held by the Registered Holder, (iii)
those issued upon any transfer or exchange pursuant to Section
6; (iv) those issued in replacement of lost, stolen, destroyed or
mutilated Warrant Certificates pursuant to Section 7; (v) those
issued pursuant to the Unit Purchase Option; and (vi) at the
option of the Company in such form as may be approved to
reflect any adjustment or change or adjustment in the Purchase
Price the number of shares of Common Stock purchasable
upon exercise of the Warrants, or the Redemption Price
Pursuant to Section 9.
(e) Pursuant to the terms of the Unit Purchase
Option, Tuschner may purchase up to _________ Units,
which include up to ________ Warrants. Notwithstanding
anything to the contrary contained herein, the Warrants
included in the Unit Purchase Option shall expire five years
after the date on which the Unit Purchase Option relating to
such Warrants is exercised and shall not be subject to
redemption by the Company.
SECTION 3. Form and Execution of Warrant
certificates.
(a) The Warrant Certificates shall be substantially in the
form annexed hereto as Exhibit A (the provisions of which are
hereby incorporated herein) and may have such letters,
numbers, or other marks of identification or designation, and
such legends, summaries, or endorsements printed,
lithographed, or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any law
or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant
Certificates shall be dated the date of issuance thereof (whether
upon initial issuance, transfer, exchange or in lieu of mutilated,
lost, stolen or destroyed Warrant Certificates) and issued in
registered form. Warrants shall be numbered serially with the
letter W.
(b) Warrant Certificates shall be executed on behalf of
the Company by its Chairman of the Board, President or Vice
President, and by its Secretary or an Assistant Secretary, by
manual signatures or by facsimile signatures printed thereon
and shall have imprinted thereon a facsimile of the Company's
seal. Warrant Certificates shall be countersigned by the
Warrant Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall
have signed any of the Warrant Certificates shall cease to be
such officer of the Company before the date of issuance of the
Warrant Certificates or before countersignature by the
Warrant Agent and issue and delivery thereof, such Warrant
Certificates may nevertheless be countersigned by the Warrant
Agent, issued, and delivered with the same force and effect as
though the person who signed such Warrant Certificates had
not ceased to be such officer of the Company. After
countersignature by the Warrant Agent, Warrant Certificates
shall be delivered by the Warrant Agent to the Registered
Holder without further action by the Company, except as
otherwise provided by Section 4(a) hereof.
SECTION 4. Exercise.
(a) Each Warrant may be exercised by the Registered
Holder thereof at any time on or after the Initial Exercise Date,
but not after the Expiration Date, upon the terms and subject
to the conditions set forth herein and in the applicable Warrant
Certificate. A Warrant shall be deemed to have been exercised
immediately prior to the close of business on the Exercise
Date, and the person entitled to receive the securities
deliverable upon such exercise shall be treated for all purposes
as the holder upon exercise thereof as of the close of business
on the Exercise Date. As soon as practicable on or after the
Exercise Date, the Warrant Agent shall promptly remit the
payment received from the exercise of a Warrant to the
Company or as the Company may direct in writing and shall
notify the Company in writing of the exercise of the Warrants.
Promptly following, and in any event within five days after the
date of such notice from the Warrant Agent or such longer
period as shall be required to satisfy the Company of the
clearance of checks drawn on banks outside Minneapolis,
Minnesota delivered upon exercise, the Company shall give
notice to the Warrant Agent to cause to be issued and delivered
by the Transfer Agent promptly thereafter, to the person or
persons entitled to receive the same, a certificate or certificates
for the securities deliverable upon such exercise (plus a
certificate for any remaining unexercised Warrants of the
Registered Holder).
SECTION 5. Reservation of Shares; Listing; Payment of
Taxes.
(a) The Company covenants that it will at all times
reserve and keep available out of its authorized Common
Stocks solely for the purpose of issue upon exercise of
Warrants such number of shares of Common Stock as shall
then be issuable upon the exercise of all outstanding Warrants
(including Warrants includable in Units subject to the Unit
Purchase Option). The Company covenants that all shares of
Common Stock which shall be issuable upon exercise of the
Warrants shall, at the time of delivery, be duly and validly
issued, fully paid, nonassessable, and free from all taxes, liens,
and charges with respect to the issue thereof (other than those
which the Company shall promptly pay or discharge), and that
upon issuance such shares shall be listed on each national
securities exchange, if any, on which the other shares of
outstanding Common Stock of the Company are then listed.
(b) The Company covenants that if any securities to be
reserved for the purpose of exercise of Warrants hereunder
require registration with, or approval of, any governmental
authority under any federal securities law before such securities
may be validly issued or delivered upon such exercise, then the
Company will in good faith and as expeditiously as reasonably
possible, endeavor to secure such registration or approval. The
Company will use reasonable efforts to obtain appropriate
approvals or registrations under state "blue sky" securities laws.
With respect to any such securities, however, Warrants may
not be exercised by, or shares of Common Stock issued to, any
Registered Holder in any state in which such exercise would be
unlawful.
(c) The Company shall pay all documentary, stamp or
similar taxes, and other governmental charges that may be
imposed with respect to the issuance of Warrants, or the
issuance or delivery of any shares upon exercise of the
Warrants; provided, however, that if the shares of Common
Stock are to be delivered in a name other than the name of the
Registered Holder of the Warrant Certificate representing any
Warrant being exercised, then no such delivery shall be made
unless the person requesting the same has paid to the Warrant
Agent the amount of transfer taxes or charges incident thereto,
if any.
(d) The Warrant Agent is hereby irrevocably authorized
to requisition the Company's Transfer Agent from time to
time for certificates representing shares of Common Stock
required upon exercise of the Warrants, and the Company will
authorize the Transfer Agent to comply with all such proper
requisitions. The Company will file with the Warrant Agent a
statement setting forth the name and address of the Transfer
Agent of the Company for shares of Common Stock issuable
upon exercise of the Warrants.
SECTION 6. Exchange and Registration of Transfer.
(a) Warrant Certificates may be exchanged for other
warrant Certificates representing an equal aggregate number of
warrants of the same class or may be transferred in whole or in
part. Warrant Certificates to be exchanged shall be surrendered
to the Warrant Agent at its Corporate Office, and upon
satisfaction of the terms and provisions hereof, the Company
shall execute and the Warrant Agent shall countersigns issue
and deliver in exchange therefor the Warrant Certificate or
Certificates which the Registered Holder making the exchange
shall be entitled to receive.
(b) The Warrant Agent shall keep at its office books in
which, subject to such reasonable regulations as it may
prescribe, it shall register Warrant Certificates and the transfer
thereof in accordance with its regular practice. Upon due
presentment for registration of transfer of any Warrant
Certificate at such office, the Company shall execute and the
Warrant Agent shall issue and deliver to the transferee or
transferees a new Warrant Certificate or Certificates
representing an equal aggregate number of Warrants.
(c) With respect to all Warrant Certificates presented for
registration or transfer, or for exchange or exercise, the
subscription form on the reverse thereof shall be duly
endorsed, or be accompanied by a written instrument or
instruments of transfer and subscription, in form satisfactory
to the Company and the Warrant Agent, duly executed by the
Registered Holder or his attorney-in-fact duly authorized in
writing.
(d) A service charge may be imposed by the Warrant
Agent for any exchange or registration of transfer of Warrant
Certificates. In addition, the Company may require payment
by such holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection
therewith.
(e) All Warrant Certificates surrendered for exercise or
for exchange in case of mutilated Warrant Certificates shall be
promptly canceled by the Warrant Agent and thereafter
retained by the Warrant Agent until termination of this
Agreement or resignation as Warrant Agent, or, with the prior
written consent of Tuschner, disposed of or destroyed, at the
direction of the Company.
(f) Prior to due presentment for registration of transfer
thereof, the Company and the Warrant Agent may deem and
treat the Registered Holder of any Warrant Certificate as the
absolute owner thereof and of each Warrant represented
thereby (notwithstanding any notations of ownership or
writing thereon made by anyone other than a duly authorized
officer of the Company or the Warrant Agent) for all purposes
and shall not be affected by any notice to the contrary. The
Warrants, which are being publicly offered in Units with
shares of Common stock pursuant to the Underwriting
Agreement, will be detachable from the Common Stock and
transferable separately therefrom from and after thirty (30)
days following the Initial Warrant Exercise Date.
SECTION 7. Loss or Mutilation. Upon receipt by the
Company and the Warrant Agent of evidence satisfactory to
them of the ownership of and loss, theft, destruction, or
mutilation of any Warrant Certificate and (in case of loss, theft
or destruction) of indemnity satisfactory to them, or (in the
case of mutilation) upon surrender and cancellation thereof, the
Company shall execute and the Warrant Agent shall (in the
absence of notice to the Company and/or Warrant Agent that
the Warrant Certificate has been acquired by a bona fide
purchaser) countersign and deliver to the Registered Holder in
lieu thereof a new Warrant Certificate of like tenor
representing an equal aggregate number of Warrants.
Applicants for a substitute Warrant Certificate shall comply
with such other reasonable regulations and pay such other
reasonable charges as the Warrant Agent may prescribe.
SECTION 8. Redemption.
(a) Subject to the provisions of paragraph 2(e) hereof, on
not less than 30 days notice given at any time after the initial
Exercise Date, the Warrants may be redeemed, at the Option
of the Company, at a redemption price of $0.01 per Warrant
provided the market price of the Common Stock receivable
upon exercise of such Warrant shall exceed 120% of the
Purchase Price. "Market price" for the purpose of this Section
8 shall mean (i) the average closing bid price of the Common
Stock for 10 consecutive trading days as reported by the
National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or (ii) if the Common Stock
is traded on a national securities exchange, the average reported
sale price for 10 consecutive trading days on the primary
exchange on which the Common Stock is traded. All Warrants
of a class, except those comprising the Unit Purchase Option,
must be redeemed if any of that class are redeemed.
(b) In case the Company shall desire to exercise its right
so to redeem the Warrants, it shall request Tuschner to mail a
notice of redemption to each of the Registered Holders of the
Warrants to be redeemed, first class, postage prepaid, not later
than the 30th day before the date fixed for redemption, at their
last address as shall appear on the records of the Warrants. Any
notice mailed in the manner provided herein shall be
conclusively presumed to have been duly given whether or not
the Registered Holder receives such notice. The Company
agrees to pay Tuschner its reasonable fees and expenses.
(c) The notice of redemption shall specify the (i) the
redemption price, (ii) the date fixed for redemption, (iii) the
place where the Warrant Certificates shall be delivered and the
redemption price paid, (iv) that Tuschner will assist each
Registered Holder of a Warrant in connection with the exercise
thereof, and (v) that the right to exercise the Warrant shall
terminate at 5:00 P.M. (Minneapolis time) on the business day
immediately preceding the date fixed for redemption. The date
fixed for the redemption of the Warrants shall be the
Redemption Date. Neither the failure to mail such notice nor
any defect therein or in the mailing thereof shall affect the
validity of the proceedings for such redemption except as to a
holder (a) to whom notice was not mailed or (b) whose notice
was defective. An affidavit of the Warrant Agent or of the
Secretary or an Assistant Secretary of Tuschner or the
Company that notice of redemption has been mailed shall, in
the absence of fraud, be prima facie evidence of the facts stated
therein.
(d) Any right to exercise a Warrant shall terminate at
5:00 P.M. (Minneapolis time) on the business day immediately
preceding the Redemption Date. On and after the Redemption
Dates, Holders of the Warrants shall have no further rights
except to receive, upon surrender of the Warrant, the
Redemption Price.
(e) From and after the date specified for redemption, the
Company shall, at the place specified in the notice of
redemption, upon presentation and surrender to the Company
by or on behalf of the Registered Holder thereof of one or
more Warrants to be redeemed, deliver or cause to be delivered
to or upon the written order of such Holder a sum in cash
equal to the redemption price of each such Warrant. From and
after the date fixed for redemption and upon the deposit or
setting aside by the Company of a sum sufficient to redeem all
the Warrants called for redemption, such Warrants shall expire
and become void, and all rights hereunder and under the
Warrant Certificates, except the right to receive payment of the
redemption price, shall cease.
SECTION 9. Adjustment of Exercise Price and Number
of Shares of Common Stock or Warrants.
(a) (1) Subject to the exceptions referred to in Section
9(g) below, in the event the Company shall, at any time or
from time to time after the date hereof, sell any shares of
Common Stock for a consideration consisting solely of cash in
an amount per share less than the Purchase Price, or issue any
shares of Common Stock as a stock dividend to the holders of
Common Stock, or subdivide or combine the outstanding
shares of Common Stock into a greater or lesser number of
shares (any such sale, issuance, subdivision or combination
being herein called a "Change of Shares"), then, and thereafter
upon each further Change of Shares, the Purchase Price in
effect immediately prior to such Change of Shares shall be
changed to a price (including any applicable fraction of a cent)
determined by dividing (i) the sum of (a) the total number of
shares of Common Stock outstanding immediately prior to
such Change of Shares, multiplied by the Purchase Price in
effect immediately prior to such Change of Shares, and (b) the
consideration, if any, received by the Company upon such sale,
issuance, subdivision or combination by (ii) the total number
of shares of Common Stock outstanding immediately after
such Change of Shares.
(2) Upon each adjustment of the Purchase Price
pursuant to this Section 9, the total number of shares of
Common Stock purchasable upon the exercise of each Warrant
shall (subject to the provisions contained in Section 9(b) hereof)
be such number of shares (calculated to the nearest tenth)
purchasable at the Purchase Price immediately prior to such
adjustment multiplied by a fraction, the numerator of which
shall be the Purchase Price in effect immediately prior to such
adjustment and the denominator of which shall be the
Purchase Price in effect immediately after such adjustment.
(b) The Company may elect, upon any adjustment of
the Purchase Price hereunder, to adjust the number of warrants
outstanding, in lieu of the adjustment in the number of shares
of Common Stock purchasable upon the exercise of each
Warrant as hereinabove provided, so that each Warrant
outstanding after such adjustment shall represent the right to
purchase one share of Common Stock. Each Warrant held of
record prior to such adjustment of the number of Warrants
shall become that number of Warrants (calculated to the
nearest tenth or hundredth, as the Company may determine to
be more appropriate) determined by multiplying the number
one by a fraction, the numerator of which shall be the
Purchase Price in effect immediately prior to such adjustment
and the denominator of which shall be the Purchase Price in
effect immediately after such adjustment. Upon each such
adjustment of the number of Warrants, the Redemption Price
in effect immediately prior to such adjustment also shall be
adjusted by multiplying such Redemption Price by a fraction,
the numerator of which shall be the Purchase Price in effect
immediately after such adjustment and the denominator of
which shall be the Purchase Price in effect immediately prior to
such adjustment. Upon each adjustment of the number of
Warrants pursuant to this Section 9, the Company shall, as
promptly as practicable, cause to be distributed to each
Registered Holder of Warrant Certificates on the date of such
adjustment Warrant Certificates evidencing, subject to Section
11 hereof, the number of additional Warrants to which such
Holder shall be entitled as a result of such adjustment or, at the
option of the Company, cause to be distributed to such Holder
in substitution and replacement for the Warrant Certificates
held by him prior to the date of adjustment (and upon
surrender thereof, if required by the Company) new Warrant
Certificates evidencing the number of Warrants to which such
Holder shall be entitled after such adjustment.
(c) In case of any reclassification, capital reorganization,
or other change of outstanding shares of Common Stock, or in
case of any consolidation or merger of the Company with or
into another corporation (other than a consolidation or merger
in which the Company is the continuing corporation and
which does not result in any reclassification, capital
reorganization or other change of outstanding shares of
Common Stock), or in case of any sale or conveyance to
another corporation of the property of the Company as, or
substantially as, an entirety (other than a sale/leaseback,
mortgage or other financing transaction), the Company shall
cause effective provision to be made so that each holder of a
Warrant then outstanding shall have the right thereafter, by
exercising such Warrant, to purchase the kind and number of
shares of stock or other securities or property (including cash)
receivable upon such reclassification, capital reorganization or
other change, consolidations merger, sale or conveyance by a
holder of the number of shares of Common Stock that might
have been purchased upon exercise of such Warrant
immediately prior to such reclassification, capital
reorganization or other change, consolidation, merger, sale or
conveyance. Any such provision shall include provision for
adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 9.
The foregoing provisions shall similarly apply to successive
reclassifications, capital reorganizations, and other changes of
outstanding shares of Common Stock and to successive
consolidations, mergers, sales, or conveyances.
(d) Notwithstanding of any adjustments or changes in
the Purchase Price or the number of shares of Common Stock
purchasable upon exercise of the Warrants, the Warrant
Certificates theretofore and thereafter issued shall, unless the
Company shall exercise its option to issue new Warrant
Certificates pursuant to Section 2(d) hereof, continue to express
the Purchase Price per share, the number of shares purchasable
thereunder, and the Redemption Price therefor as the Purchase
Price per share, as the number of shares purchasable and the
Redemption Price therefor were expressed in the Warrant
Certificates when the same were originally issued.
(e) After each adjustment of the Purchase Price pursuant
to this Section 9, the Company will promptly prepare a
certificate signed by the Chairman of the Board or President,
and by the Treasurer or an Assistant Treasurer or the Secretary
or an Assistant Secretary, of the Company setting forth: (i) the
Purchase Price as so adjusted, (ii) the number of shares of
Common Stock purchasable upon exercise of each Warrant
after such adjustment, and, if the Company shall have elected
to adjust the number of Warrants, the number of Warrants to
which the registered holder or each Warrant shall then be
entitled, and the adjustment in Redemption Price resulting
therefrom, and (iii) a brief statement of the facts accounting for
such adjustment. The Company will promptly file such
certificate with the Warrant Agent and cause a brief summary
thereof to be sent by ordinary first class mail to Tuschner and
to each registered holder of Warrants at his or her last address
as it shall appear on the registry books of the Warrant Agent.
Neither the failure to mail such notice nor any defect therein
or in the mailing thereof shall affect the validity thereof, except
as to any holder to whom the Company fails to mail such
notice or except as to the holder to whom notice is given
defectively. The affidavit of an officer of the Warrant Agent or
the Secretary or an Assistant Secretary of the Company that
such notice has been mailed shall, in the absence of fraud, be
prima facie evidence of the facts stated therein.
(f) For purposes of Sections 9(a) and 9(b) hereof the
following provisions (A) to (F) shall also be applicable:
(A) The number of shares of Common Stock
outstanding at any given time shall include shares of
Common Stock owned or held by or for the account of
the Company and the sale or issuance of such treasury
shares or the distribution of any such treasury shares
shall not be considered a Change of Shares for purposes
of said sections.
(B) No adjustment of the Purchase Price shall be
made unless such adjustment would require an increase
or decrease of at least $.10 in such price; provided that
any adjustments which by reason of this clause (B) are
not required to be made shall be carried forward and
shall be made at the time of and together with the next
subsequent adjustment which, together with any
adjustment(s) so carried forward, shall require an
increase or decrease of at least $.10 in the Purchase Price
then in effect hereunder.
(C) In case of (1) the sale by the Company solely
for cash of any rights or warrants to subscribe for or
purchase, or any options for the purchase of, Common
Stock or any securities convertible into or exchangeable
for Common Stock without the payment of any further
consideration other than cash, if any (such convertible
or exchangeable securities being herein called
"Convertible Securities"), or (2) the issuance without the
receipt by the Company of any consideration therefor,
of any rights, or warrants to subscribe for or purchase,
or any options for the purchase of, Common Stock or
Convertible Securities, in each case, if (and only if) the
consideration payable upon the exercise of such rights,
warrants, or options shall consist solely of cash, whether
or not such rights, warrants, or options, or the right to
convert or exchange such Convertible Securities, are
immediately exercisable, and the price per share for
which Common Stock is issuable upon the exercise of
such rights, warrants, or options or upon the conversion
or exchange of such Convertible Securities (determined
by dividing (x) the minimum aggregate consideration
payable to the Company upon the exercise of such
rights, warrants, or options, plus the consideration
received by the Company for the issuance or sale of such
rights, warrants, or options, plus, in the case of such
Convertible Securities, the minimum aggregate amount
of additional consideration, if any, other than such
Convertible Securities, payable upon the conversion or
exchange thereof, by (y) the total maximum number of
shares of Common Stock issuable upon the exercise of
such rights, warrants or options or upon the conversion
or exchange of such Convertible Securities issuable upon
the exercise of such rights, warrants or options) is less
than the Purchase Price in effect immediately prior to
the date of the issuance or sale of such rights, warrants
or options, then the total maximum number of shares of
Common Stock issuable upon the exercise of such
rights, warrants or options or upon the conversion or
exchange of such Convertible Securities (as of the date of
the issuance or sale of such rights, warrants or options)
shall be deemed to be outstanding shares of Common
Stock for purposes of Sections 9(a) and 9(b) hereof and
shall be deemed to have been sold for cash in an amount
equal to such price per share.
(D) In case of the sale by the Company solely for
cash of any Convertible Securities, whether or not the
right of conversion or exchange thereunder is
immediately exercisable, and the price per share for
which Common Stock is issuable upon the conversion
or exchange of such Convertible Securities (determined
by dividing (x) the total amount of consideration
received by the Company for the sale of such
Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, other than
such Convertible Securities, payable upon the
conversion or exchange thereof, by (y) the total
maximum number of shares of Common Stock issuable
upon the conversion or exchange of such Convertible
Securities) is less than the Purchase Price in effect
immediately prior to the date of the sale of such
Convertible Securities, then the total maximum number
of shares of Common Stock issuable upon the
conversion or exchange of such Convertible Securities
(as of the date of the sale of such Convertible Securities)
shall be deemed to be outstanding shares of Common
Stock for purposes of Sections 9(a) and 9(b) hereof and
shall be deemed to have been sold for cash in an amount
equal to such price per share.
(E) If the exercise or purchase price provided for
in any right, warrant or option referred to in (C) above,
or the rate at which any Convertible Securities referred
to in (C) or (D) above are convertible into or
exchangeable for Common Stock, shall change at any
time (other than under or by reason of provisions
designed to protect against dilution), the Purchase Price
then in effect hereunder shall forthwith be readjusted to
such Purchase Price as would have obtained (1) had the
adjustments made upon the issuance or sale of such
rights, warrants, options, or Convertible Securities been
made upon the basis of the issuance of only the number
of shares of Common Stock theretofore actually
delivered (and the total consideration received therefor)
upon the exercise of such rights, warrants or options or
upon the conversion or exchange of such Convertible
Securities, (2) had adjustments been made on the basis of
the Purchase Price as adjusted under clause (1) for all
transactions (which would have affected such adjusted
Purchase Price) made after the issuance or sale of such
rights, warrants, options or Convertible Securities, and
(3) had any such rights, warrants, options or Convertible
Securities then still outstanding been originally issued or
sold at the time of such change. On the expiration of
any such right, warrant, or option or the termination of
any such right to convert or exchange any such
Convertible Securities, the Purchase Price then in effect
hereunder shall forthwith be readjusted to such Purchase
Price as would have obtained (a) had the adjustments
made upon the issuance or sale of such rights, warrants,
options or Convertible Securities been made upon the
basis of the issuance of only the number of shares of
Common Stock theretofore actually delivered (and the
total consideration received therefor) upon the exercise
of such rights, warrants or options or upon the
conversion or exchange of such Convertible Securities
and (b) had adjustments been made on the basis of the
Purchase Price as adjusted under clause (a) for all
transactions (which would have affected such adjusted
Purchase Price) made after the issuance or sale of such
rights, warrants, options or Convertible Securities.
(F) In case of the sale for cash of any shares of
Common Stock, any Convertible Securities, any rights
or warrants to subscribe for or purchase, or any options
for the purchase of, Common Stock or Convertible
Securities, the consideration received by the Company
therefor shall be deemed to be the gross sales price
therefor without deducting therefrom any expense paid
or incurred by the Company or any underwriting
discounts or commissions or concessions paid or allowed
by the Company in connection therewith.
(g) No adjustment to the Purchase Price of the Warrants
or to the number of shares of Common Stock purchasable
upon the exercise of each Warrant will be made, however,
(i) upon the grant or exercise of any stock options
which may hereafter be granted or exercised under any
other employee benefit plan of the Company;
(ii) upon the sale or exercise of the Warrants,
including without limitation the sale or exercise of any
of the Warrants comprising the Unit Purchase Option;
or
(iii) upon the issuance or sale of Common Stock
or Convertible Securities upon the exercise of any rights
or warrants to subscribe for or purchase, or any options
for the purchase of, Common Stock or Convertible
Securities, whether or not such rights, warrants or
options were outstanding on the date of the original sale
of the Warrants or were thereafter issued or sold; or
(iv) upon the issuance or sale of Common Stock
upon conversion or exchange of any Convertible
Securities, whether or not any adjustment in the
Purchase Price was made or required to be made upon
the issuance or sale of such Convertible Securities and
whether or not such Convertible Securities were
outstanding on the date of the original sale of the
Warrants or were thereafter issued or sold; or
(v) upon any amendment to or change in the
terms of any rights or warrants to subscribe for or
purchase, or options for the purchase of, Common
Stock or Convertible Securities or in the terms of any
Convertible Securities, including, but not limited to, any
extension of any expiration date of any such right,
warrant or option, any change in any exercise or
purchase price provided for in any such right, warrant
or option, any extension of any date through which any
Convertible Securities are convertible into or
exchangeable for Common Stock or any change in the
rate at which any Convertible Securities are convertible
into or exchangeable for Common Stock (other than
rights, warrants, options or Convertible Securities issued
or sold after the close of business on the date of the
original issuance of the Units (i) for which an
adjustment in the Purchase Price then in effect was
theretofore made or required to be made, upon the
issuance or sale thereof, or (ii) for which such an
adjustment would have been required had the exercise or
purchase price of such rights, warrants or options at the
time of the issuance or sale thereof or the rate of
conversion or exchange of such Convertible Securities,
at the time of the sale of such Convertible Securities, or
the issuance or sale of rights or warrants to subscribe for
or purchase, or options for the purchase of, such
Convertible Securities, been the price or rate as changed,
in which case the provisions of Section 9(f)(E) hereof
shall be applicable if, but only if, the exercise or
purchase price thereof, as changed, or the rate of
conversion or exchange thereof, as changed, consists
solely of cash or requires the payment of additional
consideration, if any, consisting solely of cash and the
Company did not receive any consideration other than
cash, if any, in connection with such change).
(h) As used in this Section 9, the term "Common Stock"
shall mean and include the Company's Common Stock
authorized on the date of the original issue of the Units and
shall also include any capital stock of any class of the Company
thereafter authorized which shall not be limited to a fixed sum
or percentage in respect of the rights of the holders thereof to
participate in dividends and in the distribution of assets upon
the voluntary liquidation, dissolution or winding up of the
Company; provided, however, that the shares issuable upon
exercise of the Warrants shall include only shares of such class
designated in the Company's Certificate of Incorporation as
Common Stock on the date of the original issue of the Units,
or (i) in the case of any reclassification, change, consolidation,
merger, sale or conveyance of the character referred to in
Section 9(c) hereof, the stock, securities or property provided
for in such section, or (ii) in the case of any reclassification or
change in the outstanding shares of Common Stock issuable
upon exercise of the Warrants as a result of a subdivision or
combination or consisting of a change in par value, or from par
value to no par value, or from no par value to par value, such
shares of Common Stock as so reclassified or changed.
(i) Any determination as to whether an adjustment in
the Purchase Price in effect hereunder is required pursuant to
Section 9, or as to the amount of any such adjustment, if
required, shall be binding upon the holders of the Warrants
and the Company if made in good faith by the Board of
Directors of the Company.
(j) If and whenever the Company shall grant to the
holders of Common Stock, as such, rights or warrants to
subscribe for or to purchase, or any options for the purchase
of, Common Stock or securities convertible into or
exchangeable for or carrying a right, warrant or option to
purchase Common stock, the Company shall concurrently
therewith grant to each registered Holders of the Warrants all
of such rights, warrants or options to which each such holder
would have been entitled if, on the date of determination of
stockholders entitled to the rights granted by the Company,
such holder were the holder of record of the number of whole
shares of Common Stock then issuable upon exercise
(assuming, for purposes of this Section 9(j), that exercise of
Warrants is permissible during periods prior to the Initial
Warrant Exercise Date) of his Warrants. Such grant by the
Company to the holders of the Warrants shall be in lieu of any
adjustment which otherwise might be called for pursuant to
this Section 9.
SECTION 10. Fractional Warrants and Fractional
Shares. (a) If the number of shares of Common Stock issuable
upon the exercise of each Warrant is adjusted pursuant to
Section 9 hereof the Company shall not be required to issue
fractions of shares upon exercise of the Warrants or otherwise,
or to distribute certificates that evidence fractional shares. With
respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in
cash equal to such fraction multiplied by the current market
value of such fractional share, determined as follows:
(1) If the Common Stock is listed on a national
securities exchange or admitted to unlisted trading
privileges on such exchange or quoted on the NASDAQ
National Market System or Small Cap Market, the
current value shall be the last reported sale price of the
Common Stock on such exchange or NASDAQ on the
last business day prior to the date of exercise of this
Warrant or, if no such sale is made on such day, the
average closing bid and asked prices for such day on such
exchange or system; or
(2) If the Common Stock is not so listed or
admitted to unlisted trading privileges or quoted, the
current value shall be the mean of the last reported bid
and asked prices on NASDAQ or as reported by the
National Quotation Bureau, Inc. on the last business day
prior to the date of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or
admitted to unlisted trading privileges or quoted, and
bid and asked prices are not so reported, the current
value shall be an amount determined in such reasonable
manner as may be prescribed by the Board of Directors
of the Company.
SECTION 11. Warrant Holders Not Deemed
Stockholders. No holder of Warrants shall, as such, be entitled
to vote or to receive dividends or be deemed the holder of
Common Stock that may at any time be issuable upon exercise
of such Warrants for any purpose whatsoever, nor shall
anything contained herein be construed to confer upon the
holder of Warrants, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issue or
reclassification of stock, change of par value or change of stock
to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive
dividends or subscription rights, until such Holder shall have
exercised such Warrants and been issued shares of Common
Stock in accordance with the provisions hereof.
SECTION 12. Rights of Action. All rights of action
with respect to this Agreement are vested in the respective
Registered Holders of the Warrants, and any Registered Holder
of a Warrant, without consent of the Warrant Agent or of the
holder of any other Warrant, may, in his own behalf and for
his own benefit, enforce against the Company his right to
exercise his Warrants for the purchase of shares of Common
Stock in the manner provided in the Warrant Certificate and
this Agreement.
SECTION 13. Agreement of Warrant Holders. Every
holder of a Warrant, by his acceptance thereof, consents and
agrees with the Company, the Warrant Agent and every other
holder of a Warrant that:
(a) The Warrants are transferable only on the registry
books of the Warrant Agent by the Registered Holder thereof
in person or by his attorney duly authorized in writing and
only if the Warrant Certificates representing such Warrants are
surrendered at the office of the Warrant Agent, duly endorsed
or accompanied by a proper instrument of transfer satisfactory
to the Warrant Agent and the Company in their sole
discretion, together with payment of any applicable transfer
taxes; and
(b) The Company and the Warrant Agent may deem
and treat the person in whose name the Warrant Certificate is
registered as the holder and as the absolute, true and lawful
owner of the Warrants represented thereby for all purposes,
and neither the Company nor the Warrant Agent shall be
affected by any notice or knowledge to the contrary, except as
otherwise expressly provided in Section 7 hereof.
SECTION 14. Cancellation of Warrant Certificates. If
the Company shall purchase or acquire any Warrant or
Warrants the Warrant Certificate or Warrant Certificates
evidencing the same shall thereupon be delivered to the
Warrant Agent and canceled by it and retired. The Warrant
Agent shall also cancel Common Stock following exercise of
any or all of the Warrants represented thereby or delivered to
it for transfer, split-up, combination or exchange.
SECTION 15. Concerning the Warrant Agent.
(a) The Warrant Agent acts hereunder as agent and in a
ministerial capacity for the Company, and its duties shall be
determined solely by the provisions hereof. The Warrant
Agent shall not, by issuing and delivering Warrant Certificates
or by any other act hereunder, be deemed to make any
representations as to the validity, value or authorization of the
Warrant Certificates or the Warrants represented thereby or of
any securities or other property delivered upon exercise of any
Warrant or whether any shares of stock issued upon exercise of
any Warrant is fully paid and nonassessable.
(b) The Warrant Agent shall not at any time be under
any duty or responsibility to any holder of Warrant
Certificates to make or cause to be made any adjustment of the
Purchase Price or the Redemption Price provided in this
Agreement, or to determine whether any fact exists which may
require any such adjustments, or with respect to the nature or
extent of any such adjustment, when made, or with respect to
the method employed in making the same. It shall not (i) be
liable for any recital or statement of facts contained herein or
for any action taken, suffered or omitted by it in reliance on
any Warrant Certificate or other document or instrument
believed by it in good faith to be genuine and to have been
signed or presented by the proper party or parties, (ii) be
responsible for any failure on the part of the Company to
comply with any of its covenants and obligations contained in
this Agreement or in any Warrant Certificate, or (iii) be liable
for any act or omission in connection with this Agreement
except for its own negligence or willful misconduct.
(c) The Warrant Agent may at any time consult with
counsel satisfactory to it (who may be counsel for the
Company) and shall incur no liability or responsibility for any
action taken, suffered or omitted by it in good faith in
accordance with the opinion or advice of such counsel.
(d) Any notice, statement, instruction, request,
direction, order or demand of the Company shall be
sufficiently evidenced by an instrument signed by the
Chairman of the Board, the President, any Vice President, the
Secretary, or any Assistant Secretary (unless other evidence in
respect thereof is herein specifically prescribed). The Warrant
Agent shall not be liable for any action taken, suffered or
omitted by it in accordance with such notice, statement,
instruction, request, direction, order or demand believed by it
to be genuine.
(e) The Company agrees to pay the Warrant Agent
reasonable compensation for its services hereunder and to
reimburse it for its reasonable expenses hereunder; it further
agrees to indemnify the Warrant Agent and save it harmless
against any and all losses, expenses and liabilities, including
judgments, costs and counsel fees, for anything done or
omitted by the Warrant Agent in the execution of its duties
and powers hereunder except losses, expenses and liabilities
arising as a result of the Warrant Agent's negligence or willful
misconduct.
(f) In the event of a dispute under this Agreement
between the Company and Tuschner regarding proceeds
received by the Warrant Agent from the exercise of the
Warrants, the Warrant Agent shall have the right, but not the
obligation, to bring an interpleader action to resolve such
dispute.
(g) The Warrant Agent may resign its duties and be
discharged from all further duties and liabilities hereunder
(except liabilities arising as a result of the Warrant Agent's own
negligence or willful misconduct), after giving 30 days' prior
written notice to the Company. At least 15 days prior to the
date such resignation is to become effective, the Warrant Agent
shall cause a copy of such notice of resignation to be mailed to
the Registered Holder of each Warrant Certificate at the
Company's expense. Upon such resignation, or any inability of
the Warrant Agent to act as such hereunder, the Company
shall appoint a new warrant agent in writing. If the Company
shall fail to make such appointment within a period of 15 days
after it has been notified in writing of such resignation by the
resigning Warrant Agent, then the Registered Holder of any
Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new warrant agent. Any
new warrant agent, whether appointed by the Company or by
such a court, shall be a bank or trust company having a capital
and surplus, as shown by its last published report to its
stockholders, of not less than $10,000,000 or a stock transfer
company. After acceptance in writing of such appointment by
the new warrant agent is received by the Company, such new
warrant agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named
herein as the Warrant Agent, without any further assurance,
conveyance, act or deed; but if for any reason it shall be
necessary or expedient to execute and deliver any further
assurance, conveyance, act, or deed, the same shall be done at
the expense of the Company and shall be legally and validly
executed and delivered by the resigning Warrant Agent. Not
later than the effective date of any such appointment, the
Company shall file notice thereof with the resigning Warrant
Agent and shall forthwith cause a copy of such notice to be
mailed to the Registered Holder of each Warrant Certificate.
(h) Any corporation into which the Warrant Agent or
any new warrant agent may be converted or merged or any
corporation resulting from any consolidation to which the
Warrant Agent or any new warrant agent shall be a party or
any corporation succeeding to the trust business of the Warrant
Agent shall be a successor warrant agent under this Agreement
without any further act, provided that such corporation is
eligible for appointment as successor to the Warrant Agent
under the provisions of the preceding paragraph. Any such
successor warrant agent shall promptly cause notice of its
succession a; warrant agent to be mailed to the Company and
to the Registers Holder of each Warrant Certificate.
(i) The Warrant Agent, its subsidiaries and affiliates, and
any of its or their officers or directors, may buy and hood or
sell Warrants or other securities of the Company and otherwise
deal with the Company in the same manner and to the same
extent and with like effects as though it were not Warrant
Agent. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other
legal entity.
SECTION 16. Modification of Agreement.
The Warrant Agent and the Company may by
supplemental agreement make any changes or corrections in
this Agreement (i) that they shall deem appropriate to cure any
ambiguity or to correct any defective or inconsistent provision
or manifest mistake or error herein contained or (ii) that they
may deem necessary or desirable and which shall not adversely
affect the interests of the Registered Holders of Warrant
Certificates; provided, however, that this Agreement shall not
otherwise be modified, supplemented or altered in any respect
except with the consent in writing of the Registered Holders of
Warrant Certificates representing not less than 50% of the
Warrants then outstanding, and provided, further, that no
change in the number or nature of the securities purchasable
upon the exercise of any Warrant, or the Purchase Price
therefor, or the acceleration of the Warrant Expiration Date,
shall be made without the consent in writing of the Registered
Holder of the Warrant Certificate representing such Warrant,
other than such changes as are specifically prescribed by this
Agreement as originally executed.
SECTION 17. Notices. All notices, requests, consents
and other communications hereunder shall be in writing and
shall be deemed to have been made when personally served
against receipt or three days after being delivered or mailed first
class registered or certified mail, return receipt requested,
postage prepaid, as follows: if to the Registered Holder of a
Warrant Certificate, at the address of such holder as shown on
the registry books maintained by the Warrant Agent; if to the
Company, at 15 South Fifth Street, Suite 715, Minneapolis,
MN 55402, attention: President, or at such other address as
may have been furnished to the Warrant Agent in writing by
the Company; and if to the Warrant Agent, at its Corporate
Office; if to Tuschner, at One Financial Plaza, Suite 800, 120
South Sixth Street, Minneapolis, MN 55402, Attention:
President.
SECTION 18. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Minnesota, without reference to principles of conflict
of laws.
SECTION 19. Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the Company and the
Warrant Agent, and their respective successors and assigns, and
the holders from time to time of Warrant Certificates. Nothing
in this Agreement is intended or shall be construed to confer
upon any other person any right, remedy or claim, in equity or
at law, or to impose upon any other person any duty, liability
or obligation.
SECTION 20. Termination. This Agreement shall
terminate at the close of business on the Expiration Date of all
the Warrants of such earlier date upon which all Warrants have
been exercises, except that the Warrant Agent shall account to
the Company for cash held by it and the provisions of Section
15 hereof shall survive such termination.
SECTION 21. Counterparts. This Agreement may be
executed in several counterparts, which taken together shall
constitute a single document.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed as of the date first
above written.
ILLUMINATED MEDIA,
INC.
By
__________________________
President
TUSCHNER &
COMPANY, INC.
By
___________________________
President
NORWEST BANK
MINNESOTA, N.A.
By
_____________________________
____________________________
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
VOID AFTER _______________, ________
STOCK PURCHASE WARRANT CERTIFICATE
FOR PURCHASE OF COMMON STOCK OF
ILLUMINATED MEDIA, INC.
This certifies that FOR VALUE RECEIVED,
___________________________ or registered assigns (the
"Registered Holder") is the owner of the number of
Redeemable Common Stock Purchase Warrants ("Warrants")
specified above. Each Warrant initially entitles the Registered
Holder to purchase, subject to the terms and conditions set
forth in this Certificate and the Warrant Agreement (as
hereinafter defined), two fully paid and nonassessable share of
Common Stock, no par value, of Illuminated Media, Inc., a
Minnesota corporation (the "Company"), at any time between
_____________, 199_ and the Expiration Date (as hereinafter
defined), upon the presentation and surrender of this Warrant
Certificate with the Subscription Form on the reverse hereof
duly executed, at the corporate office of Norwest Bank
Minnesota, N.A. as warrant agent, or its successor (the
"Warrant Agent"), accompanied by payment of $2.75 per share
(the "Purchase Price") in lawful money of the united States of
America in cash or by official bank or certified check made
payable to the Company.
This Warrant Certificate and each Warrant represented
hereby are issued pursuant to and are subject in all respects to
the terms and conditions set forth in the Warrant Agreement
dated ___________, 199__ (the "Warrant Agreement"), by and
among the Company, the Warrant Agent, and Tuschner and
Company., Inc.
In the event of certain contingencies provided for in the
Warrant Agreement, the Purchase Price or the number of
shares of Common Stock subject to purchase upon the exercise
of each Warrant represented hereby, and the Redemption Price
are subject to modification or adjustment.
Each Warrant represented hereby is exercisable at the
option of the Registered Holder, but no fractional shares of
Common Stock will be issued. In the case of the exercise of less
than all the Warrants represented hereby, the Company shall
cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant
Certificates of like tenor, which the Warrant Agent shall
countersign, for the balance of such Warrants.
The term "Expiration Date" shall mean 5:00 P.M.,
Minneapolis time on _________, ______, or such earlier date
on which the Warrants shall be redeemed. If such date shall in
the State of Minnesota be a holiday or a day on which the
banks are authorized to close, then the Expiration Date shall
mean 5:00 P.M., Minneapolis time, the next following day
which in the State of Minnesota is not a holiday or a day on
which banks are authorized to close.
The Company shall not be obligated to deliver any
securities pursuant to the exercise of this Warrant unless a
registration statement under the Securities Act of 1933, as
amended, with respect to such securities is effective. The
Company has covenanted and agreed that it will file a
registration statement and will use its best efforts to cause the
same to become effective and to keep such registration
statement current while any of the Warrants are outstanding.
This Warrant shall not be exercisable by a Registered Holder in
any state where such exercise would be unlawful.
This Warrant Certificate is exchangeable, upon the
surrender hereof by the Registered Holder at the corporate
office of the Warrant Agent, for a new Warrant Certificate or
Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant
certificates to represent such number of Warrants as shall be
designated by such Registered Holder at the time of such
surrender. Upon due presentment with any tax or other
governmental charge imposed in connection therewith for
registration of transfer of this Warrant Certificate at such
office, a new Warrant Certificate or Warrant Certificates
representing an equal aggregate number of Warrants will be
issued to the transferee in exchange therefor, subject to the
limitations provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby,
the Registered Holder shall not be entitled to any rights of a
shareholder of the Company, including, without limitation,
the right to vote or to receive dividends or other distributions,
and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the
Warrant Agreement.
This Warrant may be redeemed at the option of the
Company, at a redemption price of $0.10 per Warrant at any
time after _____ _, 199_, provided that the market price (as
defined in the Warrant Agreement) for the securities issuable
upon exercise of such Warrant shall exceed 120% of the
Purchase Price. Notice of redemption shall be given not later
than the 30th day before the date fixed for redemption, all as
provided in the Warrant Agreement. On and after the date
fixed for redemption, the Registered Holder shall have no
rights with respect to this Warrant except to receive the $0.01
per Warrant upon surrender of this Certificate.
Prior to due presentment for registration of transfer
hereof, the Company and the Warrant Agent may deem and
treat the Registered Holder as the absolute owner hereof and of
each Warrant represented hereby (notwithstanding any
notations of ownership or writing hereon made by anyone
other than a duly authorized officer of the Company or the
Warrant Agent) for all purposes and shall not be affected by
any notice to the contrary.
This Warrant Certificate shall be governed by and
construed in accordance with the laws of the State of
Minnesota.
This Warrant Certificate is not valid unless
countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Company has caused
this Warrant Certificate to be duly executed, manually or in
facsimile by two of its officers thereunto duly authorized and a
facsimile of its corporate seal to be imprinted hereon.
SIGNATURES
[Corporate Seal]
To be Executed by the Registered Holder in Order to Exercise
Warrants
The undersigned Registered Holder hereby irrevocably
elects to exercise Warrants represented by this Warrant
Certificate, and to purchase the securities is issuable upon the
exercise of such Warrants, and requests that certificates for such
securities shall be issued in the name of
[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER]
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
[please print or type name and address]
and be delivered to
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
[please print or type name and address]
and if such number of Warrants shall not be all the warrants
evidenced by this Warrant Certificate, that a new Warrant
Certificate for the balance of such Warrants be registered in the
name of and delivered to the Registered Holder at the address
stated below.
The undersigned represents that the exercise of the
within Warrant was solicited by a member of the National
Association of Securities Dealers, Inc. If not solicited by an
NASD member, please write "unsolicited" in the space below.
Unless otherwise indicated, by listing the name of another
NASD member firm, it will be assumed that the exercise was
solicited by Tuschner & Co., Inc.
Dated: _____________________ __________________________________
Name of NASD Member, if other
than Tuschner & Co., Inc.
__________________________________
Signature of Registered Holder
__________________________________
__________________________________
Address
__________________________________
Taxpayer Identification Number
__________________________________
Signature Guaranteed
THE SIGNATURE ON THE ASSIGNMENT OR THE
SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS
WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATSOEVER, AND MUST BE
GUARANTEED BY A COMMERCIAL BANK OR TRUST
COMPANY OR A MEMBER FIRM OF THE
MINNESOTA STOCK EXCHANGE, AMERICAN STOCK
EXCHANGE, PACIFIC STOCK EXCHANGE OR
MIDWEST STOCK EXCHANGE.