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EXHIBIT 4.2
WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of _____________, 1996, by and between
Jubilee Gaming Enterprises, Inc., a Minnesota corporation (the "Company"), and
Norwest Bank Minnesota, National Association, as the Warrant Agent (the
"Warrant Agent").
WHEREAS, the Company proposes to issue at least 1,200,000 and up to
1,380,000 Redeemable Common Stock Purchase Warrants (the "Warrants") evidencing
the right to purchase an aggregate of up to 1,380,000 authorized but previously
unissued shares of common stock, no par value, of the Company (the "Common
Stock"). The Warrants are to be issued in connection with the issuance by the
Company of at least 1,200,000 and up to 1,380,000 Units, each Unit consisting
of one share of Common Stock and one Warrant, pursuant to the Company's
Registration Statement on Form SB-2.
WHEREAS, the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent desires so to act, in connection with the
issuance, registration, transfer, exchange and exercise of the Warrants.
NOW, THEREFORE, the Company and the Warrant Agent hereby agree as follows:
ARTICLE I
APPOINTMENT OF WARRANT AGENT;
ISSUANCE, FORM AND EXECUTION OF WARRANT CERTIFICATES
Section 1.1 Appointment of Warrant Agent. The Company hereby appoints the
Warrant Agent to act as agent for the Company, and the Warrant Agent hereby
accepts the agency established herein and agrees to perform its agency duties
in accordance with the terms and conditions of this Warrant Agreement.
Section 1.2 Warrant Certificates. The Company shall execute and deliver to
the Warrant Agent certificates which the Company has authorized to represent
the Warrants (the "Warrant Certificates"). The Warrant Certificates shall be
substantially as set forth in Exhibit A hereto and may have such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Warrant Agreement, or
as may be required to comply with any law or with any rule or regulation
relating to listing of the Warrants on the Nasdaq system, including the Nasdaq
SmallCap Market, or on any stock exchange or to conform to usage. The Warrant
Certificates shall be dated with the date of their issuance.
Section 1.3 Execution of Warrant Certificates. The Warrant Certificates
shall be executed on behalf of the Company by a duly authorized officer of the
Company, either manually or by facsimile signature printed thereon. The Warrant
Certificates shall be manually countersigned by the Warrant Agent and shall not
be valid for any purpose unless countersigned. Any Warrant Certificate may be
signed on behalf of the Company by the person who at the actual date of the
signing of such Warrant Certificate shall have been a
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duly authorized officer of the Company, regardless of whether at the date of
issuance of such Warrant Certificate such person has ceased to be a duly
authorized officer of the Company.
ARTICLE II
EXERCISE OF WARRANTS
Section 2.1 Exercise. Any or all of the Warrants represented by each
Warrant Certificate may be exercised by the holder thereof on or before 5:00
p.m., Minneapolis time, on ____________, 2001 (unless extended by the Company),
by surrender of the Warrant Certificate with the purchase form, which is printed
on the reverse thereof (or a reasonable facsimile thereof), duly executed by
such holder, to the Warrant Agent at its principal office in South St. Xxxx,
Minnesota. The purchase form must be accompanied by payment, in cash or by
certified check payable to the Company, in an amount equal to the product of the
number of shares of Common Stock issuable upon exercise of the Warrant
represented by such Warrant Certificate, as adjusted pursuant to the provisions
of Article III hereof, multiplied by the exercise price of $6.50, as adjusted
pursuant to the provisions of Article III hereof (such price as so adjusted from
time to time being herein called the "Purchase Price"), and such holder shall be
entitled to receive such number of fully paid and nonassessable shares of Common
Stock, as so adjusted, at the time of such exercise.
Section 2.2 Time of Exercise. Each exercise of Warrants shall be deemed to
have been effective immediately prior to the close of business on the business
day on which the Warrant Certificate relating to such Warrant shall have been
surrendered to the Warrant Agent as provided in Section 2.1. At such time, the
person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such exercise as provided in
Section 2.3, shall be deemed to have become the holder or holders of record
thereof.
Section 2.3 Issuance of Shares of Common Stock; No Fractional Shares. As
soon as practicable after the exercise of any Warrant, and in any event within
10 days after receipt by the Company of the notice of exercise under Section
2.1, the Company, at its expense (including the payment by it of any applicable
issue taxes), will cause to be issued in the name of and delivered to the holder
thereof or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct:
(a) a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock to which such holder shall be entitled
upon such exercise plus, in lieu of any fractional share to which such
holder would otherwise be entitled, an amount in cash equal to such
fraction multiplied by the then current value of a share of Common Stock,
such current value to be determined as follows:
(i) if the Common Stock shall be listed or admitted to
unlisted trading privileges on any single national securities
exchange, then such current value shall be computed on the basis of
the last reported sale price of the Common Stock on such exchange on
the last business day prior to the date
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of the exercise of such Warrant upon which a sale shall have been
effected; or
(ii) if the Common Stock shall not be so listed or admitted
to unlisted trading privileges and bid and asked prices therefor in
the over-the-counter market shall be reported by the Nasdaq Stock
Market, including the Nasdaq SmallCap Market, then such current value
shall be computed on the basis of the Last Reported Sale Valuation
Method or, in the event such method is not then used by Nasdaq, the
average of the closing bid and asked prices on the last business day
prior to the date of the exercise of such Warrant as so reported; or
(iii) if the Common Stock shall be listed or admitted to
unlisted trading privileges on more than one national securities
exchange or one or more national securities exchanges and in the
over-the-counter market, then such current value shall, if different
as a result of calculation under the applicable method(s) described
above in this Section, be deemed to be the higher number calculated in
connection therewith; or
(iv) if the Common Stock shall not be so listed or admitted
to unlisted trading privileges and such bid and asked prices shall not
be so reported, then such current value shall be computed on the basis
of the book value of Common Stock as of the close of business on the
last day of the month immediately preceding the date upon which such
warrant was exercised, as determined by the Company; and
(b) in case such exercise includes only part of the Warrants
represented by the Warrant Certificate, a new Warrant Certificate or
Warrant Certificates of like tenor calling in the aggregate on the face or
faces thereof for the number of shares of Common Stock equal (without
giving effect to any adjustment therein) to the number of such shares
called for on the face of such Warrant Certificate minus the number of such
shares designated by the holder for such exercise as provided in Section
2.1. Warrants represented by a properly assigned Warrant Certificate may be
exercised by a new holder without first having a new Warrant Certificate
issued.
Section 2.4 Extension of Exercise Period; Change of Exercise Price. The
Company may, upon notice given to the Warrant Agent, and without the consent of
the holders of the Warrant Certificates, (a) reduce the Purchase Price during
all or any portion of the originally stated exercise period, (b) extend the
period over which the Warrants are exercisable beyond ____________, 2001, and
(c) increase or decrease the Purchase Price for any period the Warrant exercise
period is extended. Within a reasonable time prior to the effective time of such
change or extension, the Company shall provide the Warrant Agent and
Warrantholders of record with written notice of any change in the Purchase Price
or extension of the exercise period, as the case may be, specifying the time to
which such exercise period is extended, or the new Purchase Price and the
periods for which such new Purchase Price is in effect.
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ARTICLE III
ANTIDILUTION PROVISIONS
Section 3.1 Adjustment of Purchase Price.
(a) In the event that:
(i) any dividends on any class of stock of the Company
payable in Common Stock or securities convertible into Common Stock
shall be paid by the Company;
(ii) the Company shall subdivide its then outstanding
shares of Common Stock into a greater number of shares; or
(iii) the Company shall combine outstanding shares of
Common Stock by reclassification or otherwise;
the Purchase Price in effect immediately prior to such event shall (until
adjusted again pursuant hereto) be adjusted immediately after such event to a
price (calculated to the nearest full cent) determined by dividing, (A) the
number of shares of Common Stock outstanding immediately prior to such event,
multiplied by the then existing Purchase Price, by (B) the total number of
shares of Common Stock outstanding immediately after such event (including the
maximum number of shares of Common Stock issuable in respect of any securities
convertible into Common Stock). The resulting quotient shall be the adjusted
Purchase Price per share.
(b) No adjustments of the Purchase Price shall be made if the
amount of such adjustments shall be less than $.05 per share, but in such
case any adjustment that would otherwise be required then to be made shall
be carried forward and shall be made at the time and together with a
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to not less than $.05 per share.
Section 3.2 Adjustment of Number of Shares Purchasable on Exercise of
Warrants. Upon each adjustment of the Purchase Price pursuant to Section 3.1
above, the registered holder of each Warrant shall thereafter (until another
such adjustment) be entitled to purchase at the adjusted Purchase Price the
number of shares, calculated to the nearest full share, obtained by multiplying
the number of shares specified in such Warrant (as adjusted as a result of all
adjustments in the Purchase Price in effect prior to such adjustment) by the
Purchase Price in effect prior to such adjustment and dividing the product so
obtained by the adjusted Purchase Price.
Section 3.3 Notice as to Adjustment. Upon any adjustment of the Purchase
Price and in the number of shares of Common Stock purchasable upon the exercise
of the Warrant, then, and in each such case, the Company shall within 10 days
after the effective date of such adjustment give written notice thereof, by
first class mail, postage prepaid, addressed to each registered Warrantholder at
the address of such Warrantholder as shown
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on the books of the Company, which notice shall state the adjusted Purchase
Price and the adjusted number of shares purchasable upon the exercise of the
Warrants, setting forth in reasonable detail the method of calculation and the
facts upon which each calculation is based.
Section 3.4 Effect of Reorganization, Reclassification, Merger, Etc. If
at any time while any Warrant is outstanding there should be any capital
reorganization or reclassification of the capital stock of the Company (other
than the issuance of any shares of Common Stock in subdivision of outstanding
shares of Common Stock by reclassification or otherwise and other than a
combination of shares provided for in Section 3.1 hereof or any consolidation or
merger of the Company with another corporation or any sale, conveyance, lease or
other transfer by the Company of all or substantially all of its property to any
other corporation, then the holder of any Warrant shall, during the remainder of
the period such Warrant is exercisable, be entitled to receive, upon payment of
the Purchase Price, the number of shares of stock or other securities or
property of the Company, or of the successor corporation resulting from such
consolidation or merger, or of the corporation in which the property of the
Company has been sold, conveyed, leased or otherwise transferred, as the case
may be, to which the Common Stock (and any other securities and property ) of
the Company, deliverable upon the exercise of such Warrant, would have been
entitled upon such capital reorganization, reclassification of capital stock,
consolidation, merger, sale, conveyance, lease or other transfer if such Warrant
had been exercised immediately prior to such capital reorganization,
reclassification of capital stock, consolidation, merger, sale, conveyance,
lease or other transfer; provided that, in any such case, appropriate adjustment
(as determined by the Board of Directors of the Company) shall be made in the
application of the provisions set forth in this Warrant Agreement with respect
to the rights and interests thereafter of the Warrantholders to the end that the
provisions set forth in this Warrant Agreement (including the adjustment of the
Purchase Price and the number of shares issuable upon the exercise of the
Warrants) shall thereafter be applicable, as near as may be reasonably
practicable, in relation to any shares or other property thereafter deliverable
upon the exercise of the Warrants as if the Warrants had been exercised
immediately prior to such capital reorganization, reclassification of capital
stock, consolidation, merger, sale, conveyance, lease or other transfer and the
Warrantholders had carried out the terms of the exchange as provided for by such
capital reorganization, reclassification, consolidation or merger. The Company
shall not effect any such capital reorganization, consolidation, merger or
transfer unless, upon or prior to the consummation thereof, the successor
corporation or the corporation to which the property of the Company has been
sold, conveyed, leased or otherwise transferred shall assume by written
instrument the obligation to deliver to the holder of each Warrant such shares
of stock, securities, cash or property as, in accordance with the foregoing
provisions, such holder shall be entitled to purchase.
Section 3.5 Prior Notice as to Certain Events. In case at any time:
(a) the Company shall pay any dividend upon its Common Stock
payable in stock or make any distribution (other than cash dividends) to
the holders of its Common Stock;
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(b) the Company shall offer for subscription purposes to the
holders of its Common Stock any additional shares of stock of any class or
any other rights;
(c) there shall be any capital reorganization or reclassification
of the capital stock of the Company, or consolidation or merger of the
Company with, or sale, conveyance, lease or other transfer of all or
substantially all of its assets to, another corporation; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
the Company shall give prior written notice, by first class mail, postage
prepaid, addressed to each registered Warrantholder at the address of such
Warrantholder as shown on the books of the Company, of the date on which (i)
the books of the Company shall close or a record shall be taken for each stock
dividend, distribution or subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up shall take place, as the case may be. Such notice shall also
specify the date as of which the holders of the Common Stock of record shall
participate in such dividend, distribution or subscription rights or shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation, or winding up, as the case may be. Such
written notice shall be given at least 20 days prior to the action in question
and not less than 20 days prior to the record date or the date on which the
Company's transfer books are closed in respect thereto.
Section 3.6 Certain Obligations of the Company. The Company will not, by
any voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant Agreement or the Warrant Certificate, but will
at all times in good faith assist in the carrying out of all such terms.
Without limiting the generality of the foregoing, the Company (a) will take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of all Warrants from time to time outstanding, and (b) will
not (i) transfer all or substantially all of its properties and assets to any
other person or entity, (ii) consolidate with or merge into any other entity
where the Company is not the surviving entity, or (iii) permit any other entity
to consolidate with or merge into the Company where the Company is the surviving
entity, where in connection with such consolidation or merger, the Common Stock
then issuable upon the exercise of the Warrant shall be changed into or
exchanged for shares or other securities or property of any other entity unless,
in any such case, the other entity acquiring such properties and assets,
continuing or surviving after such consolidation or merger or issuing or
distributing such shares or other securities or property, as the case may be,
shall expressly assume in writing and be bound by all the terms of this Warrant
Agreement and the Warrant Certificates.
Section 3.7 Reservation and Listing of Common Stock. The Company will at
all times reserve a sufficient number of shares of Common Stock to provide for
the issuance of the same upon the exercise of all outstanding Warrants. All
such shares shall be authorized and, when issued upon such exercise, shall be
validly issued, fully paid and
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nonassessable. Upon the exercise of any of the Warrants, the Company, at its
expense, will list on the Nasdaq system, including the Nasdaq SmallCap Market,
if applicable, and on each national securities exchange on which any Common
Stock may be listed, subject to official notice of issuance, and will maintain
such listing of, the shares of Common Stock issued upon the exercise of any
Warrant.
Section 3.8 Registration or Exemption for Common Stock. The Company will
use its best efforts (a) at all times the Warrants are exercisable, to maintain
an effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), covering Common Stock issuable upon exercise of the
Warrants, (b) to amend or supplement the prospectus contained in such
registration statement to the extent necessary in order to comply with
applicable law, (c) to qualify the Common Stock issuable upon exercise of the
Warrants for exemption from the registration requirements of the Securities Act,
and (d) to maintain exemptions or qualifications, in those jurisdictions in
which the original registration statement relating to the Warrants was initially
qualified, to permit the exercise of the Warrants and the issuance of the Common
Stock pursuant to such exercise. The Warrant Agent shall have no responsibility
for the maintenance of such exemptions or qualifications or for liabilities
arising from the exercise or attempted exercise of Warrants in jurisdictions
where exemptions or qualifications have not been maintained or are otherwise
unavailable. Shares of Common Stock will not be issued to persons desiring to
exercise the Warrants if, at the time of exercise, a registration statement is
not effective under the Securities Act or the Common Stock underlying the
Warrants is not qualified or exempt from qualification in the state where the
holders of the Warrants reside.
ARTICLE IV
REDEMPTION OF WARRANTS
Section 4.1 Redemption Price. The Warrants may be redeemed at the option
of the Company, at any time on or after ____________, 1997 [90 days from the
date of this Warrant Agreement] and on or before ___________, 2001, upon notice
as set forth in Section 4.2 and at the redemption price equal to $.01 per
warrant, provided that (a) the last reported sale price of the Common Stock on a
national securities exchange, if the Common Stock shall be listed or admitted to
unlisted trading privileges on a national securities exchange, or (b) the
closing bid price of the Common Stock on the Nasdaq system, if the Common Stock
is not so listed or admitted to unlisted trading privileges, exceeds $10.00 per
share (such price subject to adjustment from time to time in the same manner as
the Purchase Price pursuant to the provisions of Article III hereof for any 20
consecutive trading days prior to the date such notice of redemption is given.
Section 4.2 Notice of Redemption. In the case of any redemption of
Warrants, the Company or, at its request, the Warrant Agent in the name of and
at the expense of the Company, shall give notice of such redemption to the
holders of the Warrants to be redeemed as hereinafter provided in this Section
4.2. Notices of redemption to the holders of Warrants shall be given by mailing
by first-class mail a notice of such redemption not less than 30 days prior to
the date fixed for redemption. Any notice which is given in the manner herein
provided shall be conclusively presumed to have been duly given, whether
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or not the holder receives notice. In any case, failure to duly give such
notice to the holder of any Warrant Certificate shall not affect the validity of
the proceedings for the redemption of the Warrants represented by any other
Warrant Certificate. Each such notice shall specify the date fixed for
redemption, the place of redemption and the redemption price of $.01 at which
each Warrant is to be redeemed, and shall state that payment of the redemption
price of the Warrants will be made upon surrender of the Warrants at such place
of redemption, and that if not exercised by the close of business on the date
fixed for redemption, the exercise rights of the Warrants identified for
redemption shall expire unless extended by the Company. Such notice shall also
state the current Purchase Price and the date on which the right to exercise the
Warrants will expire unless extended by the Company.
Section 4.3 Payment of Warrants on Redemption; Deposit of Redemption
Price. If notice or redemption shall have been given as provided in Section 4.2,
the redemption price of $.01 per Warrant shall, unless the Warrant is
theretofore exercised pursuant to the terms hereof, become due and payable on
the date and at the place stated in such notice. On and after such date of
redemption, provided that cash sufficient for the redemption thereof shall then
be deposited by the Company with the Warrant Agent for that purpose, the
exercise rights of the Warrants identified for redemption shall expire. On
presentation and surrender of Warrant Certificates at such place of payment
specified in such notice, the Warrant identified for redemption shall be paid
and redeemed at the redemption price of $.01 per Warrant. Prior to the date
fixed for redemption, the Company shall deposit with the Warrant Agent an amount
of money sufficient to pay the redemption price of all the Warrants identified
for redemption. Any monies which shall have been deposited with the Warrant
Agent for redemption of Warrants and which are not required for that purpose by
reason of exercise of Warrants shall be repaid to the Company upon delivery to
the Warrant Agent of evidence satisfactory to it of such exercise.
ARTICLE V
CERTAIN OTHER PROVISIONS RELATING TO
RIGHTS OF HOLDERS OF WARRANT CERTIFICATES
Section 5.1 No Rights of Shareholders. The Warrant Certificates shall be
issued in registered form only. No Warrant Certificate shall entitle the holder
thereof to any of the rights of a holder of shares of Common Stock of the
Company, including, without limitation, the right to vote, to receive dividends
and other distributions, or to receive any notice of, or to attend meetings of
holders of Common Stock or any other proceeding of the Company.
Section 5.2 Loss, Theft, Destruction or Mutilation of Warrant
Certificates. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to the Warrant Agent of the loss, theft, destruction or mutilation
of any Warrant Certificate, and (a) in the case of such loss, theft, or
destruction upon delivery to the Warrant Agent of an indemnity bond in form and
amount, and issued by a bonding company, reasonably satisfactory to the Company,
or (b) in the case of any such mutilation, upon surrender to and cancellation by
the Warrant Agent of such Warrant Certificate, the Company at its expense will
execute and
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cause the Warrant Agent to countersign and deliver, in lieu thereof, a new
Warrant Certificate of like tenor.
Section 5.3 Transfer Agent; Cancellation of Warrant Certificates;
Unexercised Warrants. Norwest Bank Minnesota, National Association (and any
successor), as transfer agent (the "Transfer Agent"), is hereby irrevocably
authorized and directed at all times to reserve such number of authorized and
unissued shares of Common Stock as shall be sufficient to permit the exercise in
full of all Warrants from time to time outstanding. The Company will keep a
copy of this Warrant Agreement on file with the Transfer Agent. The Warrant
Agent, and any successor thereto, is hereby irrevocably authorized to
requisition from time to time from the Transfer Agent certificates for shares of
Common Stock required for exercise of Warrants. The Company will supply the
Transfer Agent with duly executed certificates for shares of Common Stock for
such purpose and will make available any cash required in settlement of
fractional share interests. All Warrant Certificates surrendered upon the
exercise or redemption of Warrants shall be canceled by the Warrant Agent and
shall thereafter be delivered to the Company. Such canceled Warrant
Certificates, with the purchase form on the reverse thereof duly filled in and
signed, shall constitute conclusive evidence as between the parties hereto of
the numbers of shares of Common Stock which shall have been issued upon
exercises of Warrants. Promptly after the last day on which the Warrants are
exercisable (set forth in Section 2.1 above), the Warrant Agent shall certify to
the Company the aggregate number of Warrants then outstanding and unexercised.
No shares of Common Stock shall be subject to reservation with respect to
Warrants not exercised prior to the time and date identified in Section 2.1
above as the last time and date at which Warrants may be exercised.
ARTICLE VI
TRANSFER AND EXCHANGE OF WARRANT CERTIFICATES
Section 6.1 Warrant Register; Transfer or Exchange of Warrant
Certificates. The Warrant Agent shall cause to be kept at the principal office
of the Warrant Agent a register (the "Warrant Register") in which, subject to
such reasonable regulations as the Company may prescribe, provisions shall be
made for the registration of transfers and exchanges of Warrant Certificates.
Upon surrender for transfer or exchange of any Warrant Certificate, properly
endorsed, to the Warrant Agent, the Warrant Agent at the Company's expense will
issue and deliver to or upon the order of the holder thereof a new Warrant
Certificate of like tenor, in the name of such holder or as such holder (upon
payment by such holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face thereof for the number of shares of Common Stock
called for on the face of the Warrant Certificate so surrendered. Any Warrant
Certificate surrendered for transfer or exchange shall be canceled by the
Warrant Agent and shall thereafter be delivered to the Company.
Section 6.2 Identity of Warrantholders. Until a Warrant Certificate is
transferred in the Warrant Register, the Company and the Warrant Agent may treat
the person in whose name the Warrant Certificate is registered as the absolute
owner thereof and of the Warrants represented thereby for all purposes,
notwithstanding any notice to the contrary, except that, if and when any Warrant
Certificate is properly assigned in blank, the Company
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and the Warrant Agent may (but shall not be obligated to) treat the bearer
thereof as the absolute owner of the Warrant Certificate and of the Warrant
represented thereby for all purposes, notwithstanding any notice to the
contrary.
ARTICLE VII
CONCERNING THE WARRANT AGENT
Section 7.1 Taxes. The Company will, from time to time, promptly pay to
the Warrant Agent, or make provision satisfactory to the Warrant Agent for the
payment of all taxes and charges that may be imposed by the United States or any
State upon the Company or the Warrant Agent upon the transfer or delivery of
shares of Common Stock upon the exercise of Warrants, but the Company shall not
be obligated to pay any tax imposed in connection with any transfer involved in
the delivery of a certificate for shares of Common Stock in any name other than
that of the registered holder of the Warrant Certificate surrendered in
connection with the purchase thereof.
Section 7.2 Replacement of Warrant Agent in Certain Circumstances.
(a) The Warrant Agent may resign its duties and be discharged from
all. further duties and liabilities hereunder after giving 30 days' written
notice to the Company (except that such shorter notice may be given if
approved by the Company). The Company may discharge the Warrant Agent at
any time with or without reason, effective upon 30 days' written notice to
the Warrant Agent (except that such shorter notice may be given if approved
by the Warrant Agent). If the office of Warrant Agent becomes vacant by
resignation, discharge, incapacity to act or otherwise, the Company shall
appoint a new Warrant Agent, the principal office of which shall be in
Minnesota. If the Company shall fail to make such appointment within a
period of 30 days after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Warrant Agent or by the
holder of a Warrant Certificate, then the holders 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 corporation
organized and doing business under the laws of the United States or of the
State of Minnesota and authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by federal or state
authority. Furthermore, such new Warrant Agent shall be of good standing
and shall have its principal office in Minnesota. Any new Warrant Agent
appointed hereunder shall execute, acknowledge and deliver to the Company
an instrument accepting such appointment hereunder and thereupon such new
Warrant Agent without any further act or deed shall become vested with all
the rights, powers, duties and responsibilities of the Warrant Agent
hereunder with like effect as if it had been named herein as the Warrant
Agent, but if for any reason it becomes necessary or expedient to have the
former Warrant Agent execute and deliver any further assurance, conveyance,
act or deed, the same shall be done and shall be legally and validly
executed and delivered by the former Warrant Agent. Not later than the
effective date of any such appointment the Company shall file notice
thereof with the former Warrant Agent. The Company shall promptly give
notice of any such appointment to the holders of the Warrant Certificates
by mail to their addresses as shown in the Warrant Register. Failure to
file or give such notice, or any defect therein, shall not affect the
legality or validity of the appointment of the successor Warrant Agent.
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The Company shall promptly give notice of any such appointment to the
holders of the Warrant Certificates by mail to their addresses as shown in
the Warrant Register. Failure to file or give such notice, or any defect
therein, shall not affect the legality or validity of the appointment of
the successor Warrant Agent.
(b) Any company into which the Warrant Agent or any new Warrant Agent
may be merged or converted or with which it may be consolidated or any
company resulting from any merger, conversion or consolidation to which the
Warrant Agent or any new Warrant Agent shall be a party, shall be the
successor Warrant Agent under this Warrant Agreement without any further
act; provided that if such company would not be eligible for appointment as
a successor Warrant Agent under the provisions of paragraph (a) of this
Section 7.2 the Company shall forthwith appoint a new Warrant Agent in
accordance with such provisions. Any such successor Warrant Agent may
adopt the prior countersignature of any predecessor Warrant Agent and
deliver Warrant Certificates countersigned and not delivered by such
predecessor Warrant Agent or may countersign Warrant Certificates either in
the name of any predecessor Warrant Agent or the name of the successor
Warrant Agent.
Section 7.3 Remuneration of Warrant Agent. The Company will pay the
Warrant Agent reasonable remuneration for its services as Warrant Agent
hereunder and will reimburse the Warrant Agent upon demand for all expenditures
that the Warrant Agent may reasonably incur in the execution of its duties
hereunder.
Section 7.4 Further Assurances. The Company will perform, exercise,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all acts, instruments and assurances as reasonably may be required by
the Warrant Agent for the carrying out or performing by the Warrant Agent of the
provisions of this Warrant Agreement.
Section 7.5 Limitations on Liabilities of the Warrant Agent.
(a) The Warrant Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection of the Warrant Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever, in the performance of its duties under this Warrant
Agreement, the Warrant Agent shall deem it necessary or desirable that
any matter be provided or established, or that any instructions with
respect to the performance of its duties hereunder be given, by the
Company prior to taking or suffering any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established, or
such instructions may be given, by a certificate or instrument signed by
an officer of the Company and delivered to the Warrant Agent; and such
certificate or instrument shall be full authorization to the Warrant
Agent for any action taken or suffered in good faith by it under the
provisions of this Warrant Agreement in reliance upon
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such certificate or instrument; provided, however, that in its discretion
the Warrant Agent may in lieu thereof accept other evidence of such matter
or may require such further or additional evidence as it may deem
reasonable.
(c) The Warrant Agent shall be liable hereunder only for its own
negligence or willful misconduct. The Warrant Agent shall act hereunder
solely as agent, and its duties shall be determined solely by the
provisions hereof. The Company agrees to indemnity the Warrant Agent and
save it harmless against any and all liabilities, including judgments,
costs and counsel fees, for anything done or omitted by the Warrant Agent
in the execution of this Warrant Agreement except as a result of the
Warrant Agent's negligence or willful misconduct.
(d) The Warrant Agent shall not be liable for or by any reason of
any of the statements of fact or recitals contained in this Warrant
Agreement or in the Warrant Certificates (except its countersignature
thereof) or be required to verify the same, but rather all such statements
and recitals are and shall be deemed to have been made by the Company only.
(e) The Warrant Agent shall not be under any responsibility in
respect to the validity or execution of any Warrant Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Warrant
Agreement or in any Warrant Certificate; nor shall it be responsible for
the making of any adjustment in the Purchase Price, or number of shares
issuable upon exercise of the Warrant Certificates or responsible for the
manner, method or amount of any such adjustment or the facts that would
require any such adjustment; nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation
of any shares of Common Stock to be issued pursuant to this Warrant
Agreement or any Warrant Certificate or as to whether any shares of Common
Stock or other securities are or will be duly authorized and validly issued
and fully paid and nonassessable.
Section 7.6 Amendment and Modification. The Warrant Agent may, without
the consent or concurrence of the holders of the Warrant Certificates, by
supplemental agreement or otherwise, join with the Company in making any changes
or corrections in this Warrant Agreement (a) which they shall have been advised
by counsel are required to cure any ambiguity or to correct any defective or
inconsistent provision or clerical omission or mistake or manifest error herein
contained, (b) which add to the obligations of the Company in this Warrant
Agreement further obligations thereafter to be observed by it, or surrender any
right or power reserved to or conferred upon the Company in this Warrant
Agreement, or (c) which do not or will not adversely affect, alter or change the
rights, privileges or immunities of the holders of Warrant Certificates not
provided for under this Warrant Agreement; provided, however, that any term of
this Warrant Agreement or any Warrant Certificate may be changed, waived,
discharged or terminated by an instrument in writing signed by each party
against which enforcement of such chance, waiver, discharge or termination is
sought, or by which the same is to be performed or observed.
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ARTICLE VIII
OTHER MATTERS
Section 8.1 Successors and Assigns. All the covenants and provisions of
this Warrant Agreement by or for the benefit of the Company or the Warrant Agent
shall bind and inure to the benefit of their respective successors and assigns.
Section 8.2 Notices. Any notice or demand authorized by this Warrant
Agreement to be given or made by the Warrant Agent or by the holder of any
Warrant Certificate, to or on the Company shall be sufficiently given or made if
sent by first class or registered mail, postage prepaid, addressed (until
another address is filed in writing by the Company with the Warrant Agent) as
follows:
Jubilee Gaming Enterprises, Inc.
Suite 220
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
Any notice or demand authorized by this Warrant Agreement to be given or made
by the holder of any Warrant Certificate or by the Company to or on the Warrant
Agent shall be sufficiently given or made if sent by first class or registered
mail, postage prepaid, addressed (until another address is filed in writing by
the Warrant Agent with the Company) as follows:
Norwest Bank Minnesota, National Association
Stock Transfer Department
161 North Concord Exchange
X.X. Xxx 000
Xxxxx Xxxxx Xxxx, Xxxxxxxxx 00000
Section 8.3 Governing Law. This Warrant Agreement and the Warrant
Certificates are being delivered in the State of Minnesota and shall be
construed and enforced in accordance with and governed by the laws of such
State, without giving effect to such State's choice of law rules.
Section 8.4 No Benefits Conferred. Nothing in this Warrant Agreement
expressed and nothing that may be implied from any of the provisions hereof is
intended, or shall be construed, to confer upon, or give to, any person or
corporation other than the Company, the Warrant Agent and the holders of the
Warrant Certificates, any right, remedy or claim under or by reason of this
Warrant Agreement or of any covenant, condition, stipulation, promise or
agreement herein; and all covenants, conditions, stipulations, promises and
agreements in this Warrant Agreement shall be for the sole and exclusive benefit
of the Company, the Warrant Agent, their respective successors and the holders
of the Warrant Certificates.
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Section 8.5 Headings. The descriptive headings used in this Warrant
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, this Warrant Agreement has been duly executed by, the
parties hereto as of the day and year first above written.
JUBILEE GAMING ENTERPRISES, INC.
By
------------------------------
Its
-----------------------------
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By
------------------------------
Its
-----------------------------
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EXHIBIT A
THIS WARRANT CERTIFICATE MAY BE
TRANSFERRED SEPARATELY FROM THE COMMON STOCK CERTIFICATE
WITH WHICH IT IS INITIALLY ISSUED
EXERCISABLE ON OR BEFORE, AND VOID AFTER
5:00 P.M. MINNEAPOLIS TIME _________, 2001
No. W-___________ Certificate for _________ Warrants
UNIT CUSIP _____________
WARRANT CUSIP __________
WARRANTS TO PURCHASE COMMON STOCK OF
JUBILEE GAMING ENTERPRISES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MINNESOTA
THIS CERTIFIES that ____________________________________ or assigns, is
the owner of the number of Warrants set forth above, each of which represents
the right to purchase from Jubilee Gaming Enterprises, Inc., a Minnesota
corporation (the "Company"), at any time on or before 5:00 Minneapolis time,
___________, 2001, upon compliance with and subject to the conditions set forth
herein and in the Warrant Agreement hereinafter referred to, one share (subject
to adjustments referred to below) of the Common Stock of the Company (the
"Shares"), by surrendering this Warrant Certificate, with the purchase form on
the reserve side duly executed, at the principal office of Norwest Bank
Minnesota, National Association, or its successor, as warrant agent (the
"Warrant Agent"), and by paying in full, in cash or by certified check payable
to the order of the Company, the purchase price of $6.00 per share.
Upon any exercise of less than all the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder a new Warrant Certificate in
respect of the Warrants as to which this Warrant Certificate was not exercised.
Upon the surrender for transfer or exchange hereof, properly endorsed, to
the Warrant Agent, the Warrant Agent (at the Company's expense) will issue and
deliver to the order of the holder hereof, a new Warrant Certificate or Warrant
Certificates of like tenor, in the name of such holder or as such holder (upon
payment by such holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face thereof for the number of shares of Common Stock
called for on the face hereof.
The Warrant Certificates are issued only as registered Warrant
Certificates. Until this Warrant Certificate is transferred in the Warrant
Register, the Company and the Warrant Agent may treat the person in whose name
this Warrant Certificate is registered as the
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absolute owner hereof and of the Warrants represented hereby for all purposes,
notwithstanding any notice to the contrary.
This Warrant Certificate is issued under the Warrant Agreement dated as of
____________, 1997, between the Company and the Warrant Agent and is subject to
the terms and provisions contained in said Warrant Agreement, to all of which
terms and provisions the registered holder of this Warrant Certificate consents
by acceptance hereof. Copies of said Warrant Agreement are on file at the
principal office of the Warrant Agent in Minneapolis, Minnesota, and may be
obtained by written request to the Warrant Agent.
The number of Shares receivable upon the exercise of the Warrants
represented by this Warrant Certificate and the purchase price per share are
subject to adjustment upon the happening of certain events specified in the
Warrant Agreement (which provisions are contained in Article III of the Warrant
Agreement and are hereby incorporated by reference).
No fractional Shares of the Company's Common Stock will be issued upon the
exercise of Warrants. As to any final fraction of a share which a holder of
Warrants exercised in the same transaction would otherwise be entitled to
purchase on such exercise, the Company shall pay a cash adjustment in lieu of
any fractional Share determined as provided in the Warrant Agreement.
The Warrants may be redeemed by the Company in whole, at any time on or
after ___________, 1997, and on or before ____________, 2001, at a redemption
price of $.01 per Warrant, upon notice of such redemption as set forth below,
provided that (a) the last reported sale price of the Common Stock on a
national securities exchange, if the Common Stock shall be listed or admitted
to unlisted trading privileges on a national securities exchange, or (b) the
closing bid price of the Common Stock on the Nasdaq system, if the Common Stock
is not so listed or admitted to unlisted trading privileges, exceeds $6.00 per
share (subject to adjustment as provided in the Warrant Agreement) for any 20
consecutive trading days prior to the date such notice of redemption is given.
Notice of redemption shall be mailed not less than 30 days prior to the date
fixed for redemption to the holders of Warrants at their last registered
addresses. If notice of redemption shall have been given as provided in the
Warrant Agreement and cash sufficient for the redemption to be deposited by the
Company for that purpose, the exercise rights of the Warrants identified for
redemption shall expire at the close of business on such date of redemption
unless extended by the Company.
This Warrant Certificate shall not entitle the holder hereof to any of the
rights of a holder of Common Stock of the Company, including, without
limitation, the right to vote, to receive dividends and other distributions, to
exercise any preemptive right, or to receive any notice of or to attend
meetings of holders of Common Stock or any other proceedings of the Company.
Shares may not be issued to holder upon exercise of this Warrant if, at
the time of exercise, a registration statement with respect to such Shares is
not effective under the
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Securities Act or if the Common Stock underlying the Warrants is not qualified
or exempt from qualification in the state wherein the holder of the Warrants
resides.
This Warrant Certificate shall be void and the Warrants and any rights
represented hereby shall cease unless exercised on or before 5:00 P.M.
Minneapolis time on ____________, 2001, unless extended by the Company.
This Warrant Certificate shall not be valid for any purpose until it shall
have been countersigned by the Warrant Agent.
WITNESS the facsimile signatures of the Company's duly authorized officers.
Dated:________________________ JUBILEE GAMING ENTERPRISES, INC.
By_____________________________
Xxxxx X. Xxxxxxx, Chief Executive
Officer
Attest:
______________________________
Xxxxxxxx X. XxXxxxx, Secretary
COUNTERSIGNED AND REGISTERED:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
as Warrant Agent
By_____________________________
Authorized Signature
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[REVERSE OF WARRANT CERTIFICATE]
THE ARTICLES OF INCORPORATION OF THE CORPORATION GRANT TO THE BOARD OF DIRECTORS
THE POWER TO ESTABLISH MORE THAN ONE CLASS OR SERIES OF SHARES AND TO FIX THE
RELATIVE RIGHTS AND PREFERENCES OF ANY SUCH DIFFERENT CLASS OR SERIES. THE
CORPORATION WILL FURNISH TO ANY SHAREHOLDER UPON REQUEST AND WITHOUT CHARGE A
FULL STATEMENT OF THE DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS
OF THE SHARES OF EACH CLASS OR SERIES AUTHORIZED TO BE ISSUED, SO FAR AS THEY
HAVE BEEN DETERMINED, AND THE AUTHORITY OF THE BOARD TO DETERMINE THE RELATIVE
RIGHTS AND PREFERENCES OF SUBSEQUENT CLASSES OR SERIES.
TO: Jubilee Gaming Enterprises, Inc.
c/o Norwest Bank Minnesota, National Association
Warrant Agent
PURCHASE FORM
(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO EXERCISE WARRANT
CERTIFICATES)
The undersigned hereby irrevocably elects to exercise ____________* of the
Warrants represented by the Warrant Certificate and to purchase for cash the
Shares issuable upon the exercise of said Warrants, and herewith makes payment
of $____________ therefor, and requests that certificates for such Shares be
issued in the name of
PLEASE INSERT SOCIAL SECURITY OR _____________________________
OTHER IDENTIFYING NUMBER OF (Print Name)
REGISTERED HOLDER OF CERTIFICATE
_______________________________ _____________________________
(Address)
Dated:_________________________ Signature(s)_________________
_____________________________
____________________
* Insert here the number of Warrants evidenced on the face of this Warrant
Certificate (or, in the case of a partial exercise, the portion thereof
being exercised) without making any adjustment for additional Common Stock
or any other securities or property or cash which, pursuant to the
adjustment provisions referred to in this Warrant Certificate, may be
deliverable upon exercise.
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ASSIGNMENT FORM
(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO TRANSFER WARRANT
CERTIFICATES)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
__________** of the Warrants represented by this Warrant Certificate unto
PLEASE INSERT SOCIAL SECURITY OR _________________________________
OTHER IDENTIFYING NUMBER OF (Print Name)
ASSIGNEE
______________________________ _________________________________
(Address)
and does hereby irrevocably constitute and appoint __________________ Attorney
to transfer this Warrant Certificate on the records of the Company with full
power of substitution in the premises.
Dated:_______________________ Signature(s)______________________
__________________________________
Signature(s)
Guaranteed:_______________________
____________________
** Insert here the number of warrants evidenced in the face of this Warrant
Certificate (or, in the case of a partial assignment, the portion thereof
being assigned) without making any adjustment for additional Common Stock
or any other securities or property or cash which, pursuant to the
adjustment provisions referred to in this Warrant Certificate, may be
deliverable upon exercise.
NOTICE
THE SIGNATURE(S) TO THE PURCHASE FORM OR THE ASSIGNMENT FORM MUST
CORRESPOND TO THE NAME(S) AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE
IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY DAMAGE WHATSOEVER.
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