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EXHIBIT 4.8
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR ANY STATE SECURITIES LAWS AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
OFFERED, PLEDGED OR OTHERWISE DISTRIBUTED
FOR VALUE UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR
LAWS COVERING SUCH SECURITY OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL FOR
THE HOLDER OF THIS SECURITY
(SATISFACTORY TO THE COMPANY AND ITS LEGAL
COUNSEL) STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT, PLEDGE OR
DISTRIBUTION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE
SECURITIES ACT OF 1933 AND ALL
APPLICABLE STATE SECURITIES LAWS.
WARRANT
TO PURCHASE
COMMON SHARES
OF
LEARNING VENTURES INTERNATIONAL, INC.
FOR VALUE
RECEIVED, Legg Mason Wood Walker, Incorporated, a Maryland
corporation, is entitled to subscribe for
and purchase from Learning Ventures
International, Inc., a Minnesota
corporation (the "Company"), up to One Hundred
Thirty One Thousand Two Hundred Thirty
Eight (131.238) duly authorized, fully
paid and nonassessable Common Shares of the
Company, $.10 par value per share,
or such greater or lesser number of such
shares as may be determined by
application of the anti-dilution provisions
of this warrant, at the price of
Five and 40/100 Dollars ($5.40) per share,
subject to adjustments as noted below
(the "Warrant Exercise Price").
This
warrant is subject to the following provisions, terms and
conditions:
1.
Expiration. This warrant shall expire on June 16, 2005. Subject to
the
foregoing, this warrant may be exercised,
in whole or in part, by the holder
hereof at any time or from time to time
prior to the expiration hereof.
2.
Exercise. The rights represented by this warrant may be exercised
by
the holder hereof, in whole or in part, by
written notice of exercise delivered
to the Company and by the surrender of this
warrant (properly endorsed if
required) at the principal office of the
Company and upon payment to it by
either (i) cash, certified check or bank
draft of the purchase price for the
shares to be purchased, or (ii) delivery of
certificates for the Company's
Common Shares already owned by the holder
having a fair market value equal to
the purchase price for the shares to be
purchased. "Fair market value" per
Common Share on any date shall be (A) the
average of the daily closing prices of
the Common Shares for the thirty (30)
consecutive trading days preceding such
date on the principal national securities
exchange on which the Common Shares
are listed or admitted to trading or, (B)
if not so listed or admitted, the
average of the medians of the highest
reported bid and lowest reported asked
quotations for the Common shares for each
trading day during such period as
furnished by the National Association of
Securities Dealers, Inc. or its
successor, or, (C) if not so listed,
admitted or quoted, as determined in good
faith by the Company's Board of Directors
using customary valuation methods,
provided that no
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representative, delegate or agent of the
holder on the Company's Board of
Directors shall be entitled to vote on the
determination of such fair market
value, and provided further that the Board
of Directors shall not be required to
retain outside advisors in making its
determination. The shares to be purchased
shall be deemed to be issued as of the
close of business on the date on which
this warrant has been exercised by payment
to the Company of the Warrant
Exercise Price. Certificates for the shares
so purchased, bearing the
restrictive legend set forth at the
beginning of this warrant, shall be
delivered to the holder within ten (10)
days after the rights represented by
this warrant shall have been so exercised,
and, unless this warrant has expired,
a new warrant representing the number of
shares, if any, with respect to which
this warrant has not been exercised shall
also be delivered to the holder hereof
within such time. No fractional shares
shall be issued upon the exercise of this
warrant, but in lieu of any such fractional
share the Company shall make a cash
payment therefor equal in amount to the
product of the applicable fraction
multiplied by the current fair market value
per Common Share.
3. Right
to Convert Warrant. The holder of this warrant shall have the
right to require the Company to convert
this warrant (the "Conversion Right"),
in whole or in part, at any time prior to
its expiration, into the Company's
Common Shares as provided for in this
Section 3. Upon exercise of the Conversion
Right, the Company shall deliver to the
holder (without payment by the holder of
any Warrant Exercise Price) that number of
the Company's Common Shares equal to
the quotient obtained by dividing (i) the
value of the warrant at the time the
Conversion Right is exercised (determined
by subtracting the aggregate Warrant
Exercise Price for the shares subject to
the warrant in effect immediately prior
to the exercise of the Conversion Right
from the aggregate fair market value of
the shares subject to the warrant
immediately prior to the exercise of the
Conversion Right) by (ii) the fair market
value of one Common Share of the
Company immediately prior to the exercise
of the Conversion Right and
multiplying the quotient so obtained by a
fraction equal to the portion of this
Warrant which the holder desires to
convert. For purposes hereof, "fair market
value" per Common Share shall be determined
as provided in Section 2. The
Conversion Right may be exercised by the
holder hereof, in whole or in part, by
written notice of exercise delivered to the
Company and by the surrender of this
warrant (properly endorsed if required) at
the principal office of the Company.
The shares to be issued upon exercise of
the Conversion Right shall be deemed to
be issued as of the close of business on
the date on which the Conversion Right
has been exercised by written notice and
surrender of this warrant to the
Company. Certificates for the shares so
issued, bearing the restrictive legend
set forth at the beginning of this warrant,
together with cash in lieu of any
fractional share shall be delivered to the
holder within ten (10) days after the
Conversion Right shall have been so
exercised, and, unless this warrant has
expired, a new warrant representing the
number of shares, if any, with respect
to which the Conversion Right has not been
exercised shall also be delivered to
the holder hereof within such time. No
fractional shares shall be issued upon
the exercise of the Conversion Right, but
in lieu of any such fractional share
the Company shall make a cash payment
therefor equal in amount to the product of
the applicable fraction multiplied by the
current fair market value per Common
Share.
4.
Covenants of the Company. The Company covenants and agrees that
all
shares that may be issued upon the exercise
of the rights represented by this
warrant shall, upon issuance, be duly
authorized and issued, fully paid and
nonassessable shares. The Company further
covenants and agrees that during the
period within which the rights represented
by this warrant may be exercised, the
Company will at all times have authorized,
and reserved for the
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purpose of issue or transfer upon exercise
of the subscription rights evidenced
by this warrant, a sufficient number of its
Common Shares to provide for the
exercise of the rights represented by this
warrant, and will not permit the par
value, if any of its Common Shares to
exceed the Warrant Exercise Price. If the
Company shall list its Common Shares on any
securities exchange it will, at its
expense, list, or obtain approval for
listing upon issuance of, the Common
Shares issuable under this warrant. The
Company shall similarly list, or obtain
approval for listing upon issuance of, any
other security issuable under this
warrant if such other security has been
listed on any securities exchange.
5.
Adjustments to Warrant Exercise Price. The Warrant Exercise Price
shall
be subject to adjustment from time to time
as hereinafter provided in this
Section 5:
(a) If the
Company at any time divides its outstanding Common Shares into
a greater number of shares (whether
pursuant to a stock split, stock dividend or
otherwise), and conversely, if its
outstanding Common Shares are combined into a
smaller number of shares, the Warrant
Exercise Price in effect immediately prior
to such division or combination shall be
proportionately adjusted to reflect the
reduction or increase in the value of each
such Common Share.
(b) If any
capital reorganization or reclassification of the capital stock
of the Company, or consolidation or merger
of the Company with another
corporation, or the sale of all or
substantially all of its assets to another
corporation shall be effected in such a way
that holders of the Company's Common
Shares shall be entitled to receive stock,
securities or assets with respect to
or in exchange for such Common Shares,
then, as a condition of such
reorganization, reclassification,
consolidation, merger or sale, the holder of
this warrant shall have the right to
purchase and receive upon the basis and
upon the terms and conditions specified in
this warrant and in lieu of the
Common Shares of the Company immediately
theretofore purchasable and receivable
upon the exercise of the rights represented
hereby, such shares of stock other
securities or assets as would have been
issued or delivered to the holder of
this warrant if it had exercised this
warrant and had received such Common
Shares prior to such reorganization,
reclassification, consolidation, merger or
sale. The Company shall not effect any such
consolidation, merger or sale,
unless prior to the consummation thereof
the successor corporation (if other
than the Company) resulting from such
consolidation or merger or the corporation
purchasing such assets shall assume by
written instrument executed and mailed to
the registered holder of this warrant at
the last address of such holder
appearing on the books of the Company, the
obligation to deliver to such holder
such shares of stock, securities or assets
as, in accordance with the foregoing
provisions, such holder may be entitled to
purchase.
(c) Upon
each adjustment of the Warrant Exercise Price, the holder of
this
warrant shall thereafter be entitled to
purchase, at the Warrant Exercise Price
resulting from such adjustment, the number
of shares obtained by multiplying the
Warrant Exercise Price in effect
immediately prior to such adjustment by the
number of shares purchasable pursuant
hereto immediately prior to such
adjustment and dividing the product thereof
by the Warrant Exercise Price
resulting from such adjustment.
(d) Upon
any adjustment of the Warrant Exercise Price, the Company shall
give written notice thereof, by first class
mail, postage prepaid, addressed to
the registered holder of
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this warrant at the address of such holder
as shown on the books of the Company,
which notice shall state the Warrant
Exercise Price resulting from such
adjustment and the increase or decrease, if
any, in the number of shares
purchasable at such price upon the exercise
of this warrant, setting forth in
reasonable detail the method of calculation
and the facts upon which such
calculation is based.
6. No
Voting Rights. This warrant shall not entitle the holder hereof
to
any voting rights or other rights as a
shareholder of the Company.
7.
Registration Rights. If, at any time commencing after the date
hereof,
the Company proposes to register any of its
securities for money under the
Securities Act of 1933 (the "Act"), other
than pursuant to Form S-4, Form S-8 or
a comparable registration statement and
other than in connection with demand
registrations initiated by other security
holders of the Company whose rights
exclude or restrict (to the extent of such
restriction) participatio
