EXHIBIT B
Exhibit 10.48
Void after February 15, 2004*
This Warrant and any shares acquired upon the
exercise of this Warrant have not been registered under the
Securities Act of 1933. This Warrant and such shares may not
be sold or transferred in the absence of such registration or
an exemption therefrom under said Act. This Warrant and such
shares may not be transferred except upon the conditions
specified in this Warrant, and no transfer of this Warrant or
such shares shall be valid or effective unless and until such
conditions shall have been complied with.
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COMMON STOCK PURCHASE WARRANT
Provo International, Inc. f/k/a Frontline Communications
Corporation, a Delaware corporation (the "Company"), having its principal office
at Xxx Xxxx Xxxx Xxxxx, 0xx Xxxxx, X.X. Box 1548, Pearl River, New York, 10965
hereby certifies that, for value received, Scarborough Ltd., or assigns, is
entitled, subject to the terms set forth below, to purchase from the Company at
any time on or from time to time after November 25, 2003 and before 5:00 P.M.,
New York City time, on February 15, 2004, (i) 1,666,666 shares of Common Stock
of the Company (also referred to herein as "B Warrant Shares") and (ii) a
warrant ("B2 Warrant") exercisable at $0.01 to purchase 1,250,000 shares of
Common Stock of the Company in the form attached hereto as Exhibit A, at $.30
per B Warrant Share (the "Purchase Price"). The number and character of such
shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein.
As used herein the following terms, unless the context
otherwise requires, have the following respective meanings:
(a) The term "Company" includes the Company and any
corporation which shall succeed to or assume the obligations of the
Company hereunder.
(b) The term "Common Stock" includes all stock of any class or
classes (however designated) of the Company, the holders of which shall
have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends
after the payment of dividends and distributions on any shares entitled
to preference, and the holders of which shall ordinarily, in the
absence of contingencies, be entitled to vote for the election of a
majority of directors of the
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* Or such later date as provided pursuant to paragraph 21.
Company (even though the right so to vote has been suspended by the
happening of such a contingency).
(c) The "Original Issue Date" is November 25, 2003, the date
as of which this Warrant was first issued.
(d) The term "Other Securities" refers to any stock (other
than Common Stock) and other securities of the Company or any other
person (corporate or otherwise) which the holder of the Warrant at any
time shall be entitled to receive, or shall have received, upon the
exercise of this Warrant, in lieu of or in addition to Common Stock, or
which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities
pursuant to section 6 or otherwise. Other Securities shall include, but
not be limited to the B2 Warrants and shares of Common Stock issuable
upon exercise of the B-2 Warrants.
(e) The term "Purchase Price per share" shall be the then
applicable exercise price for one share of Common Stock.
(f) The term "Owner" refers to a record owner of this Warrant
(or subdivision thereof) or the holder of any Common Stock or Other
Securities issuable upon exercise of this Warrant (or subdivision
thereof).
(g) The terms "registered" and "registration" refer to a
registration effected by filing a registration statement in compliance
with the Securities Act, to permit the disposition of Common Stock (or
Other Securities) issued or issuable upon the exercise of this Warrant,
and any post-effective amendments and supplements filed or required to
be filed to permit any such disposition.
(h) The term "Securities Act" means the Securities Act of
1933, as amended, as the same shall be in effect at the time.
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1. REGISTRATION, ETC. The Company has agreed to register the Common
Stock issuable upon exercise of this warrant, and the Common Stock issuable upon
exercise of the B-2 Warrants; pursuant to the terms of a Subscription Agreement
by and between the Company and the Owner dated November 25, 2003 ("Subscription
Agreement").
2. SALE OR EXERCISE WITHOUT REGISTRATION. If, at the time of any
exercise, transfer or surrender for exchange of this Warrant or of Common Stock
(or Other Securities) previously issued upon the exercise of this Warrant, or
Common Stock (or Other Securities) shall not be registered under the Securities
Act, the Company may require, as a condition of allowing such exercise, transfer
or exchange, that the holder or transferee of this Warrant or Common Stock (or
Other Securities), as the case may be, furnish to the Company a satisfactory
opinion of counsel to the effect that such exercise, transfer or exchange may be
made without registration under the Securities Act, provided that the
disposition thereof shall at all times be within the control of such holder or
transferee, as the case may be, and provided further that nothing contained in
this section 2 shall relieve the Company from complying with any request for
registration pursuant to section 1 hereof. The first holder of this Warrant
represents to the Company that it is acquiring this Warrant for investment and
not with a view to the distribution thereof.
3. EXERCISE OF WARRANT; PARTIAL EXERCISE.
3.1 EXERCISE IN FULL. Subject to the provisions hereof, this
Warrant may be exercised in full by the holder hereof by surrender of this
Warrant, with the form of subscription at the end hereof duly executed by such
holder, to the Escrow Agent (as defined in the Subscription Agreement to be
released, to the Company pursuant to the terms and conditions of the Escrow
Agreement (as defined in the Subscription Agreement) in the amount obtained by
multiplying the number of shares of Common Stock called for on the face of this
Warrant (without giving effect to any adjustment therein) by the Purchase Price.
3.2 PARTIAL EXERCISE. Subject to the provisions hereof, this
Warrant may be exercised in part by surrender of this Warrant in the manner and
at the place provided in subsection 3.1 except that the amount payable by the
holder upon any partial exercise shall be the amount obtained by multiplying (a)
the number of shares of Common Stock (without giving effect to any adjustment
therein) designated by the holder in the subscription at the end hereof by (b)
the Purchase Price. Upon any such partial exercise, the Company at its expense
will forthwith issue and deliver to or upon the order of the holder hereof a new
Warrant or Warrants of like tenor, in the name of the holder hereof or as such
holder (upon payment by such holder of any applicable transfer taxes) may
request, 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 this Warrant minus the
number of such shares designated by the holder in the subscription at the end
hereof.
3.3 ISSUE OF B2 WARRANT. Upon full or partial exercise of this
Warrant, the B2 Warrant shall be issued to the Owner of this Warrant.
3.4 COMPANY TO REAFFIRM OBLIGATIONS. The Company will, at the
time of any exercise of this Warrant, upon the request of the holder hereof,
acknowledge in writing its continuing obligation to afford to such holder any
rights (including, without limitation, any right
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to registration of the shares of Common Stock or Other Securities issued upon
such exercise) to which such holder shall continue to be entitled after such
exercise in accordance with the provisions of this Warrant, PROVIDED that if the
Company shall fail to take any of the actions specified by this paragraph, such
failure shall not affect the continuing obligation of the Company to afford such
holder any such rights
4. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. As soon
as practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) days thereafter, the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the
name of the holder hereof, or as such holder (upon payment by such holder of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of full paid and non-assessable shares of Common Stock (or Other
Securities) 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,
cash equal to such fraction multiplied by the then current market value of one
full share, together with any other stock or other securities and property
(including cash, where applicable) to which such holder is entitled upon such
exercise pursuant to section 5 or otherwise and such certificates shall be
delivered to the Escrow Agent (as defined in the Subscription Agreement) to be
held and released pursuant to the terms of an Escrow Agreement (as defined in
the Subscription Agreement).
5. ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK, PROPERTY, ETC.,
RECLASSIFICATION, ETC. In case at any time or from time to time after the
Original Issue Date the holders of Common Stock (or Other Securities) shall have
received, or (on or after the record date fixed for the determination of
stockholders eligible to receive) shall have become entitled to receive, without
payment therefor
(a) other or additional stock or other securities or property
(other than cash) by way of dividend, or
(b) any cash paid or payable (including, without limitation,
by way of dividend), or
(c) other or additional (or less) stock or other securities or
property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate rearrangement,
then, and in each such case the holder of this Warrant, upon the exercise hereof
as provided in section 3, shall be entitled to receive the amount of stock and
other securities and property (including cash in the cases referred to in
subdivisions (b) and (c) of this section 5) which such holder would hold on the
date of such exercise if on the Original Issue Date he had been the holder of
record of the number of shares of Common Stock called for on the face of this
Warrant as well as the number of shares of Common Stock issuable upon exercise
of the B-2 Warrant and had thereafter, during the period from the Original Issue
Date to and including the date of such exercise, retained such shares and all
such other or additional (or less) stock and other securities and property
(including cash in the cases referred to in subdivisions (b) and (c) of this
section 5) receivable by him as aforesaid during such period, giving effect to
all adjustments called for during such period by sections 6 and 7 hereof.
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6. REORGANIZATION, CONSOLIDATION, MERGER, ETC.
In case the Company after the Original Issue Date shall (a)
effect a reorganization, (b) consolidate with or merge into any other person, or
(c) transfer all or substantially all of its properties or assets to any other
person under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, the holder of this Warrant, upon the exercise
hereof as provided in section 3 at any time after the consummation of such
reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall be entitled to receive (and the Company
shall be entitled to deliver), in lieu of the Common Stock (or Other Securities)
issuable upon such exercise prior to such consummation or such effective date,
the stock and other securities and property (including cash) to which such
holder would have been entitled upon such consummation or in connection with
such dissolution, as the case may be, if such holder has so exercised this
Warrant and the B-2 Warrant immediately prior thereto, all subject to further
adjustment thereafter as provided in sections 5 and 7 hereof.
7. OTHER ADJUSTMENTS.
7.1 GENERAL. In any case to which sections 5 and 6 hereof are
not applicable, where the Company shall issue or sell shares of its Common Stock
after the Original Issue Date and prior to the expiration of this Warrant, then
the Purchase Price in effect hereunder shall simultaneously with such issuance
or sale be reduced to equal the price at which the Company sells or issues
Common Stock subsequent to the Original Issue Date, provided that such price is
lower than the Purchase Price, and the number of shares of Common Stock issuable
upon exercise hereof shall be increased so that the percentage of the Company
represented by the shares of Common Stock issuable upon exercise of this Warrant
is not reduced as a result of such issuance or sale.
7.2 CONVERTIBLE SECURITIES. In case the Company shall issue or
sell any securities convertible into Common Stock of the Company ("Convertible
Securities") after the date hereof, then such issue or sale shall be deemed to
be an issue or sale (as of the date of issue or sale of such Convertible
Securities) of such maximum number of shares of Common Stock that may be
issuable upon conversion of the Convertible Securities, provided that, if such
Convertible Securities shall by their terms provide for a decrease or decreases,
with the passage of time, in the conversion rate or rate of exchange upon the
conversion or exchange thereof, the number of shares deemed issued or sold upon
the issuance or sale of such Convertible Securities shall, forthwith upon any
such decrease becoming effective, be readjusted to reflect the same, and
provided further, that upon the expiration of such rights of conversion or
exchange of such Convertible Securities, if any thereof shall not have been
exercised, the adjusted Purchase Price per share and the number of shares of
Common Stock and other Securities issuable upon exercise of this Warrant shall
forthwith be readjusted and thereafter be the price and number of shares which
would have been in effect had an adjustment been made on the basis that the only
shares of Common Stock so issued or sold were issued or sold upon the conversion
of exchange of such Convertible Securities.
7.3 RIGHTS AND OPTIONS. In case the Company shall grant any
rights or options to subscribe for, purchase or otherwise acquire Common Stock,
then the granting of such rights
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or options shall be deemed to be an issue or sale (as of the date of the
granting of such rights or options) of such maximum number of shares of Common
Stock issuable upon exercise of such rights or options, provided that, if such
rights or options shall by their terms provide for an increase or increases,
with the passage of time, in the number of shares issuable by the Company upon
the exercise thereof, the number of shares of Common Stock deemed issued upon
such grant shall, forthwith upon any such increase becoming effective, be
readjusted to reflect the same, and provided, further, that upon the expiration
of such rights or options, if any thereof shall not have been exercised, the
adjusted Purchase Price per share and the number of shares issuable upon
exercise of this Warrant and the B-2 Warrant shall forthwith be readjusted and
thereafter be the price which it would have been had an adjustment been made on
the basis that the only shares of Common Stock so issued or sold were those
issued or sold upon the exercise of such rights or options.
8. CONVERSION LIMITATION. In order to comply with rules of the American
Stock Exchange relating to shareholder approval of a transaction by an issuer
other than in a public offering, this Warrant together with the Shares and
Warrant Shares issued pursuant to the Subscription Agreement shall not be
exercisable into the number of shares of Common Stock that, in the aggregate,
would result in the issuance of more than 19.9% of the shares of Common Stock
outstanding immediately prior to the transaction contemplated by the
Subscription Agreement (the "Conversion Limitation") until such time as the
Company receives shareholder approval of the transaction (the "Approval"). The
Company agrees to seek the Approval after December 12, 2003 but no later than
January 20, 2004. The Company shall have received proxies from each of the
executive officers and directors of the Company agreeing to vote in favor of the
Approval.
9. FURTHER ASSURANCES. The Company will take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable shares of stock upon the exercise of Warrant and
the B-2 Warrant from time to time outstanding.
10. ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable upon the exercise of this Warrant, the Company at its expense will
promptly cause the Company's regularly retained auditor to compute such
adjustment or readjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based, and the
number of shares of Common Stock outstanding or deemed to be outstanding. The
Company will forthwith mail a copy of each such certificate to the holder of
this Warrant.
11. NOTICES OF RECORD DATE, ETC. In the event of
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash
dividend payable out of earned surplus of the Company) or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
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(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the
Company to or consolidation or merger of the Company with or into any
other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares
of stock of any class or any other securities, or any right or option
to subscribe for, purchase or otherwise acquire any shares of stock of
any class or any other securities (other than the issue of Common Stock
on the exercise of this Warrant), then and in each such event the
Company will mail or cause to be mailed to the holder of this Warrant a
notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating
the amount and character of such dividend, distribution or right, (ii)
the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution,
liquidation or winding-up is to take place, and the time, if any, as of
which the holders of record of Common Stock (or Other Securities) shall
be entitled to exchange their shares of Common Stock (or Other
Securities) for securities or other property deliverable upon such
reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up, and
(iii) the amount and character of any stock or other securities, or
rights or options with respect thereto, proposed to be issued or
granted, the date of such proposed issue or grant and the persons or
class of persons to whom such proposed issue or grant and the persons
or class of persons to whom such proposed issue or grant is to be
offered or made. Such notice shall be mailed at least 20 days prior to
the date therein specified.
12. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company will at all times reserve and keep available, solely for issuance and
delivery upon the exercise of this Warrant, all shares of Common Stock (or Other
Securities) from time to time issuable upon the exercise of this Warrant and the
B-2 Warrant.
13. LISTING ON SECURITIES EXCHANGES, REGISTRATION. If the Company at
any time after the Original Issue Date shall list any Common Stock on any
national securities exchange and shall register such Common Stock under the
Securities Exchange Act of 1934 (as then in effect, or any similar statute then
in effect), the Company will, at its expense, simultaneously list on such
exchange, upon official notice of issuance upon the exercise of this Warrant,
and maintain such listing of all shares of Common Stock from time to time
issuable upon the exercise of this Warrant, and the Company will so list on any
national securities exchange, will so register and will maintain such listing
of, any Other Securities if and at the time that any securities of like class or
similar type shall be listed on such national securities exchange by the
Company.
14. EXCHANGE OF WARRANTS. Subject to the provisions of section 2
hereof, upon surrender for exchange of this Warrant, properly endorsed, to the
Company, the Company at its own expense will issue and deliver to or upon the
order of the holder thereof a new Warrant of like tenor, in the name of such
holder or as such holder (upon payment by such holder of any
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applicable transfer taxes) may direct, calling in the aggregate on the face or
faces thereof for the number of shares of Common Stock called for on the face of
this Warrant.
15. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
16. WARRANT AGENT. The Company may, by written notice to each holder of
this Warrant, appoint an agent having an office in New York, New York, for the
purpose of issuing Common Stock (or Other Securities) upon the exercise of this
Warrant pursuant to section 3, exchanging this Warrant pursuant to section 14,
and replacing this Warrant pursuant to section 14, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall
be made at such office by such agent.
17. REMEDIES. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
18. NEGOTIABILITY, ETC. This Warrant is issued upon the following
terms, to all of which each holder or owner hereof by the taking hereof consents
and agrees:
(a) subject to the provisions hereof, title to this Warrant
may be transferred by endorsement (by the holder hereof executing the
form of assignment at the end hereof) and delivery in the same manner
as in the case of a negotiable instrument transferable by endorsement
and delivery;
(b) subject to the foregoing, any person in possession of this
Warrant properly endorsed is authorized to represent himself as
absolute owner hereof and is empowered to transfer absolute title
hereto by endorsement and delivery hereof to a bona fide purchaser
hereof for value, each prior taker or owner waives and renounces all of
his equities or rights in this Warrant in favor of each such bona fide
purchaser and each such bona fide purchaser shall acquire absolute
title hereto and to all rights represented hereby, and
(c) until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to
the contrary.
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19. NOTICES, ETC. All notices and other communications from the Company
to the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder, or, until an address is so furnished, to
and at the address of the last holder of this Warrant who has so furnished an
address to the Company.
20. MISCELLANEOUS. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant is being delivered in the State of New York and shall be
construed and enforced in accordance with and governed by the laws of such
State. The headings in this Warrant are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.
21. EXTENDED EXPIRATION.
The right to exercise this Warrant shall expire at 5.00 P.M.,
New York City time , on February 15, 2004, provided, however, that if a
registration statement has not been filed or declared effective providing for
the registration of the shares of Common Stock issuable upon exercise of the B-2
Warrants prior to the expiration date of the right to exercise this Warrant,
then the right to exercise this Warrant shall be extended and shall expire
forty-five (45) days after the effective date of such registration statement.
22. ASSIGNABILITY. This Warrant is fully assignable at any time.
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Dated: January 27, 2004
Provo International, Inc. f/k/a
Frontline Communications Corporation
By: /s/ Xxxxxxx X. Xxxx-Xxxxxxxx
Name: Xxxxxxx X. Xxxx-Xxxxxxxx
Title: CEO
[Corporate Seal]
Attest:
/s/ Xxx Xxxxxx-Xxxx
Secretary
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FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: Provo International, Inc. f/k/a
Frontline Communications Corporation
One Blue Hill Plaza, 7th Floor
P.O. Box 1548 Pearl River, New York 10965
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, * shares of Common Stock of Provo International, Inc. f/k/a
Frontline Communications Corporation and herewith makes payment of $ _____
therefor, and requests that the certificates for such shares be issued in the
name of, and delivered to, ________________________, whose address is
___________________________________.
Dated:
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(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
(Address)
* Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised), in either case without making any adjustment
for additional Common Stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of the
Warrant, may be deliverable upon exercise.
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FORM OF ASSIGNMENT
(To be signed only upon transfer of Warrant)
For value received, the undersigned hereby sells, assigns and
transfers unto ________________________________ the right represented by the
within Warrant to purchase shares of Common Stock of Provo International, Inc.
f/k/a Frontline Communications Corporation, which the within Warrant relates,
and appoints _____________ as Attorney-in-Fact to transfer such right on the
books of ___________________ with full power of substitution in the premises.
The Warrant being transferred hereby is the Common Stock Purchase Warrant issued
by Provo International, Inc. f/k/a Frontline Communications Corporation, as of
November 25, 2003, and amended on January __, 2004.
Dated:
-----------------
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant)
(Address)
Signature guaranteed by a Bank or
Trust Company having its principal
office in New York City or by a
Member Firm of the New York or
American Stock Exchange
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