WARRANT AGREEMENT
BETWEEN
FRONTLINE COMMUNICATIONS CORPORATION
AND
PRIME CHARTER LTD.
DATED AS OF _________, 2000
WARRANT AGREEMENT, dated as of ________, 2000 (the "Effective Date"),
between FRONTLINE COMMUNICATIONS CORPORATION, a Delaware corporation (the
"Company"), and PRIME CHARTER LTD., a Delaware corporation ("Prime Charter").
The Company proposes to sell to Prime Charter and/or its designee(s)
warrants (the "Warrants") to purchase an aggregate of 100,000 shares (the
"Warrant Shares") of the Company's Series B Convertible Preferred Stock, par
value $.01 per share (the "Preferred Stock"), in connection with a public
offering by the Company of 1,000,000 shares of Preferred Stock (the "Offering")
pursuant to a registration statement (the "Registration Statement") on Form SB-2
(File No. 333-92969) filed by the Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act").
THEREFORE, in consideration of the mutual undertakings contained
herein, the Company and Prime Charter hereby agree as follows:
1. Issuance of Warrants. Concurrently with the initial closing (the
"Closing") under the Underwriting Agreement of even date herewith between the
Company and Prime Charter, as representative of the several underwriters named
therein (the "Underwriting Agreement"), relating to the Offering, the Company
shall issue, sell and deliver the Warrants to Prime Charter and/or, at Prime
Charter's direction, to one or more underwriters or other members of the
National Association of Securities Dealers, Inc. that participate in the
Offering and/or the bona fide officers or partners of Prime Charter or such
other participants (each, a "Permitted Designee") for a purchase price of $.0001
per Warrant. Each certificate for Warrants (a "Warrant Certificate") shall be
substantially in the form of Annex A attached hereto.
2. Registration. The Company shall maintain a register for the Warrants
at its principal executive offices for the registration of the issuance and
transfer of Warrants. The Company shall be entitled to treat the registered
holder of any Warrant (the "Holder") as the owner in fact thereof for all
purposes and shall not be bound to recognize any equitable or other claim to or
interest in such Warrant on the part of any other person. The Warrants shall be
registered initially in the name of Prime Charter and/or one or more Permitted
Designees in such denominations as Prime Charter may request not less than two
business days prior to the scheduled date of the Closing as set forth in the
Underwriting Agreement.
3. Transfer and Exchange of Warrants. Any Warrant shall be transferable
only upon surrender thereof at the Company's principal executive offices duly
endorsed by its Holder or by such Holder's duly authorized attorney or
representative, or accompanied by proper evidence of succession, assignment or
authority to transfer. Upon any registration of transfer, the Company shall
deliver a new Warrant or Warrants to the persons entitled thereto. In addition,
a Warrant
Certificate may be exchanged, at the option of the Holder thereof, for another
Warrant Certificate or Warrant Certificates of different denominations, of like
tenor and representing in the aggregate the right to purchase a like number of
Warrant Shares upon surrender at the Company's principal executive offices.
Notwithstanding the foregoing, the Warrants may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of until after the
first anniversary of the Effective Date, except to a Permitted Designee, by
operation of law or by reason of a reorganization of the Company. Thereafter,
the Warrants and any Warrant Shares shall be freely transferable, subject only
to compliance with applicable securities laws.
4. Exercise of Warrants.
4.1 Exercise Price and Term. Each Warrant shall entitle the Holder
thereof to purchase from the Company one Warrant Share at a purchase price per
share of $____ (the "Exercise Price"), as such purchase price and number of
Warrant Shares may be adjusted from time to time pursuant to the provisions of
Section 8 hereof, payable in full at the time of exercise of such Warrant. The
Warrants may be exercised, in whole or in part, at any time or from time to time
during the four-year period commencing on the first anniversary of the Effective
Date and ending at 5:00 p.m., New York City time, on the fifth anniversary of
the Effective Date (the "Expiration Date"). After the Expiration Date, any
unexercised Warrants shall be void and all rights of the Holders with respect
thereto shall cease.
4.2 Payment of Exercise Price. At the election of any Holder, the
aggregate Exercise Price for any Warrants being exercised may be paid: (a) in
cash in the amount of the aggregate Exercise Price then in effect for the number
of Warrants being exercised, (b) by surrender to the Company of shares of
Preferred Stock having an aggregate Fair Market Value (as defined below) on the
date of exercise equal to the aggregate Exercise Price then in effect for the
number of Warrants being exercised, (c) by surrender to the Company of shares of
Common Stock having an aggregate Fair Market Value on the date of exercise equal
to the aggregate Exercise Price then in effect for the number of Warrants being
exercised, (d) by a surrender of Warrants covering a number of Warrant Shares
having an aggregate Fair Market Value, net of the applicable aggregate Exercise
Price therefor, equal to the aggregate Exercise Price then in effect for the
number of Warrants being exercised, or (e) by a combination of the
aforementioned methods of payment. For purposes of this Agreement, the "Fair
Market Value" per share of Preferred Stock or Common Stock on a given date shall
be: (i) if the Preferred Stock or Common Stock is listed on a national
securities exchange or included on the Nasdaq National Market, the closing price
per share of Preferred Stock or Common Stock on such date (or, if there was no
trading on such date, on the next preceding day on which there was trading);
(ii) if the Preferred Stock or Common Stock is not listed on a national
securities exchange or included on the Nasdaq National Market, the average of
the closing bid and asked quotations per share of Preferred Stock or Common
Stock as reported by Nasdaq (or the National Quotation Bureau Incorporated or
any similar organization) on such date (or, if there were no quotations for the
Preferred Stock or Common
Stock on such date, on the next preceding day on which there were quotations) as
provided by such organization; and (iii) if the Preferred Stock or Common Stock
is not traded on a national securities exchange or included on the Nasdaq
National Market and bid and asked quotations are not provided by Nasdaq (or the
National Quotation Bureau Incorporated or any similar organization), as
determined by the agreement of the parties in good faith or, in the absence of
such agreement, as determined pursuant to arbitration under the auspices of the
American Arbitration Association.
4.3 Exercise Procedure. Warrants may be exercised by their surrender at
the Company's principal executive offices, with the Election to Purchase form
attached thereto duly completed and executed, accompanied by payment of the
aggregate Exercise Price for the Warrant Shares to be purchased upon such
exercise. Payment for the Warrant Shares shall be made (a) if payment is to be
made in cash, by a certified or bank cashier's check payable to the order of the
Company or by wire transfer to an account designated by the Company, (b) if
payment is to be made through a surrender of shares of Preferred Stock or Common
Stock, by surrender of certificates duly endorsed for transfer (with all
transfer taxes paid or provided for), and (c) if payment is to be made by a
surrender of Warrants, by surrender of certificates representing such Warrants.
Promptly after the exercise of any Warrants, upon compliance with Section 5
hereof, the Company shall issue a certificate or certificates, for the number of
full Warrant Shares to which the Holder thereof is entitled, registered in
accordance with the instructions set forth in the Election to Purchase, together
with cash as provided in Section 10 of this Warrant Agreement payable in respect
of fractional shares and (if applicable) a new Warrant Certificate or
Certificates representing all remaining unexercised Warrants. All Warrant Shares
shall be duly authorized, validly issued, fully paid, non-assessable and free of
preemptive rights, and free from all liens and charges other than those created
by the Holder. Upon compliance with Section 5 hereof, certificates representing
such Warrant Shares and remaining unexercised Warrants shall be issued by the
Company in such names and denominations, and shall be delivered to such persons,
as are specified by written instructions of the Holder.
4.4 Record Holder. Each person in whose name any such certificate for
Warrant Shares is issued shall for all purposes be deemed to have become the
holder of record of the Warrant Shares represented thereby on the date upon
which such Warrants were surrendered for exercise, accompanied by payment of the
aggregate Exercise Price as aforesaid, irrespective of the date of issuance or
delivery of such certificate for Warrant Shares; provided, however, that if, at
the date of the surrender of such Warrants and payment of the aggregate Exercise
Price, the transfer books for the Preferred Stock or any other class of stock
purchasable upon the exercise of such Warrants shall be closed, the certificates
for the Warrant Shares or for shares of such other class of
stock in respect of which such Warrants are then exercisable shall be issuable
as of the date on which such books shall next be opened (whether before or after
the Expiration Date) and, until such date, the Company shall be under no duty to
deliver any certificate for such Warrant Shares or for shares of such other
class of stock; and, provided, further, that the transfer books of record,
unless otherwise required by law, shall not be closed at any one time for a
period longer than 20 days.
5. Payment of Taxes. The Company shall promptly pay all documentary
stamp taxes attributable to the issuance of Warrants or the issuance of Warrant
Shares upon the exercise of any Warrants, except that any transfer taxes payable
in connection with the issuance of Warrants or Warrant Shares in any name other
than that of the Holder of the Warrants surrendered shall be paid by such Holder
and, if any such tax would otherwise be payable by the Company, no such issuance
or delivery shall be made unless and until the person requesting such issuance
has paid to the Company the amount of any such tax or it is established to the
reasonable satisfaction of the Company that any such tax has been paid.
6. Replacement Warrants. In case any Warrant Certificate shall be
mutilated, lost, stolen or destroyed, the Company shall issue and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate or in lieu of and substitution for the lost, stolen or destroyed
Warrant Certificate, a new Warrant Certificate of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction of such Warrant
Certificate, together with an appropriate agreement regarding indemnification of
the Company relating to the issuance of a replacement Warrant Certificate.
7. Reservation of Warrant Shares. (i)The Company shall at all times
reserve and keep available for issuance the number of its authorized but
unissued shares of Preferred Stock or other stock sufficient to permit the
exercise in full of the Warrants and any transfer agent for the Preferred Stock
or other stock issuable upon the exercise of Warrants shall be directed at all
times to reserve such number as shall be sufficient for such purpose and (ii)
the Company shall at all times reserve and keep available for issuance the
number of its authorized but unissued shares of Common Stock or other stock
sufficient to permit the conversion in full of the Warrant Shares and any
transfer agent for the Common Stock or other stock issuable upon the exercise of
Warrants shall be directed at all times to reserve such number as shall be
sufficient for such purpose. The Company will keep a copy of this Warrant
Agreement on file with each such transfer agent and will supply such transfer
agent with duly executed stock certificates for such purpose and will provide or
otherwise make available any cash that may be payable as provided in Section 10
hereof. All Warrants surrendered upon the exercise thereof shall be canceled.
After the Expiration Date, no shares of Preferred Stock or Common Stock shall be
subject to reservation in respect of any unexercised Warrants.
8. Adjustments.
8.1 Adjustment of Exercise Price.
8.1.1 Initial Exercise Price. The Exercise Price, which
initially will be as provided in Section 4.1, shall be adjusted and readjusted
from time to time as provided in this Section 8.1 and, as so adjusted or
readjusted, shall remain in effect until a further adjustment or readjustment
thereof is required by this Section 8.1.
8.1.2 Issuance of Additional Shares of Preferred Stock. In
case the Company, at any time after the date of the Closing, shall issue
additional shares of Preferred Stock for no consideration in connection with a
dividend, stock split or other distribution on the Preferred Stock (including,
without limitation, any distribution of Preferred Stock by way of spin-off,
reclassification or corporate rearrangement), then, and in each such case, the
Exercise Price shall be reduced concurrently with such issuance to a price
(calculated to the nearest cent) determined by multiplying such Exercise Price
by a fraction of which:
(a) the numerator shall be the number of shares of Preferred
Stock outstanding immediately prior to such issuance, and
(b) the denominator shall be the number of shares of Preferred
Stock outstanding immediately after such issuance.
8.1.3 Dividends and Distributions. In case the Company, at any
time after the Effective Date, shall pay or make a dividend or other
distribution on the Preferred Stock (including, without limitation, any
distribution of stock (other than Preferred Stock) or other securities,
including securities that are convertible into or exchangeable or exercisable
for Preferred Stock, property or options by way of dividend, spin-off,
reclassification or corporate rearrangement) then, and in each such case, the
Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of the holders of the Preferred Stock
entitled to receive such dividend or other distribution shall be reduced,
effective as of the close of business on such record date, to a price
(calculated to the nearest cent) determined by multiplying such Exercise Price
by a fraction of which:
(a) the numerator shall be the Exercise Price in effect
immediately prior to the close of business on such record date minus the value
of such dividend or other distribution (as determined in good faith by the Board
of Directors of the Company) applicable to one share of Preferred Stock, and
(b) the denominator shall be such Exercise Price in effect
immediately prior to the close of business on such record date; provided,
however, that no such reduction shall be made pursuant to this Section 8.1.3 for
a dividend payable in shares of Preferred Stock (which is subject to Section
8.1.2) or the ordinary stated dividend on the
Preferred Stock, whether payable in Common Stock or cash or other property. If a
dividend or distribution covered under this Section 8.1.3 is declared prior to
the Expiration Date but not paid =by such date, the Expiration Date shall be
extended until the payment thereof.
8.1.4 Adjustments for Combinations, etc. In case the
outstanding shares of Preferred Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of Preferred
Stock, the Exercise Price in effect immediately prior to such combination or
consolidation shall be proportionately increased concurrently with the
effectiveness of such combination or consolidation.
8.1.5 Minimum Adjustment of Exercise Price. If the amount of
any adjustment of the Exercise Price required pursuant to this Section 8.1 would
be less than $.01, such amount shall be carried forward, and an adjustment with
respect thereto shall be made at the time of and together with any subsequent
adjustment that, together with such amount and any other amount or amounts so
carried forward, shall aggregate at least $.01.
8.1.6 Minimum Exercise Price. Notwithstanding anything to the
contrary set forth herein, no adjustment provided for in this Section 8.1 shall
reduce the Exercise Price below the par or stated value of the Preferred Stock
and the Company shall have no obligation to change such value to permit a
further reduction of the Exercise Price; provided, however, that, except in the
event of any transactions of the type contemplated under Section 8.1.4 hereof,
the Company agrees not to change the par or stated value of the Preferred Stock.
8.2 Adjustment of Number of Warrant Shares. Upon each adjustment of the
Exercise Price pursuant to the provisions of Section 8.1, the number of Warrant
Shares that the Holder of a Warrant shall be entitled to receive upon exercise
thereof shall be adjusted to equal that number of Warrant Shares determined by
multiplying the number of Warrant Shares issuable upon exercise of such Warrant
immediately prior to such adjustment of the Exercise Price by a fraction of
which:
(a) the numerator shall be the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price, and
(b) the denominator shall be the Exercise Price in effect
immediately following such adjustment of the Exercise Price.
8.3 Notice, Evidence of Adjustments. Whenever the Exercise Price is
adjusted as herein provided, the Company shall promptly cause a notice setting
forth the adjusted Exercise Price and adjusted number of Warrant Shares,
issuable upon exercise of each Warrant to be mailed to the Holders, at their
last addresses appearing in the Warrant register, and shall cause a copy thereof
to be mailed to each transfer agent for the Preferred Stock. The Company shall
make any computation by this Section 8, and a certificate signed by the Chief
Financial Officer shall
accompany said notice and shall be conclusive evidence of the correctness of
such adjustments.
9. Consolidation, Merger, Sale of Assets, Reorganization, etc.
9.1 General Provisions. In case at any time after the Effective Date
(a) the Company shall consolidate with or merge into any other person and not be
the continuing or surviving person of such consolidation or merger, (b) any
other person shall consolidate with or merge into the Company and the Company
shall be the continuing or surviving person but, in connection with such
consolidation or merger, the Preferred Stock or other securities then issuable
upon exercise of the Warrants shall be changed into or exchanged for cash, stock
or other securities or property, (c) shall transfer, directly or indirectly, all
or substantially all its properties and assets to any other person or (d) shall
effect a capital reorganization or reclassification of the Preferred Stock or
other securities then issuable upon exercise of the Warrants (other than a
capital reorganization or reclassification resulting in an adjustment of the
Exercise Price as provided in Section 8.1), then, and in the case of each such
transaction, the Company shall make proper provision such that, upon the terms
and in the manner provided in this Warrant Agreement, the Holder of each
Warrant, upon the exercise thereof at any time after the consummation of such
transaction, shall be entitled to receive, at the Exercise Price then in effect,
in lieu of the Preferred Stock or other securities issuable upon such exercise
immediately prior to such transaction, the amount of cash, stock or other
securities or property to which such Holder would have been entitled if such
Warrant had been exercised in full immediately prior to such transaction,
subject to adjustments subsequent to such transaction as nearly equivalent as
possible to the adjustments provided for in Section 8 and this Section 9.
9.2 Assumption of Obligations. Notwithstanding anything contained in
this Warrant Agreement to the contrary, the Company shall not effect any of the
transactions described in Section 9.1(a), (b), (c) or (d) unless, prior to the
consummation thereof, the person (other than the Company) that may be required
to deliver any cash, stock or other securities or property upon exercise of any
Warrant as provided herein shall assume, by written instrument delivered to the
Holders of the Warrants, (a) the obligations of the Company under this Warrant
Agreement and the Warrants (and if the Company shall survive the consummation of
any such transaction, such assumption shall not release the Company from any
continuing obligations of the Company under this Warrant Agreement and the
Warrants) and (b) the obligation to deliver to such Holder such cash, stock or
other securities or other property as such Holder may be entitled to receive in
accordance with the provisions of this Section 9; provided, however, that this
Section 9.2 shall not be applicable to any transaction described in Section 9.1
if all such cash, stock, property or other consideration receivable upon
consummation of such transaction is delivered to the Company at such time. Such
person shall similarly
deliver to the Company an opinion of counsel to the effect that this Warrant
Agreement and the Warrants shall continue in full force and effect after any
such transaction and that the terms hereof (including, without limitation all of
the provisions of Section 8 and this Section 9.2) and thereof shall be
applicable to the cash, stock or other securities or property that such person
may be required to deliver upon any exercise of the Warrants.
9.3 No Dilution or Impairment. The Company shall not, by amendment of
its certificate of incorporation or by-laws or through any consolidation,
merger, reorganization, transfer of assets, dissolution, issue, sale, grant or
assumption of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Warrant Agreement or
the Warrants, but will at all times, whether or not requested to do so, in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Holders against dilution or other impairment. Without limiting the generality of
the foregoing, the Company agrees that it shall take all such reasonable 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
all Warrants from time to time outstanding.
10. Fractional Interests. The Company shall not be required to issue
fractions of shares of Preferred Stock upon the exercise of any Warrants. If
more than one Warrant shall be presented for exercise at the same time by the
same Holder, the number of Warrant Shares that shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a share of Preferred Stock would, except for the provisions of this
Section 10, be issuable on the exercise of any Warrant, the Company shall
purchase such fraction for an amount in cash equal to the same fraction of the
Fair Market Value of one share of Preferred Stock on the date of exercise.
11. Restrictions on Dispositions. The Warrants, the Warrant Shares have
been registered under the Act pursuant to the Registration Statement; however,
Prime Charter acknowledges that the Warrants, the Warrant Shares and the
Conversion Shares may not be transferred except pursuant to (i) a post-effective
amendment to the Registration Statement, (ii) an effective registration
statement under the Act or (iii) any available exemption from registration under
the Act permitting such disposition of securities and upon delivery to the
Company of an opinion of counsel, reasonably satisfactory to counsel for the
Company, that such exemption from registration is available. Prime Charter
agrees that the certificates representing the Warrants, Warrant Shares and
Conversion Shares shall bear an appropriate restrictive legend to such effect.
12. Registration Rights.
12.1 Demand Registration. Upon written request of the Holder(s) of at
least a majority of the then outstanding Warrants, Warrant Shares and Conversion
Shares made at any time within the period ending five years after the Effective
Date, the Company shall file within a reasonable period of time and, in any
event within the time period provided in Section 12.3(a) after receipt of such
written request, on one occasion, a registration statement (or a post-effective
amendment to a registration statement) under the Act registering the Warrant
Shares and Conversion Shares. Within 15 days after receiving any such notice,
the Company shall give notice to the other Holders of the Warrants, Warrant
Shares and Conversion Shares advising that the Company is proceeding with such
registration statement or post-effective amendment (the"Demand Registration
Statement"), and offering to include therein the Warrant Shares of such other
Holders. The Company shall not be obligated to include the Warrant Shares or
Conversion Shares of any such other Holder in such registration unless such
other Holder shall accept such offer by notice in writing to the Company within
15 days after receipt of such notice from the Company. The Company shall use its
reasonable best efforts to file and cause the Demand Registration Statement to
become effective as promptly as practicable and to remain effective for the
period of time provided in Section 12.3, to reflect in the Demand Registration
Statement financial statements that are prepared in accordance with Section
10(a)(3) of the Act, and to amend or supplement the Demand Registration
Statement to reflect any facts or events arising that, individually or in the
aggregate, represent a material change in the information set forth in the
Demand Registration Statement to enable any Holders of Warrants to exercise
warrants and/or sell Warrant Shares or Conversion Shares during such time period
provided in Section 12.3. If any registration pursuant to this Section 12.1 is
an underwritten offering, the Holders of a majority of the Warrant Shares or
Conversion Shares to be included in such registration will select an underwriter
(or managing underwriter if such offering should be syndicated) approved by the
Company, such approval not to be unreasonably withheld. Notwithstanding anything
in this Warrant Agreement to the contrary, the Company shall be entitled to
postpone for a reasonable period of time (not exceeding 60 days in any 12-month
period) the filing or effectiveness of the Demand Registration Statement
otherwise required to be prepared and filed by it pursuant to this Section 12.1
if the Company's Board of Directors determines, in its reasonable discretion,
that such registration and offering would adversely affect any financing,
acquisition, corporate reorganization or other material transaction involving
the Company and the Company promptly gives the Holders written notice of such
determination specifying the grounds therefor and an estimate of the anticipated
delay. If the Company shall so postpone the filing of the Demand Registration
Statement, a majority-in-interest of the requesting Holders shall have the right
to withdraw the request for demand registration by giving written notice to the
Company within 30 days after receipt of the notice of postponement.
12.2 Piggyback Registration. If, at any time within the period commencing
one year and ending
seven years after the Effective Date, the Company proposes to register any
voting equity securities under the Act in a primary registration on behalf of
the Company and/or in a secondary registration on behalf of holders of such
securities, and the registration form to be used may be used for registration of
the Warrant Shares or Conversion Shares, the Company shall give prompt written
notice (which, in the case of a registration pursuant to the exercise of demand
registration rights other than those provided in Section 12.1, shall be within
10 business days after the Company's receipt of notice of such exercise and, in
any event, shall be at least 30 days prior to the date of such filing) to the
Holders of Warrants, Warrant Shares and Conversion Shares (regardless of whether
some of the Holders shall have theretofore availed themselves of the demand
rights provided in Section 12.1) of its intention to effect registration and
shall offer to include in such registration such number of Warrant Shares and
Conversion Shares with respect to which the Company has received written
requests for inclusion therein within 10 business days after receipt of such
notice from the Company upon generally the same terms and conditions as the
person or persons for whom such registration is being effected have agreed to.
This Section 12.2 is not applicable to any registration statement to be filed by
the Company on Forms S-4 or S-8 or any successor forms. The Company shall not be
obligated to cause to be effective any registration statement as to which it has
given notice to the Holders of Warrants, Warrant Shares or Conversion Shares and
shall have discretion to withdraw any such registration without liability to
Holders of Warrants, Warrant Shares or Conversion Shares.
Notwithstanding the foregoing, if the managing underwriter of the
offering shall determine in good faith and advise the Company in writing that
the inclusion of the Warrant Shares, Conversion Shares and other securities
being offered in such registration would materially and adversely affect the
marketability of the offering, then the Company and the managing underwriter may
reduce the number of Warrant Shares and Conversion Shares to be registered on a
pro rata basis proportionate to the reduction of all other holders of securities
participating in such registration pursuant to the exercise of piggyback
registration rights. In such event, the Company may reduce the number of Warrant
Shares and Conversion Shares to be registered to zero as long as no other
securities are registered in such registration statement pursuant to an exercise
of piggyback registration rights.
12.3 Registration Procedures. If and whenever the Company is required
by the provisions of this Section 12 to use its reasonable best efforts to
effect the registration of any Warrant Shares or Conversion Shares under the
Act, the Company will, as expeditiously as possible:
(a) in connection with any registration pursuant to Section
12.1, prepare and file with the Commission a registration statement (which shall
be filed as soon as practical after receipt of requisite requests from Holders
of Warrant Shares or Conversion Shares for registration, but not more than 90
days in the case of a registration statement on Form S-1 or SB-2, or 45 days in
the case of any other form) with respect to the Warrant Shares or Conversion
Shares and use its reasonable best efforts to cause such registration statement
to become and remain effective for the period of the distribution contemplated
thereby (determined as hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in Section 12.3(a) and comply with the provisions of the
Act with respect to the disposition of all Warrant Shares and Conversion Shares
covered by such registration statement in accordance with the Holders' intended
method of disposition set forth in such registration statement for such period
(so long as such registration statement was filed pursuant to Section 12.1);
(c) furnish to each seller of Warrant Shares and Conversion
Shares and to each underwriter such number of copies of the registration
statement and the prospectus included therein (including each preliminary
prospectus) as such persons reasonably may request in order to facilitate the
public sale or other disposition of the Warrant Shares and Conversion Shares
covered by such registration statement;
(d) use its reasonable best efforts to register or qualify the
Warrant Shares and Conversion Shares covered by such registration statement
under such securities or blue sky laws of such jurisdictions as each seller
shall request, and do any and all other acts and things which may be necessary
under such securities or blue sky laws to enable such seller to consummate the
public sale or other disposition in such jurisdictions of the securities to be
sold by such seller, except that the Company shall not for any such purpose be
required to qualify to do business as a foreign corporation in any jurisdiction
wherein it is not qualified or to file any general consent to service of
process;
(e) use its reasonable best efforts to list the Warrant Shares
and Conversion Shares covered by such registration statement with any securities
exchange or automated quotation system on which the Preferred Stock and Common
Stock, as the case may be, is then listed;
(f) immediately notify each seller of Warrant Shares and
Conversion Shares and each underwriter under such registration statement, at any
time when a prospectus relating thereto is required to be delivered under the
Act, of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing;
(g) enter into such agreements (including an underwriting
agreement, if applicable) and take all such other actions reasonably necessary
in connection therewith in order to expedite and facilitate the disposition of
the Warrant Shares and Conversion Shares to be registered;
(h) whether or not the offering is underwritten and at the
request of any seller of Warrant Shares or Conversion Shares, furnish: (i) such
representations and warranties to such seller and the underwriters, if any, as
are customary in primary underwritten offerings, (ii) an opinion of counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and to such seller of Warrant Shares or Conversion Shares,
dated the effective date of such registration statement and in form and
substance as is customarily given to underwriters in an underwritten public
offering and to such other effect as reasonably may be requested by counsel for
the underwriters or by such seller of Warrant Shares or Conversion Shares its
counsel and (iii) a letter dated such effective date from the independent public
accountants retained by the Company, addressed to the underwriters, if any, and
to such seller of Warrant Shares or Conversion Shares, in form and substance as
is customarily given by independent certified public accountants to underwriters
in an underwritten public offering, and such letter shall additionally cover
such other financial matters (including information as to the period ending no
more than five business days prior to the date of such letter) with respect to
such registration as such underwriters reasonably may request;
(i) make available upon reasonable notice for inspection by
each seller of Warrant Shares or Conversion Shares, any underwriter
participating in any distribution pursuant to such registration statement, and
any attorney, accountant or other agent retained by such seller of Warrant
Shares or Conversion Shares or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such registration statement; and
(j) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its securityholders, as soon as reasonably practicable,
but not later than 18 months after the effective date of the registration
statement, an earnings statement covering the period of at least 12 months
beginning with the first full month after the effective date of such
registration statement, which earnings statements shall satisfy the provisions
of Section 11(a) of the Act.
For purposes of Section 12.3(a) and (b), the period of
distribution of Warrant Shares or Conversion Shares in a firm commitment
underwritten public offering shall be deemed to extend until each underwriter
has completed the distribution of all securities purchased by it, and the period
of distribution of Warrant Shares or Conversion Shares in any other registration
shall be deemed to extend until the earlier of the sale of all Warrant Shares or
Conversion Shares covered thereby and 120 days after the effective date thereof.
In connection with each registration hereunder the sellers of
Warrant Shares or Conversion Shares will furnish to the Company in writing such
information with respect to themselves and the proposed distribution by them as
reasonably shall be necessary and shall be requested by the Company in order to
comply with federal and applicable state securities laws.
In connection with each registration pursuant to this Section
12 covering an underwritten public offering, the Company and each seller of
Warrant Shares or Conversion Shares agree to enter into a written agreement with
the managing underwriter (unless the Holder is the managing underwriter) in such
form and containing such provisions as are customary in the securities business
for such an arrangement between such underwriter and companies of the Company's
size and investment stature.
12.4 Expenses. All expenses incurred by the Company in complying with
Sections 12.1, 12.2 and 12.3, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
"blue sky" laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars, costs of insurance and
reasonable fees and disbursements of counsel for the sellers of Warrant Shares
or Conversion Shares, but excluding any Selling Expenses, are herein referred to
as "Registration Expenses." "Selling Expenses," as used herein, mean all
underwriting discounts, selling commissions and non-accountable or similar
expense allowances applicable to the sale of Warrant Shares or Conversion
Shares.
The Company will pay or cause to be paid all Registration
Expenses of the participating sellers of Warrant Shares or Conversion Shares in
connection with each registration statement under Sections 12.1 and 12.2. All
Selling Expenses in connection with each registration statement under Sections
12.1 and 12.2 shall be borne by the participating sellers of Warrant Shares or
Conversion Shares in proportion to the number of Warrant Shares or Conversion
Shares sold by each, or by such participating sellers of Warrant Shares or
Conversion Shares other than the Company (except to the extent the Company shall
be a seller of Securities) as they may agree.
12.5 No Conflicts. The Company will not enter into any agreement
granting registration rights to any person or entity on terms which conflict
with the provisions of this Section 12.
12.6 Indemnification and Contribution. (a) In the event of a
registration of any Warrant Shares or Conversion Shares under the Act pursuant
to this Section 12, the Company will indemnify and hold harmless, to the fullest
extent permitted by law, each person selling Warrant Shares or Conversion Shares
thereunder, each underwriter thereunder, and each other person, if any, who
controls such seller of Warrant Shares or Conversion Shares or underwriter
within the meaning of the Act or the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), against any losses, claims, damages, liabilities and
expenses, joint or several, to which such seller underwriter or controlling
person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any registration
statement under which such Warrant Shares or Conversion Shares were registered
under the Act pursuant to Section 12, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will pay or reimburse each such seller, each such
underwriter and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company (i) will not be liable in any such case if and to the extent that (A)
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by any such seller any such
underwriter or any such controlling person, as the case may be, in writing
specifically for use in such registration statement, prospectus, amendment or
supplement or (B) in respect to such statement, alleged statement omission or
alleged omission with respect to which such loss, claim, damage or liability
directly relates, the final prospectus for such registration statement corrected
in all material respects such statement alleged statement, omission or alleged
omission and a copy of such final prospectus was not sent or given by or on
behalf of such seller (or otherwise delivered in accordance with applicable law
or regulation) at or prior to the confirmation of the sale of Warrant Shares or
Conversion Shares of such seller and (ii) will not be liable for amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, such consent not to
be unreasonably withheld or delayed.
(b) In the event of a registration of any Warrant Shares or
Conversion Shares under the Act pursuant to this Section 12, each seller of
Warrant Shares or Conversion Shares thereunder, severally and not jointly, will
indemnify and hold harmless the Company, each person, if any, who controls the
Company within the meaning of the Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Act, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or such officer, director, underwriter or controlling person may become subject
under the Act or otherwise, but only to the extent that such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) an untrue statement or alleged untrue statement or omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement under which such Warrant Shares or Conversion Shares was
registered under the Act pursuant to this Section 12, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
and will pay or reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage liability or action or (ii) any statement, alleged statement,
omission or alleged omission made by the Company with respect to which such
loss, claim, damage or liability directly relates, if the final prospectus for
such registration statement corrected in all material respects such statement,
alleged statement, omission or alleged omission and a copy of such final
prospectus was not sent or given by or on behalf of such seller (or otherwise
delivered in accordance with applicable law or regulation) at or prior to the
confirmation of the sale of Warrant Shares or Conversion Shares of such seller,
provided, however, that (A) the liability of each seller hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of the Warrant
Shares and Conversion Shares sold by such seller under such registration
statement bears to the total public offering price of all securities sold
thereunder, but not in any event to exceed the net proceeds received by such
seller from the sale of Warrant Shares and Conversion Shares covered by such
registration statement and (B) no seller shall be liable for amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such seller, such consent not to
be unreasonably withheld or delayed.
(c) Promptly after receipt by an indemnified party hereunder
of written notice of any claim or the commencement of any action or proceeding,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party hereunder, notify the indemnifying party in
writing thereof, but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to such indemnified party,
except to the extent the indemnifying party is materially prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and the indemnified party shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent it shall wish, to assume and undertake the defense thereof
with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume and undertake the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Section 12.6(c) for any legal or
other professional expenses subsequently incurred by such indemnified party in
connection with the defense thereof. No indemnifying party, in the defense of
any such claim or litigation against an indemnified party, shall consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation, unless such indemnified party shall otherwise consent in writing. An
indemnifying party who elects to assume the defense of a claim shall not be
obligated to pay the fees and expenses of counsel for the parties indemnified
by such indemnifying party with respect to such claim, unless any indemnified
party reasonably concludes, based upon the opinion of counsel, that there may
be legal defenses available to such indemnified party with respect to such
claim which are different from or additional to those available to any other
of such indemnified parties or that a conflict of interest may exist between
such indemnified party and any other of such indemnified parties with respect
to such claim, in which event the indemnifying party shall be obligated to
pay the reasonable fees and expenses of one such additional counsel (in
addition to any local counsel).
(d) In order to provide for just and equitable contribution in
any case in which either (i) any Holder exercising registration rights under
this Section 12, or any controlling person of any such Holder, makes a claim for
indemnification pursuant to this Section 12.6, but it is judicially determined
(by the entry of a final judgment or decree by a court of competent jurisdiction
and following the expiration of time to appeal or the denial of the last right
of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 12.6 provides for indemnification in
such case or (ii) contribution under the Act may be required on the part of any
such Holder or any such controlling person in circumstances for which
indemnification is provided under this Section 12.6, then, and in each such
case, the Company and such Holder shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportion as is appropriate to reflect both the relative
benefit received by such Holder and the relative fault of the Company and such
Holder; provided, however, that, in any such case, (A) no Holder will be
required to contribute any amount in excess of the public offering price of all
such Warrant Shares and Conversion Shares offered by it pursuant to such
registration statement and (B) no person or entity guilty of fraudulent
misrepresentation (within, the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation. For purposes of the preceding sentence, the
relative benefit received by the seller of Warrant Shares or Conversion Shares
shall be deemed to be in the same proportion as the public offering price of its
Warrant Shares or Conversion Shares offered by the registration statement bears
to the public offering price of all securities offered by such registration
statement; and the relative fault of the Company and such seller shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission of a material fact relates to
information supplied by the Company or by the seller and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
12.7 Securities Law Compliance. The Company covenants that it will
timely file all reports required to be filed by it under the Act and the
Exchange Act. So long as the Company is subject to the periodic reporting
requirements of the Exchange Act, the Company covenants to make publicly
available such information as may be necessary to permit the sale of Warrant
Shares and Conversion Shares without registration under the Act pursuant to the
exemption provided by Rule 144 under the Act, as such rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any holder of Warrants, Warrant Shares or
Conversion Shares at any time, if applicable the Company will deliver to such
holder or such holder's prospective transferee such information as may be
necessary to permit the sale of Warrants, Warrant Shares or Conversion Shares
pursuant to Rule 144A under the Act, as such rule may be amended from time to
time. Upon request of any holder of Warrants, Warrant Shares or Conversion
Shares, the Company will deliver to such holder a written statement as to
whether it has complied with such information requirements.
13. Notices to Holders.
13.1 Nothing contained in this Warrant Agreement or in any of the
Warrants shall be construed as conferring upon the Holders thereof as such the
right to vote or to receive dividends or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or the election of
directors of the Company or any other matter or any other rights whatsoever as
stockholders of the Company.
13.2 In the event the Company intends to:
(a) make any distribution on or with respect to its Preferred
Stock (or other securities that may then be issuable in lieu thereof upon the
exercise of Warrants), other than the ordinary stated dividend on the Preferred
Stock,
(b) issue subscription rights or warrants to holders of its
Preferred Stock,
(c) consolidate or merge with or into another entity,
(d) liquidate, dissolve or sell or otherwise dispose of
substantially all its assets, or
(e) take any other action that would result in an adjustment
to the Exercise Price or an adjustment to the number of Warrant Shares that the
Holder of a Warrant shall be entitled to receive upon exercise thereof, then the
Company shall cause a notice of its intention to take such action to be sent by
first-class mail, postage prepaid, at least 20 days prior to the date fixed as a
record date or the date of closing the transfer books for the determination of
the stockholders entitled to such distribution or issuance or to vote upon such
proposed consolidation, merger, liquidation, sale or conveyance to each Holder
at its address appearing on the Warrant register, but failure to mail or to
receive such notice or any defect therein or in the mailing thereof shall not
affect the validity of any action taken in connection with such distribution,
issuance, consolidation, merger, liquidation, sale or conveyance.
14. Notices. Any notice or demand required by this Warrant Agreement to
be given or made by any Holder to or on the Company shall be sufficiently given
or made if sent by registered or certified mail, postage prepaid, or by
facsimile transmission address as follows:
Frontline Communications Corporation
Xxx Xxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Any notice or demand required by this Warrant Agreement to be given or made by
the Company to or on
the Holder of any Warrant shall be sufficiently given or made, whether or not
such Holder receives the notice, if sent by first-class mail, postage prepaid,
addressed to such Holder at his last address as shown on the books of the
Company.
15. Governing Law. The validity, interpretation and performance of this
Warrant Agreement, of each Warrant issued hereunder and of the respective terms
and provisions thereof shall be governed by the laws of the State of New York
without giving effect to principles of conflicts of law.
16. Counterparts. This Warrant Agreement may be executed in two
counterparts, each of which when so executed shall be deemed to be an original;
but such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Warrant Agreement as
of the date first set forth above.
FRONTLINE COMMUNICATIONS CORPORATION
By___________________________________
Name:
Title:
PRIME CHARTER LTD.
By___________________________________
Name:
Title:
ANNEX A
THE WARRANTS REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT");
HOWEVER, NONE OF SUCH SECURITIES MAY BE OFFERED, OR SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO THE
REGISTRATION STATEMENT UNDER WHICH SUCH SECURITIES WERE REGISTERED UNDER THE
ACT; (ii) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR (iii) AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION
OF SECURITIES AND UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO COUNSEL FOR THE COMPANY, THAT SUCH EXEMPTION FROM
REGISTRATION UNDER THE ACT IS AVAILABLE. IN ADDITION, THE WARRANTS REPRESENTED
HEREBY MAY NOT BE TRANSFERRED OR EXERCISED EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF THE WARRANT AGREEMENT DATED AS OF ___________, 0000 XXXXXXX
XXXXXXXXX COMMUNICATIONS CORPORATION AND PRIME CHARTER LTD.
No. 1 120,000 Warrants
Void After 5:00 p.m. New York City Time
On ___________, 2005
FRONTLINE COMMUNICATIONS CORPORATION
Warrant Certificate
THIS CERTIFIES THAT, for value received, Prime Charter Ltd., or
registered assigns, is the Holder of the number of Warrants set forth above,
each Warrant entitling the owner thereof to purchase at any time after ________,
2001 and prior to 5:00 p.m., New York City time, on ____, 2005 (the "Expiration
Date"), one fully paid and non-assessable share of Series B Preferred Stock, par
value $.01 per share ("Preferred Stock"), of Frontline Communications
Corporation, a Delaware corporation (the "Company"), at a purchase price per
share (the "Exercise Price") initially equal to $_____, upon presentation and
surrender of this Warrant Certificate with the Form of Election to Purchase
(attached hereto) duly executed. The number of Warrants evidenced by this
Warrant Certificate (and the number of shares that may be purchased upon
exercise hereof (the "Warrant Shares") set forth above and the Exercise Price
set forth above are the number and Exercise Price as of the date of original
issuance of this Warrant Certificate, based on the Preferred Stock as
constituted at such date. As provided in the Warrant Agreement referred to
below, the Exercise Price and the number or kind of shares that may be purchased
upon the exercise of the Warrants evidenced by this Warrant Certificate are
subject to modification and adjustment upon the happening of certain events.
This Warrant Certificate is subject to, and entitled to the benefits
of, all of the terms, provisions and conditions of the Warrant Agreement dated
as of ________, 2000 between the Company and Prime Charter Ltd., which Warrant
Agreement is hereby incorporated herein reference and made a part hereof and to
which reference is hereby made for a full description of the rights, limitations
of rights, duties and immunities hereunder of the Company and the Holders of the
Warrant Certificates. A copy of the Warrant Agreement is on file at the
principal office of the Company.
This Warrant Certificate, with or without other Warrant Certificates,
upon surrender at the principal office of the Company, may be exchanged for
another Warrant Certificate or Warrant Certificates of like tenor, evidencing
Warrants entitling the Holder to purchase a like aggregate number of shares of
Common Stock as the Warrants evidenced by the Warrant Certificate or Warrant
Certificates surrendered entitled such Holder to purchase. If this Warrant
Certificate shall be exercised in part, the Holder hereof shall be entitled to
receive upon surrender hereof another Warrant Certificate or Warrant
Certificates for the number of whole Warrants not exercised.
The Exercise Price may be paid in cash or by surrender of the
appropriate number of Warrants or shares of Preferred Stock in a cashless
exercise or in a combination thereof as provided in Section 4.2 of the Warrant
Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Warrant or Warrants evidenced hereby, but in lieu thereof a cash
payment will be made as provided in the Warrant Agreement.
No Holder of this Warrant Certificate, as such, shall be entitled to
vote or to receive dividends or to consent or to receive notice as a stockholder
of the meetings of stockholders for the election of directors of the Company or
any other matter or to any rights whatsoever as stockholder of the Company,
until the Warrants evidenced by this Warrant Certificate shall have been
exercised and the Warrant Shares shall have been delivered as provided in the
Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within
any period during which the transfer books for the Preferred Stock or other
class of stock issuable upon exercise of this Warrant Certificate are closed for
any purpose, the Company shall not be required to make delivery of certificates
for shares issuable upon such exercise until the date of the reopening of said
transfer books as provided in the Warrant Agreement.
IN WITNESS WHEREOF, Frontline Communications Corporation has caused the
signature (or facsimile signature) of its Chief Executive Officer and Secretary
to be printed hereon.
FRONTLINE COMMUNICATIONS CORPORATION
By___________________________________
Name:
Title:
Attest:
Secretary
FORM OF ASSIGNMENT
(To be executed by the Holder if such Holder desires to transfer this Warrant
Certificate).
TO FRONTLINE COMMUNICATIONS CORPORATION
FOR VALUE RECEIVED, __________________________________________ hereby
sells, assigns and transfers unto ________________________ this Warrant
Certificate, together with all rights, title and interest therein, and does
hereby irrevocably constitute and appoint ______________________, to transfer
the within Warrant Certificate on the books of the within-named Company, with
full power of substitution.
DATED:__________________________
Signature Guaranteed: Signature__________________________
NOTICE:
The signature on the foregoing assignment must correspond to the name
as written upon the face of this Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if Holder desires to exercise the Warrants evidenced by this
Warrant Certificate).
TO FRONTLINE COMMUNICATIONS CORPORATION
The undersigned hereby (1) irrevocably elects to exercise
___________________________________ Warrants represented by this Warrant
Certificate to purchase __________ shares of Preferred Stock issuable upon the
exercise of such Warrants, (2) makes payment in full of the aggregate Exercise
Price for such Warrants by enclosure of a bank cashier's check or money order
therefor or by surrendering Warrants or shares of Common Stock for application
to the aggregate Exercise Price, upon condition that new Warrants be issued for
the balance of the Warrants remaining, and (3) requests that certificates for
shares and Warrants be issued in the name of.
(Please insert social security or other
identifying number)__________________________
(Please print name and address)__________________________
If such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, a new Warrant Certificate for the balance remaining of such
Warrants shall be registered in the name of and delivered to:
Please insert social security or other
identifying number)__________________________
(Please print name and address)
DATED:__________________________, 20___
Signature Guaranteed: Signature__________________________
NOTICE:
The signature on the foregoing election to purchase must correspond to the name
as written upon the face of this Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever.
