Exhibit 4.4
WARRANT TO PURCHASE COMMON STOCK OF
FRONTLINE CAPITAL GROUP
(Void after the Expiration Date set forth herein)
W-
This certifies that __________________________ or its permitted
assigns (the "Holder"), for value received, is entitled to purchase from
FRONTLINE CAPITAL GROUP, a Delaware corporation (the "Company"),
___________________________ fully paid and nonassessable shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), subject
to adjustment from time to time in accordance with Section 3, for cash at a
price of $47.25 per share (as may be adjusted from time to time in accordance
with Section 3, the "Stock Purchase Price") at any time or from time to time
on or after March 7, 2001 and up to and including 5:00 p.m. (New York time) on
March 7, 2005 (the "Expiration Date"). The Holder may purchase the shares
pursuant hereto upon surrender to the Company at its principal office (or at
such other location as the Company may advise the Holder in writing) of this
Warrant properly endorsed with the Form of Subscription attached hereto as
Exhibit A duly filled in and signed and, if applicable, upon payment in cash
or other same-day funds of the aggregate Stock Purchase Price for the number
of shares for which this Warrant is being exercised determined in accordance
with the provisions hereof.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares.
1.1 Exercise. This Warrant is exercisable at any time or from time
to time on or after March 7, 2001 and on or prior to the Expiration Date with
respect to all or any part of the shares of Common Stock set forth in the
first paragraph of this Warrant. Any unexercised portion of this Warrant shall
terminate on the Expiration Date. The Company agrees that the shares of Common
Stock purchased under this Warrant shall be, and are deemed to be, issued to
the Holder hereof as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered,
properly endorsed, the completed, executed Form of Subscription delivered and
full payment made in cash or other same-day funds for such shares.
Certificates for the shares of Common Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense within a reasonable time after the rights represented by
this Warrant have been so exercised. In case of a purchase of less than all
the shares which may be purchased under this Warrant, the Company shall cancel
this Warrant and execute and deliver a new Warrant or Warrants of like tenor
for the balance of the shares purchasable under the Warrant surrendered upon
such purchase to the Holder hereof within a reasonable time. Each certificate
for shares of Common Stock so delivered shall be in such denominations of
Common Stock as may be requested by the Holder hereof and shall be registered
in the name of such Holder.
1.2 Option of Company to Substitute Cash for Shares. Notwithstanding
any other provision contained herein, upon the exercise of all or any portion
of this Warrant, the Company may, at its election, in lieu of delivering the
shares of Common Stock or other securities or property for which this Warrant
is then exercisable, deliver cash in an amount equal to the fair market value
of such shares of Common Stock, securities or other property on the date the
Warrant (or portion thereof) is exercised. Any security that is principally
traded on a national securities exchange or in the NASDAQ National Market
System shall be deemed to have a fair market value, as of any date, equal to
the last sale price, regular way, reported as of 4:00 p.m., New York time, on
such date or, in case no such sale takes place on such date, the average of
the bid and asked prices as of 4:00 p.m., New York time, on such date, in
either case as reported in the principal consolidated transaction reporting
system applicable to such exchange or by NASDAQ, as the case may be. The fair
market value of any security or other property shall be determined by the
board of directors of the Company in good faith.
2. Warrant Agency; Transfer, Exchange and Replacement of Warrants.
2.1 Warrant Agency. If the holders of Warrants to purchase a
majority of the shares of Common Stock issuable upon exercise of the Warrants
shall request appointment of an independent warrant agency with respect to the
Warrants, the Company shall promptly appoint and thereafter maintain, at its
own expense, an agency in New York, New York, which agency may be the
Company's then existing transfer agent (the "Warrant Agency"), for certain
purposes specified herein, and shall give prompt notice of such appointment
(and appointment of any successor Warrant Agency) to all holders of Warrants.
Until an independent Warrant Agency is so appointed, the Company shall perform
the obligations of the Warrant Agency provided herein at its address at 1350
Avenue of the Americas, New York, New York, or such other address as the
Company shall specify by notice to all Warrantholders.
2.2 Ownership of Warrant. The Company may deem and treat the Holder
as the owner hereof (notwithstanding any notations of ownership or writing
hereon made by any Person other than the Warrant Agency) for all purposes and
shall not be affected by any notice to the contrary, until presentation of
this Warrant for registration of transfer as provided in this Section 2.
2.3 Transfer of Warrant. The Company agrees to maintain at the
Warrant Agency books for the registration of transfers of the Warrants, and
transfer of this Warrant and all rights hereunder shall be registered, in
whole or in part, on such books, upon surrender of this Warrant at the Warrant
Agency, together with a written assignment of this Warrant duly executed by
the Holder or his duly authorized agent or attorney, with (unless the Holder
is the original Warrantholder or another institutional investor) signatures
guaranteed by a bank or trust company or a broker or dealer registered with
the National Association of Securities Dealers, Inc., and funds sufficient to
pay any transfer taxes payable upon such transfer; provided, however, that
Warrants are transferable in denominations of 50,000 Warrants. Upon surrender,
the Company shall execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denominations specified in the instrument
of assignment, and this Warrant shall promptly be cancelled. This Section 2.3
is subject to the provisions of Section 8.
2.4 Division or Combination of Warrants. This Warrant may be divided
or combined with other Warrants upon surrender hereof and of any Warrant or
Warrants with which this Warrant is to be combined at the Warrant Agency,
together with a written notice specifying the names and denominations in which
the new Warrant or Warrants are to be issued (which may not be less than
50,000 Warrants), signed by the holders hereof and thereof or their respective
duly authorized agents or attorneys. Subject to compliance with Section 2.3 as
to any transfer which may be involved in the division or combination, the
Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such
notice.
2.5 Loss, Theft, Destruction or Mutilation of Warrants. Upon receipt
of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company (it being understood that the original Warrantholder's full and
unconditional indemnity shall be satisfactory indemnity in the event of loss,
theft or destruction of any Warrant owned by such holder), or, in the case of
any such mutilation, upon surrender and cancellation of such Warrant, the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the right to
purchase the same aggregate number of shares of Common Stock as provided for
in such lost, stolen, destroyed or mutilated Warrant.
2.6 Expenses of Delivery of Warrants. The Company shall pay all
expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of this Warrant and
shares of Common Stock purchasable upon exercise of this Warrant.
3. Shares to Be Fully Paid; Reservation of Shares. The Company
covenants and agrees that all shares of Common Stock which may be issued upon
the exercise of the rights represented by this Warrant will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable and free from
all preemptive rights of any stockholder and free of all taxes, liens and
charges with respect to the issue thereof. The Company further covenants and
agrees that, during the period within which the rights evidenced by this
Warrant may be exercised, the Company will at all times during such period
have authorized and reserved, for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant, a sufficient
number of shares of authorized but unissued Common Stock, or other securities
and property, when and as required to provide for the exercise of the rights
evidenced by this Warrant. The Company will take all such action as may be
necessary to assure that such shares of Common Stock may be issued as provided
herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the securities of
the Company may be listed.
4. Adjustment of Stock Purchase Price and Number of Shares. The
Stock Purchase Price and the number of shares purchasable upon the exercise of
this Warrant shall be subject to adjustment from time to time in accordance
with this Section 4. Upon each adjustment of the Stock Purchase Price, the
Holder of this Warrant shall thereafter be entitled to purchase, at the Stock
Purchase Price resulting from such adjustment, the number of shares obtained
by multiplying the Stock Purchase Price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment, and dividing the product thereof by the Stock
Purchase Price resulting from such adjustment.
4.1 Common Stock Dividends; Subdivision or Combination of Stock. In
case the Company shall at any time pay a dividend of shares of Common Stock on
all of its outstanding shares of Common Stock or subdivide its outstanding
shares of Common Stock into a greater number of shares, the Stock Purchase
Price in effect immediately prior to such dividend or subdivision shall be
proportionately reduced and, conversely, in case the outstanding shares of
Common Stock of the Company shall be combined into a smaller number of shares,
the Stock Purchase Price in effect immediately prior to such combination shall
be proportionately increased.
4.2 Cash Dividends. If the Company shall distribute a dividend in
respect of its Common Stock in cash, the Stock Purchase Price shall be
decreased, effective immediately after the record date for such dividend, to
the price determined by multiplying the Stock Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the fair market value per share of Common Stock of the Company on the
last day before the Common Stock trades without the right to receive such
dividend in the relevant market or exchange less the amount of cash
distributed in such dividend with respect to one share of Common Stock and the
denominator of which shall be the fair market value per share of Common Stock
on such last day.
4.3 Other Distributions. In the event that the Company shall
distribute to the holders of all of its Common Stock any security, property or
contractual right (including without limitation any subscription right), other
than as contemplated in Sections 4.1, 4.2 and 4.4 (each such security,
property or contractual right, an "Other Distribution"), then the Holder
hereof shall be entitled to receive, at the time such Other Distribution is
distributed to the holders of the Company's Common Stock, without payment of
any additional consideration therefor, the amount of such Other Distribution
which such Holder would have received had such Holder been the holder of
record of the Common Stock deliverable upon exercise of this Warrant in full
as of the record date for such Other Distribution.
4.4 Tender Offers. If a tender offer made by the Company or any
subsidiary for all or any portion of the Common Stock shall expire and such
tender offer shall require payment to tendering holders of Common Stock of
aggregate consideration having a market value which exceeds the fair market
value of the Common Stock acquired in such tender offer ("Excess Tender
Amount"), then the Stock Purchase Price shall be adjusted to equal the price
determined by multiplying the Stock Purchase Price in effect immediately prior
to the close of business on the expiration date for such tender offer by a
fraction, the numerator of which shall be the fair market value per share of
Common Stock on such expiration date, less the Excess Tender Amount, if any,
divided by the number of outstanding shares of Common Stock, and the
denominator of which shall be the fair market value per share of Common Stock
on such expiration date. Such adjustment shall be effective immediately after
the expiration date of such tender offer.
4.5 Reorganization, Reclassification, Consolidation, Merger or Sale.
(a) If any recapitalization, reclassification or reorganization of the capital
stock of the Company, or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets,
shall be effected (an "Organic Change"), and in connection with such Organic
Change, the Common Stock shall be converted into common stock of another
entity, then, as a condition of such Organic Change, lawful and adequate
provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of
the Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby) such shares of
stock as may be issued or payable with respect to or in exchange for a number
of outstanding shares of such Common Stock equal to the number of shares of
such stock immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby. In the event of any such Organic
Change, the Company shall make appropriate provision with respect to the
rights and interests of the Holder of this Warrant that the provisions hereof
(including, without limitation, provisions for adjustments of the Stock
Purchase Price and the number of shares purchasable and receivable upon the
exercise of this Warrant) shall thereafter be applicable to any shares of
stock thereafter deliverable upon the exercise hereof. The Company will not
effect any such consolidation, merger or sale unless, prior to the
consummation thereof, the successor entity (if other than the Company)
resulting from such consolidation or merger or the entity purchasing such
assets shall assume by written instrument reasonably satisfactory in form and
substance to the holders of a majority of the Warrants to purchase Common
Stock then outstanding, executed and mailed or delivered to the Holder hereof
at the last address of such Holder appearing on the books of the Company, the
obligation to deliver to such Holder such shares of stock as, in accordance
with the foregoing provisions, such Holder may be entitled to purchase. The
Company shall notify the Holder of this Warrant of any such proposed Organic
Change reasonably prior to the consummation thereof so as to provide such
Holder with a reasonable opportunity prior to such consummation to exercise
this Warrant in accordance with the terms and conditions hereof; provided,
however, that in the case of a transaction which requires notice be given to
the holders of Common Stock of the Company, the Holder of this Warrant shall
be provided the same notice given to the holders of Common Stock of the
Company.
(b) In the event of an Organic Change for which no adjustment is
specified by Section 4.1, Section 4.5(a) or Section 4.7, this Warrant shall be
adjusted so that, after such Organic Change, the Holder shall have a right to
purchase common stock of the surviving, resulting or acquiring company in such
Organic Change, with the number of such shares and the exercise price therefor
determined by the Board of Directors of the Company prior to such Organic
Change so as to preserve the aggregate amount payable upon the exercise of
this Warrant in full and the difference (positive or negative), if any, on the
day immediately preceding the day such Organic Change is completed, between
the fair market value of the shares of Common Stock purchasable upon the
exercise of this Warrant in full and the Stock Purchase Price therefor.
4.6 Affiliate Transactions. In the event that the Company shall
issue any shares of Common Stock to, or repurchase any shares of Common Stock
from, any "affiliate", as defined in Rule 405 under the 1933 Act, of the
Company, other than in connection with any acquisition of or investment in a
partner entity, such issuance or repurchase shall be on terms no less
favorable to the Company than those obtainable by a party who is not such an
affiliate.
4.7 Issuance at Less than Stock Purchase Price. In case the Company
shall issue shares of Common Stock (or securities convertible into or
exchangeable or exercisable for shares of Common Stock) at a price per share
(or having a conversion or exercise price per share) less than the Stock
Purchase Price in effect immediately prior to such issuance, then, and in each
such case, the Stock Purchase Price in effect immediately prior to such
issuance shall be adjusted to the price determined by multiplying the Stock
Purchase Price in effect immediately prior to such issuance by a fraction, the
numerator of which shall be the sum of (x) the number of shares of Common
Stock outstanding on such date immediately prior to the adjustment (plus the
number of shares of Common Stock, if any, into which any then outstanding
securities may be converted, exchanged or exercised if the issuance of such
outstanding securities has resulted in an adjustment to the Stock Purchase
Price in accordance with this Section 4.7) and (y) the number of shares of
Common Stock which the aggregate consideration receivable by the Company for
the total number of shares of Common Stock so issued (or into which the
convertible, exchangeable or other securities may convert or be exchanged or
exercised) would purchase at such Stock Purchase Price and the denominator of
which shall be the sum of (1) the number of shares of Common Stock outstanding
on such date (plus the number of shares of Common Stock, if any, into which
any then outstanding securities may be converted, exchanged or exercised if
the issuance of such outstanding securities has resulted in an adjustment to
the Stock Purchase Price in accordance with this Section 4.7) and (2) the
number of additional shares of Common Stock issued (or into which the
convertible, exchangeable securities or other may convert or be exchanged or
exercised). Notwithstanding the foregoing, in the event that (i) the Company
shall issue shares of Common Stock (or securities convertible into or
exchangeable or exercisable for shares of Common Stock) as part of a
consolidation or merger of the Company with another entity and the surviving
entity remains the Company, (ii) the price per share of such Common Stock
issuance (or the conversion, exchange or exercise price per share of Common
Stock underlying such securities) is less than the Stock Purchase Price in
effect immediately prior to such issuance and (iii) the entity consolidating
with or merging into the Company has an amount of cash and cash equivalents
that is less than 50% of such entity's common equity market capitalization
(or, if such entity's common equity is not traded on a national securities
exchange, the aggregate offering price of the securities and other property
paid to such entity by the Company), then the Stock Purchase Price in effect
immediately prior to such issuance shall be adjusted to the price determined
by multiplying (i) the Stock Purchase Price in effect immediately prior to
such issuance by (ii) the average of 1 and the fraction calculated in
accordance with the preceding sentence. An adjustment made pursuant to this
Section 4.7 shall be made on the next Business Day following the date on which
any such issuance is made and shall be effective retroactively immediately
after the close of business on such date. For purposes of this Section 4.7,
the aggregate consideration receivable by the Company in connection with the
issuance of shares of Common Stock or of securities convertible into or
exchangeable or exercisable for shares of Common Stock shall be deemed to be
equal to the sum of the aggregate offering price (before deduction of
underwriting discounts or commissions and expenses, if any, payable to third
parties) of all such securities plus the minimum aggregate amount, if any,
payable upon conversion, exchange or exercise of any such convertible,
exchangeable or other securities into shares of Common Stock (whether treasury
shares or newly issued shares). The aggregate offering price of securities
that are issued for consideration other than cash shall be deemed to be the
fair market value of such consideration as determined in good faith by the
Board of Directors of the Company. An issuance of shares of Common Stock
requiring an adjustment in the Stock Purchase Price pursuant to Section 4.1 or
pursuant to any employee benefit plan or program of the Company or pursuant to
any option, warrant, right, or convertible security outstanding as of the date
hereof shall not be deemed to constitute an issuance of Common Stock or
convertible, exchangeable or other securities by the Company to which this
Section 4.7 applies. Notwithstanding the foregoing, no adjustment under this
Section 4.7 shall be made for the issuance of equity securities for cash
consideration of up to an aggregate of $75 million to one or more investors in
connection with establishing strategic business relationships with such
investors.
4.8 Certain Other Events. If any event occurs as to which the
foregoing provisions of this Section 4 are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board of
Directors of the Company, fairly protect the purchase rights of the Warrants
in accordance with the essential intent and principles of such provisions,
then such Board shall make such adjustments in the application of such
provisions, in accordance with such essential intent and principles, as shall
be reasonably necessary, in the good faith judgment of such Board, to protect
such purchase rights as aforesaid, but in no event shall any such adjustment
have the effect of increasing the Stock Purchase Price or decreasing the
number of shares of Common Stock purchasable upon exercise of this Warrant, or
otherwise adversely affect the Warrantholders.
4.9 Notices of Change.
(a) Immediately upon any adjustment in the Stock Purchase Price
and the number of shares purchasable upon exercise of this Warrant, the Company
shall give written notice thereof to the Holder, setting forth in reasonable
detail and certifying the calculation of such adjustment.
(b) The Company shall give written notice to the Holder at least 5
business days prior to the date on which the Company closes its books or takes
a record for determining rights to receive any dividends or distributions.
(c) The Company shall also give written notice to the Holder at
least 10 business days prior to the date on which an Organic Change
contemplated in Section 4.5 shall take place.
4.10 Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant. Instead, the Company shall pay to the Holder, in
lieu of issuing any fractional `share, a sum in cash equal to such fraction
multiplied by the current market price of a share of Common Stock, as
determined by the Company's Chief Executive Officer, Chief Financial Officer
or Board of Directors, on the business day immediately prior to the date of
exercise.
5. Issue Tax and Expenses. The issuance of certificates for shares of
Common Stock upon the exercise of any portion of this Warrant shall be made
without charge to the Holder of this Warrant for any issue tax (other than any
applicable income taxes) or other expenses in respect thereof; provided,
however, that the Company shall not be required to pay any tax or other
expenses which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
Holder of this Warrant if exercised.
6. Closing of Books. The Company will at no time close its transfer
books against the transfer of any shares of Common Stock issued or issuable
upon the exercise of any Warrant in any manner which interferes with the
timely exercise of any portion of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder
of the Company or any other matters or any rights whatsoever as a stockholder
of the Company. Except as provided herein, no dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented
hereby or the shares of Common Stock purchasable hereunder until, and only to
the extent that, this Warrant shall have been exercised. No provisions hereof,
in the absence of affirmative action by the Holder to purchase shares of
Common Stock pursuant to this Warrant, and no mere enumeration herein of the
rights or privileges of the Holder, shall give rise to any liability of such
Holder for the Stock Purchase Price or as a stockholder of the Company,
whether such liability is asserted by the Company or by its creditors.
8. Rights and Obligations Survive Exercise of Warrant. The rights
and obligations of the Company, the Holder of this Warrant and the holder of
shares of Common Stock issued upon exercise of this Warrant referred to in
Section 8 shall survive the exercise of this Warrant.
9. Modification and Waiver. This Warrant and any provision hereof
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought.
10. Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof or the Company shall
be delivered or shall be sent by certified mail, postage prepaid, to the
Holder at the Holder's address as shown on the books of the Company or to the
Company at 1350 Avenue of the Americas, New York, New York, Attention: General
Counsel or such other address as either party may from time to time provide to
the other party.
11. Binding Effect on Successors. This Warrant shall be binding upon
any entity succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of
the Company relating to the Common Stock purchasable upon the exercise of this
Warrant shall survive the exercise of this Warrant. All of the covenants and
agreements of the Company shall inure to the benefit of the permitted
successors and assigns of the Holder hereof.
12. Descriptive Headings and Governing Law. The description headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be governed by and construed in accordance with the laws of the State of
New York without giving effect to any provisions relating to conflicts of law.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officer thereunto duly authorized.
Dated: FRONTLINE CAPITAL GROUP
-----------------------
By: ________________________________
Name:
Title:
EXHIBIT A
SUBSCRIPTION FORM
Date: ____________, _____
FRONTLINE CAPITAL GROUP
1350 Avenue of the Americas
New York, New York
Attn: General Counsel
Ladies and Gentlemen:
The undersigned hereby elects to exercise the warrant issued to it by
FRONTLINE CAPITAL GROUP (the "Company") and dated _______________________
Warrant No. W- (the "Warrant") and to purchase thereunder ___________ shares
of the Common Stock, par value $.01 per share, of the Company (the "Shares")
at a purchase price of $___ per Share or an aggregate purchase price of
______________________ Dollars ($__________) (the "Purchase Price").
Pursuant to the terms of the Warrant, the undersigned has delivered the
Purchase Price herewith in full in cash or other same-day funds.
Very truly yours,
By:
Title:
