REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement ("Agreement") dated as of
October 1, 1998, among Frontline Communications Corp., a Delaware corporation
(the "Company"), and the stockholders listed on the signature pages (each a
"Holder" and collectively, the "Holders").
RECITALS
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby agree
as follows:
WHEREAS, the Company issued to the Holders on even date
herewith an aggregate of ten (10) shares of the Company's Preferred Stock (the
"Preferred Stock"), convertible into up to an aggregate number of shares of the
common stock, par value $.01 per share, of the Company having a market value of
$1,000,000 but not to exceed an aggregate of 250,000 shares of common stock (the
"Conversion Shares"), as more particularly provided for in the Stock Purchase
Agreement of even date herewith among the Company, WOWFactor, Inc. and each of
the Holders (the "Purchase Agreements"); and
WHEREAS, it is a condition to the performance of the Holders'
obligations under the Purchase Agreement that the Company enter into this
Agreement with the Holders with respect to the Conversion Stock held by the
Holders.
NOW, THEREFORE, in consideration of the foregoing recitals and
mutual covenants herein contained, the parties hereto do hereby agree as
follows:
1. Piggyback Registration.
(a) If, at any time during the period commencing
July 15, 1999 and ending July 15, 2000, the Company proposes to prepare and file
with the Securities and Exchange Commission (the "Commission") a registration
statement on Form S-3 covering equity or debt securities of the Company, or any
such securities of the Company held by its shareholders, other than in
connection with a merger, acquisition or pursuant to a registration statement on
Form S-4 or Form S-8 or any successor form (for purposes of this Article 1, a
"Registration Statement"), the Company will give written notice of its intention
to do so by certified mail ("Notice"), at least fifteen (15) days prior to the
filing of each such Registration Statement, to the Holder. Upon the written
request of the Holder, made within ten (10) days after receipt of the Notice,
that the Company include any of the Holder's Conversion Shares in the proposed
Registration Statement,
the Company shall, as to the Holder, use reasonable efforts to effect the
registration under the Securities Act of the Conversion Shares which it has been
so requested to register ("Piggyback Registration"), at the Company's sole cost
and expense and at no cost or expense to the Holder (other than any commission,
discounts or counsel fees payable by the Holder, as further provided in Section
3(c) hereof); provided, however, that if, the Piggyback Registration is in
connection with an underwritten public offering and in the written opinion of
the Company's underwriter or managing underwriter of the underwriting group, if
any, for such offering, the inclusion of all or a portion of the Conversion
Shares requested to be registered, when added to the securities being registered
by the Company or the selling shareholder(s), if any, will exceed the maximum
amount of the Company's securities which can be marketed (i) at a price
reasonably related to their then current market value, or (ii) without otherwise
having an adverse effect on the offering, then the Company may exclude from such
offering all or a portion of the Conversion Shares which it has been requested
to register.
(b) Notwithstanding the preceding provisions of
this Section, the Company shall have the right at any time after it shall have
given written notice pursuant to this Section (irrespective of whether any
written request for inclusion of such securities shall have already been made)
to elect not to file any proposed Registration Statement, or to withdraw the
same after the filing but prior to the effective date thereof.
(c) Notwithstanding anything contained herein to
the contrary, the Company shall have no obligation under this Section 1 to
register the Conversion Shares if the Company receives an opinion of counsel
that Rule 144 promulgated under the Securities Act is available to the Holder.
2. Covenants of the Company With Respect to
Registration. The Company hereby covenants and agrees as follows:
(a) The Company shall use reasonable efforts to
cause the Registration Statement to become effective as promptly as possible
under the circumstances at the time prevailing and, if any stop order shall be
issued by the Commission in connection therewith, to use its reasonable efforts
to obtain the removal of such order.
(b) Following the effective date of a
Registration Statement, the Company shall, upon the request of the Holder,
forthwith supply such reasonable number of copies of the Registration Statement,
preliminary prospectus and prospectus meeting the requirements of the Securities
Act, and other documents necessary or incidental to the public offering of the
Conversion Shares as shall be reasonably requested by the Holder to permit the
Holder to make a public distribution of the
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Holder's Conversion Shares. The obligations of the Company hereunder with
respect to the Holder's Conversion Shares are expressly conditioned on the
Holder's furnishing to the Company such appropriate information concerning the
Holder, the Holder's Conversion Shares and the terms of the Holder's offering of
such shares as the Company may request.
(c) The Company will pay all costs, fees and
expenses in connection with all Registration Statements filed pursuant to
Section 1 hereof, including, without limitation, the Company's legal and
accounting fees, printing expenses and blue sky fees and expenses; provided,
however, that the Holder shall be solely responsible for the fees of any counsel
retained by the Holder in connection with such registration and any transfer
taxes or underwriting discounts, selling commissions or selling fees applicable
to the Conversion Shares sold by the Holder pursuant thereto.
(d) The Company will use reasonable efforts to
qualify or register the Conversion Shares included in a Registration Statement
for offering and sale under the securities or blue sky laws of such states as
are requested by the Holder, provided that the Company shall not be obligated to
execute or file any general consent to service of process (unless the Company is
already then subject to service in such jurisdiction) or to qualify as a foreign
corporation to do business under the laws of any such jurisdiction, except as
may be required by the Securities Act and its rules and regulations.
3. Covenant of the Holder.
The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-effective amendment to
the Registration Statement or a supplement to the prospectus included therein,
shall promptly discontinue the sale of Conversion Shares until the Holder
receives a copy of a supplemented or amended prospectus from the Company, which
the Company shall provide as soon as practicable after such notice.
4. Indemnification.
(a) The Company shall indemnify, defend and hold
harmless the Holder and such person who controls such Holder within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended, from and against any and all losses, claims, damages
and liabilities caused by or arising out of any untrue statement of a material
fact contained in the Registration Statement, or caused by or arising out of any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission based upon information furnished or required to be
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furnished in writing to the Company by the Holder or the trustees thereof
expressly for use therein; provided, however, that the indemnification in this
Section shall not inure to the benefit of the Holder on account of any such
loss, claim, damage or liability arising from the sale of Conversion Shares by
the Holder, if a copy of a subsequent prospectus correcting the untrue statement
or omission in such earlier prospectus was provided to the Holder by the Company
prior to the subject sale and the subsequent prospectus was not delivered or
sent by the Holder to the purchaser prior to such sale. The Holder(s) and their
successors and assigns shall at the same time, severally and jointly, indemnify
the Company, its directors, each officer signing the Registration Statement and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material fact contained in the
Registration Statement, or any prospectus included therein, or caused by any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but solely with respect
to such losses, claims, damages or liabilities caused by any untrue statement or
omissions based upon information furnished or required to be furnished in
writing to the Company by the Holder expressly for use in the Registration
Statement.
5. Governing Law.
(a) This Agreement shall be governed as to
validity, interpretation, construction, effect and in all other respects by the
internal substantive laws of the State of New York, without giving effect to the
choice of law rules thereof.
(b) Each of the Company and the Holder hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of New York and of the United States located in the
County of New York, State of New York (the "New York Courts") for any litigation
arising out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating thereto except in
such courts), waives any objection to the laying of venue of any such litigation
in the New York Courts and agrees not to plead or claim that such litigation
brought in any New York Courts has been brought in an inconvenient forum.
6. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly given when
delivered by hand or mailed by express,
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registered or certified mail, postage prepaid, return receipt requested, as
follows:
If to the Company, at:
Frontline Communications Corp.
Xxx Xxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxxx, Xxx Xxxx 00000
with a copy of the same to:
Xxxxxx Xxxxxxxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx, Esq.
If to the Holder(s), at that address set forth under their
name on the signature page.
with a copy of the same to:
Xxxx Xxxxx Xxxx & XxXxxx, LLP
Princeton Xxxxxxxxx Village
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Or such other address as has been indicated by either party in
accordance with a notice duly given in accordance with the provisions of this
Section.
7. Amendment. This Agreement may only be amended by a written
instrument executed by the Company and the Holders.
8. Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and
written, with respect to the subject matter hereof.
9. Assignment; Binding Effect; Benefits. The Holder may not
assign the Holder's rights hereunder without the prior written consent of the
Company, which consent may be given or withheld for any reason and any attempted
assignment without having obtained such prior written notice shall be void and
of no force and effect. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and the permitted assigns, heirs and legal
representatives of the Holder and the Company and its successors. Nothing herein
contained, express or implied, is intended to confer upon any person other than
the parties hereto and their respective heirs, legal representatives
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and successors, any rights or remedies under or by reason of this Agreement.
10. Headings. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
11. Severability. Any provision of this Agreement which is
held by a court of competent jurisdiction to be prohibited or unenforceable in
any jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
12. Execution in Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same document.
[signature page to follow]
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IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto as of the date first above written.
Company: FRONTLINE COMMUNICATIONS CORP.
By:_________________________________________________
Name:
Title:
Holders: XXXXXXXX XxXXXXXX
Address:____________________________________________
____________________________________________
Number of shares of Preferred
Stock:______________________________________________
XXXXXXXX XXXXXXXX
Address:____________________________________________
____________________________________________
Number of shares of Preferred
Stock:______________________________________________
XXXXXXX XxXXXXXX
Address:____________________________________________
____________________________________________
Number of shares of Preferred
Stock:______________________________________________
XXXXXXX XXXXXX
Address:____________________________________________
____________________________________________
Number of shares of Preferred
Stock:______________________________________________
XXXXXXX XXXXXXXXX XXXXXX
Address:____________________________________________
____________________________________________
Number of shares of Preferred
Stock:______________________________________________
XXXXXXXX XXXXXX
Address:____________________________________________
____________________________________________
Number of shares of Preferred
Stock:______________________________________________
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XXXXXXX XXXX
Address:____________________________________________
____________________________________________
Number of shares of Preferred
Stock:______________________________________________
XXXXX XXXX
Address:____________________________________________
____________________________________________
Number of shares of Preferred
Stock:______________________________________________
XXXXX XxXXXXXX
Address:____________________________________________
____________________________________________
Number of shares of Preferred
Stock:______________________________________________
XXXXXXXX XXXXX
Address:____________________________________________
____________________________________________
Number of shares of Preferred
Stock:______________________________________________
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