REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement ("Agreement") dated as of December 17, 1998,
between Frontline Communications Corp., a Delaware corporation (the "Company"),
and Xxxxx Xxxxxxxxxxxx (the "Holder").
RECITALS
WHEREAS, the Company issued to the Holder on even date herewith an
aggregate of 113,364 shares of common stock, par value $.01 per share, of the
Company, as more particularly provided for in the Stock Purchase Agreement dated
as of November 24, 1998, as amended as of even date herewith, among the Company,
Webspan Communications, Inc. and the Holder (the "Purchase Agreement") and that
side letter agreement of even date herewith among the same parties; and
WHEREAS, it is a condition to the performance of the Holder's obligations
under the Purchase Agreement that the Company enter into this Agreement with the
Holder with respect to 111,364 shares of Common Stock (the "Shares").
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 a one-year period following the date
hereof, the Company proposes to prepare and file with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
covering securities of the Company held by management, 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 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 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(a)
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 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 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
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 will pay all costs, fees and expenses in connection
with the Registration Statement 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 Shares sold by the Holder pursuant thereto.
(b) The Company will use reasonable efforts to qualify or register the
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.
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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 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 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 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 and his 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
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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, 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:
Mendel Zilbergerg & Associates, P.C.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx
Attn: Xxxxxx Xxxxxxxxxx, 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 Holder.
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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 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: /s/ Xxxxxxx X. Xxxx-Xxxxxxxx
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Name: Xxxxxxx X. Xxxx-Xxxxxxxx
Title: President
Holder:
/s/ Xxxxx Xxxxxxxxxxxx
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XXXXX XXXXXXXXXXXX
Address:
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