REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made as of this
___ day of _________, _____, by and among The ForeFront Group, Inc., a Delaware
corporation (the "Company") and Xxxxx X. Xxxxx, Xxxxxx Xxxx, Xxxxxxx Xxxxx,
Xxxxxx Xxxxx, and Jang Xxxxxxx Xxxxx (collectively referred to hereinafter as
the "Sellers").
Recitals
WHEREAS, the Sellers have, pursuant to an Acquisition Agreement, dated
as of the date hereof (the "Acquisition Agreement"), with the Company and
LanProfessional Inc., a wholly owned subsidiary of the Company (the
"Subsidiary") certain registration rights with respect to the Shares (as defined
herein) acquired under the Acquisition Agreement; and
WHEREAS, the obligations of the Sellers under the Acquisition Agreement
are conditioned upon the execution and delivery of this Agreement by the
Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereby agree as follows:
VIII Certain Definitions
As used in this Agreement, the following terms shall have the following
respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock, par value $.01 per share,
of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Exchangeable Shares" shall mean the exchangeable shares of
LanProfessional Inc. owned by the Sellers on the date hereof and which may be
exchanged for shares of Common Stock of ForeFront under the terms of the
Exchange Rights Agreement and the Exchangeable Share provisions, as defined in
the Purchase Agreement.
"Holders" shall mean the Sellers, and any other holder of Registrable
Securities to whom the registration rights conferred by this Agreement have been
transferred in compliance with Section 2.13 hereof.
"Incremental Registration Expenses" shall mean underwriting discounts
and selling commissions attributable to the Registrable Securities being sold,
incremental state or federal registration and filing fees and state Blue Sky
fees and expenses incurred as a result of a Holder's participation in the
registration to which such fees and expenses relate, and the fees and expenses
of a Holder's own accountants and experts.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registered Securities" shall mean any of the Registrable Securities
which are included in a Registration Statement filed by the Company pursuant to
Section 2 hereof and which has been declared effective by the Commission.
"Registrable Securities" shall mean (i) the Shares and (ii) any Common
Stock issued (or issuable upon the conversion or exercise of any warrant, right
or other security that is issued) as a dividend or other distribution with
respect to or in exchange for or in replacement of the Shares; provided,
however, that Registrable Securities shall not include any shares of Common
Stock which have been previously sold in a registered public offering under the
Securities Act, or shares of Common Stock which would otherwise be Registrable
Securities held by a Holder who is then permitted to sell all of such securities
within any three (3) month period pursuant to Rule 144 or other available
exemption.
"Registration Expenses" shall mean all expenses incurred by the Company
in complying with this Agreement including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fees and
disbursements of counsel for the Company, state Blue Sky fees and expenses, and
the expenses of any special audits incident to or required by any such
registration, but excluding underwriting discounts and selling commissions
attributable to the Registrable Securities being sold, as well as all expenses
normally incurred by the Company in connection with its ordinary business
activities, including, but not limited to, rent and salaries.
"Registration Statement" shall mean a registration statement filed by
the Company with the Commission for a public offering and sale of securities of
the Company (other than a registration statement on Form S-8 or Form S-4, or
their successors, or any registration statement covering only securities
proposed to be issued in exchange for securities or assets of another
corporation).
"Rule 144" shall mean Rule 144 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
"Rule 145" shall mean Rule 145 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Stockholders" shall mean the Holders of Registrable Securities
to be included in a Registration Statement.
"Shares" shall mean the shares of ForeFront Common Stock which have
been or may be acquired by the Sellers upon exchange, redemption or retraction
of the Exchangeable Shares.
2. Registration Rights.
2.1 Mandatory Registration.
(a) On or before the expiration of the Lock Up Agreement (as
defined in the Purchase Agreement) with respect to any Shares, the Company will:
(i) prepare and file with the Commission, a
Registration Statement on Form S-1 (or other appropriate form) with
respect to the Shares, and use its reasonable best efforts to cause
such Registration Statement to become and remain effective for a period
of 24 months;
(ii) prepare and file with the Commission such
amendments and supplements to such Registration Statement and the
prospectus used in connection therewith and use its reasonable best
efforts to cause such amendment and supplement to become effective as
may be necessary to keep such Registration Statement effective for the
period contemplated in (i) above and comply with the provisions of the
Securities Act with respect to the disposition of all Shares covered by
such Registration Statement in accordance with the Holders' intended
method of disposition set forth in such Registration Statement for such
period;
(iii) register or qualify the Shares, by the time the
Registration Statement is declared effective by the Commission, under
all applicable state securities or "Blue Sky" laws of such
jurisdictions as each Underwriter, if any, or Selling Stockholder shall
request in writing, provided, that the Company shall not be obligated
to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject;
(iv) keep each such registration or qualification
effective during the period the Registration Statement is required to
be kept effective, except as otherwise provided in Section 2.2 below;
(v) upon request by a Holder, do any and all other
acts and things which may be reasonably necessary to enable such
Underwriter, if any, and the Holder to consummate the disposition of
the Shares in each such jurisdiction;
(vi) notify the Holders when the Registration
Statement has become effective and when any post-effective amendments
and supplements thereto become effective;
(vii) in connection with an underwritten offering, if
any, notify each Holder if, between the effective date of the
Registration Statement and the closing of any sale of the Shares, the
representations and warranties of the Company contained in the
underwriting agreement relating to any underwritten offering cease to
be true and correct in all material respects or if the Company receives
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation of any
proceeding for such purpose;
(viii) furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to
the prospectus as the Holders from time to time may reasonably request
during the period of distribution of the Shares;
(ix) otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission with
respect to the disposition of the Shares covered by such Registration
Statement, and make available to its security Holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least 12 months, but not more than 18 months, beginning with the first
month after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act; and
(x) Use its best lawful efforts to cause all
Registrable Securities to be listed on each securities exchange on
which similar securities issued by the Company are then listed; and if
not so listed, use its best lawful efforts to be listed on the NASDAQ
system.
(b) In connection with each registration under this Section,
the Holders will furnish to the Company in writing such information as
reasonably shall be necessary in order to assure compliance with federal and
applicable state securities laws.
(c) Subject to Section 2.2 below, the Company agrees to
supplement or amend the Registration Statement, if required by the Securities
Act and to use its reasonable best efforts to cause each such amendment and
supplement to become effective .
(d) All Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to Section 2.1 hereof, shall
be borne by the Company.
(e) The obligations of the Company under this Section 2.1
shall terminate upon the expiration of 24 months from the effective date of a
Registration Statement or the date on which the Shares are no longer included as
Registrable Securities, whichever comes first.
2.2 Interference with Mandatory Registration.
(a) If, after the Registration Statement filed pursuant to
Section 2.1 has been declared effective, a stop order, injunction or other order
or requirement of the Commission or any other governmental agency or court is
issued which suspends the effectiveness of such Registration Statement, (i) the
Company shall promptly notify the Securities Commission of such event, (ii) upon
receipt of notice from the Company, the Holders will discontinue any disposition
of Shares or Registered Securities, respectively, pursuant to that Registration
Statement until receipt of notice from the Company that the suspension of the
effectiveness of the Registration Statement has been withdrawn and (iii) the
Company will use its reasonable best efforts to obtain the withdrawal of such
order or to meet such requirement at the earliest possible time.
(b) If, after the Registration Statement has become effective,
an event occurs as a result of which the Company determines that the
Registration Statement or the related prospectus contains any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the Company will
promptly notify the Selling Stockholders, if applicable, and use its reasonable
best efforts to prepare and promptly file a post-effective amendment or a
supplement to the Registration Statement or the related prospectus or promptly
file any other required document so that, as thereafter delivered to purchasers
of the Shares or Registered Securities, such prospectus will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(c) In order to exercise this right provided in (b) above, the
Company must deliver a certificate in writing to the Holder to the effect that a
delay in such sale is necessary because a sale pursuant to such Registration
Statement in its then-current form would reasonably be expected to constitute a
violation of the federal securities laws. Without limiting Section 2.2(b)
hereof, in no event shall such delay exceed twenty (20) business days; provided,
however, that if, prior to the expiration of such twenty (20) business day
period, the Company delivers a certificate in writing to the Holder to the
effect that a further delay in such sale beyond such twenty (20) business day
trading period is necessary because a sale pursuant to the Registration
Statement in its then-current form would reasonably be expected to constitute a
violation of the federal securities laws, the Company may refuse to permit the
Holders to resell any of the Shares pursuant to the Registration Statement for
an additional period not to exceed ten (10) business days, but in no event shall
any such delay exceed in the aggregate thirty (30) business days, unless the
matter giving rise to the exercise of such right is beyond the Company's
control.
2.3 Selection of Underwriters. With respect to the
registration of the Shares pursuant to Section 2.1 hereof, at any time or from
time to time after the Closing, the Sellers may elect to
have the Shares sold to one or more persons participating as underwriters for an
underwritten offering. In such event, the Company shall engage one or more
nationally recognized independent investment banking firms reasonably acceptable
to the Holders of a majority of the Shares, as underwriters, at the expense of
the Sellers, and the Company shall enter into and preform its obligations under
an underwriting agreement in customary form, including without limitation
customary indemnification and contribution obligations with such underwriters.
2.4 Piggyback Registration. Whenever the Company proposes to file a
Registration Statement at any time commencing one year after the Closing Date
and prior to five years after such Closing Date, unless a Registration Statement
with respect to the Shares has previously been filed and declared effective by
the Commission and the Selling Stockholder has not been prevented under Section
2.2 or 2.5 from using such Registration Statement to sell all of the Shares
covered by such prior Registration Statement, it will, at least 15 days prior to
such filing, give written notice to all Holders of Registrable Securities of its
intention to do so and, upon the written request of a Holder or Holders of
Registrable Securities given within 10 days after the Company provides such
notice (which request shall te the intended method of disposition of such
Registrable Securities), the Company shall (subject to Section 2.6 below) use
its best efforts to cause all Registrable Securities that the Company has been
requested by such Holder or Holders to register to be registered under the
Securities Act to the extent necessary to permit their sale or other disposition
in accordance with the intended methods of distribution specified in the request
of such Holder or Holders; provided that the Company shall have the right to
cancel, postpone or withdraw any registration effected pursuant to this Section
2.4 without obligation to any Holders of Registrable Securities. The Holders of
Registrable Securities that are registered shall be responsible for their
proportionate share of the Incremental Registration Expenses related to their
Registrable Securities, but shall not be responsible for any other Registration
Expenses.
2.5 Underwriter's Reductions. If the offering to which the proposed
registration under Section 2.4 relates is to be distributed by or through an
underwriter or underwriters, and if in the written opinion of the managing
underwriter the registration of all, or part of, the Registrable Securities that
the Holders have requested to be included and any other shares of Common Stock
sought to be registered by any other stockholder of the Corporation exercising
rights comparable to those of the Holders of Registrable Securities (the "Other
Common Stock"), would materially and adversely affect such public offering, then
the Company shall be required to include in the underwriting only that number of
Registrable Securities and Other Common Stock, if any, that the managing
underwriter believes may be sold without causing such adverse effect, and such
Registrable Securities as shall be excluded from registration by the managing
underwriter of an offering shall not be sold or offered for sale by the Holder
(unless they may be sold through the Rule 144 or other exemption thereof) until
120 days after the effective date of the Registration Statement. In the event of
any such determination by the managing underwriter, (i) the number of
Registrable Securities and Other Common Stock requested to be included in the
underwriting shall be reduced pro rata among the holders of the Registrable
Securities based on the number of shares that each has requested be included in
the Registration Statement and the holders of Other Common Stock requesting such
registration and inclusion in the underwriting and may, in the determination of
such managing underwriter and consistent with pro rata reduction, be reduced to
zero and (ii) such Holder shall be responsible for and pay their proportionate
share of the Incremental Registration Expenses directly related thereto. If
requested by such underwriters, the Registrable Securities that are subject to
the Registration Statement shall be sold to or through such underwriters at the
same price to be paid to the Company or other stockholders owning shares of
Other Common Stock included in such registration if the Company or such other
stockholders are offering Common Stock.
2.6 Registration Procedures. If and whenever the Company is required by
Section 2.4 to use its best efforts to effect the registration of any of the
Registrable Securities under the Securities Act, the Company shall:
(i) prepare and file with the Commission any
amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary
to keep the Registration Statement effective for a period sufficient to
effect the sale of the Registrable Securities, but in any event not
more than 90 days from the effective date;
(ii) furnish to each Selling Stockholder such
reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act,
and such other documents as the Selling Stockholder may reasonable
request to facilitate the public sale or other disposition of the
Registrable Securities owned by the Selling Stockholder; provided,
however, that the obligation of the Corporation to deliver copies of
prospectuses to such Selling Stockholders shall be subject to the
receipt by the Company of reasonable assurances from such Selling
Stockholders that they will comply with the applicable provisions of
the Securities Act and of such other securities laws as may be
applicable in connection with any use by them of any prospectuses; and
(iii) as expeditiously as possible, use its best
efforts to register or qualify the Registrable Shares covered by the
Registration Statement under the securities or Blue Sky laws of such
states or jurisdictions as the Selling Stockholder shall reasonable
request, and do any and all other acts and things that may be necessary
or desirable to enable the Selling Stockholder to consummate the public
sale or other disposition in such jurisdictions of the Registrable
Shares owned by the Selling Stockholder; provided, however, that the
Corporation shall not be required in connection with this Section
2.7(iii) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction.
2.7 Amendments to Prospectus. If the Company has delivered preliminary
or final prospectuses to the Selling Stockholder and after having done so, the
Company determines that such prospectus should be amended to comply with the
requirements of the Securities Act, the Company shall promptly notify the
Selling Stockholder and, if requested, the Selling Stockholder shall immediately
cease making offers of Registrable Securities and return all prospectuses to the
Corporation except for file copies used for archival purposes. The Company shall
use its best efforts to promptly provide the Selling Stockholder with revised
prospectuses and, following
receipt of the revised prospectuses, the Selling Stockholder shall be free to
resume making offers of the Registrable Securities.
2.8 Obligations of Selling Stockholders. No Registrable Securities
shall be included in a registration under Section 2.4 unless the Holder of such
Registrable Securities (a) completes and executes all questionnaires,
indemnities, underwriting agreements and other documents required under the
terms of any underwriting arrangement relating to such registration or under any
applicable rules and regulations of the Commission provided that such documents
are no more onerous than those executed or completed by the Company or any other
stockholder of the Company selling stock in such offering, and (b) provides to
the Company in writing such information as the Company may reasonably require
from such Holder (i) for inclusion in the Registration Statement relating to
such registration, (ii) describing the manner and circumstances of the proposed
sale or transfer of Registrable Securities by such Holder, and (iii) to enable
the Company to determine if an exemption provided for in this Agreement from the
Company's obligation to include such Registrable Securities in a Registration
Statement may be applicable.
2.9 Indemnification.
(a) To the extent permitted by law, the Company will indemnify
each Holder participating in a registration pursuant to this Agreement, each of
its officers and directors and partners, and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, to the extent such expenses, claims,
losses, damages or liabilities arise out of or are based on any untrue statement
(or alleged untrue statement) of a material fact contained in any registration
statement, prospectus, offering circular or other document, or any amendment or
supplement thereto, incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, not misleading, or any violation by the Company of the Securities Act
or any rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, each of its officers and
directors, and each person controlling such Holder, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, provided, however,
that the indemnity contained herein shall not apply to amounts paid in
settlement of any claim, loss, damage, liability or expense if settlement is
effected without the consent of the Company (which consent shall not
unreasonably be withheld), and provided further, that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by such Holder or
its controlling person specifically
for use therein. Notwithstanding the foregoing, insofar as the foregoing
indemnity relates to any such untrue statement (or alleged untrue statement) or
omission (or alleged omission) made in the preliminary prospectus but eliminated
or remedied in the amended prospectus on file with the Commission at the time
the registration statement becomes effective or in the final prospectus filed
with the Commission pursuant to Rule 424 of the Commission, the indemnity
agreement herein shall not inure to the benefit of any underwriter or (if there
is no underwriter) any Holder if a copy of the final prospectus filed pursuant
to Rule 424 was not furnished to the person or entity asserting the loss,
liability, claim or damage at or prior to the time such furnishing is required
by the Securities Act.
(b) To the extent permitted by law, each Holder will, if
Registrable Securities are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers and directors
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement by such
Holder (or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
omission by such Holder (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by such Holder of any rule or regulation
promulgated under the Securities Act applicable to such Holder and relating to
action or inaction required of such Holder in connection with any such
registration, qualification or compliance, and will reimburse the Company, such
Holders, such directors, officers, persons, underwriters or control persons for
any legal or other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
specifically for use therein; provided, however, that the indemnity contained
herein shall not apply to amounts paid in settlement of any claim, loss, damage,
liability or expense if settlement is effected without the consent of the Holder
(which consent shall not be unreasonably withheld). Notwithstanding the
foregoing, the liability of each Holder under this subsection (b) shall be
limited in an amount equal to the net proceeds from the sale of the shares sold
by such Holder, unless such liability arises out of or is based on willful
conduct by such Holder. In addition, insofar as the foregoing indemnity relates
to any such untrue statement (or alleged untrue statement) or omission (or
alleged omission) made in the preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the Commission at the time the
registration statement becomes effective or in the final prospectus filed
pursuant to Rule 424 of the Commission, the indemnity agreement herein shall not
inure to the benefit of the Company, any underwriter or (if there is no
underwriter) any Holder if a copy of the final prospectus filed pursuant to Rule
424 was not furnished to the person or entity asserting the loss, liability,
claim or damage at or prior to the time such furnishing is required by the
Securities Act.
(c) Each party entitled to indemnification under this Section
2.9 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and if counsel for the Indemnifying Party actually conducts the
defense, the Indemnified Party may participate in such defense at such party's
expense, and provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Agreement unless the failure to give such notice is
materially prejudicial to an Indemnifying Party's ability to defend such action
and provided further, that the Indemnifying Party shall not assume the defense
for matters as to which there is a conflict of interest or separate or different
defenses and the indemnity herein provided shall include the cost of such
defense. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, 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 to such claim or
litigation. No Indemnified Party shall consent to entry of any judgment or enter
into any settlement without the consent of each Indemnifying Party, which
consent shall not be unreasonably withheld or delayed.
(d) If the indemnification provided for in this Section 2.9 is
unavailable to an Indemnified Party in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities, in such proportion as is appropriate to reflect the relative fault
of the Company on the one hand and the Selling Stockholders on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and the
Selling Stockholders on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of material fact or
the omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Selling Stockholders and the parties' relevant
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Selling Stockholders agree that
it would not be just and equitable if contribution pursuant to this Section
2.9(d) were based solely upon the number of entities from whom contribution was
requested or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 2.9(d). The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages and liabilities referred to above in this Section 2.9(d) shall
be deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim, subject to the provisions of Section 2.9(c) hereof. Notwithstanding
the provisions of this Section 2.9(d), no Selling Stockholder shall be required
to contribute any amount or make any other payments under this Agreement which
in the aggregate exceed the proceeds received by such Selling Stockholder. No
person guilty of fraudulent misrepresentation (within the meaning of the
Securities Act) shall be entitled to contribution under this Section (d) from
any person who was not guilty of such fraudulent misrepresentation.
(e) Notwithstanding the foregoing provisions of this Section
2.10, if pursuant to an underwritten public offering of capital stock of the
Company, the Selling Stockholders and the underwriters enter into an
underwriting or purchase agreement relating to such offering which contains
provisions covering indemnification among the parties thereto in connection with
such offering, the indemnification provisions of this Section 2.10, to the
extent they are in conflict therewith, shall be deemed inoperative for the
purpose of such offering, except as to any parties to this Agreement who are not
parties to such subsequent underwriting or purchase agreement.
2.10 Certain Information.
(a) As a condition to exercising the registration rights
provided for herein, each Holder, with respect to any Registrable Securities
included in any registration, shall furnish the Company such information
regarding such Holder, the Registrable Securities and the distribution proposed
by such Holder as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
Section 2.
(b) The failure of any Holder to furnish the information
requested pursuant to Section 2.11(a) shall not affect the obligation of the
Company under Section 2 to the remaining Holder(s) who furnish such information
unless, in the reasonable opinion of counsel to the Company or the underwriters,
such failure impairs or may impair the legality of the Registration Statement or
the underlying offering.
(c) Each Holder, with respect to any Registrable Securities
included in any registration, shall cooperate in good faith with the Company and
its underwriters, if any, in connection with such registration, including
placing such shares in escrow or custody to facilitate the sale and distribution
thereof.
(d) Each Holder, with respect to any Registrable Securities
included in any registration, shall make no further sales or other dispositions,
or offers therefor, of such shares under such registration statement if, during
the effectiveness of such registration statement, an intervening event should
occur which, in the opinion of counsel to the Company, makes the prospectus
included in such registration statement no longer comply with the Securities Act
until such time as such holder has received from the Company copies of a new,
amended or supplemented prospectus complying with the Securities Act.
2.11 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to use its best lawful efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date that the Company becomes subject to the reporting
requirements of the Securities Act or the Exchange Act;
(b) File with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) So long as a Holder owns any Registrable Securities, to
promptly furnish to such Holder forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of said Rule
144 and of the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company and other information in the possession of or reasonably
obtainable by the Company as a Holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing such Holder to sell any
such securities without registration. In addition, if at any time following the
effective date of the first registration of any of the Company's securities
under the Securities Act the Company shall cease to be subject to the
requirements of Section 15(d) of the Exchange Act, the Company will make
available to any of the Holders the information required by Rule 15c2-11(a)(4)
of the Exchange Act (or any corresponding rule hereafter in effect).
2.12 Transfer of Registration Rights. The rights granted under this
Agreement may be assigned by each Seller to a transferee or assignee in
connection with any transfer or assignment of Registrable Securities provided
that: (i) such transferee or assignee is a member of the immediate family of
such stockholder or a trust for the benefit of any individual stockholder or a
corporation which shall at all times be controlled by such stockholder, and (ii)
such transferee or assignee is acquiring no less than 25,000 shares of
Registrable Securities (as presently constituted and subject to subsequent
adjustments for stock splits, stock dividends, reverse stock splits, and the
like); provided further that (i) such transfer may otherwise be effected in
accordance with applicable securities laws, (ii) the stockholder notifies the
Company in writing prior to the transfer or assignment and the assignee or
transferee agrees in writing to be bound by the provisions of this Agreement,
and (iii) such transfer is not pursuant to a registration statement under the
Securities Act or Rule 144 promulgated under the Securities Act.
III Miscellaneous.
3.1 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS BY THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
3.2 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
3.3 Effective Date; Entire Agreement; Amendment. This Agreement shall
constitute the full and entire understanding and agreement between the parties
with regard to the subject hereof, and shall be effective at such time as it has
been signed by the Company and the Sellers. Except as expressly provided herein,
this Agreement, or any provision hereof, may be amended, waived, discharged or
terminated upon the written consent of the Company and the Holders holding at
least one-half (1/2) of the then outstanding Registrable Securities owned by
Holders.
3.4 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger
including Federal Express or similar courier service, addressed (a) if to a
Holder, at such Holder's address set forth on the signature page, or at such
other address as such party shall have furnished to the Company in writing, or
(b) if to the Company, at The ForeFront Group, Inc., 0000 Xxxx Xxx Xxxxxxxxx,
Xxxxx 0000, Xxxxxxx, XX 00000, ATTN.: President, or at such other address as the
Company shall have furnished to the other parties hereto.
Each such notice or other communication shall for all purposes
of this Agreement be treated as effective upon receipt, if delivered personally
or by courier, or, if sent by mail, at the earlier of its receipt or 48 hours
after same has been deposited in a regularly maintained receptacle for the
deposit of the United States mail, addressed and mailed as aforesaid.
3.5 Delays or Omissions. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party to this
Agreement shall impair any such right, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party to this Agreement, shall be cumulative and not alternative.
3.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the parties
hereto, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
3.7 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
3.8 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
IN WITNESS WHEREOF, the undersigned or each of their
respective duly authorized officers or representatives have executed this
agreement effective upon the date first set forth above.
COMPANY
THE FOREFRONT GROUP, INC.
By:
Name:
Title:
SELLERS
Name: Xxxxx X. Xxxxx
Address:
-------------------------
Name: Naveen Seth
Address:
-------------------------
Name: Xxxxxxx Xxxxx
Address:
-------------------------
Name: Xxxxxx Xxxxx
Address:
-------------------------
Name: Jang Xxxxxxx Xxxxx
Address:
