REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is made and entered into
as of February 21, 2006, by and between The Singing Machine Company, Inc., a
Delaware corporation (the "Company"), and the purchasers of the Company's Common
Stock that are signatories hereto (each a "Purchaser" and collectively, the
"Purchasers").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof, by and between the Purchasers and the Company (the
"Purchase Agreement"), and pursuant to the Warrants referred to therein.
Capitalized terms used but not defined herein shall have the meaning set forth
in the Purchase Agreement.
The Company and the Purchasers hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have
the following meanings:
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means shares of the Company's common stock, par value $0.01
per share.
"EFFECTIVENESS DATE" means the 120th day following the Filing Date.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section 2(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
any successor statute.
"FILING DATE" means, with respect to the Registration Statement required
to be filed hereunder, a date no later than sixty (60) days following the date
hereof and, with respect to shares of Common Stock issuable to the Holder as a
result of adjustments to the conversion price of the exercise price of the
Warrants, pursuant to their respective terms, sixty (60) days after the
occurrence of such event or the date of such adjustment.
"HOLDER" OR "HOLDERS" means the Purchasers or any of its affiliates or
transferees to the extent any of them hold Registrable Securities.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 6(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 6(c).
"PERSON" means any individual, corporation, partnership, limited liability
company, or other legal entity.
"PROCEEDING" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
1
"PROSPECTUS" means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"REGISTRABLE SECURITIES" means the shares of Common Stock issued and/or
issuable upon the exercise of the Warrants.
"REGISTRATION STATEMENT" means each registration statement required to be
filed hereunder, including the Prospectus.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"RULE 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and any
successor statute.
"TRADING MARKET" means any of the NASD OTC Bulletin Board, NASDAQ Capital
Market, the NASDAQ National Market, the American Stock Exchange or the New York
Stock Exchange.
"WARRANTS" means the Common Stock purchase warrants issued pursuant to the
Purchase Agreement.
2. REGISTRATION.
(a) On or prior to the Filing Date the Company shall prepare and
file with the Commission a Registration Statement covering the Registrable
Securities for an offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form S-3 (except if the Company is
not then eligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on another appropriate form in
accordance herewith). The Company shall cause the Registration Statement to
become effective and remain effective as provided herein. The Company shall use
its reasonable commercial efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event no later than the Effectiveness Date. The
Company shall use its reasonable commercial efforts to keep the Registration
Statement continuously effective under the Securities Act until the date which
is the earlier date of when (i) all Registrable Securities have been sold or
(ii) all Registrable Securities may be sold immediately without registration
under the Securities Act and without volume restrictions pursuant to Rule
144(k), as determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Company's
transfer agent and the affected Holders (the "Effectiveness Period").
2
(b) If: (i) the Registration Statement is not filed on or prior to
the Filing Date; (ii) the Registration Statement is not declared effective by
the Commission by the Effectiveness Date; (iii) after the Registration Statement
is filed with and declared effective by the Commission, the Registration
Statement ceases to be effective (by suspension or otherwise) as to all
Registrable Securities to which it is required to relate at any time prior to
the expiration of the Effectiveness Period (without being succeeded immediately
by an additional registration statement filed and declared effective) for a
period of time which shall exceed 30 days in the aggregate per year or more than
20 consecutive calendar days (defined as a period of 365 days commencing on the
date the Registration Statement is declared effective); or (iv) the Common Stock
is not listed or quoted, or is suspended from trading on any Trading Market for
a period of three (3) consecutive Trading Days (provided the Company shall not
have been able to cure such trading suspension within 30 days of the notice
thereof or list the Common Stock on another Trading Market); (any such failure
or breach being referred to as an "Event," and for purposes of clause (i) or
(ii) the date on which such Event occurs, or for purposes of clause (iii) the
date which such 30 day or 20 consecutive day period (as the case may be) is
exceeded, or for purposes of clause (iv) the date on which such three (3)
Trading Day period is exceeded, being referred to as "Event Date"), then during
the period beginning on the Event Date and ending on (but not including) the
date that the applicable Event is cured, the Company shall pay to each Holder an
amount in cash, as liquidated damages and not as a penalty, equal to 1.0% for
each thirty (30) day period (prorated for partial periods on a daily basis) of
the Purchase Price of the Registrable Securities then held by such Holder and
the amount by which the Warrants are in the money. While such Event continues,
such liquidated damages shall be paid not less often than each thirty (30) days.
Any unpaid liquidated damages as of the date when an Event has been cured by the
Company shall be paid within five (5) days following the date on which such
Event has been cured by the Company.
(c) Within three (3) business days following the date on which the
Registration Statement is declared effective by the Commission, and assuming no
stop-order has been issued with respect to the Registration Statement, the
Company shall furnish to each Holder: (x) a letter, dated such date, of outside
counsel representing the Company addressed to such Holder, confirming such
effectiveness and, to the knowledge of such counsel, the absence of any stop
order, and (y) in the case of an underwriting (or if the Commission deems such
Holder as an underwriter for disclosure purposes), (i) a copy of an opinion,
dated such date, of such outside counsel, in such form and substance as is
required to be given to the underwriters, and (ii) a letter addressed to such
Holder, dated such date, from the Company's independent certified public
accountants, in such form and substance as is required to be given by the
Company's independent certified public accountants to such underwriters.
3. REGISTRATION PROCEDURES. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by the
Registration Statement and to keep such Registration Statement effective until
the expiration of the Effectiveness Period;
3
(b) upon the effectiveness of the Registration Statement, furnish to
the Purchaser such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus) as the
Purchaser reasonably may request to facilitate the public sale or disposition of
the Registrable Securities covered by the Registration Statement;
(c) use its commercially reasonable efforts to register or qualify
the Purchaser's Registrable Securities covered by the Registration Statement
under the securities or "blue sky" laws of such jurisdictions within the United
States as the Purchaser may reasonably request, provided, however, that the
Company shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction;
(d) list the Registrable Securities covered by the Registration
Statement with any securities exchange on which the Common Stock of the Company
is then listed;
(e) immediately notify the Purchaser at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the Prospectus contained in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing; and
(f) make available for inspection by the Purchasers and any
attorney, accountant or other agent retained by the Purchasers, upon reasonable
prior notice, all publicly available, non-confidential financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all publicly
available, non-confidential information reasonably requested by the attorney,
accountant or agent of the Purchasers.
4. OBLIGATIONS OF EACH HOLDER. In connection with the registration of
Registrable Securities pursuant to a Registration Statement, each Holder shall:
(a) timely furnish to the Company in writing such information
regarding itself and the intended method of disposition of such Registrable
Securities as the Company shall reasonably request in order to effect the
registration thereof;
(b) upon receipt of any notice from the Company of the happening of
any Discontinuation Event described in Section 7(d), immediately discontinue any
sale or other disposition of such Registrable Securities pursuant to such
Registration Statement until the filing of an amendment or supplement is
delivered to the Holder as described in Section 7(d), and use commercially
reasonable efforts to maintain the confidentiality of such notice and its
contents;
(c) in the event of an underwritten offering of such Registrable
Securities in which such Holder participates, enter into a customary and
reasonable underwriting agreement and execute such other documents as the
Company and the managing underwriter for such offering may reasonably request;
4
(d) notify the Company when it has sold all of the Registrable
Securities held by it; and
(e) notify the Company in the event that any information supplied by
such Holder for inclusion in such Registration Statement or related prospectus
is untrue or omits to state a material fact required to be stated therein or
necessary to make such information not misleading in light of the circumstances
then existing; immediately discontinue any sale or other disposition of such
Registrable Securities pursuant to such Registration Statement until the filing
of an amendment or supplement to such prospectus as may be necessary so that
such prospectus does not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;
and use commercially reasonable efforts to assist the Company as may be
appropriate to make such amendment or supplement effective for such purpose.
5. REGISTRATION EXPENSES. All expenses relating to the Company's
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders (to the extent such counsel is required due to Company's
failure to meet any of its obligations hereunder), are called "Registration
Expenses." All selling commissions applicable to the sale of Registrable
Securities, including any fees and disbursements of any special counsel to the
Holders beyond those included in Registration Expenses, are called "Selling
Expenses." The Company shall only be responsible for all Registration Expenses
and shall not be responsible for the Selling Expenses.
6. INDEMNIFICATION.
(a) In the event of a registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the Purchasers, and their officers, directors and each other
person, if any, who controls the Purchasers within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Purchasers, or such persons may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary Prospectus or final
Prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, subject to the provisions of Section 6(c) below,
will reimburse the Purchasers, and each such person for any reasonable legal (of
no more than one separate counsel) or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon: (i) an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by or on behalf of any Purchaser or any such person
specifically for use in any such document, or (ii) a failure of such person to
deliver or cause to be delivered the final Prospectus contained in the
Registration Statement and made available by the Company, if such delivery is
required by applicable law.
5
(b) In the event of a registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, each Purchaser will
indemnify and hold harmless the Company, and its officers, directors and each
other person, if any, who controls the Company within the meaning of the
Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact which was
furnished by such Purchaser to the Company expressly for use in (and such
information is contained in) the Registration Statement under which such
Registrable Securities were registered under the Securities Act pursuant to this
Agreement, any preliminary Prospectus or final Prospectus contained therein, or
any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and,
subject to the provisions of Section 6(c) below, will reimburse the Company and
each such person for any reasonable legal (of no more than one separate counsel)
or other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action, provided, however, that such
Purchaser will be liable in any such case if and only to the extent that any
such loss, claim, damage or liability arises out of or is based upon (i) an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished to the Company by or on behalf of
such Purchaser specifically for use in any such document, or (ii) a failure of
such person to deliver or cause to be delivered the final Prospectus contained
in the Registration Statement and made available by the Company, if such
delivery is required by applicable law. Notwithstanding the provisions of this
paragraph, no Purchaser shall be required to indemnify any person or entity in
excess of the amount of the aggregate net proceeds received by such Purchaser in
respect of Registrable Securities in connection with any such registration under
the Securities Act.
(c) Promptly after receipt by a party entitled to claim
indemnification hereunder (an "Indemnified Party") of notice of the commencement
of any action, such Indemnified Party shall, if a claim for indemnification in
respect thereof is to be made against a party hereto obligated to indemnify such
Indemnified Party (an "Indemnifying Party"), notify the Indemnifying Party in
writing thereof, but the omission so to notify the Indemnifying Party shall not
relieve it from any liability which it may have to such Indemnified Party other
than under this Section 6(c) and shall only relieve it from any liability which
it may have to such Indemnified Party under this Section 6(c) if and to the
extent the Indemnifying Party is prejudiced by such omission. In case any such
action shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such Indemnified
Party, and, after notice from the Indemnifying Party to such Indemnified Party
of its election so to assume and undertake the defense thereof, the Indemnifying
Party shall not be liable to such Indemnified Party under this Section 6(c) for
any legal expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; if the Indemnified Party retains its own counsel, then
the Indemnified Party shall pay all fees, costs and expenses of such counsel,
provided, however, that, if the defendants in any such action include both the
indemnified party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the Indemnifying
Party or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, the Indemnified Party
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the Indemnifying Party as incurred.
6
(d) In order to provide for just and equitable contribution in the
event of joint liability under the Securities Act in any case in which either:
(i) a Purchaser, or any officer, director or controlling person of a Purchaser,
makes a claim for indemnification pursuant to this Section 6 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 6 provides for indemnification in
such case, or (ii) contribution under the Securities Act may be required on the
part of such Purchaser or such officer, director or controlling person of such
Purchaser in circumstances for which indemnification is provided under this
Section 6; then, and in each such case, the Company and such Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that such
Purchaser is responsible only for the portion represented by the percentage that
the public offering price of its securities offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, provided, however, that, in any such case, (A) such
Purchaser will not be required to contribute any amount in excess of the public
offering price of all such securities offered by it pursuant to such
Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
7. MISCELLANEOUS.
(a) Remedies. In the event of a breach by the Company or by a
Holder, of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to exercise
all rights granted by law and under this Agreement, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement.
(b) No Piggyback on Registrations. Except as and to the extent
specified in Schedule 7(b) hereto, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in any Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof enter
into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. Except as and to the
extent specified in Schedule 7(b) hereto, the Company has not previously entered
into any agreement granting any registration rights with respect to any of its
securities to any Person that have not been fully satisfied.
(c) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to the
Registration Statement.
7
(d) Discontinued Disposition. Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of a Discontinuation Event (as defined below), such Holder
will forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph. For purposes of this Section 7(d), a "Discontinuation Event" shall
mean (i) when the Commission notifies the Company whether there will be a
"review" of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Company shall provide true and
complete copies thereof and all written responses thereto to each of the
Holders); (ii) any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and/or (v) the occurrence of any event or passage of time that makes
the financial statements included in such Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or Prospectus, as the case may be, it 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.
(e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity securities to
be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen (15) days after receipt of such notice, any
such Holder shall so request in writing, the Company shall use its best efforts
to include in such registration statement all or any part of such Registrable
Securities such holder requests to be registered to the extent the Company may
do so without violating registration rights of others which exist as of the date
of this Agreement, subject to customary underwriter cutbacks applicable to all
holders of registration rights and subject to obtaining any required the consent
of any selling stockholder(s) to such inclusion under such registration
statement. The Company shall have a right to postpone, delay or withdraw any
registration pursuant to this Section 7(e) without obligation to the Holder.
(f) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of at least two-thirds (2/3) of the then outstanding Registrable
Securities (without regard to any limitation on conversion or exercise of the
Registrable Securities). Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence.
8
(g) Notices. Any notice or request hereunder may be given to the
Company or the Purchasers at the respective addresses set forth in the Purchase
Agreement or as may hereafter be specified in a notice designated as a change of
address under this Section 7(g). Any notice or request hereunder shall be given
by registered or certified mail, return receipt requested, hand delivery,
overnight mail, Federal Express or other national overnight next day carrier
(collectively, "Courier") or telecopy (confirmed by mail). Notices and requests
shall be, in the case of those by hand delivery, deemed to have been given when
delivered to any party to whom it is addressed, in the case of those by mail or
overnight mail, deemed to have been given three (3) business days after the date
when deposited in the mail or with the overnight mail carrier, in the case of a
Courier, the next business day following timely delivery of the package with the
Courier, and, in the case of a telecopy, when confirmed.
(h) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign their respective rights hereunder in
connection with the transfer of the Shares or Warrants as long as: (i) the
Company is, within a reasonable period of time following such transfer,
furnished with written notice of the name and address of such transferee, (ii)
the transferee agrees in writing with the Company to be bound by all of the
provisions hereof, and (iii) such transfer is made in accordance with the
applicable requirements of the Purchase Agreement and with the prior consent of
the Company, which consent shall not be unreasonably withheld; provided,
however, that the registration rights granted in this Agreement shall not be
transferred to any person or entity that receives any Shares, Warrants or
Registrable Securities in a public transaction pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144.
(i) Execution and Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of New York,
without regard to the principles of conflicts of law thereof. Each party hereto
hereby irrevocably waives personal service of process and consents to process
being served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document, then
the prevailing party in such Proceeding shall be reimbursed by the other party
for its reasonable attorney's fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Proceeding.
9
(k) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
COMPANY:
THE SINGING MACHINE COMPANY, INC.
/s/Yi Xxxx Xxxx
------------------------------
Yi Xxxx Xxxx, Interim Chief Executive Officer
HOLDERS:
KONCEPTS INTERNATIONAL LIMITED
By: /s/ Xxx Sak Hong
------------------------------
Name: Xxx Sak Hong
Its: Chairman
11
