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Exhibit 4.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made by and between
America's Best Karate, a California corporation (the "Company"), and the
person whose name appears on the signature page attached hereto
(individually, a "Holder" and collectively, with other shareholders, the
"Holders") who purchased shares of Common Stock of the Company in a
private sale of 10,854 shares of Common Stock, no par value per share,
at a price of $22.50 per share (the "Shares").
WHEREAS, pursuant to the terms of and in order to induce the
Holders to enter into a certain subscription agreement dated the date
hereof between the Company and the Holders (the "Subscription
Agreement") to purchase the Shares, the Company and the Holders have
agreed to enter into this Agreement; and
WHEREAS, it is intended by the Company and the Holders that
this Agreement shall become effective immediately upon the acquisition
by the Holders of the Shares;
NOW, THEREFORE, in consideration of the promises and the
mutual covenants contained herein, the Company hereby agrees as follows:
1. Piggyback Registration. If the Company proposes to
register any of its securities under the Securities Act of 1933, as
amended (the "1933 Act") (other than in connection with its initial
public offering ("IPO"), a merger or pursuant to Form S-8 or other
comparable form), the Company shall include the Shares, (referred to as
the "Registrable Securities") in such registration statement. The
Company shall at such time give prompt written notice to all Holders of
its intention to file such registration statement and of such Holders'
rights under such proposed registration, and upon the request of any
Holder delivered to the Company within fifteen (15) days after giving of
such notice (which request shall specify the Registrable Securities
intended to be disposed of by such Holder and the intended method of
disposition thereof), the Company shall include such Registrable
Securities held by each such Holder requested to be included in such
registration; provided, however, that if at any time after giving such
written notice of the Company's intention to register any of the
Holder's Registrable Securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay the
registration of such Registrable Securities, the Company may give
written notice of such determination to each Holder and thereupon shall
be relieved of its obligation to register any Registrable Securities
issued or issuable in connection with such registration (but not from
its obligation to pay registration expenses in connection therewith or
to register the Registrable Securities in a subsequent registration);
and in the case of a determination to delay a registration shall
thereupon be permitted to delay registering any Registrable Securities
for the same period as the delay in respect of securities being
registered for the Company's own account.
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2. Obligation to Include Registrable Securities in
Offering. Notwithstanding anything contained in Section 1 of this
Agreement, the Company shall not be required to include any of the
Holders' Registrable Securities in an underwritten offering of the
Company's securities unless such Holders accept the terms of the
underwriting as agreed upon between the Company and the underwriters
selected by it (provided such terms are usual and customary for selling
stockholders) and the Holders agree to execute and/or deliver such
documents in connection with such registration as the Company or the
managing underwriter may reasonably request.
3. Mandatory Registration. In the event the Holders have
not sold all of their Registrable Securities in connection with a
registration statement pursuant to Sections 1 and 2 hereof the Company
shall, upon the demand of the Holders of at least a majority of the
Registrable Securities (which demand may be made at any time after the
Effective Date of the Company's initial registration statement), file a
registration statement covering the sale of all remaining Registrable
Securities as soon as practicable no later than 45 days after such
demand. The Company is hereby required to exercise its best efforts to
cause such registration statement to become effective.
4. Cooperation with Company. Holders will cooperate with
the Company in all respects in connection with this Agreement,
including, timely supplying all information reasonably requested by the
Company and executing and returning all documents reasonably requested
in connection with the registration and sale of the Registrable
Securities.
5. Registration Procedures. If and whenever the Company
is required by any of the provisions of this Agreement to use its best
efforts to effect the registration of or file a registration statement
covering any of the Registrable Securities under the 1933 Act, the
Company shall (except as otherwise provided in this Agreement), as
expeditiously as possible:
a. prepare and file with the Securities and
Exchange Commission (the "Commission") a registration statement and
shall use its best efforts to cause such registration statement to
become effective and remain effective until all the Registrable
Securities are sold or become capable of being publicly sold without
registration under the 1933 Act.
b. prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of
the 1933 Act with respect to the sale or other disposition of all
securities covered by such registration statement whenever the Holder or
Holders of such securities shall desire to sell or otherwise dispose of
the same (including prospectus supplements with respect to the sales of
securities from time to time in connection with a registration statement
pursuant to Rule 415 of the Commission);
c. furnish to each Holder such numbers of copies
of a summary prospectus or other prospectus, including a preliminary
prospectus or any amendment or supplement to any prospectus, in
conformity with the requirements of the 1933 Act, and such other
documents, as such Holder may reasonably request in order to facilitate
the public sale or other disposition of the securities owned by such
Holder;
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d. use its best efforts to register and quality
the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request, and do any and all other acts and things which may
be necessary or advisable to enable such Holder to consummate the public
sale or other disposition in such jurisdiction of the securities owned
by such Holder, except that the Company shall not for any such purpose
be required to quality to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified or to file therein any
general consent to service of process;
e. use its best efforts to list such securities on
any securities exchange on which any securities of the Company are then
listed, if the listing of such securities is then permitted under the
rules of such exchange;
f. enter into and perform its obligations under an
underwriting agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or underwriters
of such underwritten offering;
g. notify each Holder of Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto covered by such registration statement is required to
be delivered under the 1933 Act, of the happening of any event of which
it has knowledge as a result of which the prospectus included 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 the light of the circumstances then existing; and
h. furnish, at the request of any Holder on the
date such Registrable Securities are delivered to the underwriters for
sale pursuant to such registration or, if such Registrable Securities
are not being sold through underwriters, on the date the registration
statement with respect to such Registrable Securities becomes effective,
(i) an opinion, dated such date, of the counsel representing the Company
for the purpose of such registration, addressed to the underwriters, if
any, covering such legal matters with respect to the registration in
respect of which such opinion is being given as the underwriter of such
Registrable Securities may reasonably request and are customarily
included in such an opinion and (ii) letters, dated, respectively, (1)
the effective date of the registration statement and (2) the date such
Registrable Securities are delivered to the underwriters, if any, for
sale pursuant to such registration from a firm of independent certified
public accountants of recognized standing selected by the Company,
addressed to the underwriters, if any, covering such financial,
statistical and accounting matters with respect to the registration in
respect of which such letters are being given as the underwriter of such
Registrable Securities may reasonably request and are customarily
included in such letters; and
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i. take such other actions as shall be reasonably
requested by any Holder to facilitate the registration and sale of the
Registrable Securities.
6. Restrictions on Transfer of Registrable Securities.
The Holder agrees that he will not sell or transfer any of the
Registrable Securities for a period of two years from the Effective Date
of any registration statement in which such Registrable Securities are
included without the prior written consent of Xxxxxx Xxxx Securities
Group, Inc.
7. Expenses. All expenses incurred in any registration
of the Holders' Registrable Securities under this Agreement shall be
paid by the Company if such registration is pursuant to Section 1 of
this Agreement and by the Holders if such registration is pursuant 3 of
this Agreement, including, without limitation, printing expenses, fees
and disbursements of counsel for the Company, expenses of any audits to
which the Company shall agree or which shall be necessary to comply with
governmental requirements in connection with any such registration, all
registration and filing fees for the Holders' Registrable Securities
under federal and State securities laws, and expenses of complying with
the securities or blue sky laws of any jurisdictions pursuant to Section
2(h)(i); provided, however, that in no event shall the Company be liable
for (a) any discounts or commissions to any underwriter; (b) any stock
transfer taxes incurred with respect to Registrable Securities sold in
the Offering or (c) the fees and expenses of counsel for any Holder.
8. Indemnification. In the event any Registrable
Securities are included in a registration statement pursuant to this
Agreement:
a. Company Indemnity. Without limitation of any
other indemnity provided to any Holder, either in connection with the
Offering or otherwise, to the extent permitted by law, the Company shall
indemnity and hold harmless each Holder, the affiliates, officers,
directors and partners of each Holder, any underwriter (as defined in
the 0000 Xxx) for such Holder, and each person, if any, who controls
such Holder or underwriter (within the meaning of the 1933 Act or the
Securities Exchange Act of 1934 (the "Exchange Act"), against any
losses, claims, damages or liabilities ()joint or several) to which they
may become subject under the 1933 Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) 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, or (iii) any
violation or alleged violation by the Company of the 1933 Act, the
Exchange Act, or any state securities law or any rule or regulation
promulgated under the 1933 Act, the Exchange Act or any state securities
law, and the Company shall reimburse each such Holder, affiliate,
officer or director or partner, underwriter or controlling person for
any legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable to any
Holder in any such case for any such loss, claim, damage, liability or
action to the extent that it arises out of or is based upon a Violation
which occurs in reliance upon and in conformity with information
furnished expressly for use in connection with such registration by any
such Holder or any other officer, director or controlling person
thereof.
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x. Xxxxxx Indemnity. Each Holder shall indemnity
and hold harmless the Company, its affiliates, and their counsel,
officers, directors, shareholders and representatives, any underwriter
(as defined in the 0000 Xxx) and each person, if any, who controls the
Company or the underwriter (within the meaning of the 1933 Act or
liabilities joint or several) to which they may become subject under the
1933 Act, the Exchange Act or any state securities law, and the Holder
shall reimburse the Company, affiliate, counsel, officer or director or
partner, underwriter or controlling person for any legal or other
expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any statements or information provided by
such Holder to the Company in connection with the offer or sale of
Registrable Securities.
c. Notice: Right to Defend. Promptly after receipt
by an indemnified party under this Section 8 of notice of the
commencement of any action (including any governmental action), such
indemnified party shall, if a claim in respect thereof is to be made
against any indemnifying party under this Section 8 deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in and to assume
the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
indemnifying party, if the indemnified party reasonably believes that
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. It is understood that
the Company shall not in respect of the legal expenses of any
Indemnified Party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm (in addition to any local
counsel) for all such Indemnified Parties, and that all such fees and
expenses shall be reimbursed as they are incurred. The failure to
deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall relieve such
indemnifying party of any liability to the indemnified party under this
Agreement only if and to the extent that such failure is prejudicial to
its ability to defend such action, and the omission so to deliver
written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under
this Agreement.
d. Contribution. If the indemnification provided
for in this Agreement is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, liability,
claim, damage or expense referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the
other hand in connection with the statements or omissions which resulted
in such loss, liability, claim, damage or expense as well as any other
relevant equitable considerations. The relevant fault of the
indemnifying party and the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. Notwithstanding the foregoing, the amount any Holder shall be
obligated to contribute pursuant to the Agreement shall be limited to an
amount equal to the proceeds to such Holder of the Registrable
Securities sold pursuant to the registration statement which gives rise
to such obligation to contribute (less the aggregate amount of any
damages which the Holder has otherwise been required to pay in respect
of such loss, claim, damage, liability or action or any substantially
similar loss, claim, damage, liability or action arising from the sale
of such Registrable Securities).
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e. Survival of Indemnitv. The indemnification
provided by this Agreement shall be a continuing right to
indemnification and shall survive the registration and sale of any
Registrable Securities by any person entitled to indemnification
hereunder and the expiration or termination of this Agreement.
9. Limitation on Other Registration Rights. Except as
otherwise set forth in this Agreement, the Company shall not, without
the prior written consent of the Holders of Registrable Securities
representing a majority thereof held by all the Holders, file any
registration statement filed on be half of any person (including the
Company) other than a Holder to become effective during any period when
the Company is not in compliance with this agreement.
10. Remedies.
a. Time is of Essence. The Company agrees that
time is of the essence of each of the covenants contained herein and
that, in the event of a dispute hereunder, this Agreement is to be
interpreted and construed in a manner that will enable the Holders to
sell their Registrable Securities as quickly as possible after such
Holders have indicated to the Company that they desire their Registrable
Securities to be registered. Any delay on the part of the Company not
expressly permitted under this Agreement, whether material or not, shall
be deemed a material breach of this Agreement.
b. Remedies Upon Default or Delay. The Company
acknowledges the breach of any part of this Agreement may cause
irreparable harm to a Holder and that monetary damages alone may be
inadequate. The Company therefore agrees that the Holder shall be
entitled to injunctive relief or such other applicable remedy as a court
of competent jurisdiction may provide. Nothing contained herein will be
construed to limit a Holder's right to any remedies at law, including
recovery of damages for breach of any part of this Agreement.
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11. Notices.
a. All communications under this Agreement shall
be in writing and shall be mailed by first class mail, postage prepaid,
or telegraphed or telexed with confirmation of receipt or delivered by
hand or by overnight delivery service,
b. If to the Company, at:
CIO America's Best Karate
00000 Xxxxxxxxxx Xxxxxx, Xxxxx 0
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxx, Chief Executive
Officer
or at such other address as it may have furnished in
writing to the Holders of Registrable Securities at the time
outstanding, or
c. if to any Holder of any Registrable Securities,
to the address of such Holder as it appears in the stock or warrant
ledger of the Company.
d. Any notice so addressed, when mailed by
registered or certified mail shall be deemed to be given three days
after so mailed, when telegraphed or telexed shall be deemed to be given
when transmitted, or when delivered by hand or overnight shall be deemed
to be given when delivered.
12. Successors and Assigns. Except as otherwise expressly
provided herein, this Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company and
each of the Holders.
13. Amendment and Waiver. This Agreement may be amended,
and the observance of any term of this Agreement may be waived, but only
with the written consent of the Company and the Holders of securities
representing a majority of the Registrable Securities; provided,
however, that no such amendment or waiver shall take away any
registration right of any Holder of Registrable Securities or reduce the
amount of reimbursable costs to any Holder of Registrable Securities in
connection with any registration hereunder without the consent of such
Holder; further provided, however, that without the consent of any other
Holder of Registrable Securities, any Holder may from time to time enter
into one or more agreements amending, modifying or waiving the
provisions of this Agreement if such action does not adversely affect
the rights or interest of any other Holder of Registrable Securities. No
delay on the part of any party in the exercise of any right, power or
remedy shall operate as a waiver thereof, nor shall any single or
partial exercise by any party of any right, power or remedy preclude any
other or further exercise thereof, or the exercise of any other right,
power or remedy.
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14. Counterparts. One or more counterparts of this
Agreement may be signed by the parties, each of which shall be an
original but all of which together shall constitute one and same
instrument.
15. Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of New
York, without giving effect to conflicts of law principles.
16. Invalidity of Provisions. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.
17. Headings. The headings in this Agreement are for
convenience of reference only and shall not be deemed to alter or affect
the meaning or interpretation of any provisions hereof.
IN WITNESS WHEREOF, the undersigned has executed this
Agreement as
of the ____ day of___________,199__
America's Best Karate
By:_________________ __________________
Xxxxxxx Xxxx Print Name of Holder
Chief Executive Officer
__________________
Signature of Holder
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The following persons, and their respective number of shares of common
stock, have been granted registration rights per Registration Rights
Agreement herewith, executed within the month of March 1997.
Name Shares
Xxxxx Xxxxxx 4,000
Xxxxxx Xxxxx 20,000
Xxxxx Xxxxx 5,000
Xxxxxxx Xxxxx Xxx, Xx. 6,000
Xxxxx Xxxxxx 60,000
Xxxxxx Xxxxxx 31,000
Xxxxx X. Xxxxxxxx 19,000
Xxxxx Xxxxx 60,000
Xxxx Xxxxxxx 25,000
Xxxxx Xxxxxxxx 25,000
_______
255,000
