EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of this 12th day of September 2005 by and among Knockout Holdings, Inc.,
a corporation organized under the laws of Delaware (the "Company"), and the
persons identified as Purchasers pursuant to that certain Purchase Agreement of
even date herewith by and among the Company and such Purchasers (the "Purchase
Agreement").
The parties hereby agree as follows:
1. Definitions.
Capitalized terms used herein but not otherwise defined shall have
the meaning ascribed thereto in the Purchase Agreement issued pursuant to the
Purchase Agreement. As used in this Agreement, the following terms shall have
the following meanings:
"Additional Registrable Securities" shall mean any shares of Common
Stock which are included within the definition of Registrable Securities but not
included in any Registration Statement filed pursuant to Section 2(a)(i) below.
"Common Stock" shall mean the Company's Common Stock, par value
$0.001 per share.
"Conversion Price" shall have the meaning set forth in the Notes.
"Filing Date" shall mean the date which is sixty (60) days following
the Closing Date.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Securities or
Additional Registrable Securities covered by such Registration Statement and by
all other amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such prospectus.
"Purchasers" shall mean the purchasers identified in the Purchase
Agreement and any subsequent holder of any Notes Registrable Securities or
Additional Registrable Securities as a result of a transfer of such securities.
"Register," "registered" and "registration" refer to a registration
made by preparing and filing a registration statement or similar document in
compliance with the 1933 Act (as defined below), and the declaration or ordering
of effectiveness of such registration statement or document.
"Registrable Securities" shall mean (i) the Underlying Shares and
any other shares of Common Stock issued or issuable (a) upon conversion of, or
payment of interest or repayment of principal under, the Notes, or (b) upon any
distribution with respect to, any exchange for or any replacement of such Notes,
or (c) upon any conversion, exercise or exchange of any securities issued in
connection with any such distribution, exchange or replacement; (ii) 5,800,000
shares of Common Stock issued or issuable upon conversion of 36,250 shares of
the Company's Series A Convertible Preferred Stock acquired by the Purchasers in
accordance with the agreement with certain shareholders of the Company, dated as
of the date hereof; (iii) 3,000,000 shares of Common Stock issued or issuable
upon conversion of 18,750 shares of the Company's Series A Convertible Preferred
Stock acquired by the Purchasers in accordance with the agreement with Xxxx
Xxxxxxx, dated the date hereof; (iv) 688,320 shares of Common Stock issued or
issuable upon conversion of 4,302 shares of the Company's Series A Convertible
Preferred Stock acquired by certain of the Purchasers as reimbursement for
expenses in accordance with their fee letter dated the date hereof, (v)
securities issued or issuable upon any stock split, stock dividend,
recapitalization or similar event with respect to such shares of Common Stock;
and (vi) any other security issued as a dividend or other distribution with
respect to, in exchange for, or in replacement of, the securities referred to in
the preceding clauses.
"Registration Statement" shall mean any registration statement of
the Company filed under the 1933 Act that covers the resale of any of the
Registrable Securities or Additional Registrable Securities pursuant to the
provisions of this Agreement, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such Registration Statement.
"SEC" means the U.S. Securities and Exchange Commission. ---
"1933 Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
2. Registration.
(a) Registration Statements.
(i) Registrable Securities. On or prior to the Filing Date,
the Company shall prepare and file with the SEC one Registration Statement on
Form S-3 (or, if Form S-3 is not then available to the Company, on such form of
registration statement as is then available to effect a registration for resale
of the Registrable Securities), covering the resale of the Registrable
Securities in an amount equal to (i) at least 100% of the number of Underlying
Shares issuable upon full conversion of the Notes at the applicable Conversion
Price on the Maturity Date; and (ii) 5,800,000 shares of Common Stock issued or
issuable upon conversion of 36,250 shares of the Company's Series A Convertible
Preferred Stock acquired by the Purchasers in accordance with the agreement with
certain shareholders of the Company, dated as of the date hereof; (iii)
3,000,000 shares of Common Stock issued or issuable upon conversion of 18,750
shares of the Company's Series A Convertible Preferred Stock acquired by the
Purchasers in accordance with the agreement with Xxxx Xxxxxxx, dated the date
hereof; and (iv) 688,320 shares of Common Stock issued or issuable upon
conversion of 4,302 shares of the Company's Series A Convertible Preferred Stock
2
acquired by certain of the Purchasers as reimbursement for expenses in
accordance with their fee letter dated the date hereof. Such Registration
Statement also shall cover, to the extent allowable under the 1933 Act and the
rules promulgated thereunder (including Rule 416), such indeterminate number of
additional shares of Common Stock resulting from stock splits, stock dividends,
or similar transactions with respect to the Registrable Securities. The
Registration Statement (and each amendment or supplement thereto) shall be
provided in accordance with Section 3(c) to the Purchasers and their counsel
prior to its filing or other submission.
(ii) Additional Registrable Securities. At any time and from
time to time upon the written demand of the Required Holders following the
existence of any Additional Registerable Securities, and in any event within
forty-five (45) days following such demand, the Company shall prepare and file
with the SEC one Registration Statement on Form S-3 (or, if Form S-3 is not then
available to the Company, on such form of registration statement as is then
available to effect a registration for resale of the Additional Registrable
Securities) covering the resale of the Additional Registrable Securities in an
amount equal to the number of Additional Registrable Securities. Such
Registration Statement also shall cover, to the extent allowable under the 1933
Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends, or similar transactions with respect to the Additional
Registrable Securities. The Registration Statement (and each amendment or
supplement thereto) shall be provided in accordance with Section 3(c) to the
Purchaser and its counsel prior to its filing or other submission.
(b) Expenses. The Company will pay all expenses associated
with each registration in connection with the registration but excluding
discounts, commissions, fees of underwriters, selling brokers, dealer managers
or similar securities industry professionals.
(c) Effectiveness.
(i) The Company shall use its best efforts to have each
Registration Statement declared effective as soon as possible after filing. If
(A) the Registration Statement covering Registrable Securities is not declared
effective by the SEC within 120 days following the Closing Date, or the
Registration Statement covering Additional Registrable Securities is not
declared effective by the SEC within four (4) months following demand of the
Required Holders relating to the Additional Registrable Securities to be covered
thereby (each of the foregoing deadlines, a "Registration Date"), or (B) except
as may be provided in subparagraph (c)(iii) below for an Allowed Delay, after a
Registration Statement has been declared effective by the SEC, sales cannot be
made pursuant to such Registration Statement for any reason (including without
limitation by reason of a stop order, or the Company's failure to update the
Registration Statement) but except as excused pursuant to subparagraph (iii)
below, then the Company will issue to the Purchaser, as liquidated damages and
not as a penalty, 4,166 shares of Common Stock per $50,000 of principal amount
of the Notes purchased by the Purchaser for each 30 day calendar period during
which any of the events described in (A) or (B) above occurs and is continuing
(the "Blackout Period"). Each such issuance shall be made within five (5) days
of the end of each month of the Blackout Period until the termination of the
Blackout Period. The Blackout Period shall terminate upon the effectiveness of
the applicable Registration Statement in the case of (A) and (B) above.
3
(ii) In the event that the Registrable Securities (or
Additional Registrable Securities after issuance and registration) specifically
are not listed or included for quotation on the Nasdaq National Market System,
the Nasdaq Small-Cap Market, the Nasdaq OTC Bulletin Board, the New York Stock
Exchange, the American Stock Exchange or otherwise publicly traded or trading of
the Common Stock is suspended or halted thereon, within twenty (20) days
following the issuance of such Underlying Shares, then the Company will make
pro-rata payments to the Purchaser as liquidated damages and not as a penalty,
in an amount equal to 1% of the sum of the aggregate principal amount then
outstanding under the Notes for each 30 day calendar period following the
Registration Date during which any of the events described above occurs and is
continuing (the "Noncompliance Period"). Each such payment shall be due and
payable within five (5) days of the end of each month (or ending portion
thereof) of the Blackout Period until the termination of the Noncompliance
Period. The Noncompliance Period shall terminate upon listing or inclusion
and/or trading of the Registrable Securities on a public market or exchange.
(iii) For not more than twenty (20) consecutive trading days
or for a total of not more than forty-five (45) trading days in any consecutive
twelve (12) month period, the Company may delay the disclosure of material
non-public information concerning the Company, by terminating or suspending
effectiveness of any registration contemplated by this Section, the disclosure
of which at the time is not, in the good faith opinion of the Company, in the
best interests of the Company (an "Allowed Delay"); provided, that the Company
shall promptly (a) notify the Purchasers in writing of the existence of (but in
no event, without the prior written consent of a Purchaser, shall the Company
disclose to such Purchaser any of the facts or circumstances regarding) material
non-public information giving rise to an Allowed Delay, and (b) advise the
Purchasers in writing to cease all sales under the Registration Statement until
the end of the Allowed Delay. No payments under subparagraph (c)(i) shall be
required in the event and for the duration of an Allowed Delay.
(d) Underwritten Offering. If any offering pursuant to a
Registration Statement pursuant to Section 2(a) hereof involves an underwritten
offering, the Company shall have the right to select an investment banker and
manager to administer the offering, which investment banker or manager shall be
reasonably satisfactory to the Purchasers.
3. Company Obligations. The Company will use its best efforts to effect
the registration of the Registrable Securities and Additional Registrable
Securities in accordance with the terms hereof, and pursuant thereto the Company
will, as expeditiously as possible:
(a) use its best efforts to cause such Registration Statement
to become effective and to remain continuously effective for a period (the
"Registration Period") that will terminate upon the earlier of (i) the date on
which all Registrable Securities or Additional Registrable Securities have been
sold (and no Notes remain outstanding), and (ii) the date on which all
Registrable Securities or Additional Registrable Securities, as the case may be,
may be sold pursuant to Rule 144(k).
4
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement and the Prospectus as
may be necessary to keep the Registration Statement effective for the period
specified in Section 3(a) and to comply with the provisions of the 1933 Act and
the 1934 Act with respect to the distribution of all Registrable Securities and
Additional Registrable Securities; provided that, at a time reasonably prior to
the filing of a Registration Statement or Prospectus, or any amendments or
supplements thereto, the Company will furnish to the Purchasers copies of all
documents proposed to be filed, which documents will be subject to the comments
of the Purchasers;
(c) permit one counsel designated by the Purchasers to review
each Registration Statement and all amendments and supplements thereto no fewer
than five (5) business days prior to their filing with the SEC and not file any
document to which such counsel reasonably objects;
(d) furnish to the Purchasers and their one legal counsel (i)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one copy of any Registration Statement and any
amendment thereto, each preliminary prospectus and Prospectus and each amendment
or supplement thereto, and each letter written by or on behalf of the Company to
the SEC or the staff of the SEC, and each item of correspondence from the SEC or
the staff of the SEC, in each case relating to such Registration Statement
(other than any portion of any thereof which contains information for which the
Company has sought confidential treatment), and (ii) such number of copies of a
Prospectus, including a preliminary prospectus, and all amendments and
supplements thereto and such other documents as each Purchaser may reasonably
request in order to facilitate the disposition of the Registrable Securities and
Additional Registrable Securities owned by such Purchaser;
(e) in the event the Company selects an underwriter for the
offering, the Company shall enter into and perform its reasonable obligations
under an underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
underwriter of such offering;
(f) if required by the underwriter, or if any Purchaser is
described in the Registration Statement as an underwriter, the Company shall
furnish, on the effective date of the Registration Statement, on the date that
Registrable Securities or Additional Registrable Securities, as applicable, are
delivered to an underwriter, if any, for sale in connection with the
Registration Statement and at periodic intervals thereafter from time to time on
request, (i) an opinion, dated as of such date, from legal counsel representing
the Company for purposes of such Registration Statement, in form, scope and
substance as is customarily given in an underwritten public offering, addressed
to the underwriter and any such Purchaser and (ii) a letter, dated such date,
from the Company's independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriter
and any such Purchaser;
(g) make effort to prevent the issuance of any stop order or
other suspension of effectiveness and, if such order is issued, obtain the
withdrawal of any such order at the earliest possible moment;
5
(h) furnish to each Purchaser at least five copies of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules by air mail or reputable courier within three
(3) business days of the effective date thereof;
(i) prior to any public offering of Registrable Securities or
Additional Registrable Securities, use its best efforts to register or qualify
or cooperate with the Purchasers and their counsel in connection with the
registration or qualification of such Registrable Securities or Additional
Registrable Securities, as applicable, for offer and sale under the securities
or blue sky laws of such jurisdictions requested by the Purchaser (provided,
however, the Company shall not be obligated to qualify as a foreign corporation
to do business under the laws of any jurisdiction in which it is not then
qualified or to file any general consent to service of process) and do any and
all other reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities or Additional
Registrable Securities covered by the Registration Statement;
(j) cause all Registrable Securities or Additional Registrable
Securities covered by a Registration Statement to be listed on each securities
exchange, interdealer quotation system or other market on which similar
securities issued by the Company are then listed;
(k) immediately notify the Purchasers, at any time when a
Prospectus relating to the Registrable Securities or Additional Registrable
Securities is required to be delivered under the 1933 Act, upon discovery that,
or upon the happening of any event 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 any 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 at the request of any such holder,
promptly prepare and furnish to such holder a reasonable number of copies of a
supplement to or an amendment of such Prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities or
Additional Registrable Securities, as applicable, such Prospectus shall not
include an untrue statement of a material fact or omit 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
(l) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act
and take such other actions as may be reasonably necessary to facilitate the
registration of the Registrable Securities and Additional Registrable
Securities, if applicable, hereunder.
4. Due Diligence Review; Information. The Company shall make available,
during normal business hours, for inspection and review by the Purchasers who
may be deemed an underwriter, advisors to and representatives of such Purchasers
(who may or may not be affiliated with the Purchasers and who are reasonably
acceptable to the Company), and any underwriter participating in any disposition
of Common Stock on behalf of the Purchasers pursuant to the Registration
Statement or amendments or supplements thereto or any blue sky, NASD or other
filing, all financial and other records, all SEC Documents and other filings
with the SEC, and all other corporate documents and properties of the Company as
may be reasonably necessary for the purpose of establishing a due diligence
6
defense under applicable securities laws and such other reasonable purposes, and
cause the Company's officers, directors and employees, within a reasonable time
period, to supply all such information reasonably requested by such Purchasers
or any such representative, advisor or underwriter in connection with such
Registration Statement (including, without limitation, in response to all
questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of the
Registration Statement for the sole purpose of enabling such Purchasers and such
representatives, advisors and underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of the Registration Statement.
5. Obligations of the Purchasers.
(a) Each Purchaser shall furnish in writing to the Company
such information regarding itself, the Registrable Securities or Additional
Registrable Securities, as applicable, held by it and the intended method of
disposition of the Registrable Securities or Additional Registrable Securities,
as applicable, held by it, as shall be reasonably required to effect the
registration of such Registrable Securities or Additional Registrable
Securities, as applicable, and shall execute such documents in connection with
such registration as the Company may reasonably request. At least ten (10) days
prior to the first anticipated filing date of any Registration Statement, the
Company shall notify each Purchaser of the information the Company requires from
such Purchaser if such Purchaser elects to have any of the Registrable
Securities or Additional Registrable Securities included in the Registration
Statement.
(b) Each Purchaser, by its acceptance of the Registrable
Securities and Additional Registrable Securities, if any, agrees to cooperate
with the Company as reasonably requested by the Company in connection with the
preparation and filing of a Registration Statement hereunder, unless such
Purchaser has notified the Company in writing of its election to exclude all of
its Registrable Securities or Additional Registrable Securities, as applicable,
from the Registration Statement. Each Purchaser agrees to comply with the
applicable prospectus delivery requirements under the 1933 Act in connection
with any resales of Registrable Securities pursuant to the Registration
Statement.
(c) In the event the Company determines to engage the services
of an underwriter which engagement is reasonably acceptable to the Purchasers,
each Purchaser agrees to enter into and perform its obligations under an
underwriting agreement, in usual and customary form, including, without
limitation, customary indemnification and contribution obligations, with the
managing underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the dispositions of the
Registrable Securities or Additional Registrable Securities, as applicable.
(d) Each Purchaser agrees that, upon receipt of any notice
from the Company of the happening of any event rendering a Registration
Statement no longer effective, such Purchaser will immediately discontinue
disposition of Registrable Securities or Additional Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities or
Additional Registrable Securities, until the Purchaser's receipt of the copies
of the supplemented or amended prospectus filed with the SEC and declared
effective and, if so directed by the Company, the Purchaser shall deliver to the
Company (at the expense of the Company) or destroy all copies in the Purchaser's
possession of the prospectus covering the Registrable Securities or Additional
Registrable Securities, as applicable, current at the time of receipt of such
notice.
7
(e) No Purchaser may participate in any third party
underwritten registration hereunder unless it (i) agrees to sell the Registrable
Securities or Additional Registrable Securities, as applicable, on the basis
provided in any underwriting arrangements in usual and customary form entered
into by the Company, (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements, and (iii) agrees to
pay its pro rata share of all underwriting discounts and commissions and any
expenses in excess of those payable by the Company pursuant to the terms of this
Agreement.
6. Indemnification.
(a) Indemnification by Company. The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law, the
Purchasers, each of their officers, directors, partners and employees and each
person who controls the Purchasers (within the meaning of the 0000 Xxx) against
all losses, claims, damages, liabilities, costs (including, without limitation,
reasonable attorney's fees) and expenses imposed on such person caused by (i)
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or any preliminary prospectus or any
amendment or supplement thereto or 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, except insofar as the same are based upon any
information furnished in writing to the Company by such Purchasers, expressly
for use therein, or (ii) any violation by the Company of any federal, state or
common law, rule or regulation applicable to the Company in connection with any
Registration Statement, Prospectus or any preliminary prospectus, or any
amendment or supplement thereto, and shall reimburse in accordance with
subparagraph (c) below, each of the foregoing persons for any legal and any
other expenses reasonably incurred in connection with investigating or defending
any such claims. The foregoing is subject to the condition that, insofar as the
foregoing indemnities relate to any untrue statement, alleged untrue statement,
omission or alleged omission made in any preliminary prospectus or Prospectus
that is eliminated or remedied in any Prospectus or amendment or supplement
thereto, the above indemnity obligations of the Company shall not inure to the
benefit of any indemnified party if a copy of such corrected Prospectus or
amendment or supplement thereto had been provided to such indemnified party and
was not sent or given by such indemnified party at or prior to the time such
action was required of such indemnified party by the 1933 Act and if delivery of
such Prospectus or amendment or supplement thereto would have eliminated (or
been a sufficient defense to) any liability of such indemnified party with
respect to such statement or omission. Indemnity under this Section 5(a) shall
remain in full force and effect regardless of any investigation made by or on
behalf of any indemnified party and shall survive the permitted transfer of the
Registrable Securities and Additional Registrable Securities.
8
(b) Indemnification by Holder. In connection with any
registration pursuant to the terms of this Agreement, each Purchaser will
furnish to the Company in writing such information as the Company reasonably
requests concerning the holders of Registrable Securities and Additional
Registrable Securities or the proposed manner of distribution for use in
connection with any Registration Statement or Prospectus and agrees, severally
but not jointly, to indemnify and hold harmless, to the fullest extent permitted
by law, the Company, its directors, officers, employees, stockholders and each
person who controls the Company (within the meaning of the 0000 Xxx) against any
losses, claims, damages, liabilities, costs and expenses (including, without
limitation, reasonable attorney's fees) resulting from any untrue statement of a
material fact or any omission of a material fact required to be stated in the
Registration Statement or Prospectus or preliminary prospectus or amendment or
supplement thereto or necessary to make the statements therein not misleading,
to the extent, but only to the extent that such untrue statement or omission is
contained in any information furnished in writing by such Purchaser to the
Company specifically for inclusion in such Registration Statement or Prospectus
or amendment or supplement thereto and that such information was relied upon by
the Company in preparation of the Registration Statement or Prospectus or any
amendment or supplement thereto.
(c) Conduct of Indemnification Proceedings. Any person
entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided that any
person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such person unless (a)
the indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person or (c) in the reasonable
judgment of any such person, based upon written advice of its counsel, a
conflict of interest exists between such person and the indemnifying party with
respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such person); 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
hereunder, except to the extent that such failure to give notice shall
materially adversely affect the indemnifying party in the defense of any such
claim or litigation. It is understood that the indemnifying party shall not, in
connection with any proceeding in the same jurisdiction, be liable for fees or
expenses of more than one separate firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that 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 of such claim or litigation.
(d) Contribution. If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless, other than as expressly
specified therein, then the indemnifying party shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect the relative fault
of the indemnified party and the indemnifying party, as well as any other
9
relevant equitable considerations. No person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be
entitled to contribution from any person not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of a holder of
Registrable Securities or Additional Registrable Securities be greater in amount
than the dollar amount of the proceeds (net of all expenses paid by such holder
and the amount of any damages such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Registrable Securities or
Additional Registrable Securities giving rise to such contribution obligation.
7. Miscellaneous.
(a) Amendments and Waivers. This Agreement may be amended only
by a writing signed by the parties hereto. The Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company shall have obtained the written consent to such
amendment, action or omission to act, of the Purchasers affected by such
amendment, action or omission to act.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made as set forth in the Purchase Agreement.
(c) Assignments and Transfers by Purchasers. This Agreement
and all the rights and obligations of any Purchaser hereunder may be assigned or
transferred to any transferee or assignee of the Notes or Registrable Securities
as may be permitted under the Purchase Agreement and the Notes. A Purchaser may
make such assignment or transfer to any transferee or assignee of any Note,
Registrable Securities or Additional Registrable Securities, provided that (i)
such transfer is made expressly subject to this Agreement and the transferee
agrees in writing to be bound by the terms and conditions hereof, and (ii) the
Company is provided with written notice of such assignment.
(d) Assignments and Transfers by the Company. This Agreement
may not be assigned by the Company without the prior written consent of the
Purchasers, but after notice duly given, the Company shall assign its rights and
delegate its duties hereunder to any successor-in-interest corporation, and such
successor-in-interest shall assume such rights and duties, in the event of a
merger or consolidation of the Company with or into another corporation or the
sale of all or substantially all of the Company's assets (and it shall be a
condition to any such merger, consolidation or sale that such
successor-in-interest assume in writing all obligations hereunder).
(e) Benefits of the Agreement. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
10
(f) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of this Agreement by fax shall have the same force and effect as
delivery of an original executed counterpart of this Agreement.
(g) Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(h) Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms to the fullest extent permitted by law.
(i) Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
(j) Entire Agreement. This Agreement, together with the
Purchase Agreement and Notes and documents contemplated thereby, is intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. This
Agreement, together with the Purchase Agreement, Notes and documents
contemplated thereby, supersedes all prior agreements and understandings between
the parties with respect to such subject matter.
(k) Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of law.
[Signature Pages Follow]
11
IN WITNESS WHEREOF, the parties have executed this Registration
Rights Agreement as of the date first written above.
THE COMPANY:
KNOCKOUT HOLDINGS, INC.
By: /s/ Xxxxxxx Xxx
------------------------------------
Name: Xxxxxxx Xxx
Title: CFO
12
THE PURCHASERS:
VICIS CAPITAL MASTER FUND
By: Vicis Capital, LLC
By: /s/ Shad Statsney
------------------------------------
Name: Shad Statsney
Title: Member
GAMMA OPPORTUNITY CAPITAL
PARTNERS LP
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: President, Gamma Capital Advisers
Ltd, as Agent
BUSHIDO CAPITAL MASTER FUND LP
By: /s/ Xxxxxxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxxxxxx Xxxxxxx
Title: Managing Partner, Bushido Capital
Partners
ROYAL CAPITAL VALUE FUND LP
By: /s/ Yale X. Xxxxxxx
------------------------------------
Name: Yale X. Xxxxxxx
Title: Managing Member
ROYAL CAPITAL VALUE FUND (QP) LP
By: /s/ Yale X. Xxxxxxx
------------------------------------
Name: Yale X. Xxxxxxx
Title: Managing Member
ROYALCAP VALUE FUND LTD
By: /s/ Yale X. Xxxxxxx
------------------------------------
Name: Yale X. Xxxxxxx
Title: Managing Member
13
