Exhibit 4.3
REGISTRATION RIGHTS
AGREEMENT
REGISTRATION RIGHTS
AGREEMENT (this “
Agreement ”), dated as of November 15, 2004 by and
between KNOBIAS, INC., a Delaware corporation (the “
Company ”), and CORNELL CAPITAL PARTNERS, LP ,
a Delaware limited partnership (the “ Investor
”).
WHEREAS:
A. In connection with the Standby
Equity Distribution Agreement by and between the parties hereto of
even date herewith (the “ Standby Equity Distribution
Agreement ”), the Company has agreed, upon the terms and
subject to the conditions of the Standby Equity Distribution
Agreement, to issue and sell to the Investor that number of shares
of the Company’s common stock, par value US$0.01 per share
(the “ Common Stock ”), which can be purchased
pursuant to the terms of the Standby Equity Distribution Agreement
for an aggregate purchase price of up to Ten Million U.S. Dollars
($10,000,000). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Standby Equity Distribution
Agreement.
B. To induce the Investor to execute
and deliver the Standby Equity Distribution Agreement, the Company
has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the
“ Securities Act ”), and applicable state
securities laws.
NOW, THEREFORE,
in consideration of the premises and
the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Investor hereby agree as
follows:
1. DEFINITIONS .
As used in this Agreement, the
following terms shall have the following meanings:
a. “ Person ”
means a corporation, a limited liability company, an association, a
partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental
agency.
b. “ Register ,”
“ registered ,” and “ registration
” refer to a registration effected by preparing and filing
one or more Registration Statements (as defined below) in
compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering
securities on a continuous or delayed basis (“ Rule
415 ”), and the declaration or ordering of effectiveness
of such Registration Statement(s) by the United States Securities
and Exchange Commission (the “ SEC
”).
c. “ Registrable
Securities ” means the Investor’s Shares, as
defined in the Standby Equity Distribution Agreement and shares of
Common Stock issuable to the Investor pursuant to the Standby
Equity Distribution Agreement.
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d. “ Registration
Statement ” means a registration statement under the
Securities Act which covers the Registrable Securities.
2. REGISTRATION .
a. Mandatory Registration .
The Company shall prepare and file with the SEC a Registration
Statement on Form S-1, SB-2 or on such other form as is available.
The Company shall cause such Registration Statement to be declared
effective by the SEC prior to the first sale to the Investor of the
Company’s Common Stock pursuant to the Standby Equity
Distribution Agreement.
b. Sufficient Number of Shares
Registered . In the event the number of shares available under
a Registration Statement filed pursuant to Section 2(a) is
insufficient to cover all of the Registrable Securities which the
Investor has purchased pursuant to the Standby Equity Distribution
Agreement, the Company shall amend the Registration Statement, or
file a new Registration Statement (on the short form available
therefore, if applicable), or both, so as to cover all of such
Registrable Securities which the Investor has purchased pursuant to
the Standby Equity Distribution Agreement as soon as practicable,
but in any event not later than fifteen (15) days after the
necessity therefore arises. The Company shall use it best efforts
to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof. For
purposes of the foregoing provision, the number of shares available
under a Registration Statement shall be deemed “insufficient
to cover all of the Registrable Securities” if at any time
the number of Registrable Securities issuable on an Advance Notice
Date is greater than the number of shares available for resale
under such Registration Statement.
3. RELATED OBLIGATIONS
.
a. The Company shall keep the
Registration Statement effective pursuant to Rule 415 at all times
until the date on which the Investor shall have sold all the
Registrable Securities covered by such Registration Statement (the
“ Registration Period ”), which Registration
Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any 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, in light of the circumstances in which they were made, not
misleading.
b. The Company shall prepare and
file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the
prospectus used in connection with such Registration Statement,
which prospectus is to be filed pursuant to Rule 424 promulgated
under the Securities Act, as may be necessary to keep such
Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of
all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof as
set forth in such Registration Statement. In the case of amendments
and supplements to a Registration Statement which are required to
be filed pursuant to this Agreement (including pursuant to this
Section 3(b)) by reason of the Company’s filing a report on
Form 10-KSB, Form 10-QSB or Form 8-K or any analogous
report
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under the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”), the
Company shall have incorporated such report by reference into the
Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on which the
Exchange Act report is filed which created the requirement for the
Company to amend or supplement the Registration
Statement.
c. The Company shall furnish to the
Investor without charge, (i) at least one copy of such Registration
Statement as declared effective by the SEC and any amendment(s)
thereto, including financial statements and schedules, all
documents incorporated therein by reference, all exhibits and each
preliminary prospectus, (ii) ten (10) copies of the final
prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies
as such Investor may reasonably request) and (iii) such other
documents as such Investor may reasonably request from time to time
in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
d. The Company shall use its best
efforts to (i) register and qualify the Registrable Securities
covered by a Registration Statement under such other securities or
“blue sky” laws of such jurisdictions in the United
States as the Investor reasonably requests, (ii) prepare and file
in those jurisdictions, such amendments (including post-effective
amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness
thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration
Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (w)
make any change to its certificate of incorporation or by-laws, (x)
qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (y)
subject itself to general taxation in any such jurisdiction, or (z)
file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify the Investor of the
receipt by the Company of any notification with respect to the
suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or “blue
sky” laws of any jurisdiction in the United States or its
receipt of actual notice of the initiation or threat of any
proceeding for such purpose.
e. As promptly as practicable after
becoming aware of such event or development, the Company shall
notify the Investor in writing of the happening of any event as a
result of which the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a 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 (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement
or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver ten (10) copies of such
supplement or amendment to each Investor. The Company shall also
promptly notify the Investor in writing (i) when a prospectus or
any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness
shall be delivered to the Investor by facsimile on the same day of
such effectiveness), (ii) of any request by the SEC for amendments
or supplements to a
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Registration Statement or related
prospectus or related information, and (iii) of the Company’s
reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
f. The Company shall use its best
efforts to prevent the issuance of any stop order or other
suspension of effectiveness of a Registration Statement, or the
suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction within the United States of
America and, if such an order or suspension is issued, to obtain
the withdrawal of such order or suspension at the earliest possible
moment and to notify the Investor of the issuance of such order and
the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
g. At the reasonable request of the
Investor, the Company shall furnish to the Investor, on the date of
the effectiveness of the Registration Statement and thereafter from
time to time on such dates as the Investor may reasonably request
(i) 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, and (ii) an
opinion, dated as of such date, of 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 Investor.
h. Subject to Section 8.2(a) of the
Standby Equity Distribution Agreement, the Company shall make
available for inspection by (i) the Investor and (ii) one firm of
accountants or other agents retained by the Investor (collectively,
the “ Inspectors ”) all pertinent financial and
other records, and pertinent corporate documents and properties of
the Company (collectively, the “ Records ”), as
shall be reasonably deemed necessary by each Inspector, and cause
the Company’s officers, directors and employees to supply all
information which any Inspector may reasonably request; provided,
however, that each Inspector shall agree, and the Investor hereby
agrees, to hold in strict confidence and shall not make any
disclosure (except to an Investor) or use of any Record or other
information which the Company determines in good faith to be
confidential, and of which determination the Inspectors are so
notified, unless (a) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the Securities Act, (b)
the release of such Records is ordered pursuant to a final,
non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has
been made generally available to the public other than by
disclosure in violation of this or any other agreement of which the
Inspector and the Investor has knowledge. The Investor agrees that
it shall, upon learning that disclosure of such Records is sought
in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the
Records deemed confidential.
i. The Company shall hold in
confidence and not make any disclosure of information concerning
the Investor provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other final,
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non-appealable order from a court or
governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other
than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that
disclosure of such information concerning the Investor is sought in
or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to the Investor and
allow the Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.
j. The Company shall use its best
efforts either to cause all the Registrable Securities covered by a
Registration Statement (i) to be listed on each securities exchange
on which securities of the same class or series issued by the
Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or to
secure the inclusion for quotation on the National Association of
Securities Dealers, Inc. OTC Bulletin Board for such Registrable
Securities. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section
3(j).
k. The Company shall cooperate with
the Investor to the extent applicable, to facilitate the timely
preparation and delivery of certificates (not bearing any
restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case
may be, as the Investor may reasonably request and registered in
such names as the Investor may request.
l. The Company shall use its best
efforts to cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable
Securities.
m. The Company shall make generally
available to its security holders as soon as practical, but not
later than ninety (90) days after the close of the period covered
thereby, an earnings statement (in for
