Document:

EXHIBIT 10.1

                               PURCHASE AGREEMENT

            THIS PURCHASE AGREEMENT ("Agreement") is made as of the 12th day of
September 2005, by and among Knockout Holdings, Inc., a Delaware corporation
(the "Company"), and the Purchasers set forth on the signature pages affixed
hereto (each a "Purchaser" and collectively the "Purchasers").

                                    Recitals

            A. The Company and the Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(2) under the Securities Act of 1933, as amended ("1933 Act"), and
the provisions of Regulation D ("Regulation D"), as promulgated by the U.S.
Securities and Exchange Commission (the "SEC") under the 1933 Act;

            B. The Purchasers have agreed to purchase, and the Company has
agreed to sell and issue to the Purchasers, upon the terms and subject to the
conditions stated in this Agreement, an aggregate of up to $2,800,000 the
Company's 16.66% Senior Convertible Notes due March 31, 2007 in the form annexed
hereto as Exhibit A (each a "Note" and, collectively, the "Notes") in the
respective amounts set forth on the Purchaser's signature page attached hereto;
and

            D. Contemporaneous with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement, in the form annexed hereto as Exhibit B (the "Registration Rights
Agreement"), pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.

            In consideration of the mutual promises made herein and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

      1. Definitions. In addition to those terms defined above and elsewhere in
this Agreement, for the purposes of this Agreement, the following terms shall
have the meanings here set forth:

            1.1. "Affiliate" means, with respect to any Person, any other Person
which directly or indirectly controls, is controlled by, or is under common
control with, such Person, where "control" means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.

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            1.2. "Agreements" means this Agreement, the Registration Rights
Agreement, the Notes, and any other agreement entered into, now or in the
future, by the Company in connection with this Agreement or any of the other
Agreements.

            1.3. "Closing" means the consummation of the transactions
contemplated by this Agreement.

            1.4. "Closing Date" is defined in Section 3.1.

            1.5. The "Company" shall refer to the Company (as defined in the
first paragraph hereof). -------

            1.6. "Conversion Price" shall have the meaning as defined in the
Notes.

            1.7. "Disclosure Schedule" is defined in Section 4.

            1.8. "Holder" means (i) any Person in whose name a Note is
registered from time to time, or (ii) if the Note is held by a financial
intermediary for the benefit of other Persons, such other Persons as indicated
in the records of such financial intermediary.

            1.9. "Material Adverse Effect" means a material adverse effect on
the (i) condition (financial or otherwise), business, assets or results of
operations of the Company; (ii) ability of the Company to perform any of its
material obligations under the terms of the Agreements; or (iii) material rights
and remedies of a Purchaser under the terms of the Agreements.

            1.10. "Notes" shall have the meaning set forth in the recitals to
this Agreement.

            1.11. "Person" means an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, governmental authority or any other form of entity not
specifically listed herein.

            1.12. "Required Holders" means the Holders of not less than 50% in
aggregate principal amount of the Notes then outstanding exclusive of any Notes
then owned by either the Company or any of its Affiliates.

            1.13. "SEC" means the U.S. Securities and Exchange Commission.

            1.14. "SEC Filings" is defined in Section 4.6.

            1.15. "Securities" means the Notes and Underlying Shares.

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            1.16. "Subsidiary" means each corporation or other Person in which a
Person owns or controls, directly or indirectly, capital stock or other equity
interests representing more than 50% of the outstanding voting stock or other
equity interests.

            1.17. "Underlying Shares" means the shares of Common Stock issued or
issuable upon conversion of, as payment for principal and/or interest under, or
otherwise pursuant to, the Notes.

            1.18. "1933 Act" shall have the meaning set forth in the recitals to
this Agreement.

            1.19. "1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

      2. Purchase and Sale of the Notes. Subject to the terms and conditions of
this Agreement and on the basis of the representations and warranties made
herein, each of the Purchasers hereby severally, and not jointly, agrees to
purchase, and the Company hereby agrees to sell and issue to each of the
Purchasers, (a) the Notes in the principal amount set forth on such Purchaser's
signature page attached hereto at the Closing for a purchase price equal to such
principal amount (the "Purchase Price"). The Purchase Price shall be payable by
check, wire transfer or as otherwise agreed to by the Company and the Purchaser.

      3. Closing.

            3.1. Closing Procedure. Upon receipt by the Company of executed
signature pages to this Agreement from Purchasers for the purchase of
$2,800,000, the Company shall promptly notify such Purchasers and set a date for
the Closing, which shall be on or before September 12, 2005 or as otherwise
mutually agreed to by the Company and the Purchasers (the "Closing Date").

            3.2. Closing Date Deliveries.

                  (a)   On the Closing Date, the Company shall deliver to the
                        Purchasers:

                        (i)   The Notes in the form attached as Exhibit A;

                        (ii)  The executed Registration Rights Agreement in the
                              form attached as Exhibit B;

                        (iii) A certificate executed by the Chief Executive
                              Officer and Chief Financial Officer of the
                              Company, in the form attached as Exhibit C;

                        (iv)  The opinion of counsel to the Company in the form
                              attached as Exhibit D;

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                        (v)   All consents and waivers required under or in
                              respect of any agreement or instrument to which
                              the Company is a party or by which any of its
                              properties or assets is bound, or under any
                              applicable law, that are necessary or appropriate
                              in connection with the transactions contemplated
                              by the Agreements, in form and substance
                              satisfactory to the Purchasers; and

                  (b)   On the Closing Date, the Purchasers shall deliver to the
                        Company:

                        (i)   The aggregate Purchase Price in an amount equal to
                              the principal amount of the Notes set forth on the
                              Purchasers' signature pages hereto for the Notes
                              to be purchased; and

                        (ii)  The executed Registration Rights Agreement.

            3.3. Closing Conditions.

                  (a) The obligations of each Purchaser hereunder in connection
with the Closing are subject to the following conditions being met:

                        (i)   The Company shall have executed each of the
                              Agreements and delivered the same to the
                              Purchasers, including, without limitation, the
                              Notes (in such denominations as such Purchaser
                              shall request) being purchased by such Purchaser;

                        (ii)  The Common Stock shall be authorized for quotation
                              on the Nasdaq OTC Bulletin Board, trading in the
                              Common Stock shall not have been within the last
                              365 days suspended;

                        (iii) The representations and warranties of the Company
                              shall be true and correct in all material respects
                              (except to the extent that any of such
                              representations and warranties is already
                              qualified as to materiality, in which case, such
                              representations and warranties shall be true and
                              correct without further qualification) as of the
                              date when made and as of the Closing Date as
                              though made at that time (except for
                              representations and warranties that speak as of a
                              specific date) and the Company shall have
                              performed, satisfied and complied with the
                              covenants, agreements and conditions required by
                              the Agreements to be performed, satisfied or
                              complied with by the Company at or prior to the
                              Closing Date. The Purchasers shall have received a
                              certificate, executed by the Chief Executive
                              Officer and the Chief Financial Officer, dated as
                              of the Closing Date Date, to the foregoing effect
                              in the form attached hereto as Exhibit C;

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                        (iv)  The Purchasers shall have received an opinion of
                              counsel to the Company in the form attached as
                              Exhibit D;

                        (v)   The Board of Directors of the Company shall have
                              adopted resolutions authorizing and approving the
                              transactions contemplated by this Agreement and
                              the other Agreements, including without
                              limitation, the issuance of the Securities and the
                              reservation for issuance and the issuance of the
                              Underlying Shares;

                        (vi)  The Company shall have delivered to such Purchaser
                              a certificate evidencing the incorporation and
                              good standing of the Company and each of its
                              Subsidiaries in such entity's state of
                              incorporation or organization issued by the
                              Secretary of State of such state of incorporation
                              or organization as of a date within ten (10) days
                              of the Closing Date;

                        (vii) The Company shall have delivered to such Purchaser
                              a secretary's certificate dated as of the Closing
                              Date, as to (A) the resolutions of the Board of
                              Directors, (B) the Certificate of Incorporation
                              and (C) the Bylaws, each in effect at the Closing
                              Date; and

                        (viii) The Purchasers shall have entered into an
                              agreement with certain shareholders of the Company
                              whereby such shareholders shall have agreed to
                              transfer to the Purchasers in the aggregate 36,250
                              shares of the Company's Series A Convertible
                              Preferred Stock.

                  (b) The obligations of the Company hereunder in connection
with the Closing are subject to the following conditions being met:

                        (i)   Each of the Purchasers shall have executed each of
                              the Agreements to which it is a party;

                        (ii)  Each of the Purchasers shall have delivered to the
                              Company the Purchase Price for the Notes being
                              purchased by such Purchaser by wire transfer of
                              immediately available funds pursuant to the wire
                              instructions provided by the Company; and

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                        (iii) The representations and warranties of each of the
                              Purchasers shall be true and correct in all
                              material respects (except to the extent that any
                              of such representations and warranties is already
                              qualified as to materiality, in which case, such
                              representations and warranties shall be true and
                              correct without further qualification) as of the
                              date when made and as of the Closing Date as
                              though made at that time (except for
                              representations and warranties that speak as of a
                              specific date) and each of the Purchasers shall
                              have performed, satisfied and complied with the
                              covenants, agreements and conditions required by
                              the Agreements to be performed, satisfied or
                              complied with by the Purchasers at or prior to the
                              Closing Date.

      4. Representations and Warranties of the Company. Except as disclosed in
the Company's SEC Filings (as defined below) or in the Company disclosure
schedule delivered herewith (the "Disclosure Schedule"), the Company hereby
represents and warrants to the Purchasers that:

            4.1 Organization, Good Standing and Qualification. Each of the
Company and its Subsidiaries is a corporation validly existing and in good
standing under the laws of its organization and has all requisite corporate
power and authority to carry on its business as now conducted and own its
properties. Each of the Company and its Subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
makes such qualification or licensing necessary unless the failure to so qualify
would not result in a Material Adverse Effect.

            4.2. Authorization. The Company has full corporate power and
authority and has taken all requisite action on the part of the Company
necessary for (i) the authorization, execution and delivery of the Agreements,
(ii) authorization of the performance of all obligations of the Company
hereunder and thereunder, and (iii) the authorization, issuance (or reservation
for issuance) and delivery of the Securities, other than amending its
Certificate of Incorporation as set forth in Section 6.2 below. The Agreements
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors' rights generally and
general principles of equity that restrict the availability of equitable or
legal remedies.

            4.3. Capitalization. Set forth in Section 4.3 of the Disclosure
Schedule is (a) a description of the authorized capital stock of the Company on
the date hereof; (b) the number of shares of capital stock issued and
outstanding on the date hereof; (c) the number of shares of capital stock
issuable pursuant to the Company's stock plans; and (d) the number of shares of
capital stock issuable and reserved for issuance pursuant to securities (other
than the Notes) exercisable for, or convertible into or exchangeable for any
shares of capital stock (assuming the transactions contemplated herein have been
effected solely for the purpose of computing antidilutive provisions in any such
securities). All of the issued and outstanding shares of the Company's capital
stock have been duly authorized and validly issued and are fully paid and
nonassessable. No Person is entitled to preemptive or similar statutory or
contractual rights with respect to any securities of the Company.

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            4.4. Valid Issuance. The Notes and the Underlying Shares are duly
authorized, and such Securities, when issued in accordance herewith and, in
respect of the Underlying Shares, pursuant to the terms of the Notes will be
validly issued, fully paid, non-assessable and free and clear of all
encumbrances and restrictions imposed by or through the Company, except for
restrictions on transfer imposed by applicable securities laws.

            4.5. Consents. Except as set forth in the Disclosure Schedule, the
execution, delivery and performance by the Company of the Agreements and,
subject to the truth and accuracy of the representations made by the Purchasers
in Section 5 of this Agreement, the offer, issuance and sale of the Securities,
require no consent of, action by or in respect of, or filing with, any Person,
agency, or official, other than the amendment to the Certificate of
Incorporation referred to in Section 6.2 below and filings that have been made
pursuant to applicable state securities laws and post-sale filings pursuant to
applicable state and federal securities laws.

            4.6. SEC Filings; Business. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the 1934 Act (all of the
foregoing filed prior to or on the date hereof and all registration statements
and exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein being hereinafter referred to as the
"SEC Filings"). None of the SEC Filings, as of the date filed and as they may
have been subsequently amended by filings made by the Company with the SEC prior
to the date hereof, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. As of their respective dates, the financial
statements of the Company included in the SEC Filings complied as to form in all
material respects with applicable accounting requirements and published rules
and regulations of the SEC with respect thereto. Such financial statements have
been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the results of operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments). The Company is engaged only in the
business described in the SEC Filings and the SEC Filings contain a complete and
accurate description of the business of the Company in all material respects.

            4.7. Use of Proceeds. The proceeds of the sale of the Notes
hereunder shall be used by the Company for the following purposes: (a) the
repayment of indebtedness disclosed in the SEC Filings or otherwise disclosed in
Section 4.7 of the Disclosure Schedule, and (b) general corporate purposes and
working capital.

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            4.8. No Material Adverse Change. Except as disclosed and described
in the Company's SEC Filings, since December 31, 2004, there has not been:

(a) any change in the consolidated assets, liabilities, financial condition or
operating results of the Company and its Subsidiaries, except changes in the
ordinary course of business which have not had, in the aggregate, a Material
Adverse Effect;

(b) any declaration or payment of any dividend, or any authorization or payment
of any distribution, on any of the capital stock of the Company, or any
redemption or repurchase of any securities of the Company;

(c) any material damage, destruction or loss, whether or not covered by
insurance, to any assets or properties of the Company or its Subsidiaries;

(d) any waiver by the Company or any of its Subsidiaries of a material right or
of a material debt owed to it;

(e) any satisfaction or discharge of any lien, claim or encumbrance or payment
of any obligation by the Company or its Subsidiaries, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operating results or business of the Company and its
Subsidiaries taken as a whole (as such business is presently conducted and as it
is proposed to be conducted);

(f) any material change or amendment to or breach or default of a material
contract or arrangement by which the Company, any of its Subsidiaries or any of
its assets or properties is bound or subject;

(g) any material labor difficulties or labor union organizing activities with
respect to employees of the Company or its Subsidiaries;

(h) any material transaction entered into by the Company or its Subsidiaries
other than in the ordinary course of business; or

(i) any other event or condition of any character that the Company believes will
have a Material Adverse Effect.

            4.9. No Conflict, Breach, Violation or Default; Compliance with Law.
The execution, delivery and performance of the Agreements by the Company and the
issuance and sale of the Securities will not conflict with or result in a breach
or violation of any of the terms and provisions of, constitute a default under,
require any consent, approval or filing under, result in or require the creation
or imposition of any lien or encumbrance upon or with respect to the Company's
or its Subsidiaries' property under (i) the Company's or its Subsidiaries'
Certificate of Incorporation (including any certificates of designation) or the
Company's or its Subsidiaries' Bylaws, both as in effect on the date hereof,
(ii) any statute, rule, regulation or order of any governmental agency or body

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or any court, domestic or foreign, having jurisdiction over the Company, its
Subsidiaries or any of their properties; or (iii) any material contract, loan or
instrument by which the Company, its Subsidiaries or their property is bound.
Each of the Company and its Subsidiaries (i) is not to its knowledge in
violation of any statute, rule or regulation applicable to it or its assets or
its activities, (ii) is not in violation of any judgment, order or decree
applicable to it or its assets; and (iii) has not received notice from any
Person of any claim, investigation or inquiry, that, if adversely determined,
would render the preceding sentence untrue or incomplete and the Company is
aware of no facts or circumstances which could give rise to such a claim,
investigation or inquiry.

            4.10. Tax Matters. Each of the Company and its Subsidiaries has
timely prepared and filed all material tax returns required to have been filed
by the Company or its Subsidiaries with all appropriate governmental agencies
and timely paid all material taxes owed by it, in each case taking into account
permitted extensions and assessments challenged in good faith and disclosed in
the SEC Filings. The charges, accruals and reserves on the books of the Company
and its Subsidiaries in respect of taxes for all fiscal periods are adequate in
all material respects, and there are no material unpaid assessments against the
Company or its Subsidiaries nor, to the knowledge of the Company, any basis for
the assessment of any additional taxes, penalties or interest for any fiscal
period or audits by any federal, state or local taxing authority except such as
which are not material. All material taxes and other assessments and levies that
the Company or any of its Subsidiaries is required to withhold or to collect for
payment have been duly withheld and collected and paid to the proper
governmental entity or third party when due. There are no tax liens or claims
pending or threatened against the Company, any of its Subsidiaries or any of its
respective assets or property. There are no outstanding tax sharing agreements
or other such arrangements between the Company and any other corporation or
entity.

            4.11. Title to Properties and Securities. Except as disclosed in the
SEC Filings, each of the Company and its Subsidiaries has good and marketable
title to all properties and assets owned by it and material to its operations,
in each case free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made or currently
planned to be made thereof by them; and except as disclosed in the SEC Filings,
each of the Company and its Subsidiaries holds any leased real or personal
property material to the its respective operations under valid and enforceable
leases with no exceptions that would materially interfere with the use made or
currently planned to be made thereof by them.

            4.12. Certificates, Authorities and Permits. Each of the Company and
its Subsidiaries possesses adequate certificates, authorities or permits issued
by appropriate governmental agencies or bodies necessary to conduct the business
now operated by it and has not received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or its Subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.

            4.13. No Labor Disputes. No material labor dispute with the
employees of the Company or its Subsidiaries exists or, to the knowledge of the
Company, is imminent.

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            4.14. Intellectual Property. Each of the Company and its
Subsidiaries owns or possesses adequate rights or licenses to the inventions,
know-how, patents, patent rights, copyrights, trademarks, trade names, licenses,
approvals, governmental authorizations, trade secrets confidential information
and other intellectual property rights necessary to conduct the business now
operated by it and presently contemplated to be operated by it (collectively,
"Intellectual Property Rights"), free and clear of all liens, security
interests, charges, encumbrances, equities and other adverse claims, and neither
the Company nor any of its Subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property Rights. None of the Company's or its Subsidiaries' Intellectual
Property Rights have expired or terminated, or are expected to expire or
terminate within three years from the date of this Agreement, except where such
expirations or termination would not result, either individually or in the
aggregate, in a Material Adverse Effect. To the knowledge of the Company, the
Company's and its Subsidiaries' patents and other Intellectual Property Rights
and the present activities of the Company and its Subsidiaries do not infringe
any patent, copyright, trademark, trade name or other proprietary rights of any
third party where such infringement may cause a Material Adverse Effect on the
Company or its Subsidiaries, and there is no claim, action or proceeding being
made or brought against, or to the Company's knowledge, being threatened
against, the Company or its Subsidiaries regarding its Intellectual Property
Rights, and the Company is unaware of any facts or circumstances which might
give rise to any of the foregoing. The Company has no knowledge of the material
infringement of its or its Subsidiaries' Intellectual Property Rights by third
parties and has no reason to believe that any such Intellectual Property Rights
is unenforceable, and the Company is unaware of any facts or circumstances which
might give rise to any of the foregoing. Each of the Company and its
Subsidiaries has taken commercially reasonable security measures to protect the
secrecy, confidentiality and value of all of its intellectual properties.

            4.15. Environmental Matters. None of the Company and its
Subsidiaries is in violation of any statute, rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating
to the use, disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "Environmental Laws"), owns or operates any
real property contaminated with any substance that is subject to any
Environmental Laws, is liable for any off-site disposal or contamination
pursuant to any Environmental Laws, and is subject to any claim relating to any
Environmental Laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company
is not aware of any pending investigation that might lead to such a claim.

            4.16. Absence of Litigation. Except as set forth in the Company's
SEC Filings, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company, threatened
against the Company, its Subsidiaries or any of their officers or directors in
their capacities as such, that would reasonably be expected to result in
judgments against the Company or its Subsidiaries in an amount, individually or
in the aggregate, in excess of $50,000.

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            4.17. Financial Statements. The financial statements included in the
Company's SEC Filings present fairly and accurately in all material respects the
consolidated financial position of the Company as of the dates shown and its
consolidated results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis with the Company's
past practices. Except as set forth in the SEC Filings filed prior to the date
hereof, the Company has no liabilities, contingent or otherwise, except those
(a) not required under generally accepted accounting principles to be reflected
in the Company's financial statements, (b) incurred in the ordinary course of
business, or (c) which individually or in the aggregate are not material to the
financial condition or operating results of the Company.

            4.18. Insurance Coverage. Each of the Company and its Subsidiaries
maintains in full force and effect insurance coverage that the Company
reasonably believes to be adequate against all liabilities, claims and risks
against which it is customary for comparably situated companies to insure.

            4.19. Brokers and Finders. The Purchasers shall have no liability or
responsibility for the payment of any commission or finder's fee to any third
party in connection with or resulting from this agreement or the transactions
contemplated by this Agreement by reason of any agreement of or action taken by
the Company.

            4.20. No General Solicitation. Neither the Company nor any Person
acting on its behalf has conducted any general solicitation or general
advertising (as those terms are used in Regulation D) in connection with the
offer or sale of any of the Securities.

            4.21. Issuance of Securities. The Securities are duly authorized
and, upon issuance in accordance with the terms of the applicable agreements,
shall be (i) validly issued, fully paid and non-assessable and (ii) free from
all taxes, liens and charges with respect to the issuance thereof (other than
any such taxes, liens and charges created by any Purchaser or assignee or
transferee), and shall not be subject to pre-emptive rights or other similar
rights of shareholders of the Company. Upon their issuance, the Underlying
Shares will be validly issued, fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof (other than any such
taxes, liens and charges created by any Purchaser or any assignee or
transferee), with the holders being entitled to all rights accorded to a holder
of Common Stock.

      5. Representations and Warranties of the Purchaser. Each of the Purchasers
hereby severally, and not jointly, represents and warrants to the Company that:

            5.1 Organization, Good Standing, Authorization. If Purchaser is an
entity, it is a corporation, limited liability company, trust or partnership or
other similar entity duly organized, validly existing and in good standing under
the laws of its jurisdiction. Purchaser has full power and authority (corporate
or otherwise) to execute, deliver and enter into this Agreement and the
Registration Rights Agreement. The execution, delivery and performance by the
Purchaser of this Agreement and the Registration Rights Agreement have been duly
authorized and this Agreement and the Registration Rights Agreement will each
constitute the valid and legally binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors'
rights generally and general principles of equity that restrict the availability
of equitable or legal remedies.

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            5.2 Purchase Entirely for Own Account. The Securities to be received
by the Purchaser hereunder will be acquired for the Purchaser's own account, not
as nominee or agent, and not with a view to the resale or distribution of any
part thereof and the Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same. The Purchaser is not a
registered broker dealer or an entity engaged in the business of being a broker
dealer.

            5.3 Investment Experience. The Purchaser acknowledges that it can
bear the economic risk and complete loss of its investment in the Securities and
has such knowledge and experience in financial or business matters and in
private placement transactions of companies similar to the Company so that it is
capable of evaluating the merits and risks of the purchase contemplated hereby.

            5.4 Disclosure of Information. The Purchaser has had an opportunity
to receive documents related to the Company and its Subsidiaries and to ask
questions of and receive answers from the Company regarding the Company, its
Subsidiaries, its business and the terms and conditions of the offering of the
Securities and has received and read the SEC Filings filed via EDGAR. Neither
such inquiries nor any other due diligence investigation conducted by the
Purchaser shall modify, amend or affect the Purchaser's right to rely on the
Company's representations and warranties contained in this Agreement or made
pursuant to this Agreement.

            5.5 Restricted Securities. The Purchaser understands that the
Securities are characterized as "restricted securities" under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable state laws and regulations such securities may be resold without
registration under the 1933 Act only in certain limited circumstances.

            5.6 Legends. It is understood that, until registration for resale
pursuant to the Registration Rights Agreement or until sales under Rule 144(k)
under the 1933 Act are permitted, certificates evidencing the Securities may
bear one or all of the following legends or legends substantially similar
thereto:

                  (a) "The shares represented by this certificate may not be
transferred without (i) the opinion of counsel reasonably satisfactory to the
corporation that such transfer may lawfully be made without registration under
the Securities Act of 1933 or qualification under applicable state securities
laws; or (ii) such registration or qualification."

                  (b) If required by the authorities of any state in connection
with the issuance of sale of the Securities, the legend required by such state
authority.

                                       12
<PAGE>

            Upon registration for resale pursuant to the Registration Rights
Agreement or upon Rule 144(k) under the 1933 Act becoming available, the Company
shall promptly cause certificates evidencing the Underlying Shares previously
issued to be replaced with certificates which do not bear such restrictive
legends, and all Underlying Shares subsequently issued shall not bear such
restrictive legends and each Purchaser will certify to the Company that it will
thereafter sell the Common Stock evidenced by such unlegended certificates only
pursuant to the Prospectus (as defined in the Registration Rights Agreement) as
permitted under the Registration Rights Agreement or pursuant to Rule 144(k).

            5.7 Accredited Investor. The Purchaser is an "accredited investor"
as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.

            5.8 No General Solicitation. The Purchaser did not learn of the
investment in the Securities as a result of any public advertising or general
solicitation.

            5.9 No Shorting. Neither the Purchaser nor any of its affiliates and
investment partners has, directly or indirectly, engaged in "short sales" of the
Company's Common Stock or any hedging strategies. Each Purchaser agrees that on
any business day prior to the time such Purchaser no longer holds any
Securities, such Purchaser shall not maintain a Net Short Position. For purposes
hereof, "Net Short Position" shall mean circumstances in which the aggregate
number of shares of Common Stock held in a short position by such Purchaser
exceeds the sum of the number of Underlying Shares then issuable (without regard
to any limitations on conversions or exercise) to such Purchaser.

      6. Covenants and Agreements of the Company and the Purchasers.

            6.1 Reservation of Common Stock Issuable upon Conversion of Notes.
The Company hereby agrees at all times after the amendment to its Certificate of
Incorporation (as described in Section 6.2 below) to reserve and keep available
out of its authorized but unissued shares of Common Stock, solely for the
purpose of providing for the full conversion of Notes (including payment of
interest thereon), such number of shares of Common Stock as shall equal the
number of shares sufficient to permit the full conversion of Notes (including
payment of interest thereon) in accordance with the terms of the Notes.

            6.2 Amendment to Certificate of Incorporation. Within 90 days of the
Closing, the Company shall (i) amend its Certificate of Incorporation to
increase the number of its authorized shares of Common Stock to 300,000,000
shares in accordance with preliminary Schedule 14C Information Statement filed
by the Company with the SEC on May 4, 2005, and (ii) immediately thereafter
reserve for issuance such number of shares of Common Stock as shall be necessary
for issuance upon conversion of the Notes.

            6.3 Press Releases. Any press release or other publicity originating
from the Company concerning this Agreement or the transactions contemplated by
this Agreement shall be submitted to the Purchasers for comment one business day
prior to issuance and shall not identify any Purchaser without the prior consent
of such Purchaser. No press release or other public disclosure relating to this
Agreement or the transactions contemplated by this Agreement may be issued or
made by or on behalf of any Purchaser without prior consultation with and
written consent from the Company.

                                       13
<PAGE>

            6.4 No Conflicting Agreements. The Company will not, without
obtaining prior approval from the Required Holders, take any action, enter into
any agreement or make any commitment that would conflict or interfere in any
material respect with the obligations to the Purchasers under the Agreements.

            6.5 Insurance. For so long as any Purchaser beneficially owns any of
the Securities, the Company shall have in full force and effect (a) insurance
reasonably believed by the Company to be adequate on all assets and activities,
covering property damage and loss of income by fire or other casualty, and (b)
insurance reasonably believed to be adequate protection against all liabilities,
claims and risks against which it is customary for companies similarly situated
as the Company to insure (other than key man insurance).

            6.6 Compliance with Laws. So long as the Purchasers beneficially own
any Securities, the Company will use reasonable efforts to comply with all
applicable laws, rules, regulations, orders and decrees of all governmental
authorities, except to the extent non-compliance (in one instance or in the
aggregate) would not have a Material Adverse Effect.

            6.7 Corporate Existence. So long as any Notes remain outstanding,
the Company shall maintain its corporate existence, except in the event of a
merger, consolidation or sale of all or substantially all of the Company's
assets so long as the surviving or successor entity in such transaction (a)
assumes the Company's obligations hereunder and under the agreements and
instruments entered into in connection herewith, regardless of whether or not
the Company would have had a sufficient number of shares of Common Stock
authorized and available for issuance in order to fulfill its obligations
hereunder and effect the conversion (including payment of interest thereon) in
full of all Notes outstanding as of the date of such transaction; (b) has no
legal, contractual or other restrictions on its ability to perform the
obligations of the Company hereunder and under the agreements and instruments
entered into in connection herewith; and (c)(i) is a publicly traded corporation
whose common stock and the shares of capital stock issuable upon conversion and
exercise of the Notes are (or would be upon issuance thereof) listed for trading
on the Nasdaq National Market, Nasdaq Small Cap Market, New York Stock Exchange,
the American Stock Exchange or the Nasdaq OTC Bulletin Board or (ii) if not such
a publicly traded corporation, then the buyer agrees that it will, at the
election of the Purchasers, purchase such Purchasers' Securities at a price
equal to the greater of (a) 120% of the Purchase Price of such Securities or (b)
the fair market value of such Securities on an as-converted and as-exercised
basis based on the closing price immediately preceding such transaction or the
redemption date, whichever is greater.

            6.8 Current Report. On or before the 5th business day following the
Closing Date, the Company shall file a Current Report on Form 8-K with the SEC
describing the material terms of the transactions contemplated by the Agreements
and including as exhibits to such report this Agreement, the form of the Notes
and the Registration Rights Agreement in the form required by the 1934 Act (with
such exhibits, a "Required Report").

                                       14
<PAGE>

            6.9 Incurrence of Indebtedness. So long as any of the Notes are
outstanding, the Company shall not, without obtaining prior approval from the
Required Holders, enter into, create, incur, assume or suffer to exist any
indebtedness of any kind other than (a) indebtedness existing on the date
hereof; (b) indebtedness of the Company to its Subsidiary; (c) indebtedness
arising out of trade accounts payable and other accrued liabilities arising in
the ordinary course of business that are not overdue by 90 days or more or are
being contested in good faith; (d) indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument; (e)
indebtedness which is subject and subordinate in right of payment to the right
of the Holders to receive the prior indefeasible payment and satisfaction in
full of the obligations under the Notes; (f) indebtedness arising under
customary inventory and receivable bank financing; and (g) indebtedness the net
proceeds from which is used to pay the outstanding Notes in full in accordance
with their terms. The Company shall not (a) modify the terms or maturity of any
indebtedness in any material respect, except the Company may modify the terms of
such indebtedness to extend the maturity thereof, to defer the timing of any
payments in respect thereof, to cancel any portion of such indebtedness (other
than pursuant to payments in the form of cash or other assets of the Company) or
to reduce the interest rate or any fees in connection therewith, or (b) prepay
any material indebtedness in the form of cash or other assets of the Company
without obtaining the approval from the Required Holders.

            6.10 Purchaser Covenants. Each Purchaser covenants and agrees with
the Company as follows:

      (a) Confidentiality. The Purchaser agrees that it will not disclose, and
will not include in any public announcement, the name of the Company, unless
expressly agreed to by the Company or unless and until such disclosure is
required by law or applicable regulation, and then only to the extent of such
requirement.

      (b) Non-Public Information. The Purchaser agrees not to effect any
purchases or sales in the shares of the Company's Common Stock while in
possession of material, non-public information regarding the Company if such
sales would violate applicable securities law.

      (c) Confidential Information. The Company from time to time may disclose
to the Purchaser pursuant to this Agreement certain confidential technical and
nontechnical business information ("Confidential Information"). Notwithstanding
any other provision of this Agreement, including provisions regarding the
termination of this Agreement or particular terms of this Agreement, the
Purchaser shall not disclose such Confidential Information to third parties
until the earliest of (i) the date upon which such information ceases to be
Confidential Information through no fault of the Purchaser, (ii) the date such
information is required to be disclosed by law or a court of competent
jurisdiction, or (iii) the fifth anniversary of the date of disclosure by the
Company to the Purchaser. In the event that the Purchaser or any of its
representatives is requested or required to disclose any of the Confidential
Information referred to above, the Purchaser will provide the Company with
prompt notice of such request or requirement so that the Company (if it so
desires) may seek a protective order. The Purchaser further acknowledges and
understands that any information so obtained which may be considered "inside"
non-public information will not be utilized by the Purchaser in connection with

                                       15
<PAGE>

purchases and/or sales of the Company's securities except in compliance with
applicable state and federal securities laws. Confidential Information shall not
include information that (A) was previously known to the receiving party prior
to disclosure thereof by the other party, (B) is independently developed without
the use of such Confidential Information, (C) at the time of disclosure to the
receiving party is, or thereafter becomes, generally available to the public
other than as a result of a disclosure by the receiving party or its
representatives in violation of this Section 6.8(c), or (D) becomes available to
the receiving party on a non-confidential basis from a third party provided that
such third party is not bound by an obligation of confidentiality to the
Company.

      7. Survival. All representations and warranties contained in this
Agreement shall survive for eighteen (18) months following the Closing of the
transactions contemplated hereby.

      8. Miscellaneous.

            8.1 Successors and Assigns. This Agreement may not be assigned by
the Company. A Purchaser may assign its rights and delegate its duties hereunder
in whole or in part to any Person (who is not a competitor or vendor of the
Company) to which such Purchaser has transferred or assigned all or part of its
Notes in accordance with the terms of the Notes, provided in each case that such
transferee or assignee acknowledges in writing to the Company that the
representations and warranties contained herein shall apply to such transferee
or assignee. 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.

            8.2 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.

            8.3 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.

            8.4 Notices. Any and all notices or other communications or
deliveries to be provided by the Holder hereunder shall be in writing and
delivered personally, by confirmed facsimile, or by a nationally recognized
overnight courier service to the Company at the facsimile telephone number or
address of the principal place of business of the Company as set forth below.
Any and all notices or other communications or deliveries to be provided by the
Company hereunder shall be in writing and delivered personally, by facsimile, or
by a nationally recognized overnight courier service addressed to the Purchasers
at the facsimile telephone number or address of the Purchasers set forth below.
Any notice or other communication or deliveries hereunder shall be deemed
delivered (i) upon receipt, when delivered personally, (ii) when sent by
facsimile, upon receipt if received on a Business Day prior to 5:00 p.m.
(Eastern Time), or on the first Business Day following such receipt if received
on a Business Day after 5:00 p.m. (Eastern Time) or (iii) upon receipt, when
deposited with a nationally recognized overnight courier service.

                                       16
<PAGE>

                  If to the Company:

                  Knockout Holdings, Inc.
                  100 W. Whitehall Avenue
                  Northlake, IL 60164
                  Fax: (708) 279-6901
                  Attn: President

                  With a copy to:

                  Silverman Sclar Shin & Byrne PLLC
                  381 Park Avenue South
                  New York, NY 10016
                  Fax: (212) 779-8858
                  Attn: John Shin, Esq.

                  If to the Purchasers, to the addresses set forth on
                  the signature pages hereto.

            8.5 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Required
Holders. Any amendment or waiver effected in accordance with this Section shall
be binding upon Holders, future Holders and the Company.

            8.6 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.

            8.7 Entire Agreement. This Agreement, including the exhibits and
schedules hereto, the Registration Rights Agreement, the Notes and the other
documents contemplated hereby constitute the entire agreement among the parties
hereof with respect to the subject matter hereof and thereof and supersede all
prior agreements and understandings, both oral and written, between the parties
with respect to the subject matter hereof and thereof.

            8.8 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.

                                       17
<PAGE>

            8.9 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 laws.

            8.10 Remedies. The Purchasers shall be entitled to specific
performance of the Company's obligations under the Agreements.

            8.11 Like Treatment of Purchasers and Holders. The Company shall
not, directly or indirectly, redeem any Securities unless such offer of
redemption is made pro rata to all Purchasers or holders of Securities, as the
case may be, on identical terms. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and
negotiated separately by each Purchaser, and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

            8.12 Actions of Purchasers. The obligations of each Purchaser
hereunder and under the documents contemplated hereby are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall in any way
be responsible for the performance of the obligations of any other Purchaser
under any such document. Nothing contained herein or in any other document
contemplated hereby, and no action taken by any Purchaser pursuant hereto or
thereto, shall be deemed to constitute any of the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated hereby or
thereby. Each Purchaser confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each Purchaser shall be entitled to independently protect
and enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other document contemplated hereby, and it shall
not be necessary for any other Purchaser to be joined as an additional party in
any proceeding for such purpose.

            8.13 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.

            8.14 Reimbursement of Expense. At the Closing, the Company shall pay
Royal Capital Management LLC ("Royal") an expense allowance of $10,000 which
amount shall be withheld by the Purchasers affiliated with Royal from their
Purchase Price to be paid at Closing.

                            [Signature Pages Follows]

                                       18
<PAGE>

            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.

                                        The Company:

                                        KNOCKOUT HOLDINGS, INC.

                                        By: /s/ Richard Han
                                            ------------------------------------
                                        Name: Richard Han
                                        Title: CFO

                                       19
<PAGE>

                                        Purchaser:

                                        VICIS CAPITAL MASTER FUND
                                        ----------------------------------------
                                        Name
                                        By: Vicis Capital, LLC

                                        /s/ Shad Stastney
                                        ----------------------------------------
                                        By

                                        Member
                                        ----------------------------------------
                                        Title

Principal Amount of Notes being purchased:                         $1,130,000.00
                                                                   -------------

Address:                             Vicis Capital Master Fund
                                     -------------------------------------------
                                     Tower 56, Suite 700
                                     -------------------------------------------
                                     126 East 56th Street
                                     -------------------------------------------
                                     New York, NY 10022
                                     -------------------------------------------
                                     Attention: Shad Stastney, Managing Director
                                     -------------------------------------------
                                     Fax:
                                     -------------------------------------------

                                     with a copy to:

                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------

                                       20
<PAGE>

                                        Purchaser:

                                        GAMMA OPPORTUNITY CAPITAL
                                        PARTNERS, LP
                                        ----------------------------------------
                                        Name

                                        /s/ Jonathan P. Knight
                                        ----------------------------------------
                                        By

                                        President Gamma Capital Advisors Ltd,
                                        as Agent
                                        ----------------------------------------
                                        Title

Principal Amount of Notes being purchased:                           $450,000.00
                                                                     -----------

Address:                             Gamma Opportunity Capital Partners, LP
                                     -------------------------------------------
                                     1967 Longwood-Lake Mary Road
                                     -------------------------------------------
                                     Longwood, FL 32750
                                     -------------------------------------------
                                     Attention: Jonathan P. Knight, President
                                     -------------------------------------------
                                     Fax:
                                     -------------------------------------------

                                     with a copy to:

                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------

                                       21
<PAGE>

                                        Purchaser:

                                        BUSHIDO CAPITAL MASTER FUND LP
                                        ----------------------------------------
                                        Name

                                        /s/ Christopher Rossman
                                        ----------------------------------------
                                        By

                                        Managing Director, Bushido Capital
                                        Partners
                                        ----------------------------------------
                                        Title

Principal Amount of Notes being purchased:                           $450,000.00
                                                                     -----------

Address:                             Bushido Capital Master Fund LP
                                     -------------------------------------------
                                     275 Seventh Avenue, Ste 2000
                                     -------------------------------------------
                                     New York, NY 10001
                                     -------------------------------------------
                                     Attention: Chris Rossman, Director
                                     -------------------------------------------
                                     Fax:
                                     -------------------------------------------

                                     with a copy to:

                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------

                                       22
<PAGE>

                                        Purchaser:

                                        ROYAL CAPITAL VALUE FUND LP
                                        ----------------------------------------
                                        Name

                                        /s/ Yale Fergang
                                        ----------------------------------------
                                        By

                                        Managing Member
                                        ----------------------------------------
                                        Title

Principal Amount of Notes being purchased:                            $49,000.00
                                                                      ----------

Address:                             Royal Capital Value Fund LP
                                     -------------------------------------------
                                     575 Lexington Avenue, 4th Floor
                                     -------------------------------------------
                                     New York, NY 10022
                                     -------------------------------------------
                                     Attention: Yale Fergang, Portfolio Manager
                                     -------------------------------------------
                                     Fax:
                                     -------------------------------------------

                                     with a copy to:

                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------

                                       23
<PAGE>

                                        Purchaser:

                                        ROYAL CAPITAL VALUE FUND (QP) LP
                                        ----------------------------------------
                                        Name

                                        /s/ Yale Fergang
                                        ----------------------------------------
                                        By

                                        Managing Member
                                        ----------------------------------------
                                        Title

Principal Amount of Notes being purchased:                           $516,000.00
                                                                     -----------

Address:                             Royal Capital Value Fund (QP) LP
                                     -------------------------------------------
                                     575 Lexington Avenue, 4th Floor
                                     -------------------------------------------
                                     New York, NY 10022
                                     -------------------------------------------
                                     Attention: Yale Fergang, Portfolio Manager
                                     -------------------------------------------
                                     Fax:
                                     -------------------------------------------

                                     with a copy to:

                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------

                                       24
<PAGE>

                                        Purchaser:

                                        ROYALCAP VALUE FUND LTD
                                        ----------------------------------------
                                        Name

                                        /s/ Yale Fergang
                                        ----------------------------------------
                                        By

                                        Managing Member
                                        ----------------------------------------
                                        Title

Principal Amount of Notes being purchased:                           $205,000.00
                                                                     -----------

Address:                             RoyalCap Value Fund Ltd
                                     -------------------------------------------
                                     575 Lexington Avenue, 4th Floor
                                     -------------------------------------------
                                     New York, NY 10022
                                     -------------------------------------------
                                     Attention: Yale Fergang, Portfolio Manager
                                     -------------------------------------------
                                     Fax:
                                     -------------------------------------------

                                     with a copy to:

                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------
                                     -------------------------------------------

                                       25EXHIBIT 10.2

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

                16.66% SENIOR CONVERTIBLE NOTE DUE March 31, 2007

                                       OF

                             KNOCKOUT HOLDINGS, INC.

Note No.: ____                            Original Principal Amount: $[________]
Issuance Date:  September 12, 2005

      This note ("Note") is one of a duly authorized issue of Notes of Knockout
Holdings, Inc., a corporation duly organized and existing under the laws of the
State of Delaware (the "Company"), designated as the Company's 16.66% Senior
Convertible Notes Due March 31, 2007 ("Maturity Date") in an aggregate principal
amount (when taken together with the original principal amounts of all other
Notes) of $2,800,000 (together, the "Notes").

      FOR VALUE RECEIVED, the Company hereby promises to pay to the order of
[_________________________] or its registered assigns or successors-in-interest
("Holder") the principal sum of $[_____________], together with all accrued but
unpaid interest thereon, if any, on the Maturity Date, to the extent such
principal amount and interest has not been repaid or converted into the
Company's Common Stock, $0.001 par value per share (the "Common Stock"), in
accordance with the terms hereof. Interest on the unpaid and unconverted
principal balance hereof shall accrue at the rate of sixteen and 66/100 percent
(16.66%) per annum from the date of original issuance hereof (the "Issuance
Date"). Payments on the Note shall be made in accordance with Section 1 hereof.
Interest on this Note shall accrue daily commencing on the Issuance Date and
shall be computed on the basis of a 360-day year, 30-day months and actual days
elapsed and shall be payable in accordance with Section 1 hereof. Unless
otherwise agreed or required by applicable law, payments will be applied first
to any unpaid collection costs, then to unpaid interest and fees and any
remaining amount to principal.

      Except as otherwise provided herein, all payments of principal and
interest on this Note shall be made in lawful money of the United States of
America by wire transfer of immediately available funds to such account as the
Holder may from time to time designate by written notice in accordance with the
provisions of this Note or by Company check. Whenever any amount expressed to be
due by the terms of this Note is due on any day which is not a Business Day (as
defined below), the same shall instead be due on the next succeeding day which
is a Business Day.

<PAGE>

      Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Purchase Agreement dated on or about the Issuance Date
pursuant to which the Notes were originally issued (the "Purchase Agreement").
For purposes hereof the following terms shall have the meanings ascribed to them
below:

      "Bankruptcy Event" means any of the following events: (a) the Company
commences a case or other proceeding under any bankruptcy, reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction relating to the Company; (b)
there is commenced against the Company any such case or proceeding that is not
dismissed within 60 days after commencement; (c) the Company is adjudicated
insolvent or bankrupt or any order of relief or other order approving any such
case or proceeding is entered; (d) the Company suffers any appointment of any
custodian or the like for it or any substantial part of its property that is not
discharged or stayed within 60 days; (e) the Company makes a general assignment
for the benefit of creditors; (f) the Company fails to pay, or states that it is
unable to pay or is unable to pay, its debts generally as they become due; (g)
the Company calls a meeting of its creditors with a view to arranging a
composition, adjustment or restructuring of its debts; or (h) the Company, by
any act or failure to act, expressly indicates its consent to, approval of or
acquiescence in any of the foregoing or takes any corporate or other action for
the purpose of effecting any of the foregoing.

      "Business Day" shall mean any day other than a Saturday, Sunday or a day
on which commercial banks in the City of New York are authorized or required by
law or executive order to remain closed.

      "Change in Control Transaction" will be deemed to exist if (i) there
occurs any consolidation, merger or other business combination of the Company
with or into any other corporation or other entity or person (whether or not the
Company is the surviving corporation), or any other corporate reorganization or
transaction or series of related transactions in which in any of such events the
voting stockholders of the Company prior to such event cease to own thirty-three
percent (33%) or more of the voting power, or corresponding voting equity
interests, of the surviving corporation after such event (including without
limitation any "going private" transaction under Rule 13e-3 promulgated pursuant
to the Exchange Act or tender offer by the Company under Rule 13e-4 promulgated
pursuant to the Exchange Act for twenty percent (20%) or more of the Company's
Common Stock), (ii) any person (as defined in Section 13(d) of the Exchange
Act), together with its affiliates and associates (as such terms are defined in
Rule 405 under the Act), beneficially owns or is deemed to beneficially own (as
described in Rule 13d-3 under the Exchange Act without regard to the 60-day
exercise period) in excess of fifty percent (50%) of the Company's voting power,
(iii) there is a replacement of more than one-half of the members of the
Company's Board of Directors which is not approved by those individuals who are
members of the Company's Board of Directors on the date thereof, (iv) in one or
a series of related transactions, there is a sale or transfer of all or
substantially all of the assets of the Company, determined on a consolidated
basis, or (v) the Company enters into any agreement providing for an event set
forth in (i), (ii), (iii) or (iv) above.

                                       2
<PAGE>

      "Conversion Price" shall equal $.50 (which Conversion Price shall be
subject to adjustment as set forth herein).

      "Default Rate" shall mean the lower of eighteen percent (18%) per annum or
the highest rate permitted by law.

      "Effective Date" means the date on which a Registration Statement covering
all the Underlying Shares and other Registrable Securities (as defined in the
Registration Rights Agreement) is declared effective by the SEC.

      "Effective Registration" shall mean (i) the resale of all Registrable
Securities (as defined in the Registration Rights Agreement) is covered by an
effective registration statement in accordance with the terms of the
Registration Rights Agreement which registration statement is not subject to any
suspension or stop order; (ii) the resale of such Registrable Securities may be
effected pursuant to a current and deliverable prospectus that is not subject at
the time to any blackout or similar circumstance; and (iii) the requisite number
of shares of Common Stock shall have been duly authorized and reserved for
issuance as required by the terms of the Purchase Agreement and this Note.

      "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

      "Issuance Date" shall mean the date of this Note.

      "Maturity Date" shall mean March 31, 2007.

      "Principal Amount" shall refer to (i) the original principal amount of
this Note, less (ii) all amounts of principal previously repaid or converted.

      "Principal Market" shall mean a principal market or exchange on which the
Common Stock is then listed for trading.

      "Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.

      "Required Holders" means the Holders of not less than 50% in aggregate
principal amount of the Notes then outstanding exclusive of any Notes then owned
by either the Company or any of its Affiliates.

      "Securities Act" shall mean the Securities Act of 1933, as amended.

      "Trading Day" shall mean a day on which there is trading on the Principal
Market.

      The following terms and conditions shall apply to this Note:

                                       3
<PAGE>

Section 1. Payments of Principal and Interest.

            (a) Maturity Date. On the Maturity Date, the Company shall pay to
the Holder all outstanding Principal Amount and all accrued but unpaid interest
thereon, in accordance with this Section 1.

            (b) Certain Additional Payments by the Company. Any payment by the
Company to the Holder hereunder, whether for principal, interest or otherwise,
shall not be subject to any deduction, withholding or offset for any reason
whatsoever except to the extent required by law, and the Company represents that
to its best knowledge no deduction, withholding or offset is so required for any
tax or any other reason.

            (c) Redemption. (i) In the event of a Change in Control Transaction,
the Company shall redeem in cash all of the Notes for a redemption price equal
to 125% of the amount of the outstanding Principal Amount, plus accrued and
unpaid interest thereon to the applicable redemption date. The Company shall
give the Holder written notice of such redemption under this Section 1(e)(i) not
less than ten (10) days prior to the date fixed for such redemption, in each
case specifying such redemption date, the Principal Amount of the Notes (and
accrued and unpaid interest thereon) to be redeemed and terms of such Change in
Control Transaction in detail. Upon receipt of such redemption notice, the
Holder may convert at the ten applicable Conversion Price, in lieu of such
redemption, at any time prior to the date fixed for such redemption, all or any
part of Principal Amount and accrued and unpaid interest designated by the
Company for redemption.

                  (ii) At any time after the date hereof, the Company may redeem
in cash all of the Note for a redemption price equal to 125% of the amount of
the outstanding Principal Amount, plus accrued and unpaid interest thereon to
the applicable redemption date. The Company shall give the Holder written notice
of such redemption under this Section 1(e)(ii) not less than ten (10) days prior
to the date fixed for such redemption, in each case specifying such redemption
date and the Principal Amount of the Note (and accrued and unpaid interest
thereon) to be redeemed. Upon receipt of such redemption notice, the Holder may
convert at the then applicable Conversion Price, in lieu of such redemption, at
any time prior to the date fixed for such redemption, all or any part of
Principal Amount and accrued and unpaid interest designated by the Company for
redemption.

Section 2. Conversion.

            (a) Conversion Right. Subject to the terms hereof and restrictions
and limitations contained herein, the Holder shall have the right, at such
Holder's option, at any time and from time to time, to convert the outstanding
Principal Amount and the accrued but unpaid interest under this Note, in whole
or in part, into shares of Common Stock at the then applicable Conversion Price
by delivering to the Company, at least 5 Trading Days before the Maturity Date,
a fully executed notice of conversion in the form of conversion notice attached
hereto as Exhibit A (the "Conversion Notice"), which may be initially
transmitted by facsimile (provided the original Conversion Notice and this Note
is delivered to the Holder within 3 Trading Days following such facsimile
transmission).

                                       4
<PAGE>

            (b) Common Stock Issuance upon Conversion.

                  (i) Conversion Date Procedures. Upon conversion of this Note
pursuant to Section 2(a) above, the outstanding Principal Amount and interest
hereunder shall be converted into such number of fully paid, validly issued and
non-assessable shares of Common Stock, free of any liens, claims and
encumbrances as is determined by dividing the outstanding Principal Amount and
interest being converted by the Conversion Price. The date of any Conversion
Notice hereunder shall be referred to herein as the "Conversion Date". If a
conversion under this Note cannot be effected in full in accordance with the
terms hereof, or if the Holder is converting less than all of the outstanding
Principal Amount and interest hereunder pursuant to a Conversion Notice, on the
Maturity Date, the Company shall deliver to the Holder a Note (containing the
same terms a the Note herein) for such outstanding Principal Amount as has not
been converted if this Note has bee surrendered to the Company for partial
conversion. The Holder shall surrender this Note to the Company within 3 Trading
Days of any conversion, in whole or in part. .

                  (ii) Stock Certificates. Providing that an Effective
Registration Statement is effective, or providing the Conversion Notice is dated
more than two (2) years after the Issuance Date (provided the Holder is not then
deemed an affiliate of the Company in the case of reliance on the 2-year holding
period), the Company will deliver to the Holder not later than three (3) Trading
Days after the Conversion Date, a certificate or certificates which shall be
free of restrictive legends and trading restrictions, representing the number of
shares of Common Stock being acquired upon the conversion of this Note. If in
the case of any conversion hereunder, such certificate or certificates are not
delivered to the Holder by the third Trading Day after the Conversion Date, the
Holder shall be entitled by written notice to the Company at any time on or
before its receipt of such certificate or certificates thereafter, to rescind
such conversion, in which event the Company shall immediately return this Note
tendered for conversion. If the Company fails to deliver to the Holder such
certificate or certificates pursuant to this Section 2(b) (free of any
restrictions on transfer or legends, if such shares have been registered or if
the Note has been held beyond two years from the Issuance Date) in accordance
herewith, on or prior to the sixth Trading Day after the Conversion Date, the
Company shall pay to the Holder, in cash, an amount equal to .25% of the
Principal Amount subject to such conversion for each Trading Day thereafter
until such certificate(s) are delivered to the Holder or until the conversation
is rescinded by the Holder, whichever shall first occur.

                  (iii) Compensation for Buy-In on Failure to Timely Deliver
Certificates Upon Conversion. In addition to any other rights available to the
Holder, if the Company fails for any reason to deliver to the Holder such
certificate or certificates pursuant to Section 4(d)(ii) by the third Trading
Day after the Conversion Date, and if after such third Trading Day the Holder is
required by its brokerage firm to purchase (in an open market transaction or
otherwise) Common Stock to deliver in satisfaction of a sale by such Holder of
the shares of Common Stock which the Holder anticipated receiving upon
conversion (a "Buy-In"), then the Company shall (A) pay in cash to the Holder
(in addition to any remedies available to or elected by the Holder) the amount
by which (x) the Holder's total purchase price (including brokerage commissions,
if any) for the Common Stock so purchased exceeds (y) the product of (1) the
aggregate number of shares of Common Stock that such Holder anticipated
receiving from the conversion at issue multiplied by (2) the actual sale price
of the Common Stock at the time of the sale (including brokerage commissions, if
any) giving rise to such purchase obligation and (B) at the option of the
Holder, either reissue Notes in principal amount equal to the principal amount

                                       5
<PAGE>

of the attempted conversion or deliver to the Holder the number of shares of
Common Stock that would have been issued had the Company timely complied with
its delivery requirements under Section 4(d). For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of Notes with respect to which
the actual sale price of the shares of Common Stock at the time of the sale
(including brokerage commissions, if any) giving rise to such purchase
obligation was a total of $10,000 under clause (A) of the immediately preceding
sentence, the Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts payable to the
Holder in respect of the Buy-In. Notwithstanding anything contained herein to
the contrary, if a Holder requires the Company to make payment in respect of a
Buy-In for the failure to timely deliver certificates hereunder and the Company
timely pays in full such payment, the Company shall not be required to pay such
Holder under Section 4(d)(ii) in respect of the certificates resulting in such
Buy-In.

Section 3. Conversion Price Adjustments.

            (a) Stock Dividends, Splits and Combinations. If the Company, at any
time while the Notes are outstanding (A) shall pay a stock dividend or otherwise
make a distribution or distributions on any equity securities (including
instruments or securities convertible into or exchangeable for such equity
securities) in shares of Common Stock, (B) subdivide outstanding Common Stock
into a larger number of shares, or (C) combine outstanding Common Stock into a
smaller number of shares, then the Conversion Price in effect immediately prior
to such event shall be adjusted to a number equal to such Conversation Price
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding before such event and the denominator of which shall
be the number of shares of Common Stock outstanding after such event. Any
adjustment made pursuant to this section shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision or combination.

            (b) Distributions. If the Company, at any time while the Notes are
outstanding, shall distribute to all holders of Common Stock evidences of its
indebtedness or assets or cash or rights or warrants to subscribe for or
purchase any security of the Company, then concurrently with such distributions
to holders of Common Stock, the Company shall distribute to holders of the Notes
the amount of such indebtedness, assets, cash or rights or warrants which the
holders of Notes would have received had all their Notes been converted into
Common Stock at the Conversion Price immediately prior to the record date for
such distribution.

            (c) Subsequent Equity Sales. If the Company at any time while the
Notes are outstanding, shall offer, sell, grant any option to purchase or offer,
sell or grant any right to reprice its securities, or otherwise dispose of or
issue (or announce any offer, sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equivalents (but with the
exception of Excluded Issuances) entitling any entity or person to acquire
shares of Common Stock, at an effective price per share less than the then
Conversion Price (such lower price, the "Base Share Price" and such issuances
collectively, a "Dilutive Issuance"), as adjusted hereunder (if the holder of
the Common Stock or Common Stock Equivalents so issued shall at any time,
whether by operation of purchase price adjustments, reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to warrants,
options or rights per share which is issued in connection with such issuance, be
entitled to receive shares of Common Stock at an effective price per share which
is less than the Conversion Price, such issuance shall be deemed to have
occurred for less than the Conversion Price), then, the Conversion Price shall
be reduced to equal the Base Share Price. Such adjustment shall be made whenever
such Common Stock or Common Stock Equivalents are issued. The Company shall

                                       6
<PAGE>

notify the Holder in writing, no later than the Trading Day following the
issuance of any Common Stock or Common Stock Equivalents subject to this
section, indicating therein the applicable issuance price, or of applicable
reset price, exchange price, conversion price and other pricing terms (such
notice the "Dilutive Issuance Notice"). For purposes of clarification, whether
or not the Company provides a Dilutive Issuance Notice pursuant to this Section
3(c), upon the occurrence of any Dilutive Issuance, after the date of such
Dilutive Issuance the Holder is entitled to receive a number of shares of Common
Stock upon conversion based upon the Base Share Price regardless of whether the
Holder accurately refers to the Base Share Price in the Notice of Conversion.
"Common Stock Equivalents" shall means (a) any rights, warrants or options to
purchase or otherwise acquire Common Stock or (b) any stock or securities
directly or indirectly convertible into or exchangeable for Common Stock.
"Excluded Issuances" shall mean (A) any issuance by the Company of securities in
connection with a strategic partnership or a joint venture (the primary purpose
of which is not to raise equity capital), (B) any issuance by the Company of
securities as consideration for a merger or consolidation or the acquisition of
a business, product, license or other assets of another person or entity, (C)
any Common Stock Equivalents outstanding as of the Issuance Date; (D) options to
purchase shares of Common Stock issued to employees of the Company; and (E) any
issuance by the Company of securities in consideration for services rendered,
provided, an aggregate of no more than 1,000,000 shares of Common Stock are
issued or issuable in reliance on this clause (E).

            (c) Rounding of Adjustments. All calculations under this Section 3
shall be made to the nearest cent or the nearest 1/100th of a share, as the case
may be.

            (d) Notice of Adjustments. Whenever any Conversion Price is adjusted
as provided herein, the Company shall promptly deliver to each holder of the
Notes, a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment, provided
that any failure to so provide such notice shall not affect the automatic
adjustment hereunder.

            (e) Intentionally Omitted.

            (f) Notice of Certain Events. If:

                        A.    the Company shall declare a dividend (or any other
                              distribution) on its Common Stock; or

                        B.    the Company shall declare a special nonrecurring
                              cash dividend on or a redemption of its Common
                              Stock; or

                        C.    the Company shall authorize the granting to all
                              holders of the Common Stock rights or warrants to
                              subscribe for or purchase any shares of capital
                              stock of any class or of any rights; or

                                       7
<PAGE>

                        D.    the approval of any stockholders of the Company
                              shall be required in connection with any
                              reclassification of the Common Stock of the
                              Company, any consolidation or merger to which the
                              Company is a party, any sale or transfer of all or
                              substantially all of the assets of the Company, of
                              any compulsory share of exchange whereby the
                              Common Stock is converted into other securities,
                              cash or property; or

                        E.    the Company shall authorize the voluntary or
                              involuntary dissolution, liquidation or winding up
                              of the affairs of the Company,

then the Company shall cause to be mailed to the Holder at its last address as
it shall appear upon the books of the Company, on or prior to the date notice to
the Company's stockholders generally is given, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the
date on which such reclassification, securities issuance, consolidation, merger,
sale, transfer or share exchange is expected to become effective or close, and
the date as of which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange.

            (g) Notice of Certain Other Events. If:

                  A.    the Company enters into, creates, incurs, assumes or
                        suffers to exist any indebtedness of any kind in excess
                        of $50,000, in a single transaction or series of related
                        transactions, other than (a) indebtedness existing on
                        the date hereof; (b) indebtedness of the Company to its
                        Subsidiary; (c) indebtedness arising out of trade
                        accounts payable and other accrued liabilities arising
                        in the ordinary course of business that are not overdue
                        by 90 days or more or are being contested in good faith;
                        (d) indebtedness arising from the honoring by a bank or
                        other financial institution of a check, draft or similar
                        instrument; or

                  B.    the Company makes a cash disbursement in excess of
                        $1,000,000, in a single transaction or series of related
                        transactions, other than transactions which have been
                        disclosed in a SEC Filing prior to the Issuance Date or
                        which is disclosed in a SEC Filing within five (5) days
                        of such disbursement,

provided the Holder is subject to a confidentiality agreement with the Company
reasonably acceptable to the Company, the Company shall cause to be mailed to
the Holder at its last address as it shall appear upon the books of the Company,
notice of such indebtedness or disbursement.

                                       8
<PAGE>

Section 4. Reservation and Issuance of Underlying Securities. The Company
covenants that it will at all times after the effectiveness of the amendment to
its Certificate of Incorporation increasing the number of authorized shares of
Common Stock (as described in the Purchase Agreement) reserve and keep available
out of its authorized and unissued Common Stock solely for the purpose of
issuance upon conversion of this Note and repayments in stock, free from
preemptive rights or any other actual contingent purchase rights of persons
other than the holders of the Notes, not less than such number of shares of
Common Stock as shall be issuable (taking into account the adjustments under
Section 3) upon the conversion of this Note hereunder in Common Stock. The
Company covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly authorized, validly issued, fully paid and
nonassessable.

Section 5. No Fractions. Upon a conversion hereunder the Company shall not be
required to issue stock certificates representing fractions of shares of Common
Stock, but may if otherwise permitted, make a cash payment in respect of any
final fraction of a share based on the closing price of a share of Common Stock
at such time. If the Company elects not, or is unable, to make such a cash
payment, the Holder shall be entitled to receive, in lieu of the final fraction
of a share, one whole share of Common Stock.

Section 6. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the conversion of this Note and repayment in stock shall be
made without charge to the holder hereof for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the event certificates for shares of
Common Stock are to be issued in a name other than the name of the Holder, this
Note when surrendered for conversion shall be accompanied by an assignment form;
and provided further, that the Company shall not be required to pay any tax or
taxes which may be payable in respect of any such transfer.

Section 7. Cancellation. After all of the Principal Amount (including accrued
but unpaid interest and default payments at any time owed on this Note) have
been paid in full or converted into Common Stock, this Note shall automatically
be deemed canceled and the Holder shall promptly surrender the Note to the
Company at the Company's principal executive offices.

Section 8. Notices Procedures. Any and all notices or other communications or
deliveries to be provided by the Holder hereunder shall be in writing and
delivered personally, by confirmed facsimile, or by a nationally recognized
overnight courier service to the Company at the facsimile telephone number or
address of the principal place of business of the Company as set forth in the
Purchase Agreement. Any and all notices or other communications or deliveries to
be provided by the Company hereunder shall be in writing and delivered
personally, by facsimile, or by a nationally recognized overnight courier
service addressed to the Holder at the facsimile telephone number or address of
the Holder appearing on the books of the Company, or if no such facsimile
telephone number or address appears, at the principal place of business of the
Holder. Any notice or other communication or deliveries hereunder shall be
deemed delivered (i) upon receipt, when delivered personally, (ii) when sent by
facsimile, upon receipt if received on a Business Day prior to 5:00 p.m.
(Eastern Time), or on the first Business Day following such receipt if received
on a Business Day after 5:00 p.m. (Eastern Time) or (iii) upon receipt, when
deposited with a nationally recognized overnight courier service.

                                       9
<PAGE>

Section 9. Defaults and Remedies.

            (a) Events of Default. An "Event of Default" is: (i) a default in
payment of any amount due hereunder which default continues uncured for more
than 5 Trading Days after the due date thereof; (ii) a default in the timely
issuance of Underlying Shares upon and in accordance with terms hereof, within 5
Trading Days following such payment date; (iii) failure by the Company for 10
Trading Days after written notice has been received by the Company to comply
with any material provision of any of the Notes, the Purchase Agreement or the
Registration Rights Agreement; (iv) a material breach by the Company of its
covenants, representations or warranties in the Purchase Agreement or
Registration Rights Agreement that remains uncured 10 Trading Days following
receipt by the Company of written notice of such breach; or (v) if the Company
is subject to any Bankruptcy Event.

            (b) Remedies. If an Event of Default occurs and is continuing with
respect to any of the Notes, the Required Holders may declare all of the then
outstanding Principal Amount of this Note and all other Notes held by the
Holders, including any interest due thereon, to be due and payable immediately
("Event of Acceleration"). The Company shall pay interest on such amount in cash
at the Default Rate to the Holder if such amount is not paid within 7 Trading
Days thereafter. The remedies under this Note shall be cumulative.

Section 10. General.

            (a) Payment of Expenses. The Company agrees to pay all reasonable,
documented charges and expenses, including attorneys' fees and expenses, which
may be incurred by the Holder in successfully enforcing this Note and/or
collecting any amount due under this Note.

            (b) Savings Clause. In case any provision of this Note is held by a
court of competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Note will not in any way be
affected or impaired thereby. In no event shall the amount of interest paid
hereunder exceed the maximum rate of interest on the unpaid principal balance
hereof allowable by applicable law. If any sum is collected in excess of the
applicable maximum rate, the excess collected shall be applied to reduce the
principal debt. If the interest actually collected hereunder is still in excess
of the applicable maximum rate, the interest rate shall be reduced so as not to
exceed the maximum allowable under law.

            (c) Amendment. Neither this Note nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
the Company and the Holder, provided, this Note and all the other Notes issued
pursuant to the Purchase Agreement (but not less than all such Notes
outstanding) may be amended from time to time upon the written consent of the
Company and the Required Holders.

                                       10
<PAGE>

            (d) Assignment, etc. The Holder may assign or transfer this Note to
any transferee (other than to competitors or vendors of the Company). The Holder
shall notify the Company of any such assignment or transfer promptly. This Note
shall be binding upon the Company and its successors and shall inure to the
benefit of the Holder and its successors and assigns.

            (e) No Waiver. No failure on the part of the Holder to exercise, and
no delay in exercising any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Holder of any
right, remedy or power hereunder preclude any other or future exercise of any
other right, remedy or power. Each and every right, remedy or power hereby
granted to the Holder or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by the Holder
from time to time.

            (f) Governing Law; Jurisdiction.

                  (i) Governing Law. This note will be governed by and construed
in accordance with the laws of the State of New York without regard to any
conflicts of laws provisions thereof that would otherwise require the
application of the law of any other jurisdiction.

                  (ii) No Jury Trial. The Company hereto knowingly and
voluntarily waives any and all rights it may have to a trial by jury with
respect to any litigation based on, or arising out of, under, or in connection
with, this Note.

            (g) Replacement Notes. This Note may be exchanged by Holder at any
time and from time to time for a Note or Notes with different denominations
representing an equal aggregate outstanding Principal Amount, as reasonably
requested by Holder, upon surrendering the same. No service charge will be made
for the first such registration or exchange; thereafter, the Holder shall
reimburse the Company for its reasonable document fees and expenses (including
transfer agent and legal fees and expenses). In the event that Holder notifies
the Company that this Note has been lost, stolen or destroyed, a replacement
Note identical in all respects to the original Note (except for registration
number and Principal Amount, if different than that shown on the original Note),
shall be issued to the Holder, provided that the Holder executes and delivers to
the Company an agreement reasonably satisfactory to the Company to indemnify the
Company from any loss incurred by it in connection with the Note.

                            [Signature Page Follows]

                                       11
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed on the day and in the year first above written.

                                        KNOCKOUT HOLDINGS, INC.

                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

Attest:

Sign:
      --------------------------------
Print Name:

                                       12
<PAGE>

                                    EXHIBIT A

                            FORM OF CONVERSION NOTICE

(To be executed by the Holder
in order to convert a Note)

      Re:   Note (this "Note") issued by Knockout Holdings, Inc. to
            _____________________ on or about September ___, 2005 in the
            original principal amount of $________________.

The undersigned hereby elects to convert the aggregate outstanding Principal
Amount (as defined in the Note) indicated below of this Note into shares of
Common Stock, $0.001 par value per share (the "Common Stock"), of Knockout
Holdings, Inc. (the "Company") according to the conditions hereof, as of the
date written below. If shares are to be issued in the name of a person other
than undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by the Company in accordance therewith. No fee will be
charged to the holder for any conversion, except for such transfer taxes, if
any.

Conversion information:
                            ----------------------------------------------------
                            Date to Effect Conversion

                            ----------------------------------------------------
                            Aggregate Principal Amount of Note Being Converted

                            ----------------------------------------------------
                            Number of Shares of Common Stock to be Issued

                            ----------------------------------------------------
                            Applicable Conversion Price

                            ----------------------------------------------------
                            Signature

                            ----------------------------------------------------
                            Name

                            ----------------------------------------------------
                            Address

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