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EXHIBIT 10.31.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") dated this 22d day
of June, 1998, is by and between BIKERS DREAM, INC., a California corporation
(the "Company"), and SIRROM CAPITAL CORPORATION d/b/a TANDEM CAPITAL, a
Tennessee corporation (the "Holder"). Capitalized terms not otherwise defined
shall have the meanings assigned by Section 11 and by the Loan Agreement
referred to below.
W I T N E S S E T H:
WHEREAS, the Company, other Borrowers, and the Holder have entered into
a certain Loan Agreement (the "Loan Agreement") dated June 22, 1998 that
provides for, among other things, the Company to grant to Holder certain
registration rights with respect to shares of the Company's common stock, no par
value (the "Common Stock"), as set forth herein; and
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Demand Registration.
1.1 Demand Rights. At any time on or after the date hereof and
during the term of this Agreement, if the holders of at least 25% of the
Registrable Securities outstanding ("Initiating Holders") request in writing (a
"Demand Request") that the Company register an offering of Registrable
Securities under the Securities Act of 1933, as amended (the "Securities Act")
by underwriters selected by the Initiating Holders, subject to the approval of
the Company which approval shall not be unreasonably withheld, with anticipated
gross offering proceeds of at least $1,000,000 (or such lesser amount, at least
$500,000, sufficient to register the public sale of all remaining Registrable
Securities), the Company shall:
(i) promptly give Notice of the Demand Request to all
other holders of Registrable Securities; and
(ii) use its best efforts to effect the registration of
such Registrable Securities (together with all other Registrable Securities
specified in any written request received by the Company within 20 days after
the date of the Notice of Demand Request) in accordance with the intended method
of disposition thereof, and in accordance with the procedures set forth in
Section 6.
Provided, that if a Demand Request is made with respect to Registrable
Securities with anticipated gross offering proceeds of less than $2,000,000, the
Company may at its option
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repurchase such Registrable Securities at a purchase price per share equal to
the Fair Market Value per share (as defined in the Loan Agreement) of the
Company's Common Stock on the trading day immediately preceding the closing date
for the repurchase. The Company shall give written notice of its exercise of the
option within 15 days after receipt of such Demand Request. The notice shall
specify (i) a closing date not more than 60 days after the date of the notice,
and (ii) the place of closing. The repurchase price shall be paid at the closing
to the Initiating Holders, against delivery of certificates representing the
Registrable Securities, by wire transfer of immediately available funds.
1.2 Number of Demand Registrations. The holders of registration
rights under this Agreement shall be entitled to request one registration of
Registrable Securities during any consecutive twelve months during the term of
this Agreement pursuant to this Section 1 (each a "Demand Registration"); and
the Company shall pay all Registration Expenses in connection with each such
registration request. A registration shall not count towards the maximum of two
registration requests held by the Holder hereunder unless the registration
statement for such requested registration has become effective or such
registration is withdrawn at the request of the Holders. Provided, however, that
the Company in any event shall pay all Registration Expenses in connection with
any requested registration whether or not the registration statement becomes
effective (unless the failure to become effective is such as to require the
Initiating Holders to pay all Registration Expenses for such aborted or
withdrawn registration pursuant to Section 4 below, in which case such
Initiating Holders shall reimburse the Company for all such Registration
Expenses incurred and paid by the Company in connection with such registration).
1.3 Other Securities and Priority. The registration statement
filed pursuant to the Demand Request may, subject to the prior written consent
of the Initiating Holders, include other securities of the Company, whether sold
by the Company or other holders of the Company's securities, provided that all
Registrable Securities for which the Initiating Holders have requested
registration shall be covered by such registration statement and (in the case of
an underwritten offering) sold in such offering before any such other securities
are included and sold.
1.4 Limitations. The Company shall not be obligated to effect, or
to take any action to effect, any Demand Registration:
(i) in any jurisdiction in which the Company would be
required to execute a general consent to service of process, unless the Company
is already subject to service in such jurisdiction and except as may be required
by the Securities Act;
(ii) during the period beginning 45 days prior to the
Company's good faith estimate of the date of filing of, and ending 180 days
after the effective date of, a Company- initiated registration, provided that
the Company is actively employing in good faith all reasonable efforts to cause
such registration statement to become effective; or
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(iii) if the Initiating Holders propose to dispose of
shares of Registrable Securities which may be immediately registered on Form S-3
pursuant to a request made under Section 3 hereof;
(iv) if the Company will be required to obtain an audit
(other than for its normal year-end audit) for such registration to become
effective.
1.5 Deferral of Registration. If in the good faith judgment of
the Board of Directors of the Company, the filing of a registration statement as
soon as practicable after receipt of the Demand Request would be materially
detrimental to the Company and the Board of Directors of the Company concludes,
as a result, that it is essential to defer the filing of such registration
statement at such time, the Company shall furnish to the Initiating Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be materially
detrimental to the Company for such registration statement to be filed in the
near future and that it is essential to defer the filing of such registration
statement; and the Company shall have the right to defer such filing for a
period of not more than 120 days after receipt of the Demand Request of the
Initiating Holders, provided that the Company shall not defer its obligations in
this manner for more than an aggregate of 120 days in any twelve-month period,
and provided further that the Initiating Holders shall be entitled to withdraw
the request for registration within 30 days after receipt of such certificate
and, if such request is withdrawn, such registration shall not count as a
requested registration hereunder and the Company shall pay all Registration
Expenses incurred in connection with such withdrawn registration request.
1.6 Underwriting. The right of any other holders of Common Stock
to join in a request for registration shall be conditioned upon such holders'
participation in such registration on the same terms as the Initiating Holders
(unless otherwise agreed by a majority in interest of the Initiating Holders).
1.7 Inclusion of Other Securities. In any Demand Registration, if
the Company shall request inclusion of securities to be sold for its own
account, or if other persons entitled to initiate registrations shall request
inclusion in such registration, the Initiating Holders shall offer to include
such securities in the underwriting and may condition such offer on the
acceptance by the Company or such other persons of the provisions of this
Agreement and the underwriting agreement. The Company and all such other persons
proposing to distribute securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriters selected by a
majority in interest of the Initiating Holders subject to the approval of the
Company, which approval shall not be unreasonably withheld.
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2. Piggyback Registration.
2.1 Notice and Procedures. If the Company proposes to register
under the Securities Act any of its Common Stock for sale to the public, either
for its own account or for the account of other security holders (other than
holders of Registrable Securities), the Company will:
(i) promptly give written notice thereof to each holder of
Registrable Securities; and
(ii) use its best efforts to include in such registration
and in any underwriting involved therein, all Registrable Securities specified
in any written request from holders of Registrable Securities received by the
Company within 15 days after such notice.
2.2 Limitations. The provisions of this Section 2 shall not apply
to any registration relating solely to employee benefit plans (as defined under
Rule 405 of the Securities Act), or a registration relating solely to securities
issued in connection with an acquisition or merger, or a registration on any
registration form not available for registering the Registrable Securities for
sale to the public or that does not permit secondary sales.
2.3 Underwriting. The right of any holder of Registrable
Securities to participate in a piggyback registration shall be conditioned upon
such holder's agreement to enter into an underwriting agreement in customary
form with the underwriters selected by the Company.
2.4 Underwriters' Cutback. Notwithstanding any other provision of
this Section 2, if the underwriters of any Company-initiated piggyback
registration advise the Company of the need for an Underwriters' Cutback, the
underwriters may (subject to the limitations set forth below) limit the number
of Registrable Securities to be included in the registration and sold. The
Company shall advise all holders of securities requesting registration of the
Underwriters' Cutback, and the number of shares of securities that are entitled
to be included in the registration and underwriting shall be allocated first to
the Company for securities being sold for its own account and thereafter as set
forth in Section 9.
2.5 Other Provisions. If holders of Registrable Securities
request participation in a piggyback registration, the provisions of Section 1.4
shall apply to such registration, and if the piggyback registration is for an
underwritten offering, the provisions of Sections 1.6 and 1.7 shall also apply
to such registration. Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement referred to in this Section 2 without
incurring any liability to the holders of the Registrable Securities.
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3. Registration on Form S-3. If the Company is qualified for the use of
Form S-3, in addition to the demand and piggyback registration rights contained
in the foregoing provisions of this Agreement, the holders of the Registrable
Securities shall have the right to request registrations on Form S-3 or any
comparable or successor form. Each such request shall be in writing and shall
state the anticipated number of shares of Registrable Securities to be disposed
of, the anticipated gross proceeds of the offering, and the intended methods of
disposition of such shares by such holders, including whether sales are to be
made on a delayed or continuous basis pursuant to Rule 415. The Company shall
not be obligated to effect any registration pursuant to this Section 3 if (i)
the holders of Registrable Securities, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other shares of Common Stock (if any) on
Form S-3 at an aggregate price to the public of less than $500,000, or (ii) the
Company will be required to obtain an audit (other than for its normal year-end
audit) for such registration to become effective. Sections 1 .4(ii) and 1.5
shall apply to all requests for registration under this Section 3. The Company
shall only be required to effect two registrations of Registrable Securities
pursuant to this Section 3 in any consecutive twelve months, provided, however,
that if the offering is to be effected on a continuous or delayed basis pursuant
to Rule 415 (or any successor rule), and the registration statement is kept
effective for a period in excess of 180 days, then the Company shall not be
required to effect another registration under this Section 3 for a period of 90
days after such registration is no longer effective.
4. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Agreement, shall be borne by the Company; provided, however, that a holder of
Registrable Securities shall bear the Registration Expenses for any registration
process begun pursuant to Section 1 and subsequently withdrawn by such holder,
unless such withdrawal is based upon (i) material adverse information relating
to the Company that is different from the information known or available (upon
request from the Company or otherwise) to the Initiating Holders at the time of
the request for registration under Section 1, or (ii) material adverse changes
in the financial markets which result in a decline of at least 20 percent in the
public market price for the Company's Common Stock from the date of the request
to the date of such withdrawal. All Selling Expenses relating to securities
registered pursuant to this Agreement shall be borne by the holders of such
securities pro rata on the basis of the number of shares of securities so
registered on their behalf.
5. Holdback Agreements.
5.1 By Holders. If requested in writing by the Company and the
managing underwriter of an underwritten registered public offering of the Common
Stock of the Company under this Agreement by the Company or by any person other
than a Holder, the Holders of Registrable Securities shall agree not to sell or
otherwise transfer or dispose of any Common Stock of the Company held by such
holders (other than those included in the registration
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statement) for a period not to exceed 180 days following the effective date of a
registration statement of the Company filed under the Securities Act, provided
that all officers and directors of the Company, all other holders of the
Registrable Securities, and all other holders of rights to registration of any
other security of the Company (unless such holders initiated the subject
registration), if they also register their shares in such offering, enter into
similar agreements identical in terms to that of the holders of Registrable
Securities.
5.2 By Company. In connection with any underwritten registration,
the Company shall not effect any public sale or distribution of its equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and during the 90-day period
after the effective date of any underwritten registration pursuant to this
Agreement.
6. Registration Procedures. In the case of each registration effected by
the Company pursuant to this Agreement, the Company will use its best efforts to
effect the registration of Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(i) prepare and file a registration statement with respect to
such offering of Registrable Securities, and use its best efforts to cause such
registration statement to become effective,
(ii) notify each holder of Registrable Securities of the
effectiveness of each registration statement hereunder and prepare and file with
the Securities and Exchange Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of not less
than 90 days or until all Registrable Securities included in the registration
have been sold, whichever occurs first, and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition set forth in such registration statement;
(iii) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(iv) use its best efforts to register or qualify such Registrable
Securities (to the extent legally required) under such other securities or blue
sky laws of such jurisdictions as any seller reasonably requests and do any and
all other acts and things which may be reasonably
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necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such seller;
(v) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not materially misleading, and, at the request of any such seller, the Company
shall prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not materially
misleading;
(vi) cause all such Registrable Securities to be listed on each
securities exchange or automated quotation system, if any, on which similar
securities issued by the Company are then listed, or, if not, to secure NASDAQ
authorization for such Registrable Securities and to cause such securities to be
listed for trading on the over the counter market and quoted on the National
Association of Securities Dealers Electronic Bulletin Board;
(vii) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(viii) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (excluding a stock split, stock
dividend, recapitalization, or combination of shares);
(ix) make available for inspection at reasonable times by any
seller of Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant
or other agent retained by any such seller or underwriter, all financial and
other records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent accountants
to supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement,
provided that any recipient of such records, documents or information executes
such confidentiality agreement as the Company reasonably requests;
(x) otherwise use its best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the
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effective date of the registration statement, which earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(xi) permit any holder of Registrable Securities which holder, in
its sole and exclusive judgment, might be deemed to be an underwriter or
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which (i) with respect to matters
relating to such holder of Registrable Securities, should be included in the
reasonable judgment of such holder and its counsel, and (ii) with respect to
matters relating to the Company, should be included in the reasonable judgment
of such holder, subject in the case of clause (ii) to the approval of the
Company and any managing underwriter of the offering (which approval shall not
be unreasonably withheld); and
(xii) use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
sellers thereof to consummate the disposition of such Registrable Securities.
7. Indemnification.
7.1 By Company. The Company shall indemnify each holder of
Registrable Securities, each of its officers, directors, employees, agents, and
Affiliates, and each underwriter, and each of its officers, directors,
employees, agents, and Affiliates, against all expenses, claims, losses,
damages, and liabilities (or actions, proceedings, or settlements in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus (including any related
registration statement, notification, or the like) incident to any registration
under this Agreement, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of the
Securities Act or any rule or regulation thereunder applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, and will reimburse such persons for any reasonable legal
and any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability or action;
provided however, that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission based upon written information
furnished to the Company by such holder or underwriter and stated to be
specifically for use therein; provided, further, that the holders of Registrable
Securities shall consent to such indemnity defense being conducted by counsel to
the Company unless in the good faith opinion of counsel to Holder, Company's
counsel will be unable to effectively defend such holders due to a conflict of
interest, in which event, such defense may be conducted by counsel selected by
the holders of a majority of the Registrable Securities provided that the
Company will only be
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obligated to pay for the reasonable fees and expenses owing to one such counsel.
It is agreed that the indemnity agreement contained in this Section shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the prior written consent of
the Company (which consent shall not be unreasonably withheld).
7.2 By Holders. In connection with the registration or sale of
shares of Registrable Securities pursuant to this Agreement, each holder whose
Registrable Securities are included in such registration being effected under
this Agreement, shall indemnify the Company, and each of its directors,
officers, employees, agents, and Affiliates, and each underwriter, and each of
its directors, officers, employees, agents, and Affiliates, against all
expenses, claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement or
prospectus, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse such persons for any reasonable legal or any
other expenses reasonably incurred in connection with investigating or defending
any such clam, loss, damage, liability, or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement or
prospectus, in reliance upon and in conformity with written information
furnished to the Company by such holder of the Registrable Securities, and
stated to be specifically for use therein; provided, however, that the
obligations of such holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages, or liabilities if such
settlement is effected without the prior written consent of such holder, which
consent shall not be unreasonably withheld; and provided that in no event shall
any indemnity under this Section 7.2 exceed the net amount of proceeds from the
offering received by such holder.
7.3 Procedure. Each party entitled to indemnification under this
Section (the "Indemnified Party") shall give notice to the party or parties
required to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the defense of
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be reasonably acceptable to the
Indemnified Party. Failure to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations under this section to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of an unconditional release from all liability in
respect to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably
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request in writing and as shall be reasonably required in connection with
defense of such claim and litigation resulting therefrom.
7.4 Contribution. If the indemnification provided for in this
Section is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
7.5 Conflicting Provisions. Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in any
underwriting agreement entered into in connection with a registration are in
conflict with the foregoing provisions, the provisions of the underwriting
agreement shall control.
8. Information by Holder. Each holder of Registrable Securities shall
furnish to the Company in writing such information regarding such holder and the
distribution proposed by such holder as the Company or underwriters may
reasonably request in writing and as shall be reasonably required in connection
with any registration, qualification, or compliance referred to in this
Agreement in order to assure compliance with federal and applicable state
securities laws.
9. Allocation of Registration Opportunities. In any circumstance in
which all of the Registrable Securities and other outstanding shares of Common
Stock of the Company (the "Other Shares") requested and entitled to be included
in a demand registration cannot be so included as a result of limitations on the
aggregate number of shares of Registrable Securities and Other Shares that may
be so included, or in case of an Underwriters' Cutback, the number of shares of
Registrable Securities and Other Shares that may be so included shall be
allocated among the holders of Registrable Securities and other selling
stockholders pro rata on the basis of the number of shares of Registrable
Securities and Other Shares held by such holders and other selling stockholders,
subject to the Company's being required to comply in good faith with contractual
obligations outstanding as of the date of this Agreement which do not require
the holders of Other Shares to agree to such pro rata allocation, but provided
that if Registrable Securities are not allocated such pro rata participation
such demand registration shall not be counted toward the maximum of five demand
requests under Section 1.2. If any holder of
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Registrable Securities or other selling stockholder does not request inclusion
of the maximum number of shares of Registrable Securities and Other Shares
allocated to him pursuant to this procedure, the remaining portion of his
allocation shall be reallocated among those requesting holders of Registrable
Securities and other selling stockholders whose allocations did not satisfy
their requests pro rata on the basis of the number of shares of Registrable
Securities and Other Shares held by such holders and other selling stockholders,
and this procedure shall be repeated until all of the shares of Registrable
Securities and Other Shares which may be included in the registration on behalf
of the holders of Registrable Securities and other selling stockholders have
been so allocated. Provided, however, the Company shall not limit the number of
Registrable Securities to be included in a registration pursuant to this
Agreement in order to include shares held by stockholders with no registration
rights or to include in that registration shares of stock issued to employees,
officers, directors, or consultants pursuant to any Company stock option plan,
and in such case all Registrable Securities covered by the registration shall be
sold before any such other securities are sold.
10. Survival of Rights. The right of any Holder of Registrable
Securities to request registration or inclusion in any registration pursuant to
this Agreement shall terminate on the earlier of (i) such date as all
Registrable Securities held by such Holder shall equal less than 25% of the
total Registrable Securities at such time, or (ii) ten years from the date a
Demand Request may first be made under Section 1.1.
11. Definitions. As used herein,
"Holder" means any person who holds Registrable Securities and
any holder of Registrable Securities to whom the registration rights conferred
by this Agreement have been transferred in compliance herewith.
"Initiating Holders" means holders of the Registrable Securities
who in the aggregate hold not less than 25 percent of the outstanding
Registrable Securities.
"Person" means an individual, partnership, corporation, limited
liability company, joint venture, sole proprietorship, trust or any other
unincorporated organization or business association, and a government or
government agency or political subdivision thereof.
"Register," "registered" and "registration" refers to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933 and applicable rules and regulations
thereunder, and such other actions as may be required to cause such registration
statement to become effective or with respect to registration, qualification or
compliance under applicable state securities laws.
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"Registration Expenses" means all expenses incurred in effecting
any registration pursuant to this Agreement, including, without limitation, all
registration, qualification, and filing fees, printing expenses, fees and
disbursements of custodians, fees and disbursements of counsel for the Company
and its independent certified public accountants, blue sky fees and expenses,
and reasonable fees and disbursements of one counsel chosen by the holders of a
majority of the Registrable Securities included in such registration, but shall
not include Selling Expenses.
"Registrable Securities" means shares of the Company's Common
Stock issued or issuable (i) upon exercise of the Warrants under the Loan
Agreement, and (ii) as a dividend or other distribution with respect to, or in
exchange for, or in replacement of, the shares referred to in clause (i);
provided, however, that shares shall cease to be Registrable Securities if and
when (x) they are sold pursuant to Rule 144 under the Securities Act or a
registration statement under the Securities Act, or (y) such shares are eligible
for resale pursuant to Rule 144 under the Securities Act without regard to any
volume limitations thereunder.
"Rule 144" means Rule 144 as promulgated by the SEC under the
Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the SEC.
"Rule 145" means Rule 145 as promulgated by the SEC under the
Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the SEC.
"Security" has the same meaning as in Section 2(1) of the
Securities of 1933, as amended.
"Selling Expenses" means all underwriting discounts,
underwriters' expenses, selling commissions, and stock transfer taxes applicable
to the sale of Registrable Securities, and fees and disbursements of counsel for
any Holder(s) (other than the fees and disbursements of one counsel for the
holders of Registrable Securities, as selling shareholders, included in
Registration Expenses).
"Underwriters' Cutback" means a reduction in the number of shares
to be included in any underwritten offering as the result of receipt of written
notice from the representative(s) of the underwriters to the effect that the
number of shares requested to be included in such registration exceeds the
number which, in the representative's judgment, can be sold in an orderly manner
in such offering within a price range acceptable to either the Company (in a
primary registration) or the majority of the holders initially requesting such
registration (in a secondary registration).
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"Warrants" means the Initial Warrant and the Contingent Warrants
as defined under the Loan Agreement.
12. Notice of Transfer. The registration rights granted to the Holder
hereunder may be transferred to any transferee of not less than 100,000
Registrable Securities (adjusted appropriately for stock splits, stock dividends
and the like) of Registrable Securities; provided, however, that the
registration rights of the initial Holder may be transferred to a wholly-owned
subsidiary of such Holder without regard to the number of Registrable Securities
transferred. Each such permitted transferee must agree in a written instrument
provided to the Company to be bound hereby and shall thereupon be deemed to be a
"Holder" for purposes hereunder.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be executed by their duly authorized officers as of the date
first above written.
BIKERS DREAM, INC.
By: /s/ X. Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
---------------------------------
Title: President/CEO
---------------------------------
SIRROM CAPITAL CORPORATION
d/b/a TANDEM CAPITAL
By: /s/ Xxxx Xxxxxxx
---------------------------------
Name: Xxxx Xxxxxxx
---------------------------------
Title: V.P.
---------------------------------
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