Exhibit 10.7
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of August 1, 2005 by and among Noble Roman's, Inc., an Indiana
corporation (the "Company"), and SummitBridge National Investments, LLC, a
Delaware limited liability company (the "Investor"). Capitalized terms used
herein but not otherwise defined shall have the meanings ascribed to such terms
in Section 1.
1. Definitions. As used herein, the following terms shall have the
following meanings.
"Common Stock" means, collectively, (i) the Common Stock of the Company,
and (ii) any other equity securities of the Company issued or issuable with
respect to the Common Stock described in the preceding clause (i) by way of a
stock dividend or stock split or in connection with a combination of stock,
recapitalization, merger, consolidation or other reorganization.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or other entity, or a governmental
entity (or any department, agency or political subdivision thereof).
"Registrable Securities" means 2,400,000 shares of Common Stock owned by
the Investor (plus any shares of Common Stock acquired by, or issued or issuable
to the Investor in respect of such Common Stock) or any other Person who becomes
a holder of such Common Stock and to whom registration rights under this
Agreement are assigned pursuant to Section 10(d) below. For purposes of this
Agreement, a Person will be deemed to be a holder of Registrable Securities
whenever such Person has the right to acquire directly or indirectly such
Registrable Securities (in connection with a transfer of securities or
otherwise), whether or not such acquisition has actually been effected. Such
Common Stock will cease to be Registrable Securities when sold (i) pursuant to a
registration statement under the Securities Act, or (ii) in a transaction
pursuant to Rule 144.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with this Agreement, including without limitation,
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery expenses
and fees and disbursements of counsel and independent certified public
accountants for the Company, but specifically excluding any fees or expenses of
underwriters or counsel for the holders of any Registrable Securities.
"Registration Period" means the period beginning on the later of (i)
October 31, 2005 and (ii) the expiration of the "Stand Still Period," as such
term is defined in that certain Settlement Agreement dated as of August 1, 2005,
by and among the Company, the Investor and certain parties related to them, and
ending on October 31, 2006.
"Rule 144" means Rule 144 under the Securities Act (or any similar rule
then in force).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
2. Demand Registrations.
(a) Requests for Registration. Subject to the provisions of this Section 2,
at any time during the Registration Period, the holders of a majority of the
Registrable Securities may request registration under the Securities Act of all
or any portion of their Registrable Securities on such form as may be
appropriate, which may be a Form S-1 or any similar long-form registration or a
Form S-3 or any similar short-form registration, if available. All registrations
requested pursuant to this Section 2(a) are referred to herein as "Demand
Registrations". Each request for a Demand Registration shall specify the number
of Registrable Securities requested to be registered, the anticipated method or
methods of distribution (which may be a shelf registration for open market or
privately negotiated transactions, an underwritten public offering or other
manner of distribution) and the anticipated per share price range for such
offering.
(b) Limitations on Demand Registrations. The holder(s) of the Registrable
Securities will be entitled to request one (1) Demand Registration, for which
the Company will pay all Registration Expenses. A registration will not count as
the permitted Demand Registration until it has become effective and remained
effective for at least 90 days (including any period during which a
post-effective amendment is effective), except that if the registration
statement relates to open market and privately negotiated transactions (and does
not provide for an underwritten offering), the registration statement shall have
remained effective for at least 180 days; provided, however, that the holders of
Registrable Securities making a request for a Demand Registration hereunder may
withdraw from such registration at any time prior to the effective date of such
Demand Registration, in which case such request will count as a Demand
Registration for such holder, irrespective of whether or not such registration
is effected, unless the requesting holder(s) reimburse the Company for all
expenses incurred in connection with such withdrawn registration.
(c) Priority on Demand Registrations. The Company will not include in any
Demand Registration any securities which are not Registrable Securities without
the prior written consent of the holders of a majority of the Registrable
Securities included in such registration. If a Demand Registration is an
underwritten offering and the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold therein without adversely affecting the marketability of the
offering, the Company will include in such registration, (i) first, the number
of Registrable Securities requested to be included in such registration by the
holders of Registrable Securities, pro rata among the holders of such
Registrable Securities on the basis of the number of Registrable Securities
owned by each such holder, and (ii) second, any other securities of the Company
requested to be included in such registration, pro rata among the respective
holders thereof on the basis of the number of shares owned by each such holder.
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(d) Selection of Underwriters. In the case of a Demand Registration, the
holders of a majority of the Registrable Securities will have the right to
select the investment banker(s) and manager(s) to administer the offering,
subject to the approval of the Company which shall not be unreasonably withheld.
(e) Other Registration Rights. Except as provided in this Agreement, prior
to the expiration of the Registration Period, the Company will not grant to any
Persons the right to request the Company to register any equity securities of
the Company, without the prior written consent of a majority of the holders of
the Registrable Securities.
3. Holdback Agreements.
(a) Each holder of Registrable Securities agrees not to effect any public
sale or distribution (including sales pursuant to Rule 144) of equity securities
of the Company, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to and the 180-day
period beginning on the date of the final prospectus relating to any Demand
Registration (except as part of such registration), unless the underwriters
managing the registered public offering otherwise agree to a shorter period.
(b) The Company (i) will not effect any sale or distribution of equity
securities, or any securities convertible into or exchangeable or exercisable
for such securities, during the seven days prior to and during the 180-day
period beginning on the effective date of any underwritten Demand Registration
(except as part of such underwritten registration), unless the underwriters
managing the registered offering otherwise agree, and (ii) will use commercially
reasonable efforts to cause each of its directors, officer and holders of more
than 5.0% of the Company's outstanding Common Stock or any securities
convertible into or exchangeable or exercisable for Common Stock to agree not to
effect any sale or distribution (including sales pursuant to Rule 144) of any
such securities during such period (except as part of such offering, if
otherwise permitted), unless the underwriters managing such offering otherwise
agree. Notwithstanding the foregoing, the Company may at any time grant stock
options and issue shares of common stock upon the exercise of presently
outstanding stock options or options granted after the date hereof.
4. Registration Procedures. Whenever the holders of Registrable Securities
have requested that any Registrable Securities be registered pursuant to this
Agreement, the Company will use its commercially reasonable efforts to effect
the registration and the sale of such Registrable Securities in accordance with
the intended method of disposition thereof, and pursuant thereto the Company
will as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission (the
"SEC") a registration statement with respect to such Registrable Securities and
use its commercially reasonable efforts to cause such registration statement to
become effective (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will furnish to
one counsel selected by the holders of a majority of the Registrable Securities
covered by such registration statement copies of all such documents proposed to
be filed and provide such counsel with an opportunity to comment on such
documents);
(b) prepare and file with the SEC 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 such period which
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will terminate upon the earlier to occur of such time when all Registrable
Securities covered by the registration statement have been sold or the
registration statement has been effective for 90 days (provided, however, that
such 90 day period shall be 180 days if the registration statement relates to
open market and privately negotiated transactions ^and does not provide for an
underwritten offering^), and to otherwise 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 by the sellers thereof set forth in such registration
statement;
(c) 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;
(d) use its best efforts to register or qualify such Registrable Securities
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 necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subsection, (ii) subject itself to taxation in any such
jurisdiction, (iii) consent to general service of process (i.e., service of
process which is not limited solely to securities law matters) in any such
jurisdiction, or (iv) incur unreasonable effort or expense);
(e) 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 misleading, and,
at the request of any such seller, the Company will promptly prepare a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each securities
exchange or nationally recognized quotation system on which similar securities
issued by the Company are then listed;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) 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 (including, without limitation, preparing and participating in
customary and reasonable "road show" presentations to institutional investors);
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(i) make available at reasonable times for inspection 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,
subject to the applicable person(s) executing a nondisclosure agreement in
reasonable form and substance if reasonably required by the Company;
(j) otherwise 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 earning statement covering the period of
at least twelve months beginning with the first day of the Company's first full
calendar quarter after the 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;
(k) permit any holder of Registrable Securities which holder, in its sole
and exclusive judgment, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such registration or
comparable statement and consider the insertion therein of material, furnished
to the Company in writing, which in the reasonable judgment of such holder and
its counsel should be included;
(l) use best efforts to prevent the issuance of any stop order ("Stop
Order") suspending the effectiveness of a registration statement, or of any
order suspending or preventing the use of any related prospectus or suspending
the qualification of any securities included in such registration statement for
sale in any jurisdiction, and, in the event of such issuance, the Company shall
immediately notify the holders of Registrable Securities included in such
registration statement of the receipt by the Company of such notification and
shall use its best efforts promptly to obtain the withdrawal of such order;
(m) 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; and
(n) obtain a "cold comfort" letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by "cold comfort" letters as the holders of a majority of the
Registrable Securities being sold reasonably request.
If any such registration or comparable statement refers to any holder by name or
otherwise as the holder of any securities of the Company and if, in its sole and
exclusive judgment, such holder is or might be deemed to be a controlling person
of the Company, such holder shall have the right to require (i) the insertion
therein of language, in form and substance satisfactory to such holder and
presented to the Company in writing, to the effect that the holding by such
holder of such securities is not to be construed as a recommendation by such
holder of the investment quality of the Company's securities covered thereby and
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that such holding does not imply that such holder will assist in meeting any
future financial requirements of the Company, or (ii) in the event that such
reference to such holder by name or otherwise is not required by the Securities
Act or any similar Federal statute then in force, the deletion of the reference
to such holder; provided, that with respect to this clause (ii) such holder
shall furnish to the Company a written opinion of counsel to such effect, which
opinion and counsel shall be reasonably satisfactory to the Company.
5. Registration Expenses. All Registration Expenses will be borne by the
Company. The holders of Registrable Securities shall bear all expenses incurred
by them in connection with any offer or sale of the Registrable Securities.
6. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted by law, each
holder of Registrable Securities, its partners, members, officers and directors
and each Person who controls such holder (within the meaning of the Securities
Act) against all losses, claims, damages, liabilities and expenses arising out
of or based upon any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse such holder, partner,
member, director, officer or controlling person for any legal or other expenses
reasonably incurred by such holder, partner, member, director, officer or
controlling person in connection with the investigation or defense of such loss,
claim, damage, liability or expense, except insofar as the same are caused by or
contained in any information furnished in writing to the Company by such holder
expressly for use therein or by such holder's failure to deliver a copy of the
registration statement or prospectus or any amendments or supplements thereto
after the Company has furnished such holder with a sufficient number of copies
of the same. In connection with an underwritten offering, the Company will
indemnify such underwriters, their officers and directors and each Person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the holders
of Registrable Securities.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder will furnish to the
Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, will (i) indemnify the Company,
its directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) or who signs a registration statement filed
pursuant hereto, against any losses, claims, damages, liabilities and expenses
resulting from any untrue or alleged untrue statement of material fact relating
to such holder and provided by such holder to the Company or the Company's agent
contained in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or omission is contained in, or based upon, any information or
affidavit so furnished in writing by such holder or such holder's
representative; provided, that the obligation to indemnify will be individual to
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each holder and will be limited to the net amount of proceeds received by such
holder from the sale of Registrable Securities pursuant to such registration
statement, and (ii) reimburse the Company, its directors and officers and each
Person who controls the Company (within the meaning of the Securities Act) for
any legal or other expenses reasonably incurred by such Persons in connection
with the investigation or defense of such loss, claim, damage, liability or
expense, except insofar as the same are caused by or contained in any
information furnished to such holder of Registrable Securities expressly for use
therein. In connection with an underwritten offering in which a holder of
Registrable Securities is participating, each such holder will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Company, its directors
and officers and each Person who controls the Company (within the meaning of the
Securities Act) or who signs the registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification (provided that failure to give such notice shall not
affect the right of such Person to indemnification hereunder unless such failure
is prejudicial to the indemnifying party's ability to defend such claim) and
(ii) unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist with
respect to such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of securities. The Company and
each holder also agree to make such provisions, as are reasonably requested by
any indemnified party, for contribution to such party in the event the
indemnification provided for herein is unavailable for any reason.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with an underwritten public offering conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.
7. Holders' Obligations.
(a) No Person may participate in any registration hereunder which is
underwritten unless such Person (i) agrees to sell such Person's securities on
the basis provided in any underwriting arrangement approved by the Person or
Persons entitled hereunder to approve such arrangements and (ii) completes and
executes all customary questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements; provided, that no holder of Registrable
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Securities included in any underwritten registration shall be required to make
any representations or warranties to the Company or the underwriters other than
representations and warranties regarding such holder and such holder's intended
method of distribution.
(b) Upon receipt of notification described in Section 4(e), the holder(s)
participating in an offering shall immediately cease offering or selling any
Registrable Securities and shall not resume such offers or sales until the
Company consents thereto and, thereafter, any offers or sales will be made only
by means of an amended or supplemented prospectus furnished by the Company.
8. Rule 144 Reporting. With a view to making available to the holders of
Registrable Securities the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use commercially reasonable efforts to:
(a) make and keep current public information available, within the meaning
of Rule 144 or any similar or analogous rule promulgated under the Securities
Act, at all times after it has become subject to the reporting requirements of
the Exchange Act;
(b) file with the SEC, in a timely manner, all reports and other documents
required of the Company under the Securities Act and Exchange Act; and
(c) so long as any party hereto owns any Registrable Securities which may
not be resold under Rule 144(k), furnish to such Person forthwith upon request,
a written statement by the Company as to its compliance with the reporting
requirements of said Rule 144, the Securities Act and the Exchange Act; a copy
of the most recent annual or quarterly report of the Company; and such other
reports and documents as such Person may reasonably request in availing itself
of any rule or regulation of the SEC allowing it to sell any such Registrable
Securities without registration.
9. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally, sent
via a nationally recognized overnight courier or sent via facsimile to the
recipient. Such notices, demands and other communications will be sent to the
address indicated below:
If to the Company:
Noble Roman's Inc.
One Virginia Avenue, Suite 800
Indianapolis, Indiana 46204
Attention: President
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With a copy to:
Thomas A. Litz, Esq.
Thompson Coburn LLP
One US Bank Plaza
St. Louis, MO 63101-1611
If to Investor:
Senior Asset Manager
Summit National Investments LLC
Well Fargo Building, Suite 2150
Denver CO 80203
or such other address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending party.
10. Miscellaneous.
(a) No Inconsistent Agreements. Prior to the end of the Registration
Period, the Company will not enter into any agreement which is inconsistent with
or violates the rights granted to the holders of Registrable Securities in this
Agreement.
(b) Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.
(c) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and the holders of at least a majority of the
Registrable Securities; provided that no amendment or waiver shall materially
and adversely affect the rights hereunder of any of the parties hereto when
compared with its effect on the other similarly-situated parties hereto without
the prior written approval of such materially and adversely affected party.
(d) Successors and Assigns. All covenants and agreements in this Agreement
by or on behalf of any of the parties hereto will bind and inure to the benefit
of the respective successors and assigns of the parties hereto whether so
expressed or not. Notwithstanding the foregoing to the contrary, the provisions
of this Agreement which are for the benefit of purchasers or holders of
Registrable Securities may be assigned to one or more subsequent holders of
Registrable Securities only if: (i) such assignee acquires at least 480,000
shares of Registrable Securities; and (ii) and the Company receives written
notice of such assignment, including the name and address of the assignee,
within 30 days thereof.
(e) Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
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such prohibition or invalidity, without invalidating the remainder of this
Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together will constitute one and the
same Agreement.
(g) Governing law. All questions concerning the construction, validity and
interpretation of this agreement shall be governed by and construed in
accordance with the domestic laws of the State of Indiana, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of Indiana or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Indiana.
(h) Time is of the Essence; Computation of Time. Time is of the essence for
each and every provision of this Agreement. Whenever the last day for the
exercise of any privilege or the discharge of any duty hereunder shall fall upon
a Saturday, Sunday, or any date on which banks in New York, New York are
authorized to be closed, the party having such privilege or duty may exercise
such privilege or discharge such duty on the next succeeding day which is a
regular business day.
(i) Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
(j) Termination. This Agreement shall terminate at such time as neither the
Investor nor any Person who holds Registrable Securities as a transferee of
Investor (or as a transferee of any transferee) holds five percent (5.0%) or
more than of the common stock of the Company outstanding, based on the Company's
most recent periodic report filed under the Exchange Act.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first above written.
NOBLE ROMAN'S, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
SUMMITBRIDGE NATIONAL INVESTMENTS LLC
By: __________________________________
Name: ________________________________
Title: _______________________________
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