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EXHIBIT 10.27
OPTION AGREEMENT
THIS OPTION AGREEMENT (the "Agreement") is entered into and shall be
effective as of July 22, 1997, by and between Bikers Dream, Inc., a corporation
organized under the laws of the State of California ("Company") and Xxxxx X.
Xxxxxx ("Optionee").
RECITALS
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WHEREAS, Company and Optionee have entered into a Settlement Agreement
and Mutual Release of even date herewith (the "Settlement Agreement"); and
WHEREAS, the Company, pursuant to the terms of the Settlement
Agreement, has agreed to grant Optionee an option to purchase shares of the
Company's Common Stock in accordance with the terms of this Option Agreement.
NOW, THEREFORE, it is agreed:
1. Grant of Option. Company grants to Optionee the irrevocable
right and option (the "Option") to purchase one hundred fifty thousand
(150,000) shares of the Company's Common Stock (the "Shares") at a price of
eighty-seven and one-half cents ($.875) per share.
2. Option Term. The term of the Option shall be for a period of
one (1) year commencing on the date hereof and expiring on July 21, 1998 (the
"Expiration Date").
3. Exercise of Option. The Option may be exercised with respect
to all or any portion of the Shares at any time after the date hereof and prior
to the Expiration Date.
4. Method of Exercise. The Option may be exercised by giving
written notice of exercise of the Option to the Company at the address and in
the manner set forth in Section 9(e) below. The notice shall state Optionee's
election to exercise the Option and the number of Shares with respect to which
the Option is being exercised. The notice of exercise shall be accompanied by
full payment (in cash or by check) of the amount of the purchase price of the
Shares as to which the Option is being exercised, except that the Company
agrees that Optionee is entitled to a credit of Fifteen Thousand Dollars
($15,000) which shall be applied to the payment of the purchase price of the
first Seventeen Thousand One Hundred Forty Two (17,142) shares as to which the
Option is exercised. A certificate or certificates for the Shares as to which
the Option is exercised shall be delivered to Optionee as soon as practicable
after the notice and payment has been received by the Company.
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5. Investment Representations. Optionee represents and agrees
that unless a registration statement under the Securities Act of 1933 is in
effect as to Shares purchased upon exercise of the Option:
(a) Optionee is acquiring the Option Shares upon exercise of
the Option for Optionee's own account, and not with a
view to, or for sale in connection with, any
distribution thereof;
(b) The Shares shall not be sold or transferred until they
first shall have been registered under the Securities
Act of 1933, or (ii) the Company first shall have been
furnished with an opinion of legal counsel, reasonably
satisfactory to the Company, to the effect that such
sale or transfer is exempt from the registration
requirements of the Securities Act of 1933; and
(c) The certificates evidencing the Shares issued upon
exercise of the Option will bear the following
restrictive legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 ("THE
ACT") AS AMENDED, AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS AND UNTIL SUCH SHARES ARE
REGISTERED UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT
THAT SUCH REGISTRATION IS NOT REQUIRED."
6. Privileges of Stock Ownership. Optionee shall not have any of
the rights or privileges of a stockholder of the Company with respect to any
Shares issuable upon the exercise of the Option until certificates representing
such Shares shall have been issued and delivered.
7. Adjustments to Number and Purchase Price of Shares. If the
outstanding shares of the Common Stock of the Company are increased, decreased,
changed into or exchanged for a different number or kind of shares or
securities of the Company through merger, consolidation, combination, exchange
of shares, other reorganization, recapitalization, reclassification, stock
dividend, stock split or reverse stock split, an appropriate and proportionate
adjustment shall be made in the maximum number and kind of shares as to which
the Option may be exercised pursuant to this Agreement. Any such adjustment in
shares subject to the Option shall be made without change in the aggregate
purchase price applicable to the unexercised portion of the Option, but with a
corresponding adjustment in the price for each share covered by the Option.
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Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of all or substantially all of the assets of the Company to
another person or persons, appropriate provision shall be made in writing in
connection with such transaction for the continuance of the Option and for the
assumption of the obligations of the Company hereunder, or the substitution for
the option granted hereunder of new options covering the stock of a successor
corporation, or a parent or subsidiary thereof, with appropriate adjustment as
to the number and kind of shares and exercise prices.
8. Registration Rights. The Company agrees to register the Shares
on a Form S-8 registration statement and to work as expeditiously as possible to
file such registration statement with the Securities and Exchange Commission
by August 14, 1997. The costs and expenses of such registration shall be
borne entirely by the Company.
9. General Provisions.
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(a) The subject headings of the sections and paragraphs of
this Agreement are included for purposes of convenience
only, and shall not affect the construction or
interpretation of any of its provisions.
(b) This Agreement constitutes the entire agreement between
the parties pertaining to the subject matter contained
in it and supersedes all prior and contemporaneous
agreements, representations and understandings of the
parties. No supplement, modification, or amendment of
this Agreement shall be binding unless executed in
writing by all of the parties. No waiver of any of the
provisions of this Agreement shall be deemed or shall
constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making
the waiver.
(c) This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one
and the same instrument.
(d) This Agreement shall be binding on, and shall inure to
the benefit of, the parties to it and their respective
heirs, legal representatives, successors and permitted
assigns.
(e) Any and all notices, demands or other communications
required or desired to be given hereunder by any party
shall be in writing and shall be validly given or made
to another party if given by personal delivery, telex,
facsimile, telegram or if deposited in the United States
mail, certified or registered, postage prepaid, return
receipt requested.
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If such notice, demand or other communication is given
by personal delivery, telex, facsimile or telegram,
service shall be conclusively deemed made at the time of
receipt. If such notice, demand or other communication
is given by mail, such notice shall be conclusively
deemed given forty-eight (48) hours after the deposit
thereof in the United States mail addressed to the party
to whom such notice, demand or other communication is to
be given as hereinafter set forth:
To Company: Bikers Dream, Inc.
0000 Xxxxxxx Xxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx,
Chief Executive Officer
To Optionee: At the address set forth below his name on the
signature page of this Agreement.
Any party may change its address for purposes of this paragraph by
giving the other party written notice of the new address in the manner set
forth above.
IN WITNESS WHEREOF, the parties have executed this Option Agreement as
of the day and year first above written.
"COMPANY" "OPTIONEE"
Bikers Dream, Inc. /s/ Xxxxx X. Xxxxxx
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By: /s/ Xxxxxx Xxxxx Xxxxx X. Xxxxxx
----------------------------- Address:
Its: CEO 00000 Xxxxxx Xxxxxxxxx
----------------------------- Xxx Xxxxxxx, XX 00000-0000
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