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EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of September 14, 2001, among Active IQ Technologies, Inc., a
Minnesota corporation (the "COMPANY"), and the shareholders listed on Exhibit A
hereto (the "HOLDERS").
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Holders agree as
follows:
1. Definitions. In addition to the terms defined elsewhere in this
Agreement, the following terms have the meanings indicated:
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON STOCK" means the Company's Common Stock, $.01 par
value per share.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"PROSPECTUS" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes
any information previously omitted from a prospectus filed as part of
an effective Registration Statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Registration
Statement, and all other amendments and supplements to the prospectus,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such prospectus.
"REGISTRABLE SECURITIES" means any Common Stock issued to the
Holders pursuant to that certain Agreement and Plan of Merger dated
August 30, 2001 by and among the Company, CBS Acquisition, Inc. and
Champion Business Systems, Inc. (the "Merger Agreement"). As to any
particular Registrable Securities, such securities shall cease to be
Registrable Securities when they have been distributed to the public
pursuant to an offering registered under the Securities Act or sold to
the public through a broker, dealer or market maker in compliance with
Rule 144. 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 (upon
conversion, exchange or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such
acquisition has actually been effected.
"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, fees of the National Association of
Securities Dealers, Inc., fees of transfer agents and registrars and
fees and disbursements of counsel for the Company and all independent
certified public
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accountants, underwriters (excluding discounts and commissions) and
other persons retained by the Company.
"REGISTRATION STATEMENT" means a registration statement filed
hereunder, including (in each case) the Prospectus, all amendments and
supplements to such registration statement or Prospectus, including
pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
"RULE 144" and "RULE 158" means Rule 144 and Rule 158
promulgated by the Commission pursuant to the Securities Act, as such
rules may be amended from time to time, or any similar rules or
regulations hereafter adopted by the Commission having substantially
the same effect as such rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"TRADING DAY" means (a) any day on which the Common Stock is
traded on its primary Trading Market, or (b) if the Common Stock is not
then listed or quoted on any national securities exchange, market or
trading or quotation facility, then a day on which trading occurs on
the New York Stock Exchange (or any successor thereto).
"TRADING MARKET" means the Nasdaq SmallCap Market or any other
national securities exchange, market or trading or quotation facility
on which the Common Stock is then listed or quoted.
2. Registration. As soon as practicable following the execution of this
Agreement, the Company shall prepare and file a Registration Statement with the
Commission, covering the resale of the Registrable Securities. The Company shall
undertake to maintain the effectiveness of such Registration Statement for at
least one year following the effective date of such Registration Statement. The
Holders understand that the Company has filed a registration statement, File No.
333-68088 with the Commission and that such registration statement has not been
declared effective. Unless to do so would materially adversely affect the timing
of the declaration of effectiveness of such registration statement, the Company
will include the Holders' shares in such registration statement.
3. Covenants of the Company. The Company will use its best efforts to
effect the registration of the Registrable Securities in accordance with Section
2 hereof, and pursuant thereto the Company will as expeditiously as possible:
(a) prepare and file with the Commission a Registration
Statement with respect to such Registrable Securities and 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 any participating Holder copies of all such
documents proposed to be filed);
(b) prepare and file with the 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 six months
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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;
(c) furnish to the participating Holders 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 the Holders may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by them;
(d) register or qualify such Registrable Securities under such
securities or blue sky laws of such jurisdictions as the participating Holders
reasonably request and do any and all other acts and things which may be
reasonably necessary or advisable to enable the Holders to consummate the
disposition in such jurisdiction of the Registrable Securities owned by it
(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 or (iii) consent to general service of process (i.e., service of
process which is not limited solely to securities law violations) in any such
jurisdiction);
(e) notify the Holders 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
the participating Holders, 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 exchanges, automated quotation system or over-the-counter
market upon which securities of the Company of the same class are then listed;
(g) make available for inspection by the Holders, any
underwriter participating in any disposition pursuant to such Registration
Statement, any attorney for the Holders, and any accountant retained by the
Holders or the underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers and
employees to supply all information reasonably requested by the Holders and any
such underwriter, attorney, accountant or agent in connection with such
Registration Statement subject to standard confidentiality covenants;
(h) comply with all applicable rules and regulations of the
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 effective date of the Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder; and
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(i) cause such Registrable Securities covered by such
Registration Statement to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary to
enable the Holders to consummate the disposition of such Registrable Securities.
4. Registration Expenses.
All expenses incident to the Company's performance of or compliance
with this Agreement, including without limitation all Registration Expenses,
will be borne by the Company.
5. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted
by law, the Holders 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
for any legal or other expenses reasonably incurred by such Holder 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. 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) It shall be a condition precedent to the obligation of the
Company to include in any Registration Statement any Registrable Securities held
by the Holders that in connection with any Registration Statement in which the
Holders are participating, the Holders shall have furnished 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 a
written undertaking to indemnify the Company, its directors and officers and
each person who controls the Company (within the meaning of the Securities Act)
against any losses, claims damages, liabilities and expenses resulting from any
untrue or alleged untrue statement of material fact 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 any information or affidavit so furnished in writing by the
Holders.
(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 and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties exists with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel reasonably satisfactory
to the indemnified party. If such defense is assumed, the indemnifying party
will not be subject to any liability for any settlement made by the indemnified
party without its consent
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(provided that such consent shall not be unreasonably withheld). 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 exists between such indemnified party and any other indemnified party
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 also agrees to make such provisions as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
6. Rule 144 Reporting. With a view to making available to the Holders
the benefits of certain rules and regulations of the Commission which may permit
the sale of the Registrable Securities to the public without registration, the
Company agrees to use its best 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;
(b) file with the Commission, 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 the Holders owns any Registrable Securities,
furnish to it 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 the Holders may reasonably
request in availing itself of any rule or regulation of the Commission allowing
it to sell any such securities without registration.
7. Restriction on Transfer. The Holders agree that, following the date
on which the Commission shall declare the Registration Statement effective, the
Holders will not, directly or indirectly, sell, offer to sell, transfer,
contract to sell, grant any option to purchase, or otherwise dispose of the
Registrable Securities, except (a) by operation of law, (b) pursuant to a bona
fide gift or private sale to any person or other entity which agrees in writing
to be bound by the provisions of this Agreement, or (c) by bona fide pledge;
provided, however, that every three (3) months following the date on which the
Commission shall declare the Registration Statement effective, 12.5 percent of
the shares of Common Stock issued under the Merger Agreement shall no longer be
subject to the foregoing restrictions on transfer. In addition, the Holders
agree that the Company may, and that each of the Holders will (i) with respect
to any Registrable Securities, cause the transfer agent for the Common Stock to
note stop transfer instructions with respect to such shares on the transfer
books and records of the Company.
8. Miscellaneous
(a) Remedies. In the event of a breach by the Company or by
the Holders of any of their obligations under this Agreement, the Holders or the
Company, as the case may be,
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in addition to being entitled to exercise all rights granted by law and under
this Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and the Holders
agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders.
(c) No Inconsistent Agreements. Neither the Company nor any of
its subsidiaries has entered, as of the date hereof, nor shall the Company or
any of its subsidiaries, on or after the date of this Agreement, enter into any
agreement with respect to its securities that would have the effect of impairing
the rights granted to the Holders in this Agreement or otherwise conflict with
the provisions hereof.
(d) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number provided pursuant to this Agreement prior to 6:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile telephone number provided pursuant to this Agreement on a day
that is not a Trading Day or later than 6:30 p.m. (New York City time) and
earlier than 11:59 p.m. (New York City time) on any Trading Day, (c) the Trading
Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications
shall be as may be designated in writing, in the manner set forth herein.
(e) Successors and Assigns. Subject to the provisions of
Section 7 hereof, the Holders may assign their rights and obligations hereunder
without the consent of any person. This Agreement shall inure to the benefit of
and be binding upon the Holders and each of their respective successors and
assigns and the Company. The Company may not assign its rights or obligations
hereunder without the prior written consent of the Holders, except any
assignment effected by operation of law.
(f) Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(g) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and
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enforced in accordance with the laws of the State of Minnesota, without regard
to the principles of conflicts of law thereof. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts in
Minnesota for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement, and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
(h) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(i) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
ACTIVE IQ TECHNOLOGIES, INC.
By: /s/ D. Xxxxxx Xxxx
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D. Xxxxxx Xxxx
President and Chief Operating Officer
HOLDERS:
/s/ Xxxxxxx X. Xxxxx
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[Signature]
Print Name: Xxxxxxx X. Xxxxx, Director
BancBoston Capital Inc.
/s/ Xxxxxx Xxxxxx
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[Signature]
Print Name: The Xxxxxx Family Ltd
Partnership
/s/ Xxxxxx Xxxxxx
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[Signature]
Print Name: Xxxxxx Xxxxxx
AG Xxxxxx & Sons Inc.,
custodian for Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxxxxxx
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[Signature]
Print Name: Xxxxxx Xxxxxxxxxx
/s/ Xxxxxx X. Xxxxxx
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[Signature]
Print Name: Xxxxxx X. Xxxxxx
/s/ Xxxx X. Xxxxxx, III
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[Signature]
Print Name: Xxxx X. Xxxxxx, III
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/s/ Xxxxxx Xxxxxxx
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[Signature]
Print Name: Xxxxxx Xxxxxxx
/s/ Xxxx Xxxxx
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[Signature]
Print Name: Xxxx Xxxxx
/s/ Xxxx X. Xxxxx
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[Signature]
Print Name: Xxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx
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[Signature]
Print Name: Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxx
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[Signature]
Print Name: Xxxxx X. Xxxx
/s/ Xxxxxxx Xxxxxxxxx
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[Signature]
Print Name: Xxxxxxx Xxxxxxxxx
/s/ Xxxxxx X. Xxxxx
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[Signature]
Print Name: Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. Treat
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[Signature]
Print Name: Xxxxxxx X. Treat
/s/ Xxxxx X. Xxxxxxx
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[Signature]
Print Name: Xxxxx X. Xxxxxxx
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/s/ Xxxxxx Xxxxxxxxx
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[Signature]
Print Name: Xxxxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxxxx
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[Signature]
Print Name: Xxxxxx Xxxxxxx
/s/ Xxxxxxx Lucerne Xxxxxx
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[Signature]
Print Name: Xxxxxxx Lucerne Xxxxxx
/s/ Xxxxxxx Xxxxxx
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[Signature]
Print Name: Xxxxxxx Xxxxxx
/s/ Xxxxxx X. Xxxxx
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[Signature]
Print Name: Xxxxxx X. Xxxxx
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