EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
________, 1998, is entered into by and between CLARUS CORPORATION, a Delaware
corporation, formerly known as SQL Financials International, Inc. (the
"Company"), and each of the parties listed under "Shareholders" on the signature
page hereto (each signatory individually a "Shareholder" and collectively the
"Shareholders"), each with offices at the addresses listed under such
Shareholder's name on Schedule I hereto.
RECITALS:
The Company and Elekom Corporation, a Washington corporation
("Elekom"), have entered into an Agreement and Plan of Reorganization dated
August 31, 1998 (the "Reorganization Agreement"), that provides for the merger
of Elekom into a wholly owned subsidiary of the Company in a forward triangular
merger, and for all of the outstanding capital stock of Elekom to be converted,
in part, into _______________ shares of common stock of the Company, $.0001 par
value (the "Common Stock"), and in connection therewith the Shareholders are to
receive certain registration rights in respect of the Common Stock. The
execution of this Agreement is a condition to the Closing under the
Reorganization Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual terms
and provisions of this Agreement, the sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms
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shall have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange Commission or
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any other federal agency at the time administering the Securities Act or the
Exchange Act;
(b) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time;
(c) "Holder" shall mean a Shareholder if such Shareholder holds
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Registrable Securities and any other person holding Registrable Securities to
whom these registration rights have been transferred pursuant to Section 16 of
this Agreement; provided however, that any person who acquires any of the
Registrable Securities in a distribution pursuant to a sale under Rule 144 under
the Securities Act shall not be considered a Holder.
(d) The terms "register," "registered" and "registration" refer to a
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registration effected by preparing and filing a Registration Statement in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such Registration Statement by the Commission;
(e) "Registration Expenses" shall mean all expenses (except for
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"Selling Expenses" as defined below) incurred by the Company in complying with
Section 2 of this Agreement, including, without limitation, all registration and
filing fees, printing expenses and reasonable fees and disbursements of counsel
for the Company and, subject to Section 3, the reasonable fees and disbursements
of one counsel to the selling shareholders.
(f) "Registrable Securities" shall mean (i) shares of Common Stock
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issued pursuant to the Reorganization Agreement, and (ii) any Common Stock
issued upon any stock split, stock dividend or other distribution with respect
to, or in exchange or in replacement of, the foregoing;
(g) "Registration Statement" shall mean a registration statement on
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Form S-1 or Form S-3 filed by the Company with the Commission for a public
offering and sale of securities of the Company;
(h) "Securities Act" shall mean the Securities Act of 1933, as
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amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time;
(i) "Selling Expenses" shall mean all underwriting discounts and
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selling commissions applicable to the sale of shares of Common Stock pursuant to
Section 2 and all fees and disbursements of counsel for the Holders not included
in Registration Expenses; and
(j) All other capitalized terms used herein but not otherwise defined
shall have the meanings ascribed to them in the Reorganization Agreement.
2. Piggyback Registrations.
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(a) If at any time or from time to time prior to the second
anniversary of the date hereof the Company shall determine to register any of
its Common Stock, for its own account or for the account of any of its
shareholders (other than the Holders), other than a registration relating solely
to employee benefit plans, or a registration relating solely to a Commission
Rule 145 transaction or any rule adopted by the Commission in substitution
therefor or in amendment thereto, or a registration on any registration form
which does not include substantially the same information as would be required
to be included in a Registration Statement covering the sale of Registrable
Securities, the Company will:
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(i) promptly give to each Holder written notice thereof (which shall
include a list of the jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable Blue Sky or other state securities
laws); and
(ii) include in such registration (and any related qualification under
Blue Sky laws or other compliance), and in any underwriting involved therein,
all of the Registrable Securities specified in a written request or requests
received by the Company within twenty (20) days after the giving of such written
notice by the Company, by any Holder or Holders, subject to the limitations set
forth in Section 2(b).
(b) If the registration of which the Company gives notice is for a
registered public offering involving an underwritten public offering, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2(a)(i). In such event the right of any Holder to
registration pursuant to this Section 2 shall be conditioned upon such Holder's
participation in such underwritten public offering and the inclusion of such
Holder's Registrable Securities in the underwritten public offering to the
extent provided herein. All Holders proposing to distribute their securities
through such underwritten public offering shall (together with the Company and
the other Holders distributing their securities through such underwritten public
offering) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwritten public offering by
the Company. Notwithstanding any other provision of this Section 2, if the
underwriter determines that marketing factors require a limitation of the number
of shares to be sold, all shares to be sold by the Company shall be included in
such offering before any Registrable Securities are so included, and further,
the underwriter otherwise may limit the number of Registrable Securities to be
included in the registration and underwritten public offering. The Company
shall so advise all Holders (except those Holders who have not elected to
distribute any of their Registrable Securities through such underwritten public
offering) and the number of shares of Registrable Securities, securities of the
Company that are "Registrable Securities" as defined in that certain Stock
Purchase Agreement, dated September 26, 1997, by and among SQL Financials
International, Inc. and the parties listed in Schedule A thereto (the "Purchase
Agreement") (the "Preferred Stock") and Management Stock (as defined in the
Purchase Agreement) that may be included in the Registration and underwritten
public offering shall be allocated among such Holders and holders of Preferred
Stock and Management Stock in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities and shares of Preferred Stock and
Management Stock owned by them at the time of filing the Registration Statement.
No Registrable Securities excluded from the underwritten public offering by
reason of the underwriter's marketing limitation shall be included in such
registration. If the terms of any such underwritten public offering differ
materially from the terms (including range of offering price) previously
communicated to any Holder, such Holder may elect to withdraw therefrom by
written notice to the Company and the underwriter, which notice, to be
effective, must be received by the Company at least two (2) business days before
the anticipated effective date of the Registration Statement. The Registrable
Securities and/or other securities so withdrawn from such underwritten public
offering shall also be withdrawn from such registration; provided, however, that
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if by the withdrawal of such Registrable Securities a greater number of
Registrable Securities held by other selling Holders may be included in such
registration
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(up to the maximum of any limitation imposed by the underwriters) then the
Company shall include in such registration in place of such withdrawn
Registrable Securities such additional Registrable Securities held by other
selling Holders whose Registrable Securities were excluded pursuant to
limitation by the underwriter pursuant to this Section 2(b) in the same
proportion as such Registrable Securities were excluded pursuant to such
underwriter limitation (with no more Registrable Securities being so included
than were withdrawn). In the event that the contemplated sale does not involve
an underwritten public offering and a determination that the inclusion of the
Registrable Securities adversely affects the marketing of the shares shall be
made by the Board of Directors of the Company in its good faith discretion, then
no Registrable Securities are required hereby to be included in the contemplated
sale.
(c) The Company may at any time withdraw or abandon any Registration
Statement which triggers the provisions of this Section 2 without any liability
to the Holders.
3. Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification and compliance pursuant to
Section 2 shall be borne by the Company. All Selling Expenses incurred in
connection with any such registration shall be borne by the selling Holders on a
pro rata basis. If, notwithstanding this Agreement, applicable authorities in
any state wherein Registrable Securities are to be sold require an allocation of
Registration Expenses, each Holder agrees to pay its apportioned share thereof.
4. Registration Procedures. In the case of each registration,
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qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities, and use its best efforts in good faith
to cause such Registration Statement to become and remain effective as provided
herein;
(b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus included in such
Registration Statement as may be necessary or advisable to comply in all
material respects with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement or as may
be necessary to keep such Registration Statement effective and current, but for
no longer than nine (9) months subsequent to the effective date of such
registration;
(c) furnish to each seller of Registrable Securities such number of
copies of such Registration Statement, each amendment and supplement thereto (in
each case including all exhibits thereto), the prospectus included in such
Registration Statement (including each preliminary prospectus), and such other
documents as any such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities held by such seller;
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(d) enter into such customary agreements and take all such other
action in connection therewith as any Holder may reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities;
(e) use its best efforts in good faith to register and qualify the
Registrable Securities covered by such Registration Statement under such
securities or Blue Sky laws of such jurisdictions as any selling Holder on
behalf of itself or any other selling Holder shall reasonably request and do any
and all such other acts and things as may be reasonably necessary or advisable
to enable such selling Holder to consummate the disposition in such
jurisdictions of the Registrable Securities held by such selling Holder;
provided, however that the Company shall not be required in connection therewith
to qualify to do business or file a general consent to service of process in any
such jurisdiction; and
(f) furnish to each prospective selling Holder a signed counterpart,
addressed to the prospective selling Holders, of (i) an opinion of counsel for
the Company, dated the effective date of the Registration Statement, and, to the
extent available to selling stockholders from the independent auditors of the
Company, (ii) a "comfort" letter signed by the independent public accountants
who have certified the Company's financial statements included in the
Registration Statement, covering substantially the same matters with respect to
the Registration Statement (and the prospectus included therein) and (in the
case of the "comfort" letter) with respect to events subsequent to the date of
the financial statements, as are customarily covered (at the time of such
registration) in opinions of issuer's counsel and in "comfort" letters delivered
to the underwriters in underwritten public offerings of securities; provided,
that the requirements of this paragraph (f) shall apply only to Holders which
are including at least 50,000 shares (such number to be appropriately adjusted
in the event of stock splits, stock combinations, stock dividends or similar
recapitalizations) of Registrable Securities in such registration.
Notwithstanding the foregoing provisions of this Section 4, (1) the Holders
of Registrable Securities included in any Registration Statement will not (until
further notice) effect sales thereof after receipt of telegraphic or written
notice from the Company to suspend sales to permit the Company to correct or
update such Registration Statement or prospectus; but the obligations of the
Company with respect to maintaining any Registration Statement current and
effective shall be extended by a period of days equal to the period such
suspension is in effect; and (2) at the end of any period during which the
Company is obligated to keep any Registration Statement current and effective as
provided by this Section 4 (and any extensions thereof required by the preceding
paragraph (1) of this Section 4), the Holders of Registrable Securities included
in such Registration Statement shall discontinue sales of shares pursuant to
such Registration Statement upon notice from the Company of its intention to
remove from registration the shares covered by such Registration Statement which
remain unsold, and such Holders shall notify the Company of the number of shares
registered which remain unsold promptly after receipt of such notice from the
Company.
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5. Indemnification.
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(a) The Company will indemnify each Holder, each of the officers,
directors and partners of such Holder, and each person controlling such Holder,
if Registrable Securities held by such Holder are included in the securities
with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter of such Registrable
Securities, if any, and each person who controls such underwriter, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on (i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other similar
document (including any related Registration Statement, notification or the
like) incident to any such registration, qualification or compliance, 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
in the light of the circumstances under which they were made, or (ii) any
violation by the Company of any federal, state or common law rule or regulation
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse such Holder, each of the officers, directors and partners of
such Holder, and each person controlling such Holder, such underwriter and each
person who controls such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable to a Holder or underwriter in any such case to the extent that such
claim, loss, damage, liability or expense arises out of or is based on (i) any
untrue statement or omission made in reliance upon and in conformance with
written information furnished to the Company by or on behalf of such Holder or
underwriter and which was furnished specifically for the purpose of being used
therein or (ii) a failure by any Holder to deliver a final prospectus to its
transferee if any material change has been made to the preliminary prospectus.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities covered by such
registration, qualification or compliance, each person who controls the Company
or such underwriter within the meaning of the Securities Act, and each other
Holder, each of the officers, directors and partners of each such other Holder
and each person controlling such other Holder, against all 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, prospectus, offering circular or
other similar document, 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 in the light of the circumstances under which they were
made, and will reimburse the Company, such other Holders, such directors,
officers, partners, persons, underwriters or control persons for any legal or
any other expenses reasonably incurred in connection with investigating or
defending any such claim, 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,
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prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder and which was furnished specifically for the purpose of being used
therein; provided, however, that the liability of such Holder under this Section
5(b) shall be limited to an amount equal to the proceeds to such Holder of
Registrable Securities sold as contemplated herein.
(c) Each party entitled to indemnification under this Section 5 (the
"Indemnified Party") shall give notice to the party 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, at such party's expense, to assume the defense of
any such claim or any litigation resulting therefrom, provided that counsel for
the Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense (except for the payment of fees, costs and
expenses provided for below), and provided further that the failure of any
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Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement, unless such failure
to give notice shall materially adversely affect the Indemnifying Party in the
defense of any such claim or any such litigation. 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
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. Notwithstanding the election of the
Indemnifying Party to assume the defense of any such claim or litigation, the
Indemnified Party shall have the right to employ separate counsel and to
participate in the defense of such claim or litigation, and the Indemnifying
Party shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of the counsel chosen by the Indemnifying Party to
represent the Indemnified Party would present such counsel with a conflict of
interest; (ii) the defendants in, or targets of, any such claim or litigation
include both the Indemnified Party and the Indemnifying Party and the
Indemnified Party shall have reasonably concluded that there may be legal
defenses available to it or to other Indemnified Parties which are different
from or additional to those available to the Indemnifying Party (in which case
the Indemnifying Party shall not have the right to direct the defense of such
action on behalf of the Indemnified Party); (iii) in the exercise of the
Indemnified Party's reasonable judgment, the Indemnifying Party shall not have
employed satisfactory counsel to represent the Indemnified Party within a
reasonable time after notice of the institution of such claim or litigation; or
(iv) the Indemnifying Party shall authorize the Indemnified Party to employ
separate counsel at the expense of the Indemnifying Party. The Indemnified
Party shall not settle any such claim or litigation without the consent of the
Indemnifying Party.
(d) Notwithstanding the foregoing provisions of this Section 5, if a
registration is subject to a firm commitment underwriting, neither the Company
nor a Holder including Registrable Securities in the registration shall be
required to indemnify any other party to a greater extent than the obligation of
the Company or such Holder to the underwriters pursuant to the underwriting
agreement pertaining to such registration.
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6. Information by Holder. The Holder or Holders of Registrable
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Securities included in any registration shall furnish to the Company in writing
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may reasonably request in writing and
as shall be required in connection with any registration, qualification or
compliance referred to in this Agreement.
7. Term. The obligations of the Company under Section 2 of this
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Agreement shall terminate on the second anniversary of the date hereof.
8. Market "Stand-off" Agreement. The Holders, if requested by the
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Company and an underwriter of the Company's securities, shall agree not to sell
or otherwise transfer or dispose of any common stock (or other securities) of
the Company (other than securities of the Company acquired in the open market)
held by Holders during the 30-day periods following the effective date of a
Registration Statement of the Company filed under the Securities Act provided,
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that such 30-day periods shall only apply to a Registration Statement filed with
respect to an underwritten public offering by the Company; and provided,
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further, that all Holders holding more than two percent of the outstanding
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common stock and all officers and directors of the Company enter into similar
agreements. Such agreement shall be in writing in form satisfactory to the
Company and such underwriter. The Company may impose stop-transfer instructions
with respect to the shares (or securities) subject to the foregoing restriction
until the end of such 30-day periods.
9. Amendments and Waivers. The provisions of this Agreement,
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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 Company has obtained the written consent of Holders
of at least a majority of the outstanding Registrable Securities, voting
together as a single class.
10. Notices. All notices, demands and other communications made
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hereunder shall be in writing and shall be given either by personal delivery, by
nationally recognized overnight courier (with charges prepaid) or by telecopy
(with telephone confirmation), and shall be deemed to have been given or made
when personally delivered, the day following the date deposited with such
overnight courier service or when transmitted to telecopy machine and confirmed
by telephone, addressed to the respective parties at the following addresses (or
such other address for a party as shall be specified by like notice):
If to a Shareholder:
To each Shareholder at the address and/or fax number set forth on
Schedule I of this Agreement, and with copies to counsel, if any,
indicated on Schedule I.
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If to the Company:
Clarus Corporation, formerly known as
SQL Financials International, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, President and CEO
Facsimile: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: G. Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
11. Counterparts. This Agreement may be executed in any number of
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counterparts and by the parties hereto in separate 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.
12. Headings. The headings in this Agreement are for convenience of
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reference only and shall not limit or otherwise affect the meaning hereof.
13. Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Georgia.
14. Severability. In the event that any one or more of the
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provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
15. Entire Agreement. This Agreement is intended by the parties as a
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final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the
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Common Stock. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
16. Transfer or Assignment. Except as otherwise provided herein,
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this Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Shareholders
by the Company under this Agreement may not be transferred or assigned to any
transferee or assignee of any Registrable Securities except that such rights may
be transferred or assigned to transferees who are affiliates of the
Shareholders, so long as such transferee holds at least 1% of the outstanding
capital stock of the Company and agrees in writing with the Company to hold such
stock subject to the provisions of this Agreement.
17. Parties Benefitted. Nothing in this Agreement, express or
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implied, is intended to confer upon any third party any rights, remedies,
obligations or liabilities.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Registration Rights Agreement to be signed by its duly authorized officer as of
the date first above written.
CLARUS CORPORATION, F/K/A
SQL FINANCIALS INTERNATIONAL, INC
By:
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Name:
---------------------------------
Title:
--------------------------------
SHAREHOLDERS:
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XXXXXX XXXXX
XXXXXXX.XXX, INC.
By:
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Name:
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Title:
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HUMMER WINBLAD VENTURE PARTNERS
By:
-----------------------------------
Name:
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Title:
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HUMMER WINBLAD TECHNOLOGIES FUND
By:
-----------------------------------
Name:
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Title:
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OLYMPIC VENTURE PARTNERS IV
By:
-----------------------------------
Name:
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Title:
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OVP IV ENTREPRENEURS FUND
By:
-----------------------------------
Name:
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Title:
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XXX XXXXXXX
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SCHEDULE I
SHAREHOLDERS:
Xxxxxx Xxxxx
Xxxxxxx.Xxx, Inc.
Hummer Winblad Venture Partners
Hummer Winblad Technologies Fund
Olympic Venture Partners IV
OVP IV Entrepreneurs Fund
Xxx Xxxxxxx
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