<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 26, 2000
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
QRS CORPORATION
(Exact name of Registrant as specified in its charter)
------------------------------
DELAWARE 7370 68-0102251
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation Classification Code Number) Identification No.)
or organization)
1400 MARINA WAY SOUTH
RICHMOND, CALIFORNIA 94804
(510) 215-5000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
------------------------------
JOHN S. SIMON
CHIEF EXECUTIVE OFFICER
QRS CORPORATION
1400 MARINA WAY SOUTH
RICHMOND, CALIFORNIA 94804
(510) 215-5000
(Name, address, including zip code, and telephone number, including area
code, of agent for service of process)
------------------------------
Copies to:
RONALD B. MOSKOVITZ, ESQ.
SCOTT D. KARCHMER, ESQ.
BARBARA SKAGGS GALLAGHER, ESQ.
BROBECK, PHLEGER & HARRISON LLP
ONE MARKET
SPEAR STREET TOWER
SAN FRANCISCO, CALIFORNIA 94105
(415) 442-0900
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to a dividend or interest reinvestment plans, please check the
following box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _____________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / _____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER SHARE(1) OFFERING PRICE (1)) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value.................. 847,290 shares $46.44 $39,348,147 $10,387.91
===================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of 1933
and based upon the average of the high and low prices of the Company's
Common Stock as reported on the Nasdaq National Market on April 25, 2000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING
AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OF SALE
IS NOT PERMITTED.
===============================================================================+
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 26, 2000
PROSPECTUS
847,290 SHARES
[LOGO]
QRS CORPORATION
COMMON STOCK
- --------------------------------------------------------------------------------
This prospectus relates to the public offering, which is not being
underwritten, of 847,290 shares of our common stock which is held by some of
our current stockholders. 100,000 shares which may be offered hereby were
received by certain of the selling stockholders in connection with our
acquisition of all the outstanding capital stock of Image Info Inc and 747,290
shares which may be offered hereby were received by certain of the selling
stockholders in connection with our acquisition of substantially all of the
assets of RockPort Trade Systems, Inc.
The prices at which such stockholders may sell the shares will be
determined by the prevailing market price for the shares or in negotiated
transactions. We will not receive any of the proceeds from the sale of the
shares. We have agreed to bear certain expenses in connection with the
registration of the shares being offered and sold by the stockholders hereby.
Our common stock is quoted on the Nasdaq National Market under the
symbol QRSI. On April 25, 2000, the closing price for the common stock was
$45.5625.
----------------------
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
----------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities nor passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is April , 2000.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
from the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus, and later information filed with
the SEC will update and supersede this information. Any information so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this prospectus. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of
1934 until our offering is completed.
(a) Annual Report on Form 10-K for the fiscal year ended December
31, 1999 filed with the SEC on March 29, 2000;
(b) Current Reports on Form 8-K filed with the Commission on
(i) January 28, 2000, and amended on March 27, 2000, and (ii) March 24, 2000,
respectively; and
(c) The Registration Statement on Form 8-A filed with the SEC on
June 18, 1993 pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), in which there is described the terms, rights
and provisions applicable to our outstanding common stock.
You may request a copy of these filings, at no cost, by writing or telephoning
us at the following address:
Shawn M. O'Connor
President, Chief Operating Officer and Interim Chief Financial Officer and
Secretary
QRS Corporation
1400 Marina Way South
Richmond, CA 94804
(510) 215-5000
You should rely only on the information incorporated by reference or provided in
this prospectus or the prospectus supplement. We have authorized no one to
provide you with different information. We are not making an offer of these
securities in any state where the offer is not permitted. You should not assume
that the information in this prospectus or the prospectus supplement is accurate
as of any date other than the date on the front of the document.
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QRS CORPORATION
QRS Corporation ("QRS", "We", "Our", or "Us") principal executive offices are
located at 1400 Marina Way South, Richmond, California 94804. QRS' telephone
number is (510) 215-5000.
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING AN
INVESTMENT DECISION. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE
ONLY ONES FACING US. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY KNOWN TO
US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS OPERATIONS.
IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION
OR RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY AFFECTED. IN SUCH CASE,
THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR
PART OF YOUR INVESTMENT.
THIS PROSPECTUS ALSO CONTAINS "FORWARD-LOOKING" STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS,
INCLUDING THE RISKS FACED BY US DESCRIBED BELOW AND IN THE DOCUMENTS
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
OUR OPERATING RESULTS MAY FLUCTUATE FROM QUARTER TO QUARTER.
Our future quarterly operating results may vary and we could experience reduced
levels of earnings or losses in one or more quarters. Fluctuations in our
quarterly operating results could result from a variety of factors, including:
- - changes in the demand for our services
- - changes in our pricing policies or those of our competitors
- - market acceptance of new and enhanced versions of our services
- - changes in operating expenses
- - changes in our strategy
- - introduction of alternative technologies by our competitors
- - effect of potential acquisitions
- - industry and general economic factors
We cannot control all of these factors. Due to all of these
factors and other risks discussed in this report, period-to-period
comparisons of our results of operations may not reflect our future
performance.
OUR MARKETPLACE SERVICES ARE EVOLVING AND WE CANNOT BE SURE THEY WILL BE
SUCCESSFUL.
We are continuing to expand the breadth of our B2B eCommerce services through
our marketplace services initiative. In particular, we have introduced
Tradeweave, an Internet marketplace designed to facilitate the trade and auction
of first-run and excess merchandise. Tradeweave is new and unproven, and we
cannot assure you that it will be successful. Some of our existing customers
have agreed to participate in Tradeweave. None of these customers are obligated
to buy or sell any retail merchandise through Tradeweave. As a result, we
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<PAGE>
cannot assure you that these or any of our other customers will trade or
auction first-run or excess retail merchandise.
The implementation of Tradeweave has and is expected to continue to require
significant investment of both financial and management resources, and the
expenses related to Tradeweave have had and we expect will continue to have an
adverse impact on our operating results and earnings for the near term. We
expect that our operational and development costs related to Tradeweave will
increase significantly as we invest in infrastructure and product development,
and increase the sales and marketing efforts. We do not expect to derive
significant revenue from these services in the near future. The success of
Tradeweave will require, among other things, broad market acceptance by our
existing and future customers. If Tradeweave does not generate sufficient
revenues to achieve and maintain profitability, our investment in Tradeweave
could adversely affect our operating results and earnings in future quarters. If
our operating results and earnings fall below the expectations of public market
analysts and investors, the trading price of our common stock is likely to
decline.
THE SUCCESS OF OUR BUSINESS DEPENDS ON OUR CUSTOMERS' CONTINUING ACCEPTANCE OF
OUR B2B ECOMMERCE SERVICES.
Currently, our revenues are derived from the use of our B2B eCommerce services
by retailers and their trading partners. As a result, the success of our
business depends upon:
- - our current customers' adoption and acceptance of additional services that
we currently offer and will offer in the future
- - our ability to attract new customers and their acceptance of our current
and future service offerings
The retail industry is often characterized as being conservative in its approach
to adopting new technologies. Many of our customers are new to the use of B2B
eCommerce practices and may not have sufficient resources or properly trained
personnel to utilize our services. If we are unable to increase customer
acceptance of our current service offerings and achieve market acceptance of our
future service offerings, our business, financial condition, and results of
operations will be materially adversely affected.
THE MARKET FOR B2B ECOMMERCE SERVICES IS INTENSELY COMPETITIVE.
We compete with a number of companies providing B2B eCommerce services as well
as companies providing software and services to the retail industry. We believe
the principal factors on which we compete include:
- - breadth and quality of services
- - price
- - customer base
- - customer service and support
- - retail industry focus, presence and knowledge
- - product, merchandise and other related content
- - enabling inter-enterprise relationships
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Many of our existing and potential competitors have financial, marketing or
technological resources that exceed our own resources, and we cannot assure you
that we will be able to compete successfully. Competition may affect our ability
to gain new customers and retain and expand business with our existing
customers. It may also affect the range of services we can offer to our
customers.
We expect competition to increase as more companies enter the market and
existing competitors continue to change and expand their service offerings. In
addition, in-house systems and third-party software providers are also
significant competitors to our services. Some of our potential competitors have
longer operating histories, larger customer bases, and greater brand recognition
in B2B eCommerce markets than we do. In addition, other companies may be
acquired by, receive investments from, or enter into other commercial
relationships with larger, well-established and well-financed companies. As a
result, some of our competitors with other revenue or investment sources may be
able to devote more resources to marketing and promotional campaigns, adopt more
aggressive pricing policies and devote substantially more resources to website
and systems development than we can, which may adversely affect our business.
Furthermore, some of our competitors, in particular Internet companies, may not
be bound by investors' expectations of earnings and, therefore, may be able to
allocate more resources to grow their Internet operations.
NEW TECHNOLOGY COULD MAKE OUR EXISTING SERVICES OBSOLETE.
The market for B2B eCommerce services is characterized by rapidly changing
technology and continuously evolving standards. To be successful, we must adapt
by continually improving the performance, features, and reliability of our
services or else our services may become obsolete. We cannot assure you that we
will be able to respond in a timely manner to technological changes. The ability
of competitors to successfully incorporate evolving standards and technologies
into new services may make our services noncompetitive. Technological changes
could force us to lower the price of our services. If we fail to adapt to or
incorporate new standards or technology, it may have a material adverse effect
on our business and results of operations.
WE DEPEND ON IBM FOR MOST OF OUR ECOMMERCE SERVICES AND FOR A SUBSTANTIAL
PORTION OF OUR REVENUES.
Since 1988, we have used the IBM value-added network, or VAN, as the network
platform over which we provide customers with most of our eCommerce services.
We depend on the IBM VAN for a substantial part of our revenues and such
dependence is expected to continue and last through the term of our contract,
which expires December 31, 2001. Because we have no right to control the
maintenance and operation of the IBM VAN, we do not control decisions that
could have a material adverse impact on the operation of the VAN and
consequently, on our business and results of operations. In addition, if IBM
becomes unable or unwilling to provide VAN services, we would either have to
provide these services directly or arrange for another third party to provide
such services. We cannot assure you that we would be able to do so on a
timely basis, if at all, or that the costs of any such arrangements would not
materially adversely affect our business and results of operations.
Disruption or unavailability of the IBM VAN may have a material adverse
effect on our business and results of operations.
IBM currently charges us for our use of its network and messaging services by
our customers. In the event that IBM decides to increase the prices that it
charges us or reduces the amount of discounts or allowances after our current
contract expires, we may not be able to pass along these charges to our
customers. If we are unable to do so, our business and results of operations
could be materially adversely affected. We have an agreement with IBM to
purchase $335 million of network services over a four-year period ending
December 31, 2001. This amount is subject to specified volume discounts and
allowances. The agreement includes specified annual minimum purchases and a
graduated adjustment charge if total purchases fall below the minimum amount.
We cannot assure you that we will meet the minimum purchase requirements, and
if we do not do so, we will have to pay more for IBM's network and messaging
services and our revenues may be adversely affected. We met our purchase
commitment for 1998. However, we did not meet our annual purchase commitment
in 1999 and recorded additional expense of $120,000. It is uncertain whether
we will meet our purchase commitment in 2000 and 2001.
4
<PAGE>
IBM AND AT&T COULD DECIDE TO COMPETE AGAINST US.
In April 1999, AT&T purchased IBM's Global Network and corporate networking
business. We have continued to receive our network services pursuant to the
terms of our IBM agreements. If AT&T markets IBM network services to the retail
industry or directly to our customers or permits one or more of our competitors
to use and remarket IBM's network services to the retail industry, our business
and results of operations could be materially adversely affected. IBM and AT&T
are free to compete against us, and we cannot assure you that IBM and AT&T will
not choose to compete with us in the future. If AT&T or IBM were to become a
competitor, our business and results of operations may be materially adversely
affected.
WE MAY NOT BE ABLE TO EFFECTIVELY MANAGE OUR GROWTH.
We have experienced significant revenue growth as we have added new retailers
and vendors, increased the number of trading partnerships and increased the size
of QRS KEYSTONE, our product information database. Maintaining profitability
during a period of expansion will depend, among other things, on our ability to
manage effectively our operations. More recently, we have significantly
increased our service offerings and customers both through internal growth and
acquisitions. In particular, we expect Tradeweave to require significant
additional expansion of our operations, employees, and infrastructure. If we are
unable to manage our growth effectively, it may have a material adverse effect
on our business and results of operations.
OUR SUCCESS DEPENDS UPON OUR ABILITY TO ATTRACT, TRAIN AND RETAIN KEY PERSONNEL.
Our success depends significantly upon the performance of our executive officers
and other key employees. We also need to attract, train, retain, and motivate
technical, managerial, and marketing personnel. Competition for qualified
personnel is intense, particularly with respect to Internet product and service
personnel. We cannot assure you that we will be able to continue to attract and
retain the qualified personnel necessary for the development of our business. If
we lose key personnel or fail to recruit necessary additional personnel, our
business and results of operations may be materially adversely affected.
FAILURE TO EXPAND THE INTERNET INFRASTRUCTURE COULD LIMIT OUR FUTURE GROWTH.
We increasingly rely on the Internet for the delivery of our services. The
recent growth in Internet traffic has caused frequent periods of decreased
performance. If Internet usage continues to grow rapidly, its infrastructure may
not be able to support these demands and its performance and reliability may
decline. If outages or delays on the Internet occur frequently or increase in
frequency, overall Internet usage, including usage of our services, could grow
more slowly or decline. Our ability to deliver services through the Internet to
customers is ultimately limited by and depends upon the speed and reliability of
both the Internet and our customers' internal networks. Consequently, the growth
of the market for our services, particularly Tradeweave, depends upon
improvements being made to the entire Internet as well as to our individual
customers' networking infrastructures to alleviate overloading and congestion.
If these improvements are not made, our customers' ability to utilize our
services will be hindered, and our business and results of operations may
suffer.
OUR SUCCESS DEPENDS IN PART ON OUR ABILITY TO INTRODUCE NEW SERVICES IN A TIMELY
MANNER.
Our future growth depends on our successful and timely introduction of new
services in existing and emerging markets. We cannot assure you that we will
successfully complete development or that if such development is completed, our
planned introduction of these services will gain market acceptance or will meet
the technical or other requirements of potential customers. To provide our
services, we rely on complex software, which may contain undetected errors or
failures. Software errors or delays could result in loss of, or delay in, market
5
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acceptance of our services, which may have a material adverse effect on our
business, results of operations, and financial condition.
WE DEPEND ON SEVERAL KEY CUSTOMERS FOR OUR BUSINESS.
We provide services and generate revenues by enabling certain of our key retail
customers and their trading partners to conduct business over our network.
Estimated revenues attributable to all of the billings of any one of these
customers and its trading partners may exceed 10% of our total revenues in
future quarters. In addition, the retail industry has recently experienced
significant consolidation. If any of our retail customers consolidate, it could
adversely affect our revenues. In addition, our customers could elect either to
develop their own B2B eCommerce services or to transfer all or a significant
portion of their activities to one of our competitors, which could have a
material adverse effect on our business and results of operations.
DAMAGE TO OUR DATA CENTER FACILITY COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS AND RESULTS OF OPERATIONS.
Our content and application services, such as QRS KEYSTONE, run on a computer
system contained in our data center facility in Richmond, California. The data
center is located in a single facility and we have no present intention of
establishing an additional data center in a separate location. However, we have
arranged for use of off site computer facilities, if necessary, and have taken
other precautions to protect ourselves and our customers from events that could
interrupt delivery of our services. These precautions include off-site storage
of back-up data, fire protection, and physical security systems, an early
warning detection, and Halon fire extinguishing system. Notwithstanding these
precautions, we cannot assure you that a fire, earthquake, or other natural
disaster affecting the data center would not disable our computer system. Our
data center routes through independent AT&T hubs in San Francisco and Los
Angeles. In the event that service through these locations is interrupted, we
have back-up access through AT&T's Seattle hub. Any significant damage to our
data center or disruption of its connectivity to the IBM VAN network and/or AT&T
network could have a material adverse effect on our business and results of
operations.
WE MAY NOT BE ABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY AND INFORMATION.
We rely on a combination of copyright, trade secret, and trademark laws and
nondisclosure agreements to protect our proprietary rights. Existing copyright
laws afford only limited protection and we may not be able to police
unauthorized use of our services, and proprietary technology, and information.
Unauthorized third parties may be able to copy our services or otherwise obtain
and use our proprietary technology and information. For example, if a competitor
were able to duplicate the information contained in our product information
database, our business could be adversely affected. Further, the laws of certain
countries in which our services may be distributed may not protect our services
and intellectual rights to the same extent as the laws of the United States. If
unauthorized third parties obtain and use our proprietary technology and
information, our business and results of operations may be materially adversely
affected.
ACQUISITIONS OR INVESTMENTS COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.
We have made acquisitions in the past and we expect to acquire complementary
businesses or technologies in the future. The success of any acquisition will
depend upon, among other things, our ability to:
- - identify and evaluate the proposed acquisition of complementary businesses
or technologies
- - complete the acquisition on reasonable terms
- - obtain any necessary financing
- - integrate effectively the acquired personnel, operations or technologies
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- - retain customers and motivate key personnel
An acquisition could cause a distraction of our management and employees, an
increase in our expenses, an assumption of additional debt, and/or an issuance
of equity which could be dilutive to existing stockholders, and expose us to the
risk that we will fail to successfully implement the acquisition. This may
materially and adversely affect our results of operations and financial
condition.
OUR STOCK PRICE MAY FLUCTUATE SUBSTANTIALLY.
The market price of our common stock has fluctuated significantly since the
initial public offering of our common stock in August 1993. The market price of
our common stock could be subject to significant fluctuations in the future
based on factors including:
- - announcements of new services by us or by our competitors
- - fluctuations in our quarterly financial results
- - fluctuations in our competitors' quarterly financial results
- - changes in analysts' estimates of our financial performance or our failure
to meet these estimates
- - conditions in the Internet commerce, information services, and high
technology industries
- - conditions in the financial markets
The stock market in general has experienced extreme price and volume
fluctuations which have particularly affected the market prices for many high
technology companies and which have often been unrelated to the operating
performance of the specific companies. Many technology companies, including
QRS, have recently experienced significant fluctuations in the market price
of their equity securities. We cannot assure you that the market price of our
common stock will not continue to experience significant fluctuations in the
future.
RESIDUAL PROBLEMS RELATING TO THE YEAR 2000 COULD NEGATIVELY AFFECT OUR
BUSINESS.
We completed the tasks we believed were necessary to confirm that our business
critical computer and other systems are able to function without disruption with
respect to the application of dating systems in Year 2000. There were no
significant product delivery or internal systems issues reported over the Year
2000 transition. Although we believe that all appropriate steps have been taken
to address Y2K readiness, there can be no guarantee that undetected errors or
defects associated with Year 2000 date functions will prevent a material adverse
impact on the results of operations and financial condition.
OUR CHARTER DOCUMENTS AND DELAWARE LAW MAY MAKE A TAKEOVER MORE DIFFICULT.
We are a Delaware corporation. The Delaware General Corporation Law contains
certain provisions that may make a change in control of our company more
difficult or prevent the removal of incumbent directors. In addition, our
certificate of incorporation and bylaws contain provisions that have the same
effect. Under our agreement with Tradeweave, Inc., Peter R. Johnson and Garth
Saloner, the demand registration right of the minority stockholders of
Tradeweave, Inc. is affected by a change of control of QRS. Any of these
provisions may have a negative impact on the price of our common stock, may
discourage third-party bidders from making a bid for QRS or may reduce any
premiums paid to our stockholders for their common stock.
7
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USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling stockholders.
PLAN OF DISTRIBUTION
We are registering all 847,290 shares (the "Shares") on behalf of certain
selling stockholders. All of the Shares originally were issued by us in
connection with our acquisition of all the outstanding capital stock of Image
Info Inc. and our acquisition of substantially all of the assets of RockPort
Trade Systems, Inc. We will receive no proceeds from the sale of the Shares
by the selling stockholders. The selling stockholders named in the table
below or pledgees, donees, transferees or other successors-in-interest
selling Shares received from a named selling stockholder as a gift,
partnership distribution or other non-sale-related transfer after the date of
this prospectus (collectively, the "Selling Stockholders") may sell the
Shares from time to time. The Selling Stockholders will act independently of
QRS in making decisions with respect to the timing, manner and size of each
sale. The sales may be made on one or more exchanges or in the
over-the-counter market or otherwise, at prices and at terms then prevailing
or at prices related to the then current market price, or in negotiated
transactions. The Selling Stockholders may effect such transactions by
selling the Shares to or through broker-dealers. The Shares may be sold by
one or more of, or a combination of, the following:
- a block trade in which the broker-dealer so engaged will attempt to
sell the Shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction,
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus,
- an exchange distribution in accordance with the rules of
such exchange,
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
- in privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from time
to time to describe a specific plan of distribution. In effecting sales,
broker-dealers engaged by the Selling Stockholders may arrange for other
broker-dealers to participate in the resales.
The Selling Stockholders may enter into hedging transactions with broker-dealers
in connection with distributions of the Shares or otherwise. In such
transactions, broker-dealers may engage in short sales of the Shares in the
course of hedging the positions they assume with the Selling Stockholders. Some
or all of the Shares covered by this registration statement may be sold to cover
short positions in the open market. The Selling Stockholders may enter into
option or other transactions with broker-dealers which require the delivery to
the broker-dealer of the Shares. The broker-dealer may then resell or otherwise
transfer such Shares pursuant to this prospectus. The Selling Stockholders also
may loan or pledge the Shares to a broker-dealer. The broker-dealer may sell the
Shares so loaned, or upon a default the broker-dealer may sell the pledged
Shares pursuant to this prospectus.
Broker-dealers or agents may receive compensation in the form of commissions,
discounts or concessions from the Selling Stockholders. Broker-dealers or agents
may also receive compensation from the purchasers of the Shares for whom they
act as agents or to whom they sell as principals, or both. Compensation as to a
particular broker-dealer might be in excess of customary commissions and will be
in amounts to be negotiated in connection with the sale. Broker-dealers or
agents and any other participating broker-dealers or the Selling Stockholders
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act in connection with sales of the Shares. Accordingly, any such
commission, discount or concession received by
8
<PAGE>
them and any profit on the resale of the Shares purchased by them may be
deemed to be underwriting discounts or commissions under the Securities Act.
Because the Selling Stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the Selling Stockholders
will be subject to the prospectus delivery requirements of the Securities
Act. In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 promulgated under the Securities Act may be sold
under Rule 144 rather than pursuant to this prospectus.
The Shares will be sold only through registered or licensed brokers or dealers
if required under applicable state securities laws. In addition, in certain
states the Shares may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the Shares may not simultaneously engage in
market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution. In addition, the
Selling Stockholders will be subject to applicable provisions of the Exchange
Act and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the Selling Stockholders. QRS will make copies of
this prospectus available to the Selling Stockholders and has informed the
Selling Stockholders of the need for delivery of copies of this prospectus to
purchasers at or prior to the time of any sale of the Shares.
The Selling Stockholders will bear all commissions and discounts, if any,
attributable to the sales of the Shares. The Selling Stockholders may agree to
indemnify any broker-dealer or agent that participates in transactions involving
sales of the Shares against certain liabilities, including liabilities arising
under the Securities Act. The Selling Stockholders have agreed to indemnify
certain persons, including broker-dealers and agents, against certain
liabilities in connection with the offering of the Shares, including liabilities
arising under the Securities Act.
9
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the number of shares owned by each of the Selling
Stockholders and the number of Shares registered for resale hereby. No estimate
can be given as to the amount of shares that will be held by the Selling
Stockholders after completion of this offering because the Selling Stockholders
may offer all or some of the Shares and because there currently are no
agreements, arrangements or understandings with respect to the sale of any of
the Shares. The Shares offered by this prospectus may be offered from time to
time by the Selling Stockholders named below.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Percentage of Number of Shares
Owned Prior to the Outstanding Registered for
NAME OF SELLING STOCKHOLDER Offering Shares(1) Sale Hereby(2)
- --------------------------- -----------------------------------------------------------------
<S> <C> <C> <C>
Craig Schlossberg 161,771 1.06% 36,690
Jonathan Pinsky 161,771 1.06% 36,690
Earl Rosen 40,432 * 9,170
Catherine Pinsky 32,363 * 7,340
John Orvos 20,238 * 4,590
James Killough III 17,725 * 4,020
Jason Pinsky 6,614 * 1,500
Susan Welch 340,523 2.24% 340,523
William Welch 8,161 * 8,161
Stephen Welch 8,161 * 8,161
Judy Charron 8,161 * 8,161
Jack Zakarian 182,504 1.2% 115,000
Insight Capital Partners II, L.P. 120,278 * 120,278
Insight Capital Partners (Cayman) II, L.P. 13,364 * 13,364
Imprimis SB L.P. 133,642 * 133,642
</TABLE>
- -------------------------
* Less than one percent.
(1) Based on 15,189,786 shares of common stock outstanding on April 14, 2000.
(2) This registration statement also shall cover any additional shares of
common stock which become issuable in connection with the Shares registered
for sale hereby by reason of any stock divided, stock split, recapitalization
or other similar transaction effected without the receipt of consideration
which results in an increase in the number of QRS' outstanding shares of
common stock.
10
<PAGE>
The Shares which may be offered by Craig Schlossberg, Jason Pinsky, James
Killough III, John Orvos, Jonathan Pinsky, Earl Rosen and Catherine Pinsky
were acquired by them in connection with QRS' acquisition of all the
outstanding capital stock of Image Info Inc. Immediately prior to the
acquisition, each of those individuals, with the exception of Jason Pinsky,
held positions with Image Info Inc. After the completion of the acquisition,
Mr. Schlossberg became QRS' Vice President and General Manager, Imaging
Software, Mr. Jonathan Pinsky became QRS' Vice President and General Manager,
Imaging Services, Mr. Killough became a consultant to QRS, Mr. Orvos became
an Account Executive for QRS and Mr. Rosen became Vice President, Marketing
for QRS.
The Shares which may be offered by Susan Welch, William Welch, Stephen Welch,
Judy Charron, Jack Zakarian, Insight Capital Partners II, L.P., Insight Capital
Partners (Cayman) II, L.P. and Imprimis SB L.P. were acquired by them in
connection with QRS' acquisition of substantially all of the assets of RockPort
Trade Systems, Inc. Prior to the acquisition, Ms. Welch and Mr. Zakarian were
each employed with RockPort Trade Systems, Inc. After the completion of the
acquisition, Ms. Welch became Senior Vice President, Application Services for
QRS and Mr. Zakarian became a consultant to QRS.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for QRS by
Brobeck, Phleger & Harrison LLP, San Francisco, California.
EXPERTS
The financial statements incorporated in this prospectus by reference from QRS'
Annual Report on Form 10-K for the year ended December 31, 1999 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
The financial statements incorporated in this prospectus by reference from QRS'
Current Report on Form 8-K/A dated March 27, 2000 for the years ended December
31, 1999 and 1998 have been audited by Goldstein Golub Kessler LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
11
<PAGE>
================================================================================
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE A STATEMENT THAT DIFFERS FROM WHAT
IS IN THIS PROSPECTUS. IF ANY PERSON DOES MAKE A STATEMENT THAT DIFFERS FROM
WHAT IS IN THIS PROSPECTUS, YOU SHOULD NOT RELY ON IT. THIS PROSPECTUS IS NOT
AN OFFER TO SELL, NOR IS IT SEEKING AN OFFER TO BUY, THESE SECURITIES IN
ANY STATE IN WHICH THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION IN
THIS PROSPECTUS IS COMPLETE AND ACCURATE AS OF ITS DATE, BUT THE
INFORMATION MAY CHANGE AFTER THAT DATE.
--------------
TABLE OF CONTENTS
PAGE
----
Where You can Find More Information...................................... 1
QRS Corporation.......................................................... 2
Risk Factors............................................................. 2
Use of Proceeds.......................................................... 8
Plan of Distribution..................................................... 8
Selling Stockholders..................................................... 10
Legal Matters............................................................ 11
Experts.................................................................. 11
QRS CORPORATION
847,290 SHARES
OF COMMON STOCK
--------------
PROSPECTUS
--------------
April __, 2000
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth an itemized statement of all estimated expenses
in connection with the issuance and distribution of the securities being
registered:
SEC Registration fee $10,388
Printing and engraving
expenses 1,500
Legal expenses 15,000
Accounting fees and
Expenses 10,000
Miscellaneous 500
--------
Total $37,388
Item 15. Indemnification of Officers and Directors.
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceedings, whether civil, criminal,
administrative or investigative (other than action by or in the right of such
corporation), by reason of the fact that such person was an officer or
director of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another corporation
or enterprise. The indemnity may include expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith and in
a manner he reasonably believed to be in or not opposed to the corporation's
best interests, and, for criminal proceedings, had no reasonable cause to
believe his conduct was illegal. A Delaware corporation may indemnify
officers and directors in an action by or in the right of the corporation
under the same conditions, except that no indemnification is permitted
without judicial approval if the officer or director is adjudged to be liable
to the corporation in the performance of his duty. Where an officer or
director is successful on the merits or otherwise in the defense of any
action referred to above, the corporation must indemnify him against the
expenses which such officer or director actually and reasonably incurred.
In accordance with the Delaware Law, our certificate of incorporation limits
the liability of our directors to the maximum extent permitted by law. Under
Delaware law, our directors will not be personally liable for monetary
damages, except for liability (i) for any breach of the director's duty of
loyalty to us or our stockholders, (ii) for any acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) the unlawful payment of dividends or unlawful stock purchases or
redemptions, as provided in Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which a director derived an improper
personal benefit.
QRS' Bylaws provide that QRS shall indemnify its directors and may indemnify
its other officers and employees and other agents to the fullest extent
permitted by law. QRS believes that indemnification under its Bylaws covers
at least negligence and gross negligence on the part of the indemnified
parties. QRS' Bylaws also permit it to secure insurance on behalf of any
officer, director, employee of other agent for any liability arising out of
his or her actions in such capacity, regardless of whether the Bylaws have
the power to indemnify him or her under the General Corporation Law of
Delaware. QRS currently has secured such insurance on behalf of its directors
and officers.
II-1
<PAGE>
QRS has entered into agreements to indemnify its directors and executive
officers, in addition to the indemnification to which they are entitled under
QRS' Bylaws. These agreements, among other things, indemnify QRS' directors
and executive officers for certain expenses (including attorneys' fees),
judgments, fines and settlement amounts incurred by any such person in any
action or proceeding, including any action by or in the right of QRS arising
out of such person's services as a director or executive officer of QRS, any
subsidiary of QRS or any other company or enterprise to which the person
provides services at the request of QRS.
Item 16. Exhibits
(a) Exhibits
2.1 Agreement and Plan of Merger dated January 21, 2000 by and between QRS and
Image Info Inc.(1)
2.2 Agreement and Plan of Reorganization dated February 29, 2000 by and between
QRS and RockPort Trade Systems, Inc.(2)
4.1 Specimen of Common Stock Certificate of QRS. (3)
4.2 Registration Rights Agreement dated January 21, 2000 by and between QRS and
certain individuals listed therein.
4.3 Registration Rights Agreement dated February 29, 2000 by and between QRS
and RockPort Trade Systems, Inc.
5.1 Opinion of Brobeck, Phleger & Harrison LLP. (4)
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Goldstein Golub & Kessler LLP
23.3 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1
hereto).
24.1 Power of Attorney (included on page II-4 hereto).
- ---------------------------
(1) Incorporated by reference to Exhibit of same number filed with QRS' Current
Report on Form 8-K dated January 28, 2000 and amended on March 27, 2000.
(2) Incorporated by reference to Exhibit 2.1 filed with QRS' Current Report
on Form 8-K dated March 24, 2000.
(3) Incorporated by reference to Exhibit of same number of QRS' Registration
Statement on Form S-1 (Registration No. 33-63938).
(4) To be filed by amendment.
(b) Financial Data Schedule
Not applicable
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by section 10(a)(3) of the Securities Act of
1933; (ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that (i) and (ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by (i) and (ii) is
contained in periodic
II-2
<PAGE>
reports filed by the Registrant pursuant to Section 13 or Section 15 of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
For purposes of determining any liability under the Securities Act of 1933, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richmond, State of California on this 25th day
of April, 2000.
QRS CORPORATION
By: /s/ John S. Simon
---------------------------------------
John S. Simon
Chief Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of QRS Corporation, a Delaware
corporation, do hereby constitute and appoint John S. Simon, Chief Executive
Officer and Shawn M. O'Connor, President, Chief Operating Officer and Interim
Chief Financial Officer and each of them, the lawful attorneys-in-fact and
agents with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and any one of
them, determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act of 1933, as amended, and any rules
or regulations or requirements of the Securities and Exchange Commission in
connection with this Registration Statement. Without limiting the generality of
the foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement, and to any and all instruments or documents filed as
part of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
that all said attorneys and agents, or any one of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney
as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------ ----------------------------------------------- -----------------------
<S> <C> <C>
/s/ John S. Simon Chief Executive Officer and Director (Principal April 25, 2000
- ---------------------------- Executive Officer)
John S. Simon
/s/ Shawn M. O'Connor President, Chief Operating Officer and Interim April 25, 2000
- ---------------------------- Chief Financial Officer (Principal Financial
Shawn M. O'Connor and Accounting Officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------ ----------------------------------------------- -----------------------
<S> <C> <C>
/s/ Peter R. Johnson Chairman of the Board of Directors April 25, 2000
- ----------------------------
Peter R. Johnson
/s/ Tania Amochaev Director April 25, 2000
- ----------------------------
Tania Amochaev
/s/ Steven D. Brooks Director April 25, 2000
- ----------------------------
Steven D. Brooks
/s/ David A. Cole Director April 25, 2000
- ----------------------------
David A. Cole
/s/ John P. Dougall Director April 25, 2000
- ----------------------------
John P. Dougall
/s/ Philip Schlein Director April 25, 2000
- ----------------------------
Philip Schlein
/s/ Garen K. Staglin Director April 25, 2000
- ----------------------------
Garen K. Staglin
/s/ Garth Saloner Director April 25, 2000
- ----------------------------
Garth Saloner
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT TITLE
2.1 Agreement and Plan of Merger dated January 21, 2000 by and between
QRS and Image Info Inc.(1)
2.2 Agreement and Plan of Reorganization dated February 29, 2000 by and
between QRS and RockPort Trade Systems, Inc.(2)
4.1 Specimen of Common Stock Certificate of QRS.(3)
4.2 Registration Rights Agreement dated January 21, 2000 by and between
QRS and certain individuals listed therein.
4.3 Registration Rights Agreement dated February 29, 2000 by and between
QRS and RockPort Trade Systems, Inc.
5.1 Opinion of Brobeck, Phleger & Harrison LLP. (4)
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Goldstein Golub & Kessler LLP
23.3 Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1
hereto).
24.1 Power of Attorney (included on page II-4 hereto).
- --------------------
(1) Incorporated by reference to Exhibit of same number filed with QRS' Current
Report on Form 8-K dated January 28, 2000 and amended on March 27, 2000.
(2) Incorporated by reference to Exhibit 2.1 filed with QRS' Current Report on
Form 8-K dated March 24, 2000.
(3) Incorporated by reference to Exhibit of same number of QRS' Registration
Statement on Form S-1 (Registration No. 33-63938).
(4) To be filed by amendment.
<PAGE>
EX 4.2
QRS CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made as of January
, 2000, by and among QRS Corporation, a Delaware corporation (the
"ACQUIROR"), and the individuals listed on Exhibit A hereto, each of whom is
herein referred to as a "HOLDER."
RECITALS
A. Image Info Inc., a New York corporation ("Target"), Acquiror and
WS Acquisition Corp., a New York corporation and a wholly-owned subsidiary of
Acquiror ("Merger Sub"), have entered into an Agreement and Plan of Merger,
dated as of January 16, 2000 (the "Merger Agreement "), pursuant to which
Target will be merged with and into Merger Sub (the "Merger").
B. Upon the consummation of the Merger and in connection therewith,
the shareholders of Target will become the owner of shares of common stock,
$0.001 par value per share, of Acquiror (the "Acquiror Common Stock").
C. In order to induce Target to enter into the Merger Agreement,
certain holders of Target have agreed to vote to approve of the Merger
Agreement and the transaction contemplated thereby and Acquiror has agreed to
provide certain registration rights to the Holders.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements, provisions and covenants set forth in the Merger Agreement and
in this Agreement, it is hereby agreed as follows:
1. REGISTRATION RIGHTS. Acquiror and the Investors covenant and
agree as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The term the "ACT" means the Securities Act of 1933,
as amended.
(b) The term "EXCHANGE ACT" means the Securities Exchange
Act of 1934, as amended.
(c) The term "PUBLIC OFFERING" means a firm commitment
underwritten public offering of Acquiror Common Stock pursuant to a
registration statement under the Act.
(d) The terms "REGISTER," "REGISTERED," and "REGISTRATION"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration
or ordering of effectiveness of such registration statement or document.
<PAGE>
(e) The term "SEC" means the Securities and Exchange
Commission.
(f) The term "SHAREHOLDERS' AGENT" means Craig Schlossberg.
(g) Terms not otherwise defined herein shall have the
meaning set forth in the Merger Agreement.
1.2 INVESTORS' REQUEST FOR REGISTRATION.
(a) If Acquiror shall receive from the Holders of not less
than a majority of the shares of Acquiror Common Stock received by all of the
Holders in connection with the Merger a written request that Acquiror effect
a shelf registration on the appropriate form under the Act with respect to
the resale of shares of Acquiror Common Stock received by the Holders in
connection with the Merger, Acquiror will:
(i) promptly give written notice of the proposed
registration to all other Holders; and
(ii) use its reasonable best efforts to register as
expeditiously as reasonably possible, but in any event the filing of a
registration statement for such request shall occur no later than ninety (90)
days after receipt of the request, the resale of up to an aggregate of
100,000 shares of Acquiror Common Stock received by the Holders in
connection with the Merger to the extent requested by such requesting Holders
and any other Holder(s) joining in such request as are specified in a written
request given within twenty (20) days after receipt of such written notice
from Acquiror.
Each Holder is only entitled to have registered his or her
pro rata portion of the 100,000 shares of Acquiror Common Stock, which amount
is set forth on Exhibit A hereto.
(b) Notwithstanding the foregoing, if Acquiror shall
furnish to the Shareholders' Agent a certificate signed by the Chief
Executive Officer of Acquiror stating that, in the good faith judgment of the
Board of Directors of Acquiror, it would be seriously detrimental to Acquiror
and its shareholders for such registration statement to be filed in the near
future, Acquiror shall have the right to defer such filing for a period of
not more than one hundred twenty (120) days after receipt of the request;
PROVIDED, HOWEVER, that Acquiror may not utilize this right more than once in
any twelve-month period.
(c) Acquiror shall not be obligated to effect, or to take
any action to effect, a registration pursuant to this Section 1.2:
(i) if Acquiror delivers notice to the Shareholders'
Agent promptly after their registration request of its intent to file a
registration statement for a Public Offering within ninety (90) days of such
notice, provided that Acquiror is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective;
or
2.
<PAGE>
(ii) during the one hundred eighty (180) day period
following the effective date of the registration statement relating to
Acquiror's Public Offering.
(d) Notwithstanding anything herein to the contrary,
Acquiror shall be entitled, without prior notice to any person, to suspend a
registration hereunder (x) during customary "blackout" periods relating to
material non-public information regarding Acquiror that cause the prospectus
contained in the relevant registration statement to not be complete or
correct in any material respect and (y) with respect to then current
employees of Acquiror, during any applicable Acquiror trading windows.
(e) Notwithstanding anything herein to the contrary,
Acquiror shall not in any event be required to include in a registration
hereunder any shares which can then be sold (and are not subject to the
volume limits) pursuant to Rule 144 under the Act without registration under
the Act.
1.3 OBLIGATIONS OF ACQUIROR. Whenever required under this
Agreement to effect the registration of any Acquiror Common Stock, Acquiror
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Acquiror Common Stock and use its best efforts to cause
such registration statement to become effective and keep such registration
statement effective until the earlier of the date six (6) months after the
effective date or until the sale of all Acquiror Common Stock covered
thereby, keeping the Holders advised as to the initiation, progress and
completion of the registration; PROVIDED, HOWEVER, that such six (6) month
period shall be extended for a period of time equal to the period the Holder
refrains from selling any securities included in such registration as a
result of a suspension of the registration pursuant to Section 1.2(d).
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus and all amendments and
supplements thereto, in conformity with the requirements of the Act, and such
other documents as they may reasonably request in order to facilitate the
disposition of Acquiror Common Stock owned by them and registered pursuant to
this Agreement.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities
or blue sky laws of such jurisdictions as shall be reasonably requested by
the Holders, PROVIDED that Acquiror shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such jurisdiction.
(e) Notify each Holder of Acquiror Common Stock covered by
such registration statement at any time when a prospectus relating thereto is
required to be
3.
<PAGE>
delivered under the Act of the happening of any event, as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
1.4 FURNISH INFORMATION. It shall be a condition precedent to
the obligations of Acquiror to take any action pursuant to this Agreement
with respect to registration of the Acquiror Common Stock of any selling
Holder that such Holder shall furnish to Acquiror such information regarding
itself, the Acquiror Common Stock held by it, and the intended method of
disposition of such securities as shall be required to effect the
registration of such Holder's Acquiror Common Stock.
1.5 EXPENSES OF DEMAND REGISTRATION. Other than commissions
applicable to the Acquiror Common Stock covered by a registration, all
expenses incurred in connection with registrations, filings or qualifications
pursuant to Section 1.2, including (without limitation) all registration,
filing and qualification fees, printers' and accounting fees and fees and
disbursements of counsel for Acquiror shall be equally borne by Acquiror and
the Holders. The Holders shall be solely responsible for commissions
applicable to the Acquiror Common Stock covered by a registration statement
and any fees, disbursements and expenses of any counsel to the Holders.
1.6 INDEMNIFICATION. In the event any Acquiror Common Stock
are included in a registration statement under this Agreement:
(a) To the extent permitted by law, Acquiror will
indemnify and hold harmless each Holder, any underwriter (as defined in the
Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the Exchange Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "VIOLATION"): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein
not misleading, or (iii) any violation or alleged violation by Acquiror of
the Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the Act, the Exchange Act or any state securities law; and
Acquiror will pay to each such Holder, underwriter or controlling person, as
incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that he indemnity agreement
contained in this Section 1.6(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of Acquiror (which consent shall
not be unreasonably withheld), nor shall Acquiror be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs (x) in reliance upon
and in conformity with written information furnished expressly for use in
connection with such
4.
<PAGE>
registration by any such Holder, underwriter or controlling person,
(y) results from such Holder's failure to deliver a copy of the prospectus or
any supplements thereto after Acquiror has furnished such Holder with a
sufficient number of copies of same, or (z) results from such Holder's
delivery of prospectuses after Acquiror has notified such Holder in writing
to discontinue delivery of prospectuses.
(b) To the extent permitted by law, each selling Holder
will indemnify and hold harmless Acquiror, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls Acquiror within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing
persons may become subject, under the Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred
by any person intended to be indemnified pursuant to this Section 1.6(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this Section 1.6(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this Section 1.6(b) exceed the net proceeds from the offering received
by such Holder, except in the case of willful misconduct by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.6,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; PROVIDED, HOWEVER, that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain
one separate counsel, with the reasonable fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action, if materially prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 1.6, but the omission
so to deliver written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than under
this Section 1.6.
5.
<PAGE>
(d) If the indemnification provided for in this
Section 1.6 is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations; PROVIDED, that, in no
event shall any contribution by a Holder under this Section 1.6(d) exceed the
net proceeds from the offering received by such Holder, except in the case of
willful misconduct by such Holder. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied
by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct
or prevent such statement or omission.
(e) The obligations of Acquiror and the Holders under this
Section 1.6 shall survive the completion of any offering of Acquiror Common
Stock in a registration statement under this Agreement, and otherwise.
2. COVENANTS OF THE ACQUIROR.
The Acquiror agrees to:
(a) Notify the Holders of Acquiror Common Stock included in a
registration statement pursuant to this Agreement (i) of the issuance by the
Commission of any stop order suspending the effectiveness of such
registration statement and (ii) upon learning of the initiation of any
proceedings for the purpose of suspending such effectiveness, the existence
of such proceedings. Acquiror will use its commercially reasonable efforts
to prevent the issuance of any stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible time.
(b) Take all commercially reasonable actions necessary to expedite
and facilitate disposition of the registrable securities by the Holders
thereof pursuant to a registration statement pursuant to this Agreement.
(c) Prior to the filing of a registration statement pursuant to
this Agreement or any amendment thereto (whether pre-effective or
post-effective), and prior to the filing of any prospectus or prospectus
supplement related thereto, Acquiror will provide each Holder with copies of
all pages thereto, if any, which reference such Holder.
(d) Take all actions commercially reasonably necessary to
facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legend) representing Acquiror Common Stock sold pursuant to a
registration statement pursuant to this Agreement and to enable such
certificates to be in such denominations and registered in such names as the
Holders may reasonably request.
6.
<PAGE>
3. MISCELLANEOUS.
3.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective successors and assigns of the parties
(including transferees of any Acquiror Common Stock). Nothing in this
Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
3.2 GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto shall be governed, construed and interpreted in
accordance with the laws of the State of California, without giving effect to
principles of conflicts of laws.
3.3 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
3.4 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.5 NOTICES. Unless otherwise provided, any notice required or
permitted by this Agreement shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by overnight courier
or sent by telegram or fax, or forty-eight (48) hours after being deposited
in the U.S. mail, as certified or registered mail, with postage prepaid, and
addressed to the party to be notified at such party's address as set forth
below or on EXHIBIT A hereto or as subsequently modified by written notice.
3.6 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of Acquiror and the Holders who
hold a majority of the Acquiror Common Stock received in connection with the
Merger. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each Holder of any Acquiror Common Stock received in
connection with the Merger.
3.7 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, then (x) such provision shall be excluded from this Agreement,
(y) the balance of the Agreement shall be interpreted as if such provision
were so excluded and (z) the balance of the Agreement shall be enforceable in
accordance with its terms.
[Signature Page Follows]
7.
<PAGE>
The parties have executed this Registration Rights Agreement as of
the date first above written.
COMPANY:
QRS CORPORATION
By:___________________________________
HOLDER:
______________________________________
Name:_________________________________
<PAGE>
EXHIBIT A
SCHEDULE OF FORMER TARGET EQUITY HOLDERS
<TABLE>
<CAPTION>
NAME AND ADDRESS OF HOLDER NO. OF SHARES RECEIVED IN PRO RATA PORTION OF THE
CONNECTION WITH THE SHARES RECEIVED IN CONNECTION
MERGER WITH THE MERGER
<S> <C> <C>
Craig Schlossberg 161,771 36,690
10 Jones St. #6K
New York, NY 10014
(212) 366-5670
Jonathan Pinsky 161,771 36,690
22 Maplewood Road
Hartsdale, NY 10530
(914) 949-0773
Catherine Pinsky 32,363 7,340
22 Maplewood Road
Hartsdale, NY 10530
(914) 949-0773
Earl Rosen 40,432 9,170
14 Dexter Road
Westport, CT 06880
(203) 254-2625
Jason Pinsky 6,614 1,500
284 Mott Street #5M
New York, NY 10012
(212) 431-3220
John Orvos 20,238 4,590
457 West 46th Street #3B
New York, NY 10036
(212) 265-3711
James Killough III 17,725 4,020
88 Summit Avenue
Bronxville, NY 10708
</TABLE>
2
<PAGE>
EX 4.3
QRS CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made as of
, 2000, by and among QRS Corporation, a Delaware corporation (the
"ACQUIROR"), and Rockport Trade Systems, Inc., a Massachusetts corporation (the
"Company").
RECITALS
A. The Company and Acquiror have entered into an Agreement and Plan
of Reorganization, dated as of February 27, 2000 (the "Reorganization
Agreement "), pursuant to which Company will transfer its business and
substantially all of its assets to Acquiror solely in exchange for voting
shares of Acquiror and cash in lieu of fractional shares, and as soon as
practical after consummation of the acquisition, Company will completely
liquidate and dissolve and will cause to be distributed to Holders, all of
its right, title and interest in and to the Acquiror Common Stock, to be
received by Company in exchange for the surrender by such shareholders for
cancellation of certificates representing all of Company's outstanding
capital stock (the "Reorganization").
B. Upon the consummation of the acquisition stage of the
Reorganization and in connection therewith, the Company will become the owner
of shares of common stock, $0.001 par value per share, of Acquiror (the
"Acquiror Common Stock").
C. In order to induce Company to enter into the Reorganization
Agreement, Acquiror has agreed to provide certain registration rights to the
Holders.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements, provisions and covenants set forth in the Reorganization
Agreement and in this Agreement, it is hereby agreed as follows:
1. REGISTRATION RIGHTS. Acquiror and the Company covenant and
agree as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
(a) The term the "Act" means the Securities Act of 1933,
as amended.
(b) The term "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
(c) The term "Holders" means the individuals and entities
listed on EXHIBIT A hereto, each of whom is herein referred to as a "Holder."
(d) The term "Institutional Holders" means Imprimis SB,
L.P. and Insight Capital Partners II, L.P.
<PAGE>
(e) The term "Public Offering" means a firm commitment
underwritten public offering of Acquiror Common Stock pursuant to a
registration statement under the Act.
(f) The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration
or ordering of effectiveness of such registration statement or document.
(g) The term "SEC" means the Securities and Exchange
Commission.
(h) Terms not otherwise defined herein shall have the
meaning set forth in the Reorganization Agreement.
1.2 INSTITUTIONAL HOLDERS' REQUEST FOR REGISTRATION.
(a) If Acquiror shall receive from the Institutional
Holders of not less than a majority of the shares of Acquiror Common Stock
received by all of the Institutional Holders in connection with the
Reorganization a written request that Acquiror effect a shelf registration on
the appropriate form under the Act with respect to the resale of shares of
Acquiror Common Stock received by the Institutional Holders in connection
with the Reorganization, Acquiror will:
(i) promptly give written notice of the proposed
registration to all other Institutional Holders; and
(ii) use its reasonable best efforts to register as
expeditiously as reasonably possible, but in any event the filing of a
registration statement for such request shall occur no later than ninety (90)
days after receipt of the request, the resale of Acquiror Common Stock
received by the Institutional Holders in connection with the Reorganization
to the extent requested by such requesting Institutional Holders and any
other Institutional Holder(s) joining in such request as are specified in a
written request given within twenty (20) days after receipt of such written
notice from Acquiror.
(b) Notwithstanding the foregoing, if Acquiror shall
furnish to each Institutional Holder a certificate signed by the Chief
Executive Officer of Acquiror stating that, in the good faith judgment of the
Board of Directors of Acquiror, it would be seriously detrimental to Acquiror
and its shareholders for such registration statement to be filed in the near
future, Acquiror shall have the right to defer such filing for a period of
not more than one hundred twenty (120) days after receipt of the request;
PROVIDED, HOWEVER, that Acquiror may not utilize this right more than once in
any twelve-month period.
(c) Acquiror shall not be obligated to effect, or to take
any action to effect, a registration pursuant to this Section 1.2:
2.
<PAGE>
(i) if Acquiror delivers notice to the Institutional
Holders promptly after their registration request of its intent to file a
registration statement for a Public Offering within ninety (90) days of such
notice, provided that Acquiror is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective;
or
(ii) during the one hundred eighty (180) day period
following the effective date of the registration statement relating to
Acquiror's Public Offering; or
(iii) in the event Acquiror has already effected a
registration pursuant to this Section 1.2.
(d) Notwithstanding anything herein to the contrary,
Acquiror shall be entitled, without prior notice to any person, to suspend a
registration hereunder (x) during customary "blackout" periods relating to
material non-public information regarding Acquiror that cause the prospectus
contained in the relevant registration statement to not be complete or
correct in any material respect and (y) with respect to then current
employees of Acquiror, during any applicable Acquiror trading windows.
(e) Notwithstanding anything herein to the contrary,
Acquiror shall not in any event be required to include in a registration
hereunder any shares which can then be sold (and are not subject to the
volume limits) pursuant to Rule 144 under the Act without registration under
the Act.
1.3 ACQUIROR REGISTRATION.
(a) If (but without any obligation to do so) the Acquiror
proposes to register (including for this purpose a registration effected by
the Acquiror for shareholders other than the Holders) any of its stock or
other securities under the Act in connection with the public offering of such
securities solely for cash (other than (i) a registration relating solely to
the sale of securities to participants in an Acquiror stock plan, (ii) a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Acquiror Common Stock received by the Holders in
connection with the Reorganization or (iii) a registration in which the only
Acquiror Common Stock being registered is Acquiror Common Stock issuable upon
conversion of debt securities which are also being registered in an SEC Rule
145 transaction), the Acquiror shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of each Holder
given within twenty (20) days after mailing of such notice by the Acquiror in
accordance with Section 3.5, the Acquiror shall, subject to the provisions of
Section 1.8, use its commercially reasonable best efforts to cause to be
registered under the Act all of the Acquiror Common Stock received by the
Holder in connection with the Reorganization that each such Holder has
requested to be registered. If a Holder decides not to include all of its
Acquiror Common Stock in any registration statement thereafter filed by the
Acquiror, such Holder shall nevertheless continue to have the right to
include any of such Acquiror Common
3.
<PAGE>
Stock in any subsequent registration statements as may be filed by the
Acquiror with respect to offerings of its securities, all upon the terms and
conditions set forth herein.
(b) The Acquiror shall have the right to terminate or
withdraw any registration initiated by it under this Section 1.3 prior to the
effectiveness of such registration whether or not any Holder has elected to
include securities in such registration.
(c) Notwithstanding anything herein to the contrary,
Acquiror shall not in any event be required to include in a registration
hereunder any shares which can then be sold (and are not subject to the
volume limits) pursuant to Rule 144 under the Act without registration under
the Act.
1.4 OBLIGATIONS OF ACQUIROR. Whenever Acquiror undertakes under
this Agreement to effect the registration of any Acquiror Common Stock,
Acquiror shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Acquiror Common Stock and use its commercially
reasonable best efforts to cause such registration statement to become
effective and keep such registration statement effective for up to the
earlier of ninety (90) days or until the Holder or Holders have completed the
distribution relating thereto, keeping the Holders advised as to the
initiation, progress and completion of the registration; PROVIDED, HOWEVER,
that such ninety (90) day period shall be extended for a period of time equal
to the period the Holder refrains from selling any securities included in
such registration at the request of an underwriter.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus and all amendments and
supplements thereto, in conformity with the requirements of the Act, and such
other documents as they may reasonably request in order to facilitate the
disposition of Acquiror Common Stock owned by them and registered pursuant to
this Agreement.
(d) Use its commercially reasonable best efforts to
register and qualify the securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions as shall
be reasonably requested by the Holders, provided that Acquiror shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
jurisdiction.
(e) Notify each Holder of Acquiror Common Stock covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event, as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a
4.
<PAGE>
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in the light of
the circumstances then existing.
(f) In the event of any Public Offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering; provided that
each Holder participating in such underwriting shall also enter into and
perform its obligations under such an agreement.
(g) Cause all Acquiror Common Stock of a selling Holder
registered hereunder to be listed on each Securities Exchange on which
similar securities issued by the Acquiror are then listed.
1.5 FURNISH INFORMATION. It shall be a condition precedent to
the obligations of Acquiror to take any action pursuant to this Agreement
with respect to registration of the Acquiror Common Stock of any selling
Holder that such Holder shall furnish to Acquiror such information regarding
itself, the Acquiror Common Stock held by it, and the intended method of
disposition of such securities as shall be required to effect the
registration of such Holder's Acquiror Common Stock.
1.6 EXPENSES OF REGISTRATION.
(a) Other than commissions applicable to the Acquiror
Common Stock covered by a registration, all expenses incurred in connection
with registrations, filings or qualifications pursuant to Section 1.2,
including (without limitation) all registration, filing and qualification
fees, printers' and accounting fees and fees and disbursements of counsel for
Acquiror shall be equally borne by Acquiror and the Institutional Holders.
The Institutional Holders shall be solely responsible for commissions
applicable to the Acquiror Common Stock covered by a registration statement
and any fees, disbursements and expenses of any counsel to the Institutional
Holders.
(b) The Acquiror shall bear and pay all expenses incurred
in connection with registrations, filings or qualifications pursuant to
Section 1.3, including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees relating or apportionable
thereto, but excluding underwriting discounts and commissions relating to the
Acquiror Common Stock of such Holders covered by a registration statement and
any fees, disbursements and expenses of any counsel to the Holders.
1.7 INDEMNIFICATION. In the event any shares of Acquiror Common
Stock are included in a registration statement under this Agreement:
(a) To the extent permitted by law, Acquiror will
indemnify and hold harmless each Holder, any underwriter (as defined in the
Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the Exchange Act, against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based
5.
<PAGE>
upon any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by Acquiror of the Act, the Exchange Act, any state securities law
or any rule or regulation promulgated under the Act, the Exchange Act or any
state securities law; and Acquiror will pay to each such Holder, underwriter
or controlling person, as incurred, any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 1.6(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of Acquiror (which consent shall
not be unreasonably withheld), nor shall Acquiror be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs (x) in reliance upon
and in conformity with written information furnished expressly for use in
connection with such registration by any such Holder, underwriter or
controlling person, (y) results from such Holder's failure to deliver a copy
of the prospectus or any supplements thereto after Acquiror has furnished
such Holder with a sufficient number of copies of same, or (z) results from
such Holder's delivery of prospectuses after Acquiror has notified such
Holder in writing to discontinue delivery of prospectuses.
(b) To the extent permitted by law, each selling Holder
will indemnify and hold harmless Acquiror, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls Acquiror within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing
persons may become subject, under the Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs
in reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred
by any person intended to be indemnified pursuant to this Section 1.7(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this Section 1.7(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided, that, in no event shall any indemnity
under this Section 1.7(b) exceed the net proceeds from the offering received
by such Holder, except in the case of willful misconduct by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying
6.
<PAGE>
party under this Section 1.7, deliver to the indemnifying party a written
notice of the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to
assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party (together with all other
indemnified parties which may be represented without conflict by one counsel)
shall have the right to retain one separate counsel, with the reasonable fees
and expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if
materially prejudicial to its ability to defend such action, shall relieve
such indemnifying party of any liability to the indemnified party under this
Section 1.7, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 1.7.
(d) If the indemnification provided for in this Section
1.7 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations; provided, that, in no
event shall any contribution by a Holder under this Section 1.7(d) exceed the
net proceeds from the offering received by such Holder, except in the case of
willful misconduct by such Holder. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied
by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct
or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the Public Offering are in conflict
with the foregoing, the provisions in the underwriting agreement shall
control.
(f) The obligations of Acquiror and the Holders under this
Section 1.7 shall survive the completion of any offering of Acquiror Common
Stock in a registration statement under this Agreement, and otherwise.
1.8 UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares of Acquiror Common Stock, the Acquiror
shall not be required under Section 1.3 to include any of the Holders'
Acquiror Common Stock received in
7.
<PAGE>
connection with the Reorganization in such underwriting unless the Holders
accept the terms of the underwriting as agreed upon between the Acquiror and
the underwriters selected by it (or by other persons entitled to select the
underwriters), and then only in such quantity as the underwriters determine
in their sole discretion will not jeopardize the success of the offering by
the Acquiror. If the total amount of securities, including Acquiror Common
Stock received in connection with the Reorganization, requested by
shareholders to be included in such offering exceeds the amount of securities
sold other than by the Acquiror that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Acquiror
shall be required to include in the offering only that number of such
securities, including Acquiror Common Stock received in connection with the
Reorganization, which the underwriters determine in their sole discretion
will not jeopardize the success of the offering and the managing underwriter
may exclude shares (including Acquiror Common Stock received in connection
with the Reorganization) from the registration and the underwriting, and the
number of shares that will be included in the registration and the
underwriting shall be allocated, first, to the Acquiror, and second, to each
of the Holders of Acquiror Common Stock requesting inclusion of their
Acquiror Common Stock in such registration statement and to each of the other
holders of the Acquiror's securities requesting inclusion of their Acquiror
securities in such registration statement, to be allocated among all Holders
and holders thereof pro rata based on the amount of shares of Acquiror Common
Stock and the other shares of Acquiror securities owned by each such Holder
and other holder. To facilitate the allocation of shares in accordance with
the above provisions, the Acquiror may round the number of shares allocated
to any Holder or holder to the nearest 100 shares. Any securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from any
registration, and, in the case of withdrawn shares, shall not be transferred
in a public distribution prior to 90 days after the effective date of the
registration statement relating thereto, or such other shorter period of time
as the underwriters may require. For any Holder which is a partnership or
corporation, the partners, retired partners and stockholders of such Holder,
or the estates and family members of any such partners and retired partners
and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "Holder," and any pro rata reduction with respect to
such "Holder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"Holder," as defined in this sentence.
1.9 ASSIGNMENT OF REGISTRATION RIGHTS.
(a) Acquiror and the Company contemplate that for the
Holders to receive and be able to exercise the rights to cause Acquiror to
register Acquiror Common Stock received by the Holders in connection with the
Reorganization, Company shall assign such rights (but only with all related
obligations) to the Holders in connection with the Reorganization. Such
assignment shall be effective hereunder, provided that (i) Company provides
Acquiror with written notice of the Reorganization and the distribution of
Acquiror Common Stock to Shareholder, (ii) each Holder agrees in writing to
be bound by all obligations under this Agreement by executing EXHIBIT A
hereto, and (iii) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the
Holder is restricted under the Act.
8.
<PAGE>
(b) The rights to cause the Acquiror to register Acquiror
Common Stock received by the Holder in connection with the Reorganization
pursuant to Sections 1.2 and 1.3 may be assigned (but only with all related
obligations) to a transferee or assignee reasonably acceptable to the
Acquiror in connection with the transfer of Acquiror Common Stock received by
the Holders in connection with the Reorganization, provided: (a) such
assignee or transferee acquires at least 140,000 shares of Acquiror Common
Stock received in connection with the Reorganization (subject to appropriate
adjustment for stock splits, stock dividends, combinations and other
recapitalizations) from such transferor; (b) such transferor provides the
Acquiror with written notice of the proposed transfer; (c) such transferee or
assignee agrees in writing to be bound by all obligations under this
Agreement; and (d) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act. Notwithstanding anything
to the contrary provided herein, the rights to cause the Acquiror to register
Acquiror Common Stock received in connection with the Reorganization may be
assigned by a Holder to any partner, retired partner (including spouses and
ancestors, lineal descendants and siblings of such partners or spouses who
acquire Acquiror Common Stock received in connection with the Reorganization
by gift, will or intestate succession), affiliate partnership of such Holder,
or affiliate trust of such Holder, without regard to the number of shares of
Acquiror Common Stock received in connection with the Reorganization
transferred to such partner, retired partner, or affiliate; provided that
(i) all assignees and transferees who would not qualify individually for
assignment of registration rights shall have a single attorney-in-fact for
the purpose of exercising any rights, receiving notices or taking any action
under Section 1.2 or Section 1.3 and (ii) written notice thereof is promptly
given to the Acquiror.
1.10 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees
that, during the period of duration specified by the Acquiror and an
underwriter of Acquiror Common Stock, following the date of the final
prospectus distributed in connection with a registration statement of the
Acquiror filed under the Act pursuant to Section 1.3, it shall not, to the
extent requested by the Acquiror and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any
short sale), grant any option to purchase or otherwise transfer or dispose of
(other than to donees who agree to be similarly bound) any securities of the
Acquiror held by it at any time during such period except Acquiror Common
Stock purchased in a public offering and Acquiror Common Stock purchased in
an open market transaction; PROVIDED, HOWEVER, that:
(a) such market stand-off time period shall not exceed 90
days; and
(b) all officers and directors of the Acquiror enter into
similar agreements.
In order to enforce the foregoing covenant, the Acquiror may
impose stop-transfer instructions with respect to the Acquiror Common Stock
of each Holder (and the shares or securities of every other person subject to
the foregoing restriction) until the end of such period, and each Holder
agrees that, if so requested, such Holder will execute an agreement in the
9.
<PAGE>
form provided by the underwriter containing terms which are essentially
consistent with the provisions of this Section 1.10.
Notwithstanding the foregoing, the obligations described in this
Section 1.10 shall not apply to a registration relating solely to employee
benefit plans on Form S-1 or Form S-8 or similar forms which may be
promulgated in the future, or a registration relating solely to an SEC Rule
145 transaction on Form S-4 or similar forms which may be promulgated in the
future.
2. COVENANTS OF THE ACQUIROR. The Acquiror agrees to:
(a) Notify the Holders of Acquiror Common Stock included
in a registration statement pursuant to this Agreement (i) of the issuance by
the Commission of any stop order suspending the effectiveness of such
registration statement and (ii) upon learning of the initiation of any
proceedings for the purpose of suspending such effectiveness, the existence
of such proceedings. Acquiror will use its commercially reasonable efforts to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible time.
(b) Take all commercially reasonable actions necessary to
expedite and facilitate disposition of the registrable securities by the
Holders thereof pursuant to a registration statement pursuant to this
Agreement.
(c) Prior to the filing of a registration statement
pursuant to this Agreement or any amendment thereto (whether pre-effective or
post-effective), and prior to the filing of any prospectus or prospectus
supplement related thereto, Acquiror will provide each Holder with copies of
all pages thereto, if any, which reference such Holder.
(d) Take all actions commercially reasonably necessary to
facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legend) representing Acquiror Common Stock sold pursuant to a
registration statement pursuant to this Agreement and to enable such
certificates to be in such denominations and registered in such names as the
Holders may reasonably request.
(e) Comply with all of its Exchange Act reporting
requirements for the two year period following consummation of the
Reorganization.
3. MISCELLANEOUS.
3.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective successors and assigns of the parties
(including transferees of any Acquiror Common Stock). Nothing in this
Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
10.
<PAGE>
3.2 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto shall be governed, construed and interpreted in accordance
with the laws of the State of California, without giving effect to principles
of conflicts of laws.
3.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.4 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.5 NOTICES. Unless otherwise provided, any notice required or
permitted by this Agreement shall be in writing and shall be deemed
sufficient upon delivery, when delivered personally or by overnight courier
or sent by telegram or fax, or forty-eight (48) hours after being deposited
in the U.S. mail, as certified or registered mail, with postage prepaid, and
addressed to the party to be notified at such party's address as set forth
below or on EXHIBIT B hereto or as subsequently modified by written notice.
3.6 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of Acquiror and the Holders who
hold a majority of the Acquiror Common Stock received in connection with the
Reorganization. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each Holder of any Acquiror Common Stock
received in connection with the Reorganization.
3.7 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, then (x) such provision shall be excluded from this Agreement, (y)
the balance of the Agreement shall be interpreted as if such provision were
so excluded and (z) the balance of the Agreement shall be enforceable in
accordance with its terms.
[Signature Page Follows]
11.
<PAGE>
The parties have executed this Registration Rights Agreement as of the
date first above written.
COMPANY:
QRS CORPORATION
By:_______________________________________
Its:____________________________________
Address: 1400 Marina Way South
Richmond, CA 94804
Attention: President
ROCKPORT TRADE SYSTEMS, INC.
By:_______________________________________
Its:____________________________________
Address: 17 Rogers Street
Gloucester, MA 01930
Attention: President
<PAGE>
EXHIBIT A
In consideration of the distribution of shares of Acquiror Common Stock
to the undersigned Holder and the receipt by the undersigned Holder of the
rights to cause Acquiror to register some or all of such shares as set forth in
that certain Registration Rights Agreement dated , 2000 entered into
between QRS Corporation and Rockport Trade Systems, Inc. (the "Agreement"), the
undersigned Holder agrees to be bound by all of the terms and conditions of the
Agreement.
Executed at __________, the _____ day of _________, 2000.
Holder
______________________________________
signature
______________________________________
(print name)
Address:______________________________
______________________________________
______________________________________
<PAGE>
EXHIBIT B
SCHEDULE OF FORMER COMPANY EQUITY HOLDERS
<TABLE>
<CAPTION>
NO. OF SHARES RECEIVED
IN CONNECTION WITH
NAME AND ADDRESS OF HOLDER THE REORGANIZATION
<S> <C>
Susan Welch 222,096
248 Atlantic Avenue
Gloucester, MA 01930
William Welch 5,323
Stephen Welch 5,323
Judith Charron 5,319
Jack Zakarian 119,032
Insight Capital Partners II 108,250
527 Madison Avenue
102 Floor
New York, NY 10022
Insight Capital Partners (Cayman) II, LLP 12,027
527 Madison Avenue
102 Floor
New York, NY 10022
Imprimis SB L.P. 120,278
c/o Wexford Management
411 West Putnam Avenue
Suite 125
Greenwich, CT 06830
Attention: Robert Holz
</TABLE>
2
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of QRS Corporation on Form S-3 of our report dated February 4, 2000 (March
20, 2000 as to Note 17), appearing in the Annual Report on Form 10-K of QRS
Corporation for the year ended December 31, 1999, and to the reference to us
under the heading "Experts" in the Propspectus, which is part of this
Registration Statement.
DELOITTE & TOUCHE LLP
San Jose, California
April 26, 2000
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of QRS Corporation on Form S-3 of our report dated February 23, 2000, on the
financial statements of Image Info Inc., as of and for the years ended
December 31, 1999 and 1998, included in QRS Corporation's Current Report on
Form 8-K/A dated March 27, 2000, and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
GOLDSTEIN GOLUB KESSLER LLP
April 26, 2000
New York, New York
