Exhibit 10.46

 

SILICON VALLEY BANK

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT is entered into as of December 31, 2001 by
and between SILICON VALLEY BANK (“Purchaser”) and ZAMBA CORPORATION (the
“Company”).

 

RECITALS

 

A.            Concurrently with the execution of this Agreement, the Purchaser
is purchasing from the Company a Warrant to Purchase Stock (the “Warrant”)
pursuant to which Purchaser has the right to acquire from the Company the Shares
(as defined in the Warrant).  The Warrant is referred to as the “12-2001 Target
Date Warrant” in that certain Amendment to Loan Documents dated as of December
31, 2001 between Purchaser and Company.

 

B.            By this Agreement, the Purchaser and the Company desire to set
forth the registration rights of the Shares all as provided herein.

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:

 

1.             Registration Rights.  The Company covenants and agrees as
follows:

 

1.1           Definitions.  For purposes of this Section 1:

 

(a)           The term “register,” “registered,” and “registration” refer to a
registration effected by preparing and filing a Registration Statement or
similar document in compliance with the Securities Act of 1933, as amended (the
“Securities Act”), and the declaration or ordering of effectiveness of such
Registration Statement or document.

 

(b)           The term “Registrable Securities” means (i) the Shares, and
(ii) any Common Stock of the Company issued as (or issuable upon the conversion
or exercise of any warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of, any stock referred to in (i).

 

(c)           The terms “Holder” or “Holders” means the Purchaser or qualifying
transferees under Section 1.9 hereof who hold Registrable Securities.

 

(d)           The term “SEC” means the Securities and Exchange Commission.

 

(e)           The term “Registration Statement” means a registration statement
filed by the Company with the SEC in compliance with the Securities Act and the
rules and

 

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regulations promulgated thereunder for a public offering and sale of its Common
Stock (other than a registration statement on a Limited Purpose Form).  As used
herein, “Limited Purpose Form” means Form S-8 relating solely to employee stock
option or purchase plans, or Form S-4 relating solely to an SEC Rule 145
transaction, or any other form (but excluding Forms S-1, S-2, S-3 or S-18, or
their successor forms) or any successor to such forms, which does not include
substantially the same information as would be required to be included in a
Registration Statement covering the sale of Registrable Securities.

 

1.2           Company Registration.

 

(a)           Registration.  If at any time or from time to time, the Company
shall determine to register any of its securities, for its own account or the
account of any of its shareholders, other than a registration on a Limited
Purpose Form, the Company will:

 

(i)            promptly give to each Holder written notice thereof (which shall
include a list of the jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or other state securities
laws); and

 

(ii)           include in such registration (and compliance), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within 30 days after receipt of such written
notice from the Company, by any Holder or Holders, except as set forth in
Section 1.2(b) below.

 

(b)           Underwriting.  If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.2(a)(i).  In such event the right of any Holder to
registration pursuant to this Section 1.2 shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting to the extent provided herein.  All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other shareholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
1.2, if the underwriter advises the Company that marketing factors require a
limitation of the number of securities underwritten (including Registrable
Securities), then the Company shall so advise all holders (including the
Holders) of Registrable Securities that would otherwise be so underwritten, and
the number of shares that may be included in the underwriting shall be allocated
to the holders (including the Holders) of such Registrable Securities on a pro
rata basis based on the number of Registrable Securities held by all such
holders (including the Holders).

 

1.3           Expenses of Registration.  All expenses incurred in connection
with any registration, qualification or compliance pursuant to this Section 1
including without limitation, all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the Company and
expenses of any special audits incidental to or required by such registration,
shall be borne by the Company except the Company shall not be required to pay
underwriters’

 

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fees, discounts or commissions relating to Registrable Securities.  All expenses
of any registered offering not otherwise borne by the Company shall be borne pro
rata among the Holders participating in the offering and the Company.

 

1.4           Registration Procedures.  In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Holder participating
therein advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof.  At its expense
(except as otherwise provided in Section 1.3), the Company will:

 

(a)           (i) in the case of a registration under Section 1.2, prepare and
file with the SEC a Registration Statement with respect to such Registrable
Securities and use its best efforts to cause such Registration Statement to
become effective, and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such Registration Statement
effective for up to 120 days.; and (ii) in the case of a registration under
Section 1.8, take the actions specified in such Section.

 

(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
Securities 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, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.

 

(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 the Company 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 states or jurisdictions.

 

(e)           In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering.  Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.

 

(f)            Notify each Holder of Registrable Securities covered by such
Registration Statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or 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.

 

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1.5           Indemnification.

 

(a)           The Company will indemnify each Holder of Registrable Securities
and each of its officers, directors and partners, and each person controlling
such Holder, with respect to which such registration, qualification or
compliance has been effected pursuant to this Rights Agreement, and each
underwriter, if any, and each person who controls any underwriter of the
Registrable Securities held by or issuable to such Holder, against all claims,
losses, expenses, damages and liabilities (or actions in respect thereto)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus, offering circular or other document
(including any related Registration Statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statement therein not misleading, or any
violation or alleged violation by the Company of the Securities Act, the
Securities Exchange Act of 1934, as amended, (“Exchange Act”) or any state
securities law applicable to the Company or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any such state law and relating to
action or inaction required of the Company in connection with any such
registration, qualification of compliance, and will reimburse each such Holder,
each of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each person who controls any such underwriter,
within a reasonable amount of time after incurred for any reasonable legal and
any other expenses incurred in connection with investigating, defending or
settling any such claim, loss, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 1.5(a) shall not apply to
amounts paid in settlement of any such claim, loss, damage, liability, or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld); and provided further, that the Company will
not be liable in any such case to the extent that any such claim, loss, damage
or liability arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company by an instrument duly executed
by such Holder or underwriter specifically for use therein.

 

(b)           Each Holder will, if Registrable Securities held by or issuable to
such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company’s
securities covered by such a Registration Statement, each person who controls
the Company within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person controlling
such Holder, against all claims, losses, expenses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such Registration
Statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, partners, persons or
underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such

 

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Registration Statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder specifically for use
therein; provided, however, that the indemnity agreement contained in this
Section 1.5(b) shall not apply to amounts paid in settlement of any such claim,
loss, damage, liability or action if such settlement is effected without the
consent of the Holder, (which consent shall not be unreasonably withheld); and
provided further, that the total amount for which any Holder shall be liable
under this Section 1.5(b) shall not in any event exceed the aggregate proceeds
received by such Holder from the sale of Registrable Securities held by such
Holder in such registration.

 

(c)           Each party entitled to indemnification under this Section 1.5 (the
“Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party’s expense; and provided further, that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in prejudice to the
Indemnifying Party; and provided further, 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 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.  No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.

 

1.6           Information by Holder.  Any Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.

 

1.7           Rule 144 Reporting.  With a view to making available to Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees at all times to:

 

(a)           make and keep public information available, as those terms are
understood and defined in SEC Rule 144;

 

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(b)           file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and

 

(c)           so long as a Holder owns any Registrable Securities, to furnish to
such Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144, the Securities Act,
and the Exchange Act, a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed by the Company as the
Holder may reasonably request in complying with any rule or regulation of the
SEC allowing the Holder to sell any such securities without registration.

 

1.8           Demand Registration of Registrable Securities.

 

(A)           IF THE COMPANY SHALL RECEIVE AT ANY TIME AFTER THE CLOSING OF THE
AGREEMENT, A WRITTEN REQUEST FROM THE HOLDER THAT THE COMPANY FILE A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING THE REGISTRABLE
SECURITIES, THEN THE COMPANY SHALL,

 

(i)            within fifteen (15) days of the receipt thereof, give written
acknowledgment of such request to the Holder; and

 

(ii)           subject to the limitations of Sections 1.8.b-1.8.d, effect, as
soon as practicable, the registration under the Securities Act and all such
qualifications and compliances as would permit or facilitate the sale and
distribution of all Registrable Securities that the Holder requests to be
registered.

 

(B)           IF THE HOLDER INTENDS TO DISTRIBUTE THE REGISTRABLE SECURITIES
COVERED BY ITS REQUEST BY MEANS OF AN UNDERWRITING, THE HOLDER SHALL SO ADVISE
THE COMPANY AS A PART OF ITS REQUEST MADE PURSUANT TO THIS SECTION 1.8 AND THE
COMPANY SHALL INCLUDE SUCH INFORMATION IN THE WRITTEN NOTICE REFERRED TO IN
SECTION 1.8(A).  IN SUCH EVENT, THE RIGHT OF THE HOLDER TO INCLUDE ITS
REGISTRABLE SECURITIES IN SUCH REGISTRATION SHALL BE CONDITIONED UPON SUCH
HOLDER’S PARTICIPATION IN SUCH UNDERWRITING AND THE INCLUSION OF SUCH HOLDER’S
REGISTRABLE SECURITIES IN THE UNDERWRITING TO THE EXTENT PROVIDED HEREIN.  IF
THE HOLDER PROPOSES TO DISTRIBUTE ITS SECURITIES THROUGH SUCH UNDERWRITING, THE
HOLDER SHALL ENTER INTO AN UNDERWRITING AGREEMENT IN CUSTOMARY FORM WITH THE
UNDERWRITER OR UNDERWRITERS SELECTED FOR SUCH UNDERWRITING (WHICH UNDERWRITER OR
UNDERWRITERS SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY).  NOTWITHSTANDING
ANY OTHER PROVISION OF THIS SECTION 1.8, IF THE UNDERWRITER ADVISES THE COMPANY
IN WRITING THAT MARKETING FACTORS REQUIRE A LIMITATION OF THE NUMBER OF
SECURITIES TO BE UNDERWRITTEN THEN THE COMPANY SHALL SO ADVISE THE HOLDER, AND
THE NUMBER OF SHARES THAT MAY BE INCLUDED IN THE UNDERWRITING SHALL BE ALLOCATED
TO THE HOLDERS OF SUCH REGISTRABLE SECURITIES ON A PRO RATA BASIS.  ANY
REGISTRABLE SECURITIES EXCLUDED OR WITHDRAWN FROM SUCH UNDERWRITING SHALL BE
WITHDRAWN FROM THE REGISTRATION.

 

(C)           IF, AT THE TIME ANY WRITTEN REQUEST FOR REGISTRATION IS RECEIVED
BY THE COMPANY PURSUANT TO THIS SECTION 1.8, THE COMPANY HAS DETERMINED TO
PROCEED WITH THE ACTUAL PREPARATION AND FILING OF A REGISTRATION STATEMENT UNDER
THE SECURITIES ACT IN CONNECTION WITH THE PROPOSED OFFER AND SALE FOR CASH OF
ANY OF ITS SECURITIES BY IT OR ANY OF ITS SECURITY HOLDERS, SUCH WRITTEN REQUEST
SHALL BE DEEMED TO HAVE BEEN GIVEN PURSUANT TO SECTION 1.2 HEREOF RATHER THAN
THIS SECTION 1.8, AND THE RIGHTS OF THE HOLDER SHALL BE GOVERNED BY SECTION 1.2
HEREOF.

 

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(D)           UPON THE EFFECTIVENESS OF A REGISTRATION STATEMENT UNDER THIS
SECTION 1.8, THE COMPANY WILL KEEP SUCH REGISTRATION STATEMENT EFFECTIVE FOR UP
TO NINETY (90) DAYS.

 

1.9           Transfer of Registration Rights.  Holders’ rights to cause the
Company to register their securities and keep information available, granted to
them by the Company under Sections 1.2, 1.7, and 1.8 may be assigned to a
transferee or assignee of a Holder’s Registrable Securities not sold to the
public, provided, that the Company is given written notice by such Holder at the
time of or within a reasonable time after said transfer, stating the name and
address of said transferee or assignee and identifying the securities with
respect to which such registration rights are being assigned.  The Company may
prohibit the transfer of any Holders’ rights under this Section 1.9 to any
proposed transferee or assignee who the Company reasonably believes is a
competitor of the Company.

 

2.             General.

 

2.1           Waivers and Amendments.  With the written consent of the record or
beneficial holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities without the consent of all of
the Holders of the Registrable Securities.  Upon the effectuation of each such
waiver, consent, agreement of amendment or modification, the Company shall
promptly give written notice thereof to the record holders of the Registrable
Securities who have not previously consented thereto in writing.  This Agreement
or any provision hereof may be changed, waived, discharged or terminated only by
a statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, except to the extent
provided in this Section 2.1.

 

2.2           Governing Law.  This Agreement shall be governed in all respects
by the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.

 

2.3           Successors and Assigns.  Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.

 

2.4           Entire Agreement.  Except as set forth below, this Agreement and
the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.

 

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2.5           Notices, etc.  All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested,
addressed (a) if to Holder, at such Holder’s address as set forth below, or at
such other address as such Holder shall have furnished to the Company in
writing, or (b) if to the Company, at the Company’s address set forth below, or
at such other address as the Company shall have furnished to the Holder in
writing.

 

2.6           Severability.  In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement or any provision of the other
Agreements shall not in any way be affected or impaired thereby.

 

2.7           Titles and Subtitles.  The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

 

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2.8           Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

 

PURCHASER

COMPANY

 

 

SILICON VALLEY BANK

ZAMBA CORPORATION

 

 

By:

/s/ J. Anthony Clarkson

By:

/s/ Michael H. Carrel

Name:

J. Anthony Clarkson

Name:

Michael H. Carrel

Title:

Market Manager

Title:

Chairman of the Board, President or Vice President

Address:
Silicon Valley Bank
Attn: Treasury Department
3003 Tasman Drive
Santa Clara, CA  95054

Address:
ZAMBA Corporation
3033 Excelsior Boulevard, Suite 200
Minneapolis, Minnesota 55416

 

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