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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PUMA TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 7372 77-0349154
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD (I.R.S. EMPLOYER
OF INCORPORATION OR INDUSTRIAL IDENTIFICATION NUMBER)
ORGANIZATION) CLASSIFICATION CODE
NUMBER)
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2550 NORTH FIRST STREET, SUITE 500
SAN JOSE, CA 95131
(408) 321-7650
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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BRADLEY A. ROWE
CHIEF EXECUTIVE OFFICER
2550 NORTH FIRST STREET, SUITE 500
SAN JOSE, CA 95131
(408) 321-7650
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
SUSAN J. SKAER, ESQ.
GENERAL COUNSEL ASSOCIATES LLP
1891 LANDINGS DRIVE
MOUNTAIN VIEW, CA 94043
(650) 428-3900
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to 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, as amended (the "Securities Act"), 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: / /
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
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Common Stock, $.001 par value............... 1,067,232 $30.47 $32,517,225 $8,584.55
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(1) Estimated solely for purposes of calculation of the registration fee based
on the high and low sales prices of the Registrant's Common Stock on the
Nasdaq National Market on April 19, 2000.
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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 THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PRELIMINARY, SUBJECT TO COMPLETION, DATED APRIL 21, 2000
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 STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROSPECTUS
1,067,232 SHARES
PUMA TECHNOLOGY, INC.
COMMON STOCK
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The selling stockholders listed on page 17 are offering up to
1,067,232 shares of Puma Technology, Inc. common stock. We sold the shares to
the selling stockholders on March 17, 2000 in a private transaction.
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.
Our common stock is quoted on the Nasdaq National Market under the symbol
"PUMA." On April 19, 2000, the average of the high and low price for the common
stock was $30.47.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE 2 OF THIS PROSPECTUS FOR CERTAIN RISKS AND UNCERTAINTIES THAT YOU SHOULD
CONSIDER.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS APRIL , 2000.
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TABLE OF CONTENTS
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Where You Can Find More Information......................... 1
About Puma.................................................. 2
Risk Factors................................................ 2
Plan of Distribution........................................ 15
Selling Stockholders........................................ 17
Legal Matters............................................... 18
Experts..................................................... 18
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No person is authorized to give any information or to make any
representations, other than those contained in this prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by us or the
selling stockholders. This prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, nor shall there be any sale of these securities
by any person in any jurisdiction in which it is unlawful for such person to
make such offer, solicitation or sale. Neither the delivery of this prospectus
nor any sale made hereunder shall under any circumstances create an implication
that the information contained herein is correct as of any time subsequent to
the date hereof.
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 Room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the Public Reference Room. Our SEC filings are also available to the public
at 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. 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 July 31, 1999,
filed with the SEC on October 29, 1999, including certain information in our
Definitive Proxy Statement in connection with our 1999 Annual Meeting of
Stockholders;
(b) Our Quarterly Report on Form 10-Q for the fiscal quarter ended
October 31, 1999 filed December 15, 1999;
(c) Our Quarterly Report on Form 10-Q for the fiscal quarter ended
January 30, 2000 filed March 16, 2000;
(d) Our Current Report on Form 8-K dated April 18, 2000;
(e) Our Current Report on Form 8-K dated December 10, 1999 and amended on
January 11, 2000; and
(f) The description of our common stock contained in our registration
statement on Form 8-A filed November 8, 1996, including any amendments or
reports filed for the purpose of updating such descriptions.
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You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Kelly Hicks, Vice President of Operations and Chief Financial Officer
Puma Technology, Inc.
2550 North First Street, Suite 500
San Jose, CA 95131
(408) 321-7650
You should rely only on the information incorporated by reference or
provided in this prospectus or any 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 any prospectus supplement is
accurate as of any date other than the date on the front of the document.
ABOUT PUMA
We are a Delaware corporation. Our principal executive offices are located
at 2550 North First Street, Suite 500, San Jose, CA 95131 and our telephone
number at that address is (408) 321-7650. In this prospectus references to
"Puma," "we," "us" and "our" refer to Puma Technology, Inc. unless the context
requires otherwise.
RISK FACTORS
An investment in our common stock offered pursuant to this prospectus
involves a high degree of risk. Our common stock should not be purchased if you
cannot afford the loss of your entire investment. Purchasers should carefully
consider the following risk factors in conjunction with the other information
included and incorporated by reference in this prospectus before purchasing or
otherwise acquiring our common stock. Our business, operating results and
financial condition could be adversely affected by any of the following risks.
The trading price of our common stock could decline due to any of these risks,
and you could lose all or part of your investment. You should also refer to the
other information set forth or incorporated by reference in this prospectus,
including our financial statements and the related notes.
This prospectus also contains forward-looking statements that involve risks
and uncertainties. These statements relate to our future plans, objectives,
expectations and intentions, and the assumptions underlying or relating to any
of these statements. These statements may be identified by the use of words such
as "expects," "anticipates," "intends," and "plans" and similar expressions. Our
actual results could differ materially from those discussed in these statements.
Factors that could contribute to such differences include, but are not limited
to, those discussed below and elsewhere in this prospectus.
BECAUSE WE HAVE NO INTERNET OPERATING HISTORY, IT IS DIFFICULT TO EVALUATE
OUR BUSINESS, AND WE MAY FACE VARIOUS RISKS, EXPENSES AND DIFFICULTIES
ASSOCIATED WITH EARLY STAGE COMPANIES.
Historically, we have licensed our products and technology primarily to PC
OEMs, corporations and to end users through our channels of distribution. In our
second quarter of fiscal 2000, we launched our Internet initiative. The
launching of this initiative requires us to add additional resources and to
develop and market our Intellisync.com portal and the products and technologies
recently acquired in the ProxiNet merger. We believe that NetMind's personnel
and technologies enhance our Internet initiative. We plan to market and license
our web-based products and solutions, which are currently under development, to
e-commerce providers, web portals, wireless carriers and individual consumers.
We also plan to offer these new products and solutions to corporations. We
expect to incur significant costs in launching our Internet initiative.
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Our overall operating results are expected to change significantly as a
result of developing and bringing to market our new Internet products. It is
important to understand that our historical financial statements prior to the
quarter ended January 31, 2000, do not include operating results of our recently
formed Internet and consumer division. As a result of our new division, we
expect our combined results to reflect an operating loss for the foreseeable
future. There can be no assurance that we will be able to achieve or sustain
profitability.
Since we just launched our Internet initiative, there is little information
on which to evaluate our business and prospects as an Internet company. An
investor in our common stock should consider the risks, expenses and
difficulties that young companies frequently encounter in the new and rapidly
evolving markets for Internet products and services. These risks to us include:
- our evolving new business model;
- our need and ability to manage growth; and
- rapid evolution of technology.
To address these risks and uncertainties, we must take several steps,
including:
- creating and maintaining strategic relationships;
- expanding sales and marketing activities;
- raising additional capital;
- integrating existing and acquired technologies;
- expanding our customer base and retaining key clients;
- introducing new services;
- managing rapidly growing operations, including new facilities and
IT infrastructure;
- competing in a highly competitive market; and
- attracting, retaining and motivating key employees.
We may not be successful in implementing any of our strategies or in
addressing these risks and uncertainties. We expect that our operating expenses
will substantially increase, primarily as a result of our investment in our new
Internet product initiative. Moreover, even if we accomplish our objectives, we
still may not achieve sustainable profitability in the future.
We have invested substantial amounts in technology and infrastructure
development. We expect to continue to invest substantial financial and other
resources to develop and introduce new Internet and wireless products and
services, and to expand our sales and marketing organizations, strategic
relationships and operating infrastructure. We expect that our cost of revenue,
sales and marketing expenses, general and administrative expenses, operations
and customer support expenses, and depreciation and amortization expenses will
continue to increase in absolute dollars and may increase as a percent of
revenue. If revenue does not correspondingly increase, our operating results and
financial condition could be negatively affected.
OPERATING RESULTS MAY FLUCTUATE SIGNIFICANTLY AND MAY BE DIFFICULT TO
PREDICT.
Our operating results have fluctuated in the past, and with our Internet
product initiative and the NetMind merger our operating results are likely to
fluctuate significantly. A number of factors, many of which are outside of our
control, are likely to cause fluctuations in operating results, including, but
not limited to:
- the demand for our products;
- our success in developing new products and integrating acquired
technologies;
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- the timing of new product introductions by us and our competitors;
- market acceptance of our new and enhanced products;
- market acceptance of handheld devices generally, and those supported by
our products;
- the emergence of new industry standards;
- the timing of customer orders;
- the mix of products sold;
- product life cycles;
- competition;
- the mix of distribution channels employed;
- seasonal trends;
- the timing and magnitude of our capital expenditures, including costs
relating to the expansion of operations;
- the evolving and unpredictable nature of the markets for our products and
mobile computing devices generally;
- the rate of growth of the Internet and the personal computer market in
general; and
- general economic conditions.
In addition, we typically operate with a relatively small order backlog. As
a result, quarterly sales and operating results depend in part on the volume and
timing of orders received and fulfilled within the quarter, which are difficult
to forecast. In addition, a significant portion of our expense levels is fixed
in advance, based in large part on our resource requirements to meet planned
product and customer requirements. If revenue is below expectations in any given
quarter, the adverse impact of the shortfall on operating results may be
magnified by our inability to adjust spending to compensate for the shortfall.
Therefore, a shortfall in actual revenue as compared to estimated revenue would
have an immediate adverse effect on our business, operating results and
financial condition that could be material.
Due to our ongoing efforts to expand into retail and reseller channels, we
are focusing our efforts on licensing our SDK to software developers and mobile
computing device manufacturers and licensing our server and personal
applications to corporations. As a result, we expect that our notebook and PC
OEM revenue will decrease as a percentage of our overall revenue. This new sales
strategy has the following risks:
- sales into these channels are harder to predict and may have lower margins
than sales in other channels;
- we have a very limited history in penetration and support for these
channels;
- the average transaction size and sales cycle vary significantly, making
forecasting difficult;
- smaller transactions may have relatively higher administrative costs;
- any significant deferral of purchases of our products by customers could
jeopardize our operating results in any particular quarter;
- to the extent that significant sales occur earlier than expected,
operating results for subsequent quarters may be adversely affected;
- products that are accepted in the OEM market may not be readily accepted
by corporations; and
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- we may incur increased costs related to new infrastructure requirements.
Our gross margin on service revenue, particularly non-recurring engineering
service revenue, is substantially lower than gross margin on license revenue.
Any increase in non-recurring engineering service revenue would have a
corresponding increase in cost of revenue and would have an adverse effect on
our gross margins. We may also change prices or increase spending in response to
competition or to pursue new market opportunities.
The operating results of many software companies reflect seasonal
fluctuation. For example, sales in Europe and certain other countries typically
are adversely affected in the summer months when business activity is reduced.
Our revenue and operating results may be adversely affected by diminished demand
for products on a seasonal basis.
Period-to-period comparisons of operating results are not a good indication
of future performance. It is likely that operating results in some quarters will
be below market expectations. In this event, the price of our common stock is
likely to decline.
THE SIZE OF THE MOBILE COMPUTING MARKET CANNOT BE ACCURATELY PREDICTED, AND
IF OUR MARKET DOES NOT GROW AS IT EXPECTS, OUR REVENUE WILL BE BELOW OUR
EXPECTATIONS AND OUR BUSINESS AND FINANCIAL RESULTS WILL SUFFER.
We are focusing on expanding into the mobile computing market which is an
unproven market. Accordingly, the size of this market cannot be accurately
estimated and therefore we are unable to accurately determine the potential
demand for our products and services. If our customer base does not expand or if
there is not widespread acceptance of our products and our services, our
business and prospects will be harmed. For the fiscal year ended July 31, 1999,
we had one OEM customer, Toshiba Corporation, which accounted for approximately
21% of our revenue. We believe that our potential to grow and increase our
market acceptance depends principally on the following factors, some of which
are beyond our control:
- the effectiveness of our marketing strategy and efforts;
- our product and service differentiation and quality;
- our ability to provide timely, effective customer support;
- our distribution and pricing strategies as compared to our competitors;
- growth in the sales of handheld devices supported by our software;
- our industry reputation; and
- general economic conditions such as downturns in the computer or software
markets.
WE WILL REQUIRE SIGNIFICANT ADDITIONAL CAPITAL, WHICH WE MAY NOT BE ABLE TO
OBTAIN.
The expansion and development of our business will require significant
capital in the future to fund our operating losses, working capital needs and
capital expenditures. We may not be able to obtain future equity or debt
financing on satisfactory terms or at all. Our failure to generate sufficient
cash flows from sales of products and services or to raise sufficient funds may
require us to delay or abandon some or all of our development and expansion
plans or otherwise forego market opportunities. Our inability to obtain
additional capital on satisfactory terms may delay or prevent the expansion of
our business, which could cause our business, operating results and financial
condition to suffer.
Our working capital is primarily comprised of cash, accounts receivable,
accounts payable and accrued expenses. The timing and amount of our future
capital requirements may vary significantly depending on numerous factors,
including our financial performance, technological, competitive and other
developments in our industry. These factors may cause our actual revenue and
costs to vary from
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expected amounts, possibly to a material degree, and such variations are likely
to affect our future capital requirements.
RAPID GROWTH IN OUR BUSINESS COULD STRAIN OUR RESOURCES AND HARM OUR
BUSINESS AND FINANCIAL RESULTS.
The planned expansion of our Internet and consumer initiative as well as
growth in our existing enterprise business will place a significant strain on
our management, financial controls, operations systems, personnel and other
resources. To date, we have not recognized any revenue from our Internet
initiatives. In addition, if we are successful in implementing our marketing
strategy, we also expect the demands on our technical support resources to grow
rapidly, and we may experience difficulties responding to customer demand for
our services and providing technical support in accordance with our customers'
expectations. We expect that these demands will require not only the addition of
new management personnel, but also the development of additional expertise by
existing management personnel and the establishment of long-term relationships
with third-party service vendors. Additionally, we have recently opened
additional facilities in New Hampshire and intend to open new offices in Europe.
We may encounter difficulties in integrating information and communications
systems in multiple locations. Due to the difficulty in finding acceptable
office space in the Silicon Valley, we may not be able to consolidate our San
Jose, California and Campbell, California locations. We may not be able to keep
pace with growth, successfully implement and maintain our operational and
financial systems or successfully obtain, integrate and utilize the employees,
facilities, third-party vendors and equipment, or management, operational and
financial resources necessary to manage a developing and expanding business in
our evolving and increasingly competitive industry. If we are unable to manage
growth effectively, we may lose customers or fail to attract new customers and
our business and financial results will suffer.
THE INTEGRATION OF KEY NEW EMPLOYEES AND OFFICERS INTO OUR MANAGEMENT TEAM
HAS INTERFERED, AND WILL CONTINUE TO INTERFERE, WITH OUR OPERATIONS.
We have recently hired a number of key employees and officers and are
currently seeking additional engineering, sales and marketing, and general and
administrative personnel. To integrate into Puma, such individuals must spend a
significant amount of time learning our business model and management system, in
addition to performing their regular duties. Accordingly, the integration of new
personnel has resulted and will continue to result in some disruption to our
ongoing operations. If we fail to complete this integration in an efficient
manner, our business and financial results will suffer.
WE MUST RETAIN AND ATTRACT KEY EMPLOYEES OR ELSE WE MAY NOT GROW OR BE
SUCCESSFUL.
We are highly dependent on key members of our management and engineering
staff. The loss of one or more of these officers or key employees might impede
the achievement of our business objectives. Furthermore, recruiting and
retaining qualified technical personnel to perform research, development and
technical support is critical to our success. If our business grows, we will
also need to recruit a significant number of management, technical and other
personnel for our business. Competition for employees in our industry and
geographic location is intense. We may not be able to continue to attract and
retain skilled and experienced personnel on acceptable terms.
ACQUISITIONS WE HAVE MADE AND MAY MAKE IN THE FUTURE COULD DISRUPT OUR
BUSINESS OR NOT BE SUCCESSFUL AND HARM OUR FINANCIAL CONDITION.
We have in the past acquired or made investments in, and intend in the
future to acquire or make investments in other complementary companies, products
and technologies. We have acquired NetMind Technologies, Inc., ProxiNet, Inc.,
SoftMagic, Inc., RealWorld Solutions, Inc. and IntelliLink Corp. In the event of
any future acquisitions or investments, we could:
- issue stock that would dilute the ownership of our then existing
stockholders;
- incur debt;
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- assume liabilities;
- face SEC challenges to the accounting treatment of these acquisitions
which may result in changes to our financial statements and cause us to
incur charges to earnings over time that we did not expect;
- incur amortization expenses related to goodwill and other intangible
assets; or
- incur large and immediate write-offs.
These acquisitions and investments also involve numerous risks, including:
- problems integrating the operations, technologies or products purchased
with those we already have;
- unanticipated costs and liabilities;
- diversion of management's attention from our core business;
- adverse effects on existing business relationships with suppliers and
customers;
- risks associated with entering markets in which we have no or limited
prior experience; and
- potential loss of key employees, particularly those of the acquired
organizations.
FAILURE OF THE NETMIND MERGER TO QUALIFY AS A POOLING OF INTERESTS WOULD
HARM THE FINANCIAL RESULTS OF THE COMBINED COMPANY.
If the NetMind merger does not qualify for pooling of interests accounting
treatment for financial reporting purposes, the future reported earnings of the
combined company would be harmed due to amortization of goodwill and other
intangible assets, which would be likely to harm the trading price of the
combined company's stock. The availability of pooling of interests accounting
treatment for this merger depends upon circumstances and events occurring before
and after the effective time of the merger. For example, there must not be any
significant changes in the business of the combined company, including
significant dispositions of assets, for a period of two years following
completion of the merger.
BECAUSE TRACKING INTERNET-BASED INFORMATION ACROSS THE ENTIRE WORLDWIDE WEB
IS A HIGHLY COMPLEX PROCESS, OUR PRODUCTS AND SERVICES MAY HAVE ERRORS OR
DEFECTS THAT COULD SERIOUSLY HARM OUR BUSINESS.
The tracking of Internet-based information across the entire worldwide web
is a highly complex process. We and our customers have from time to time
discovered errors and defects in our software. In the future, there may be
additional errors and defects in our software that may adversely affect our
products and services. If we are unable to efficiently fix errors or other
problems that may be identified, we could experience:
- loss of or delay in revenue and loss of market share;
- loss of customers;
- failure to attract new customers or achieve market acceptance;
- diversion of development resources;
- loss of reputation and credibility;
- increased service costs; and
- legal actions by our customers.
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REGULATIONS OR CONSUMER CONCERNS REGARDING PRIVACY ON THE INTERNET COULD
LIMIT MARKET ACCEPTANCE OF OUR PRODUCTS AND SERVICES.
Our products and services will allow our customers to develop and maintain
web user profiles to tailor content to specific users. Profile development
involves both data supplied by the user and data derived from the user's web
site behavior. Privacy concerns may cause users to resist providing personal
data or to avoid web sites that track user behavior. In addition, legislative or
regulatory requirements may heighten consumer concerns if businesses must notify
web site users that user profile data may be used to direct product promotion
and advertising to users. Other countries and political entities, such as the
European Economic Community, have adopted such legislation or regulatory
requirements. The United States may do so in the future. If privacy legislation
is enacted or consumer privacy concerns limit the market acceptance of
personalization software, our business, financial condition and operating
results could be harmed.
We use cookies to provide users convenient access to the web sites they are
minding and to track demographic information and user preferences. A cookie is
information keyed to a specific user that is stored on a computer's hard drive,
typically without the user's knowledge. Cookies are generally removable by the
user, although removal could affect the content available on a particular site.
A number of governmental bodies and commentators in the United States and abroad
have urged passage of laws limiting or abolishing the use of cookies. If such
laws are passed or if users begin to delete or refuse cookies as a common
practice, market demand for our products and services could be reduced.
ACTIONS BY MAJOR WEB SITE PROVIDERS TO BLOCK OUR SOFTWARE FROM MINDING THEIR
SITES COULD LIMIT MARKET ACCEPTANCE OF OUR PRODUCTS.
One of the primary benefits of our products and services is that they bring
users back to a web site through click-throughs on links within our change
notifications. This is generally very beneficial to web site providers. These
providers do, however, have the ability to detect our monitoring of their sites
and could block our access to their site. Widespread blocking of us by major web
sites could seriously limit market acceptance of our products.
OUR BUSINESS AND PROSPECTS DEPEND ON DEMAND FOR AND MARKET ACCEPTANCE OF THE
INTERNET, WIRELESS DEVICES AND MOBILE COMPUTING DEVICES.
The increased use of the Internet, wireless devices and mobile computing
devices for retrieving, sharing and transferring information among businesses,
consumers, suppliers and partners, and for Internet personalization services has
only begun to develop in recent years. Our success will depend in large part on
continued growth in the use of the Internet, wireless devices and mobile
computing devices. Critical issues concerning the commercial use of the
Internet, wireless devices and mobile computing devices, including security,
reliability, cost, ease of access and use, quality of service, regulatory
initiatives and necessary increases in bandwidth availability, remain unresolved
and are likely to affect the development of the market for our services. The
adoption of the Internet, wireless devices and mobile computing devices for
information retrieval and exchange, commerce and communications generally will
require the acceptance of a new medium of conducting business and exchanging
information. Demand for and market acceptance of the Internet, wireless devices
and mobile computing devices are subject to a high level of uncertainty and are
dependent on a number of factors, including:
- the growth in access to and market acceptance of new interactive
technologies;
- emergence of a viable and sustainable market for Internet personalization
services;
- the development of technologies that facilitate interactive communication
between organizations; and
- increases in bandwidth for data transmission.
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If the market for Internet personalization services or the Internet,
wireless devices and mobile computing devices as a commercial or business medium
does not develop, or develops more slowly than expected, our business, results
of operations and financial condition will be seriously harmed.
Specifically, even if an Internet personalization services market does
develop, services that we currently offer or may offer in the future may not
achieve widespread market acceptance. Failure of our current and planned
services to operate as expected could delay or prevent their adoption. If our
target customers do not adopt, purchase and successfully deploy our current and
planned services, our revenue will not grow significantly and our business,
results of operations and financial condition will be seriously harmed. We have
not taken any steps to mitigate the risks associated with reduced demand for our
existing Internet personalization services.
THERE ARE MANY COMPANIES PROVIDING COMPETING PRODUCTS AND SERVICES.
There are few substantial barriers to entry and we expect that we will face
additional competition from existing competitors and new market entrants in the
future.
We currently face direct competition with respect to a number of our
individual products from several companies, including Advanced Systems, Inc.,
Chapura, Inc., DataViz, Inc., Extended Systems, Inc., Laplink.com, Inc.,
Motorola, Inc. and River Run Computers, Inc. (recently acquired by Aether
Systems, Inc.). In the future, we will also face competition relative to our
upcoming products from vendors offering server-based mobile device data exchange
products and services, including AvantGo, Inc., fusionOne, Inc.,
Phone.com, Inc. (recently acquired by Spyglass, Inc.) and Spyglass, Inc. In
addition to direct competition, we face indirect competition from existing and
potential customers that provide internally developed solutions.
Many of our competitors have substantially greater financial, technical and
marketing resources, larger customer bases, longer operating histories, greater
name recognition and more established relationships in the industry than we do.
Our larger competitors may be able to provide customers with additional benefits
in connection with their Internet systems and network solutions, including
reduced communications costs. As a result, these companies may be able to price
their products and services more competitively than we can and respond more
quickly than us to new or emerging technologies and changes in customer
requirements. If we are unable to compete successfully against our current or
future competitors, we may lose market share, and our business and prospects
would suffer.
As competition in the Internet personalization services market continues to
intensify, new solutions will come to market. We also compete directly with
several private companies including Alerts.com, InGenius Technologies, Inc.
(recently acquired by Aeneid Corporation) and The Informant. We believe that we
may face competition from other providers of competing products and services.
In addition, no assurances can be given that the Internet user driven
personalization market will develop in a way that we currently anticipate. For
example, while we currently intend to offer our customers the most comprehensive
solution available in the marketplace today, there currently exists an array of
competitors that offer partial solutions to the problems that we intend to
address, and a number of these companies have been and are likely to continue to
be quite successful. Examples of companies that address the personalization
market include BroadVision, Inc. and NetPerceptions, Inc. We cannot assure you
that these solutions will not be more cost effective than our service or will
not continue to be the service of choice for many of their potential customers.
Increased competition could result in:
- price and revenue reductions and lower profit margins;
- loss of customers or failure to obtain additional customers; and
- loss of market share.
9
<PAGE>
Any one of these could materially and adversely affect our business,
financial condition and results of operations.
OUR MARKET CHANGES RAPIDLY DUE TO CHANGING TECHNOLOGY AND EVOLVING INDUSTRY
STANDARDS. IF WE DO NOT ADAPT TO MEET THE SOPHISTICATED NEEDS OF OUR CUSTOMERS,
OUR BUSINESS AND PROSPECTS WILL SUFFER.
The market for our services is characterized by rapidly changing technology,
evolving industry standards and frequent new service introductions. Our future
success will depend to a substantial degree on our ability to offer services
that incorporate leading technology, address the increasingly sophisticated and
varied needs of our current and prospective customers and respond to
technological advances and emerging industry standards and practices on a timely
and cost-effective basis. You should be aware that:
- our technology or systems may become obsolete upon the introduction of
alternative technologies;
- we may not have sufficient resources to develop or acquire new
technologies or to introduce new services capable of competing with future
technologies or service offerings; and
- the price of the services we provide is expected to decline as rapidly as
the cost of any competitive alternatives.
We may not be able to effectively respond to the technological requirements
of the changing market. To the extent we determine that new technologies and
equipment are required to remain competitive, the development, acquisition and
implementation of such technologies and equipment are likely to continue to
require significant capital investment by us. Sufficient capital may not be
available for this purpose in the future, and even if it is available,
investments in new technologies may not result in commercially viable
technological processes and there may not be commercial applications for such
technologies. If we do not develop and introduce new products and services and
achieve market acceptance in a timely manner, our business and prospects may
suffer.
FOREIGN EXCHANGE FLUCTUATIONS COULD DECREASE OUR REVENUES OR CAUSE US TO
LOSE MONEY, ESPECIALLY SINCE WE DO NOT HEDGE AGAINST CURRENCY FLUCTUATIONS.
To date, the majority of our customers have paid for our services in U.S.
dollars. For fiscal 1998 and fiscal 1999, costs denominated in foreign
currencies were nominal and we had minimal foreign currency losses during those
periods. However, we believe that in the future an increasing portion of our
costs will be denominated in foreign currencies. Fluctuations in the value of
the Yen, Euro or other foreign currencies may cause our business and prospects
to suffer. We currently do not engage in foreign exchange hedging activities
and, although we have not yet experienced any material losses due to foreign
currency fluctuation, our international revenues are currently subject to the
risks of foreign currency fluctuations and such risks will increase as our
international revenues increase.
YEAR 2000 COMPUTER COMPLICATIONS COULD DISRUPT OUR OPERATIONS AND HARM OUR
BUSINESS.
Some computers, software, and other equipment include programming code in
which calendar year data is abbreviated to only two digits. As a result of this
design decision, some of these systems could fail to operate or fail to produce
correct results if "00" is interpreted to mean 1900, rather than 2000. These
problems are commonly referred to as the "Millennium Bug" or "Year 2000
Problem."
The Year 2000 Problem could affect computers, software, and other equipment
used, operated or maintained by us. We have not experienced any significant
problems on January 1, 2000 or since then and believe that our computer systems
are Year 2000 compliant.
We believe that we have substantially identified and resolved all potential
Year 2000 Problems with any of the software products that we develop and market.
However, we also believe that it is not possible to determine with complete
certainty that all Year 2000 Problems affecting our software
10
<PAGE>
products have been identified or corrected due to the complexity of these
products and the fact that these products interact with other third-party vendor
products and operate on computer systems which are not under our control.
Since January 1, 2000, we have had minimal interruptions with third-party
software and we have not received any significant complaints from any customers
relating to Year 2000 problems in their products. We have not developed any Year
2000 contingency plans. We do not believe that the Year 2000 Problem will have a
material adverse effect on our business or results of operations.
OUR FAILURE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS MAY HARM OUR
COMPETITIVE POSITION.
We rely on a combination of patents, copyrights, trademark, service mark and
trade secret laws and contractual restrictions to establish and protect
proprietary rights in our products and services. However, we will not be able to
protect our intellectual property if we are unable to enforce our rights or if
we do not detect unauthorized use of our intellectual property.
Although we currently have eleven issued United States patents, and eight
patent applications pending, we cannot be certain that such patents and patent
applications will provide an adequate level of intellectual property protection.
In addition, we have corresponding international patent applications pending
under the Patent Cooperation Treaty in countries to be designated at a later
date. We cannot be certain that any pending or future patent applications will
be granted, that any pending or future patents will not be challenged,
invalidated or circumvented, or that rights granted under any patent that may be
issued will provide competitive advantages to us.
We have also provided our source code under escrow agreements and to foreign
translators which may increase the likelihood of misappropriation by third
parties.
We have applied for trademarks and service marks on certain terms and
symbols that we believe are important for our business. However, the steps we
have taken to protect our technology or intellectual property may be inadequate.
Our competitors may independently develop technologies that are substantially
equivalent or superior to ours. Moreover, in other countries where we do
business, there may not be effective legal protection of patents and other
proprietary rights that we believe are important to our business.
As a matter of company policy, we enter into confidentiality and assignment
agreements with our employees, consultants and vendors. We also control access
to and distribution of our software, documents and other proprietary
information. Notwithstanding these precautions, it may be possible for an
unauthorized third party to copy or otherwise obtain and use our software or
other proprietary information or to develop similar software independently.
Policing unauthorized use of our products is difficult, particularly because the
global nature of the Internet makes it difficult to control the ultimate
destination or security of software and other transmitted data. The laws of
other countries may afford us little or no effective protection of our
intellectual property. The steps we have taken to prevent misappropriation of
our technology, including entering into agreements for that purpose may be
insufficient. In addition, litigation may be necessary in the future to enforce
our intellectual property rights, to protect our trade secrets, to determine the
validity and scope of the proprietary rights of others or to defend against
claims of infringement or invalidity. Such litigation, whether successful or
unsuccessful, could result in substantial costs and diversions of our management
resources, either of which could harm our business.
WE MAY BE UNABLE TO LICENSE NECESSARY TECHNOLOGY AND WE MAY BE SUBJECT TO
INFRINGEMENT CLAIMS BY THIRD PARTIES.
Our commercial success will also depend in part on not infringing the
proprietary rights of others and not breaching technology licenses that cover
technology used in our products. It is uncertain whether any third party patents
will require us to develop alternative technology or to alter our
11
<PAGE>
products or processes, obtain licenses or cease activities that infringe on
third party's intellectual property rights. If any such licenses are required,
we may not be able to obtain such licenses on commercially favorable terms, if
at all. Our failure to obtain a license to any technology that we may require to
commercialize our products and services could cause our business and prospects
to suffer. Litigation may also be necessary to enforce any patents issued or
licensed to us or to determine the scope and validity of third party proprietary
rights.
WE ARE DEPENDENT ON NON-EXCLUSIVE LICENSES FOR CERTAIN TECHNOLOGY INCLUDED
IN OUR PRODUCTS.
There are certain risks associated with such non-exclusive third party
licenses:
- If we are unable to continue to license the technology or to license other
necessary technologies for use with our products or if there are
substantial increases in royalty payments under third-party licenses, it
could jeopardize our operating results.
- The effective implementation of our products depends upon the successful
operation of these licenses in conjunction with our products, and
therefore any undetected errors in products resulting from such licenses
may prevent the implementation or impair the functionality of our
products, delay new product introductions and injure our reputation. Such
problems could have a material adverse effect on our business, operating
results and financial condition.
- Although we are generally indemnified against claims that the third party
technology we license infringes the proprietary rights of others, this
indemnification is not always available for all types of intellectual
property rights (for example, patents may be excluded) and, in some cases,
the scope of such indemnification is limited. Even if we receive broad
indemnification, third party indemnitors are not always well-capitalized
and may not be able to indemnify us in the event of infringement,
resulting in substantial exposure to us. There can be no assurance that
infringement or invalidity claims arising from the incorporation of third
party technology in our products, and claims for indemnification from our
customers resulting from these claims, will not be asserted or prosecuted
against us. These claims, even if not meritorious, could result in the
expenditure of significant financial and managerial resources in addition
to potential product redevelopment costs and delay, all of which could
materially adversely affect our business, operating results and financial
condition.
OUR PRODUCTS MAY CONTAIN PRODUCT ERRORS WHICH COULD SUBJECT US TO PRODUCT
LIABILITY CLAIMS.
Our products may contain undetected errors or failures when first introduced
or as new versions are released, which can result in loss of or delay in market
acceptance and could adversely impact future operating results. We do not
currently maintain product liability insurance. Although our license agreements
contain provisions limiting our liability in the case of damages resulting from
use of the software, in the event of such damages, we may be found liable, and
in such event such damages could materially affect our business, operating
results and financial condition.
WE ARE DEPENDENT ON OUR INTERNATIONAL OPERATIONS FOR A SIGNIFICANT PORTION
OF OUR REVENUES.
Our international activities expose us to additional risks. International
revenue, primarily from Japan, accounted for 40% of our revenue in fiscal 1999
and 48% in fiscal 1998. A key component of our strategy is to expand our
international activities. As we continue to expand internationally, we are
increasingly subject to risks of doing business internationally, including:
- unexpected changes in regulatory requirements and tariffs;
- export controls relating to encryption technology and other export
restrictions;
- political and economic instability;
- difficulties in staffing and managing foreign operations;
12
<PAGE>
- reduced protection for intellectual property rights in some countries;
- longer payment cycles;
- problems in collecting accounts receivable;
- potentially adverse tax consequences;
- seasonal reductions in business activity during the summer months in
Europe and certain other parts of the world;
- fluctuations in currency exchange rates that may make our products more
expensive to international customers;
- causing gains and losses on the conversion to U.S. dollars of accounts
receivable and accounts payable arising from international operations due
to foreign currency denominated sales;
- nonrefundable withholding taxes on royalty income from customers in
certain countries, such as Japan and Taiwan; and
- an adverse effect on our provision for income taxes based on the amount
and mix of income from foreign customers.
Any of these risks could harm our international operations. For example,
some European countries already have laws and regulations related to content
distributed on the Internet and technologies used on the Internet that are more
strict than those currently in force in the United States. The European
Parliament has recently adopted a directive relating to the reform of copyright
in the European Community which will, if made into law, restrict caching and
mirroring. Any or all of these factors could cause our business and prospects to
suffer.
Our international sales growth will be limited if we are unable to establish
additional foreign operations, expand international sales channel management and
support, hire additional personnel, customize products for local markets and
develop relationships with international service providers, distributors and
device manufacturers. Even if we are able to successfully expand international
operations, we cannot be certain that we will succeed in maintaining or
expanding international market demand for our products.
WE HAVE ANTI-TAKEOVER DEFENSES THAT COULD DELAY OR PREVENT A TAKEOVER THAT
STOCKHOLDERS MAY CONSIDER FAVORABLE.
Certain provisions of our certificate of incorporation and bylaws and
provisions of Delaware law could have the effect of delaying, deferring or
preventing an acquisition of us. For example, we may authorize the issuance of
up to 2,000,000 shares of "blank check" preferred stock. In addition, our
stockholders may not take actions by written consent and our stockholders are
limited in their ability to make proposals at stockholder meetings.
WE ISSUED STOCK AT LESS THAN FAIR MARKET VALUE AND MAY DO SO AGAIN IN THE
FUTURE, AND ISSUANCES AT LESS THAN FAIR MARKET VALUE SUBJECT OUR STOCKHOLDERS TO
ADDITIONAL DILUTION.
On March 17, 2000, we issued 1,067,232 shares of common stock (post-split)
in a private placement for aggregate proceeds of approximately $82 million.
These shares were issued at a discount to the fair market value of our shares
based on prices of our common stock as quoted on the Nasdaq National Market on
the date of issue. As a result, we will record a deemed dividend of
approximately $7.1 million on March 17, 2000. We may sell shares in the future
for less than fair market value. In the event we sell shares for less than fair
market value in the future, out stockholders will be subject to additional
dilution.
13
<PAGE>
OUR STOCK WILL LIKELY BE SUBJECT TO SUBSTANTIAL PRICE AND VOLUME
FLUCTUATIONS DUE TO A NUMBER OF FACTORS, SOME OF WHICH ARE BEYOND OUR CONTROL.
The trading price of our common stock has been and is likely to continue to
be highly volatile. Our stock price is subject to wide fluctuations in response
to a variety of factors including:
- quarterly variations in operating results;
- announcements of technological innovations;
- announcements of new software or services by us or our competitors;
- changes in financial estimates by securities analysts;
- changes in general market conditions; or
- other events beyond our control.
In addition, the stock market has experienced significant price and volume
fluctuations that have particularly affected the trading prices of equity
securities of many high technology companies. These fluctuations have often been
unrelated or disproportionate to the operating performance of these companies.
Any negative change in the public's perception of Internet or Internet software
companies or companies in the wireless communications market could depress our
stock price regardless of our operating results.
Recently, when the market price of a stock has been volatile, holders of
that stock have often instituted securities class action litigation against the
company that issued the stock when such stock declines. If any of our
stockholders brought such a lawsuit against us, it could incur substantial costs
defending the lawsuit. The lawsuit could also divert the time and attention of
our management.
We expect that our future operating results could fluctuate significantly as
a result of numerous factors including, but not limited to, the demand for our
products, our success in developing new products, the timing of new product
introductions by us and our competitors, the timing of releases of new handheld
devices by our customers, market acceptance of our new and enhanced products,
the emergence of new industry standards, the timing of customer orders, the mix
of products sold, competition, the mix of distribution channels employed, the
evolving and unpredictable nature of the markets for our products and mobile
computing devices generally, the rate of growth of the personal computer market
in general and general economic conditions.
14
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders may sell the shares from time to time. The selling
stockholders will act independently of us in making decisions regarding 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
privately negotiated transactions. The selling stockholders may effect these
transactions by selling the shares to or through broker-dealers. The selling
stockholders may sell their shares in one or more of, or a combination of:
- a block trade in which the broker-dealer 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 a broker-dealer
for their account under this prospectus,
- an exchange distribution in accordance with the rules of an exchange,
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers, and
- 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. If the plan of
distribution involves an arrangement with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, the amendment or supplement
will disclose:
- the name of each selling stockholder and of the participating
broker-dealer(s),
- the number of shares involved,
- the price at which the shares were sold,
- the commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable,
- that a broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus, and
- other facts material to the transaction.
From time to time, a selling stockholder may transfer, pledge, donate or
assign our shares of common stock to lenders or others and each of such persons
will be deemed to be a "selling stockholder" for purposes of this prospectus.
The number of shares of common stock beneficially owned by the selling
stockholder will decrease as and when it takes such actions. The plan of
distribution for the selling stockholders' shares of common stock sold under
this prospectus will otherwise remain unchanged, except that the transferees,
pledgees, donees or other successors will be selling stockholders hereunder.
Upon being notified by a selling stockholder that a donee or pledgee intends to
sell more than 500 shares, we will file a supplement to this prospectus.
The selling stockholders may enter into hedging transactions with
broker-dealers in connection with distributions of the shares or otherwise. In
these transactions, broker-dealers may engage in short sales of the shares in
the course of hedging the positions they assume with selling stockholders. The
selling stockholders also may sell shares short and redeliver the shares to
close out short positions. 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 the shares under this prospectus. The selling stockholders also may
loan or pledge the shares to a broker-dealer. The broker-dealer may sell the
loaned shares, or upon a default the broker-dealer may sell the pledged shares
under this prospectus.
15
<PAGE>
In effecting sales, broker-dealers engaged by the selling stockholders may
arrange for other broker-dealers to participate in the resales. Broker-dealers
or agents may receive compensation in the form of commissions, discounts or
concessions from 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 of
1933, as amended, in connection with sales of the shares. Accordingly, any
commission, discount or concession received by 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 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 that qualify for sale
under Rule 144 promulgated under the Securities Act may be sold under Rule 144
rather than under this prospectus. There is no underwriter or coordinating
broker acting in connection with the proposed sale of shares by the selling
stockholders. The shares will be sold only through registered or licensed
brokers or dealers if required under applicable state securities laws. In
addition, in some 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 Securities Exchange Act of
1934, as amended, 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 the
distribution. In addition, each selling stockholder 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.
We will make copies of this prospectus available to the selling stockholders
and have informed them of the need to deliver copies of this prospectus to
purchasers at or prior to the time of any sale of the shares. We will bear all
costs, expenses and fees in connection with the registration 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 specific liabilities, including liabilities arising
under the Securities Act. The selling stockholders have agreed to indemnify
specific persons against specific liabilities in connection with the offering of
the shares, including liabilities arising under the Securities Act.
We have agreed to maintain the effectiveness of this registration statement
until the earlier of the following dates:
- March 17, 2002;
- the date each selling stockholder can sell of the shares its holds under
Rule 144(k) promulgated under the Securities Act; or
- when all shares registered under this registration statement have been
sold by the selling stockholders.
The selling stockholders may sell all, some or none of the shares offered by
this prospectus.
16
<PAGE>
SELLING STOCKHOLDERS
The table below lists the selling stockholders, the number of shares of our
common stock which each owned prior to the offering, the number of shares of our
common stock subject to sale pursuant to this Prospectus, and the number of the
shares of our common stock which each would own assuming that such number of
shares were offered and assuming the sale of all such shares permitted to be
sold. All share numbers in this prospectus have been adjusted to reflect the
2-for-1 stock split in the form of a dividend paid to our shareholders on
March 22, 2000.
<TABLE>
<CAPTION>
SHARES SHARES TO BE SHARES
BENEFICIALLY OWNED SOLD IN THE BENEFICIALLY OWNED
SELLING STOCKHOLDERS(1) PRIOR TO OFFERING OFFERING AFTER THE OFFERING(2)
- ----------------------- ------------------ ------------ ---------------------
<S> <C> <C> <C>
Colonial Fund, LLC................................. 91,206 91,206 0
Van Wagoner Emerging Growth Fund................... 83,634 83,634 0
Baystar Capital LP................................. 58,632 58,632 0
Baystar International Ltd.......................... 39,088 39,088 0
JP Morgan Ventures Corporation..................... 39,088 39,088 0
Pogue Capital International Ltd.................... 39,086 39,086 0
Van Wagoner Post-Venture Fund...................... 32,952 32,952 0
Galleon Technology Offshore, Ltd................... 32,208 32,208 0
Chilton International, L.P......................... 31,780 31,780 0
Van Wagoner Technology Fund........................ 30,908 30,908 0
Galleon Technology Partners II, L.P................ 15,948 15,948 0
Chilton Investment Partners, L.P................... 13,734 13,734 0
MCP Global Corporation Ltd......................... 13,030 13,030 0
Van Wagoner Mid-Cap Fund........................... 10,260 10,260 0
Chilton QP Investment Partners, L.P................ 6,604 6,604 0
Galleon Technology Partners I, L.P................. 3,962 3,962 0
John Deere Pension Trust........................... 3,400 3,400 0
Lifeway Christian Resource Master Retirement....... 1,712 1,712 0
Fidelity Mt. Vernon Street Trust: 400,000 400,000 0
Fidelity Aggressive Growth Fund..................
Fidelity Advisor Series I: 55,200 55,200 0
Fidelity Advisor Small Cap Fund..................
Fidelity Trend Fund................................ 54,000 54,000 0
Fidelity Advisor Series I: 10,800 10,800 0
Fidelity Advisor Retirement Growth Fund..........
</TABLE>
- ------------------------
(1) The selling stockholders each own less than 1% of the outstanding shares of
our common stock.
(2) Assumes the sale of all of the offered shares.
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<PAGE>
LEGAL MATTERS
Our legal counsel, General Counsel Associates LLP, 1891 Landings Drive,
Mountain View, California 94043, has rendered an opinion to the effect that the
common stock offered hereby is duly and validly issued, fully paid and
non-assessable. Attorneys in the firm of General Counsel Associates LLP own
approximately 5,200 shares of Puma's common stock.
EXPERTS
The financial statements incorporated in this prospectus by reference to the
Annual Report on Form 10-K of Puma Technology, Inc. for the year ended July 31,
1999, the audited supplementary consolidated balance sheets as of July 31, 1999
and 1998 and the supplementary consolidated statements of operations, of
stockholders' equity, and of cash flows for each of the years in the three year
period ended July 31, 1999 incorporated in this prospectus by reference to the
report on Form 8-K dated April 18, 2000 and, the audited financial statements of
ProxiNet, Inc. for the period from June 27, 1997 (date of inception) to
December 31, 1997, the year ended December 31, 1998 and the cumulative period
from June 27, 1997 (date of inception) to December 31, 1998 incorporated by
reference in this prospectus to the report on Form 8-K of Puma Technology, Inc.
dated December 10, 1999, as amended on January 11, 2000 have been so
incorporated herein in reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
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PUMA TECHNOLOGY, INC.
REGISTRATION STATEMENT ON FORM S-3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<S> <C>
Item
Number
- ------
</TABLE>
Item 14 OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
The following table sets forth costs and expenses of the sale and distribution
of the securities being registered. All amounts except Securities and Exchange
Commission and NASD fees are estimates.
<TABLE>
<S> <C>
Registration fee--Securities and Exchange Commission........ $ 8,585
NASD fees................................................... $ 11,075
Accounting fees............................................. $ 50,000
Legal fees and expenses..................................... $ 25,000
Miscellaneous............................................... $ 10,000
--------
Total....................................................... $104,660
</TABLE>
- ------------------------
* Represents expenses relating to the distribution by the selling stockholders
pursuant to the Prospectus prepared in accordance with the requirements of
Form S-3. These expenses will be borne by us on behalf of the selling
stockholders.
Item 15 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Delaware General Corporation Law, we have included in
our certificate of incorporation a provision to eliminate the personal liability
of our directors for monetary damages for breach or alleged breach of their
fiduciary duties as directors, subject to certain exceptions. In addition, our
bylaws provide that we are required to indemnify our officers and directors
under certain circumstances, including the circumstances in which
indemnification would otherwise be discretionary, and we are required to advance
expenses to our officers and directors as incurred in connection with
proceedings against them for which they may be indemnified. We have entered into
indemnification agreements with our officers and directors containing provisions
that are in some respects broader than the specific indemnification provisions
contained in the Delaware General Corporation Law. The indemnification
agreements may require us, among other things, to indemnify such officers and
directors against certain liabilities that may arise by reason of their status
or service as directors or officers (other than liabilities arising from willful
misconduct of a culpable nature), to advance expenses incurred as a result of
any proceeding against them as to which they could be indemnified, and to obtain
directors' and officers' insurance if available on reasonable terms. We believe
that our charter provisions and indemnification agreements are necessary to
attract and retain qualified persons as directors and officers. We understand
that the staff of the Securities and Exchange Commission is of the opinion that
statutory charter and contractual provisions as are described above have no
effect on claims arising under the federal securities law.
II-1
<PAGE>
Item 16 EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<C> <S>
5.1 Opinion of General Counsel Associates LLP
10.1 Form of Stock Purchase Agreement by and between Puma
Technology, Inc. and each of the selling stockholders.
23.1 Consent of Independent Accountants of Puma Technology, Inc.
23.2 Consent of Independent Accountants of ProxiNet, Inc.
23.3 Consent of General Counsel Associates LLP (Included in
Exhibit 5.1)
24.1 Power of Attorney (contained on Page II-4)
</TABLE>
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.
(2) That, for the purpose of determining any liability under the Securities
Act, each 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.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act 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.
The undersigned hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) 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
as that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-2
<PAGE>
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, we will, unless in the opinion of our 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 Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
PUMA TECHNOLOGY, INC., a corporation organized and existing under the laws of
the State of Delaware, 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 San Jose, State of California, on April 20,
2000.
<TABLE>
<S> <C> <C>
PUMA TECHNOLOGY, INC.
By: /s/ KELLY J. HICKS
-----------------------------------------
Kelly J. Hicks,
VICE PRESIDENT OF OPERATIONS AND CHIEF
FINANCIAL OFFICER
</TABLE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Kelly J. Hicks, Karen A. Ammer and Susan J.
Skaer, jointly and severally, as his or her attorneys-in-fact, each with the
power of substitution, for him or her in any and all capacities, to sign any
amendments to this Registration Statement on Form S-3, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his or her substitute or substitutes, may do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on April 20,
2000 in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
/s/ MICHAEL M. CLAIR
------------------------------------------- Chairman of the Board of Directors
MICHAEL M. CLAIR
/s/ BRADLEY A. ROWE
------------------------------------------- Chief Executive Officer and Director
BRADLEY A. ROWE (Principal Executive Officer)
/s/ KELLY J. HICKS Vice President of Operations and Chief
------------------------------------------- Financial Officer (Principal Financial and
KELLY J. HICKS Accounting Officer)
/s/ MATTHEW FREIVALD
------------------------------------------- Director
MATTHEW FREIVALD
/s/ M. BRUCE NAKAO
------------------------------------------- Director
M. BRUCE NAKAO
/s/ STEPHEN A. NICHOL
------------------------------------------- Director
STEPHEN A. NICHOL
/s/ TYRONE F. PIKE
------------------------------------------- Director
TYRONE F. PIKE
/s/ GARY RIESCHEL
------------------------------------------- Director
GARY RIESCHEL
</TABLE>
II-4
<PAGE>
EXHIBIT 5.1
April 21, 2000
Puma Technology, Inc.
2550 North First Street, #500
San Jose, California 95131
RE: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by you
with the Securities and Exchange Commission on or about April 21, 2000 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of a total of 1,067,232 shares of your
common stock (the "Shares"), all of which are issued and outstanding and to be
offered for sale for the benefit of certain Selling Stockholders. The Shares are
to be sold from time to time in the over-the counter-market at prevailing prices
or as otherwise described in the Registration Statement. As legal counsel for
Puma Technology, Inc., we have examined the proceedings taken and are familiar
with the proceedings proposed to be taken by you in connection with the sale of
the Shares.
It is our opinion that the Shares are legally and validly issued, fully paid
and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, including the prospectus constituting a part thereof, and further
consent to the use of our name wherever it appears in the Registration Statement
and any amendments thereto.
Very truly yours,
GENERAL COUNSEL ASSOCIATES LLP
/s/ General Counsel Associates LLP
<PAGE>
EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
Puma Technology, Inc.
2550 North First Street, Suite 500
San Jose, CA 95131
Ladies & Gentlemen:
The undersigned, _________________________________(the "Investor"),
hereby confirms its agreement with you as follows:
1. This Stock Purchase Agreement (the "Agreement") is made as of _______ __,
2000 between Puma Technology, Inc., a Delaware corporation (the "Company"),
and the Investor.
2. The Company has authorized the sale and issuance of up to ________
shares (the "Shares") of common stock of the Company, $0.001 par value per
share (the "Common Stock"), subject to adjustment by the Company's Board of
Directors, to certain investors in a private placement (the "Offering").
3. The Company and the Investor agree that the Investor will purchase from
the Company and the Company will issue and sell to the Investor ___________
Shares, for a purchase price of $_______ per share, or an aggregate purchase
price of $_______________ (the foregoing Share amounts are on a pre- 2-for-1
stock split basis; the number of Shares to be delivered to the Investor for
purposes of Section 3 of Annex I will be post-split), pursuant to the Terms
and Conditions for Purchase of Shares attached hereto as Annex I and
incorporated herein by reference as if fully set forth herein. Unless
otherwise requested by the Investor, certificates representing the Shares
purchased by the Investor will be registered in the Investor's name and
address as set forth below.
4. The Investor represents that, except as set forth below, (a) it has had
no position, office or other material relationship within the past three
years with the Company or persons known to it to be affiliates of the
Company, (b) neither it, nor any group of which it is a member or to which it
is related, beneficially owns (including the right to acquire or vote) any
securities of the Company and (c) it has no direct or indirect affiliation or
association with any member of the National Association of Securities Dealers
as of the date hereof. Exceptions:
________________________________________________________________________________
_______________________________________________________________________________.
(If no exceptions, write "none." If left blank, response will be deemed to
be "none.")
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose. By
executing this Agreement, you acknowledge that the Company may use the
information in paragraph 4 above and the name and address information below
in preparation of the Registration Statement (as defined in Annex I).
AGREED AND ACCEPTED:
- --------------------
PUMA TECHNOLOGY, INC. "INVESTOR"
- --------------------------------- -----------------------------------------
By: By:
Title: Print Name:
-----------------------------
Title:
---------------------------------
Address:
--------------------------------
-----------------------------------------
Tax ID No.:
-----------------------------
Contact name:
---------------------------
Telephone:
Name in which shares should be registered
(if different):
-------------------------
1
<PAGE>
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES
1. AUTHORIZATION AND SALE OF THE SHARES. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale of up to
________ Shares. The Company reserves the right to increase or decrease this
number.
2. AGREEMENT TO SELL AND PURCHASE THE SHARES; SUBSCRIPTION DATE.
2.1 At the Closing (as defined in Section 3), the Company will
sell to the Investor, and the Investor will purchase from the Company, upon
the terms and conditions hereinafter set forth, the number of Shares set
forth on the signature page hereto at the purchase price set forth on such
signature page.
2.2 The Company may enter into this same form of Stock Purchase
Agreement with certain other investors (the "Other Investors") and expects to
complete sales of Shares to them. (The Investor and the Other Investors are
hereinafter sometimes collectively referred to as the "Investors," and this
Agreement and the Stock Purchase Agreements executed by the Other Investors
are hereinafter sometimes collectively referred to as the "Agreements.") The
Company may accept executed Agreements from Investors for the purchase of
Shares commencing upon the date on which the Company provides the Investors
with the proposed purchase price per Share and concluding upon the date (the
"Subscription Date") on which the Company has (i) executed Agreements with
Investors for the purchase of at least _______ Shares, and (ii) notified the
Investors in writing that it is no longer accepting Agreements from Investors
for the purchase of Shares. The Company may not enter into any Agreements
after the Subscription Date.
3. DELIVERY OF THE SHARES AT CLOSING. The completion of the
purchase and sale of the Shares (the "Closing") shall occur (the "Closing
Date") on ________ __, 2000, at the offices of the Company's counsel. At the
Closing, the Company shall deliver to the Investor one or more stock
certificates representing the number of Shares set forth on the signature
page hereto, PROVIDED THAT if the Closing Date is after March 8, 2000 but on
or before March 22, 2000, the Company shall deliver to the Investor one or
more stock certificates representing one-half of the number of Shares set
forth on the signature page hereto, and in any event, each such certificate
to be registered in the name of the Investor or, if so indicated on the
signature page hereto, in the name of a nominee designated by the Investor.
If the Closing Date is after March 8, 2000 but on or before March 22, 2000,
the Company will deliver one or more stock certificates representing the
other half of the number of Shares set forth on the signature page hereto on
or promptly after March 22, 2000, each such certificate registered in
accordance with the preceding sentence.
The Company's obligation to issue the Shares to the Investor shall be
subject to the following conditions, any one or more of which may be waived
by the Company: (a) receipt by the Company of a certified or official bank
check or wire transfer of funds in the full amount of the purchase price for
the Shares being purchased hereunder as set forth on the signature page
hereto; (b) completion of the purchases and sales under the Agreements with
the Other Investors; and (c) the accuracy of the representations and
warranties made by the Investors and the fulfillment of those undertakings of
the Investors to be fulfilled prior to the Closing.
The Investor's obligation to purchase the Shares shall be subject to
the following conditions, any one or more of which may be waived by the
Investor: (a) Investors shall have executed Agreements for the purchase of at
least _______ Shares, (b) the representations and warranties of the Company
set forth herein shall be true and correct as of the Closing Date in all
material respects and (c) the Investor shall have received (i) such documents
as such Investor shall reasonably have requested prior to execution of this
Agreement and delivery of the purchase price for its Shares purchased
hereunder and (ii) a standard opinion of Company counsel as to the matters
set forth in Section 4.2 and as to exemption from the registration
requirements of the Securities Act of 1933, as amended, of the sale of the
Shares.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company hereby represents and warrants to, and covenants with, the Investor,
as follows:
1
<PAGE>
4.1 ORGANIZATION. The Company is duly organized and validly
existing in good standing under the laws of the jurisdiction of its
organization. Each of the Company and its Subsidiaries (as defined in Rule
405 under the Securities Act of 1933, as amended (the "Securities Act")) has
full power and authority to own, operate and occupy its properties and to
conduct its business as presently conducted and as described in the
confidential offering memorandum, dated March 3, 2000 distributed in
connection with the sale of the Shares (including the documents incorporated
by reference therein, the "Placement Memorandum") and is registered or
qualified to do business and in good standing in each jurisdiction in which
it owns or leases property or transacts business and where the failure to be
so qualified would have a material adverse effect upon the business,
financial condition, properties or operations of the Company and its
Subsidiaries, considered as one enterprise, and no proceeding has been
instituted in any such jurisdiction, revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or
qualification.
4.2 DUE AUTHORIZATION AND VALID ISSUANCE. The Company has all
requisite power and authority to execute, deliver and perform its obligations
under the Agreements, and the Agreements have been duly authorized and
validly executed and delivered by the Company and constitute legal, valid and
binding agreements of the Company enforceable against the Company in
accordance with their terms, except as rights to indemnity and contribution
may be limited by state or federal securities laws or the public policy
underlying such laws, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law). The Shares being purchased by the Investor hereunder will, upon
issuance pursuant to the terms hereof, be duly authorized, validly issued,
fully-paid and nonassessable.
4.3 NON-CONTRAVENTION. The execution and delivery of the
Agreements, the issuance and sale of the Shares to be sold by the Company
under the Agreements, the fulfillment of the terms of the Agreements and the
consummation of the transactions contemplated thereby will not (A) conflict
with or constitute a violation of, or default (with the passage of time or
otherwise) under, (i) any material bond, debenture, note or other evidence of
indebtedness, lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which the
Company or any Subsidiary is a party or by which it or any of its
Subsidiaries or their respective properties are bound, (ii) the charter,
by-laws or other organizational documents of the Company or any Subsidiary,
or (iii) any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the
Company or any Subsidiary or their respective properties, or (B) result in
the creation or imposition of any lien, encumbrance, claim, security interest
or restriction whatsoever upon any of the material properties or assets of
the Company or any Subsidiary or an acceleration of indebtedness pursuant to
any obligation, agreement or condition contained in any material bond,
debenture, note or any other evidence of indebtedness or any material
indenture, mortgage, deed of trust or any other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of them is
bound or to which any of the property or assets of the Company or any
Subsidiary is subject. No consent, approval, authorization or other order
of, or registration, qualification or filing with, any regulatory body,
administrative agency, or other governmental body in the United States or any
other person is required to be made or received by the Company for the
execution and delivery of the Agreements and the valid issuance and sale of
the Shares to be sold pursuant to the Agreements, other than such as have
been made or obtained, or as may be required by securities laws of foreign
countries, and except for any post-closing securities filings or
notifications required to be made under federal or state securities laws.
4.4 CAPITALIZATION. The capitalization of the Company as of
February 25, 2000 is as set forth in the Placement Memorandum (excluding
unvested options and treasury shares). The Company has not issued any
capital stock since that date other than pursuant to (i) employee benefit
plans disclosed in the Placement Memorandum, or (ii) outstanding warrants or
options disclosed in the Placement Memorandum. The Shares to be sold
pursuant to the Agreements have been duly authorized, and when issued and
paid for in accordance with the terms of the Agreements will be duly and
validly issued, fully paid and nonassessable. The outstanding shares of
capital stock of the Company have been duly and validly issued and are fully
paid and nonassessable, have been issued in compliance with all federal and
state securities laws, and were not issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities. Except as
set forth in or contemplated by the Placement Memorandum, there are no
outstanding rights (including, without limitation, preemptive rights),
warrants or options to acquire, or instruments convertible into or
exchangeable for, any unissued shares of capital stock or
2
<PAGE>
other equity interest in the Company or any Subsidiary, or any contract,
commitment, agreement, understanding or arrangement of any kind to which the
Company is a party or of which the Company has knowledge and relating to the
issuance or sale of any capital stock of the Company or any Subsidiary, any
such convertible or exchangeable securities or any such rights, warrants or
options. Without limiting the foregoing, no preemptive right, co-sale right,
right of first refusal, registration right, or other similar right exists
with respect to the Shares or the issuance and sale thereof. No further
approval or authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale of the Shares. The
Company owns the entire equity interest in each of its Subsidiaries, free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest, other than as described in the Placement Memorandum. Except as
disclosed in the Placement Memorandum, there are no stockholders agreements,
voting agreements or other similar agreements with respect to the Common
Stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company's stockholders.
4.5 LEGAL PROCEEDINGS. There is no material legal or
governmental proceeding pending or, to the knowledge of the Company,
threatened to which the Company or any Subsidiary is or may be a party or of
which the business or property of the Company or any Subsidiary is subject
that is not disclosed in the Placement Memorandum.
4.6 NO VIOLATIONS. Neither the Company nor any Subsidiary is
in violation of its charter, bylaws, or other organizational document, or in
violation of any law, administrative regulation, ordinance or order of any
court or governmental agency, arbitration panel or authority applicable to
the Company or any Subsidiary, which violation, individually or in the
aggregate, would be reasonably likely to have a material adverse effect on
the business or financial condition of the Company and its Subsidiaries,
considered as one enterprise, or is in default (and there exists no condition
which, with the passage of time or otherwise, would constitute a default) in
any material respect in the performance of any bond, debenture, note or any
other evidence of indebtedness in any indenture, mortgage, deed of trust or
any other material agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound or
by which the properties of the Company or any Subsidiary are bound, which
would be reasonably likely to have a material adverse effect upon the
business or financial condition of the Company and its Subsidiaries,
considered as one enterprise.
4.7 GOVERNMENTAL PERMITS, ETC. With the exception of the
matters which are dealt with separately in Section 4.1, 4.12, 4.13, and 4.14,
each of the Company and its Subsidiaries has all necessary franchises,
licenses, certificates and other authorizations from any foreign, federal,
state or local government or governmental agency, department, or body that
are currently necessary for the operation of the business of the Company and
its Subsidiaries as currently conducted and as described in the Placement
Memorandum except where the failure to currently possess could not reasonably
be expected to have a material adverse effect.
4.8 INTELLECTUAL PROPERTY. Except as specifically disclosed
under "Risk Factors" in the Placement Memorandum (i) each of the Company and
its Subsidiaries owns or possesses sufficient rights to use all material
patents, patent rights, trademarks, copyrights, licenses, inventions, trade
secrets, trade names and know-how (collectively, "Intellectual Property")
described or referred to in the Placement Memorandum as owned or possessed by
it or that are necessary for the conduct of its business as now conducted or
as proposed to be conducted as described in the Placement Memorandum except
where the failure to currently own or possess would not have a material
adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its
Subsidiaries considered as one enterprise, (ii) neither the Company nor any
of its Subsidiaries has received any notice of, or has any knowledge of, any
infringement of asserted rights of a third party with respect to any
Intellectual Property that, individually or in the aggregate, would have a
material adverse effect on the financial condition or business of the Company
and its Subsidiaries considered as one enterprise and (iii) neither the
Company nor any of its Subsidiaries has received any notice of any
infringement of rights of a third party with respect to any Intellectual
Property that, individually or in the aggregate, would have a material
adverse effect upon the business or financial condition of the Company and
its Subsidiaries, considered as one enterprise.
4.9 FINANCIAL STATEMENTS. The financial statements of the
Company and the related notes contained in the Placement Memorandum present
fairly, in accordance with generally accepted accounting principles, the
financial position of the Company and its Subsidiaries as of the dates
indicated, and the results of its operations and cash flows for the periods
therein specified. Such financial statements (including the related notes)
3
<PAGE>
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods therein
specified, except as disclosed in the Placement Memorandum. The other
financial information contained in the Placement Memorandum has been prepared
on a basis consistent with the financial statements of the Company.
4.10 NO MATERIAL ADVERSE CHANGE. Except as disclosed in the
Placement Memorandum, since October 31, 1999, there has not been (i) any
material adverse change in the financial condition or earnings of the Company
and its Subsidiaries considered as one enterprise nor has any material
adverse event occurred to the Company or its Subsidiaries, (ii) any material
adverse event affecting the Company, (iii) any obligation, direct or
contingent, that is material to the Company and its Subsidiaries considered
as one enterprise, incurred by the Company, except obligations incurred in
the ordinary course of business, (iv) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company or any of its
Subsidiaries, or (v) any loss or damage (whether or not insured) to the
physical property of the Company or any of its Subsidiaries which has been
sustained which has a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the
Company and its Subsidiaries considered as one enterprise.
4.11 DISCLOSURE. The information contained in the Placement
Memorandum as of the date hereof and as of the Closing Date, did not and
shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
4.12 NASDAQ COMPLIANCE. The Company's Common Stock is
registered pursuant to Section 12(g) of the Exchange Act and is listed on The
Nasdaq Stock Market, Inc. National Market (the "Nasdaq National Market"), and
the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from the Nasdaq National Market, nor has the
Company received any notification that the Securities and Exchange Commission
(the "SEC") or the National Association of Securities Dealers, Inc. ("NASD")
is contemplating terminating such registration or listing.
4.13 REPORTING STATUS. The Company has filed in a timely manner
all documents that the Company was required to file under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") during the 12 months
preceding the date of this Agreement. The following documents complied in
all material respects with the SEC's requirements as of their respective
filing dates, and the information contained therein as of the date thereof
did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under where they were made
not misleading:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended July 31, 1999, containing audited financial
statements for the fiscal year ended July 31, 1999.
(b) The Company's Definitive Proxy Statement Filed with the SEC
on November 22, 1999 in connection with the 1999 Annual
Meeting of Stockholders.
(c) The Company's Quarterly Report on Form 10-Q for the quarter
ended October 31, 1999.
(d) The Company's Current Report on Form 8-K filed with the SEC
on February 25, 2000.
(e) All other documents, if any, filed by the Company with the
SEC since March 3, 2000 pursuant to the reporting
requirements of the Exchange Act.
4.14 LISTING. The Company shall comply with all requirements of
the National Association of Securities Dealers, Inc. with respect to the
issuance of the Shares and the listing thereof on the Nasdaq National Market.
4.15 NO MANIPULATION OF STOCK. The Company has not taken and
will not, in violation of applicable law, take, any action designed to or
that might reasonably be expected to cause or result in stabilization or
4
<PAGE>
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Shares.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR.
5.1 The Investor represents and warrants to, and covenants
with, the Company that: (i) the Investor is an "accredited investor" as
defined in Regulation D under the Securities Act and the Investor is also
knowledgeable, sophisticated and experienced in making, and is qualified to
make decisions with respect to investments in shares presenting an investment
decision like that involved in the purchase of the Shares, including
investments in securities issued by the Company and investments in comparable
companies, and has requested, received, reviewed and considered all
information it deemed relevant in making an informed decision to purchase the
Shares; (ii) the Investor is acquiring the number of Shares set forth on the
signature page hereto in the ordinary course of its business and for its own
account for investment only and with no present intention of distributing any
of such Shares or any arrangement or understanding with any other persons
regarding the distribution of such Shares; (iii) the Investor will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of
(or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Shares except in compliance with the Securities Act,
applicable state securities laws and the respective rules and regulations
promulgated thereunder; (iv) the Investor has answered all questions on the
signature page hereto for use in preparation of the Registration Statement
and the answers thereto are true and correct as of the date hereof and will
be true and correct as of the Closing Date; (v) the Investor will notify the
Company immediately of any change in any information provided to the Company,
to the extent the Company requires any such changed information in order to
comply with any law or any regulation or rule of any government agency, the
National Association of Securities Dealers or the Nasdaq National Market
applicable to the Company, until such time as the Investor has sold all of
its Shares or until the Company is no longer required to keep the
Registration Statement effective; and (vi) the Investor has, in connection
with its decision to purchase the number of Shares set forth on the signature
page hereto, relied only upon the Placement Memorandum and the
representations and warranties of the Company contained herein. Investor
understands that its acquisition of the Shares has not been registered under
the Securities Act or registered or qualified under any state securities law
in reliance on specific exemptions therefrom, which exemptions may depend
upon, among other things, the bona fide nature of the Investor's investment
intent as expressed herein. Investor has completed or caused to be completed
and delivered to the Company the Investor Questionnaire attached to the
Placement Memorandum, which questionnaire is true and correct in all material
respects. Investor agrees to furnish promptly to the Company such
information regarding such Investor and the distribution proposed by such
Investor as the Company may reasonably request in order to prepare the
Registration Statement and to the extent the Company requires any such
information in order to comply with any law or any regulation or rule of any
government agency, the National Association of Securities Dealers or the
Nasdaq National Market applicable to the Company.
5.2 The Investor acknowledges, represents and agrees that no
action has been or will be taken in any jurisdiction outside the United
States by the Company that would permit an offering of the Shares, or
possession or distribution of offering materials in connection with the issue
of the Shares, in any jurisdiction outside the United States where legal
action by the Company for that purpose is required. Each Investor outside
the United States will comply with all applicable laws and regulations in
each foreign jurisdiction in which it purchases, offers, sells or delivers
Shares or has in its possession or distributes any offering material, in all
cases at its own expense.
5.3 The Investor hereby covenants with the Company not to make
any sale of the Shares without complying with the provisions of this
Agreement and without causing the prospectus delivery requirement under the
Securities Act to be satisfied, and the Investor acknowledges that the
certificates evidencing the Shares will be imprinted with a legend that
prohibits their transfer except in accordance therewith. The Investor
acknowledges that there may occasionally be times when the Company determines
that it must suspend the use of the Prospectus forming a part of the
Registration Statement, as set forth in Section 7.2(c).
5.4 The Investor further represents and warrants to, and
covenants with, the Company that (i) the Investor has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and (ii)
this Agreement constitutes a valid and binding obligation of the Investor
enforceable against the Investor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and
contracting parties'
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rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law) and except as the indemnification
agreements of the Investors herein may be legally unenforceable.
5.5 Investor will not use any of the restricted Shares acquired
pursuant to this Agreement to cover any short position in the Common Stock of
the Company if doing so would be in violation of applicable securities laws.
5.6 The Investor understands that nothing in the Placement
Memorandum, this Agreement or any other materials presented to the Investor
in connection with the purchase and sale of the Shares constitutes legal, tax
or investment advice. The Investor has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of Shares.
6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the
delivery to the Investor of the Shares being purchased and the payment
therefor.
7. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT.
7.1 REGISTRATION PROCEDURES AND OTHER MATTERS. The Company
shall:
(a) subject to receipt of necessary information from the
Investors after prompt request from the Company to the Investors to provide
such information, use its reasonable best efforts to prepare and file with
the SEC, within 35 days after the Closing Date, a registration statement (the
"Registration Statement") to enable the resale of the Shares by the Investors
from time to time through the automated quotation system of the Nasdaq
National Market or in privately-negotiated transactions;
(b) will use its reasonable best efforts to file with the
SEC on or prior to 30 days from the Closing a Current Report on Form 8-K
which includes the financial statements required by Regulation S-X for such
Registration Statement reflecting the acquisition of NetMind Technologies,
Inc. in a pooling of interests transactions;
(c) use its reasonable best efforts, subject to receipt
of necessary information from the Investors after prompt request from the
Company to the Investors to provide such information, to cause the
Registration Statement to become effective within 30 days after the
Registration Statement is filed by the Company such efforts to include,
without limiting the generality of the foregoing, preparing and filing with
the SEC in such 30-day period any financial statements that are required to
be filed prior to the effectiveness of such Registration Statement;
(d) use its reasonable efforts to prepare and file with
the SEC such amendments and supplements to the Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep the
Registration Statement current and effective for a period not exceeding, with
respect to each Investor's Shares purchased hereunder, the earlier of (i) the
second anniversary of the Closing Date, (ii) the date on which the Investor
may sell all Shares then held by the Investor without restriction by the
volume limitations of Rule 144(e) of the Securities Act, or (iii) such time
as all Shares purchased by such Investor in this Offering have been sold
pursuant to a registration statement.
(e) furnish to the Investor with respect to the Shares
registered under the Registration Statement such number of copies of the
Registration Statement, Prospectuses and Preliminary Prospectuses in
conformity with the requirements of the Securities Act and such other
documents as the Investor may reasonably request, in order to facilitate the
public sale or other disposition of all or any of the Shares by the Investor;
provided, however, that the obligation of the Company to deliver copies of
Prospectuses or Preliminary Prospectuses to the Investor shall be subject to
the receipt by the Company of reasonable assurances from the Investor that
the Investor will comply with the applicable provisions of the Securities Act
and of such other securities or blue sky laws as may be applicable in
connection with any use of such Prospectuses or Preliminary
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Prospectuses;
(f) file documents required of the Company for normal
blue sky clearance in states specified in writing by the Investor; provided,
however, that the Company shall not be required to qualify to do business or
consent to service of process in any jurisdiction in which it is not now so
qualified or has not so consented;
(g) bear all expenses in connection with the procedures
in paragraph (a) through (f) of this Section 7.1 and the registration of the
Shares pursuant to the Registration Statement; and
(h) advise the Investor, promptly after it shall receive
notice or obtain knowledge of the issuance of any stop order by the SEC
delaying or suspending the effectiveness of the Registration Statement or of
the initiation or threat of any proceeding for that purpose; and it will
promptly use its reasonable efforts to prevent the issuance of any stop order
or to obtain its withdrawal at the earliest possible moment if such stop
order should be issued.
Notwithstanding anything to the contrary herein, the Registration
Statement shall cover only the Shares.
The Company understands that the Investor disclaims being an
underwriter, but the Investor being deemed an underwriter by the SEC shall
not relieve the Company of any obligations it has hereunder; PROVIDED,
HOWEVER that if the Company receives notification from the SEC that the
Investor is deemed an underwriter, then the period by which the Company is
obligated to submit an acceleration request to the SEC shall be extended to
the earlier of (i) the 90th day after such SEC notification, or (ii) 120 days
after the initial filing of the Registration Statement with the SEC.
7.2 TRANSFER OF SHARES AFTER REGISTRATION; SUSPENSION.
(a) The Investor agrees that it will not effect any
disposition of the Shares or its right to purchase the Shares that would
constitute a sale within the meaning of the Securities Act except as
contemplated in the Registration Statement referred to in Section 7.1 and as
described below or as otherwise permitted by law, and that it will promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding the Investor or its plan of distribution to
the extent such changes would be required to be reflected in such
Registration Statement or an amendment thereto.
(b) Except in the event that paragraph (c) below applies,
the Company shall (i) if deemed necessary by the Company, prepare and file
from time to time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that such Registration Statement will not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and so that, as thereafter delivered to purchasers of the Shares
being sold thereunder, such Prospectus will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (ii) provide the
Investor copies of any documents filed pursuant to Section 7.2(b)(i); and
(iii) inform each Investor that the Company has complied with its obligations
in Section 7.2(b)(i) (or that, if the Company has filed a post-effective
amendment to the Registration Statement which has not yet been declared
effective, the Company will notify the Investor to that effect, will use its
reasonable efforts to secure the effectiveness of such post-effective
amendment as promptly as possible and will promptly notify the Investor
pursuant to Section 7.2(b)(i) hereof when the amendment has become effective).
(c) Subject to paragraph (d) below, in the event (i) of
any request by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for
amendments or supplements to a Registration Statement or related Prospectus
or for additional information; (ii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose; or (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for
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such purpose; or (iv) of any event or circumstance which, upon the advice of
its counsel, necessitates the making of any changes in the Registration
Statement or Prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact or
any omission to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; then the Company shall, deliver a
certificate in writing to the Investor (the "Suspension Notice") to the
effect of the foregoing and, upon receipt of such Suspension Notice, the
Investor will refrain from selling any Shares not already sold pursuant to
the Registration Statement (a "Suspension") until the Investor's receipt of
copies of a supplemented or amended Prospectus prepared and filed by the
Company, or until it is advised in writing by the Company that the current
Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by
reference in any such Prospectus. In the event of any Suspension, the
Company will use its reasonable efforts to cause the use of the Prospectus so
suspended to be resumed as soon as reasonably practicable within 20 business
days after the delivery of a Suspension Notice to the Investor. In addition
to and without limiting any other remedies (including, without limitation, at
law or at equity) available to the Investor, the Investor shall be entitled
to specific performance in the event that the Company fails to comply with
the provisions of this Section 7.2(c).
(d) Notwithstanding the foregoing paragraphs of this
Section 7.2, the Investor shall not be prohibited from selling Shares under
the Registration Statement as a result of Suspensions on more than three
occasions of not more than 30 days each in any twelve month period, unless,
in the good faith judgment of the Company's Board of Directors, upon advice
of counsel, the sale of Shares under the Registration Statement in reliance
on this paragraph 7.2(d) would be reasonably likely to cause a violation of
the Securities Act or the Exchange Act and result in liability to the Company.
(e) Provided that a Suspension is not then in effect the
Investor may sell Shares under the Registration Statement, provided that it
arranges for delivery of a current Prospectus to the transferee of such
Shares. Upon receipt of a request therefor, the Company has agreed to provide
an adequate number of current Prospectuses to the Investor and to supply
copies to any other parties requiring such Prospectuses.
(f) In the event of a sale of Shares by the Investor
pursuant to the Registration Statement, the Investor must also deliver to the
Company's transfer agent, with a copy to the Company, a Certificate of
Subsequent Sale substantially in the form attached hereto, so that the Shares
may be properly transferred.
7.3 INDEMNIFICATION. For the purpose of this Section 7.3:
(i) the term "Selling Stockholder" shall include the Investor
and any affiliate of such Investor;
(ii) the term "Registration Statement" shall include any final
Prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 7.1; and
(iii) the term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any omission or alleged omission to
state in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless
each Selling Stockholder from and against any losses, claims, damages or
liabilities to which such Selling Stockholder may become subject (under the
Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or
are based upon (i) any untrue statement of a material fact contained in the
Registration Statement, or (ii) any failure by the Company to fulfill any
undertaking included in the Registration Statement, and the Company will
reimburse such Selling Stockholder for any reasonable legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any
such action, proceeding or claim, or preparing to defend any such action,
proceeding or claim, PROVIDED, HOWEVER, that the Company shall not be liable
in
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any such case to the extent that such loss, claim, damage or liability arises
out of, or is based upon, an untrue statement made in such Registration
Statement in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Selling Stockholder
specifically for use in preparation of the Registration Statement or the
failure of such Selling Stockholder to comply with its covenants and
agreements contained in Section 7.2 hereof respecting sale of the Shares or
any statement or omission in any Prospectus that is corrected in any
subsequent Prospectus that was delivered to the Investor prior to the
pertinent sale or sales by the Investor. The Company shall reimburse each
Selling Stockholder for the amounts provided for herein on demand after such
expenses are incurred but prior to final determination of any lawsuits or
other legal proceedings.
(b) The Investor agrees to indemnify and hold harmless
the Company (and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, each officer of the Company who
signs the Registration Statement and each director of the Company) from and
against any losses, claims, damages or liabilities to which the Company (or
any such officer, director or controlling person) may become subject (under
the Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or
are based upon, (i) any failure to comply with the covenants and agreements
contained in Section 7.2 hereof respecting sale of the Shares, or (ii) any
untrue statement of a material fact contained in the Registration Statement
if such untrue statement was made in reliance upon and in conformity with
written information furnished by or on behalf of the Investor specifically
for use in preparation of the Registration Statement, and the Investor will
reimburse the Company (or such officer, director or controlling person), as
the case may be, for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding
or claim; PROVIDED that the Investor's obligation to indemnify the Company
shall be limited to the net amount received by the Investor from the sale of
the Shares.
(c) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 7.3, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, but the omission
to so notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party under this Section 7.3 (except to
the extent that such omission materially and adversely affects the
indemnifying party's ability to defend such action) or from any liability
otherwise than under this Section 7.3. Subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified
person, the indemnifying person shall be entitled to participate therein,
and, to the extent that it shall elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, shall be entitled to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to
assume the defense thereof, such indemnifying person shall not be liable to
such indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, PROVIDED, HOWEVER,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the
same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying
person; provided, however, that no indemnifying person shall be responsible
for the fees and expenses of more than one separate counsel (together with
appropriate local counsel) for all indemnified parties. In no event shall
any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved
the terms of such settlement; PROVIDED that such consent shall not be
unreasonably withheld. No indemnifying person shall, without the prior
written consent of the indemnified person, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified person
is or could have been a party and indemnification could have been sought
hereunder by such indemnified person, unless such settlement includes an
unconditional release of such indemnified person from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section
7.3 is unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
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claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Company on
the one hand and the Investor, as well as any other Selling Stockholders
under such registration statement on the other in connection with the
statements or omissions or other matters which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, in the case of an untrue
statement, whether the untrue statement relates to information supplied by
the Company on the one hand or an Investor or other Selling Stockholder on
the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement. The Company and
the Investor agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even
if the Investor and other Selling Stockholders were treated as one entity for
such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to above in this subsection
(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this subsection (d), the Investor shall not be required to
contribute any amount in excess of the amount by which the net amount
received by the Investor from the sale of the Shares to which such loss
relates exceeds the amount of any damages which such Investor has otherwise
been required to pay by reason of such untrue statement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Investor's obligations in
this subsection to contribute shall be in proportion to its Investor sale of
Shares to which such loss relates and shall not be joint with any other
Selling Stockholders.
(e) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel
during the negotiations regarding the provisions hereof including, without
limitation, the provisions of this Section 7.3, and are fully informed
regarding said provisions. They further acknowledge that the provisions of
this Section 7.3 fairly allocate the risks in light of the ability of the
parties to investigate the Company and its business in order to assure that
adequate disclosure is made in the Registration Statement as required by the
Act and the Exchange Act. The parties are advised that federal or state
public policy as interpreted by the courts in certain jurisdictions may be
contrary to certain of the provisions of this Section 7.3, and the parties
hereto hereby expressly waive and relinquish any right or ability to assert
such public policy as a defense to a claim under this Section 7.3 and further
agree not to attempt to assert any such defense.
7.4 TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions
precedent imposed by Section 5 or this Section 7 upon the transferability of
the Shares shall cease and terminate as to any particular number of the
Shares when such Shares shall have been effectively registered under the
Securities Act and sold or otherwise disposed of in accordance with the
intended method of disposition set forth in the Registration Statement
covering such Shares or at such time as an opinion of counsel satisfactory to
the Company shall have been rendered to the effect that such conditions are
not necessary in order to comply with the Securities Act.
7.5 INFORMATION AVAILABLE. So long as the Registration
Statement is effective covering the resale of Shares owned by the Investor,
the Company will furnish to the Investor:
(a) as soon as practicable after it is available, one
copy of (i) its Annual Report to Stockholders (which Annual Report shall
contain financial statements audited in accordance with generally accepted
accounting principles by a national firm of certified public accountants),
(ii) its Annual Report on Form 10-K and (iii) its Quarterly Reports on Form
10-Q (the foregoing, in each case, excluding exhibits);
(b) upon the request of the Investor, all exhibits
excluded by the parenthetical to subparagraph (a) of this Section 7.5 as
filed with the SEC and all other information that is made available to
stockholders; and
(c) upon the reasonable request of the Investor, an
adequate number of copies of the Prospectuses to supply to any other party
requiring such Prospectuses; and the Company, upon the reasonable request of
the Investor, will meet with the Investor or a representative thereof at the
Company's headquarters to discuss all information relevant for disclosure in
the Registration Statement covering the Shares and will otherwise cooperate
with any Investor conducting an investigation for the purpose of reducing or
eliminating such Investor's exposure to liability under the Securities Act,
including the reasonable production of information at the Company's
headquarters; provided, that the Company shall not be required to disclose
any confidential information to or meet at its headquarters with any Investor
until and unless the Investor shall have entered into a confidentiality
agreement in
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form and substance reasonably satisfactory to the Company with the Company
with respect thereto.
8. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed (A) if within
domestic United States by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, or by
facsimile, or (B) if delivered from outside the United States, by
International Federal Express or facsimile, and shall be deemed given (i) if
delivered by first-class registered or certified mail domestic, three
business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by
International Federal Express, two business days after so mailed, (iv) if
delivered by facsimile, upon electronic confirmation of receipt and shall be
delivered as addressed as follows:
(a) if to the Company, to:
Puma Technology, Inc.
2550 North First Street, Suite 500
San Jose, CA 95131
Attention: Chief Financial Officer
(b) with a copy to:
General Counsel Associates LLP
1891 Landings Drive
Mountain View, CA 94043
Attention: Susan J. Skaer, Esq.
(c) if to the Investor, at its address on the signature
page hereto, or at such other address or addresses as may have
been furnished to the Company in writing.
9. CHANGES. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investor.
10. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed
to be part of this Agreement.
11. SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby.
12. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware,
without giving effect to the principles of conflicts of law.
13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.
14. RULE 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and
the rules and regulations adopted by the SEC thereunder (or, if the Company
is not required to file such reports, it will, upon the request of any
Investor holding Shares purchased hereunder made after the first anniversary
of the Closing Date, make publicly available such information as necessary to
permit sales pursuant to Rule 144 under the Securities Act), and it will take
such further action as any such Investor may reasonably request, all to the
extent required from time to time to enable such Investor to sell Shares
purchased hereunder without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (b) any similar rule
or regulation hereafter adopted by the SEC. Upon the request of the
Investor, the Company will deliver to such holder a written statement as to
whether it has complied with such information and requirements.
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated August 20, 1999, except for Note 12,
which is as of August 24, 1999, relating to the consolidated financial
statements of Puma Technology, Inc. which appear in the 1999 Annual Report to
Shareholders of Puma Technology, Inc., which is incorporated by reference in the
Annual Report on Form 10-K of Puma Technology, Inc. for the year ended July 31,
1999.
We also consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated August 20, 1999, except as to the
pooling of interests with NetMind Technologies, Inc., which is as of
February 24, 2000, and the common stock split discussed in Note 1 which is as of
March 22, 2000, relating to the supplementary consolidated financial statements
of Puma Technology, Inc. which appear in the report on Form 8-K dated April 18,
2000. We also consent to the reference to us under the heading "Experts" in such
Registration Statement on Form S-3.
PRICEWATERHOUSECOOPERS LLP
/s/ PricewaterhouseCoopers LLP
San Jose, California
April 21, 2000
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated December 30, 1999 relating to the
audited financial statements of ProxiNet, Inc. for the period from June 27, 1997
(date of inception) to December 31, 1997, the year end December 31, 1998 and the
period from June 27, 1997 (date of inception) to December 31, 1998, which appear
in the report on Form 8-K dated December 10, 1999 as amended on January 11,
2000.
PRICEWATERHOUSECOOPERS LLP
/s/ PricewaterhouseCoopers LLP
San Jose, California
April 21, 2000
