<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 1995
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
RADIUS INC.
(Exact name of Registrant as specified in its charter)
CALIFORNIA 68-0101300
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
______________________
215 MOFFETT PARK DRIVE
SUNNYVALE, CALIFORNIA 94089
(408) 541-6100
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
____________________
DAVID G. PINE
GENERAL COUNSEL
RADIUS INC.
215 MOFFETT PARK DRIVE
SUNNYVALE, CALIFORNIA 94089
(408) 541-6100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
____________________
COPIES TO:
EDWIN N. LOWE, ESQ.
CHERYL D. DAVEY, ESQ.
FENWICK & WEST
TWO PALO ALTO SQUARE, SUITE 800
PALO ALTO, CALIFORNIA 94306
____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME FOR A PERIOD OF 45 DAYS (OR SUCH LONGER PERIOD, AS MORE FULLY DESCRIBED
HEREIN, THAT MAY APPLY IF USE OF THIS REGISTRATION STATEMENT IS DEFERRED OR
SUSPENDED BY THE REGISTRANT) AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT OR UNTIL THE EARLIER OF SALE OF ALL SHARES REGISTERED HEREUNDER.
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / _____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /_____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
_____________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) SHARE(1) PRICE(1) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock 2,509,319 shs. $8.3125 $20,858,714 $7,193
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<FN>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee, pursuant to Rule 457(c) under the Securities Act, based
on the average of the average of the high and low prices of the Common
Stock on the Nasdaq National Market on August 21, 1995.
_______________________
</TABLE>
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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<PAGE>
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PROSPECTUS
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2,509,319 SHARES
RADIUS INC.
COMMON STOCK
___________________
ALL OF THE SHARES OF COMMON STOCK OFFERED HEREBY ARE BEING SOLD BY THE SELLING
SHAREHOLDERS NAMED HEREIN UNDER "SELLING SHAREHOLDERS." SUCH SHARES ARE BEING
OFFERED ON A CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, AS AMENDED, DURING A PERIOD, WHICH IS ANTICIPATED TO BE 45 DAYS IN LENGTH
BUT WHICH IS SUBJECT TO REDUCTION OR EXTENSION AS DESCRIBED IN "PLAN OF
DISTRIBUTION," FOLLOWING THE DATE ON WHICH THE REGISTRATION STATEMENT TO WHICH
THIS PROSPECTUS RELATES BECOMES EFFECTIVE. NO UNDERWRITING DISCOUNTS,
COMMISSIONS OR EXPENSES ARE PAYABLE OR APPLICABLE IN CONNECTION WITH THE SALE OF
SUCH SHARES. THE COMMON STOCK OF RADIUS INC. (THE "COMPANY") IS QUOTED ON THE
NASDAQ NATIONAL MARKET ("NNM") UNDER THE SYMBOL "RDUS." THE SHARES OF COMMON
STOCK OFFERED HEREBY WILL BE SOLD FROM TIME TO TIME AT THEN PREVAILING MARKET
PRICES, AT PRICES RELATING TO PREVAILING MARKET PRICES OR AT NEGOTIATED PRICES.
ON AUGUST 21, 1995, THE CLOSING PRICE OF THE COMMON STOCK ON THE NNM WAS $8.25.
THE SHARES OF COMMON STOCK OFFERED HEREBY WERE ISSUED BY THE COMPANY IN A
PRIVATE PLACEMENT TRANSACTION OCCURRING IN JUNE 1995 (THE "PRIVATE PLACEMENT").
THE SHARES OF COMMON STOCK OFFERED HEREBY REPRESENT APPROXIMATELY 14.7% OF THE
COMPANY'S CURRENTLY OUTSTANDING COMMON STOCK.
___________________
SEE "RISK FACTORS" COMMENCING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK
OFFERED HEREBY.
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
PROCEEDS TO
PRICE TO THE UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT COMPANY(1) SHAREHOLDERS(1)
------ -------- ---------- ---------------
PER SHARE. . . . SEE TEXT ABOVE NONE NONE SEE TEXT ABOVE
TOTAL . . . . . .SEE TEXT ABOVE NONE NONE SEE TEXT ABOVE
___________
(1) THE SHARES OF COMMON STOCK OFFERED HEREBY WILL BE SOLD FROM TIME TO TIME AT
THE THEN PREVAILING MARKET PRICES, AT PRICES RELATING TO PREVAILING MARKET
PRICES OR AT NEGOTIATED PRICES. THE COMPANY WILL PAY EXPENSES OF
REGISTRATION ESTIMATED AT $60,000.
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THE DATE OF THIS PROSPECTUS IS AUGUST __, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission located at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Commission's regional offices at Seven World Trade Center, 13th Floor,
New York, New York 10048; and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can
also be obtained from the Public Reference Section of the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Company's Common Stock is quoted for trading on the
Nasdaq National Market and reports, proxy statements and other information
concerning the Company may be inspected at the offices of the National
Association of Securities Dealers, Inc., 9513 Key West Avenue, Rockville,
Maryland 20850.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock offered hereby. This Prospectus does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto. For further information with respect to the
Company and the Common Stock offered hereby, reference is made to the
Registration Statement and the exhibits and schedules filed therewith.
Statements contained in this Prospectus as to the contents of any contract or
any other document referred to are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference. A copy of the Registration Statement may be
inspected, without charge, at the offices of the Commission in Washington, D.C.
and copies of all or any part of the Registration Statement may be obtained from
the Public Reference Section of the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, upon the payment of the fees
prescribed by the Commission.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom this Prospectus is delivered, upon
written or oral request of such person, a copy of any and all of the information
that has been incorporated by reference in this Prospectus (not including
exhibits to the information that is incorporated by reference unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Requests should be directed to Mr. David G.
Pine, General Counsel, Radius Inc., 215 Moffett Park Drive, Sunnyvale,
California 94089; telephone number (408) 541-6100.
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer to sell or solicitation of an offer to buy any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information
2
<PAGE>
herein is correct as of any time subsequent to the date hereof or that there has
been no change in the affairs of the Company since such date.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated herein by
reference:
(a) The Company's annual report on Form 10-K filed with the Commission for the
fiscal year ended September 30, 1994.
(b) The Company's quarterly reports on Form 10-Q filed with the Commission for
the quarters ended December 30, 1994, April 1, 1995 and July 1, 1995.
(c) The Company's current report on Form 8-K filed with the Commission on June
28, 1995.
(d) All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act following the date of this Prospectus and
prior to the termination of the offering contemplated hereby.
(e) The description of the Company's Common Stock contained in the Company's
registration statement on Form 8-A filed with the Commission on July 13,
1990.
THE COMPANY
The principal executive offices of the Company are located at 215 Moffett
Park Drive, Sunnyvale, California 94089 and its telephone number is (408) 541-
6100. In this Prospectus, the term "Radius" or "Company" refers to Radius Inc.,
a California corporation, unless the context otherwise requires.
RISK FACTORS
Investors should consider carefully the following factors, in addition to
the other information contained in this Prospectus, before purchasing the shares
of Common Stock offered hereby.
CONTINUING OPERATING LOSSES
The Company experienced net operating losses in the fiscal years ended
September 30, 1993 and 1994 and in the nine months ended July 1, 1995. The
Company's ability to achieve and sustain profitable operations will depend upon
a number of factors, including the Company's ability to control costs; to
develop innovative and cost-competitive new products and to bring those products
to market in a timely manner; the rate and mix of Apple computers and related
products sold; competitive factors such as new product introductions, product
enhancements and aggressive marketing and pricing practices; general economic
conditions; and other factors. The Company's MacOS compatible systems business
has entailed and will continue to entail significant new challenges for the
Company (see, "-- New Business of MacOS Compatible Systems" below), and the
Company is confronting these challenges at a time in which substantial portions
of its core business are in transition. The Company has faced and expects to
continue to face increased competition in graphic cards and other products as
Apple revamps its product line
3
<PAGE>
to a structure based on the Peripheral Component Interconnect Local Bus standard
(the "PCI Bus"). As a result of this competition, the Company recently reduced
prices on its line of graphic cards for MacOS based PCI Bus computers at the
same time that it has experienced increased production costs for those products.
In addition, the Company anticipates significantly lower revenue and gross
profit from its digital video products primarily due to high sales channel
inventory levels of Radius Telecast, the Company's professional quality high-end
digital video product, resulting from a longer sales cycle than anticipated,
training requirements and technical issues associated with this new product.
The Company currently is implementing sales and marketing programs intended to
increase sales of the product to end users, although there can be no assurance
that such programs will be successful. For these and other reasons, including
those referred to herein, it is anticipated that the Company will record a
significant loss for its current fiscal quarter, and there can be no assurance
that the Company will be able to achieve profitability in the near term.
WORKING CAPITAL REQUIREMENTS
The Company's relatively low cash resources have restricted the Company's
ability to purchase inventory which has in turn limited its ability to
manufacture and sell products and has resulted in higher freight costs for
expedited deliveries. The Company's low cash position is due in part to the
Company's investment in components for its MacOS based systems and its lack of
profitability. The Company is currently in the process of transferring
component purchasing for these systems to its turn-key manufacturer, although
there can be no assurance whether or when such transfer will be completed or as
to the extent to which it will relieve the Company's shortage of cash.
Additional funds may be needed to finance the Company's planned development of
MacOS compatibles and other products, and for other purposes. There can be no
assurance that additional financing will be available when needed or, if
available, that the terms of such financing will not adversely affect the
Company's results of operations.
FLUCTUATIONS IN OPERATING RESULTS
The Company has experienced substantial fluctuations in operating results.
The Company's customers generally order on an as-needed basis, and the Company
has historically operated with relatively small backlogs. Quarterly sales and
operating results depend heavily on the volume and timing of bookings received
during the quarter, which are difficult to forecast. A substantial portion of
the Company's revenues are derived from sales made late in each quarter, which
increases the difficulty in forecasting sales accurately. Recently, shortages
of available cash have delayed the Company's receipt of products from suppliers
and increased shipping and other costs. The Company recognizes sales upon
shipment of product, and allowances are recorded for estimated noncollectible
amounts, returns, credits and similar costs, including product warranties and
price protection. Due to the inherent uncertainty of such estimates, there can
be no assurance that the Company's forecasts regarding bookings, collections,
rates of return, credits and related matters will be accurate. A significant
portion of the operating expenses of the Company are relatively fixed in nature,
and planned expenditures are based primarily on sales forecasts which, as
indicated above, are uncertain. Any inability on the part of the Company to
adjust spending quickly enough to compensate for any failure to meet sales
forecasts or to receive anticipated collections, or any unexpected increase in
product returns or other costs, could also have an adverse impact on the
Company's operating results.
4
<PAGE>
DEPENDENCE ON AND COMPETITION WITH APPLE
SUCCESS OF APPLE'S BUSINESS
Historically, substantially all of the Company's products have been
designed for and sold to users of Apple personal computers, and it is expected
that sales of products for such computers will continue to represent
substantially all of the net sales of the Company for the foreseeable future.
The Company's operating results would be adversely affected if Apple should lose
market share, if Macintosh sales were to decline or if other developments were
to adversely affect Apple's business. As software applications for the
professional desktop publishing and video markets become more available on
platforms other than Macintosh, it is likely that these other platforms will
continue to gain acceptance in these markets. For example, recently introduced
versions of the Windows operating environment for International Business
Machines Corporation ("IBM") and IBM-compatible personal computers support high
performance graphics and video applications similar to those offered on the
Macintosh. There is a risk that this trend will reduce the support given to
Macintosh products by third party developers and could substantially reduce
demand for Macintosh products and peripherals over the long term.
COMPETITION WITH APPLE
A number of the Company's products compete with products marketed by Apple.
For example, Apple sells displays and computers in direct competition with
displays and MacOS compatibles offered by the Company. As a competitor of the
Company, Apple could in the future take steps to hinder the Company's
development of compatible products and slow sales of the Company's products.
The Company's business is based in part on supplying products that meet the
needs of high-end customers that are not fully met by Apple's products. As
Apple improves its products or bundles additional hardware or software into its
computers, it reduces the market for Radius products that provide those
capabilities. For example, the Company believes that the on-board performance
capabilities included in Macintosh Power PC products have reduced and continue
to reduce overall sales for the Company's graphics cards. In the past, the
Company has developed new products as Apple's progress has rendered existing
Company products obsolete, but there can be no assurance that the Company will
continue to develop successful new products on a timely basis in the future. In
order to develop products for the Macintosh on a timely basis, the Company
depends upon access to advance information concerning new Macintosh products. A
decision by Apple to cease sharing advance product information with the Company
would adversely affect the Company's business.
MARKET DISRUPTION CAUSED BY APPLE PRODUCT INTRODUCTIONS
New products anticipated from and introduced by Apple could cause customers
to defer or alter buying decisions due to uncertainty in the marketplace, as
well as presenting additional direct competition for the Company. For example,
the Company believes that Apple's transition during 1994 to Power PC products
caused delays and uncertainties in the market place and had the effect of
reducing demand for the Company's products. In addition, sales of the Company's
products could be adversely affected by the uncertainties associated with
Apple's revamping of its entire product line from using the NuBus structure to
using a structure based on the PCI Bus standard. The Company recently reduced
prices on its line of graphic cards for MacOS based PCI Bus computers in
anticipation of increased competition. In the past, transitions in Apple's
products have been accompanied by shortages in those products and in key
components for them,
5
<PAGE>
leading to a slowdown in sales of those products and in the development and sale
by the Company of compatible products. In addition, it is possible that the
introduction of new Apple products with improved performance capabilities may
create uncertainties in the market concerning the need for the performance
enhancements provided by the Company's products and could reduce demand for such
products.
NEW BUSINESS OF MACOS COMPATIBLE SYSTEMS
DEVELOPMENT AND DISTRIBUTION OF NEW PRODUCT LINE
Traditionally, the Company has made peripheral products for Macintosh
computers. Becoming a provider for full MacOS-based systems has entailed, and
will continue to entail, significant challenges for the Company in designing,
developing, manufacturing and distributing products that are substantially
different than the Company's other product lines. There can be no assurance
that the Company will be successful in this new business. The Company's MacOS
compatibles will compete directly with Apple as well as other Apple licensees.
Currently, Apple has licensed four other companies to manufacture and sell MacOS
compatible systems, and it has announced that it intends to have additional
licensees by the end of 1995. The Company's entry into this business will
involve substantially greater investment of capital and other resources by the
Company than its peripherals business has required. The Company may require
additional sources of funding, including, possibly, corporate partnering
arrangements, in order to finance its entry into the compatibles business.
There can be no assurance that such financing will be available.
DEPENDENCE ON APPLE'S SUPPORT
The Company's entry into the MacOS compatible systems business has been
made possible by the Company's license from Apple of the MacOS operating system
and the right to manufacture and sell MacOS compatible computers. The Company
believes that Apple has licensed these rights to the Company pursuant to Apple's
announced strategy to license others to produce and market MacOS compatibles so
as to increase overall sales of computers using Apple's MacOS operating system.
The Company's MacOS compatibles business is dependent upon Apple's continued
commitment to this strategy and Apple's support of the Company's MacOS
compatible business. If Apple should, in the future, change its strategy or
reduce its support, the Company's compatibles business would be adversely
affected. Under the Company's MacOS licenses, the Company must obtain
certification from Apple that the Company's compatibles meet Apple's
quality/compatibility standards, and the Company must depend upon Apple's
willingness to grant such certification. Currently, the Company's licenses from
Apple are limited to certain board designs, to certain languages (including
English, German, Spanish and French) and to the current generation of the MacOS.
In the future, the Company will need to negotiate additional licenses from Apple
covering additional board designs and foreign languages, as well as new
generations of the operating system as they are introduced. There can be no
assurance that such licenses will be available on a timely basis or on
acceptable terms. Under the current license agreements, Apple is required to
provide adequate information, documentation and support to the Company and to
make available to the Company third party licenses of certain technology used in
the MacOS compatibles. At times, it has been difficult for the Company to
obtain such information, documentation and third party licenses on a timely
basis, and there is a risk that Apple will not be willing or able to provide
adequate technology
6
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and other support in the future. The Company has also confronted delays in
obtaining adequate supplies of components for its compatibles. In order to
obtain components on a timely basis, the Company must rely on Apple's
willingness to authorize component providers to supply the Company's needs and
must permit the Company to obtain adequate allocations of components that are in
short supply. There can be no assurance that Apple will take the necessary
action to assist the Company in obtaining an adequate supply of components or to
otherwise provide the necessary assistance and support to the Company's MacOS
compatible business.
The Company's initial sales of MacOS system products have been lower than
anticipated as a result of initial production difficulties and delays and
component shortages. In addition, the Company expects that the gross margins on
such products will be substantially reduced in the near term due to the high
costs of production for the initial products reflecting start-up costs and
component supply constraints coupled with pricing pressure due to the recent and
continuing price reductions by Apple.
COMPETITION
The markets for the Company's products are highly competitive, and the
Company expects competition to intensify. As indicated above, the Company faces
competition from Apple, but at the same time is dependent on Apple's support in
many respects. See "-- Dependence on and Competition with Apple" and "-- New
Business of MacOS Compatible Systems." The Company also faces direct
competition in each of its product groups. RasterOps Corporation competes with
many of the Company's products. In displays, the Company competes with Apple,
Sony Corporation of America ("Sony"), NEC Technology, Inc., Mitsubishi
Electronics of America, Inc. and Hitachi Corporation of America, Inc.
("Hitachi"), among others. The Company is dependent on certain of these
competitors, including Sony and Hitachi, for its supply of monitors, and there
is a risk that these competitors will use their leverage as suppliers to
adversely affect the Company's business. The Company's video products face
intense competition from Data Translations, RasterOps, Avid Technology, Inc.
("Avid"), and others. Avid's sales of digital video products are significantly
greater than the Company's. The Company's video software products compete with
products from Adobe and other software providers, but the Company must depend
upon access to technical information from Adobe in order for the Company's
hardware products to operate in Adobe's software environment. The Company's
MacOS compatible systems compete directly with Macintosh computers as well as
other licensees of Apple's MacOS technology. See "-- New Business of MacOS
Compatible Systems."
In addition to direct competition from Macintosh-based products, the
Company faces indirect competition from Windows-based products, and there is no
assurance that the vendors of these products will not enter the Macintosh
market. The impending convergence of the Macintosh and Windows platforms on the
PCI Bus will increase the availability of competitive products (including the
Company's line of graphic cards for MacOS-based PCI Bus computers) from other
suppliers. IBM and other personal computer or workstation manufacturers
currently offer products that compete directly with some of the Company's
products and could introduce additional products, add additional features to
their computer systems or alter their systems architectures in a manner that
could adversely affect the Company's ability to compete.
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Many of the Company's current and prospective competitors have
significantly greater financial, technical, manufacturing and marketing
resources than the Company. The Company believes that its ability to compete
will depend on a number of factors, including the success and timing of new
product developments by the Company and its competitors, product performance,
price and quality, breadth of distribution and customer support. There can be
no assurance that the Company will be able to compete successfully with respect
to these factors. In addition, the introduction of lower priced competitive
products could result in price reductions that would adversely affect the
Company's results of operations.
DEPENDENCE ON SUPPLIERS
OUTSOURCING
The Company outsources the manufacturing and assembly of its products to
third party suppliers. Although the Company uses a number of
manufacturer/assemblers, each of its products is manufactured and assembled by a
single supplier. The failure of a supplier to ship the quantities of a product
ordered by the Company could cause a material disruption in the Company's sales
of that product. In the past, the Company has at times experienced substantial
delays in its ability to fill customer orders for displays and other products,
due to the inability of certain suppliers to meet their volume and schedule
requirements and, recently, due to the Company's shortages in available cash.
Due to recent shortages in cash resources and because the Company seeks to
manage its use of working capital by, among other things, limiting the backlog
of inventory it purchases, the Company is particularly vulnerable to delays in
shipments from suppliers. Such delays can cause fluctuations in the Company's
short term results and contribute to order cancellations.
COMPONENTS
The Company is also dependent on sole or limited source suppliers for
certain key components used in its products, including color monitors, certain
CPU components, certain digital to analog converters, digital video chips,
printer engines and other products. Certain other semiconductor components and
molded plastic parts are also purchased from sole or limited source suppliers.
A number of these suppliers, including the suppliers of monitors and other
display components, are direct competitors of the Company with respect to the
components supplied. The Company purchases these sole or limited source
components primarily pursuant to purchase orders placed from time to time in the
ordinary course of business and has no guaranteed supply arrangements with sole
or limited source suppliers. The Company expects that these suppliers will
continue to meet its requirements for the components, but there can be no
assurance that they will do so. The introduction of new products presents
additional difficulties in obtaining timely shipments from suppliers.
Additional time may be needed to identify and qualify suppliers of the new
products. Also, the Company has experienced delays in achieving volume
production of new products due to the time required for suppliers to build their
manufacturing capacity. Certain components are purchased from foreign
suppliers, including displays from Asia. Currency fluctuations can adversely
affect the cost and availability of components from these suppliers. An
extended interruption in the supply of any of the components for the Company's
products, regardless of the cause, could have an adverse impact on the Company's
results of operations. The Company's products also incorporate components, such
as VRAMs, DRAMs and ASICs that are available from multiple sources but have been
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subject to substantial fluctuations in availability and price. Although the
Company currently is able to obtain an adequate supply of such components, there
can be no assurance that the Company will be able to obtain an adequate supply
in the future. In addition, because a substantial portion of the total material
cost of the Company's products is represented by these components, significant
fluctuations in their price and availability could affect its results of
operations.
TECHNOLOGICAL CHANGE; CONTINUING NEED TO DEVELOP NEW PRODUCTS
TECHNOLOGICAL CHANGE
The personal computer industry in general, and the professional publishing
and video applications within the industry, are characterized by rapidly
changing technology, often resulting in short product life cycles and rapid
price declines. The Company believes that its success will be highly dependent
on its ability to develop innovative and cost-competitive new products and to
bring them to the marketplace in a timely manner. Should the Company fail to
introduce new products on a timely basis, the Company's operating results could
be adversely affected. Technological innovation is particularly important for
the Company, since its business is based on its ability to provide functionality
and features not included in Apple's products. As Apple introduces new products
with increased functionality and features, the Company's business will be
adversely affected unless it develops new products that provide advantages over
Apple's latest offerings. Continued reduction in the available cash resources
of the Company could result in the interruption or cancellation of research and
product development efforts.
EVOLUTION TO DESKTOP VIDEO EDITING
The Company anticipates that the video editing industry will follow the
pattern of the professional publishing industry in which desktop publishing
products, including those produced by Radius, replaced more expensive,
proprietary products, and the Company also anticipates that this evolution will
lead to a significant increase in the purchase and use of video editing
products. There is a risk that this evolution will not occur in the video
editing industry as expected by the Company, or that it will occur at a slower
pace than anticipated.
NEW PRODUCTS
The introduction of new products is inherently subject to risks of delay.
Should the Company fail to introduce new products on a timely basis, the
operating results of the Company could be adversely affected. The introduction
of new products and the phasing out of older products will require the Company
to carefully manage its inventory to avoid inventory obsolescence and may
require increases in inventory reserves. The long lead times -- as much as
three to five months -- associated with the procurement of certain components
(principally displays and ASICs) exposes the Company to greater risk in
forecasting the demand for new products. There can be no assurance that the
Company's forecasts regarding new product demand and its estimates of
appropriate inventory levels will be accurate. Moreover, no assurance can be
given that the Company will be able to cause all of its new products to be
manufactured at acceptable manufacturing yields or that the Company will obtain
market acceptance for these products.
9
<PAGE>
DISTRIBUTION
The Company's primary means of distribution is through a limited number of
third-party distributors and master resellers, and all of the Company's sales of
Radius branded MacOS-based systems products in the United States and Canada are
made through Ingram Micro, Inc. ("Ingram"). As a result, the Company's business
and financial results are highly dependent on the amount of the Company's
products that are ordered by these distributors and resellers. Such orders are
in turn dependent upon the continued viability and financial condition of these
distributors and resellers as well as on their ability to resell such products
and maintain appropriate inventory levels. Due in part to the historical
volatility of the personal computer industry, certain of the Company's resellers
have from time to time experienced declining profit margins, cash flow shortages
and other financial difficulties. The future growth and success of the Company
will continue to depend in large part upon its reseller channels. If its
resellers were to experience financial difficulties, the Company's results of
operations could be adversely affected.
Ingram accounted for 43.8% and 25.1% of the Company's net sales for the
three and nine months periods ending July 1, 1995, respectively. For the
corresponding periods of 1994, Ingram accounted for 11.0% and 12.0%,
respectively, of the Company's net sales. The increase in sales to Ingram
reflects a reduction in orders placed by many of the Company's distributors and
resellers following the Company's announcement in June 1995 that it had entered
into a distribution agreement granting Ingram the exclusive right to distribute
Radius branded MacOS-based system products in the United States and Canada.
While the Company believes that this exclusive distribution arrangement will
facilitate effective and lower-cost marketing distribution of its MacOS-based
system products, the extent to which this exclusive distribution arrangement
with Ingram will affect the size of future orders from the Company's other
distributors and resellers is uncertain. During fiscal 1994 and 1993, Ingram
accounted for approximately 13.5% and 11.5% of the Company's net sales,
respectively. During fiscal 1992, Intelligent Electronics accounted for 12.4%
of the Company's net sales. No other reseller accounted for 10% or more of the
Company's net sales during these periods.
INTERNATIONAL SALES
International sales represented 33.0%, 34.5%, 32.0% and 33.4% of the
Company's net sales for the nine months ended July 1, 1995 and the fiscal years
ended September 30, 1994, 1993 and 1992, respectively. The Company's
international sales are primarily made through distributors and the Company's
subsidiary in Japan. The Company expects that international sales will
represent a significant portion of its net sales and that it will be subject to
the normal risks of international sales such as currency fluctuations, longer
payment cycles, export controls and other governmental regulations and, in some
countries, a lesser degree of intellectual property protection as compared to
that provided under the laws of the United States. In addition, fluctuations in
exchange rates could affect demand for the Company's products. If for any
reason exchange or price controls or other restrictions on foreign currencies
are imposed, the Company's business and operating results could be materially
adversely affected.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends to a significant degree upon the continued
contributions of its key management, marketing, product development and
operational personnel and the
10
<PAGE>
Company's ability to retain and continue to attract highly skilled personnel.
Competition for employees in the computer industry is intense, and there can be
no assurance that the Company will be able to attract and retain qualified
employees. The Company has recently made a number of management changes,
including the appointment of a new Chief Financial Officer. If the Company
continues to experience financial difficulties, it may become increasingly
difficult for it to hire new employees and retain current employees. The
Company's inability to retain and attract key employees could have a material
adverse effect on the Company's product development and results of operations.
The Company does not carry any key person life insurance with respect to any of
its personnel.
DEPENDENCE ON PROPRIETARY RIGHTS
The Company relies on a combination of patent, copyright, trademark and
trade secret protection, nondisclosure agreements and licensing arrangements to
establish and protect its proprietary rights. The Company has a number of
patents and patent applications and intends to file additional patent
applications as it considers appropriate. There can be no assurance that
patents will issue from any of these pending applications or, if patents do
issue, that any claims allowed will be sufficiently broad to protect the
Company's technology. In addition, there can be no assurance that any patents
that may be issued to the Company will not be challenged, invalidated or
circumvented, or that any rights granted thereunder would provide proprietary
protection to the Company. The Company has a number of trademarks and trademark
applications. There can be no assurance that litigation with respect to
trademarks will not result from the Company's use of registered or common law
marks, or that, if litigation against the Company were successful, any resulting
loss of the right to use a trademark would not reduce sales of the Company's
products in addition to the possibility of a significant damages award.
Although, the Company intends to defend its proprietary rights, policing
unauthorized use of proprietary technology or products is difficult, and there
can be no assurance that the Company's efforts will be successful. The laws of
certain foreign countries may not protect the proprietary rights of the Company
to the same extent as do the laws of the United States. The Company has
licensed from Apple the right to manufacture and sell certain MacOS compatibles.
The license agreement does not provide for indemnity by Apple against any claims
that might be brought alleging that the technology incorporated in the Company's
MacOS compatibles infringe third party intellectual property rights.
The Company has received, and may receive in the future, communications
asserting that its products infringe the proprietary rights of third parties,
and the Company is engaged and has been engaged in litigation alleging that the
Company's products infringe others' patent rights. There can be no assurance
that other intellectual property litigation will not be brought in the future or
such litigation will not have a material adverse effect on the Company's
financial position or results of operations. As a result of such claims or
litigation, it may become necessary or desirable in the future for the Company
to obtain licenses relating to one or more of its products or relating to
current or future technologies, and there can be no assurance that it would be
able to do so on commercially reasonable terms.
VOLATILITY OF STOCK PRICE; DILUTION
The price of the Company's Common Stock has fluctuated widely in the past.
Management believes that such fluctuations may have been caused by announcements
of new
11
<PAGE>
products, quarterly fluctuations in the results of operations and other factors,
including changes in conditions of the personal computer industry in general.
Stock markets have experienced extreme price volatility in recent years. This
volatility has had a substantial effect on the market prices of securities
issued by the Company and other high technology companies, often for reasons
unrelated to the operating performance of the specific companies. Due to the
factors referred to herein, the dynamic nature of the Company's industry,
general economic conditions and other factors, the Company's future operating
results and stock prices may be subject to significant volatility in the future.
In addition, any change in other operating results could have an immediate and
significant effect on the prices of the Company's Common Stock. Such stock
price volatility for the Common Stock has in the past provoked securities
litigation, and future volatility could provoke litigation in the future that
could divert substantial management resources and have an adverse effect on the
Company's results of operations.
12
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
August 1, 1995 by each Selling Shareholder named below (without regard to shares
sold by such persons pursuant to this Prospectus). All of the Selling
Shareholders named below acquired the shares of Common Stock offered hereby in
connection with the Private Placement. Except as described below, no Selling
Shareholder has had any position, office or other material relationship with the
Company within the past three years. The following table assumes each Selling
Shareholder sells all of the shares held by such Selling Shareholder in this
offering. The Company is unable to determine the exact number of shares that
will actually be sold.
Assignees of the Selling Shareholders, if any, who acquire shares of Common
Stock of the Company from a Selling Shareholder and satisfy certain conditions
are entitled to the same registration rights as the named Selling Shareholders.
If any such assignee wishes to sell shares hereunder, this Prospectus will be
amended or supplemented to name such assignee as a Selling Shareholder.
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Prior to Offering Owned After Offering
----------------------- --------------------
Shares Being
Name Number Percent Offered Number Percent
---- ------ ------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
Banque Franck S.A. 884,173 5.2% 884,173 -- --
Banque Scandinave en Suisse-Geneva 545,000 3.2% 545,000 -- --
Legong Investments N.V. 150,000 * 150,000 -- --
Buchanan Fund Limited-Atlantic Fund 125,000 * 125,000 -- --
Buchanan Partners Limited 125,000 * 125,000 -- --
J.M. Hull Associates 100,000 * 100,000 -- --
Millenco, L.P. 100,000 * 100,000 -- --
Wajilei Stiftung 100,000 * 100,000 -- --
Hull Overseas Ltd. 75,000 * 75,000 -- --
Harbour Investments Ltd. 67,200 * 67,200 -- --
Bank Ehringer & CIE 55,000 * 55,000 -- --
Convertible Hedged Growth Ltd. 50,000 * 55,000 -- --
Swiss Volksbank(1) 40,946 * 40,146 800 *
Firebird Overseas, Ltd. 25,000 * 25,000 -- --
Dennis B. Poster 25,000 * 25,000 -- --
Field Nominees Ltd.(2) 20,000 * 20,000 -- --
Strong Special Investment Limited Partnership 12,800 * 12,800 -- --
Associated Asset Management Inc. 10,000 * 10,000 -- --
--------------------
* Less than 1%.
(1) Includes 40,146 shares held of record and 800 shares which Swiss Volksbank
has the right to acquire within 60 days.
(2) Represents shares held by Field Nominees Ltd. as trustee for three trusts.
</TABLE>
13
<PAGE>
PLAN OF DISTRIBUTION
In connection with the Private Placement, each of the Selling Shareholders
entered into a Registration Rights Agreement (collectively, the "Agreements")
with the Company. The Registration Statement of which this Prospectus forms a
part has been filed pursuant to the Agreements. To the Company's knowledge, no
Selling Shareholder has entered into any agreement, arrangement or understanding
with any particular broker or market maker with respect to the shares offered
hereby, nor does the Company know the identity of the brokers or market makers
which will participate in the offering.
The shares of Common Stock covered hereby may be offered and sold from time
to time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. Such sales may be made over the NNM or otherwise,
at prices and on terms then prevailing or at prices related to the then market
price, or in negotiated transactions. The shares may be sold by one or more of
the following: (a) a block trade in which the broker-dealer engaged by the
Selling Shareholder will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction;
(b) purchases by the broker-dealer as principal and resale by such broker or
dealer for its account pursuant to this Prospectus; and (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers. The
Company has been advised by the Selling Shareholders that they have not, as of
the date hereof, entered into any arrangement with a broker-dealer for the sale
of shares through a block trade, special offering, or secondary distribution of
a purchase by a broker-dealer. In effecting sales, broker-dealers engaged by
the Selling Shareholders may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or discounts from the Selling
Shareholders in amounts to be negotiated immediately prior to the sale.
In offering the shares, the Selling Shareholders and any broker-dealers who
execute sales for the Selling Shareholders may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales, and any
profits realized by the Selling Shareholders and the compensation of such
broker-dealer may be deemed to be underwriting discounts and commissions.
The Selling Shareholders have advised the Company that, during such time as
they may be engaged in a distribution of the shares of Common Stock included
herein, they will comply with Rules 10b-6 and 10b-7 under the Exchange Act and,
in connection therewith, the Selling Shareholders have agreed not to engage in
any stabilization activity in connection with any securities of the Company, to
furnish copies of this Prospectus to each broker-dealer through which the shares
of Common Stock included herein may be offered, and not to bid for or purchase
any securities of the Company or attempt to induce any person to purchase any
securities of the Company except as permitted under the Exchange Act. The
Selling Shareholders have also agreed to inform the Company and broker-dealers
through whom sales may be made hereunder when the distribution of the shares is
completed.
Rule 10b-6 under the Exchange Act prohibits participants in a distribution
from bidding for or purchasing for an account in which the participant has a
beneficial interest, any of the securities that are the subject of the
distribution. Rule 10b-7 under the Exchange Act governs
14
<PAGE>
bids and purchases made to stabilize the price of a security in connection with
a distribution of the security.
The Agreements provide that the Registration Statement of which this
Prospectus forms a part will remain effective for at least 45 consecutive days.
Notwithstanding the foregoing, upon the occurrence of certain events the Company
may suspend use of this Prospectus. However, the Company may not exercise its
right to suspend use of this Prospectus for the first 30 days after the
Registration Statement of which this Prospectus forms a part has been declared
effective; and the period during which the Company is required to maintain the
effectiveness of such Registration Statement will be extended by 1.5 days for
each day during which use of this Prospectus is suspended.
This offering will terminate as to each Selling Shareholder on the earlier
of (a) the period described in the previous paragraph during which the Company
is required to maintain the effectiveness of the Registration Statement of which
this Prospectus is a part; or (b) the date on which all shares offered hereby
have been sold by the Selling Shareholders. There can be no assurance that any
of the Selling Shareholders will sell any or all of the shares of Common Stock
offered hereby.
Upon the occurrence of any of the following events, this Prospectus will be
amended to include additional disclosure before offers and sales of the
securities in question are made: (a) to the extent the securities are sold at a
fixed price or at a price other than the prevailing market price, such price
would be set forth in the Prospectus, (b) if the securities are sold in block
transactions and the purchaser acting in the capacity of an underwriter wishes
to resell, such arrangements would be described in the Prospectus, (c) if a
Selling Shareholder sells to a broker-dealer acting in the capacity as an
underwriter, such broker-dealer will be identified in the Prospectus and (d) if
the compensation paid to broker-dealers is other than usual and customary
discounts, concessions or commissions, disclosure of the terms of the
transaction would be included in the Prospectus.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Fenwick & West, Two Palo Alto Square,
Suite 800, Palo Alto, California 94306.
EXPERTS
The consolidated financial statements and schedules of Radius Inc.
incorporated by reference in Radius Inc.'s Annual Report (Form 10-K) for the
year ended September 30, 1994, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon (which contains an
explanatory paragraph with respect to the litigation mentioned in Note 3 to the
consolidated financial statements), included therein and incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
15
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RADIUS INC.
2,509,319 Shares of
Common Stock
____________________
PROSPECTUS
____________________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Registrant in connection with this
offering are as follows:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee $ 7,193
Accounting fees and expenses 15,000
Legal fees and expenses 30,000
Miscellaneous 7,807
--------
Total $ 60,000
--------
--------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The provisions of Section 317 of the California Corporations Code, Article
V of the Registrant's Articles of Incorporation and Article VI of the
Registrant's Bylaws provide for indemnification to the fullest extent permitted
by law for expenses, judgments, fines, settlements and other amounts actually
and reasonably incurred in connection with any proceeding arising by reason of
the fact that any person is or was a director, officer or employee of the
Registrant. This indemnification may be sufficiently broad to permit
indemnification of the Registrant's officers and directors for liabilities
arising under the Securities Act. In addition, Article IV of the Registrant's
Articles of Incorporation provides that the liability of the Registrant's
directors shall be eliminated to the fullest extent permissible under the
California Law.
The Registrant has entered into Indemnity Agreements with each of its
current directors to give such directors additional contractual assurances
regarding the scope of the indemnification and liability limitations set forth
in the Registrant's Articles of Incorporation and Bylaws.
The Registrant currently carries a director and officer liability insurance
policy with a per claim and annual aggregate coverage limit of $10 million.
ITEM 16. EXHIBITS.
The following exhibits are filed herewith or incorporated by reference
herein:
EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
4.01 -- Specimen Certificate for shares of Common Stock of the
Registrant.(1)
4.02 -- Form of Registration Rights Agreement between the Registrant and
certain shareholders.
II-1
<PAGE>
EXHIBIT
NUMBER EXHIBIT TITLE
------ -------------
4.03 -- The Registrant's Sixth Amended and Restated Articles of
Incorporation.(2)
4.04 -- Certificate of Amendment of Registrant's Sixth Amended and
Restated Articles of Incorporation.(3)
4.05 -- The Registrant's Bylaws.(4)
5.01 -- Opinion of Fenwick & West regarding the legality of the
securities being issued.
23.01 -- Consent of Ernst & Young LLP, Independent Auditors.
23.02 -- Consent of Fenwick & West (included in Exhibit 5.01).
24.01 -- Power of Attorney (see page II-4).
________________
(1) Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 33-35769) filed with the Commission on July 6, 1990.
(2) Incorporated by reference to the Registrant's Report on Form 10-K for the
fiscal year ended September 30, 1990.
(3) Incorporated by reference to the Registrant's Report on Form 10-K for the
fiscal year ended September 30, 1994.
(4) Incorporated by reference to the Registrant's Registration Statement on
Form S-8 (File No. 33-47525) filed with the Commission on April 29, 1992.
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 (the
"Securities Act"); (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 in the Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement; PROVIDED,
HOWEVER, that paragraphs (i) and (ii) do not apply if the information required
to be included in a post-effective amendment is contained in periodic reports
filed with or furnished to the Securities and Exchange Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") that are incorporated by reference in the
Registration Statement.
II-2
<PAGE>
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed 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 this 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, 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 Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
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, the Registrant
certifies that it has reasonable grounds to believe that it meets all for 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 Sunnyvale, State of California, on the 22nd day of
August, 1995.
RADIUS INC.
By: /s/Charles W. Berger
-------------------------
Charles W. Berger
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints Robert W. Saltmarsh and David G. Pine, and each
of them, his attorneys-in-fact and agents, each with the power of substitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement, and to sign any registration statement for the same offering covered
by this Registration Statement that is to be effective upon filing pursuant to
Rule 462(b) promulgated under the Securities Act of 1933, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or his or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
PRINCIPAL EXECUTIVE OFFICER:
/s/Charles W. Berger President, Chief Executive August 22, 1995
---------------------- Officer and Chairman of the
Charles W. Berger Board of Directors
PRINCIPAL FINANCIAL OFFICER:
/s/Robert W. Saltmarsh Vice President, Finance and August 22, 1995
------------------------ Chief Financial Officer
Robert W. Saltmarsh
II-4
<PAGE>
PRINCIPAL ACCOUNTING OFFICER:
/s/Cherrie L. Jurado Controller August 22, 1995
------------------------
Cherrie L. Jurado
ADDITIONAL DIRECTORS:
/s/Michael D. Boich Director August 22, 1995
------------------------
Michael D. Boich
/s/Lawrence G. Finch Director August 16, 1995
------------------------
Lawrence G. Finch
/s/Michael A. McConnell Director August 22, 1995
------------------------
Michael A. McConnell
/s/Regis McKenna Director August 22, 1995
------------------------
Regis McKenna
/s/David B. Pratt Director August 16, 1995
------------------------
David B. Pratt
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT TITLE PAGE
------ ------------- ----
4.01 -- Speciman Certificate for shares of Common Stock of the
Registrant.(1)
4.02 -- Form of Registration Rights Agreement between the Registrant
and certain shareholders.
4.03 -- The Registrant's Sixth Amended and Restated Articles of
Incorporation.(2)
4.04 -- Certificate of Amendment of Registrant's Sixth Amended and
Restated Articles of Incorporation.(3)
4.05 -- The Registrant's Bylaws.(4)
5.01 -- Opinion of Fenwick & West regarding the legality of the
securities being issued.
23.01 -- Consent of Ernst & Young LLP, Independent Auditors.
23.02 -- Consent of Fenwick & West (included in Exhibit 5.01).
24.01 -- Power of Attorney (see page II-4).
________________
(1) Incorporated by reference to the Registrant's Registration Statement on
Form S-1 (File No. 33-35769) filed with the Commission on July 6, 1990.
(2) Incorporated by reference to the Registrant's Report on Form 10-K for the
fiscal year ended September 30, 1990.
(3) Incorporated by reference to the Registrant's Report on Form 10-K for the
fiscal year ended September 30, 1994.
(4) Incorporated by reference to the Registrant's Registration Statement on
Form S-8 (File No. 33-47525) filed with the Commission on April 29, 1992.
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of __________, 1995 (this
"Agreement"), is made by and between RADIUS INC., a California corporation (the
"Company"), and the person named on the signature page hereto (the "Initial
Investor").
W I T N E S S E T H:
WHEREAS, in connection with the Subscription Agreement, dated as of
_______, 1995, between the Initial Investor and the Company (the "Subscription
Agreement"), the Company has agreed, upon the terms and subject to the
conditions of the Subscription Agreement, to issue and sell to the Initial
Investor shares (the "Shares") of Common Stock, no par value (the "Common
Stock"); and
WHEREAS, to induce the Initial Investor to execute and deliver the
Subscription Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), and applicable state securities laws with respect to the
Shares;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Initial
Investor hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Investor" means the Initial Investor and any transferee or
assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof.
(ii) "register," "registered" and "registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and, to the extent required
hereunder, pursuant to Rule 415 under the Securities Act or any successor rule
providing for offering securities on a continuous basis ("Rule 415"), and the
declaration or ordering of effectiveness of such Registration Statement by the
United States Securities and Exchange Commission (the "SEC").
(iii) "Registrable Securities" mean the Shares.
(iv) "Registration Statement" means a registration statement of
the Company under the Securities Act.
<PAGE>
(b) As used in this Agreement, the term "Investor" includes (i) each
Investor (as defined above) and (ii) each person who is a permitted transferee
or assignee of the Registrable Securities pursuant to Section 9 of this
Agreement.
(c) Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Subscription Agreement.
2. REGISTRATION.
(a) PIGGY-BACK REGISTRATIONS. If at any time the Company shall
determine to file with the SEC a Registration Statement relating to an offering
for its own account or the account of others under the Securities Act any of its
equity securities, other than on Form S-4 or Form S-8 or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity, business or assets or equity securities issuable in
connection with stock option or other employee benefit plans, or shall receive a
notice of intention under Section 2(b) hereof, the Company shall send to each
Investor, who is entitled to registration rights under this Section 2(a) written
notice of such determination or notice has been given, such Investor shall so
request in writing, the Company shall include in such Registration Statement all
or any part of the Registrable Securities such Investor requests to be
registered, except that if, in connection with any underwritten public offering
for the account of the Company the managing underwriter(s) thereof shall impose
a limitation on the number of shares of Common stock which may be included in
the Registration Statement because, in such underwriter(s)' judgment, such
limitation is necessary to effect an orderly public distribution, then the
Company shall be obligated to include in such Registration Statement only such
limited portion of the Registrable Securities with respect to which such
Investor has requested inclusion hereunder. Any exclusion of Registrable
Securities shall be made pro rata among the Investors seeking to include
Registrable Securities (and the other holders referred to in the second proviso
below seeking to include their securities that are subject to registration
rights), in proportion to the number of Registrable Securities sought to be
included by such Investors (and the number of securities subject to registration
rights sought to be included by such other holders); PROVIDED, HOWEVER, that the
Company shall not exclude any Registrable Securities unless the Company has
first excluded all outstanding securities the holders of which are not entitled
by right to inclusion of securities in such Registration Statement; and PROVIDED
FURTHER, HOWEVER, that, after giving effect to the immediately preceding
proviso, any exclusion of Registrable Securities shall be made pro rata with
holders of other securities having the right to include such securities in the
Registration Statement. No right to registration of Registrable Securities
under this Section 2(a) shall be construed to limit any registration required
under Section 2(b) hereof. The obligations of the Company under this Section
2(a) may be waived by Investors holding a majority in interest of the
Registrable Securities and shall expire after the Company has afforded the
opportunity for the Investors to exercise registration rights under this Section
2(a) for two registrations; PROVIDED, HOWEVER, that any Investor who shall have
had any Registrable Securities excluded from any Registration Statement in
accordance with this Section 2(a) shall be entitled to include the Registrable
Securities so excluded in any additional Registration Statement subject to this
Section 2(a) filed by the Company (a "Further Piggyback Registration").
(b) DEMAND REGISTRATION. If at any time after the earlier of (1) the date
which is 60 days after the closing under the Subscription Agreement or (2) the
closing of the
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Company's current offering of equity securities pursuant to the Memorandum (and
any supplements or amendments thereto or documents delivered in place thereof),
the Initial Investor or Investors who, in accordance with Section 9 hereof, are
entitled to registration rights under this Section 2(b) shall notify the Company
in writing that it or they intend to offer or cause to be offered for public
sale Registrable Securities held by such Investors, the Company shall cause such
of the Registrable Securities as may be requested by any such Investors to be
registered as expeditiously as possible, under the Securities Act and applicable
state laws on no more than two occasions during any Year (for the purposes of
this Agreement the 12-month period commencing with the period in which demand
may first be made under this Section 2(b), the next succeeding 12-month period,
and the next succeeding period ending with the expiration of this Agreement are
each referred to as a "Year"). In no event will the Company be required to
effect more than four Registration Statements under this Agreement pursuant to
this Section 2(b) plus any Further Piggyback Registrations as may be required
under Section 2(a). Once a right for registration of any Registrable Securities
under this Section 2(b) has been exercised by any Investor, the Company shall
prepare and file a Registration Statement covering such Registrable Securities
with the SEC within thirty (30) days of the exercise of such demand registration
right; PROVIDED, HOWEVER, that, in the case of the first exercise of demand
registration rights under this Section 2(b), if such Investor has notified the
Company at least fifteen (15) days before the exercise of such demand
registration right that such Investor intends to exercise such registration
right under this Section 2(b) and in fact exercises such registration right, the
Company shall file the Registration Statement covering the Registrable
Securities for which such registration right has been exercised with the SEC
within fifteen (15) days of the exercise of such registration right (it being
understood that such Investor is under no obligation to exercise such
registration right under this Section 2(b) after notifying the Company of the
Investor's intention to do so and such registration right shall remain in full
force and effect notwithstanding the giving of such notice of intention to
exercise such registration right if such investor fails to exercise such
registration right). The Company shall not be required to file more than two
Registration Statements under this Section 2(b) during any Year. Each Investor
acknowledges that other holders of securities of the Company may have rights to
participate in any registration by the Company pursuant to this Section 2(b),
but the inclusion of securities of any other such holder shall not form the
basis for exclusion from such Registration Statement of any Registrable
Securities held by any Investor.
(c) If any offering pursuant to a Registration Statement (as defined
herein) pursuant to Section 2(b) hereof involves (at the Company's election
only) an underwritten offering (an "Underwritten Offering"), the Investors who
hold a majority in interest of the Registrable Securities subject to such
Underwritten Offering shall have the right to select one legal counsel and an
investment banker or bankers and manager or managers to administer the offering,
which investment banker or bankers or manager or managers shall be reasonably
satisfactory to the Company. The Investors who hold the Registrable Securities
to be included in such underwriting shall pay all underwriting discounts and
commissions and other fees and expenses of such investment banker or bankers and
manager or managers so selected in accordance with this Section 2(c) (other than
fees and expenses relating to registration of Registrable Securities under
federal or state securities laws which are payable by the Company pursuant to
Section 5 hereof) with respect to their Registrable Securities and the fees and
expenses of such legal counsel so selected by the Investors.
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(d) PAYMENTS BY THE COMPANY. If a Registration Statement covering
the Registrable Securities for which a demand for registration has been made
pursuant to Section 2(b) hereof, is not effective within 90 days after such
demand has been made, then the Company will make payments to the Initial
Investor in such amounts and at such times as shall be determined pursuant to
this Section 2(d). The amount to be paid by the Company to the Initial Investor
shall be determined as of each Computation Date, and such amount shall be equal
to 2% of the aggregate subscription price paid by the Initial Investor for the
Shares pursuant to the Subscription Agreement (the "Periodic Amount"); PROVIDED,
HOWEVER, that if any Computation Date is less than 30 days subsequent to another
Computation Date, then the Periodic Amount payable on the later Computation Date
shall be pro rated. The Periodic Amount shall be paid by the Company within
five business days after each Computation Date and shall be payable in cash;
PROVIDED, HOWEVER, that the Company may elect in lieu of payment of any Periodic
Amount in cash to deliver to the Initial Investor shares of Common Stock having
an Aggregate Market Value equal to the amount of the Periodic Amount if, but
only if, such shares are freely tradable by the Initial Investor without any
restriction under the Securities Act or any applicable state securities or "blue
sky" law.
As used in this Section 2(d), the following terms shall have the
following meanings:
"Aggregate Market Value" of any shares of Common Stock as of any
Computation Date means the product obtained by multiplying (a) such number of
shares of Common Stock times (b) the Average Market Price of the Common Stock
for the Measurement Period for such Computation Date.
"Average Market Price" of any security for any period shall be
computed as the mean average of the daily mean average of the high and low sales
prices of such security (or the mean average of the high and low bid prices for
such security on any trading day for which no sales are reported) for each
trading day in such period on the principal trading market for such security, as
reported in THE WALL STREET JOURNAL.
"Computation Date" means the date which is 90 days after the exercise
of demand registration rights under Section 2(b) and, if the Registration
Statement required to be filed by the Company pursuant to Section 2(b) has not
theretofore been declared effective by the SEC, each date which is 30 days after
a Computation Date and, if the Registration Statement required to be filed by
the Company pursuant to Section 2(b) is not declared effective by the SEC within
90 days after the exercise of demand registration rights under Section 2(b), the
date on which such Registration Statement is declared effective.
"Measurement Period" means the period of ten consecutive trading days
for the Common Stock ending on (or on the last trading day preceding) each
Computation Date.
(e) ELIGIBILITY FOR FORM S-3. The Company represents and warrants
that it meets the requirements for the use of Form S-3 for registration of the
sale by the Initial Investor and any Investor of the Registrable Securities and
the Company shall file all reports required to be filed by the Company with the
SEC in a timely manner so as to maintain such eligibility for the use of Form S-
3.
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3. OBLIGATIONS OF THE COMPANY. In connection with the registration of
the Registrable Securities pursuant to this Agreement, the Company shall:
(a) prepare promptly and file with the SEC promptly (but in no event
later than as is set forth in Section 2(b) hereof) after a request in accordance
with Section 2(b) hereof a Registration Statement or Statements with respect to
all Registrable Securities to be included therein, and thereafter use its best
efforts to cause the Registration Statement to become effective as soon as
reasonably possible after such filing, and keep the Registration Statement
effective pursuant to Rule 415 (except in the case of an Underwritten Offering,
for which Rule 415 will not be used) at all times for at least 45 consecutive
days or until such earlier date as all the Registrable Securities covered by the
Registration Statement have been sold (in either case, the "Registration
Termination Date"), which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
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 in which they were made, not misleading: PROVIDED, HOWEVER, that,
subject to the conditions set forth in Section 4(a) below, each Investor may
notify the Company in writing that it wishes to exclude all or a portion of its
Registrable Securities from such Registration Statement; and PROVIDED FURTHER,
HOWEVER, that each Investor shall have complied with its obligations under
Section 4 with respect to the Registrable Securities of such Investor to be
included in the Registration Statement. Notwithstanding the foregoing, in the
event that (i) any request is made by the SEC or any other federal or state
governmental authority during the period of effectiveness of a Registration
Statement for amendments or supplements to a Registration Statement or related
prospectus, (ii) any event occurs that makes any statement made in such
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
which requires the making of any changes in the Registration Statement or
prospectus so that, in the case of the Registration Statement, it will not
contain any untrue statement of 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
omit to state any 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, or (iii) in the judgment of the Company, it is
advisable to suspend use of the prospectus included in such Registration
Statement for a discrete period of time due to pending corporate developments,
public filings with the SEC or similar events, then the Company shall deliver a
certificate in writing to the Investors whose Registrable Securities are
included in the Registration Statement to the effect of the foregoing and, upon
receipt of such certificate, the use of the Registration Statement and
prospectus will be deferred or suspended and will not recommence until such
Investor's receipt of copies of the supplemented or amended prospectus, or until
such Investors are advised in writing by the Company that the prospectus may be
used, and until such Investors have received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such prospectus. The Company will use its best efforts to ensure that the
use of the Registration Statement and prospectus may be resumed, as soon as
practicable and, in the case of a pending development, filing or event referred
to in (iii) above, as soon, in the judgment of the Company, as disclosure of the
material information relating to such pending development, filing or event would
not have a materially adverse effect on the Company's ability to consummate the
transaction, if any, to which such development, filing or event relates.
Notwithstanding the foregoing or any other
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provision of this Agreement, (1) the Company shall not under any circumstances
be entitled to exercise its right to defer or suspend use of the Registration
Statement and prospectus under this Section 3(a) for the first thirty (30) days
after the Registration Statement with respect to the first exercise of demand
registration rights pursuant to Section 2(b) hereof has been declared effective
or for more than an aggregate of 60 days, and (2) the period during which the
Company shall be required to maintain the effectiveness of such Registration
Statement as stated in the first sentence of this Section 3(a) shall be extended
by 1.5 days for each full or partial day during which the use of such
Registration Statement or prospectus is deferred or suspended by the Company in
accordance with this Section 3(a);
(b) prepare and file with the SEC such amendments (including post-
effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times until the
Registration Termination Date, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;
(c) furnish to each Investor whose Registrable Securities are
included in the Registration Statement, such number of copies of a prospectus,
including a preliminary prospectus, and all amendments and supplements thereto
and such other documents, as such Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by such Investor;
(d) use reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statement under such other
securities or blue sky laws of such jurisdictions as the Investors who hold a
majority in interest of the Registrable Securities being offered reasonably
request, (ii) prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements, (iii) take such other actions as may
be necessary to maintain such registrations and qualifications in effect at all
times until the Registration Termination Date and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable Securities for sale
in such jurisdictions; PROVIDED, HOWEVER, that the Company shall not be required
in connection therewith or as a condition thereto to (I) quality to do business
in any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(d), (II) subject itself to general taxation in any such
jurisdiction, (III) file a general consent to service of process in any such
jurisdiction, (IV) provide any undertakings that cause more than nominal expense
or burden to the Company or (V) make any change in its charter or by-laws;
(e) in the event Investors who hold a majority in interest of the
Registrable Securities being offered in the offering select underwriters for the
offering and in the event the Company consents to such selection and to causing
the registered offering to be an Underwritten Offering, enter into and perform
its obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering;
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<PAGE>
(f) as promptly as practicable after becoming aware of such event,
notify each Investor of the happening of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement to correct such untrue statement or
omission, and deliver a number of copies of such supplement or amendment to each
Investor as such Investor may reasonably request;
(g) as promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold (or, in the
event of an Underwritten Offering, the managing underwriters) of the issuance by
the SEC (or any state agency) of any stop order or other suspension of
effectiveness of the Registration Statement (or state qualification) at the
earliest possible time;
(h) permit a single firm of counsel designated as selling
stockholders' counsel by the Investors who hold a majority in interest of the
Registrable Securities being sold to review the Registration Statement and all
amendments and supplements thereto a reasonable period of time prior to their
filing with the SEC, and shall not file any document in a form to which such
counsel reasonably objects;
(i) make generally available to its security holders as soon as
practical, but not later than ninety (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following the date
of the Registration Statement;
(j) at the request of the Investors who hold a majority in interest
of the Registrable Securities being sold in an Underwritten Offering, furnish on
the date that Registrable Securities are delivered to an underwriter for sale in
connection with the Registration Statement (i) a letter, dated such date, from
the Company's independent certified public accountants in form and substances as
is customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters; and (ii) an
opinion, dated such date, from counsel representing the Company for purposes of
such Registration Statement, in form and substance as is customarily given in an
underwritten public offering, addressed to the underwriters and the Investors;
(k) make available for inspection by any Investor, any underwriter
participating to any Underwritten Offering, and any attorney, accountant or
other agent retained by any such Investor or underwriter (collectively, the
"Inspectors"), all pertinent documents of the Company (collectively, the
"Records"), as shall be reasonably necessary to enable each Inspector to
exercise its due diligence responsibility, if and to the extent it has any such
responsibility under the Securities Act, and cause the Company's officers,
directors and employees to supply all
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information which any Inspector may reasonably request for purposes of such due
diligence; PROVIDED, HOWEVER, that each Inspector shall hold in confidence and
shall not make any disclosure (except to an Investor) of any Record or other
information which the Company determines in good faith to be confidential, and
of which determination the Inspectors are so notified, unless (i) the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
any Registration Statement, (ii) the release of such Records is ordered pursuant
to a subpoena or other order from a court or government body of competent
jurisdiction or (iii) the information in such Records has been made generally
available to the public other than by disclosure in violation of this or any
other agreement; and PROVIDED FURTHER, HOWEVER, that in the event any Investor
obtains material nonpublic information concerning the Company pursuant to this
Section 3(k) or Section 3(a) or 3(f) or otherwise, such Investor shall not
purchase or sell or otherwise trade in any securities of the Company in
violation of applicable law until such information is made public by the
Company. The Company shall not be required to disclose any confidential
information in such Records to any Inspector until and unless such Inspector
shall have entered into confidentiality agreements (in form and substance
satisfactory to the Company) with the Company with respect thereto,
substantially in the form of this Section 3(k). Each Investor agrees that it
shall, upon learning that disclosure of such Records is sought in or by a court
or governmental body of competent jurisdiction, given prompt notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of, or to obtain a protective order for, the Records
deemed confidential. The Company shall hold in confidence and shall not make
any disclosure of information concerning an Investor provided to the Company
pursuant to Section 4(e) hereof unless (i) disclosure of such information is
necessary to comply with federal or state securities laws, (ii) the disclosure
of such information is necessary to avoid or correct a misstatement or omission
in any Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other order from a court or governmental body of
competent jurisdiction or (iv) such information has been made generally
available to the public other than by disclosure in violation of this or any
other agreement. The Company agrees that it shall, upon learning that
disclosure of such information concerning an Investor is sought in or by a court
or governmental body of competent jurisdiction, given prompt notice to such
Investor, at such Investor's expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.
(l) use its best efforts either to (i) cause all the Registrable
Securities covered by the Registration Statement to be listed on a national
securities exchange and on each additional national securities exchange on which
similar securities issued by the Company are then listed, if any, if the listing
of such Registrable Securities is then permitted under the rules of such
exchange or (ii) secure designation of all the Registrable Securities covered by
the Registration Statement as a National Association of Securities Dealers
Automated Quotations System ("Nasdaq") "national market system security" within
the meaning of Rule 11Aa2-1 of the SEC under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the quotation of the Registrable
Securities on the Nasdaq National Market or, if, despite the Company's best
efforts to satisfy the preceding clause (i) or (ii), the Company is unsuccessful
in satisfying the preceding clause (i) or (ii), to secure listing on a national
securities exchange or Nasdaq authorization and quotation for such Registrable
Securities and, without limiting the generality of the foregoing, to arrange for
at least two market makers to register with the National Association of
Securities Dealers, Inc. ("NASD") as such with respect to such Registrable
Securities;
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<PAGE>
(m) provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of the
Registration Statement;
(n) cooperate with the Investors who hold Registrable Securities
being sold and the managing underwriter or underwriters, if any, to facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legends) representing Registrable Securities to be sold pursuant to the
Registration Statement and enable such certificates to be in such denominations
or amounts as the case may be, and registered in such names as the managing
underwriter or underwriters, if any, or the Investors may reasonable request;
and
(o) take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement;
4. OBLIGATIONS OF THE INVESTORS. In connection with the registration of
the Registrable Securities, the Investors shall have the following obligations:
(a) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Agreement with respect to any
Investor that such Investor shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it as shall be reasonably
required to the effect the registration of the Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request. At least fifteen (15) days prior to the first anticipated
filing date of the Registration Statement, the Company shall notify each
Investor of the information the Company requires from each such Investor (the
"Requested Information") if such Investor elects to have any of such Investor's
Registrable Securities included in the Registration Statement. If within five
(5) business days prior to the filing date the Company has not received the
Requested Information from an Investor (a "Non-Responsive Investor"), then the
Company may file the Registration Statement without including Registrable
Securities of such Non-Responsive Investor;
(b) Each Investor by such Investor's acceptance of the Registrable
Securities agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement;
(c) In the event Investors holding a majority in interest of the
Registrable Securities being registered determine to engage the services of an
underwriter and the Company consents thereto, each Investor agrees to enter into
and perform such Investor's obligations under an underwriting agreement, in
usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing underwriting of
such offering and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of the Registrable Securities, unless
such Investor has notified the Company in writing of such Investor's election to
exclude all of such Investor's Registrable Securities from the Registration
Statement;
(d) Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of any kind described in Section 3(f) or
3(g), such Investor will
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immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(f) or 3(g) and, if so directed by the Company, such
Investor shall deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice; and
(e) No Investor may participate in any Underwritten Offering
hereunder unless such Investor (i) agrees to sell such Investor's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the Investors entitled hereunder to approve such arrangements, (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements and (iii) agrees to pay its pro rata share of all
underwriting discounts and commissions and other fees and expenses of investment
bankers and any manager or managers of such underwriting and legal expenses of
the underwriters applicable with respect to its Registrable Securities, in each
case to the extent not payable by the Company pursuant to the terms of this
Agreement.
(f) No Investor shall include the Investor's Registrable Securities
in any Registration Statement unless the Investor has at such time a current
intent to sell such Registrable Securities, and by including such Registrable
Securities in such Registration Statement, the Investor will be deemed to
represent to the Company that the Investor has such intent. Any sale of any
Registrable Securities by any Investor under a Registration Statement will
constitute a representation and warranty by such Investor that the information
relating to such Investor and its plan of distribution is as set forth in the
prospectus prepared by the Company and furnished to such Investor for use in
connection with such disposition, and such prospectus does not as of the time of
such sale contain any untrue statement of a material fact relating to such
Investor or its plan of distribution and that such prospectus does not as of the
time of such sale omit to state any material fact relating to such Investor or
its plan of distribution necessary to make the statements in such Prospectus, in
light of the circumstances under which they were made, not misleading.
(g) Each Investor agrees that, in disposing of any Registrable
Securities pursuant to a Registration Statement, the Investor will cause the
disposition to be made in accordance with the terms of the Registration
Statement, including the plan of distribution described therein, and will comply
with all applicable securities laws, including Rules 10b-2, 10b-5, 10b-6 and
10b-7 promulgated under the Exchange Act. Each Investor agrees that in selling
any Registrable Securities under a Registration Statement, the Investor will
deliver the current prospectus contained in the Registration Statement, as
amended and supplemented, to all persons as required by the Securities Act and
the regulations thereunder and will comply with any applicable "blue sky" laws
and regulations in connection with the disposition of such shares.
5. EXPENSES OF REGISTRATION. All expenses, other than underwriting
discounts and commissions and other fees and expenses of investment bankers and
other than brokerage commissions, incurred in connection with registrations,
filings or qualifications pursuant to Sections 2 and 3, including, without
limitation, all registration, listing and qualifications fees,
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printers and accounting fees and the fees and disbursements of counsel for the
Company and the Investors, shall be borne by the Company; PROVIDED, HOWEVER,
that the Investors shall bear the fees and out-of-pocket expenses of their legal
counsel, if any, selected by the Investors pursuant to Section 2(c) hereof in
the case of an Underwritten Offering.
6. INDEMNIFICATION. In the event any Registrable Securities are included
in a Registration Statement are included in a Registration Statement under this
Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Investor who holds such Registrable Securities, the
directors, if any, of such Investor, the officers, if any, of such Investor,
each person, if any, who controls any Investor within the meaning of the
Securities Act or the Exchange Act, and, if the Registration Statement is for an
Underwritten Offering, any underwriter (as defined in the Securities Act) for
the Investors, the directors, if any, of such underwriter and the officers, if
any, of such underwriter, and each person, if any, who controls any such
underwriter within the meaning of the Securities Act or the Exchange Act (each,
an "Indemnified Person"), against any losses, claims, damages, expenses or
liabilities (joint or several) (collectively, "Claims") to which any of them may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations in the Registration Statement, or any post-effective
amendment thereof, or any prospectus included therein: (i) any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or any post-effective amendment thereof or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading or (iii) any violation or alleged
violation by the Company of the Securities Act, any state securities law or any
rule or regulation by the Company of the Securities Act, the Exchange Act or any
state securities law (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"). Subject to the restrictions set forth in
Section 6(d) with respect to the number of legal counsel, the Company shall
reimburse the Indemnified Persons, promptly as such expense are incurred and are
due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (I) shall not apply to a Claim
arising out of or based upon (A) a Violation which occurs in reliance upon and
in conformity with information furnished in writing to the Company by any
Indemnified Person or underwriter for such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(c) hereof or (B) any violation by
an Investor of the Investor's obligations under this Agreement; (II) with
respect to any preliminary prospectus shall not inure to the benefit of any such
person from whom the person asserting any such Claim purchased the Registrable
Securities that are the subject thereof (or to the benefit of any person
controlling such person) if the untrue statement or
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omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if such prospectus was
timely made available by the Company pursuant to Section 3(c) hereof; and (III)
shall not apply to amounts paid in settlement of any claim if such settlement is
effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9.
(b) In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to indemnify and hold
harmless, to the same extent and in the same manner set forth in Section 6(a),
the Company, each of its directors, each of its officers who signs the
Registration Statement, each person, if any, who controls the Company within the
meaning of the Securities Act or the Exchange Act, any underwriter and any other
stockholder selling securities pursuant to the Registration Statement or any of
its directors or officers or any person who controls such stockholder or
underwriter within the meaning of the Securities Act or the Exchange Act
(collectively and together with an Indemnified Person, an "Indemnified Party"),
against any Claim to which any of them may become subject, under the Securities
Act, the Exchange Act or otherwise, insofar as such Claim arises out of or is
based upon (i) any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by such Investor expressly for use
in connection with such Registration Statement; and such Investor will reimburse
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Claim or (ii) any violation by any Investor
of such Investor's obligations under this Agreement; PROVIDED, HOWEVER, that the
indemnity agreement contained in this Section 6(b) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld; PROVIDED FURTHER, HOWEVER, that the Investor shall be liable under
this Section 6(b) for only that amount of a Claim as does not exceed the amount,
if any, by which (1) the net proceeds to such Investor as a result of the sale
of the Registrable Securities pursuant to such Registration Statement exceed (2)
the purchase price paid by such Investor for the Registrable Securities sold by
such Investor pursuant to such Registration Statement. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or supplemented.
(c) The Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in any distribution, to the same extent as provided
above, with respect to information such persons so furnished in writing by such
persons expressly for inclusion in the Registration Statement.
(d) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental
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action), such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying parties; PROVIDED,
HOWEVER, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified Person
or Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. The Company shall pay for only one separate legal counsel for the
Indemnified Persons; such legal counsel shall be selected by the Investors
holding a majority in interest of the Registrable Securities. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.
7. CONTRIBUTION. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; PROVIDED,
HOWEVER, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6, (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation and (c)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available to the
Investors the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit the
Investors to sell securities of the Company to the public without registration
("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy
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of the most recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company and (iii) such other information
as may be reasonably requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to transferees or assignees of all of
any portion of such securities only if: (a) the Investor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment, (b)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (i) the name and address of such transferee or
assignee and (ii) the securities with respect to which such registration rights
are being transferred or assigned, (c) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the Securities Act and applicable state securities
laws, and (d) at or before the time the Company received the written notice
contemplated by clause (b) of this sentence the transferee or assignee agrees in
writing with the Company to be bound by all of the provisions contained herein
and (e) the transfer or assignment is made in compliance with the transfer
restrictions in the Subscription Agreement.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors who hold a majority in interest of
the Registrable Securities. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon each Investor and the Company.
11. TERM. The term of this Agreement and the obligations of the parties
hereunder (other than their obligations under Sections 5, 6 and 7, which will
continue) will end on the third anniversary of the closing under the
Subscription Agreement. In no event will the Company be required to register
hereunder any Registrable Securities that are then eligible for resale under
Rule 144 (it being agreed that any proposed resale of Registrable Securities
before the two-year holding period of Rule 144 has expired or, thereafter, any
proposed resale of Registrable Securities in excess of the applicable volume
limitations of Rule 144, will not be deemed eligible for resale under Rule 144
for these purposes).
12. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall be in
writing and shall be deemed to be sufficiently given when personally delivered
(by hand, by courier, by telephone line facsimile transmission or other means)
or sent by certified mail, return receipt requested, properly addressed and with
proper postage prepaid (i) if to the Company, at Radius
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Inc., 215 Moffett Park Drive, Sunnyvale, California 94089, Attention:
President, (ii) if to the Initial Investor, at the address set forth under its
name in the Subscription Agreement and (iii) if to any other Investor, at such
address as such Investor shall have provided in writing to the Company, or at
such other address as each such party furnishes by notice given in accordance
with this Section 12(b), and shall be effective, when personally delivered, upon
receipt and, when so sent by certified mail, four days after deposit with the
United States Postal Service.
(c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a wavier thereof.
(d) This Agreement shall be enforced, governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State. In the event that any provision
of this Agreement is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any provision hereof which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision hereof.
(e) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.
(f) Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
(g) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(h) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(i) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered
to the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
RADIUS INC.
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
INITIAL INVESTOR:
Name:
-------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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Exhibit 5.01
August 22, 1995
Radius Inc.
215 Moffett Park Drive
Sunnyvale, California 94089
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-3 to
be filed with the Securities and Exchange Commission on or about August 23, 1995
(the "REGISTRATION STATEMENT") in connection with the registration under the
Securities Act of 1933, as amended, of 2,509,319 shares of your Common Stock
(the "STOCK"), all of which are presently issued and outstanding and will be
sold by certain Selling Shareholders (the "SELLING SHAREHOLDERS"). The Stock is
to be sold to the public in the manner described in the Registration Statement.
As your counsel, we have examined the proceedings relating to the issuance
of the Stock to the Selling Shareholders. It is our opinion that the Stock is
legally and validly issued and is fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us in the Registration
Statement, the Prospectus constituting a part thereof, and any amendments
thereto.
Very truly yours,
FENWICK & WEST
<PAGE>
Exhibit 23.01
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Radius Inc. for the
registration of 2,509,319 shares of its common stock and to the incorporation by
reference therein of our report dated October 20, 1994, with respect to the
consolidated financial statements and schedules of Radius Inc. included in its
Annual Report (Form 10-K) for the year ended September 30, 1994 filed with the
Securities and Exchange Commission.
Ernst & Young LLP
Palo Alto, California
August 22, 1995
