As filed with the Securities and Exchange Commission on April 20, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CLICKACTION INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0195362
(State of Incorporation) (I.R.S. Employer Identification No.)
2197 EAST BAYSHORE ROAD
PALO ALTO, CA 94303
(650) 473-3600
(Address, including zip code, and telephone number, including area code of
Registrant's principal executive offices)
GREGORY W. SLAYTON
CLICKACTION INC.
2197 EAST BAYSHORE ROAD
PALO ALTO, CA 94303
(650) 473-3600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
JAMES C. KITCH, ESQ.
COOLEY GODWARD LLP
FIVE PALO ALTO SQUARE
3000 EL CAMINO REAL
PALO ALTO, CA 94306
(650) 843-5000
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box.[]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, 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
Title of Class of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities to be Registered Offering Aggregate Registration
Registered (2) Price per Share(1) Offering Price(1) Fee
- ---------------- ------------ ------------------- --------------- --------
Common stock,
$.001 par value 200,000 $9.8595 $1,971,900 $ 521
(1) Estimated solely for the purpose of calculating the registration fee based
on the average of the high and low sales prices of the Common stock on the
Nasdaq National Market on April 17, 2000 (as adjusted to reflect a two-for-one
stock split, effected in the form of a stock dividend on April 20, 2000 to all
holders of the Company's common stock as of April 5, 2000 (the "Stock Split")).
It is not known how many shares will be purchased under this registration
statement or at what price such shares will be purchased.
(2) As adjusted to reflect the Stock Split.
================================================================================
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.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED APRIL 20, 2000
PROSPECTUS
200,000 SHARES
CLICKACTION INC.
COMMON STOCK
OFFERED BY CERTAIN SELLING STOCKHOLDERS
The Selling Stockholders:
The selling stockholders identified in this prospectus are offering up to
200,000 shares (as adjusted to reflect a two-for-one stock split, effected in
the form of a stock dividend on April 20, 2000) of our common stock. We sold
the shares to the selling stockholders on March 21, 2000 in a private
transaction.
We are not selling any shares of our common stock under this prospectus and
will not receive any of the proceeds from the sale of shares by the selling
stockholders.
Offering Price: The selling stockholders may sell the shares of common
stock described in this prospectus in a number of different ways and at varying
prices. We provide more information about how the selling shareholders may
sell their shares in the section titled "Plan of Distribution" on page 14.
Trading Market: Our common stock is listed on the Nasdaq National Market under
the symbol "CLAC." On April 17, 2000, the closing sale price of our common stock
, as reported on the Nasdaq National Market, was $9.03 (as adjusted to reflect
a two-for-one stock split, effected in the form of a stock dividend on
April 20, 2000).
Risks: Investing in our common stock involves a high degree of risk. See
"Risk Factors" beginning on page 5.
The shares offered or sold under this prospectus have not been approved by
the Securities and Exchange Commission or any state securities commission,
nor have these organizations determined that this prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is April 20, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
PROSPECTUS SUMMARY.......................................................3
SELECTED FINANCIAL DATA .................................................4
RISK FACTORS.............................................................5
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.......................12
WHERE YOU CAN GET MORE INFORMATION......................................12
USE OF PROCEEDS.........................................................13
SELLING STOCKHOLDERS....................................................13
PLAN OF DISTRIBUTION....................................................14
LEGAL MATTERS...........................................................15
EXPERTS.................................................................16
Our web site address is www.clickaction.com. Information contained in our
web site is not a part of this prospectus
................................................................................
You should rely only on the information contained in this
prospectus. We have not authorized anyone to provide you
with information different from that contained in this
prospectus. The selling stockholders are offering to sell
and seeking offers to buy the shares only in jurisdictions
where offers and sales are permitted. The information
contained in this prospectus is accurate only as of the date
of this prospectus.
<PAGE>
PROSPECTUS SUMMARY
The following is a short summary of our business. You should carefully read
the "Risk Factors" section of this prospectus and our Annual Report on Form
10-KSB, as amended, for the year ended December 31, 1999 for more information
on our business and the risks involved in investing in our stock. In addition
to the historical information contained in this prospectus, this prospectus
contains forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act that involve risks and
uncertainties. Our actual results could differ materially from our expectations.
Factors that could cause or contribute to such differences are discussed in
"Risk Factors" below and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business" in our Annual Report.
ClickAction designs, markets, and supports a family of leading task-
specific software applications, annuity-based products and internet services
for small businesses, including home-based businesses. In addition, we provide
web-based email marketing services to our enterprise clients to help them
organize and manage their email marketing campaigns. We provide users with
easy-to-learn and easy-to-use direct marketing solutions, including tools for
downloading on-line prospects lists, managing mail lists and saving on direct
mail postage. We also provide graphic tools and productivity tools for creating
brochures, stationery , postcards, labels, and invoices and estimates.
In addition to our desktop direct marketing products and services, we
shifted our focus in late 1999 and have been investing heavily in the
development and marketing of permission-based email relationship management
("ERM") tools and services. These ERM tools and services are designed to
allow direct marketers to cost-effectively communicate with their customers,
increase revenue and acquire new customers. Our other current services include:
* address correction, available through subscriptions to the MyPostageRateSaver
CD-ROM; and
* an on-line prospects service, available over the internet at www.myprospects
.com.
With an increasing number of businesses relying on direct marketing to
grow their businesses, our focus is on meeting the on-line list prospecting,
mailing and email campaign management needs of this important market.
We are a Delaware corporation. Our principal offices are located at
2197 East Bayshore Road, Palo Alto, CA 94303, and our telephone number is
(650) 473-3600. In this prospectus, "ClickAction," "we" and "our" refer to
ClickAction Inc. unless the context otherwise requires.
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data has been adjusted to reflect a two-
for-one stock spilt, effected in the form of a stock dividend to all holders
of our common stock on April 20, 2000.
<TABLE>
<CAPTION>
ClickAction Inc. and Subsidiary
Consolidated Statements of Operations
Years Ended December 31,
-------------------------------------------
1999 1998 1997
-------------------------------------------
<S> <C> <C> <C>
Net revenues $ 21,264,986 $ 15,044,637 $ 12,353,090
Cost of revenues 6,046,300 4,200,746 5,737,570
-------------- ------------- -------------
Gross profit 15,218,686 10,843,891 6,615,520
-------------- ------------- -------------
Operating expenses:
Product development 3,442,070 1,997,355 2,221,712
Sales and marketing 10,776,215 6,149,935 6,356,201
General and administrative 3,206,298 2,678,934 2,190,461
Restructuring charge ----- ---- 193,000
Merger-related expense 231,674 ---- ----
------------- ----------- ------------
Total operating expenses 17,656,257 10,826,224 10,961,374
------------- ------------ ------------
Operating (loss) income (2,437,571) 17,667 (4,345,854)
Interest income 232,920 238,860 309,240
(Loss) income before income taxes (2,204,651) 256,527 (4,036,614)
Income tax expense 18,641 36,627 ----
------------- ------------ ------------
Net (loss) income $ (2,223,292) $ 219,900 $(4,036,614)
============= ============= ============
Basic net (loss) income per share $ (0.22) $ 0.02 $ (0.47)
============= ============= ============
Shares used in computing basic net
(loss) income per share 10,022,390 9,306,040 8,575,796
============= ============= ===========
Diluted net (loss) income per share $ (0.22) $ 0.02 $ (0.47)
============= ============= ==========
Shares used in computing diluted net
(loss) income per share 10,022,390 10,151,430 8,575,796
============= ============= ==========
</TABLE>
<PAGE>
RISK FACTORS
You should carefully consider the following risk factors and warnings
before making an investment decision. The risks described below are not the only
risks we face. Additional risks that we do not yet know of or that we currently
think are immaterial may also impair our business operations. If any of the
events or circumstances described in the following risks actually occurs, our
business, financial condition, or results of operations could be materially
adversely affected. In such case, the trading price of our common stock could
decline, and you may lose all or part of your investment. You should also
refer to the other information set forth in this prospectus, including our
financial statements and the related notes.
WE COMPETE IN AN EMERGING MARKET AND WE DO NOT KNOW IF OUR EXISTING OR FUTURE
PRODUCTS AND SERVICES WILL BE ACCEPTED
Our success depends on the market acceptance of our new and existing
products and services. The majority of our current revenues derive from the
sale of task-specific software applications for small businesses through the
retail channel. The emergence of the internet and on-line e-commerce makes it
difficult to predict with any assurance the future size of this market. Our
focus on a small number of core products heightens exposure to market
development and product acceptance risks. In addition, there also can be no
assurance that our existing products will achieve broad-based market
acceptance, that sales of such products will continue at historical rates or
that we will introduce new products that achieve significant market acceptance
in the future.
Our success increasingly depends upon our ability to secure arrangements
with OEM partners that distribute our products and services as well as provide
us other strategic benefits. These relationships allow us to generate additional
revenues, expand our target market for our products and services, and build
awareness of the ClickAction and ClickAction brands. The market for these
relationships is highly competitive, and there can be no assurance that we
will be successful in sustaining existing relationships or creating new
relationships in the future.
Our strategy of transitioning ClickAction to an email marketing campaign
management company is very risky and untested due to the limited operating
history of the management team and the emerging nature of the emarketing
industry. The internet market is highly competitive with many well-funded
companies and this service is relatively new to most of our clients. There is no
assurance that we can successfully execute our plan of continuously developing
new technology ahead of our competitors, retaining our existing enterprise
clients, or acquiring
new clients.
OUR SUCCESS DEPENDS ON OUR TIMELY DEVELOPMENT OF NEW PRODUCTS AND SERVICES
We believe that our future success depends in large part upon our ability
to keep pace with competitive offerings, to adapt to new operating systems,
hardware platforms, media, and industry standards, and to provide additional
functionality by enhancing our existing products and services and introducing
new products and services on a timely basis. If we are unable to develop such
products or services in a timely manner due to resource constraints or
technological or other reasons, this inability could have a material adverse
effect on our business. Failure to develop and introduce new products and
services in a timely fashion could have a material adverse effect on our
business.
OUR SUCCESS DEPENDS ON POSTAL REGULATIONS AND AVAILABILITY OF POSTAL INFORMATION
Our line of mailing products, which in the aggregate accounted for 15% of
our net revenues in 1999, have been developed based on current Postal Service
regulations. Changes in Postal Service regulations, which historically have
occurred frequently, could necessitate updating these products or could
eliminate or reduce the usefulness of these products, which could adversely
affect our operating results. We license from an independent third-party,
address information and certain software code embodied in the MyDeluxeMailList
and AddressChecker products that perform address correction, add ZIP+4 Codes
and supply delivery point bar codes. There can be no assurance that we will
be able to maintain or renew our relationship with this third party or that
the code and information we license will be error free or perform to our
specifications or in accordance with Postal Service regulations. Significant
<PAGE>
changes in Postal Service regulations or the inability to maintain or renew
our relations with the independent party on acceptable terms or at all could
have a material adverse effect on our business and prospects. We must also
obtain Postal Service certification on a bi-monthly basis in order to be able
to supply MyDeluxeMailList and AddressChecker users with CD-ROM updates in a
timely manner. There can be no assurance that we will be able to continue to
secure such certification on a timely basis, if at all, and the failure
to do so could have a material adverse effect on our business.
FLUCTUATIONS IN OPERATING RESULTS MAY AFFECT OUR BUSINESS
We have historically experienced, and may continue to experience,
significant fluctuations in the operating results of our desktop software
products due to a variety of factors. These factors include:
* the size and rate of growth of the market for task-specific applications
for small businesses and of the software market in general;
* the timing and number of product enhancements and new product and services
introductions by us and our competitors;
* the timing and delivery of partnership arrangements;
* product returns;
* changes in pricing policies by us and our competitors;
* accuracy of retailers' forecasts of consumer demand;
* timing of the receipt of orders from major retailer and distributor customers;
* cancellations or terminations by retail or distributor accounts;
* shelf space reductions; and
* delays in shipment.
We believe that revenue fluctuations with respect to our new email
marketing services will follow the revenue fluctuations of the traditional
direct marketing industry. However, we have a limited history with these new
offerings and cannot predict the effects of these fluctuations on our quarterly
operating results. Furthermore, a significant portion of our operating expenses
are relatively fixed, and planned expenditures are based, in part, on
expectations with regard to future sales. As a result, if net revenues do not
meet our expectations in any given quarter, operating results may be materially
adversely affected. In response to competitive pressure, we may also take
certain pricing or marketing actions that could have a material adverse effect
on our business. There can be no assurance that we will achieve consistent
profitability on a quarterly or annual basis.
WE EXPECT TO INCUR SIGNIFICANT FUTURE OPERATING LOSSES AS A RESULT OF OUR
STRATEGIC TRANSITION
Following the acquisition of MarketHome in August 1999, we began to shift
our strategic focus to web-based email marketing products and services. We
intend to invest in the development, sales and marketing of such e-marketing
Web-based products and services. Due to such shift in strategy and investment
in the web-based products and services, our management is anticipating
operating losses in the near future. Our management does not have past
experience in email marketing. There is no assurance that we can grow the email
marketing revenues as planned or that we will achieve profitability in the
future. In addition, we expect that our development, sales and marketing,
system and administrative expenses will increase significantly in the future.
Failure to increase our revenues to achieve or sustain profitability in the
future could have a material adverse effect on our business and operations.
As a result of our recent acquisition and our investment in the new
web-based products and services, we have experienced negative cash flows from
operations in fiscal year 1999. We are currently in the process of evaluating
various financing options and our overall financing strategy. The failure to
secure adequate finance could adversely affect the execution of our new strategy
and could have a material adverse effect on our operations.
WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY
The market for our products and services is intensely competitive, and is
characterized by pressure to:
* increase marketing and promotional activities;
<PAGE>
* incorporate new features;
* release new product versions; and
* reduce prices.
Our desktop products compete with the task-specific products sold by
several other companies of varying size and financial and marketing strength,
including:
* Avery's labeling software;
* Intuit's invoicing and estimating software; and
* Mattel's business card, labeling and marketing material software.
Our desktop products also compete with general purpose programs, such as word
processing, database and desktop publishing products from major software
companies, including Adobe, Lotus, Microsoft, and Corel. We believe that we
would face increased competition from such general purpose programs if such
programs were designed for greater ease-of-use of task-specific functions. There
can be no assurance that we will have the resources required to respond to
market or technological changes or to compete successfully in the future.
In addition, increasing competition in the small business software market
may cause prices to fall, which could adversely affect our business and
financial performance.
Our prospecting web services compete with the similar services provided
by some large data providers, such as InfoUSA, iMarketinc, I-Rent-America, and
Dun & Bradstreet. We believe that we will face increased competition from
similar web services provided by other data companies like Acxiom, First Data
and Experian. We started offering our prospecting web services in December
1998 and expect to see increased competition from other larger data companies
in the near future. There can be no assurance that we will have the resources
required to successfully drive traffic to our prospecting web site or to
convert such web site traffic into revenues.
We have experienced and expect to continue to face intense competition
in the delivery of email marketing services. Current competitors include,
but are not limited to: Digital Impact, MessageMedia, Kana Communications,
Exactis.com, Media Synergy and Responsys.com, as well as in-house information
technology departments of existing and prospective clients. We may compete in
the future with internet service providers, advertising and direct marketing
agencies and other large established companies like Double Click, America
Online, Microsoft and Yahoo!. Many of the companies with which we currently
compete, or may compete in the future, have greater financial, technical,
marketing, sales, and customer support resources, as well as greater name
recognition and access to customers than we do. These potential competitors
may also choose to enter the market by acquiring one of the existing
competitors or by forming strategic alliances with these competitors, which
could adversely affect our ability to compete.
OUR SUCCESS DEPENDS ON LIMITED DISTRIBUTION AND RETAIL CHANNELS FOR DESKTOP
SOFTWARE
Sales to a limited number of distributors and retailers have constituted,
and are anticipated to continue to constitute, a significant share of our net
revenues from desktop software. Some distributors control access to shelf space
of certain retailers, and termination of our relationship with a particular
distributor may prevent us from obtaining shelf space in some retail outlets.
There can be no assurance that such retailers will continue to purchase our
products or provide our products with high quality and adequate levels of shelf
space and promotional support. We have nonexclusive arrangements with our
distributors and retailers which generally do not require minimum purchases
of our products and which may be terminated at any time. In addition, other
types of retail outlets and methods of product distribution may become important
in the future, such as the internet, online services, and other electronic
distribution services. Our success with the desktop software will depend,
in part, upon our ability to maintain access to existing channels of
distribution and gain access to new channels if and when they develop.
OUR SUCCESS DEPENDS ON THE INTERNET
<PAGE>
The success of our new emarketing strategy and internet services may rely
on the demand for such new evolving services. Our email marketing services are
very different from the traditional direct marketing methods that many of our
clients have used. Demand for our email marketing services may not materialize
because:
* businesses may not adopt the email marketing strategy and method due to
substantial investments in traditional marketing methods;
* consumers may not accept email emarketing messages;
* consumer confusion between permission-based email services and
unsolicited commercial email may influence businesses not to use
emarketing services; or
* the effectiveness of email marketing campaigns may diminish if consumers
become inundated with email direct marketing.
The failure to grow our email marketing services could result in lower
revenues and could have a material adverse effect on our financial position.
OUR SUCCESS DEPENDS ON SALES TO A LIMITED NUMBER OF RETAILERS AND DISTRIBUTORS
AND OUR ABILITY TO COLLECT RECEIVABLES
We sell our desktop products principally to a limited number of major
retailers and to distributors for resale to retailers. Such sales have
constituted, and may continue to constitute, a majority of our net revenues.
In 1998, one distributor accounted for 34% of net revenues, and one retailer
accounted for 31% of net revenues. None of our distributors or retailers has
a minimum purchase obligation. The loss of, or significant reduction in,
sales volume attributable to any of our principal distributors or retail
accounts could materially and adversely affect our business. In addition, a
majority of our software sales are made through retailers. We could be adversely
affected if an alternative channel for distribution of software were to become a
major vehicle for distributing software.
Our sales are made on credit terms, and we do not hold collateral to secure
payment. Although we currently maintain accounts receivable insurance that
covers a portion of accounts, there can be no assurance that we will be able
to maintain or increase such insurance on acceptable terms or at all. The
inability to collect any significant receivable in a timely manner could
adversely affect our financial results.
OUR BUSINESS COULD SUFFER IF THERE ARE SIGNIFICANT PRODUCT RETURNS
We have granted over distributors and retailers that allow distributors
and retailers certain rights to return our desktop products. There can be no
assurance that retailers and distributors will not seek and obtain additional
return and credit rights. We also provide end-users with a 30-day money-back
guarantee. Accordingly, we are exposed to the risk of product returns
from retailers and distributors, particularly during times of product
transition. In addition, promotional or other activities of competitors could
cause returns to increase sharply at any time. We establish allowances based on
estimated future returns of products, taking into account promotional
activities, the timing of new product introductions, distributor and retailer
inventories of our products, and other factors. Product returns that exceed our
allowances could adversely affect our operating results and financial condition.
OUR BUSINESS DEPENDS ON CODING CONTRACTORS AND LICENSORS
We generally internally develop the specifications for both new products
and updates of our existing products. From time to time, we also license third-
party products that are complementary to our core product line. In addition
to our own development team, we use independent firms to help write the
coding for our email marketing system. While we generally own the code that
is developed by these firms, the base code used in developing our brochures
and business cards products is owned by the third-party coders. With respect
to these products, we hold an irrevocable, non-exclusive license to
copy and distribute the executable code complied form the base code and to
make limited modifications. Although the agreements with these firms contain
various protective terms, there can be no assurance that such provisions will
effectively protect our interests or that third-party coders will not develop or
market products that compete with our products or services. As independent
coders are in high demand, there can be no assurance that independent coders,
including those who have developed products for us in the past, will be
<PAGE>
available to provide coding services to us in the future. There can be no
assurance that we will be able to obtain or renew such coding or licensing
agreements on favorable terms, or at all.
We are highly dependent on technologies we license from companies like
Oracle and others which enable us to send email through the internet and allow
us to offer a variety of data base management and targeted marketing
capabilities. The emarketing industry is rapidly evolving, and we may need to
license additional technologies to remain competitive. There is no assurance
that we may be able to license these technologies on commercially reasonable
terms or at all. The failure to license such technologies could adversely
affect our business and operations.
OUR BUSINESS DEPENDS ON THIRD-PARTY SERVICE PROVIDERS, SUPPLIES AND FACILITIES
For our desktop products, we rely on external service providers to perform
most of our customer support and product assembly functions. One independent
firm provides substantially all customer support for our software products.
Our agreement with this firm is terminable on 60 days notice by either
party. This contractor also provides services to several larger companies,
and there can be no assurance that demands from such companies or other factors
will not result in termination by such contractor of our relationship. The
unavailability of such firm to perform customer technical support for us would
result in significant disruption to our operations, could lead to customer
dissatisfaction and could have a material adverse effect on our business and
operations. We rely on three companies to print, assemble and package our
products. We do not have contracts in place with these companies and have
only limited sources for some of our supplies. All of our inventory of packaging
components is maintained at third-party facilities. Our ability to assemble
and package our products depends on continued relationships with these parties.
The failure of those vendors to provide supplies and services on a timely basis
could adversely affect our business.
Our email marketing data center and hardware system, which are critical to
our email campaign management operations, are located at facilities provided
by a third party. Our operations rely on this third party's ability to protect
our data center and hardware system from damage or interruption caused by
human error, computer viruses, sabotage, break-ins, intentional acts and
other similar incidents. There is no assurance that this third party is able
to adequately protect our data center and hardware system or prevent
interruptions in the delivery of our email campaign services. Failure to
maintain and protect our data center and hardware system will have a material
adverse effect on our business and may cause us to lose clients. Furthermore,
our data center and hardware system are vulnerable to damage caused by natural
disasters like earthquakes, flood, fire, power loss and telecommunication
failures. There is no assurance that we can timely repair the damage caused
by any of these events so that clients' email campaigns will not be interrupted.
Failure to provide uninterrupted email services may have a material adverse
effect on our business and may cause us to lose clients. Finally, there is no
assurance that we are able to safeguard confidential information in our data
center. Failure to prevent unauthorized access to our servers could cause
misappropriation of confidential customer information and could have a
material adverse effect on our reputation and business.
OUR BUSINESS COULD SUFFER AS A RESULT OF OUR CLIENTS' EMARKETING ACTIVITIES
If our clients' promotion of their products and services is not compliant
with Federal, state or local laws, we may be exposed to liability under such
laws. Our email marketing services involve the transmission of information
designed by our clients over the internet. Such transmissions may include
offensive or negative messages, harmful applications, unauthorized reproduction
of copyrighted material, inaccurate information or computer viruses. Failure to
prevent transmitting this data or information could expose us to legal claims
and liability and could have a material adverse effect on our reputation and
business.
WE ARE AT RISK OF UNCERTAINTIES AND CHANGES IN THE LAW AND REGULATIONS GOVERNING
EMARKETING
Several states have passed legislation to restrict the sending of
unsolicited commercial email. The federal government and several other
states are considering, or have considered, adopting similar legislation. To
date, we have been sending emails only to those individuals and entities that
have given us their permission. However, due to the increasing use of the
internet and emarketing promotion, it is likely that additional laws and
regulations may be enacted to govern additional issues including copyrights,
content, privacy and consumer protection. The adoption of any additional or
<PAGE>
regulations may affect the growth of our emarketing business and operations
and have a material adverse effect on our financial results.
OUR SUCCESS DEPENDS ON KEY PERSONNEL
Our success depends to a significant extent on the performance and
continued service of our senior management and certain key employees.
Competition for highly skilled employees with technical, management, marketing,
sales, product development and other specialized skills is intense, and there
can be no assurance that we will be successful in attracting and retaining such
personnel. In addition, there can be no assurance that our employees will not
leave or, after leaving, compete against us. Our failure to attract additional
qualified employees or to retain the services of key personnel could have a
material adverse effect on our performance.
WE MAY NOT BE ABLE TO MANAGE OUR GROWTH AND IMPLEMENT OUR
NEW STRATEGY
We have experienced periods of growth that have placed, and could continue
to place, a significant strain on our financial, management, and other
resources. We may attempt to hire additional key personnel in senior management
positions in the future. Our ability to manage growth and expand our email
marketing business effectively will require us to continue to improve financial
management systems, and to attract, train, motivate, manage, and retain key
employees. If our management is unable to manage growth or execute our
emarketing strategy effectively, our business operations could be adversely
affected.
The success of our emarketing strategy depends on our ability to provide
satisfactory services to our clients and keep pace with their demands. There is
o assurance that we will be able to add client services
personnel to enhance our services. Failure to meet our clients' demands for
emarketing services will have a material adverse effect on our business and
reputation. In addition, the success of our emarketing strategy depends on
our ability to deliver emails over the internet through Internet service
providers and recipients in major corporations. Our email delivery may be
blocked or our email delivery technology may be incompatible with the
technologies of internet service providers. The failure to deliver email
messages may cause us to lose clients and will have a material adverse effect
on our emarketing strategy and business.
OUR LIMITED PROTECTION OF INTELLECTUAL PROPERTY AND PROPRIETARY
RIGHTS MAY AFFECT OUR BUSINESS
We rely primarily on a combination of trademarks, copyright and trade
secret laws, employee and third-party nondisclosure agreements and other methods
to protect our proprietary rights. We do not include in our products any
mechanism to prevent or inhibit unauthorized copying. Unauthorized copying
occurs within the software Industry, and if a significant amount of unauthorized
copying of our products were to occur, our business could be adversely affected.
In addition, as the number of software products in the industry increases and
the functionality of these products further overlaps, software developers and
publishers may increasingly become subject to infringement claims. There can be
no assurance that third parties will not assert infringement claims against
us in the future with respect to current or future products. Use of third-party
coders or publishing of licensed products may increase the risk of
infringement. In the event that our third-party coders or licensors were to use
infringing code in our products, we could be required to pay damages or be
subject to an injunction to prevent us from shipping our products. The third-
party coders' liability to us for any infringement of copyrights, trade secrets,
or patents is contractually limited to amounts received from us. Although
we have not been the target of any actual, pending, or threatened intellectual
property litigation, there has been substantial litigation regarding copyright,
trademark, and other intellectual property rights in our industry. Any such
claims or litigation, with or without merit, could be costly and a diversion
of management's attention, which could have a material adverse effect on our
business and prospects. Adverse determinations in such claims or litigation
could also have a material adverse effect our business.
WE ARE AT RISK OF YEAR 2000 ISSUES
We have not experienced any Year 2000-related disruption in the operation
of our systems. Although most Year 2000 problems should have become evident on
January 1, 2000, additional Year 2000-related problems may become evident in the
future and have a material adverse effect on our business and operations.
<PAGE>
WE ARE AT RISK OF POTENTIAL STOCK PRICE VOLATILITY
Many factors outside our control may cause the market price of our common
stock to fluctuate, including:
* quarterly fluctuations in our revenues or results of operations;
* general conditions in the computer hardware, software and internet
industries;
* announcements of new products and services by us or by or
competitors; and
* announcements of alliance or partnership by us or by our
competitors.
In addition, in recent years the stock market in general, and the
prices of the stocks of technology companies in particular, has experienced
large price fluctuations, sometimes without regard to the fundamentals of the
particular company. These broad market and industry fluctuations may adversely
affect the market price of our common stock.
WE HAVE IMPLEMENTED ANTI-TAKEOVER PROVISIONS THAT COULD DELAY OR PREVENT A
CHANGE IN CONTROL
Our board of directors has the authority to issue up to 2,000,000 shares of
preferred stock and to determine the price, rights, preferences, and privileges
of those shares without any further vote or action by the stockholders. The
rights of the holders of our common stock will be subject to and may be
adversely affected by, the rights of the holders of any preferred stock that
may be issued in the future. Issuance of shares of preferred stock could
have the effect of making it more difficult for a third party to acquire a
majority of our outstanding voting stock. In addition, we are subject to anti-
takeover provisions of Section 203 of the Delaware General Corporation Law,
which prohibits us from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. The application of Section 203
also could have the effect of delaying or preventing a change of control of
ClickAction. Certain other provisions of our certificate of incorporation may
have the effect of delaying or preventing changes in control or management,
which could adversely affect the market price of our common stock. In addition,
in June 1998 our board of directors adopted a share purchase rights plan,
or poison pill. This poison pill could have the effect of discouraging,
delaying or preventing an acquisition of ClickAction.
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus and the documents incorporated by
reference are forward-looking statements. These statements involve known and
unknown risks, uncertainties, and other factors that may cause our or our
industry's results, levels of activity, performance, or achievements to be
materially different from any future results, levels of activity, performance,
or achievements expressed or implied by such forward-looking statements. These
factors include, among others, those listed under "Risk Factors" and in the
documents incorporated by reference.
In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "or "continue" or the negative of such
terms or other comparable terminology. Although we believe that the
expectations reflected in the forward-looking statements are reasonable,
we cannot guarantee future results, events, levels of activity, performance
or achievements. We do not assume responsibility for the accuracy and
completeness of the forward-looking statements. We do not intend to update
any of the forward-looking statements after the date of this prospectus to
conform them to actual results.
WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission
(the "SEC"). You may read and copy these reports, proxy statements and other
information at the SEC's public reference rooms in Washington, DC, New York,
NY and Chicago, IL. You can request copies of these documents by writing to
the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-
SEC-0330 for more information about the operation of the public reference rooms.
Our SEC filings are also available at the SEC's web site at "http://www.sec.
gov." In addition, you can read and copy our SEC filings at the office of the
National Association of Securities Dealers, Inc. at 1735 "K" Street, Washington,
DC 20006.
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference
is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information.
We incorporate by reference the documents listed below and any future filings
we will make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
* Annual Report on Form 10-KSB, as amended, for the fiscal
year ended December 31, 1999;
* Proxy Statement for the annual meeting of stockholders to
be held on May 18, 2000;
* Current Report on Form 8-K filed March 23, 2000; and
* The description of the common stock contained in ClickAction's
Registration Statement on Form 8-A, as filed on May 4, 1995 with the SEC
under the Securities Exchange Act of 1934, as amended.
In addition, we incorporate by reference any future filings we will make with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934, as amended.
You may request a copy of these filings at no cost, by writing or telephoning us
at:
ClickAction Inc.
2197 East Bayshore Road
Palo Alto, CA 94303
(650) 473-3600
This prospectus is part of a Registration Statement we filed with the SEC.
You should rely only on the information incorporated by reference or provided in
this prospectus and the Registration Statement.
<PAGE>
USE OF PROCEEDS
The proceeds from the sale of the common stock offered pursuant to this
prospectus are solely for the account of the selling stockholders. We will not
receive any proceeds from the sale of these shares of common stock.
SELLING STOCKHOLDERS
We are registering the shares covered by this prospectus on behalf of the
selling stockholders named in the table below. We issued all of the shares to
the selling stockholders in a private placement transaction. We have registered
the shares to permit the selling stockholders and their pledgees, donees,
transferees or other successors-in-interest that receive their shares from a
selling stockholder as a gift, partnership distribution or other non-sale
related transfer after the date of this prospectus
to resell the shares.
The following table sets forth the name of each selling stockholder, the
number of shares owned by each selling stockholder, the number of shares that
may be offered under this prospectus and the number of shares of our common
stock owned by each selling stockholder after this offering is completed.
Except as set forth in the table below, none of the selling stockholders has
had a material relationship with us within the past three years. The number
of shares in the column "Number of Shares Being Offered" represent all of the
shares that each selling stockholder may offer under this prospectus. The
selling stockholders may sell some, all or none of their shares.
We do not know how long the selling stockholders will hold the shares before
selling them and we currently have no agreements, arrangements or understandings
with any of the selling stockholders regarding the sale of any of the shares.
The shares offered by this prospectus may be offered from time to time by the
selling stockholders.
The percentages of shares owned prior to the offering are based on 11,325,566
shares of our common stock outstanding on April 17, 2000 (after giving effect to
(1) the sale of 200,000 shares to the selling stockholders in our March 2000
private placement, and (2) a two-for-one split of our common stock, in the form
of a stock dividend, effected on April 20, 2000).
<TABLE>
<CAPTION>
NUMBER SHARES
SHARES OF BENEFICIALLY
BENEFICIALLY OWNED SHARES OWNED
PRIOR TO OFFERING BEING AFTER OFFERING**
________________________________________________________________________________
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
<S> <C> <C> <C> <C> <C>
Banner Partners 54,000 * 54,000 0 *
Minaret
Palo Alto Crossover 30,000 * 30,000 0 *
Fund, L.P.
William H. Draper, 6,000 * 6,000 0 *
III Revocable Trust
Fred M. Gibbons 6,000 * 6,000 0 *
Micro Cap 92,000 * 92,000 0 *
Partners, L.P.
Micro-Mousse 6,000 * 6,000 0 *
Partners, L.P.
The Investment Fund 6,000 * 6,000 0 *
for Foundations
* less than 1%
** assuming the sale of all offered shares
</TABLE>
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders may sell the shares from time to time. The selling
stockholders will act independently of us in making decisions regarding the
timing, manner and size of each sale. The sales may be made on one or more
exchanges or in the over-the-counter market or otherwise, at prices and at
terms then prevailing or at prices related to the then current market price,
or in privately negotiated transactions. The selling stockholders may effect
these transactions by selling the shares to or through broker-dealers. The
selling stockholders may sell their shares in one or more of, or a combination
of:
* a block trade in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction;
* purchases by a broker-dealer as principal and resale by a broker-dealer
for its account under this prospectus;
* an exchange distribution in accordance with the rules of an exchange;
* ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
* privately negotiated transactions.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. If the plan of
distribution involves an arrangement with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, the amendment or supplement
will disclose:
* the name of each selling stockholder and of the participating broker-
dealer(s);
* the number of shares involved;
* the price at which the shares were sold;
* the commissions paid or discounts or concessions allowed to the broker-
dealer(s), where applicable;
* that a broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus; and
* other facts material to the transaction.
From time to time, a selling stockholder may transfer, pledge, donate or assign
its shares of common stock to lenders or others and each of such persons will be
deemed to be a "selling stockholder" for purposes of this prospectus. The number
of shares of common stock beneficially owned by the selling stockholder will
decrease as and when it takes such actions. The plan of distribution for the
selling stockholders' shares of common stock sold under this prospectus
will otherwise remain unchanged, except that the transferees, pledgees, donees
or other successors will be selling stockholders hereunder. Upon being notified
by a selling stockholder that a donee or pledgee intends to sell more than 500
shares, we will file a supplement to this prospectus.
The selling stockholders may enter into hedging transactions with broker-dealers
in connection with distributions of the shares or otherwise. In these
transactions, broker-dealers may engage in short sales of the shares in the
course of hedging the positions they assume with selling stockholders. The
selling stockholders also may sell shares short and redeliver the shares to
close out short positions. The selling stockholders may enter into option or
other transactions with broker-dealers which require the delivery to the broker-
dealer of the shares. The broker-dealer may then resell or otherwise transfer
the shares under this prospectus. The selling stockholders also may loan or
pledge the shares to a broker-dealer. The broker-dealer may sell the loaned
shares, or upon a default the broker-dealer may sell the pledged shares under
this prospectus.
In effecting sales, broker-dealers engaged by the selling stockholders may
arrange for other broker-dealers to participate in the resales. Broker-dealers
or agents may receive compensation in the form of commissions, discounts or
concessions from selling stockholders. Broker-dealers or agents may also
receive compensation from the purchasers of the shares for whom they act as
agents or to whom they sell as principals, or both. Compensation as to a
particular broker-dealer might be in excess of customary commissions and will
be in amounts to be negotiated in connection with the sale. Broker-dealers or
agents and any other participating broker-dealers or the selling stockholders
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, as amended, in connection with sales of the shares.
Accordingly, any commission, discount or concession received by them and any
<PAGE>
profit on the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. Because selling
stockholders may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, the selling stockholders will be subject to the
prospectus delivery requirements of the Securities Act. In addition, any
securities covered this prospectus that qualify for sale under Rule 144
promulgated under the Securities Act may be sold under Rule 144 rather than
under this prospectus. The selling stockholders have advised that they have
not entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities. There
is no underwriter or coordinating broker acting in connection with the proposed
sale of shares by the selling stockholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
some states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the
registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Securities Exchange Act of
1934, as amended, any person engaged in the distribution of the shares may not
simultaneously engage in market making activities with respect to our common
stock for a period of two business days prior to the commencement of the
distribution. In addition, each selling stockholder will be subject to
applicable provisions of the Exchange Act and the associated rules and
regulations under the Exchange Act, including Regulation M, which provisions
may limit the timing of purchases and sales of shares of our common stock by
the selling stockholders.
We will make copies of this prospectus available to the selling
stockholders and have informed them of the need to deliver copies of this
prospectus to purchasers at or prior to the time of any sale of the shares.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling stockholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The selling
stockholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against specific liabilities,
including liabilities arising under the Securities Act. The selling stockholders
have agreed to indemnify specific persons, including broker-dealers and agents,
against specific liabilities in connection with the offering of the shares,
including liabilities arising under the Securities Act.
We have agreed to maintain the effectiveness of this registration statement
for up to two years, or until each selling stockholder can sell all of the
shares it holds under Rule 144(k) promulgated under the Securities Act. The
selling stockholders may sell all, some or none of the shares offered by this
prospectus.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby will be
passed upon for ClickAction by Cooley Godward LLP, Palo Alto, California.
EXPERTS
The financial statements of ClickAction Inc. and subsidiary, formerly known
as MySoftware Company, as of December 31, 1999 and 1998, and for each of the
years in the three-year period ended December 31, 1999 have been incorporated
by reference herein and in the registration statement in reliance upon the
report of KPMG LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than the underwriting
discounts and commissions, payable by ClickAction in connection with the sale of
the common stock being registered. All the amounts shown are estimates except
for the registration fee.
Registration fee.................. $ 581
Legal fees and expenses........... 30,000
Accounting Fees and Expenses...... 25,000
Miscellaneous..................... 5,000
Nasdaq Additional Listing fee..... 2,000
___________
Total $ 62,581
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Under Section 145 of the Delaware General Corporation law we have broad powers
to indemnify our directors and officers against liabilities they may incur in
such capacities, including liabilities under the Securities Act. Our By-laws
require us to indemnify our directors and executive officers, and permit us to
indemnify our other officers, employees and other agents, to the extent
permitted by Delaware law. Under our By-laws, indemnified parties are
entitled to indemnification for negligence, gross negligence and other wise
to the fullest extent permitted by law. The By-laws also require us to
advance litigation expenses in the case of stockholder derivative actions or
other actions, against an undertaking by the indemnified party to repay
such advances if it is ultimately determined that the indemnified party is not
entitled to indemnification. We have entered into indemnity agreements with each
of ur directors and executive officers. Such indemnity agreements contain
provisions which are in some respects broader than the specific indemnification
provisions contained in Delaware law. We also maintain an insurance policy for
our directors and executive officers insuring against certain liabilities
arising in their capacities as such.
<PAGE>
ITEM 16. EXHIBITS
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
5.1 Opinion of Cooley Godward LLP.
10.1 Common Stock Purchase Agreement, dated as of
March 15, 2000, by and among ClickAction and
the selling stockholders.
23.1 Consent of KPMG LLP.
23.2 Consent of Cooley Godward LLP.
Reference is made to Exhibit 5.1.
24.1 Power of Attorney is contained
on the signature page hereto.
__________
ITEM 17. UNDERTAKINGS.
(a) Rule 415 offerings.
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, as amended;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective 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 (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the issuer pursuant to
section 13 or section 15(d) of the Exchange Act that are incorporated by
reference herein.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) to remove the registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) Filings incorporating subsequent Exchange Act documents by reference.
<PAGE>
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(e) Incorporated annual and quarterly reports.
The undersigned Registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated
by reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver, or cause to
be delivered to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
(h) Request for acceleration of effective date.
(1) 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 foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by 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.
(i) Registration Statement Permitted by Rule 430A
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
ClickAction duly certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Palo Alto, County of Santa Clara, State of
California, on April 20, 2000.
CLICKACTION INC.
/s/ Gregory W. Slayton
Gregory W. Slayton
President, Chief Executive Officer
and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gregory W. Slayton and Sharon S. Chiu
and each or any one of them, as his true and lawful attorney-in-fact and agents
with full power of substitution and resubstitution, 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
file the same, with all exhibits thereto, and other 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 connection therewith, 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 their or his substitutes or substitute,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
______________________________________________________________________________
/s/ Gregory W. Slayton President, April 20, 2000
- -----------------------
Gregory W. Slayton Chief Executive
Officer and Director
(Principal Executive Officer)
/s/ Sharon S. Chiu Vice President, April 20, 2000
- --------------------
Sharon S. Chiu Chief Financial Officer
and Secretary
(Principal Financial
and Accounting Officer)
/s/ David P. Mans Chairman of the April 20, 2000
- -------------------
David P. Mans Board
/s/ Edward R. Niehaus III Director April 20, 2000
- -------------------------
Edward R. Niehaus III
<PAGE>
/s/ John K. Katsaros Director April 20, 2000
- ---------------------
John K. Katsaros
/s/ Donald F. Wood Director April 20, 2000
- ---------------------
Donald F. Wood
/s/ Emerick M. Woods Director April 20, 2000
- ---------------------
Emerick M. Woods
/s/ Howard Love Director April 20, 2000
- ---------------------
Howard Love
<PAGE>
INDEX TO EXHIBITS
ITEM 16. EXHIBITS
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
___________________________________________________________________
5.1 Opinion of Cooley Godward LLP.
10.1 Common Stock Purchase Agreement, dated as of March 15, 2000, by
and among ClickAction and the selling stockholders.
23.1 Consent of KPMG LLP.
23.2 Consent of Cooley Godward LLP. Reference is made to
Exhibit 5.1.
24.1 Power of Attorney is contained on the signature page hereto.
____
<PAGE>
April 20, 2000 EXHIBIT 5.1
JAMES C. KITCH
(650) 843-5027 [email protected]
ClickAction Inc.
2197 East Bayshore Road
Palo Alto, California 94303
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in
connection with the filing by ClickAction Inc. (the "Company") of a Registration
Statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission covering the offering of up to 200,000 shares (assuming the
distribution of a two-for-one stock spilt, to be effected in the form of a
stock dividend to all holders of the Company's common stock, $0.001 par value,
on April 20, 2000) of the Company's common stock, $.001 par value (the
"Shares"), to be sold by certain stockholders as described in the Registration
Statement. Defined terms used herein shall have the meanings attributed to such
terms in the Registration Statement unless otherwise stated herein.
In connection with this opinion, we have examined the Registration
Statement, the Company's Certificate of Incorporation and Bylaws, and such
other documents, records, certificates, memoranda and other instruments as
we deem necessary as a basis for this opinion. We have assumed the genuineness
and authenticity of all documents submitted to us as originals, the conformity
to originals of all documents submitted to us as copies thereof, and the due
execution and delivery of all documents where due execution and delivery are
a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the
opinion that the Shares are validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Legal Matters" in
the prospectus included in the Registration Statement.
Very truly yours,
Cooley Godward LLP
By: /s/ James C. Kitch
-------------------------
James C. Kitch
<PAGE>
EXHIBIT 10.1
CLICKACTION INC.
COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made as of March
15, 2000, by and among CLICKACTION INC., a Delaware corporation (the "Company"),
with its principal office at 2197 East Bayshore Road, Palo Alto, California
94303, and the persons listed on the Schedule of Investors attached hereto as
Exhibit A (individually, a "Purchaser," and collectively, the "Purchasers").
Section 1. AUTHORIZATION AND SALE OF COMMON STOCK AND WARRANTS TO PURCHASE
COMMON STOCK
1.1 Authorization. The Company has authorized the sale and
issuance of (i) up to 100,000 shares of its common stock, par value $0.001 per
share (the "Common Stock"), and (ii) warrants to purchase up to an aggregate of
10,000 shares of Common Stock (each a "Warrant" and collectively the "Warrants")
, pursuant to this Agreement.
1.2 Sale of Common Stock. Subject to the terms and conditions of
this Agreement, the Company agrees to issue and sell to each Purchaser, and each
Purchaser severally agrees to purchase from the Company, on the Closing Date
(hereinafter defined) the number of shares of Common Stock set forth opposite
such Purchaser's name on Exhibit A (collectively, the "Shares") for a purchase
price of $42.50 per share (the "Purchase Price").
1.3 Issuance of Warrants. Subject to the terms and conditions of
this Agreement, the Company agrees to issue to each Purchaser on the Closing
Date (hereinafter defined) a Warrant, in substantially the form attached hereto
as Exhibit B, to purchase that number of shares of Common Stock set forth
opposite such Purchaser's name on Exhibit A (collectively, the "Warrant
Shares"). Each Warrant shall have a per share exercise price equal to the
Purchase Price.
Section 2. CLOSING DATE; DELIVERY
2.1 Closing Date. The closing of the purchase and sale of the
Shares and Warrants (together, the "Securities") hereunder (the "Closing") shall
be held at the offices of Cooley Godward LLP, 3175 Hanover Street, Palo Alto,
California at 9:00 a.m. (Pacific Time), on the third business day following
the date hereof or at such other time and place upon which the Company and
the Purchasers shall agree. The date of the Closing is hereinafter referred
to as the "Closing Date."
(a) Delivery. At the Closing, the Company will deliver to each
Purchaser (i) a certificate, registered in the Purchaser's name as shown on
Exhibit A, representing the number of shares of Common Stock to be purchased
by such Purchaser, and (ii) a Warrant, registered in the Purchaser's name as
shown on Exhibit A, to purchase that number of Warrant Shares set forth opposite
<PAGE>
such Purchaser's name on Exhibit A. Such delivery shall be against payment of
the Purchase Price therefor by wire transfer of immediately available funds in
the amount set forth opposite such Purchaser's name on Exhibit A to a bank
account designated by the Company to each Purchaser at least one (1) business
day prior to the Closing Date.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers as follows, effective
as of the date hereof and the Closing Date.
3.1 Organization and Standing. The Company is a corporation duly organized
, validly existing and in good standing under the laws of the State of Delaware.
The Company has all requisite corporate power to own or lease and operate its
properties and assets and to carry on its business as presently conducted and as
proposed to be conducted.
3.2 Corporate Power. The Company has all requisite legal and corporate
power to execute and deliver this Agreement, to sell and issue the Securities
and to carry out and perform its obligations under the terms of this Agreement
including all exhibits and schedules hereto.
3.3 Capitalization. The authorized capital stock of the Company consists
of (i) 20,000,000 shares of Common Stock par value $.001, of which 5,417,175
shares were issued and outstanding as of January 31, 2000, and (ii) 2,000,000
shares of Preferred Stock, par value $.001 per share, 200,000 of which are
designated Series A Junior Participating Preferred Stock, none of which were
issued and outstanding as of January 31, 2000. As of January 31, 2000, except
for outstanding options to purchase an aggregate of 2,173,774 shares of Common
Stock granted pursuant to the Company's 1995 Equity Incentive Plan, 1995 Non-
Employee Directors' Stock Option Plan, 1998 Non-Officer Stock Option Plan,
the MarketHome 1997 Equity Incentive Plan (together, the "Plans") and a
non-qualified stock option granted outside of the Plans in 1994, (i) there were
no outstanding rights of first refusal, preemptive rights or other rights
(contingent or otherwise), options, warrants, convertible securities, conversion
rights, or other agreements either directly or indirectly for the purchase or
acquisition from, or the issuance by, the Company of any shares of its capital
stock, and (ii) the Company has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof. The Company does not own, directly or indirectly, any
interest in any joint venture, partnership, corporation or other business
entity. There are no outstanding stockholder agreements, voting trusts,
proxies or other arrangements or understandings among the stockholders of the
Company relating to the voting of their respective shares.
3.4 Authorization
(a) All corporate action on the part of the Company, its
directors and stockholders necessary for the authorization, execution, delivery
and performance of the Agreement by the Company, the authorization, sale,
issuance and delivery of the Securities and the performance of the Company's
obligations under this Agreement has been or will be taken prior to the Closing.
<PAGE>
This Agreement, when executed and delivered by the Company, will constitute
valid and binding of the Company enforceable in accordance with their terms,
subject to laws of general application relating to bankruptcy, insolvency, the
relief of debtors, general equity principles, and limitations upon rights to
indemnity. The Shares, when issued in compliance with the provisions of this
Agreement, will be duly and validly issued, fully paid, and nonassessable. The
Warrant Shares, when issued upon exercise of the Warrants (as provided for
therein), will be duly and validly issued, fully paid, and nonassessable.
3.5 Financial Information; SEC Reports.
(a) The Company has made available to the Purchasers audited
consolidated balance sheets at December 31, 1999, together with the related
consolidated statements of operations, stockholders' equity and cash flows
for the period then ended (such financial statements are referred to
hereinafter as the "Financials"). The Financials have been prepared in
accordance with generally accepted accounting principles consistently applied
by the Company throughout the periods involved, except for accounting changes
described in the related notes thereto, and present fairly the financial
position of the Company as of the respective dates of said balance sheets and
the results of operations of the Company for the respective periods covered.
(b) Since December 31, 1999, to the Company's knowledge, there
has not been:
(i) any material change in the assets, liabilities,
financial condition or operating results of the Company from that reflected in
the Financials, except changes in the ordinary course of business which have not
been, in the aggregate, materially adverse to the financial condition, operating
results, prospects or business of the Company;
(ii) any material damage, destruction or loss or
interruption in use of any material asset or property of the Company, whether or
not covered by insurance, materially and adversely affecting the assets,
properties, financial condition, operating results, prospects or business of
the Company (as such business is presently conducted and as it is proposed to be
conducted);
(iii) any waiver by the Company of a material right or
debt owed to it; or
(iv) any material change in the accounting or tax
methods or practices of the Company or the making or by the Company of any
material tax election.
(c) The Company has filed in a timely manner all documents that the
Company was required to file with the SEC under Sections 13, 14(a) and 15(d)
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder (the "Exchange Act"), during
the twelve (12) months preceding the date of this Agreement. As of their
respective filing dates, all documents filed by the Company with the SEC (the
<PAGE>
"SEC Reports") complied in all material respects with the requirements of the
Exchange Act, and, to the Company's knowledge, did not contain, as of the
respective date of such SEC Report, any untrue statement of a material fact or
omitted as of its date to state a material fact necessary in order to make the
statements made therein, in light of the circumstances in which they were made,
not misleading.
3.6 Offering. Assuming the accuracy of the representations and warranties
of the Purchasers contained in Section 4 hereof, the offer, issuance and sale of
the Securities are exempt from the registration and prospectus delivery
requirements of the Securities Act, and the Securities have been registered
or qualified (or are exempt from registration and qualification) under the
registration, permit, or qualification requirements of all applicable state
securities laws.
3.7 Disclosure. For the purposes of this Agreement and the transactions
contemplated hereby, to the Company's knowledge, none of the representations
or warranties made by the Company in this Agreement and no information in the
Exhibits or Schedules hereto by the Company contain any untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements contained herein and therein, in light of the circumstances
under which they were made, not misleading. To the extent any communication or
information has been provided to Purchasers which could be deemed to
constitute a forward-looking statement or projection regarding the Company or
its business, prospects, financial condition, results of operations or otherwise
, the Company makes no representation that any such forward-looking statement or
projection will actually be proved true or be achieved, as the case may be.
Section 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
Each Purchaser hereby, severally and not jointly, represents and warrants
to the Company, effective as of the Closing Date, as follows:
4.1 Authorization. Purchaser represents and warrants to the Company that:
(i) Purchaser has all requisite legal and corporate or other power and capacity
and has taken all requisite corporate or other action to execute and deliver
this Agreement, to purchase the Securities to be purchased by it and to carry
out and perform all of its obligations under this Agreement; and (ii) assuming
the due execution and delivery of this Agreement by the Company, this Agreement
constitutes the legal, valid and binding obligation of the Purchaser,
enforceable in accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, or similar laws relating to or affecting
the enforcement of creditors' rights generally and (b) as limited by equitable
principles generally.
4.2 Investment Experience. Purchaser is an "accredited investor" as
defined in Rule 501(a) under the Securities Act. Purchaser is aware of the
Company's business affairs and financial condition and has had access to and
has acquired sufficient information about the Company to reach an informed
and knowledgeable decision to acquire the Securities. Purchaser acknowledges
that an investment in the Company is extremely speculative. Purchaser has such
business and financial experience as is required to give it the capacity to
protect its own interests in connection with the purchase of the Securities.
As set forth in Section 3.7 above, Purchaser acknowledges that there is no
assurance that any communication or other information which could be construed
<PAGE>
to be a forward-looking statement or projection relating to the Company or its
business, prospects, financial condition, results of operations, or otherwise,
will actually be proved true or be achieved. Purchaser represents that it is
not relying upon any such forward-looking statement in deciding to purchase the
Securities.
4.3 Investment Intent. Purchaser is purchasing the Securities for its
own account as principal, for investment purposes only, and not with a present
view to, or for, resale, distribution or fractionalization thereof, in whole or
in part, within the meaning of the Securities Act. Purchaser understands that
its acquisition of the Securities has not been registered under the Securities
Act or registered or qualified under any state securities law in reliance on
specific exemptions therefrom, which exemptions may depend upon, among other
things, the bona fide nature of Purchaser's investment intent as expressed
herein. Purchaser has completed or caused to be completed the Purchaser
Questionnaire attached hereto as Exhibit C for use in preparation of the Shelf
Registration (as defined below), will deliver the Purchaser Questionnaire to the
Company on or prior to the Closing Date, and the responses provided therein
shall be true and correct as of the date hereof and the Closing Date and will
be true and correct as of the effective date of the Shelf Registration.
4.4 Registration or Exemption Requirements.
(a) Purchaser further acknowledges and understands that the Shares
and Warrant Shares issuable upon exercise of the Warrants must be held
indefinitely, and they may not be resold or otherwise transferred, except in
a transaction registered under the Securities Act or otherwise exempt
from such registration requirements of the Securities Act. Purchaser
understands that the certificate(s) evidencing the Shares and Warrant Shares
will be imprinted with a legend in substantially the form set forth in Section
8.2 hereof that indicates that the transfer of the Shares and Warrant Shares
is prohibited unless (i) they are registered or such registration is not
required to transfer such Shares or Warrant Shares, or (ii) the transfer is
pursuant to an exemption from registration under the Securities Act and,
if the Company shall so request in writing, an opinion of counsel reasonably
satisfactory to the Company is obtained to the effect that the transaction is
so exempt and in compliance with applicable state law.
(b) Purchaser further acknowledges that resale of the Shares and
Warrant Shares may be limited by applicable state law even where a registration
statement covering resale of the Shares and Warrant Shares has been declared
effective under the Securities Act. For example, certain states may limit
resale of the Shares or Warrant Shares to qualified institutions or in
unsolicited qualified broker transactions in the absence of qualification or
another exemption in such state.
4.5 Restriction on Short Sales. Purchaser represents and warrants to and
covenants with the Company that Purchaser has not engaged and will not engage in
any short sale of the Company's Common Stock prior to the earlier to occur of
(i) the date which is 90 days following the Closing Date and (ii)the
effectiveness of the Shelf Registration.
4.6 No Legal, Tax or Investment Advice. Purchaser understands that
nothing in this Agreement or any other materials presented to Purchaser in
<PAGE>
connection with the purchase and sale of the Securities constitutes legal, tax
or investment advice. Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Securities.
Section 5. CONDITIONS TO CLOSING OF PURCHASERS
Each Purchaser's obligation to purchase the Securities at the
Closing is, at the option of such Purchaser, subject to the
fulfillment or waiver as of the Closing Date of the following conditions:
5.1 Representations and Warranties. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct in
all material respects on the date hereof, and shall be true and correct in all
material respects on the Closing Date, with the same force and effect as if they
had been made on and as of said date.
5.2 Officers' Certificate. The Company shall deliver to the
Purchasers a certificate, dated as of the Closing Date, signed by the Chief
Executive Officer of the Company, certifying that the representations and
warranties set forth in Section 3 are true as of, and all of the closing
conditions set forth in Section 5 have been satisfied on, the Closing Date,
in all material respects.
5.3 Covenants. All covenants, agreements and conditions contained
in this Agreement to be performed by the Company on or prior to the Closing Date
shall have been performed or complied with in all material respects as of the
Closing Date.
5.4 No Injunction, etc. No injunction, judgment, order, writ,
decree, law, rule or regulation shall exist that restrains, enjoins or
prohibits the consummation of any of the transactions contemplated hereby or
awards damages or other relief in respect of the consummation of any such
transactions.
Section 6. CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Securities at the Closing
is, at the option of the Company, subject to the fulfillment or waiver of the
following conditions:
6.1 Representations and Warranties. The representations made by
the Purchasers in Section 4 hereof shall be true and correct in all material
respects on the date hereof, and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had
been made on and as of such date.
6.2 Covenants. All covenants, agreements and conditions contained
in this Agreement to be performed by the Purchasers on or prior to the Closing
Date shall have been performed or complied with in all material respects.
Section 7. Affirmative Covenants of the Company
The Company hereby covenants and agrees as follows:
<PAGE>
7.1 Registration Requirements.
(a) Shelf Registration. The Company shall use its reasonable
commercial efforts to prepare and file with the Securities and Exchange
Commission (the "SEC") a Registration Statement pursuant to Rule 415 (or any
appropriate similar rule that may be adopted by the SEC) under the Securities
Act covering the Shares (including any amendment thereto, the "Shelf
Registration") not later than thirty (30) days after the Closing Date
(the "Filing Date"). The Shelf Registration shall be on Form S-3 or another
appropriate form permitting registration of such Shares for resale by the
Purchasers from time to time. Each Purchaser agrees to furnish promptly to
the Company in writing all information required from time to time to be
disclosed in order to make the information previously furnished to the Company
by such holder not misleading.
(b) Effectiveness. The Company shall use its reasonable
commercial efforts to cause the Shelf Registration to become effective under
the Securities Act within sixty (60) days of the Filing Date (the date such
Shelf Registration is declared effective is hereinafter referred to as the
"Effective Date"). Subject to the requirements of the Securities Act including,
without limitation, requirements relating to updating through post-effective
amendments, prospectus supplements or otherwise, the Company shall use its
reasonable commercial efforts to keep the Shelf Registration continuously
effective and in compliance with the Securities Act until the earlier of (i)
the one-year anniversary of the Closing Date, (ii) such date as all of the
Shares have been resold or (iii) such time as all of the Shares held by the
Purchasers may be sold within a given three-month period without compliance
with the registration requirements of the Securities Act pursuant to Rule 144
under the Securities Act ("Rule 144"); provided, however, that in the event of
a Suspension Period, as set forth in Section 7.1(c) hereof, the Company shall
extend the period of effectiveness of such Shelf Registration by the number of
days of each such Suspension Period. The Company shall use its reasonable
commercial efforts to take such actions under the laws of various states as
may be required, from time to time during the effectiveness of the Shelf
Registration (and subject to Purchasers' compliance with their obligations
hereunder), to cause the resale of the Shares pursuant to the Shelf
Registration to be lawful. The Company will use its reasonable commercial
efforts to cause, as of the Effective Date, all the Shares to be listed for
quotation on the Nasdaq NMS.
(c) Suspension Periods. Following the effectiveness of a
Shelf Registration filed pursuant to this section, the Company may, at any time,
suspend the effectiveness of such Shelf Registration for up to thirty (30) days,
as appropriate (a "Suspension Period"), by giving notice to each Purchaser, if
the Company shall have determined, through action by its Board of Directors,
that the Company may be required to disclose any material corporate development,
which disclosure, in the judgment of the Company's Board of Directors, could
reasonably be expected to have a material adverse effect on the Company; and
at least two (2) business days prior to implementing any such Suspension
Period, the Company shall deliver to each Purchaser a certificate to that
effect. Notwithstanding the foregoing, no more than two (2) Suspension
Periods may occur in any calendar year. The period of any such suspension of
the registration statement shall be added to the period of time the Company
agrees to keep the Shelf Registration effective as provided in Section 7.1(b).
The Company shall use its reasonable commercial efforts to limit the duration
and number of any Suspension Periods, including, without limitation,
<PAGE>
preparing and filing with the SEC post-effective amendments to the Shelf
Registration and/or prospectus supplements to the prospectus included in the
Shelf Registration. Each Purchaser agrees that, upon receipt of notice from
the Company of a Suspension Period in accordance with the provisions of this
Section 7.1(c), such Purchaser shall forthwith discontinue disposition of shares
covered by such registration statement or prospectus in accordance with the
provisions of this Section 7.1(c) until such Purchaser (i) is advised in
writing by the Company that the applicable Suspension Period has been
terminated and the use of the prospectus may be resumed, (ii) has received
copies of a supplemental or amended prospectus, if applicable, and (iii) has
received copies of any additional or supplemental filings which are incorporated
or deemed to be incorporated by reference in such prospectus. Each Purchaser
shall treat any information relating to a Suspension Period, including its
receipt of notice of a Suspension Period, as confidential information of the
Company, and shall not use or disclose any such information except with the
prior written consent of the Company.
(d) Registration Expenses. The Purchasers shall pay (i) all
Registration Expenses (as defined below) in connection with any registration,
and (ii) all Selling Expenses (as defined below) and other expenses that are not
Registration Expenses relating to the Shares resold by such Purchaser.
"Registration Expenses" shall mean all expenses, except for Selling Expenses,
incurred by the Company in complying with the registration provisions herein
described, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and expenses in connection
with listing the Shares for quotation on Nasdaq NMS, fees and disbursements
of counsel for and the independent auditors of the Company, blue sky fees and
expenses and the expense of any special audits incident to or required by any
such registration. "Selling Expenses" shall mean selling commissions,
underwriting fees and stock transfer taxes applicable to the Shares and all
fees and disbursements of counsel for any Purchaser.
(e) Notification. In addition to the Company's other obligations
under this Section 7.1, in connection with the registration of the Shares
on the Shelf Registration, the Company shall:
(i) As promptly as practicable after becoming aware of such
event, notify each Purchaser of the occurrence of any event, as a result
of which the prospectus included in the Shelf Registration, 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
promptly prepare an amendment to the Shelf Registration and supplement to the
prospectus to correct such untrue statement or omission, and deliver a number
of copies of such supplement and amendment to each Purchaser as such Purchaser
may reasonably request; and
(ii) As promptly as practicable after becoming aware of such
event, notify each Purchaser who holds Shares being sold of the issuance by
the SEC of any stop order or other suspension of the effectiveness of the
<PAGE>
Shelf Registration at the earliest possible time and take all lawful action to
effect the withdrawal, recession or removal of stop order or other suspension,
(f) Rule 144. With a view to making available to the Purchasers
the benefits of Rule 144 promulgated under the Securities Act ("Rule 144") and
any other rule or regulation of the SEC that may at any time permit a Purchaser
to sell Shares to the public without registration or pursuant to registration,
the Company covenants and agrees to use its reasonable commercial efforts to:
(i) make and keep public information available, as those terms are understood
and defined in Rule 144, until the earlier of (A) the second anniversary of the
Closing Date or (B) such date as all of the Shares shall have been resold;
and (ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act.
7.2 Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Purchaser from and
against any losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) to which such Purchaser (including for such purpose its
officers, directors, partners, attorneys and agents) may become subject (under
the Securities Act or otherwise) to the extent such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any untrue statement of a material fact contained in the Shelf
Registration or the prospectus (including any supplement) contained therein or
arise out of, or are based upon, the omission to state therein 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 in the case of the
prospectus), not misleading, or to the extent arising out of any failure by the
Company to fulfill any undertaking included in the Shelf Registration, and the
Company will, on a quarterly basis, reimburse such Purchaser for any legal or
other expenses reasonably incurred in investigating or defending any such
action, proceeding or claim; provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon (i) an untrue statement made in such Shelf
Registration in reliance upon and in conformity with information furnished to
the Company by or on behalf of such Purchaser, (ii) the failure of such
Purchaser to comply with the covenants and agreements contained in this
Agreement, or (iii) any untrue statement in any prospectus that is corrected in
any subsequent prospectus that was delivered to the Purchaser prior to the
pertinent sale or sales by the Purchaser.
(b) Each Purchaser, severally and not jointly, agrees to indemnify and hold
harmless the Company (including for such purpose its officers, directors,
partners, attorneys and agents) from and against any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) to which the
Company may become subject (under the Securities Act or otherwise) to the extent
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Shelf Registration
or the prospectus (including any supplement) contained therein or to the extent
arising out of, or are based upon, the omission or alleged omission to state
therein 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 in the case of the prospectus), not misleading, in each case, to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
<PAGE>
conformity with written information furnished to the Company by or on behalf
of such Purchaser specifically for use in preparation of the Shelf Registration.
(c) Promptly after receipt by any indemnified person of a notice of a claim
or the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 7.2, such indemnified
person shall notify the indemnifying person in writing of such claim or of
the commencement of such action (but the omission to so notify the indemnifying
party shall not relieve it from any liability that it otherwise may have to the
indemnified party, except to the extent that the indemnifying party is
materially prejudiced and forfeits substantive rights and defenses by reason
of such failure), and, subject to the provisions hereinafter stated, in case
any such action shall be brought against an indemnified person and the
indemnifying person shall have been notified thereof, the indemnifying person
shall be entitled to participate therein, and, in the case of any claim as to
which both the indemnified party and the indemnifying party are parties, to
the extent that it shall wish, the indemnifying party may assume the defense
thereof, with counsel reasonably satisfactory to the indemnified person.
After notice from the indemnifying person to such indemnified person of the
indemnifying person's election to assume the defense thereof, the
indemnifying person shall not be liable to such indemnified person for any
legal expenses subsequently incurred by such indemnified person in connection
with the defense thereof; provided, however, that if there exists or shall
exist a conflict of interest that would make it inappropriate in the
reasonable judgment of the indemnified person for the same counsel to represent
both the indemnified person and such indemnifying person or any affiliate or
associate thereof, the indemnified person shall be entitled to retain
its own counsel at the expense of such indemnifying person. If the indemnifying
party shall assume the defense of any such claim, it shall not, without prior
written consent of the indemnified party (which consent shall not unreasonably
be withheld), settle or compromise any such claim or consent to the entry of
any judgment that does not include an unconditional release of the indemnified
party from all liabilities with respect to such claim or judgment. Further,
no indemnifying party shall have any obligation with respect to any settlement
entered into by an indemnified party without the prior written approval of this
indemnifying party.
(d) If the indemnification provided for in this Section 7.2 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above in respect of any losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative fault of the Company on the one hand and the Purchasers
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or a Purchaser on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Purchasers agree that it would
not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Purchasers were treated
<PAGE>
as one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
The Purchasers' obligations in this subsection (d) to contribute are several in
proportion to their respective sales of Shares to which such loss relates and
not joint.
7.3 Nasdaq NMS Listing. The Company shall use its reasonable
commercial efforts as soon as practicable after the Closing
Date, and in any event no later than the Effective Date, to
cause the Shares to be listed for inclusion on the Nasdaq
National Market System ("Nasdaq NMS").
Section 8. RESTRICTIONS ON TRANSFERABILITY OF SHARES:
COMPLIANCE WITH SECURITIES ACT
8.1 Restrictions on Transferability. The Shares and Warrant Shares
shall not be transferable in the absence of a registration under the Securities
Act or an exemption therefrom or in the absence of compliance with any term of
this Agreement. The Company shall be entitled to give stop transfer
instructions to its transfer agent with respect to the Shares or Warrant Shares
in order to enforce the foregoing restrictions.
8.2 Restrictive Legend. Each certificate representing Shares and
Warrant Shares shall bear substantially the following legends (in addition to
any legends required under applicable securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS.
THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
8.3 Transfer of Shares after Registration. Each Purchaser hereby
covenants with the Company not to make any sale of the Shares or Warrant Shares
except either (i) in accordance with the Shelf Registration, in which case
Purchaser covenants to comply with the requirement of delivering a current
prospectus, or (ii) in accordance with Rule 144, in which case Purchaser
covenants to comply with Rule 144. Purchaser further acknowledges and agrees
that such Shares and Warrant Shares are not transferable on the books of the
Company unless the certificate submitted to the Company's transfer agent
evidencing uch Shares or Warrant Shares is accompanied by a separate
certificate executed by an officer of, or other person duly authorized by,
the Purchaser in the form attached hereto as Exhibit D.
<PAGE>
8.4 Purchaser Information. Each Purchaser covenants that it
will immediately notify the Company in writing of any changes in the information
set forth in the Shelf Registration regarding such Purchaser or such Purchaser's
"Plan of Distribution."
Section 9. Miscellaneous
9.1 Waivers and Amendments. With the exception of Sections 7 and 9
hereof, the terms of this Agreement may be waived or amended with the written
consent of the Company and each Purchaser. With the written consent of the
Company and the record holders of more than fifty percent (50%) of the Shares
then outstanding and held by Purchasers, the terms of Sections 7 and 9 hereof
may be waived or amended and any such amendment or waiver shall be binding upon
the Company and all holders of Shares. No delay or omission to exercise any
right, power or remedy accruing to a Purchaser, upon any breach or default of
the Company under this Agreement, shall impair any such right, power or remedy
of the Purchaser nor shall it be construed to be a waiver or any such
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of the Purchaser of any breach or default under this
Agreement, or any waiver on the part of the Purchaser of any provisions or
conditions of this Agreement, must be in writing and shall be effective only
to the extent specifically set forth in such writing.
9.2 Broker's Fee. Each of the parties hereto hereby represents that,
on the basis of any actions and agreements by it, there are no other brokers or
finders entitled to compensation of any kind or nature in connection with the
sale of the Securities to the Purchasers.
9.3 Governing Law. This Agreement shall be governed in all respects
by and construed in accordance with the laws of the State of Delaware without
any regard to conflicts of laws principles.
9.4 Survival. All covenants and agreements of the Company and the
Purchasers herein, and the indemnity and contribution agreements contained in
Section 7.2 hereof shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Purchaser or any
person controlling any Purchaser within the meaning of the Securities Act,
or by or on behalf of the Company, or any of its officers, directors or
controlling persons within the meaning of the Securities Act, and shall survive
the delivery of the Securities to the Purchasers hereunder. All representations
and warranties of the Company and the Purchasers herein shall no longer be
operative and shall of no effect as of the Closing Date.
9.5 Successors and Assigns.
(a) The provisions hereof shall inure to the benefit of, and be binding upon,
the successors, assigns, heirs, executors and administrators of the parties to
this Agreement. Notwithstanding the foregoing, no Purchaser shall assign
its rights or obligation under this Agreement without the prior written
consent of the Company.
<PAGE>
9.6 Entire Agreement. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
9.7 Notices, etc. All notices and other communications required or
permitted under this Agreement shall be effective upon receipt and shall be in
writing and may be delivered in person, by telecopy, overnight delivery service
or registered or certified United States mail, addressed to the Company or the
Purchasers, as the case may be, at their respective addresses set forth at
the beginning of this Agreement or on Exhibit A, or at such other address as
the Company or the Purchasers shall have furnished to the other party in
writing. All notices and other communications shall be effective upon the
earlier of actual receipt thereof by the person to whom notice is directed or
(i) in the case of notices and communications sent by personal delivery or
telecopy, one business day after such notice or communication arrives at the
applicable address or was successfully sent to the applicable telecopy
number, (ii) in the case of notices and communications sent by overnight
delivery service, at noon (local time) on the second business day following
the day such notice or communication was sent, and (iii) in the case of notices
and communications sent by United States mail, seven days after such notice or
communication shall have been deposited in the United States mail.
9.8 Severability of this Agreement. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
9.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
9.10 Expenses. The Company and each such Purchaser shall bear its own
expenses incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby, including fees of legal counsel.
9.11 Announcements. The parties hereto agree that all public announcements
by any Purchaser regarding the transactions contemplated by this Agreement shall
be approved in advance in writing by the Company; provided, however that any
Purchaser will not be precluded hereby from making such disclosures as it may
be required to make in order to comply with all applicable laws or listing
agreements.
<PAGE>
The foregoing agreement is hereby executed as of the date first above written.
"COMPANY"
CLICKACTION INC.
a Delaware corporation
By: /s/ Gregory W. Slayton
Name: Gregory W. Slayton
Title: President and CEO
"PURCHASER"
BANNER PARTNERS MINARET
By: /s/ William L. Edwards
Name: William L. Edwards
Title: Registered Investment Advisor
<PAGE>
The foregoing agreement is hereby executed as of the date first above written.
"COMPANY"
CLICKACTION INC.
a Delaware corporation
By: /s/ Gregory W. Slayton
Name: Gregory W. Slayton
Title: President and CEO
"PURCHASER"
PALO ALTO CROSSOVER FUND, L.P.
By: /s/ William L. Edwards
Name: William L. Edwards
Title: General Partner
<PAGE>
The foregoing agreement is hereby executed as of the date first above written.
"COMPANY"
CLICKACTION INC.
a Delaware corporation
By: /s/ Gregory W. Slayton
Name: Gregory W. Slayton
Title: President and CEO
"PURCHASER"
WILLIAM H. DRAPER, III REVOCABLE TRUST
By: /s/ William L. Edwards
Name: William L. Edwards
Title: Registered Investment Advisor
<PAGE>
The foregoing agreement is hereby executed as of the date first above written.
"COMPANY"
CLICKACTION INC.
a Delaware corporation
By: /s/ Gregory W. Slayton
Name: Gregory W. Slayton
Title: President and CEO
"PURCHASER"
FRED M. GIBBONS
By: /s/ William L. Edwards
Name: William L. Edwards
Title: Registered Investment Advisor
<PAGE>
The foregoing agreement is hereby executed as of the date first above written.
"COMPANY"
CLICKACTION INC.
a Delaware corporation
By: /s/ Gregory W. Slayton
Name: Gregory W. Slayton
Title: President and CEO
"PURCHASER"
MICRO CAP PARTNERS, L.P.
By: /s/ William L. Edwards
Name: William L. Edwards
Title: General Partner
<PAGE>
The foregoing agreement is hereby executed as of the date first above written.
"COMPANY"
CLICKACTION INC.
a Delaware corporation
By: /s/ Gregory W. Slayton
Name: Gregory W. Slayton
Title: President and CEO
"PURCHASER"
MICRO-MOUSSE PARTNERS, L.P.
By: /s/ William L. Edwards
Name: William L. Edwards
Title: General Partner
<PAGE>
The foregoing agreement is hereby executed as of the date first above written.
"COMPANY"
CLICKACTION INC.
a Delaware corporation
By: /s/ Gregory W. Slayton
Name: Gregory W. Slayto
Title: President and CEO
"PURCHASER"
THE INVESTMENT FUND FOR FOUNDATIONS
By: /s/ William L. Edwards
Name: William L. Edwards
Title: Registered Investment Advisor
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
SCHEDULE OF PURCHASERS
Investor Name Shares Purchase Warrant
Purchased Price Shares
<S> <C> <C> <C>
Banner Partners Minaret 27,000 $1,147,500 2,700
Palo Alto Crossover 15,000 $637,500 1,500
Fund, L.P.
William H. Draper, 3,000 $127,500 300
III Revocable Trust
Fred M. Gibbons 3,000 $127,500 300
Micro Cap Partners, 46,000 $1,955,000 4,600
L.P.
Micro-Mousse Partners, 3,000 $127,500 300
L.P.
The Investment Fund 3,000 $127,500 300
For Foundations
Total 100,000 $4,250,000 10,000
_________ _____________ ________
</TABLE>>
<PAGE
EXHIBIT B
FORM OF WARRANT
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN
ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE
LAWS IS AVAILABLE WITH RESPECT THERETO.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK OF
CLICKACTION INC.
(Void after March 15, 2003)
Warrant No. C-2 10,000 Shares of Common Stock
CLICKACTION INC.
1. Issuance. This Warrant is issued to Palo Alto Investors by
ClickAction Inc., a Delaware corporation (hereinafter with its successors called
the "Company").
2. Purchase Price; Number of Shares. The registered holder of this
Warrant (the "Holder"), commencing on the date hereof, is entitled upon
surrender of this Warrant with the subscription form annexed hereto as
Attachment B-1 duly executed, at the principal office of the Company, to
purchase from the Company up to 10,000 fully paid and nonassessable shares
(the "Shares") of Common Stock, $0.001 par value, of the Company (the
"Common Stock") at a price per share (the "Purchase Price") of $42.50 at any
time or from time to time up to and including 5:00 p.m. (Pacific Time) on March
15, 2003. The person or persons in whose name or names any certificate
representing shares of Common Stock is issued hereunder shall be deemed to have
become the holder of record of the shares represented thereby as at the close
of business on the date this Warrant is exercised, whether or not the transfer
books of the Company shall be closed.
3. Payment of Purchase Price. The Purchase Price may be paid (i) in
cash or by certified check or wire transfer, (ii) by the surrender or
forgiveness by the Holder to the Company of any promissory notes or other
obligations issued by the Company, with all such notes and obligations so
surrendered being credited against the Purchase Price in an amount equal to
the principal amount thereof plus accrued interest to the date of surrender,
or (iii) by any combination of the foregoing.
4. Net Issue Election. The Holder may elect to receive, without the
payment by the Holder of any additional consideration, shares of Common Stock
equal to the value of this Warrant by the surrender of this Warrant to the
Company, with the net issue election notice set forth in Attachment B-1
annexed hereto duly executed, at the principal office of the Company.
<PAGE>
Thereupon, the Company shall issue to the Holder such number of fully paid and
nonassessable shares of Common Stock as is computed using the following formula:
Y(A-B)
X=------
A
where:
X = the number of shares of Common Stock to be issued to
the Holder pursuant to this Section 4.
Y = the number of shares of Common Stock covered by this
Warrant at the time the net issue election is made pursuant to this
Section 4.
A = the fair market value of one share of Common Stock,
determined as follows: (i) if at such time the Common Stock is
listed on a national securities exchange or on the over-the-counter
market, then the closing price of the Common Stock on the business
day immediately prior to the date of exercise or, if no sale of the
Common Stock was made on such day, the first business day
immediately preceding such day upon which a sale was made, or (ii)
if at such time the Common Stock is not listed on a national
securities exchange or on the over-the-counter market, then as
determined in good faith by the Board at the time the net issue
election is made pursuant to this Section 4.
B = the Purchase Price in effect under this Warrant at
the time the net issue election is made pursuant to this Section 4.
5. Fractional Shares. No fractional shares shall be issued upon
exercise of this Warrant. The Company shall, in lieu of issuing any fractional
share, pay the holder entitled to such fraction a sum in cash equal to such
fraction multiplied by the then effective Purchase Price.
6. Exercise; Expiration Date; Automatic Exercise. This Warrant may be
exercised in whole or in part at any time commencing on the date hereof and
ending at 5:00 p.m. Pacific Time on the third anniversary of the date of this
Warrant (the "Expiration Date") and shall be void thereafter.
7. Reserved Shares; Valid Issuance. The Company covenants that it
will at all times from and after the date hereof reserve and keep available
such number of its authorized shares of Common Stock of the Company, free
from all preemptive or similar rights therein, as will be sufficient to permit
the exercise of this Warrant in full. The Company further covenants that such
shares as may be issued pursuant to such exercise will, upon issuance, be duly
and validly issued, fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issuance thereof.
<PAGE>
8. Stock Splits and Dividends. If after the date hereof the Company
shall subdivide the Common Stock, by stock split or otherwise, or combine the
Common Stock, or issue additional shares of Common Stock in payment of a stock
dividend on the Common Stock, the number of shares of Common Stock issuable on
the exercise of this Warrant shall forthwith be proportionately increased in the
case of a subdivision or stock dividend, or proportionately decreased in the
case of a combination, and the Purchase Price shall forthwith be proportionately
decreased in the case of a subdivision or stock dividend, or proportionately
increased in the case of a combination.
9. Mergers and Reclassifications. If after the date hereof the Company
shall enter into any Reorganization (as hereinafter defined), then, as a
condition of such Reorganization, lawful provisions shall be made, and duly
executed documents evidencing the same from the Company or its successor shall
be delivered to the Holder, so that the Holder shall thereafter have the right
to purchase, at a total price not to exceed that payable upon the exercise of
this Warrant in full, the kind and amount of shares of stock and other
securities and property receivable upon such Reorganization by a holder of the
number of shares of Common Stock which might have been purchased by the Holder
immediately prior to such Reorganization, and in any such case appropriate
provisions shall be made with respect to the rights and interest of the
Holder tothe end that the provisions hereof (including without limitation,
provisions for the adjustment of the Purchase Price and the number of shares
issuable hereunder) shall thereafter be applicable in relation to any shares
of stock or other securities and property thereafter deliverable upon exercise
hereof. For the purposes of this Section 9, the term "Reorganization" shall
include without limitation any reclassification, capital reorganization or
change of the Common Stock (other than as a result of a subdivision,
combination or stock dividend provided for in Section 8 hereof), or any
consolidation of the Company with, or merger of the Company into, another
corporation or other business organization (other than a merger in which the
Company is the surviving corporation and which does not result in any
reclassification or change of the outstanding Common Stock), or any sale or
conveyance to another corporation or other business organization of all or
substantially all of the assets of the Company.
10. Certain Events. If any change in the outstanding Common Stock of
the Company or any other event occurs as to which the provisions of Section 8
or Section 9 are not strictly applicable or if strictly applicable would not
fairly protect the purchase rights of the Holder of the Warrant in accordance
with such provisions, then the Board of Directors of the Company shall make an
adjustment in the number and class of shares available under the Warrant, the
Purchase Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give
the Holder of the Warrant upon exercise for the same aggregate Purchase Price
the total number, class and kind of shares as he would have owned had the
Warrant been exercised prior to the event and had he continued to hold such
shares until after the event requiring adjustment.
11. Certificate of Adjustment. Whenever the Purchase Price is adjusted,
as herein provided, the Company shall promptly deliver to the Holder a
certificate of the Company's chief financial officer setting forth the
Purchase Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.
<PAGE>
12. Issue Tax. The issuance of certificates for the Shares upon the
exercise of the Warrant shall be made without charge to the Holder of the
Warrant for any issue tax (other than any applicable income taxes) in respect
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than that of the then Holder
of the Warrant being exercised.
13. Notices of Record Date, Etc. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase, sell or otherwise acquire or dispose of any shares
of stock of any class or any other securities or property, or to receive any
other right;
(b) any reclassification of the capital stock of the Company,
capital reorganization of the Company, consolidation or merger involving the
Company, or sale or conveyance of all or substantially all of its assets; or
(c) any voluntary or involuntary dissolution, liquidation or winding
- -up of the Company; then and in each such event the Company will provide or
cause to be provided to the Holder a written notice thereof. Such notice shall
be provided at least fifteen (15) business days prior to the date specified in
such notice on which any such action is to be taken.
14. Representations, Warranties and Covenants. This Warrant is issued
and delivered by the Company and accepted by each Holder on the basis of the
following representations, warranties and covenants made by the Company:
(a) The Company has all necessary authority to issue, execute and
deliver this Warrant and to perform its obligations hereunder. This Warrant
has been duly authorized, issued, executed and delivered by the Company and
is the valid and binding obligation of the Company, enforceable in accordance
with its terms.
(b) The shares of Common Stock issuable upon the exercise of this
Warrant have been duly authorized and reserved for issuance by the Company and,
when issued in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable.
(c) The issuance, execution and delivery of this Warrant do not, and
the issuance of the shares of Common Stock upon the exercise of this Warrant in
accordance with the terms hereof will not, (i) violate or contravene the
Company's certificate of incorporation or by-laws, or any law, statute,
regulation, rule, judgment or order applicable to the Company, (ii) violate,
contravene or result in a breach or default under any contract, agreement or
instrument to which the Company is a party or by which the Company or any of
its assets are bound or (iii) require the consent or approval of or the filing
of any notice (other than, if any, post-issuance state securities laws filings)
or registration with any person or entity.
<PAGE>
15. No Voting or Dividend Rights; Limitation of Liability. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to receive notice as a shareholder of the Company
or any other matters or any rights whatsoever as a shareholder of the Company.
No dividends or interest shall be payable or accrued in respect of this Warrant
or the interest represented hereby or the shares purchasable hereunder until,
and only to the extent that, this Warrant shall have been exercised. No
provisions hereof, in the absence of affirmative action by the Holder to
purchase Shares, and no mere enumeration herein of the rights or privileges
of the Holder hereof, shall give rise to any liability of such Holder for the
Purchase Price or as a shareholder of the Company, whether such liability is
asserted by the Company or by its creditors.
16. Amendment. The terms of this Warrant may be amended, modified or
waived only with the written consent of the Holder.
17. Notices, Etc.
(a) Any notice or written communication required or permitted
to be given to the Holder may be given by United States mail, by overnight
courier or by facsimile transmission at the address most recently provided by
the Holder to the Company or by hand, and shall be deemed received upon the
earlier to occur of (i) receipt, (ii) if sent by overnight courier, then on
the day after which the same has been delivered to such courier for overnight
delivery, or (iii) if sent by United States mail, seventy-two (72) hours after
the same has been deposited in a regularly maintained receptacle for the deposit
of the United States mail.
(b) In case this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue a new warrant of like tenor and denomination
and deliver the same (i) in exchange and substitution for and upon surrender and
cancellation of any mutilated Warrant, or (ii) in lieu of any Warrant lost,
stolen or destroyed, upon receipt of an affidavit of the Holder or other
evidence reasonably satisfactory to the Company of the loss, theft or
destruction of such Warrant.
18. No Impairment. The Company will not, by amendment of its certificate
of incorporation or through any reclassification, capital reorganization,
consolidation, merger, sale or conveyance of assets, dissolution, liquidation,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance of performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in
order to protect the rights of the Holder.
19. Descriptive Headings and Governing Law. The descriptive headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The provisions
and terms of this Warrant shall be governed by and construed in accordance with
the internal laws of the State of California.
<PAGE>
20. Successors and Assigns. This Warrant shall be binding upon the
Company's successors and assigns and shall inure to the benefit of the Holder's
successors and legal representatives.
Dated March 15, 2000 CLICKACTION INC.
_________________________
<PAGE>
ATTACHMENT B-1
SUBSCRIPTION FORM
Date: _________________, 200___
ClickAction Inc.
2197 East Bayshore Road
Palo Alto, CA 94303-3219
Attn: President
Ladies and Gentlemen:
The undersigned hereby elects:
[] to exercise the warrant issued to it by ClickAction Inc. (the
"Company") and dated March 15, 2000 (the "Warrant") in full and to
purchase all of the ____________________________ shares of the Common
Stock of the Company (the "Shares") purchasable thereunder at a purchase
price of $42.50 per Share or an aggregate purchase price of _____________
Dollars ($__________) (the "Purchase Price"). Pursuant to the terms of
the Warrant the undersigned has delivered the Purchase Price herewith in
full in cash or by certified check or wire transfer or as otherwise
permitted pursuant to Section 3 of the Warrant; or
[] to surrender the right to purchase Shares pursuant to this Warrant
and to receive in lieu thereof Shares pursuant to the provisions of
Section 4 of the Warrant.
The undersigned also makes the representations set forth on Attachment
B-2 attached to the Warrant.
The certificate(s) for such shares shall be issued in the name of the
undersigned or as otherwise indicated below:
Very truly yours,
<PAGE>
ATTACHMENT B-2
THIS AGREEMENT MUST BE COMPLETED, SIGNED AND RETURNED TO CLICKACTION INC. ALONG
WITH THE SUBSCRIPTION FORM BEFORE THE SHARES ISSUABLE UPON EXERCISE OF THE
WARRANT CERTIFICATE DATED MARCH 15, 2000 WILL BE ISSUED.
_____________________, 200___
ClickAction Inc.
2197 East Bayshore Road
Palo Alto, CA 94303-3219
Attention: President
The undersigned, ___________________ ("Purchaser"), intends to acquire up
to ______________ shares of the Common Stock (the "Shares") of ClickAction Inc.
(the "Company") from the Company pursuant to the exercise of a certain Warrant
to purchase Shares held by Purchaser. The Shares will be issued to Purchaser in
a transaction not involving a public offering and pursuant to an exemption from
registration under the Securities Act of 1933, as amended (the "1933 Act") and
applicable state securities laws. In connection with such purchase and in
order to comply with the exemptions from registration relied upon by the
Company, Purchaser represents, warrants and agrees as follows:
1. Purchaser is acquiring the Shares for its own account, to hold for
investment, and Purchaser shall not make any sale, transfer or other disposition
of the Shares in violation of the 1933 Act or the General Rules and Regulations
promulgated thereunder by the Securities and Exchange Commission (the "SEC")
or in violation of any applicable state securities law;
2. Purchaser has been advised that the Shares have not been registered
under the 1933 Act or state securities laws on the ground that this transaction
is exempt from registration, and that reliance by the Company on such exemptions
is predicated in part on Purchaser's representations set forth in this letter;
3. Purchaser has been informed that under the 1933 Act, the Shares
must be held indefinitely unless it is subsequently registered under the 1933
Act or unless an exemption from such registration (such as Rule 144) is
available with respect to any proposed transfer or disposition by Purchaser
of the Shares;
4. The Company may refuse to permit Purchaser to sell, transfer or
dispose of the Shares (except as permitted under Rule 144) unless there is in
effect a registration statement under the 1933 Act and any applicable state
securities laws covering such transfer, or unless Purchaser furnishes an
opinion of counsel reasonably satisfactory to counsel for the Company, to the
effect that such registration is not required;
<PAGE>
5. Purchaser has invested in securities of companies in the development
stage and acknowledges that it is able to fend for itself, can bear the economic
risk of its investment, and has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of the
investment in the Shares. Purchaser represents and warrants that it is an
"accredited investor" within the meaning of Rule 501 of Regulation D of the
1933 Act.
Purchaser also understands and agrees that there will be placed on the
certificate(s) for the Shares, or any substitutions therefor, legends stating
in substance:
"These securities have not been registered under the Securities Act of 1933,
as amended (the "Act"), or any applicable state securities laws, and may
not be sold, offered for sale or transferred unless such sale or transfer
is in accordance with the registration requirements of such Act and
applicable laws or an exemption from the registration requirements of
such Act and applicable laws is available with respect thereto." Any
legend required pursuant to applicable state securities laws.
Purchaser has carefully read this letter and has discussed its requirements
and other applicable limitations upon Purchaser's resale of the Shares with
Purchaser's counsel.
Very truly yours,
<PAGE>
EXHIBIT C
INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Common Stock Purchase Agreement)
A. Complete the following items in the Common Stock Purchase Agreement:
1. Provide the information regarding the Purchaser requested
on the signature page. The Agreement must be executed
by an individual authorized to bind the Purchaser.
2. Exhibit C-1 - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire;
3. Exhibit C-2 - Registration Statement Questionnaire:
Provide the information requested by the Registration Statement
Questionnaire.
4. Exhibit C-3 - Purchaser Certificate:
Provide the information requested by the Certificate for
Individual Purchasers or the Certificate for Corporate,
Partnership, Trust, Foundation and Joint Purchasers, as
applicable.
5. Return the signed Purchase Agreement including the properly
completed Exhibit C to:
Cooley Godward LLP
Attn: David L. Wilke
3000 El Camino Real
5 Palo Alto Square
Palo Alto, CA 94306
B. Instructions regarding the transfer of funds for the purchase of Shares
will be provided by facsimile to the Purchaser by the Company at a later date.
C. Upon the resale of the Shares by the Purchaser after the Registration
Statement covering the Shares is effective, as described in the Purchase
Agreement, the Purchaser:
(i) must deliver a current prospectus, and annual and quarterly
reports of the Company to the buyer (prospectuses, and
annual and quarterly reports may be obtained from the
Company at the Purchaser's request); and
(ii) must send a letter in the form of Exhibit D to the Company
so that the Shares may be properly transferred.
<PAGE>
EXHIBIT C-1
CLICKACTION INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 4.3 of the Agreement, please provide us with the
following information:
1. The exact name that the Shares
are to be registered in (this is the
name that will appear on the stock
certificate(s)). You may use a
nominee name if appropriate: ________________________
2. The relationship between the
Purchaser of the Shares and
the Registered Holder listed in
response to item 1 above: ________________________
3. The mailing address of the
Registered Holder listed in
response to item 1 above: ________________________
4. The Tax Identification Number
of the Registered Holder
listed in response to item 1 above: ________________________
<PAGE>
EXHIBIT C-2
CLICKACTION INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information regarding the Purchaser.
1. Please state your organization's name exactly as it should appear in
the Registration Statement:
2. Have you or your organization had any position, office or other
material relationship within the past three years with the Company?
_____Yes _____No
If yes, please indicate the nature of any such relationships below:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
<PAGE>
EXHIBIT C-3
CLICKACTION INC.
CERTIFICATE FOR INDIVIDUAL PURCHASERS
If the investor is an individual Purchaser (or married couple) the
Purchaser must complete, date and sign this Certificate.
CERTIFICATE
I certify that the representations and responses below are true and accurate:
In order for the Company to offer and sell the Shares in conformance with
state and federal securities laws, the following information must be obtained
regarding your investor status. Please initial each category applicable to you
as an investor in the Company.
_____ (1) A natural person whose net worth, either individually
or jointly with such person's spouse exceeds $1,000,000;
_____ (2) A natural person who had an income in excess of $200,000,
or joint income with that person's spouse in excess of $300,000 in 1998 and
1999, and reasonably expects to have individual income reaching the same level
in 2000;
_____ (3) An executive officer or director of the Company.
My principal residence is in the state of _______________________
Dated: ___________, 2000
Name(s) of Purchaser
_______________________
Signature
_______________________
Signature
<PAGE>
EXHIBIT C-3
CLICKACTION INC.
CERTIFICATE FOR CORPORATE, PARTNERSHIP,
TRUST, FOUNDATION AND JOINT PURCHASERS
If the investor is a corporation, partnership, trust, pension plan,
foundation, joint purchaser (other than a married couple)or other entity, an
authorized officer, partner, or trustee mustcomplete, date and sign this
Certificate.
CERTIFICATE
The undersigned certifies that the representations and responses below are
true and accurate:
(a) The investor has been duly formed and is validly existing and has
full power and authority to invest in the Company. The person signing on behalf
of the undersigned has the authority to execute and deliver the Common Stock
Purchase Agreement on behalf of the Purchaser and to take other actions with
respect thereto.
(b) Indicate the form of entity of the undersigned:
________Limited Partnership
________General Partnership
________Corporation
________Revocable Trust (identify each grantor and indicate under
what circumstances the trust is revocable by the grantor):
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
(Continue on a separate piece of paper, if necessary.)
________Other Type of Trust (indicate type of trust and, for trusts
other than pension trusts, name the grantors and beneficiaries):
______________________________________________________
______________________________________________________
______________________________________________________
______________________________________________________
(Continue on a separate piece of paper, if necessary.)
<PAGE>
_____Other form of organization (indicate form of organization):
(c) Indicate the date the undersigned entity was formed:_____.
(d) In order for the Company to offer and sell the Sharesin conformance
with state and federal securities laws, the following information must be
obtained regarding your investor status. Please initial each category
applicable to you as an investor in the Company.
_____1. A bank as defined in Section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity;
_____2. A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934;
_____3. An insurance company as defined in Section 2(13) of the
securities Act;
_____4. An investment company registered under the Investment
Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act;
_____5. A Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958;
_____6. A plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a
state or its political subdivisions, for the benefit of its
employees, if such plan has total assets in excess of $5,000,000;
_____7. An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment
decision is made by a plan fiduciary, as defined in Section 3(21)
of such act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000
or, if a self-directed plan, with investment decisions made
solely by persons that are accredited investors;
_____8. A private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
_____9. An organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose
of acquiring the Shares, with total assets in excess of $5,000,000;
<PAGE>
_____10. A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Shares, whose
purchase is directed by a sophisticated person who has such
knowledge and experience in financial and business matters that
such person is capable of evaluating the merits and risks of
investing in the Company;
_____11. An entity in which all of the equity owners qualify under
any of the above subparagraphs. If the undersigned belongs to this
investor category only, list the equity owners of the undersigned,
and the investor category which each such equity owner satisfies:
_________________________________________________________________
_________________________________________________________________
________________________________________________________________
(Continue on a separate piece of paper, if necessary.)
(e) The state of incorporation or formation of the investor is_______ and the
investor's principal office is located in the state of ________________________
Dated:___________, 2000
_______________________
Name of investor
_________________________________
Signature and title of authorized
officer, partner or trustee
<PAGE>
EXHIBIT D
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
To: Sharon Chiu
ClickAction Inc.
2197 East Bayshore Road
Palo Alto, CA 94303-3219
The undersigned, the Purchaser or an officer of, or other person duly
authorized by the Purchaser, hereby certifies that was the Purchaser of the
shares evidenced by the attached certificate, and as such, proposes to transfer
such shares on or about _____________________, 200__ either
(check the applicable box):
[] (i) in accordance with the registration statement, file number 333-_______
in which case the Purchaser certifies that the requirement of delivering a
current prospectus has been complied with or will be complied with in connection
with such sale, or:
[] (ii) in accordance with Rule 144 under the Securities Act of 1933 ("Rule
144"), in which case the Purchaser certifies that it has complied with or will
comply with the requirements of Rule 144.
Print or type:
Name of Purchaser:___________________________
Name of Individual
representing Purchaser
(if an Institution):_________________________
Title of Individual
representing Purchaser
(if an Institution):_________________________
Signature by:
Purchaser or
Individual representing
Purchaser:___________________________________
<PAGE>
CLICKACTION INC.
COMMON STOCK PURCHASE AGREEMENT
by and among
CLICKACTION INC.
AND THE PURCHASERS
LISTED ON EXHIBIT A
Dated as of March 15, 2000
<PAGE>
Section 1.Authorization and Sale of Common Stock and Warrants to Purchase Common
Stock........................................................................1
1.1 Authorization..........................................................1
1.2 Sale of Common Stock...................................................1
1.3 Issuance of Warrants...................................................1
Section 2.Closing Date; Delivery.............................................1
2.1 Closing Date...........................................................1
(a) Delivery.........................................................1
Section 3.Representations and Warranties of the Company......................2
3.1 Organization and Standing..............................................2
3.2 Corporate Power........................................................2
3.3 Capitalization........................................................ 2
3.4 Authorization..........................................................2
3.5 Financial Information; SEC Reports.....................................3
3.6 Offering...............................................................3
3.7 Disclosure.............................................................4
Section 4.Representations, Warranties and Covenants of the Purchasers........4
4.1 Authorization..........................................................4
4.2 Investment Experience..................................................4
4.3 Investment Intent......................................................4
4.4 Registration or Exemption Requirements.................................5
4.5 Restriction on Short Sales.............................................5
4.6 No Legal, Tax or Investment Advice.....................................5
Section 5.Conditions to Closing of Purchasers................................5
5.1 Representations and Warranties.........................................6
5.2 Officers' Certificate..................................................6
5.3 Covenants..............................................................6
5.4 No Injunction, etc.....................................................6
Section 6.Conditions to Closing of Company...................................6
6.1 Representations and Warranties.........................................6
6.2 Covenants..............................................................6
Section 7.Affirmative Covenants of the Company...............................6
<PAGE>
7.1 Registration Requirements..............................................6
(a) Shelf Registration...............................................6
(b) Effectiveness....................................................7
(c) Suspension Periods...............................................7
(d) Registration Expenses............................................8
(e) Notification.....................................................8
(f) Rule 144.........................................................8
7.2 Indemnification and Contribution.......................................9
7.3 Nasdaq NMS Listing....................................................10
Section 8.Restrictions on Transferability of Shares: Compliance with
Securities Act..............................................................11
8.1 Restrictions on Transferability.......................................11
8.2 Restrictive Legend....................................................11
8.3 Transfer of Shares after Registration.................................11
8.4 Purchaser Information.................................................11
Section 9.Miscellaneous.....................................................11
9.1 Waivers and Amendments................................................11
9.2 Broker's Fee..........................................................12
9.3 Governing Law.........................................................12
9.4 Survival..............................................................12
9.5 Successors and Assigns................................................12
9.6 Entire Agreement......................................................12
9.7 Notices, etc..........................................................12
9.8 Severability of this Agreement........................................13
9.9 Counterparts..........................................................13
9.10 Expenses..............................................................13
9.11 Announcements.........................................................13
Exhibit A Schedule of Purchasers
Exhibit B Form of Warrant
Exhibit C Instruction Sheet for Purchaser
Exhibit D Purchaser's Certificate of Subsequent Sale
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to incorporation by reference in the registration statement on Form
S-3 of ClickAction, Inc. and subsidiary of our report dated February 11, 2000,
relating to the consolidated balance sheets of ClickAction, Inc. and subsidiary
(formerly known as MySoftware Company) as of December 31, 1999, and 1998, and
the related consolidated statements of operations, stockholders' equity, and the
cash flows for each of the years in the three-year period ended December 31,
1999, which report appears in the December 31, 1999, annual report on Form
10-KSB of ClickAction, Inc. and subsidiary and to the reference to our firm
under the heading "Experts".
/s/ KPMG LLP
___________________
Mountain View, California
April 20, 2000
