As filed with the Securities and Exchange Commission on September 5, 2000
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Registration No. 333
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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CLICKACTION INC
(Exact name of registrant as specified in its charter)
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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)
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Copies to:
IAIN MICKLE, ESQ.
JOHN P. COOK, ESQ.
DENNIS E. MICHAELS, ESQ.
Orrick, Herrington & Sutcliffe LLP
400 Capitol Mall, Suite 3000
Sacramento, CA 95814
(916) 447-9200
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
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If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.
f 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 Amount to Proposed Maximum Proposed Maximum Amount of
of Securities be Offering Price per Registration Fee Registration
to be Registered Registered Share (1) Price (1) Fee
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Common Stock,
$0.001 par
value 716,646 $13.00 $9,316,398 $2,460
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(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 August 31, 2000. It is not known how many shares will
be purchased under this registration statement or at what price such shares will
be purchased.
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>
[Red Herring Legend]
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.
<PAGE>
===========================================================================
SUBJECT TO COMPLETION, - SEPTEMBER 5, 2000
Prospectus
September ___, 2000
CLICKACTION
716,646 SHARES
COMMON STOCK
OFFERED BY CERTAIN SELLING STOCKHOLDERS
The Selling Stockholders:
The selling stockholders identified in this prospectus are offering up to
716,646 shares of our common stock. We sold the shares to the selling
stockholders on June 8, 2000, June 9, 2000, June 15, 2000, June 18, 2000, June
26, 2000, June 29, 2000 and July 6, 2000 in a series of private transactions.
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 15.
Trading Market:
Our common stock is listed on the Nasdaq National Market under the symbol
"CLAC." On August 31, 2000, the closing sale price of our common stock, as
reported on the Nasdaq National Market, was $13.00.
Risks:
Investing in our common stock involves a high degree of risk. See "Risk
Factors" beginning on page 5.
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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.
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<PAGE>
TABLE OF CONTENTS
Page
Prospectus Summary 3
Selected Financial Data 4
Risk Factors 5
Special Note Regarding Forward-Looking Statements 13
Where You Can Get More Information 13
Use Of Proceeds 14
Selling Stockholders 14
Plan Of Distribution 15
Legal Matters 17
Experts 17
<PAGE>
PROSPECTUS SUMMARY
You should rely only on the information contained or incorporated by reference
in this prospectus. We have not authorized anyone to provide you with infor-
mation different from that contained or incorporated by reference 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.
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.
We are a leading provider of permission-based email relationship management,
or ERM, products and services that enable businesses to develop and enhance
one-to-one customer relationships through targeted email marketing campaigns.
Our ERM solution is permission-based, which means that our clients send
emails only to customers and potential customers who have provided their
email addresses and explicitly asked to receive information on specific
subjects, brands, services or products. Our clients typically use our ERM
solution to send content rich emails that inform these customers about new
products, sales and promotions, specified items of interest and corporate
events.
Our ERM solution also allows our clients to collect and profile customer data
and, based on this information, personalize their permission-based email
marketing campaigns. Because our clients are provided with real-time access to
the results of each email marketing campaign, they can easily test the
effectiveness of each promotion prior to full-scale deployment and they can
make adjustments to increase the response rate of future email marketing
campaigns. Since implementing our email marketing strategy in August 1999,
we have developed and executed thousands of email marketing campaigns for
over 200 clients, including Nabisco and Sarah Lee.
Since our incorporation in 1986, we have also offered a desktop software
product line consisting of a family of desktop software applications
specifically tailored to address the sales and marketing needs of small
businesses and home offices. Our desktop products provide users with
powerful, easy-to-learn and easy-to-use tools for mail list management,
postage savings and the creation of brochures, stationery and postcards.
Revenues generated from our sale of desktop software products represented
94.9%, 75.5% and 70.3% of our total revenues for the year ended December 31,
1999, the six months June 30, 2000 and the three months ended June 30, 2000,
respectively. We expect this percentage to continue to decrease as the
revenues from our ERM business increases at a higher rate.
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,
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1999 1998 1997
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(in thousands, except per share data)
<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
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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 ---
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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 all other
information contained and incorporated by reference in this prospectus, before
you decide to purchase shares of our common stock. 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. If that happens, the
trading price of our common stock could decline, and you may lose all or part
of your investment.
Risks Related to our Email Relationship Management Business
Our business and future prospects are difficult to evaluate because we have a
limited operating history in email marketing.
Following our acquisition of MarketHome in August 1999, we shifted our
strategic focus to Web-based email marketing products and services. During
the six months ended June 30, 2000, only 24.5% of our total revenues were
derived from the licensing of our email relationship management software and
the sale of related services. Therefore, we have a limited operating history
in email marketing upon which you can evaluate our business and future
prospects. In addition, our management does not have past experience in
email marketing. Together, these influences make predicting our future
operating results difficult.
If email marketing is not widely accepted or if use of the Internet by
consumers does not continue to grow, there will be a decreased demand for our
email marketing products and services and our business will suffer as a
result.
The market for email marketing products and services is new and
rapidly evolving. If email marketing does not gain widespread acceptance as
a means of marketing to, and communicating with, consumers, our business will
suffer. Businesses that have relied upon traditional means of attracting new
customers and maintaining customer relationships may not accept, or may be
slow in accepting, our email marketing products and services because:
* they have already invested substantial resources in other more traditional
methods of marketing and communicating;
* they have allocated a limited portion of their marketing budgets to email
marketing;
* they may find email marketing to be less effective for promoting their
products and services;
* their customers may have concerns about security and privacy on the
Internet or confuse our permission-based emails with unsolicited emails; or
* the effectiveness of email marketing may diminish significantly if the
volume of direct marketing email results in a negative reaction from
consumers.
Our success also depends on the growth and acceptance of the Internet as a
medium for executing transactions. If consumers do not continue to purchase
products online, then the market for our email marketing solution may disappear.
If that happens, or if the number of business-to-consumer electronic commerce
transactions grows more slowly than we anticipate, our business would suffer.
Our business will be harmed if we fail to meet the demands of our email
marketing clients.
The success of our email marketing business depends to a significant extent on
our ability to provide satisfactory services to our clients, meet their demands
and maintain an infrastructure capable of handling, without interruption, the
volume of emails resulting from our clients' email marketing campaigns.
<PAGE>
The success of our email marketing business also depends on our ability to
successfully deliver emails over the Internet. Software programs exist that
limit or prevent advertising from being delivered to a user's computer.
Widespread adoption of this software by Web users would significantly undermine
the commercial viability of Internet advertising and marketing. The failure to
deliver email messages for our clients in an effective and consistent manner
may cause our clients to discontinue their use of our email campaign
services. In addition, because we provide our clients with a 100% service
guarantee, if our clients are not completely satisfied with our service we
may be required to refund the delivery fees paid by dissatisfied clients or
resend an email marketing campaign at our own expense. If these refunds are
large in amount, our business and financial results could be adversely affected.
Unplanned system interruptions and capacity constraints could disrupt our
business and damage our reputation.
We must offer clients reliable, secure and continuous service to attract and
retain clients and persuade them to increase their reliance on our email
marketing solution. As the volume of emails generated by our clients
increases, we must continuously upgrade and enhance our technical
infrastructure to accommodate the increased demands placed on our systems.
Our operations also depend in part on our ability to protect our systems
against physical damage from fire, earthquakes, power loss,
telecommunications failures, computer viruses, unauthorized user access or
hacker attacks, physical break-ins and similar events. Any interruption or
decrease in response time of our email marketing services could damage our
reputation, reduce customer satisfaction and decrease usage of our services.
If our system security is breached, our business and reputation could suffer.
A fundamental requirement for online communications and transactions is the
secure transmission of confidential information over public networks. Third
parties may attempt to breach our security or that of our customers. Any
breach in our online security could result in liability to our customers,
damage to our reputation and harm to our business. Our servers are
vulnerable to computer viruses or software programs that disable or impair
computers, physical or electronic break-ins and similar disruptions, which
could lead to loss of data. We may need to spend significant resources to
license technologies to protect against security breaches or to address
problems caused by a security breach.
Increasing governmental regulation of electronic commerce and legal
uncertainties could decrease demand for our email marketing service or increase
our cost of doing business.
We are subject not only to regulations applicable to businesses generally, but
also to laws and regulations directly applicable to privacy and electronic
commerce. Although there are currently few of these laws and regulations,
state, federal and foreign governments may adopt more of these laws and
regulations. The adoption of new laws or the adaptation of existing laws to
the Internet may decrease the growth in the use of the Internet, which could
in turn decrease the demand for our services, increase our cost of doing
business or otherwise harm our business. Federal, state, local and foreign
governments are considering a number of legislative and regulatory proposals
relating to Internet commerce. As a result, a number of laws or regulations
may be adopted regarding:
* the pricing and taxation of goods and services offered over the Internet;
* intellectual property ownership; and
* the characteristics and quality of products and services offered over the
Internet.
It is also uncertain as to how existing laws may be applied to the Internet in
areas such as property ownership, copyright, trademark and trade secrets. The
recent growth of Internet commerce has been attributed by some to the lack of
sales and value-added taxes on interstate sales of goods and services over the
Internet. Numerous state and local authorities have expressed a desire to
impose such taxes on sales to consumers and businesses in their jurisdictions.
The Internet Tax Freedom Act of 1998 prevents imposition of such taxes through
October 2001. If the federal moratorium on state and local taxes on Internet
sales is not renewed, or if it is terminated before its expiration, sales of
goods and services over the Internet could be subject to multiple overlapping
<PAGE>
tax schemes, which could substantially hinder the growth of Internet commerce,
including the use of our email marketing solution.
The Internet generates privacy concerns which could result in market
perceptions or legislation which could harm our business, result in reduced
sales of our services, or both.
We gather and maintain data related to consumers' buying behavior. Recently,
lawsuits have been brought alleging, among other things, that at least one
company, which combines information from online and other sources regarding
users, has improperly collected and used information concerning Internet users
in violation of federal electronics privacy statutes and other privacy laws.
The United States Federal Trade Commission has launched an informal inquiry to
determine whether that company has engaged in unfair or deceptive practices in
collecting and maintaining information concerning Internet users. While we
believe the "opt-in" nature of the user profiles that we create do not raise
these issues, we may be sued or investigated regarding our practices. Any
similar legal actions, whether against us or others, could limit our ability to
sell our email marketing services or otherwise seriously harm our business.
Privacy concerns may cause consumers who use the Internet to decide not to opt
in to receive emails and even the perception of security and privacy concerns,
whether or not valid, may indirectly inhibit market acceptance of our email
marketing services. In addition, legislative or regulatory requirements may
heighten these concerns if businesses must notify users that the data captured
after visiting Web sites may be used to direct product promotions and
advertising to that user. For example, the European Union recently enacted its
own privacy regulations that may result in limits on the collection and use of
some user information. The United States and other countries may adopt similar
legislation or regulatory requirements. If privacy legislation is enacted or
consumer privacy concerns are not adequately addressed, our business could be
harmed.
We may be exposed to liability for information displayed on our customers' Web
sites or within their marketing partners' Web sites or email messages.
Because our email marketing services often require us to provide a connection
to the Web sites of our customers and their marketing partners, we may be
perceived as being associated with the content of these Web sites. We do not
and cannot screen all of the content generated by our customers and their
marketing partners. As a result, we may face potential liability for
defamation, negligence, copyright, patent or trademark infringement and other
claims based on the materials displayed on our customers' sites and on their
marketing partners' sites and email messages. For example, if one of our
customers is sued for posting information on its Web site that is alleged to
be defamatory, we may also be named as a defendant in that legal action based
solely on our limited association with that customer's Web site. As a
result, we could be involved in legal proceedings and disputes that are
costly to resolve. We may also suffer a loss of customers or damage to our
reputation harm based on this information or resulting from our involvement
in these legal proceedings. Furthermore, some foreign governments have
enforced laws and regulations related to content distributed over the
Internet that are more strict than those currently in place in the United
States.
Risks Related to our Desktop Software Business
Because we rely on sales of our desktop software to a limited number of
retailers and distributors, our business could be harmed if these retailers and
distributors cease doing business with us or significantly reduce the level of
their purchases.
We sell our desktop products principally to a limited number of major retailers
and to distributors for resale to retailers. These sales have historically
constituted, and may continue to constitute, a majority of our total revenues.
Our largest distributor accounted for 34% of our total revenues for the twelve
months ended December 31, 1999 and 31% of our total revenues for the six
months ended June 30, 2000. Another retailer accounted for 27% and 22% of
our total revenues during these same periods. 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,
<PAGE>
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 financial results could be harmed if we are unable to collect outstanding
receivables.
Our sales of desktop software products are made on credit terms, and we do not
hold collateral to secure payment. We maintain accounts receivable insurance
that covers only a portion of our accounts and we may not be able to maintain
or increase this insurance on acceptable terms or at all. The inability to
collect any significant receivable in a timely manner could adversely affect
our financial results.
Significant returns of our desktop software products could adversely affect our
reputation, operating results and financial condition.
Distributors and retailers may return our desktop software products according to
negotiated terms or pursuant to any promotional terms that may be in effect.
We also provide end-users with a 30-day money-back guarantee. Accordingly, we
are exposed to the risk of product returns from retailers, distributors and end-
users, 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 reserves 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 reserves could materially
adversely affect our business.
Our desktop software business depends on third-party service providers,
suppliers and facilities.
We rely on third-party service providers to perform most of our customer
technical support and product assembly functions for our desktop software
products. One independent firm provides substantially all customer technical
support for our desktop software products. Our agreement with this firm may be
terminated with or without cause on 60 days notice by either party. This firm
also provides services to several larger companies, and demands from these
companies or other factors could cause this firm to terminate its agreement
with us. The unavailability of this 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. In addition, we rely on two printers
for packaging and two assembly houses to assemble and package our desktop
software products and have only limited sources for some of our supplies. We
do not have contracts with such assembly houses or suppliers. 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 third parties. The failure of these third-party
vendors to continue to provide supplies and services to us on a timely basis,
or at all, could adversely affect our business.
Our success depends on postal regulations and availability of postal
information.
Our line of mailing software products, which in the aggregate accounted for
16.4% of our total revenues in the year ended December 31, 1999 and 4.2% of our
total revenues in the six months ended June 30, 2000, have been developed based
on current United States Postal Service regulations. Changes in these
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 software used in some of our
desktop software products. We may not be able to maintain or renew our
relationship with this third party or that the software we license will be
error free or perform to our specifications or in accordance with Postal
Service regulations. Significant changes in Postal Service regulations or
the inability to maintain or renew our license agreement with the independent
party on acceptable terms, or at all, could damage our business. We must
also obtain Postal Service certification on a bi-monthly basis in order to
supply updates to our end-users in a timely manner. We may not be able to
continue to secure such certification on a timely basis, if at all, and the
failure to do so could damage our business.
<PAGE>
Risks Related to our Overall Business
We expect to incur significant future operating losses.
We incurred a net loss of $2.2 million for the year ended December 31, 1999 and
a net loss of $3.8 million for the six months ended June 30, 2000. As of June
30, 2000, we had an accumulated deficit of $9.7 million. We expect to incur
significant operating losses for the foreseeable future because we anticipate
that our operating expenses relating to our email marketing business will
increase more quickly than our total revenues. We rely to a significant extent
on the revenues and cash flow generated from the sale of our desktop software
products to fund the development and expansion of our email marketing
strategy. Our ability to continue to do so would be harmed if we were to
experience a decline in sales of our desktop software products. Our ability
to achieve profitability in the future will depend upon our ability to
continue development of new email marketing products and services, enhance
our infrastructure and expand our customer base and brand awareness. To
achieve these goals, we need to increase spending on product development,
sales and marketing and technology. To the extent that our email marketing
revenues do not significantly increase as a result of this increased
spending, we may not achieve profitability. Even if we do achieve
profitability, we may not be able to sustain or increase our profitability on
a quarterly or annual basis in the future.
Our quarterly operating results are subject to significant fluctuations due to
many factors, any of which could adversely affect our stock price.
We have experienced, and may continue to experience, significant fluctuations
in our quarterly operating results due to a variety of factors, many of which
are outside our control. These factors include:
* the rate of growth of the use of the Internet as a medium for consumer and
business communications and transactions, and the size and rate of growth
of the market for email marketing products and services;
* the timing and number of product enhancements and new product and services
introductions by us and our competitors;
* the timing and number of email marketing campaigns conducted by our customers;
* the timing and delivery of strategic alliance arrangements;
* changes in pricing policies by us and our competitors;
* our ability to upgrade and expand our infrastructure;
* technical difficulties or system downtime affecting use of our email
marketing products or services;
* the seasonal nature of our desktop software business and our email
relationship management business;
* changes in the level of our operating expenses to support our growth;
* domestic and international regulation of email marketing, including privacy
legislation;
* timing of the receipt of orders for our desktop software products from major
retailer and distributor customers;
* desktop software product returns;
* cancellations or terminations by retail or distributor accounts;
* reductions in shelf space for our desktop software products; and
<PAGE>
* delays in shipment of our desktop software products.
Due to these factors, we believe that quarter-to-quarter comparisons of our
operating results may not be meaningful and should not be relied upon as an
indication of our future performance. In addition, a significant portion of
our operating expenses, particularly labor costs and rent, are relatively
fixed, and planned expenditures are based, in part, on expectations with
regard to future sales. As a result, we will likely be unable, or may elect
not to, reduce spending quickly enough to offset any unexpected revenue
shortfall. In the event of a revenue shortfall or unanticipated expenses in
any given quarter, our operating results may be below the expectations of
securities analysts or investors. If this occurs, the market price of our
common stock may decline significantly.
Intense competition could impair our ability to grow and achieve profitability.
The market for email marketing products and services is intensely competitive
and rapidly evolving. We expect competition to increase significantly in the
future because of the attention the Internet has received as a means of
advertising and direct marketing and because there are relatively low barriers
to entry in our market. We compete directly with publicly traded email service
providers such as Digital Impact, MessageMedia and Exactis.com, as well as
numerous private companies. We compete with the information technology
departments of current and prospective clients who use in-house email systems
to manage and deliver email marketing campaigns. We also compete with
companies providing software and services for outsourced solutions such as
email distribution, list management, reporting and bounce processing, email
consulting and campaign analysis.
The market for our desktop software products is also intensely competitive, and
is characterized by pressure to reduce prices, capture limited retail shelf
space, increase marketing and promotional activity, incorporate new features
and release new product versions. The competition for retail shelf space is
likely to increase due to the proliferation of software products. Failure to
achieve and maintain unit sales volumes may result in loss of shelf space,
which may, in turn, lead to further reductions in sales volumes. Existing
software companies may broaden or enhance their product lines to compete with
our desktop software products, and other potential new competitors, including
computer hardware manufacturers, diversified media companies, and small
business service companies, may enter or increase their focus on the small
business software market, resulting in even greater competition.
Many of our current and potential competitors in both the market for email
marketing products and services and the desktop software market have longer
operating histories, greater name recognition, larger customer bases, more
diversified lines of products and services and significantly greater resources
than we have. These competitors may be able to devote significant resources to
sales and marketing, adopt more aggressive pricing policies and deliver
superior solutions. If we are not able to compete effectively with our
current or future competitors, our business would be harmed.
Our current products and services may become obsolete and unmarketable if we
are not able to adequately respond to rapidly changing technology and customer
demands.
Our industry is characterized by rapid changes in technology and customer
demands. As a result, our current products and services may quickly become
obsolete and unmarketable. We believe that our future success depends in large
part upon our ability to keep pace with competitive offerings and customer
requirements, 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 and cost-effective basis. We may be unable to do this due to resource
constraints or technological or other reasons. Any failure or delay in
adapting to technological advances or emerging industry standards or
developing, introducing or marketing new products and services could cause us
to lose clients or fail to gain new clients. If this happens, our business
could suffer and our stock price could decline.
Our business could be harmed if external coding contractors on which we depend
compete with us or are not available to provide us with their coding services.
We generally develop internally 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 an independent firm to assist us with the
<PAGE>
coding on 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 coder. With respect to
these products, we hold an irrevocable, non-exclusive license to copy and
distribute the executable code compiled from the base code and to make limited
modifications. Although the agreements with these firms contain various
protective terms, these provisions may not effectively protect our interests and
third-party coders may develop or market products that compete with our products
or services. Independent coders are in high demand, and independent coders,
including those who have developed products for us in the past, may not be
available to provide coding services to us in the future. In addition, we may
not be able to obtain or renew coding or licensing agreements on favorable
terms, or at all.
We are dependent on licensed third-party technologies and we may need to
license additional technologies to succeed in our business.
We are highly dependent on technologies we license from third parties to enable
us to send email through the Internet and to offer a variety of database
management and targeted marketing capabilities. The email marketing industry
is rapidly evolving, and we may need to license additional technologies to
remain competitive. We may not be able to license these technologies on
commercially reasonable terms, or at all. The failure to license these
technologies could adversely affect our ability to offer competitive email
marketing products and services.
We may not be able to hire and retain the qualified personnel necessary to
support our growth.
We depend on the continued services of our key technical, sales and senior
management personnel, particularly our president and chief executive officer
Gregory W. Slayton, and our chief technical officer, Kentyn Reynolds. Any
officer or employee can terminate his or her relationship with us at any time,
and we do not maintain key man insurance policies for either Mr. Slayton or Mr.
Reynolds. In addition, the future growth of our business will depend to a
significant extent on our ability to attract and retain qualified, highly-
skilled employees, particularly persons with marketing, Internet and
information technology experience. Because of the recent substantial growth
in email marketing and Internet related industries, competition for these
employees with technical, management, marketing, sales, product development
and other specialized skills is intense. We may not be successful in
attracting and retaining these personnel.
Our business would suffer if we are not able to manage our growth and implement
our email marketing strategy.
We have experienced periods of growth that have placed, and are expected to
continue to place, a significant strain on our financial, management,
operational and other resources. Our ability to manage growth and execute our
email marketing strategy effectively will require us to continue to improve our
operational, financial and information management systems and controls on a
timely basis. If our management is unable to manage growth, and expand our
ability to offer email marketing products and services, our business could be
harmed.
Our limited protection of intellectual property and proprietary rights may
adversely 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. These measures may not be adequate to prevent
unauthorized use of our proprietary technology and other intellectual property
rights. We do not include in our desktop software products any mechanism to
prevent or inhibit unauthorized copying. Unauthorized copying occurs
frequently 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. Third parties may 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.
There has been substantial litigation regarding copyright, trademark and
other intellectual property rights in our industry. Any claims or litigation,
<PAGE>
with or without merit, could be costly to defend or litigate and divert
resources and our management's attention. Adverse determinations in any claim or
litigation could also require us to pay damages or change our technologies.
Our growth may be impaired and our business may suffer if we do not
successfully address risks associated with acquisitions.
As part of our growth strategy, we may pursue the acquisition of businesses,
technologies or products that are complementary to our business. Acquisitions
involve a number of special risks that could harm our business, including the
diversion of management's attention, the assimilation of the operations and
personnel of the acquired companies, the amortization of acquired intangible
assets and the potential loss of key employees. In particular, the failure to
maintain adequate operating and financial control systems or unexpected
difficulties encountered during expansion could harm our business.
We have implemented anti-takeover provisions that could delay or prevent a
change in control that may offer you a premium.
Various provisions of our certificate of incorporation and bylaws, our
stockholder rights plan and Delaware law may have the effect of delaying or
preventing changes in control or management, even if the change in control
would be beneficial to you. These provisions may deprive you of an
opportunity to sell your shares at a premium over prevailing prices. The
potential inability of our stockholders to obtain a control premium could
adversely affect the market price of our common stock.
Risks Related to this Offering
Our stock price has been volatile, and you may not be able to sell your shares
at a profit.
The market price of our common stock has been, and is likely to continue to be,
volatile. Fluctuations in market price and volume are particularly common
among securities of Internet and other technology companies. As a result, you
may not be able to resell your shares at a profit. The market price of our
common stock may fluctuate significantly in response to the following factors,
some of which are beyond our control:
* quarterly fluctuations in our revenues or results of operations;
* general conditions in the computer software and Internet industries;
* announcements of new products and services by us or by our competitors;
* new regulations or interpretations of existing regulations applicable to our
email marketing activities;
* announcements of alliances by us or by our competitors;
* system slowdowns or failure by us or by our competitors;
* changes in earnings estimates by securities analysts and in analyst
recommendations; and
* changes in market valuations of other Internet companies.
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.
<PAGE>
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:
* Our Annual Report on Form 10-KSB, as amended, for the year ended
December 31, 1999, as amended;
* Our Definitive Proxy Statement, dated April 17, 2000, filed in connection
with our annual meeting of stockholders held on May 18, 2000;
* Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000 and
June 30, 2000, filed with the SEC on May 12, 2000 and August 14, 2000,
respectively;
* Our Current Reports on Form 8-K filed with the SEC on March 23, 2000, as
amended, June 30, 2000 and July 27, 2000; and
* The description of our 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.
USE OF PROCEEDS
The proceeds from the sale of the common stock offered pursuant to this
prospectus are solely for the accounts of the selling stockholders. We will not
receive any proceeds from the sale of these shares of common stock.
<PAGE>
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 series of private placement transactions. 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. 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 12,410,774
shares of our common stock outstanding on August 31, 2000.
<TABLE>
<CAPTION>
Shares Beneficially Number Of Shares Share Benefically
Owned Prior To Offering Being Offered Owned After Offering**
----------------------- ---------------- ----------------------
Name Number Percent Number Number Percent
-------------- -------- --------- ---------------- ------- --------
<S> <C> <C> <C> <C> <C>
21st Century
Digital
Industries Fund
, L.P. 500,000 1% 130,000 0 *
Parakletos@
Ventures Fund
2000K, L.P. 142,858 1% 142,858 0 *
Kenneth E. and
Roberta E. Eldred
Revocable Trust
UAD 1-19-90 120,715 * 35,715 0 *
Pogue Capital
International,
Ltd. 143,000 * 143,000 0 *
Catherine M. Heald 32,258 * 32,258 0 *
Banner Partners
Minaret 136,100 * 13,300 0 *
Palo Alto
Crossover Fund,
L.P. 60,000 * 30,000 0 *
William H. Draper III
Revocable Trust 13,200 * 1,200 0 *
Fred M. Gibbons 20,000 * 2,000 0 *
Micro Cap Partners
L.P. 221,400 * 22,000 0 *
Micro-Mousse
Partners, L.P. 24,600 * 2,600 0 *
Edwards Foundation 600 * 600 0 *
Edwards Charitable
Trust 400 * 400 0 *
Majesty I, L.P. 71,000 * 71,000 0 *
Michael V.
Cimmarrusti 4,000 * 4,000 0 *
Wildwood Partners,
LLC 85,715 * 85,715 0 *
*Less than 1%
** Assumes 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.
The selling stockholders may enter into hedging transactions with
broker-dealersin 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.
<PAGE>
In effecting sales, broker-dealers engaged by the selling stockholders may
arrange for other broker-dealers to participate in the resales. Broker-dealers
or agents may receive compensation in the form of commissions, discounts or
concessions from selling stockholders. Broker-dealers or agents may also receive
compensation from the purchasers of the shares for whom they act as agents or to
whom they sell as principals, or both. Compensation as to a particular broker-
dealer might be in excess of customary commissions and will be in amounts to be
negotiated in connection with the sale. Broker-dealers or agents and any other
participating broker-dealers or the selling stockholders may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act of
1933, as amended, in connection with sales of the shares. Accordingly, any
commission, discount or concession received by them and any profit on the resale
of the shares purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Act. Because selling stockholders may be deemed
to be "underwriters" within the meaning of Section 2(11) of the Securities Act,
the selling stockholders will be subject to the prospectus delivery requirements
of the Securities Act. In addition, any securities covered by this prospectus
that qualify for sale under Rule 144 promulgated under the Securities Act may be
sold under Rule 144 rather than under this prospectus. 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
until the earlier of July 6, 2001, such time as all the shares covered by this
registration statement have been sold, or until each selling stockholder can
sell all of the shares it holds within a given three month period without
compliance with the registration requirements of the Securities Act pursuant to
Rule 144 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 Orrick, Herrington & Sutcliffe LLP, Sacramento,
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.
SEC Registration fee............................................ $ 2,460
Legal fees and expenses......................................... 15,000
Accounting Fees and Expenses.................................... 15,000
Miscellaneous................................................... 5,000
-----------
Total....................................................... $ 37,460
===========
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 our
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.
Item 16. Exhibits
(a) Exhibits.
Exhibit Description Of Document
Number
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
10.1 Form of Common Stock Purchase Agreement by and among ClickAction and
the selling stockholders.
23.1 Consent of KPMG LLP.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP. (included as part of
Exhibit 5.1 to this Registration Statement)
24.1 Power of Attorney is contained on the signature page hereto.
Item 17. Undertakings
(a) Rule 415 Offerings
The Undersigned Registrant Hereby Undertakes:
<PAGE>
(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.
The undersigned registrant hereby undertakes that, for purposes of
determining 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
deliveredwith 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 interimfinancial 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
<PAGE>
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 September 5, 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, Chief Executive Officer September 5, 2000
---------------------- and Director
Gregory W. Slayton (Principal Executive Officer)
/s/ Sharon S. Chiu Vice President, Chief Financial September 5, 2000
---------------------- Officer and Secretary
Sharon S. Chiu (Principal Financial and
Accounting Officer)
/s/ David P. Mans Chairman of the Board September 5, 2000
----------------------
David P. Mans
/s/ Edwin R. Niehaus III Director September 5, 2000
-------------------------
Edwin R. Niehaus III
/s/ Gary J. Daichendt Director September 5, 2000
----------------------
Gary J. Daichendt
/s/ Randy Haykin Director September 5, 2000
----------------------
Randy Haykin
/s/ Emerick M. Woods Director September 5, 2000
----------------------
Emerick M. Woods
/s/ Howard Love Director September 5, 2000
----------------------
Howard Love
<PAGE>
INDEX TO EXHIBITS
Item 16. Exhibits
(a) Exhibits.
Exhibit Description Of Document
Number
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP.
10.1 Form of Common Stock Purchase Agreement, by and among ClickAction
and the selling stockholders.
23.1 Consent of KPMG LLP.
23.2 Consent of Orrick, Herrington & Sutcliffe LLP. (included as part of
Exhibit 5.1 to this Registration Statement)
24.1 Power of Attorney is contained on the signature page hereto.
<PAGE>
EXHIBIT 5.1
September 5, 2000
ClickAction Inc.
2197 East Bayshore Road
Palo Alto, CA 94303
Re: ClickAction Inc.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
At your request, we are rendering this opinion in connection with a proposed
sale by certain stockholders of ClickAction Inc., a Delaware corporation (the
"Company"), of up to 716,646 shares (the "Shares") of common stock, $0.001 par
value (the "Common Stock") pursuant to a Registration Statement on Form S-3.
We have examined instruments, documents, and records which we deemed relevant
and necessary for the basis of our opinion hereinafter expressed. In such
examination, we have assumed the following: (a) the authenticity of original
documents and the genuineness of all signatures; (b) the conformity to the
originals of all documents submitted to us as copies; and (c) the truth,
accuracy, and completeness of the information, representations, and warranties
contained in the records, documents, instruments, and certificates we have
reviewed.
Based on such examination, we are of the opinion that the currently issued and
outstanding Shares, covered by the Registration Statement are legally issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the above-
referenced Registration Statement and to the use of our name wherever it appears
in said Registration Statement, including the Prospectus constituting a part
thereof, as originally filed or as subsequently amended or supplemented. In
giving such consent, we do not consider that we are "experts" within the meaning
of such term as used in the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission issued thereunder, with
respect to any part of the Registration Statement, including this opinion as an
exhibit or otherwise.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE LLP
<PAGE>
CLICKACTION INC.
COMMON STOCK PURCHASE AGREEMENT
by and among
CLICKACTION INC.
AND THE PURCHASERS
LISTED ON EXHIBIT A
Dated as of _____, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1.
AUTHORIZATION AND SALE OF COMMON STOCK
AND WARRANTS TO PURCHASE COMMON STOCK
1.1 Authorization...................................................1
1.2 Sale of Common Stock............................................1
1.3 Issuance of Warrants............................................1
SECTION 2.
CLOSING DATE; DELIVERY
2.1 Closing Date....................................................1
(a) Delivery........................................................1
SECTION 3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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........................................................4
3.7 Disclosure......................................................4
SECTION 4.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
4.1 Authorization...................................................4
4.2 Investment Experience...........................................4
4.3 Investment Intent...............................................5
4.4 Registration or Exemption Requirements..........................5
4.5 No Legal, Tax or Investment Advice..............................5
SECTION 5.
CONDITIONS TO CLOSING OF PURCHASERS
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
6.1 Representations and Warranties..................................6
6.2 Covenants.......................................................6
SECTION 7.
AFFIRMATIVE COVENANTS OF THE COMPANY
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
<PAGE>
7.3 Nasdaq NMS Listing.............................................11
SECTION 8.
RESTRICTIONS ON TRANSFERABILITY OF SHARES:
COMPLIANCE WITH SECURITIES ACT
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
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...................................A-1
Exhibit B FORM OF WARRANT..........................................B-1
Exhibit C INSTRUCTION SHEET FOR PURCHASER..........................C-1
Exhibit C-1 CLICKACTION INC. STOCK CERTIFICATE QUESTIONNAIRE........C(1)-1
Exhibit C-2 CLICKACTION INC. REGISTRATION STATEMENT QUESTIONNAIRE...C(2)-1
Exhibit C-3 CLICKACTION INC. CERTIFICATE FOR INDIVIDUAL PURCHASERS..C(3)-1
Exhibit C-3 CLICKACTION INC. CERTIFICATE FOR CORPORATE, PARTNERSHIP,
TRUST, FOUNDATION AND JOINT PURCHASERS..................C(3)-2
Exhibit D PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE...............D-1
<PAGE>
CLICKACTION INC.
FORM OF COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made as of ______,
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
Authorization. The Company has authorized the sale and issuance of (i) up
to _____ shares of its common stock, par value $0.001 per share (the "Common
Stock"), and (ii) warrants to purchase up to an aggregate of _____ 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 $__ 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 Orrick, Herrington & Sutcliffe LLP, 400 Capitol Mall,
Suite 3000, Sacramento, California at 9:00 a.m. (Pacific Time), on _____, 2000
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." 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 such
Purchaser's name on Exhibit A. Such delivery shall be against payment of the
Purchase Price therefore 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
Effective as of the date hereof and the Closing Date, the Company represents and
warrants to the Purchasers as follows:
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.
<PAGE>
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) 60,000,000 shares of Common Stock, par value $.001 per share, of
which 11,459,172 shares were issued and outstanding as of May 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 May 31, 2000. As of May 31, 2000, except for
outstanding warrants to purchase 25,478 shares of Common Stock and outstanding
options to purchase an aggregate of 4,816,210 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.
This Agreement, when executed and delivered by the Company, will constitute
valid and binding obligations 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 its audited
consolidated balance sheet as of December 31, 1999 and its unaudited
consolidated balance sheet at March 31, 2000, together with the related
consolidated statements of operations, stockholders' equity and cash flows for
the periods 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 March 31, 2000, 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,
<PAGE>
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 changing 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 Securities and Exchange Commission
(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 "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 of 1933, as amended
(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
to be a forward-looking statement or projection relating to the Company or
<PAGE>
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 No Legal, Tax or Investment Advice. Purchaser understands that
nothing in this Agreement or any other materials presented to Purchaser in
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 or Chief Financial 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.
<PAGE>
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:
7.1 Registration Requirements.
(a) Shelf Registration. The Company shall use its reasonable
commercial efforts to prepare and file with 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 ninety (90) 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,
<PAGE>
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, 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 Company shall pay all
Registration Expenses (as defined below) in connection with any registration,
qualification or compliance hereunder, and each Purchaser shall pay 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 Shelf
Registration at the earliest possible time and take all lawful action to effect
the withdrawal, recession or removal of such 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 orregulation 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
<PAGE>
(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 conformity with written
information furnished to the Company by or on behalf of such Purchaser
specifically for use in preparation of the Shelf Registration; provided,
however, that in no event shall the indemnity under this subsection 7.2(b)
exceed the net proceeds from the offering received by such Purchaser, except in
the case of willful fraud by such Purchaser.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or 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.
<PAGE>
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 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
WarrantShares 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 in accordance with the Shelf Registration, in which case Purchaser
covenants to comply with the requirement of delivering a current prospectus, or
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 such
Shares or Warrant Shares is accompanied by a separate certificate executed by an
<PAGE>
officer of, or other person duly authorized by, the Purchaser in the form
attached hereto as Exhibit D.
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 breach 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 be 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.
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
<PAGE>
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 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:__________________________________
Name:__________________________________
Title:__________________________________
"PURCHASER"
By:__________________________________
Name:__________________________________
Title:__________________________________
<PAGE>
EXHIBIT A
SCHEDULE OF PURCHASERS
Investor Name Shares Purchase Warrant
Purchased Price Per Shares
Shares
--------- --------- --------
TOTAL ========= ========= ========
<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 June 29, 2003)
Warrant No. C-_ 0,000 Shares of Common Stock
CLICKACTION INC.
1. Issuance. This Warrant is issued to ___________________ 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 0,000 fully paid and nonassessable shares (the "Shares") of Common Stock,
$0.001 par value per share, of the Company (the "Common Stock") at a price per
share (the "Purchase Price") of $__ at any time or from time to time up to and
including 5:00 p.m. (Pacific Time) on _____, 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. 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
<PAGE>
where:
X =the number of shares of Common Stock to be issued to the Holder
pursuant to this Section 4.
<PAGE>
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 (or, in the
case of a partial exercise, the number of warrant shares being exercised).
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 pre-
emptive 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.
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 to the 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
<PAGE>
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.
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:
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;
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
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:
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.
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.
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
<PAGE>
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.
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.
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.
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 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.
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: _____, 2000 CLICKACTION INC.
By:___________________
Name:___________________
Title:___________________
<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 _____, 2000 (the "Warrant") in full and to purchase all of the 0,000
shares of the Common Stock of the Company (the "Shares") purchasable thereunder
at a purchase price of $__ per Share for an aggregate purchase price of
_______________ Thousand and _______________ Dollars ($00,000) (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 JUNE 29, 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:
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;
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;
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;
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;
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
<PAGE>
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:
Orrick, Herrington & Sutcliffe LLP
Attn: John Cook
400 Capitol Mall, Suite 3000
Sacramento, CA 95814
Telephone: (916) 329-7922
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 must complete, 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.)
______ 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 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 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;
<PAGE>
_____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;
______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>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
ClickAction Inc.
We consent to incorporation herein by reference of our report dated
February 11, 2000, relating to the consolidated balance sheets of ClickAction
Inc., as of December 31, 1999 and 1998, and the related consolidated statements
of operations, stockholders' equity, and 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.
/s/ KPMG LLP
Mountain View, California
September 5, 2000
