<PAGE>
As filed with the Securities and Exchange Commission on October 4, 1999
Registration No. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BLUE WAVE SYSTEMS INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1425902
(State of incorporation) (I.R.S. employer identification no.)
2410 Luna Road
Carrollton, Texas 75006
972-277-4600
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
-------------------
Charles D. Brockenbush
Vice President-Finance and Chief Financial Officer
Blue Wave Systems Inc.
2410 Luna Road
Carrollton, Texas 75006
972-277-4600
(Name, address including zip code, and telephone number, including area
code, of agents for service)
-------------------
Copy to:
Bruce H. Hallett
Crouch & Hallett, L.L.P.
717 N. Harwood St., Suite 1400
Dallas, Texas 75201
(214) 953-0053
-------------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Title of Each Class of Amount Being Proposed Maximum Offering Proposed Maximum Amount of
Securities Being Registered Registered Price Per Share(1) Aggregate Offering Price Registration Fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 2,200,002 $4.656 $10,243,759 $2,848
par value shares
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for purposes of calculating the amount of the
registration fee pursuant to the provisions of Rule 457(c).
-------------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement is effective. This
Prospectus is not an offer to sell these securities and we are not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
Subject to Completion, dated October 4, 1999
BLUE WAVE SYSTEMS INC.
----------------
2,200,002 SHARES
COMMON STOCK, $0.01 PAR VALUE
----------------
Several of the stockholders of Blue Wave Systems Inc., a Delaware
corporation, are offering 2,200,002 shares of our common stock, $0.01 par value.
See "Selling Stockholders" on page 6 of this prospectus. Blue Wave Systems will
not receive any of the proceeds from the selling stockholders' sale of their
shares.
You should carefully consider the risk factors described in this
prospectus. See "Risk Factors" beginning on page 3 of this prospectus.
Our Common Stock is traded on the Nasdaq National Market under the trading
symbol BWSI. The last reported sale price of the Common Stock on the Nasdaq
National Market on September 29, 1999 was $4 3/8 per share.
__________________
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
_________________
The date of this Prospectus is October ___, 1999.
<PAGE>
TABLE OF CONTENTS
-----------------
Risk Factors........................................................ 3
Selling Stockholders................................................ 6
Plan of Distribution................................................ 7
Legal Opinions...................................................... 7
Experts............................................................. 7
Where you Can Find More Information................................. 8
Explanatory Note.................................................... 8
2
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RISK FACTORS
We wish to caution you that the following important factors, among others,
could cause the actual results of Blue Wave Systems Inc. to differ materially
from those indicated by forward-looking statements made from time to time in
news releases, reports, proxy statements, registration statements and other
written communications, as well as oral forward-looking statements made from
time to time by representatives of Blue Wave Systems. Except for historical
information, the matters discussed in such oral and written communications are
forward-looking statements that involve risks and uncertainties, including but
not limited to general business conditions and the impact of competition and
other risks detailed below.
Rapid Technological Change May Affect Blue Wave Systems' Business. The
market for high performance computer sub-systems and components has experienced
short product life cycles and rapid technological change as a result of
continued advancements in software technology and hardware capability.
Responding to these advancements requires high levels of expenditures by Blue
Wave Systems for research and development. Blue Wave Systems must continue to
enhance its existing products and successfully develop and introduce new
products to the market in order to remain competitive. Blue Wave Systems
continues to sell its prior generation of non-digital signal processing
computing sub-systems, but does not actively market these products and is not
currently designing any non-DSP products. In the event Blue Wave Systems does
not continue to incorporate new advances in DSP technology into its products,
Blue Wave Systems' business will be adversely affected. Any failure by Blue
Wave Systems to anticipate or respond adequately to technological developments
and customer requirements, or any significant delays in product development or
introduction, could have a material adverse effect on Blue Wave Systems. We
cannot assure you that our new products or product enhancements intended to
respond to technological change or evolving customer requirements will achieve
acceptance.
Blue Wave Systems has Experienced Fluctuations in Operating Results. We
have experienced and may in the future continue to experience fluctuations in
our quarterly operating results due to the fact that sales cycles, from initial
evaluation to purchase, vary substantially from customer to customer. Delays in
the sales cycle frequently occur because our customers' purchasing decisions are
influenced by our competition, changes in customer personnel, and our customers'
budgets and spending priorities. The delay of customer orders for a small number
of existing contracts could adversely affect our revenues for a given fiscal
quarter. Our results are also affected by the new product introductions by Blue
Wave Systems and its competitors. In the most recent fiscal years, Blue Wave
Systems' business has been increasingly dominated by customer contracts with
longer time periods and larger volumes. As a result, the loss of a single
contract, or the change in a contract's delivery schedules can significantly
affect quarterly financial results. We have historically earned a substantial
portion of our revenues in the last month of any particular quarter. The failure
to achieve revenues during a future quarter in accordance with our historic
trends could have a material adverse effect on Blue Wave Systems' financial
results for the relevant interim period.
Integration of Blue Wave Systems and its Operating Subsidiary May Affect
Our Operating Results. We acquired Blue Wave Systems Ltd. (f/k/a Loughborough
Sound Images Limited) in April 1998, and subsequently commenced the integration
of its operations, facilities, and management with Blue Wave Systems. During
fiscal year 1999, we substantially completed integration of the respective
products and services of the aforementioned entities. Further steps toward
completing integration will occur in fiscal 2000. There is a risk that the
integration of the companies will not be successful. The merger of the companies
could have a material adverse effect on our relationships with customers,
employees,
3
<PAGE>
distributors or suppliers. The operating history of Blue Wave Systems Ltd. on a
stand-alone basis cannot necessarily be regarded as indicative of our prospects
on a consolidated basis. Accordingly, we cannot assure you that Blue Wave
Systems will achieve growth in revenues, or sustain revenues at a level
consistent with its historical results and the historical results of Blue Wave
Systems Ltd. on a stand-alone basis. The diversion of management time towards
integration of the companies may also adversely affect customer support of
existing products and the development of new products.
Concentration of Blue Wave Systems' Defense Industry Customers May Affect
Our Business. Blue Wave Systems' largest single concentration of customers is
prime contractors in the United States military and aerospace industry, which
accounted for 23% and 26% of our revenues for fiscal 1998 and 1999,
respectively. The federal government continues to reduce overall defense
spending and, in certain cases, has delayed or deferred funding for defense
applications, which has in turn, in certain occasions, adversely affected Blue
Wave Systems' revenues. Our continued financial performance and growth in fiscal
2000 will depend upon our ability to continue to market our products
successfully in the defense industry and to market products for distribution in
other markets. This will require us to make substantial product development and
distribution channel investments. We cannot assure you that Blue Wave Systems
will be able to continue marketing its products successfully in the defense
industry or will be able to introduce successfully new or existing products in
markets other than the defense industry. Blue Wave Systems believes, however,
that reduced defense spending has increased the demand for efficiency and for
upgraded electronics in new and existing defense electronics systems. We cannot
assure you that continued defense cutbacks will not adversely affect Blue Wave
Systems' customers and its business. Additionally, there has been extensive
consolidation of companies in the defense industry, and further consolidation is
possible in the future. Any continued consolidation in the defense industry may
adversely affect Blue Wave Systems.
Our Business is Dependent upon Suppliers and Subcontractors. All of Blue
Wave Systems' products incorporate electronic components that are available from
a limited number of sources. In the event of shortages of any of the single
source components, Blue Wave Systems would be severely impacted. In addition,
Blue Wave Systems has no internal manufacturing capability. If one or more of
Blue Wave Systems' subcontractors ceased operations or became unable or
unwilling to handle our requirements, we may be adversely affected.
Retention of Key Personnel is Necessary for our Future Success. We believe
that our future success will depend in large part upon our ability to attract,
retain and successfully motivate skilled employees, in particular our key sales
and technical personnel. Blue Wave Systems is particularly dependent upon
electrical engineers and software developers which are in high demand in the job
marketplace because of the continued growth of high technology businesses. We
cannot assure you that Blue Wave Systems will be successful in hiring or
retaining qualified personnel. The loss of key personnel, or our inability to
hire and retain qualified personnel, could have an adverse effect on Blue Wave
Systems. Blue Wave Systems does not have key-person life insurance on any of its
personnel. Our Chief Executive Officer, Mr. Simon Yates, is currently on medical
leave and is expected to return at the end of calendar year 1999.
Competition within Blue Wave Systems' Industry is Intense. The market for
Blue Wave Systems' products is highly competitive, and is subject to rapid and
innovative technological change. We cannot assure you that future technological
changes or the development of new or competitive products by others will not
render Blue Wave Systems' current or planned products less competitive or
obsolete. Additionally,
4
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many of the companies with which Blue Wave Systems competes have significantly
greater financial and other resources than Blue Wave Systems.
Historical and Potential Future Operating Losses. Recently, we incurred net
losses of $2,023,000 and $9,942,000 (including a non-recurring provision of
$8,426,000 for merger and realignment expenses) in fiscal 1999 and 1998,
respectively. The loss incurred in fiscal 1999 is primarily the result of
production related problems involving our military/aerospace product line. The
loss incurred in 1998 is due primarily to a decrease in our revenues and, to a
lesser extent, increased spending for product and market development. Many of
Blue Wave Systems' potential customers, including those involved in the
telecommunications and military/aerospace industries, are evaluating new DSP
microprocessor technology for their next generation products, which appear to
have dramatic performance enhancements as compared to current, widely available
DSP microprocessors. Since many customers are in an evaluation stage, and
availability of certain new DSP microprocessors is quite limited, our ability to
generate significant revenues from new DSP products is currently limited. If
demand for Blue Wave Systems' new products is below that currently forecasted,
or supply of new DSP microprocessors is less than forecasted, or we continue to
experience production problems, then we could incur an operating loss during
fiscal 2000. In the event Blue Wave Systems experiences continued operating
losses in 2000, and continues to consume working capital to fund its operations,
the financial institutions which currently provide Blue Wave Systems with credit
facilities might alter such facilities. In this situation, we may seek
alternative sources of working capital. Management believes that Blue Wave
Systems will have adequate working capital to fund its operations throughout
fiscal year 2000.
Year 2000 Compliance May Present Uncertainties. Currently, there is a
significant uncertainty in the software industry and among software users
regarding the impact of the year 2000 on installed software. Software database
modifications, and/or implementation modifications, will be required to enable
software to distinguish between 21st century and 20th century dates. Blue Wave
Systems has implemented a plan to attempt to assess and mitigate the potential
impact of the year 2000 problem throughout Blue Wave Systems. Blue Wave Systems
uses third-party system software which will need to be modified or replaced in
order to address year 2000 compliance. Although Blue Wave Systems believes that
its year 2000 compliance plan will adequately address the potential impact
caused by the year 2000 problem, there can be no assurance that Blue Wave
Systems' year 2000 compliance plan will be sufficiently comprehensive or that it
will be completed on a timely basis. In addition, we cannot assure you that the
systems of other companies on which our systems rely will be year 2000
compliant, or that a failure to convert by a supplier or customer, or a
conversion that is incompatible with our systems, would not have a material
adverse affect on Blue Wave Systems. If a key supplier or customer of Blue Wave
Systems fails to be year 2000 compliant, we could suffer a material loss of
business or incur significant additional expenses or consume additional working
capital.
5
<PAGE>
SELLING STOCKHOLDERS
The selling stockholders acquired their shares of Common Stock in a private
placement transaction by Blue Wave Systems which was closed on August 24, 1999.
In connection with the private placement, the selling stockholders acquired
1,200,000 shares of Blue Wave Systems' Common Stock and warrants exercisable for
an additional 1,000,002 shares of Common Stock, all of which are being offered
by the selling stockholders in this prospectus. Blue Wave Systems is registering
the shares of the selling stockholders pursuant to certain registration rights
granted to them under a Registration Rights Agreement entered into in connection
with the private placement. The offering of the shares contemplated hereby will
terminate as of the date on which all shares offered hereby either have been
sold or have become eligible for resale under the Securities Act of 1933,
without the volume limitations of Rule 144 under the Securities Act.
The table below sets forth the beneficial ownership of Blue Wave Systems'
Common Stock by the selling stockholders at September 20, 1999, and after giving
effect to the sale of the shares of Common Stock offered hereby. Except as
otherwise noted, each of the stockholders named below has sole voting and
investment power with respect to the shares of Common Stock beneficially owned
by it.
<TABLE>
<CAPTION>
Name of Shareholder Shares Owned Shares Shares Owned Percentage of
Before the Offered After the Outstanding Shares
Offering Hereby Offering(1) Owned After the
Offering (1)
<S> <C> <C> <C> <C>
Special Situations Fund III, L.P. 1,259,400(2) 880,000(2) 379,400 2.5 %
Special Situations Cayman Fund, L.P. 410,534(3) 293,334(3) 117,200 *
Special Situations Private Equity Fund, L.P. 733,334(4) 733,334(4) 0 *
Special Situations Technology Fund, L.P. 293,334(5) 293,334(5) 0 *
</TABLE>
___________________
* Less than 1%.
(1) Assumes that all of the shares offered hereby are sold.
(2) Includes 200,000 shares issuable upon exercise of warrants at an exercise
price of $3.50 per share, and 200,000 shares issuable upon exercise of
warrants at an exercise price of $4.50 per share.
(3) Includes 66,667 shares issuable upon exercise of warrants at an exercise
price of $3.50 per share, and 66,667 shares issuable upon exercise of
warrants at an exercise price of $4.50 per share.
(4) Includes 166,667 shares issuable upon exercise of warrants at an exercise
price of $3.50 per share, and 166,667 shares issuable upon exercise of
warrants at an exercise price of $4.50 per share.
(5) Includes 66,667 shares issuable upon exercise of warrants at an exercise
price of $3.50 per share, and 66,667 shares issuable upon exercise of
warrants at an exercise price of $4.50 per share.
6
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders may offer the shares of Common Stock from time to
time in open market transactions (which may include block transactions) or
otherwise in the over-the-counter market through the Nasdaq National Market, or
in private transactions at prices relating to prevailing market prices or at
negotiated prices. The selling stockholders may effect such transactions by
selling the shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the selling stockholders and/or purchasers of the shares for whom such broker-
dealers may act as agent or to whom they sell as principal or both (which
compensation as to a particular broker-dealer might be in excess of customary
commissions). The selling stockholders and any broker-dealer acting in
connection with the sale of the shares offered hereby may be deemed to be
"underwriters" within the meaning of the Securities Act, in which event any
discounts, concessions or commissions received by them, which are not expected
to exceed those customary in the types of transactions involved, or any profit
on resales of the shares by them, may be deemed to be underwriting commissions
or discounts under the Securities Act. The offering of the selling stockholders'
shares will terminate upon the earlier to occur of the sale of all the shares
and the date on which all of the shares offered hereby that have not been sold
are eligible for resale under the Securities Act, without the volume limitations
of Rule 144 of the Securities Act.
Blue Wave Systems will pay the costs, expenses and fees incurred in
connection with the registration of the shares, which are estimated to be
$16,348 (excluding selling commissions and brokerage fees incurred by the
selling stockholders). Blue Wave Systems has also agreed to indemnify certain
of the selling stockholders against certain liabilities, including liabilities
under the Securities Act.
LEGAL OPINIONS
The validity of the shares of Common Stock being offered hereby has been
opined to by Crouch & Hallett, L.L.P., Dallas, Texas.
EXPERTS
The financial statements and schedule incorporated by reference in this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
The audited financial statements of Loughborough Sound Images Limited
(n/k/a Blue Wave Systems Ltd.), not separately presented in this Registration
Statement, have been audited by PricewaterhouseCoopers, independent
accountants, whose report thereon is incorporated by reference herein. Such
financial statements, to the extent they have been included in the financial
statements of Blue Wave Systems Inc., have been so included in reliance on the
report of such independent accountants given on the authority of said firm as
experts in auditing and accounting.
7
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WHERE YOU CAN FIND MORE INFORMATION
We file reports and other information with the Securities and Exchange
Commission. You may inspect and copy reports, proxy statements and other
information concerning Blue Wave Systems at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549; 7 World Trade Center, Suite 1300, New York, New York 10048; and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. You may obtain copies
of such material from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. You may also
obtain certain reports, proxy statements and other information filed by Blue
Wave Systems at the Commission's World Wide Web site, located at
http://www.sec.gov. In addition, you can inspect such material at the offices
of the Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information that we file
with the Commission will automatically update and supersede the information that
was previously incorporated by reference. We incorporate by reference the
documents listed below and any future filings made with the Commission under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
the selling stockholders sell all the shares offered in this prospectus.
. Annual Report on Form 10-K for the fiscal year ended June 30, 1999.
. Current Report on Form 8-K dated September 7, 1999.
. the description of our Common Stock that is contained in Blue Wave
Systems' Registration Statement on Form 8-A under the Exchange Act
(File No. 000-26858), including any amendments or reports filed for
the purpose of updating such descriptions.
We will provide you without charge upon your written or oral request, a
copy of the documents incorporated by reference herein, other than exhibits to
such documents not specifically incorporated by reference. Please direct such
requests to Blue Wave Systems Inc., 2410 Luna Road, Carrollton, Texas 75006,
Attention: Charles D. Brockenbush (telephone 972-277-4600).
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling stockholders will
not make an offer of these shares in any state where the offer is not permitted.
You should not assume that the information in this prospectus or any supplement
is accurate as of any date other than the date on the front of those documents.
EXPLANATORY NOTE
Statements and information presented within this prospectus contain
"forward-looking statements" within the meaning of Section 21E of the Exchange
Act. These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "may," "will" or similar terms. Forward-
looking statements also include projections of financial performance, statements
regarding management's plans and objectives and statements concerning any
assumptions relating to the foregoing. We have described important factors
8
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which may cause actual results to vary materially from these forward-looking
statements in the disclosures containing those forward-looking statements and
elsewhere in this prospectus under "Risk Factors". All subsequent written or
oral forward-looking statements attributable to Blue Wave Systems or persons
acting on its behalf are expressly qualified by these factors.
9
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
-------------------------------------------
The following expenses will be paid by the Registrant:
<TABLE>
<CAPTION>
Item Amount (1)
- ---- ----------
<S> <C>
Securities and Exchange Commission registration fee $ 2,848
Legal fees and expenses $ 3,000
Accounting fees $ 9,000
Miscellaneous $ 1,500
-------
Total $16,348
</TABLE>
______________________
(1) All items other than Securities and Exchange Commission registration are
estimated.
Item 15. Indemnification of Directors and Officers.
-----------------------------------------
The Registrant's Certificate of Incorporation eliminates to the fullest
extent permissible under the General Corporation Law of Delaware the liability
of directors of the Registrant and the stockholders for monetary damages for
breach of fiduciary duty as a director. This provision does not eliminate
liability (a) for any breach of a director's duty of loyalty to the Registrant
or its stockholders; (b) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of the law; (c) in
connection with payment of any illegal dividend or illegal stock repurchase; or
(d) for any transaction from which the director derives an improper personal
benefit. In addition, these provisions do not apply to equitable remedies such
as injunctive relief.
The Bylaws of the Registrant provide that indemnification of directors and
officers shall be provided to the fullest extent permitted under Delaware law
and the Registrant's Certificate of Incorporation.
The Registrant has entered into Indemnification Agreements with each of its
directors contractually requiring the Registrant to provide such indemnification
to the extent permitted by law.
Item 16. Exhibits.
--------
2.1 Share Purchase Agreement, dated November 17, 1997, between the Registrant
and Loughborough Sound Images Limited (formerly Loughborough Sound Images
plc) (1)
2.2 Letter Agreement dated March 24, 1998, between the Registrant and
Loughborough Sound Images Limited. (1)
3.1 Certificate of Incorporation of the Registrant, as amended. (2)
3.2 Bylaws, as amended, of the Registrant. (3)
II-1
<PAGE>
4.1 Securities Purchase Agreement, dated August 20, 1999, between the
Registrant and each of the purchasers set forth on the signature pages
thereto, together with all Exhibits and Schedules. (4)
5. Opinion of Crouch & Hallett, L.L.P. (7)
10.1 Form of Indemnification and Hold Harmless Agreement. (3)
10.2 Credit Agreement by and between Fleet National Bank and the Registrant
dated December 11, 1998. (5)
10.3 Advice of Borrowing Terms by and between National Westminister Bank plc
and the Registrant dated December 16, 1998. (5)
10.4 Advice of Borrowing Terms by and between National Westminister Bank plc
and the Registrant dated July 28, 1999. (6)
10.5 Employment Agreement between the Registrant and Simon Yates. (6)
23.1 Consent of Arthur Andersen LLP. (7)
23.2 Consent of PricewaterhouseCoopers. (7)
23.3 Consent of Crouch & Hallett, L.L.P. (included in Exhibit 5)
24. Power of Attorney (included on p. II-4)
______________________
(1) Incorporated by reference in the Exhibits in the Registrant's Current
Report on Form 8-K dated May 12, 1998.
(2) Incorporated by reference in the Exhibits in the Registrant's
Registration Statement on Form S-3 (File No. 333-63173).
(3) Incorporated by reference in the Exhibits in the Registrant's
Registration Statement on Form S-1 (File No. 33-95852).
(4) Incorporated by reference in the Exhibits in the Registrant's Current
Report on Form 8-K dated September 7, 1999.
(5) Incorporated by reference in the Exhibits in the Registrant's Form 10-Q
filed for the quarter ended December 31, 1998.
(6) Incorporated by reference in the Exhibits in the Registrant's Form 10-K
filed for the fiscal year ended June 30, 1999.
(7) Filed herewith.
Item 17. Undertakings.
------------
(a) Rule 415 Offering
The registrant hereby undertakes (1) to file, during any period in
which offers or sales are being made of the Shares registered hereby, a
post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change
to such information in this Registration Statement; (2) that, for the
purpose of determining any liability under the Securities Act of 1933, 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; and (3) to remove from registration by means of a post-
effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
II-2
<PAGE>
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference
The registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of Blue Wave
Systems' annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement 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.
(c) Indemnification for Liability under the Securities Act of 1933
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the successful defense
of any action, suit, or proceeding) is asserted by such director, officer,
or controlling person in connection with the securities being registered,
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 Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
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, hereunto duly
authorized in the City of Carrollton and State of Texas on the 4th day of
October, 1999.
BLUE WAVE SYSTEMS INC.
By: /s/ Rob Shaddock
-------------------------------------------
Rob Shaddock, Executive Vice President and
Interim Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Charles D. Brockenbush as attorney and
agent for the undersigned, with full power of substitution, for and in the name,
place and stead of the undersigned, to sign and file with the Securities and
Exchange Commission under the Securities Act of 1933 any and all amendments and
exhibits to this Registration Statement and any and all applications,
instruments and other documents to be filed with the Securities and Exchange
Commission pertaining to the registration of the securities covered hereby, with
full power and authority to do and perform any and all acts and things
whatsoever requisite or desirable.
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 October 4, 1999.
Signature Title
- --------- -----
/s/ Simon Yates
- ----------------------------- Director, President and Chief Executive Officer
Simon Yates
/s/ Charles D. Brockenbush Vice President-Finance and Chief Financial
- ----------------------------- Officer (Chief Financial and Accounting Officer)
Charles D. Brockenbush
/s/ John Forrest Director
- -----------------------------
John Forrest
/s/ John L. Rynearson Director
- -----------------------------
John L. Rynearson
/s/ Rob Shaddock Director, Executive Vice President and Interim
- ----------------------------- Chief Executive Officer (Chief Executive
Rob Shaddock Officer)
/s/ Sam Smith Chairman of the Board
- -----------------------------
Sam Smith
II-4
<PAGE>
EXHIBIT LIST
2.1 Share Purchase Agreement, dated November 17, 1997, between the Registrant
and Loughborough Sound Images Limited (formerly Loughborough Sound Images
plc) (1)
2.2 Letter Agreement dated March 24, 1998, between the Registrant and
Loughborough Sound Images Limited. (1)
3.1 Certificate of Incorporation of the Registrant, as amended. (2)
3.2 Bylaws, as amended, of the Registrant. (3)
4.1 Securities Purchase Agreement, dated August 20, 1999, between the
Registrant and each of the purchasers set forth on the signature pages
thereto, together with all Exhibits and Schedules. (4)
5. Opinion of Crouch & Hallett, L.L.P. (7)
10.1 Form of Indemnification and Hold Harmless Agreement. (3)
10.2 Credit Agreement by and between Fleet National Bank and the Registrant
dated December 11, 1998. (5)
10.3 Advice of Borrowing Terms by and between National Westminister Bank plc and
the Registrant dated December 16, 1998. (5)
10.4 Advice of Borrowing Terms by and between National Westminister Bank plc and
the Registrant dated July 28, 1999. (6)
10.5 Employment Agreement between the Registrant and Simon Yates. (6)
23.1 Consent of Arthur Andersen LLP. (7)
23.2 Consent of PricewaterhouseCoopers. (7)
23.3 Consent of Crouch & Hallett, L.L.P. (included in Exhibit 5)
24. Power of Attorney (included on p. II-4)
______________________
(1) Incorporated by reference in the Exhibits in the Registrant's Current
Report on Form 8-K dated May 12, 1998.
(2) Incorporated by reference in the Exhibits in the Registrant's Registration
Statement on Form S-3 (File No. 333-63173).
(3) Incorporated by reference in the Exhibits in the Registrant's Registration
Statement on Form S-1 (File No. 33-95852).
(4) Incorporated by reference in the Exhibits in the Registrant's Current
Report on Form 8-K dated September 7, 1999.
(5) Incorporated by reference in the Exhibits in the Registrant's Form 10-Q
filed for the quarter ended December 31, 1998.
(6) Incorporated by reference in the Exhibits in the Registrant's Form 10-K
filed for the fiscal year ended June 30, 1999.
(7) Filed herewith.
<PAGE>
Exhibit 5
(214) 953-0053
October 4, 1999
Blue Wave Systems Inc.
2410 Luna Road
Carrollton, Texas 75006
Gentlemen:
We have served as counsel for Blue Wave Systems Inc., a Delaware
corporation (the "Company"), and certain stockholders of Blue Wave Systems (the
"Selling Stockholders") in connection with the Registration Statement on Form S-
3 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, covering the proposed
sale from time to time by the Selling Stockholders of a maximum of 2,200,002
shares (the "Shares") of Common Stock, $0.01 par value, of Blue Wave Systems.
With respect to the foregoing, we have examined such documents and
questions of law as we have deemed necessary to render the opinions expressed
below. Based upon the foregoing, we are of the opinion that the Shares, when
sold and delivered in accordance with the Registration Statement, will be duly
and validly issued and outstanding and fully paid and nonassessable.
We consent to the use of this opinion as Exhibit 5 to the Registration
Statement and to the use of our name in the Registration Statement and in the
Prospectus included therein under the heading "Legal Matters."
Very truly yours,
CROUCH & HALLETT, L.L.P.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated August 24, 1999
(except with respect to the matter discussed in Note 8, as to which the date is
September 17, 1999) included in the Blue Wave Systems Inc.'s Form 10-K for the
year ended June 30, 1999 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Dallas, Texas
October 4, 1999
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Blue Wave Systems Inc. of our report dated December 9,
1997 relating to the consolidated financial statements of Loughborough Sound
Images Limited (n/k/a Blue Wave Systems Ltd.) appearing in Blue Wave Systems
Inc.'s Annual Report on Form 10-K for the year ended June 30, 1999. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
PricewaterhouseCoopers
Leicester, England
October 4, 1999
