-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L1aYZXhYSGoaB+BeU95jFpMYzFBQ72a+BYRHo1fBqWyPZDPb2bj/RHOAAF5BKnK2 WntYs3CuLtqSoxL+vr7EYA== 0000950150-96-001100.txt : 19961011 0000950150-96-001100.hdr.sgml : 19961011 ACCESSION NUMBER: 0000950150-96-001100 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19961010 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUARTERDECK CORP CENTRAL INDEX KEY: 0000707668 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 954320650 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-10269 FILM NUMBER: 96642039 BUSINESS ADDRESS: STREET 1: 13160 MINDANAO WAY CITY: MARINA DEL REY STATE: CA ZIP: 90292 BUSINESS PHONE: 3103093700 MAIL ADDRESS: STREET 1: 13160 MINDANAO WAY CITY: MARINA DEL RAY STATE: CA ZIP: 90292 FORMER COMPANY: FORMER CONFORMED NAME: QUARTERDECK OFFICE SYSTEMS INC DATE OF NAME CHANGE: 19940510 S-3/A 1 AMENDMENT NO. 1 TO FORM S-3 1 As filed with the Securities and Exchange Commission on October 10, 1996 Registration No. 333-10269 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________ AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 __________________________________ QUARTERDECK CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 95-4320650 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) __________________________________ 13160 Mindanao Way Marina del Rey, California 90292 (310) 309-3700 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) _____________________________________ BRADLEY D. SCHWARTZ, ESQ. Senior Vice President and General Counsel Quarterdeck Corporation 13160 Mindanao Way Marina del Rey, California 90292 (310) 309-3700 (Name, address, including zip code and telephone number, including area code, of agent for service) __________________________________ COPY TO: KAREN E. BERTERO, ESQ. Gibson, Dunn & Crutcher LLP 333 South Grand Avenue Los Angeles, California 90071-3197 (213) 229-7000 __________________________________ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [x] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement from 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.[ ] THE REGISTRATION HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY IT 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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. 2 Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities. In any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any State. SUBJECT TO COMPLETION, DATED OCTOBER 10, 1996 PROSPECTUS QUARTERDECK CORPORATION COMMON STOCK ($.001 PAR VALUE) 5,014,889 SHARES This Prospectus relates to 5,014,889 shares of Common Stock, par value $.001 per share ("Common Stock"), of Quarterdeck Corporation, a Delaware corporation (the "Company"), which may be offered for sale from time to time by the stockholders of the Company listed herein under "Selling Stockholders" (the "Selling Stockholders"). The shares of Common Stock offered hereby (hereinafter, the "Securities") were issued in connection with the acquisition by the Company of Vertisoft Systems, Inc., Limbex Corporation and certain assets of Interlink Technology Co. The Company is registering the Securities pursuant to the terms of certain Registration Rights Agreements (the "Registration Rights Agreements") between the Company and the Selling Stockholders in order to provide the holders thereof with freely tradeable securities, but the registration of the Securities does not necessarily mean that all or any of the Securities will be sold by the Selling Stockholders. The Company will not receive any of the proceeds from the sale of the Securities. The Company will pay all of the expenses associated with the registration of the Securities, estimated to be approximately $53,000. The Selling Stockholders will pay the other costs, if any, associated with any sale of the Securities. See "Risk Factors" beginning on page 3 for certain considerations relevant to an investment in the Securities. The Common Stock is quoted on the Nasdaq National Market under the symbol "QDEK." On October 9, 1996, the last reported sale price per share of the Common Stock, as quoted on the Nasdaq National Market, was $6 9/16. ________________________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is October __, 1996. 3 AVAILABLE INFORMATION The Company has filed Registration Statements on Form S-3 (the "Registration Statements"), File No. 333-10269 with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), covering the Securities covered by this Prospectus. This Prospectus omits certain information and exhibits included in the Registration Statements, copies of which may be obtained upon payment of a fee prescribed by the Commission or may be examined free of charge at the principal office of the Commission in Washington, D.C. The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Commission. Such reports, proxy statements and other information filed with the Commission by the Company can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at 500 West Madison Street, Room 1400, Chicago, Illinois 60606 and at the Jacob K. Javits Federal Building, 75 Park Place, New York, New York 10278. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission are by this reference incorporated in and made a part of this Prospectus: (i) the Annual Report on Form 10-K for the fiscal year ended September 30, 1995, File No. 0-19207; (ii) the Quarterly Reports on Form 10-Q for the quarters ended December 31, 1995, March 31, 1996 and June 30, 1996, File No. 0-19207; (iii) the Registration Statement on Form 8-A filed April 26, 1991; (iv) the Current Reports on Form 8-K dated December 29, 1995, March 28, 1996, May 15, 1996, June 13, 1996, July 18, 1996, July 25, 1996, August 14, 1996, August 27, 1996 and October 7, 1996 and Current Reports on Form 8-K/A dated March 28, 1996 and July 18, 1996, and (v) all documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to the filing of a post-effective amendment which indicates that all Securities offered hereby have been sold or which deregisters all Securities then remaining unsold. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Copies of all documents that are incorporated herein by reference (not including the exhibits to such documents, unless such exhibits are specifically incorporated by reference into such documents or into this Prospectus) will be provided without charge to each person, including any beneficial owner, to whom this Prospectus is delivered, upon a written or oral request to Quarterdeck Corporation, Attention: Corporate Secretary, 13160 Mindanao Way, Third Floor, Marina del Rey, California 90292, telephone number (310) 309-3700. 2 4 THE COMPANY The Company develops, markets and supports computer software products primarily in the utilities and Internet areas. The Company's utility products enhance the performance of personal computers running Microsoft Windows 3.x, Windows 95, Windows NT and DOS software. The Company's Internet products and services relate to information management and communications/collaboration solutions. The Company was incorporated in California in 1982 as Quarterdeck Office Systems. In June 1991, the Company changed its state of incorporation from California to Delaware and in February 1995 changed its name to Quarterdeck Corporation. The principal offices of the Company are located at 13160 Mindanao Way, Third Floor, Marina del Rey, California 90292, telephone number (310) 309-3700. RISK FACTORS The Securities offered hereby are speculative in nature and involve a high degree of risk. In addition to the other information included elsewhere in this Prospectus, the following factors should be considered carefully in evaluating an investment in the Securities offered by this Prospectus. DEPENDENCE ON NEW PRODUCTS AND ADAPTATION TO TECHNOLOGICAL CHANGE The computer software industry is subject to rapid technological change often evidenced by new competing products and improvements in existing products. The Company depends on the successful development of new products, including upgrades of existing products, to replace revenues from products introduced in prior years that have begun to experience reduced revenues. If the Company's leading products become outdated and lose market share or if new products or existing product upgrades are not introduced when planned or do not achieve the revenues anticipated by the Company, the Company's operating results could be materially adversely affected. Even with normal development cycles, the market environment can change so quickly that features in certain products can become outdated soon after market introduction. These events may occur in the future and may have an adverse effect on future revenues and operating results. Many of the Company's existing products supplement and enhance Windows 3.x and the DOS operating system by providing multitasking and memory management capabilities. Microsoft Windows 95, which was released in August 1995, integrates a 32-bit version of Windows with DOS. As application programs and device drivers are developed to take advantage of this 32-bit operating environment, they are expected to lack certain of the memory limitations inherent in current versions of DOS and Windows and in DOS-based applications. With the introduction of Windows 95, the software market is experiencing a shift to this new platform. The Company is focusing its development efforts on Windows 95 and Windows NT, while continuing to support Windows 3.x and DOS platforms. In September 1995, the Company released several new utility products for Windows 95, including memory compression (MagnaRAM), diagnostics (WINProbe) and disk management (CleanSweep). QEMM, the Company's leading memory management product, has been upgraded to version 8; QEMM 8 enhancements include new memory solutions and reporting utilities for Windows 3.x and Windows 95, as well as continued support for DOS systems. It is the Company's expectation that memory management products will continue to be needed on Windows 95, but that memory management has experienced a shift from 16-bit DOS device driver management (older versions of QEMM) to complex solutions such as memory compression and better use of virtual memory (QEMM 8). 3 5 The Company is devoting substantial efforts to the development of software products that are designed to operate on Microsoft's Windows 95 and Windows NT. Should the Company not be able to continue to develop products successfully and timely that function under Windows 95 and Windows NT, and offer perceived value to Windows 95 and Windows NT users, future revenues would be adversely affected. There can be no assurance that QEMM 8 or the Company's other utility products for Windows 95 and Windows NT will be commercially successful. The Company is also focusing significant efforts on products for the telecommunications and collaborative computing and Internet markets and expects that a significant portion of future revenues will come from these products. The revenues from such new products may be less than the Company anticipates due to various factors including the timing of release in relation to competitive products, and uncertainties surrounding the rate and extent of development of these new and emerging markets. The Company's Internet-related products are dependent upon the viability and continued growth of the Internet, and its expanded use by businesses and individuals for networking and communications. COMPETITION The personal computer market is intensely competitive, subject to strategic alliances of hardware and software companies and characterized by rapid changes in technology and frequent introductions of new products and features. The Company's competitors include developers of operating systems, applications and utility software vendors and personal computer manufacturers that develop their own software products. The Company's current revenues and profitability are dependent on the viability of the Microsoft Windows and DOS operating systems and, with respect to the Company's Internet and telecommunications and collaborative computing products, the continued viability and growth of the Internet, the World Wide Web as well as the X Window System market. The Company expects to encounter continued competition both from established companies and from new companies that are now developing, or may develop, competing products. Many of the Company's existing and potential competitors have financial, marketing and technological resources significantly greater than those of the Company. The Company's memory management and other utility products compete directly with the memory management and utility features of Microsoft Windows 95 as well as Microsoft Windows 3.x and DOS, as well as with other third-party memory management products and other utility software products. The Company's telecommunications and collaborative computing products compete with other telecommunications and collaborative computing and other PC X server products from other third-party software vendors. These competitive products are frequently bundled with computer hardware as well as with operating system software. Future competitive product releases may cause disruptions in orders for the Company's products while users and the marketplace evaluate the competitive products. The extent of the disruption in orders and the impact on future orders of the Company's products will depend on various factors that are not fully known at this time, including the level of functionality, performance and features included in the final release of these competitive products and the market's evaluation of competitive products compared to the then current functionality, performance and features of the Company's products. The Company's Internet-related products compete with Internet access, creation and server tools from a variety of companies, including Netscape Communications Corporation, Microsoft Corporation and other connectivity, networking and Internet software application developers, Internet access providers and other on-line service providers, as well as operating system vendors, including Microsoft and IBM. The original Mosaic browser developed by the National Center for Supercomputing Applications is made available to be downloaded in electronic format for free from the Internet. Certain competitors have also made versions of their Internet access, creation and server products available on the Internet for users to download at no charge or for extended evaluation. In addition, the market for Internet products may be adversely impacted to the extent that vendors of PC hardware or PC operating systems incorporate Internet tools, functions or capabilities within their operating systems or PC hardware and thereby reduce the market for stand-alone Internet products. 4 6 The Company is dedicating substantial efforts on products and services for the telecommunications and collaborative computing and Internet markets and expects that a significant portion of future revenues will come from these products and services. The revenues from such new products and services may be less than the Company anticipates due to various factors including the timing of release in relation to competitive products and services, and uncertainties surrounding the rate and extent of development of these new and emerging markets. The Company's Internet-related products and services are dependent upon the viability and continued growth of the Internet, and its expanded use by businesses and individuals for networking and communications. The Company anticipates that the type and level of competition experienced to date will continue and may increase and that future sales of its products will be dependent upon the Company's ability to timely and successfully develop or acquire new products or enhanced versions of its existing products for Windows 95 and Windows NT, Apple Macintosh and/or other operating systems that may gain market acceptance, and to demonstrate to the user a need for the Company's products while developers of operating systems and competitive software products continue to enhance their products. To the extent that operating system enhancements, competitive products or bundling of competitive products with operating systems or computer hardware reduce the number of users who perceive a benefit from the Company's products, sales of the Company's products in the future would be adversely impacted. FLUCTUATIONS IN OPERATING RESULTS AND STOCK PRICE The Company's future operating results and stock price could be subject to significant fluctuations and volatility. The Company's revenues and quarterly operating results may experience significant fluctuations and be unpredictable as the result of a number of factors including, among others, introduction of new or enhanced products by the Company or its competitors, rapid technological changes in the Company's markets, seasonality of revenues, changes in operating expenses and general economic conditions. The Company's net revenues and net income (loss) have fluctuated significantly from year to year since the Company's initial public offering in June 1991. The Company's pattern of revenues and earnings may also be affected by the phenomenon known as "channel fill." Channel fill occurs following the introduction of a new product or a new version of a product as distributors buy significant quantities of the new product or version in anticipation of sales of such product or version. Following such purchases, the rate of distributors' purchases often declines, depending on the rates of purchases by end users or "sell-through." The phenomenon of "channel fill" may also occur in anticipation of price increases or in response to sales promotions or incentives, some of which may be designed to encourage customers to accelerate purchases that might otherwise occur in later periods. Channels may also become filled simply because the distributors are unable to, or do not, sell their inventories to retail distribution or end users as anticipated. If sell-through does not occur at a sufficient rate, distributors will delay purchases or cancel orders in later periods or return prior purchases in order to reduce their inventories. In addition, between the date the Company announces a new version or new product and the date of release, distributors, dealers and end users often delay purchases, cancel orders or return products in anticipation of the availability of the new version of the product. Such order delays or cancellations can cause material fluctuations in revenues from one quarter to the next. Net revenues may be materially affected favorably or adversely by these effects. For the third quarter ended June 30, 1996, the Company suffered a net loss of $22.9 million primarily due to a significant decline in sell-through levels for memory management products, a decline to historic rates of sell-through of PROCOMM PLUS data communication software following unusually high sales after a new product launch in the prior quarter and slower than planned integration of acquisitions. Additionally, on October 7, 1996, the Company announced that results for the fourth quarter ended September 30, 1996 and for the 1996 fiscal year will fall well below expectations. Costs associated with a comprehensive corporate restructuring that is expected to reduce the workforce by approximately 40%, charges related to various recent acquisitions and less than expected revenues in the quarter will result in a net loss for the fourth quarter and will contribute to a net loss for the fiscal year. As a result of recent results, the Company's cash from operations was less than expected in the last two quarters of fiscal 1996. On September 30, 1996, the Company improved its cash position and strengthened its balance sheet with the completion of a $20 million convertible preferred stock and warrant offering. The Company may in the future explore various other financing alternatives, if necessary, in order to finance the core business of the Company and help provide adequate working capital for operations. There can be no assurance that the Company will not suffer additional losses in the future, that adequate operating funds will be internally generated, or that additional financing, if necessary, will be available, or if available, will be available on acceptable terms. Should product shipments be delayed, or should the Company continue to experience significant shortfalls in anticipated revenues or experience unforeseen expenses, the Company might not have sufficient capital to meet its operating expenses. The Company also has experienced wide fluctuations in its stock price and may be subject to significant fluctuations in the future over a short period of time. The trading price of the Common Stock increased from approximately $3.00 in January 1995 to a high of approximately $39.00 in December 1995 to a low of approximately $6.00 in September 1996. Fluctuations may be due to factors specific to the Company, to changes in analysts' estimates, or to factors affecting the computer industry or the securities markets in general. In addition, any decline in revenues or quarterly operating results, or failure to meet market expectations, could have an immediate and significant adverse effect on the trading price of the Common Stock in any given period. 5 7 MANAGEMENT OF ACQUISITIONS AND GROWTH Since June 1995, the Company has consummated a number of acquisitions. The Company may make additional acquisitions in the future. While these acquisitions have broadened the Company's product portfolio and sales distribution channels, the acquisitions have resulted in the Company's competing with companies and in markets where it has not previously competed. As a result, there is uncertainty regarding customer acceptance of the combined products. There can be no assurance that the Company will be successful in realizing benefits from a broadened product portfolio and sales distribution channels. In addition, it is critical to the Company's success to integrate effectively the operations and businesses of the acquired companies, and to utilize effectively acquired intellectual property. On October 7, 1996, the Company announced a comprehensive corporate restructuring that is expected to reduce the workforce by approximately 40%, primarily through the elimination of redundant positions resulting from the ten acquisitions made by the Company since June 1995. SUBSTANTIAL DEPENDENCE ON DISTRIBUTION CHANNELS A substantial portion of the Company's domestic and international sales are made through a limited number of personal computer hardware and software distributors which represent the Company on a non-exclusive basis. If the Company were to lose all or a significant portion of the revenue attributable to any of its principal distributors, or if its principal distributors were to lose sales of the Company's products to any of their principal accounts, the loss could have a material adverse affect on the Company's operating results. In addition, there has been a trend toward consolidation of distributors of personal computer hardware and software products. A reduction in the number of software distributors will increase the Company's dependence upon its major distributors and could affect their willingness to distribute and promote products of the Company. PRODUCT RETURNS Like other manufacturers of package software products, the Company is exposed to the risk of product returns from distributors and reseller customers. There can be no assurance that actual returns in excess of recorded allowances will not result in a material adverse effect on business, operating results and financial condition. DEPENDENCE ON AND INTENSE COMPETITION FOR KEY PERSONNEL Recruitment of personnel in the computer software industry is highly competitive. The Company's success depends to a significant extent upon the performance of its executive officers and other key personnel. The loss of the services of key individuals could have a material adverse effect on the Company. The Company's future success will depend in part upon its continued ability to attract and retain highly qualified personnel. There can be no assurance that the Company will be successful in attracting and retaining such personnel. PATENTS AND PROPRIETARY INFORMATION The Company relies on a combination of trade secret, patent, copyright and trademark laws, and license agreements to protect its rights to its products. The Company holds two United States patents relating to memory management, one of which expires in 2010 and the other of which expires in 2011. The Company believes that its software products are proprietary and protects them with copyrights, trade secrets and non-disclosure agreements. The Company provides its products to end users under a non-exclusive, non-transferable license. Under the Company's current form of software license agreement, software is to be used solely for internal operations on designated computers at specified sites. The ability of software companies to enforce such licenses has not been finally determined and there can be no assurance that misappropriation will not occur. The Company's trademark and service mark rights include rights associated with its use of its trademarks and servicemarks, and rights obtained by registrations of its trademarks and servicemarks ("marks"). The Company has applied for or obtained United States trademark registrations for certain marks and has applied for or obtained registrations in various international jurisdictions. The use and registration rights of the Company for its marks do not assure that the Company has superior rights to others that may have registered or used identical or related 6 8 marks on related goods or services, nor that such registrations or uses will not be used to attempt to foreclose use of a particular mark by the Company. The extent to which U.S. and foreign copyright and patent laws protect software as well as the enforceability of end-user licensing agreements has not been fully determined. In addition, changes in the interpretation of copyright and patent laws could expand or reduce the extent to which the Company or its competitors are able to protect their software and related intellectual property. Because the computer industry is characterized by technological changes, the policing of the unauthorized use of computer software is a difficult task. Software piracy is expected to continue to be a persistent problem for the packaged software industry. Despite steps taken by the Company to protect its software products, third parties still make unauthorized copies of the Company's products for their own use or for sale to others. These concerns are particularly acute in certain international markets. The Company believes that the knowledge, abilities and experience of its employees, its timely product enhancements and upgrades and the availability and quality of its support services provided to users are more significant factors in protecting its software products than patent, trade secret and copyright protection laws. GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES There are currently few laws or regulations directly applicable to access to or commerce on the Internet. However, due to the increasing popularity and use of the Internet, it is possible that a number of laws and regulations may be adopted with respect to the Internet. Such laws and regulations may cover issues such as user privacy, pricing and characteristics and quality of products and services. The Telecommunications Act of 1996 (the "1996 Act"), which was recently enacted and the judicial interpretation of which is uncertain, imposes criminal penalties for transmission of or allowing access to certain obscene communications over the Internet and other computer services and contains additional provisions intended to protect minors. In addition, America's Carriers Telecommunication Association ("ACTA") recently filed a Petition for Declaratory Ruling Special Relief, and Institution of Rulemaking (the "ACTA Petition") before the Federal Communications Commission ("FCC"), arguing that the FCC has authority to regulate the Internet and, as such, should regulate, as the telecommunications carriers, providers of computer software products (such as the Company) which enable voice transmission over the Internet. The ACTA Petition requests the FCC to declare its authority over interstate and international telecommunications services using the Internet, to order providers of the aforementioned software to cease the sale of such software pending a rulemaking, and to institute a rulemaking body to govern the use of the Internet as a means for providing telecommunications services. The enactment of the 1996 Act, and of any similar laws or regulations in the future, may decrease the growth or use of the Internet, which could in turn decrease the demand for the Company's services and products and increase the Company's cost of doing business or otherwise have an adverse effect on the Company's business, operating results and financial condition. INTERNATIONAL OPERATIONS The Company has operations in various foreign locations. International operations are subject to certain risks common to international activities, such as changes in foreign governmental regulations, tariffs and taxes, export license requirements, the imposition of trade barriers, difficulties in staffing and managing foreign operations, and political and economic instability. The Company conducts business in various foreign currencies and is therefore subject to the transaction exposures that arise from foreign exchange rate movements between the dates that foreign currency transactions are recorded and the date that they are consummated. The Company is also subject to certain exposures arising from the translation and consolidation of the financial results of its foreign subsidiaries. The Company has from time to time taken limited actions to attempt to mitigate the Company's foreign transaction exposure. However, there can be no assurance that actions taken to manage such exposure will be successful or that future changes in currency exchange rates will not have a material impact on the Company's future operating results. The Company does not hedge either its translation risk or its economic risk. 7 9 INTENTION REGARDING PAYMENT OF COMMON STOCK DIVIDENDS The Company currently retains all of its earnings for use in the expansion and operation of its business, and does not anticipate paying any cash dividends in the foreseeable future. There can be no assurance that the Company will pay cash dividends at any time, or that the failure to pay dividends for a period of time will not adversely affect the market price of the Common Stock. DILUTION The Company has made, and may make in the future, acquisitions using shares of the Common Stock. An acquisition using shares of the Common Stock would have the effect of reducing the percentage ownership of the Company by each pre-acquisition stockholder. FORWARD LOOKING STATEMENTS When used herein or in documents incorporated herein by reference, words such as "anticipates," "expects" and similar conditional expressions and any other statements not based on historical fact are intended to identify forward looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, in addition to those set forth under "Risk Factors," those noted in the documents incorporated herein by reference. SELLING STOCKHOLDERS Except for the stockholders specified below, the Selling Stockholders listed below received their shares of Common Stock in connection with the Company's acquisition of Vertisoft Systems, Inc. ("Vertisoft") and Limbex Corporation ("Limbex") by way of mergers (the "Mergers") of wholly owned subsidiaries of the Company with and into Vertisoft and Limbex, respectively. Interlink Technology Co. ("Interlink") received 205,000 shares of Common Stock (the "Interlink Shares") in connection with the Company's acquisition of substantially all of the assets of Interlink (the "Acquisition"). Interlink distributed the Interlink Shares to its shareholders on a pro rata basis. As a result of such distribution, the persons listed below as shareholders of Interlink are Selling Stockholders of up to the number of shares of Common Stock set forth opposite their respective names. As part of the Mergers and the Acquisition and pursuant to the terms of the Registration Rights Agreements, the Company agreed to use its best efforts to register the Common Stock issued or distributed to the Selling Stockholders for offer or sale to the public. The registration of the Securities, however, does not necessarily mean that all or any of the Securities will be sold by the Selling Stockholders. Except as noted below, the Shares offered represent all Shares owned by the respective Selling Stockholders. 8 10
Shares Offered Selling Stockholder Hereby ------------------- -------------- Anatoly Tikhman 2,442,214 Philip Johnson 832,212 Bradley Allen 602,964 Alexander Jacobson 576,640 Jacob Graudenz 225,573 Harold Lund(1) 82,000 Joseph Niosi(1) 82,000 Inference Corporation 77,897 Thomas Conticello(1) 41,000 Howard Morgan(2) 34,984 Thelma Birks 13,388 Clay Chisum 2,678 Michelle Kraus 1,339
- ------------ (1) Shareholder of Interlink. (2) Mr. Morgan owns an aggregate of 95,426 shares of Common Stock. (3) Mr. Chisum owns an aggregate of 3,678 shares of Common Stock. 9 11 USE OF PROCEEDS The Company will not receive any of the proceeds from the sale of the Securities offered hereby. PLAN OF DISTRIBUTION The Securities may be sold from time to time by the Selling Stockholders, or by pledgees, donees, tranferees or other successors in interest. Such 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 negotiated transactions. The Securities may be sold by one or more of the following: (a) a block trade in which the broker-dealer so engaged will attempt to sell the Securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker-dealer as principal and resale by such broker-dealer for its account pursuant to this Prospectus; (c) an exchange distribution in accordance with the rules of such exchange; and (d) ordinary brokerage transactions and transactions in which the broker solicits purchasers. In effecting sales, broker-dealers engaged by the Selling Stockholders may arrange for other broker-dealers to participate in the resales. In addition, any securities covered by this Prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this Prospectus. The Selling Stockholders may also sell Securities short and redeliver the Securities to close out such short positions. The Selling Stockholders may also enter into option, hedging or other transactions with broker-dealers which require the delivery to the broker-dealer of the Securities registered hereunder, which the broker-dealer may resell or otherwise transfer pursuant to this Prospectus. The Selling Stockholder may also loan or pledge the Securities registered hereunder to a broker-dealer and the broker-dealer may sell the Securities so loaned or upon a default the broker-dealer may effect sales of the pledged Securities pursuant to this Prospectus. Broker-dealers or agents may receive compensation in the form of commissions, discounts or concessions from Selling Stockholders in amounts to be negotiated in connection with the sale. Such broker-dealers and any other participating broker-dealers may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as amended (the "Act"), in connection with such sales and any such commission, discount or concession may be deemed to be underwriting discounts or commissions under the Act. The Selling Stockholders may agree to indemnify any broker-dealer or agent that participates in transactions involving sales of the Securities against certain liabilities, including liabilities arising under the Act. There is no assurance that any of the Selling Stockholders will offer for sale or sell any or all of the Securities covered by this Prospectus. LEGAL MATTERS Certain legal matters will be passed upon for the Company by Gibson, Dunn & Crutcher LLP, Los Angeles, California. MISCELLANEOUS NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO BUY, COMMON STOCK BY ANYONE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON 10 12 MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. 11 13 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following expenses will be paid by the Company. SEC Registration Fee $13,402 Nasdaq Application Fee 17,500 Legal fees and expenses* 10,000 Accounting fees and expenses* 5,000 Blue sky fees and expenses* 2,500 Miscellaneous* 5,000 ------- TOTAL* $53,402 ======= - ---------------
* Estimated. No expenses in connection with the distribution contemplated by this Registration Statement will be borne by the Selling Stockholders, other than compensation paid to one or more broker-dealers in connection with distribution transactions from time to time. Item 15. Indemnification of Directors and Officers As permitted by Section 145 of the Delaware General Corporation Law, the Bylaws of the Registrant provide: (i) the Registrant is required to indemnify its directors and officers and may indemnify its other employees and agents, and persons serving in such capacities in other business enterprises (including, for example, subsidiaries of the Registrant) at the Registrant's request, to the fullest extent permitted by Delaware law, including those circumstances in which indemnification would otherwise be discretionary; (ii) the Registrant is required to advance expenses, as incurred, to such directors and officers and may advance expenses to such other employees and agents in connection with defending a proceeding (except that it is not required to advance expenses to a person against whom the Registrant brings a claim for breach of the duty of loyalty, failure to acting in good faith, intentional misconduct, knowing violation of law or deriving an improper personal benefit); (iii) the rights conferred in the Bylaws are not exclusive and the Registrant is authorized to enter into indemnification agreements with such directors, officers, employees and agents; (iv) the Registrant may maintain director and officer liability insurance to the extent reasonably available; and (v) the Registrant may not retroactively amend the Bylaw provisions in a way that is adverse to such directors, officers, employees and agents. The Registrant has also entered into an agreement with its directors and certain of its officers indemnifying them to the fullest extent permitted by the foregoing. These indemnification provisions, and the Indemnification Agreements entered into between the Registrant and its directors and certain of its officers, may be sufficiently broad to permit indemnification of the Registrants' officers and directors for liabilities arising under the Securities Act of 1933, as amended. The Company's Stock Plans, as amended, provides for indemnification by the Company of any committee member, officer or director administering or interpreting such plan for actions not undertaken in bad faith or fraud. II-1 14 ITEM 16. EXHIBITS The following are filed as exhibits to this Registration Statement:
Exhibit Number Description ----------- ----------- 4.1 Registration Rights Agreement dated as of July 18, 1996 among Quarterdeck Corporation, Vertisoft Systems, Inc., Vertisoft Direct, Inc., Anatoly Tikhman, Philip Johnson and Jacob Graudenz (previously filed as Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and incorporated herein by this reference). 4.2 Registration Rights Agreement dated as of August 13, 1996 among Quarterdeck Corporation, and the holders of capital stock of Limbex Corporation listed on the signature pages thereto (previously filed as Exhibit 10.2 to the registrant's Current Report on Form 8-K dated August 13, 1996 and incorporated herein by this reference). 4.3 Registration Rights Agreement dated as of July 16, 1996 among Quarterdeck Corporation, Interlink Technology Co., Harold Lund, Joseph Niosi and Thomas Conticello. 5.1 Opinion and consent of Gibson, Dunn & Crutcher LLP. 23.1 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1). 23.2 Consent of KPMG Peat Marwick LLP, independent certified public accountants. 23.3 Consent of Arthur Andersen, LLP independent certified public accountants. 23.4 Consent of KPMG Peat Marwick LLP, independent certified public accountants. 23.5 Consent of KPMG Peat Marwick LLP, independent certified public accountants. 23.6 Consent of Williams Keepers LLP, independent certified public accountants. 23.7 Consent of Caracansi and Company, P.C., independent certified public accountants. 24.1 Power of Attorney.* - --------------------- * Previously filed.
ITEM 17. UNDERTAKINGS The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's 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 thereby and the offerings of such securities at the time shall be deemed to be the initial bona fide offering thereof. 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 matters 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. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information 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) and 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 II-2 15 price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any additional or changed material information on the plan of distribution; 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 registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the 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 therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-3 16 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 Amendment to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on this 8th day of October, 1996. QUARTERDECK CORPORATION By: FRANK R. GREICO -------------------------- Frank R. Greico Senior Vice President and Chief Financial Officer POWER OF ATTORNEY Pursuant to the requirements of the Securities Act of 1933, this Amendment has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- * Member of the Office of the President (Principal October 8, 1996 -------------------------------------- Executive Officer), Director King R. Lee FRANK R. GREICO Senior Vice President and Chief Financial October 8, 1996 -------------------------------------- Officer (Principal Financial and Accounting Frank R. Greico Officer) * Chairman, Director October 8, 1996 -------------------------------------- Frank W.T. LaHaye * Director October 8, 1996 -------------------------------------- Howard L. Morgan Director October __, 1996 -------------------------------------- William Lane *By: FRANK R. GREICO ---------------------------------- Frank R. Greico Attorney-in-Fact
II-4 17 INDEX TO EXHIBITS
Sequentially Exhibit Numbered Number Description Page - ------ ----------- ------------ 4.1 Registration Rights Agreement dated as of July 18, 1996 among Quarterdeck Corporation, Vertisoft Systems, Inc., Vertisoft Direct, Inc., Anatoly Tikhman, Philip Johnson and Jacob Graudenz (previously filed as Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1996 and incorporated herein by this reference). 4.2 Registration Rights Agreement dated as of August 13, 1996 among Quarterdeck Corporation, and the holders of capital stock of Limbex Corporation listed on the signature pages thereto (previously filed as Exhibit 10.2 to the registrant's Current Report on Form 8-K dated August 13, 1996 and incorporated herein by this reference). 4.3 Registration Rights Agreement dated as of July 16, 1996 among Quarterdeck Corporation, Interlink Technology Co., Harold Lund, Joseph Niosi and Thomas Conticello. 5.1 Opinion and consent of Gibson, Dunn & Crutcher LLP. 23.1 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1). 23.2 Consent of KPMG Peat Marwick LLP, independent certified public accountants. 23.3 Consent of Arthur Andersen, LLP independent certified public accountants. 23.4 Consent of KPMG Peat Marwick LLP, independent certified public accountants. 23.5 Consent of KPMG Peat Marwick LLP, independent certified public accountants. 23.6 Consent of Williams Keepers LLP, independent certified public accountants. 23.7 Consent of Caracansi and Company, P.C., independent certified public accountants. 24.1 Power of Attorney.* - --------------- * Previously filed.
II-5 EX-4.3 2 REGISTRATION RIGHTS AGREEMENT DATED AS OF 7-16-96 1 EXHIBIT 4.3 REGISTRATION RIGHTS AGREEMENT THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into as of July 16, 1996, by and among Quarterdeck Corporation, a Delaware corporation (the "Company"), InterLink Technology Co., a Delaware corporation ("InterLink"), Harold Lund ("HL"), Joseph Niosi ("JN") and Thomas Conticello ("TC") (each of HL, JN and TC individually to be referred to herein as a "Stockholder" and collectively as the "Stockholders"). WHEREAS, InterLink is becoming the owner of shares of common stock of the Company in connection with the acquisition by the Company of certain assets of InterLink (the "Acquisition") pursuant to the terms of that certain Asset Purchase Agreement and Plan of Reorganization dated as of July 16, 1996 (the "Acquisition Agreement") by and among the Company, InterLink and the Stockholders; and WHEREAS, pursuant to the terms of the Acquisition Agreement, the Company has agreed to grant to InterLink the registration rights provided for below. NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the mutual covenants and agreements set forth in the Acquisition Agreement and hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, agree as follows: 1. CERTAIN DEFINITIONS. As used in this Agreement, the following capitalized defined terms shall have the following meanings: "Closing" shall mean the closing of the Acquisition on the date hereof. "Common Shares" shall mean shares of common stock, par value $.001 per share, of the Company. "Holder" shall mean InterLink, so long as it holds any Shares, and each Stockholder, so long as such Stockholder holds Shares as a result of a distribution by, or a dissolution, liquidation or winding up of, InterLink. "Person" shall mean an individual or a corporation, partnership, limited liability company, association, trust, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof. "Prospectus" shall mean any prospectus included in the Registration Statement, including any resale prospectus and any preliminary prospectus, and any amendment or supplement thereto, and in each case including all material incorporated by reference therein. "Registration Expenses" shall mean any and all expenses incident to performance of or compliance with this Agreement, including, without limitation: (i) all applicable registration and filing fees imposed by the SEC and such securities exchange or exchanges on which Common Shares are then listed or the National Association of Securities Dealers, Inc. (the 2 "NASD"); (ii) all fees and expenses incurred in connection with compliance with state securities or "blue sky" laws (including reasonable fees and disbursements of counsel in connection with qualification of any of the Shares under any state securities or blue sky laws and the preparation of a blue sky memorandum) and compliance with the rules of the NASD; (iii) all expenses of any Persons in preparing or assisting in preparing, printing and distributing the Registration Statement, any Prospectus, certificates and other documents relating to the performance of and compliance with this Agreement; (iv) all fees and expenses incurred in connection with the listing, if any, of any of the Shares on any securities exchange or exchanges pursuant to Section 3(i) hereof; and (v) the fees and disbursements of counsel for the Company and of the independent public accountants of the Company, including the expenses relating to any special audits or "cold comfort" letters required by or incident to such performance and compliance. Registration Expenses shall specifically exclude underwriting discounts and commissions, the fees and disbursements of counsel representing a Holder and transfer taxes, if any, relating to the sale or disposition of Shares by a Holder. "Registration Statement" shall mean the registration statement filed by the Company pursuant to Section 2(a) of this Agreement, as amended from time to time. "SEC" shall mean the Securities and Exchange Commission or any successor entity. "Securities Act" shall mean the Securities Act of 1933, as amended from time to time. "Shares" shall mean the Common Shares issued to InterLink on the date hereof at the Closing. 2. REGISTRATION UNDER THE SECURITIES ACT. (a) Registration. (i) Subject to Section 6(b) below, the Company shall file a registration statement on Form S-3 or an amendment to an existing registration statement on Form S-3 (the "Registration Statement"), within thirty (30) days following the Closing, relating to the sale by the Holders of any or all of the Shares, and shall use its best efforts to cause such registration statement to be declared effective by the SEC as soon as practicable thereafter. The Company agrees to use its best efforts to keep the Registration Statement continuously effective (and to include a Prospectus at all times meeting the requirements of the Securities Act) for a period of six (6) months from the closing of the Acquisition. (ii) If the Holders desire different methods of distribution of the Shares included in the Registration Statement, the method of distribution shall be determined by the Holders of a majority of the Shares to be included in such Registration Statement. (b) Expenses. The Company shall pay all Registration Expenses in connection with a registration pursuant to this Agreement. Each Holder shall pay all underwriting discounts and commissions relating to such Holder's Shares, the fees and disbursements of counsel 3 representing such Holder and transfer taxes, if any, relating to the sale or disposition of Shares by such Holder. 3. REGISTRATION PROCEDURES. In connection with the obligations of the Company under Section 2 hereof, the Company shall: (a) prepare and file with the SEC, within the time period set forth in Section 2(a)(i) hereof, and use its best efforts to have declared effective by the SEC, the Registration Statement, which shall (i) be available for public resale of the Shares by the selling Holders, and (ii) comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith; (b) (i) prepare and file with the SEC such amendments to the Registration Statement as may be necessary to keep it effective for the applicable period; (ii) cause any Prospectus to be amended or supplemented as required and to be filed as required by Rule 424 or any similar rule that may be adopted under the Securities Act; (iii) respond as promptly as practicable to any comments received from the SEC with respect to the Registration Statement or any amendment thereto; and (iv) comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the selling Holders; (c) furnish to each Holder, upon request and without charge, as many copies of any Prospectus and any amendment or supplement thereto as such Holder may request in order to facilitate the public sale or other disposition of the Shares; (d) use its best efforts to register or qualify the Shares under all applicable state securities or blue sky laws of such jurisdictions in the United States and its territories and possessions as any Holder may reasonably request in writing and keep such registration or qualification effective during the period the Registration Statement is required to be kept effective; provided, however, that in connection therewith, the Company shall not be required to (i) qualify as a foreign corporation to do business or to register as a broker or dealer in any such jurisdiction where it would not otherwise be required to qualify or register but for this Section 3(d), (ii) subject itself to taxation in any such jurisdiction with respect to such registration or qualification, or (iii) file a general consent to service of process in any such jurisdiction; (e) notify each Holder promptly and, if requested by a Holder, confirm in writing, (i) when the Registration Statement and any post-effective amendments thereto have become effective, (ii) when any amendment or supplement to a Prospectus has been filed with the SEC, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of the Registration Statement or any part thereof or the initiation of any proceedings for that purpose, (iv) if the Company receives any notification with respect to the suspension of the qualification of the Shares for offer or sale in any jurisdiction or the initiation of any proceeding for such purpose, and (v) of the happening of any event during the period the Registration Statement is effective as a result of which (A) the Registration Statement contains any untrue statement of a material fact or omits to state any material fact required to be stated 3 4 therein or necessary to make the statements therein not misleading or (B) a Prospectus as then amended or supplemented contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (f) use best efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement by the SEC or any state securities authority as promptly as possible; (g) furnish to each Holder upon request, without charge, at least one conformed copy of the Registration Statement and any post-effective amendment thereto (without documents incorporated therein by reference or exhibits thereto, unless requested); (h) cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Shares to be sold and not bearing any Securities Act legend and enable certificates for such Shares to be issued for such numbers of Shares and registered in such names as the Holders may reasonably request; and (i) use its best efforts to cause all Shares to be listed on any securities exchange on which the Common Shares are then listed, or included on the Nasdaq National Market if the Common Shares are then so included. 4. CERTAIN AGREEMENTS OF HOLDERS. (a) Each Holder shall (i) furnish to the Company in writing such information regarding such Holder and such Holder's proposed distribution of Shares as the Company may from time to time reasonably request in connection with the preparation of the Registration Statement or the registration or qualification of the Shares under state securities or blue sky laws, and (ii) report to the Company within ten (10) days after the end of each month all sales or other dispositions of Shares made by such Holder during such month. (b) Each Holder who executes this Agreement agrees, if requested by the Company in the case of a Company-initiated non-underwritten offering, or if requested by the managing underwriter or underwriters in a Company-initiated underwritten offering, not to effect any public sale or distribution of any Shares (including a sale pursuant to Rule 144 under the Securities Act), except as part of such Company-initiated registration, during the ten (10) day period prior to, and during the ninety (90) day period beginning on, the date of effectiveness of each Company-initiated offering made pursuant to a registration statement, to the extent such request is timely made in writing by the Company or the managing underwriters. 5. INDEMNIFICATION, CONTRIBUTION. (a) Indemnification by the Company. Subject to Section 5(c), the Company agrees to indemnify and hold harmless each Holder and its officers and directors and partners and each Person, if any, who controls any Holder within the meaning of Section 15 of the Securities Act, as follows: 4 5 (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to which such Holder, partner, officer, director or controlling Person may become subject under the Securities Act or otherwise (A) that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (B) that arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Prospectus or any amendment or supplement thereto, or the omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (C) that arise out of or are based upon any violation or alleged violation by the Company of the Securities Act, the Securities Exchange Act of 1934 (the "Exchange Act"), or any federal or state securities law in connection with the offering covered by the Registration Statement; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any claim, litigation, investigation or proceeding by any governmental agency or body, commenced or threatened, based upon any such untrue statement or alleged untrue statement, or omission or alleged omission, if such settlement is effected with the written consent of the Company; and (iii) against any and all expenses (including reasonable fees and disbursements of counsel) reasonably incurred in investigating, preparing or defending against any claim, litigation, investigation or proceeding by any governmental agency or body, commenced or threatened, in each case whether or not a party, based upon any such untrue statement or alleged untrue statement, or omission or alleged omission, that relates to the sale by a Holder of Shares under the Registration Statement, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; provided, however, that the indemnity provided pursuant to this Section 5(a) shall not apply to any Holder with respect to any loss, liability, claim, damage or expense that arises out of or is based upon (1) any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use in the Registration Statement or any amendment thereto or a Prospectus or any amendment or supplement thereto or (2) trades made by such Holder in violation of Section 6(a) below. (b) Indemnification by Holders. Each Holder severally (but not jointly), in proportion of the number of Shares sold and to be sold by each Holder pursuant to the Registration Statement, agrees to indemnify and hold harmless the Company and the other Holders, and each of their respective directors, officers and partners (including each director of the Company and each officer of the Company who signs the Registration Statement), and each Person, if any, who controls the Company or any other Holder within the meaning of Section 15 of the Securities Act, to the same extent as the indemnity contained in Section 5(a) hereof, but only insofar as such loss, liability, claim, damage or expense arises out of or is based upon (i) any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement or any amendment thereto or a Prospectus or any amendment or 5 6 supplement thereto in reliance upon and in conformity with written information furnished to the Company by the indemnifying Holder expressly for use therein or (ii) trades made by the indemnifying Holder in violation of Section 6(a) below; provided that, in the case of the indemnifying Holder's obligation set forth in this Section 5(b) corresponding to Section 5(a)(ii) above, such settlement must be effected with the written consent of such Holder. (c) Conduct of Indemnification Proceedings. Each indemnified party shall give reasonably prompt notice to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party (i) shall not relieve the indemnifying party from any liability that it may have under the indemnity agreement provided in Section 5(a) or (b) above, except to the extent that it did not otherwise timely learn of such action or proceeding and the lack of notice by the indemnified party materially prejudices the indemnifying party or results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) shall not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided under Section 5(a) or (b) above. After receipt of such notice, the indemnifying party shall be entitled to participate in and, at its option, jointly with any other indemnifying party so notified, to assume the defense of such action or proceeding at such indemnifying party's own expense with counsel chosen by such indemnifying party and approved by the indemnified party or parties, which approval shall not be unreasonably withheld; provided, however, that, if the defendants in any such action or proceeding include both an indemnified party and an indemnifying party and the indemnified party reasonably determines, upon advice of counsel, that a conflict of interest exists, then the indemnified parties shall be entitled to counsel (which shall be limited to a single law firm for all indemnified parties), the reasonable fees and expenses of which shall be paid by the indemnifying parties. If none of the indemnifying parties assumes the defense of any such action or proceeding, after having received the notice referred to in the first sentence of this paragraph, the indemnifying parties will pay the reasonable fees and expenses of counsel (which shall be limited to a single law firm for all indemnified parties) for the indemnified parties. In such event, however, no indemnifying party will be liable for any settlement effected without the written consent of such indemnifying party. If one or more of the indemnifying parties assumes the defense of any such action or proceeding in accordance with this paragraph, such indemnifying party shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action or proceeding except as set forth in the proviso to the second sentence of this Section 5(c). (d) Contribution. (i) In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section 5 is for any reason held to be unenforceable although applicable in accordance with its terms, the indemnifying parties shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such indemnity agreement incurred by the indemnified party, in such proportion as is appropriate to reflect the relative fault of and benefits to each indemnifying party and each indemnified party in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits to the indemnifying parties and indemnified parties shall be determined by 6 7 reference to, among other things, the total proceeds received by each indemnifying party and indemnified party in connection with the offering to which such losses, claims, damages, liabilities or expenses relate. The relative fault of each indemnifying party and indemnified party shall be determined by reference to, among other things, whether the action in question, including any untrue or alleged untrue statement of a material fact, or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified party, and the parties' relative intent, access to information and opportunity to correct or prevent such action. (ii) The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in Section 5(d)(i) above. (iii) Notwithstanding the foregoing, (1) 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 and (2) no Person who violates Section 6(a) below shall be entitled to contribution from any Person who was not guilty of violating Section 6(a) in any case where the right to contribution is asserted in connection with a violation of Section 6(a). (iv) For purposes of this Section 5(d), each Person, if any, who controls a Holder within the meaning of Section 15 of the Securities Act and directors, officers and partners of a Holder shall have the same rights to contribution as such Holder, and each director of the Company, each officer of the Company who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Company. (e) Notwithstanding any term or condition to the contrary, the liability of any Holder pursuant to this Section 5 shall be limited to the gross proceeds received by such Holder as a result of the sale giving rise to the liability, except where such Holder is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act). (f) The obligations of the Company and the Holders under this Section 5 shall survive the completion of any offering of the Shares pursuant to the Registration Statement. 6. SUSPENSION OF REGISTRATION REQUIREMENT. (a) Each Holder shall not effect any sales of Shares pursuant to the Registration Statement after such Holder has received notice from the Company to suspend sales as a result of the occurrence or existence of any Suspension Event (as defined in Section 6(b) below) until the Company provides notice to such Holder that all Suspension Events have ceased to exist. In addition, each Holder shall not effect any sales of Shares pursuant to the Registration Statement after such Holder has received notice from the Company to suspend sales because the Registration Statement, any Prospectus or any supplement thereto contains an untrue statement of 7 8 a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, until the Company notifies such Holder that the misstatement or omission has been corrected. (b) Notwithstanding anything to the contrary set forth in this Agreement, the Company's obligation to file the Registration Statement and make any filings with any state securities authority, to use its best efforts to cause the Registration Statement or any state securities filings to become effective, or to amend or supplement the Registration Statement or any state securities filings shall be temporarily suspended in the event of and during a Suspension Event. A "Suspension Event" shall exist at (i) any time that the Company is not eligible to use Form S-3 for the Registration Statement or (ii) such times as the Company determines that circumstances exist that make it impractical or inadvisable for the Company to file, amend or supplement the Registration Statement or such filings or to cause the Registration Statement or such filings to become effective (such circumstances to include, without limitation, (A) the Company conducting an underwritten primary public offering and being advised by the underwriters that the sale of Shares under the Registration Statement would have a material adverse effect on the Company's offering or (B) pending negotiations relating to, or consummation of, a transaction or the occurrence of some other event (1) where any of the foregoing would require disclosure under applicable securities laws of material information in the Registration Statement (or any other document incorporated into the Registration Statement by reference) or such state securities filings and (2) as to which the Company has a bona fide business purpose for preserving confidentiality or which renders the Company unable to comply with SEC requirements). Suspension of the Company's obligations pursuant to this Section 6(b) shall continue only for so long as a Suspension Event or its effect is continuing. The Company shall notify each Holder promptly after any Suspension Event occurs or ceases to exist. 7. MISCELLANEOUS. (a) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified, supplemented or waived, nor may consent to departures therefrom be given, without the written consent of the Company and the Holders of 50% of the Shares then held by the Holders. (b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery, (i) if to a Holder, at such Holder's registered address appearing on the share register of the Company, and if no such address appears or if such address is incorrect, then to the address of InterLink, or (ii) if to the Company, at 13160 Mindanao Way, 3rd Floor, Marina del Rey, California, Attention: Law Department. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five (5) business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; or at the time delivered if delivered by an air courier guaranteeing overnight delivery. (c) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company. This Agreement and the 8 9 registration rights granted hereunder may not be assigned by a Holder without the consent of the Company and such assignee agreeing to be bound by the provisions of this Agreement. (d) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (e) Headings and Interpretation. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. In construing the meaning of this Agreement, no party hereto nor its counsel shall be deemed the drafter of this Agreement, and this Agreement shall be construed according to its fair meaning and not strictly for or against any Person as the drafter hereof. (f) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without giving effect to the conflicts of law provisions thereof. (g) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior oral and written agreements and understandings and all contemporaneous written agreements and understandings between the parties with respect to such subject matter. (h) Attorneys' Fees. In the event of any suit or other proceeding to construe or enforce any provision of this Agreement, or otherwise in connection with this Agreement, the prevailing party's or parties' reasonable attorneys' fees and costs (in addition to all other amounts and relief to which such party or parties may be entitled) shall be paid by the other party or parties in such suit or proceeding. 9 10 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. QUARTERDECK CORPORATION By: ------------------------------- Name: Title: INTERLINK TECHNOLOGY CO. By: ------------------------------- Name: Harold Lund Title: ---------------------------------- Harold Lund ---------------------------------- Joseph Niosi ---------------------------------- Thomas Conticello 10 EX-5.1 3 OPINION AND CONSENT OF GIBSON, DUNN & CRUTCHER 1 EXHIBIT 5.1 October 8, 1996 (213) 229-7000 C 73127-00018 Quarterdeck Corporation 13160 Mindanao Way Marina del Rey, California 90292 Re: Quarterdeck Corporation - Form S-3 Registration Statement File No. 333-10269 Ladies and Gentlemen: We have acted as special counsel to Quarterdeck Corporation, a Delaware corporation (the "Company"), in connection with the registration by the Company on Form S-3 (the "Registration Statement") under the Securities Act of 1933, as amended, of 5,014,889 shares of the Company's common stock, $.001 par value (the "Shares"). The Shares are being offered for sale by certain stockholders of the Company (the "Selling Stockholders") identified in the Registration Statement. On the basis of such investigation as we have deemed necessary, we are of the opinion that the Shares to be offered for sale by the Selling Stockholders have been duly authorized and either (i) are validly issued, fully paid and non-assessable, or (ii) upon issuance in accordance with the terms of that certain Agreement and Plan of Reorganization dated as of August 13, 1996 among the Company, Limbex Corporation ("Limbex") and the shareholders of Limbex listed on the signature pages thereto, will be validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to this firm under the heading "Legal Matters" contained in the prospectus that forms a part of the Registration Statement. Very truly yours, GIBSON, DUNN & CRUTCHER LLP EX-23.2 4 CONSENT OF KPMG PEAT MARWICK LLP 1 EXHIBIT 23.2 The Board of Directors Quarterdeck Corporation: We consent to the incorporation by reference in amendment No. 1 to the registration statement (No. 333-10269) on Form S-3 of Quarterdeck Corporation of our report dated November 8, 1995, except as to Note 14 which is as of March 28, 1996, with respect to the consolidated balance sheets of Quarterdeck Corporation and subsidiaries as of September 30, 1995 and 1994, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the three-year period ended September 30, 1995, which report appears in the Form 8-K/A of Quarterdeck Corporation dated March 28, 1996. KMPG Peat Marwick LLP Los Angeles, California October 9, 1996 EX-23.3 5 CONSENT OF ARTHUR ANDERSON, LLP 1 EXHIBIT 23.3 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement on Form S-3 (No. 333-10269) of Quarterdeck Corporation of our report dated March 1, 1996, relating to the balance sheets of Datastorm Technologies, Inc. as of December 31, 1995 and 1994, and the related statements of income and changes in retained earnings, and cash flows for the years then ended, included in the Form 8-K/A of Quarterdeck Corporation dated March 28, 1996. Arthur Andersen, LLP St. Louis, Missouri, October 8, 1996 EX-23.4 6 CONSENT OF KPMG PEAT MARWICK LLP 1 EXHIBIT 23.4 The Board of Directors Vertisoft Systems, Inc.: We consent to the incorporation by reference in the registration statement No. 333-10269) on Form S-3 of Quarterdeck Corporation of our report dated September 13, 1996, with respect to the consolidated balance sheet of Vertisoft Systems, Inc. as of January 31, 1996, and the related statements of operations, shareholders' equity, and cash flows for the year then ended, which report appears in the Form 8-K of Quarterdeck Corporation dated July 18, 1996. KMPG Peat Marwick LLP Los Angeles, California October 9, 1996 EX-23.5 7 CONSENT OF KPMG PEAT MARWICK LLP 1 EXHIBIT 23.5 The Board of Directors Limbex Corporation: We consent to the incorporation by reference in registration statement (No. 333-10269) on Form S-3 of Quarterdeck Corporation of our report dated August 16, 1996, with respect to the consolidated balance sheet of Limbex Corporation as of March 31, 1996, and the related statements of operations, shareholders' equity, and cash flows for the period from May 5, 1995 (inception) through March 31, 1996, which report appears in the Form 8-K of Quarterdeck Corporation dated July 18, 1996. KMPG Peat Marwick LLP Los Angeles, California October 9, 1996 EX-23.6 8 CONSENT OF WILLIAMS KAPERS LLP 1 EXHIBIT 23.6 [WILLIAMS-KEEPERS LLP LETTERHEAD] The Board of Directors Quarterdeck Corporation: We consent to the incorporation by reference in the registration statements (No. 333-10269) of Form S-3 of Quarterdeck Corporation of our report dated February 25, 1994, with respect to the balance sheet of Datastorm Technologies, Inc., as of December 31, 1993, and the related statements of income, retained earnings and cash flows for the year then ended, which appears in the Form 8-K of Quarterdeck Corporation dated May 24, 1996. Williams-Keepers LLP /s/ WILLIAMS-KEEPERS LLP Columbia, Missouri September 30, 1996 EX-23.7 9 CONSENT OF CARACANSI AND COMPANY 1 EXHIBIT 23.7 [CARACANSI AND COMPANY, P.C. LETTERHEAD] The Board of Directors Quarterdeck Corporation We consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 33-96064, No. 333-4606, and No. 333-10269), on Form S-4 (No. 333-03723), and on Form S-8 (No. 333-01766 and No. 333-4602) of Quarterdeck Corporation of our report dated October 16, 1995 with respect to the balance sheets of Inset Systems, Inc. as of March 31, 1995 and 1994, and the related statements of income, retained earnings and cash flows for the years then ended, which report appears in the current report on Form 8-K filed on January 11, 1996 of Quarterdeck Corporation. /s/ CARACANSI AND COMPANY, P.C. CARACANSI AND COMPANY, P.C. Danbury, CT September 27, 1996 -----END PRIVACY-ENHANCED MESSAGE-----