As filed with the Securities and Exchange Commission on December 17, 1999
Registration No.AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 2000
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORMS---------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THISTHE SECURITIES ACT OF 1933
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CMGI, INC.
(Exact name of Registrant as Specified in its Charter)
DELAWARE 04-2921333
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
100 BRICKSTONE SQUARE, ANDOVER, MASSACHUSETTS 01810
(978) 684-3600
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
-------------------------------------------------
DAVID S. WETHERELL
PRESIDENT, CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
CMGI, INC.
100 BRICKSTONE SQUARE
ANDOVER, MASSACHUSETTS 01810
(978) 684-3600
(Name, Address, Including Zip Code, and Telephone Number, Including Area
Code, of Agent For Service)
----------------------
Copies to:
WILLIAM WILLIAMS II MARK G. BORDEN DAVID J. GOLDSCHMIDTT. BREWSTER
VICE PRESIDENT AND GENERAL COUNSEL HALE AND DORR LLP SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
CMGI, INC. 60 STATEONE BEACON STREET FLOM LLP
100 BRICKSTONE SQUARE BOSTON, MASSACHUSETTS 02109 919 THIRD AVENUE02108
ANDOVER, MASSACHUSETTS 01810 (617) 526-6000 NEW YORK, NEW YORK 10022573-4825
(978) 684-3600 (212) 735-3000
----------------------
Approximate date of commencement of proposed sale to the public: From---------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED At such time to timeor times on
SALE TO THE PUBLIC: and after the date on which this
registration statement becomes
effective.effective as the selling
stockholders may determine.
---------------------------
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]|X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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 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
- ----------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed
Title Of Each Class of Amount To Be ProposedOffering Price Maximum ProposedAggregate Amount Of
Securities to be Registered Registered(1)Registered (1) Per Share (1) Offering Price Maximum Aggregate(1)(2) Registration Fee
Per Unit(1)(2) Offering Price(1)(2)
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Common Stock, $0.01 par value $0.01 per share 10,810,911 $36.44 $393,949,613 $104,002.70
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Preferred Stock, $0.01 par value per share----------------------------------------------------------------------------------------------------------------------------
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Senior Notes----------------------------------------------------------------------------------------------------------------------------
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Subordinated Notes----------------------------------------------------------------------------------------------------------------------------
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Total $1,000,000,000 $264,000$393,949,613 $104,002.70
- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Such indeterminateThe shares of common stock being registered may be issued to the
holders of interests in promissory notes of the Registrant issued in
connection with the purchase by the Registrant of a controlling
interest of Tallan, Inc. The Registrant has the option of paying, on
or before maturity, some or all of the principal and interest owed on
the notes in either cash or common stock or a combination thereof. The
number of shares of common stock and preferredbeing registered represents a
good-faith estimate of the number of such shares the Registrant would
be required to issue to repay the promissory notes, plus interest
thereon through maturity, as it may be extended by the Registrant, in
common stock and
such indeterminateas determined by dividing aggregate principal amount of
seniorthe promissory notes, and subordinated notesplus interest thereon through maturity,
reflected as may from time to time be issued at indeterminate prices.the Proposed Maximum Aggregate Offering Price above, by
the closing price per share of CMGI common stock, as reported on the
Nasdaq National Market on August 11, 2000 reflected as the Proposed
Maximum Offering Price Per Share above.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
(3) In no event will the aggregate initial public offering price of all
securities issued from time to time pursuant to this registration statement
exceed $1,000,000,000. The aggregate amount of Common Stock registered
hereunder is further limited to that which is permissible under Rule
415(a)(4) of the Securities Act. The securities registered hereunder may be
sold separately or as units with other securities registered hereunder.
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)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)8(A), MAY DETERMINE.
********************************************************************************
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
********************************************************************************
Subject to completion, preliminary prospectus dated December 17, 1999August 22, 2000
Prospectus
$1,000,000,00010,810,911 SHARES
COMMON STOCK
CMGI, INC.
Common Stock, Preferred Stock100 Brickstone Square
Andover, Massachusetts 01810
(978) 684-3600
------------------------------------
This prospectus registers for resale by the former stockholders of
Tallan, Inc. the shares of our common stock that we may issue upon
repayment of certain promissory notes. The consideration paid to the former
stockholders of Tallan, Inc. for our purchase of a controlling interest in
Tallan, Inc. on March 31, 2000, included three promissory notes. One note,
in the principal amount of $241,794,649.00, matures on September 30, 2000
and Debt Securities
-------------------------------
CMGI,two notes, in the aggregate principal amount of $135,101,879.00, mature
on December 31, 2000. Each promissory note allows us to extend the maturity
date by up to 30 days. We have the option, on or before the maturity of the
notes, of paying some or all of the principal and interest owed on the
notes in our common stock. We put these notes in escrow on behalf of the
former Tallan, Inc. may sell:
.stockholders, pending payment on or before maturity
and, in the case of one of the notes maturing on December 31, 2000 in the
principal amount of $50,000,000.00, pending the resolution of
indemnification claims, if any.
We will value the shares of our common stock to be issued upon
payment of the public;
. preferrednotes based upon the average of the closing price per share
of our common stock, as reported on the Nasdaq National Market (the
"Nasdaq"), on the five consecutive trading days immediately preceding the
third trading day prior to the public;date of repayment of the respective note.
Our common stock is traded on the Nasdaq under the ticker symbol
"CMGI." On August 11, 2000, the last reported sales price of the common
stock was $36.44 per share.
The selling stockholders identified in this prospectus, or their
pledgees, donees, transferees or other successors- in-interest, may offer
the shares from time to time through public or private transactions at
prevailing market prices, at prices related to prevailing market prices or
at privately negotiated prices. More detailed information concerning the
distribution of the shares is contained in the section of this prospectus
entitled "Plan of Distribution" which begins on page 16.
We will not receive any proceeds from the sale of the shares.
The selling stockholders will pay all brokerage fees and
. debt securitiescommissions and similar sale-related expenses. We are paying expenses
relating to the public.
-------------------------------registration of the shares with the Securities and Exchange
Commission.
We urge you to read this prospectus and the accompanying
prospectus supplement which will describe the specific terms of the common stock, the
preferred stock and the debt securities, carefully before you make your investment decision.
-------------------------------
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved of these securities or determined if this prospectus
or the accompanying prospectus supplement is truthful or complete. Any
representation to the contrary is a criminal offense.
-------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES
REGULATORS HAVE NOT APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS OR THE ACCOMPANYING PROSPECTUS SUPPLEMENT IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 1.
------------------------------------
This prospectus may not be used to sell securities unless accompanied
by a prospectus supplement.
, 1999
TABLE OF CONTENTS
Page
----
ABOUT THIS PROSPECTUS............................................. 1
CMGI, INC......................................................... 1
RATIO OF EARNINGSPage
RISK FACTORS ..............................................................1
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS...........................8
ABOUT THIS PROSPECTUS......................................................9
DESCRIPTION OF CAPITAL STOCK...............................................9
USE OF PROCEEDS...........................................................14
THE SELLING STOCKHOLDERS..................................................14
PLAN OF DISTRIBUTION......................................................16
LEGAL MATTERS.............................................................18
EXPERTS .................................................................18
WHERE YOU CAN FIND MORE INFORMATION ABOUT US..............................20
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...........................21
PART II ...............................................................II-1
SIGNATURES..............................................................II-5
POWER OF ATTORNEY.......................................................II-5
EXHIBIT INDEX...........................................................II-6
RISK FACTORS
An investment in our securities is extremely risky. This section
describes risks involved in purchasing our securities. Before you invest in
our securities, you should consider carefully the following risks, in
addition to the other information presented in this prospectus and the
other documents incorporated by reference into this prospectus, in
evaluating us and our business. Any of the following risks could seriously
harm our business and financial results and cause the value of our
securities to decline, which in turn could cause you to lose all or part of
your investment.
RISKS PARTICULAR TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS.. 1
USE OF PROCEEDS................................................... 1
DESCRIPTION OF SECURITIES......................................... 1
DESCRIPTION OF CAPITAL STOCK...................................... 2
DESCRIPTION OF DEBT SECURITIES.................................... 7
PLAN OF DISTRIBUTION.............................................. 11
LEGAL MATTERS..................................................... 12
EXPERTS........................................................... 12
WHERE YOU CAN FIND MORE INFORMATION ABOUT US...................... 13
CMGI
INC.
CMGI developsWE MAY NOT HAVE OPERATING INCOME OR NET INCOME IN THE FUTURE.
During the fiscal year ended July 31, 1999 and operatesfor the nine months
ended April 30, 2000, we had an operating loss of approximately $127
million and $1.4 billion, respectively. We anticipate continuing to incur
significant operating expenses in the future, including significant costs
of revenues and selling, general and administrative and amortization
expenses. As a result, we expect to continue to incur operating losses and
may not have enough money to grow our business in the future. We cannot
assure you that we will achieve profitability or be capable of sustaining
profitable operations.
WE MAY HAVE PROBLEMS RAISING MONEY WE NEED IN THE FUTURE.
In recent years, we have financed our operating losses in part with
profits from selling some of the stock of companies in which we had
invested through our @Ventures funds. This funding source may not be
sufficient in the future, and we may need to obtain funding from outside
sources. However, we may not be able to obtain funding from outside
sources. In addition, even if we find outside funding sources, we may be
required to issue to such outside sources securities with greater rights
than those currently possessed by holders of shares of our common stock. We
may also be required to take other actions, which may lessen the value of
our common stock, including borrowing money on terms that are not favorable
to us.
WE MAY INCUR SIGNIFICANT COSTS TO AVOID INVESTMENT COMPANY STATUS AND MAY
SUFFER ADVERSE CONSEQUENCES IF DEEMED TO BE AN INVESTMENT COMPANY.
We may incur significant costs to avoid investment company status and
may suffer other adverse consequences if deemed to be an investment company
under the Investment Company Act of 1940. Some of our equity investments in
other businesses and our venture subsidiaries may constitute investment
securities under the Investment Company Act. A company may be deemed to be
an investment company if it owns investment securities with a value
exceeding 40% of its total assets, subject to certain exclusions.
Investment companies are subject to registration under, and compliance
with, the Investment Company Act unless a particular exclusion or safe
harbor provision applies. If we were to be deemed an investment company, we
would become subject to the requirements of the Investment Company Act. As
a consequence, we would be prohibited from engaging in business or issuing
our securities as we have in the past and might be subject to civil and
criminal penalties for noncompliance. In addition, certain of our contracts
might be voidable, and a court-appointed receiver could take control of us
and liquidate our business.
Although our investment securities currently comprise less than 40% of
our total assets, fluctuations in the value of these securities or of our
other assets may cause this limit to be exceeded. Unless an exclusion or
safe harbor was available to us, we would have to attempt to reduce our
investment securities as a percentage of our total assets. This reduction
can be attempted in a number of ways, including the disposition of
investment securities and the acquisition of non-investment security
assets. If we were required to sell investment securities, we may sell them
sooner than we otherwise would. These sales may be at depressed prices and
we may never realize anticipated benefits from, or may incur losses on,
these investments. We may be unable to sell some investments due to
contractual or legal restrictions or the inability to locate a suitable
buyer. Moreover, we may incur tax liabilities when we sell assets. We may
also be unable to purchase additional investment securities that may be
important to our operating strategy. If we decide to acquire non-investment
security assets, we may not be able to identify and acquire suitable assets
and businesses or the terms on which we are able to acquire such assets may
be unfavorable.
WE DEPEND ON CERTAIN IMPORTANT EMPLOYEES, AND THE LOSS OF ANY OF THOSE
EMPLOYEES MAY HARM OUR BUSINESS.
Our performance is substantially dependent on the performance of our
executive officers and other key employees, in particular, David S.
Wetherell, our chairman, president and chief executive officer, Andrew J.
Hajducky III, our executive vice president, chief financial officer and
treasurer, and David Andonian, our president, corporate development. The
familiarity of these individuals with the Internet industry makes them
especially critical to our success. In addition, our success is dependent
on our ability to attract, train, retain and motivate high quality
personnel, especially for our management team. The loss of the services of
any of our executive officers or key employees may harm our business. Our
success also depends on our continuing ability to attract, train, retain
and motivate other highly qualified technical and managerial personnel.
Competition for such personnel is intense.
THERE MAY BE CONFLICTS OF INTEREST AMONG OUR NETWORK COMPANIES, OUR
OFFICERS, DIRECTORS AND STOCKHOLDERS AND US.
Some of our officers and directors also serve as officers or directors
of one or more of our network companies. As a result we, our officers and
directors, and our network companies may face potential conflicts of
interest with each other and with our stockholders. Specifically, our
officers and directors may be presented with situations in their capacity
as officers or directors of one of our network companies that conflict with
their fiduciary obligations as officers or directors of our company or of
another network company.
IN FISCAL 1999 AND THE FIRST NINE MONTHS OF FISCAL 2000, WE DERIVED A
SIGNIFICANT PORTION OF OUR REVENUES FROM A SMALL NUMBER OF CUSTOMERS AND
THE LOSS OF ANY OF THOSE CUSTOMERS COULD SIGNIFICANTLY DAMAGE OUR BUSINESS.
During the fiscal year ended July 31, 1999, sales to Cisco Systems,
Inc. accounted for 36% of our total revenues and 47% of our revenues from
our fulfillment services segment. During the nine months ended April 30,
2000, sales to Cisco accounted for 13.4% of our total revenues and 56.4% of
our revenues from our fulfillment services segment. We currently do not
have any agreements with Cisco which obligate this customer to buy a
minimum amount of products from us or to designate us as its sole supplier
of any particular products or services. During the nine months ended April
30, 2000, approximately 16.5% of our total revenues and 21% of revenues
from our Internet segment were derived from customer advertising contracts
serviced by DoubleClick, Inc. We believe that we will continue to derive a
significant portion of our operating revenue from sales to a small number
of customers.
OUR STRATEGY OF SELLING ASSETS OF OR INVESTMENTS IN THE COMPANIES THAT WE
HAVE ACQUIRED AND DEVELOPED PRESENTS RISKS.
One element of our business plan involves raising cash for working
capital for our Internet business by selling, in public or private
offerings, some of the companies, or portions of the companies, that we
have acquired and developed. Market and other conditions largely beyond our
control affect:
o our ability to engage in such sales;
o the timing of such sales; and
o the amount of proceeds from such sales.
As a result, we may not be able to sell some of these assets. In
addition, even if we are able to sell, we may not be able to sell at
favorable prices. If we are unable to sell these assets at favorable
prices, our business will be harmed.
OUR STOCK PRICE MAY FLUCTUATE BECAUSE THE VALUE OF SOME OF OUR COMPANIES
FLUCTUATES.
A portion of our assets include the equity securities of both publicly
traded and non-publicly traded companies. For example, we, directly or
through our @Ventures funds, own a significant number of shares of common
stock of Critical Path, Engage, Hollywood Entertainment, Kana
Communications, Lycos, Marketing Services Group, MotherNature.com,
NaviSite, Netcentives, Pacific Century CyberWorks, Primedia, Ventro and
Vicinity, which are publicly traded companies. The market price and
valuations of the securities that we hold in these and other companies may
fluctuate due to market conditions and other conditions over which we have
no control. Fluctuations in the market price and valuations of the
securities that we hold in other companies may result in fluctuations of
the market price of our common stock and may reduce the amount of working
capital available to us.
OUR STRATEGY OF EXPANDING OUR BUSINESS THROUGH ACQUISITIONS OF OTHER
BUSINESSES AND TECHNOLOGIES PRESENTS SPECIAL RISKS.
We intend to continue to expand through the acquisition of businesses,
technologies, products and services from other businesses. Acquisitions
involve a number of special problems, including:
o difficulty integrating acquired technologies, operations, and
personnel with our existing businesses;
o diversion of management attention in connection with both
negotiating the acquisitions and integrating the assets;
o strain on managerial and operational resources as management
tries to oversee larger operations;
o exposure to unforeseen liabilities of acquired companies;
o potential issuance of securities in connection with an
acquisition with rights that are superior to the rights of
holders of our currently outstanding securities;
o the need to incur additional debt; and
o the requirement to record potentially significant additional
future operating costs for the amortization of goodwill and other
intangible assets.
We may not be able to successfully address these problems. Moreover,
our future operating results will depend to a significant degree on our
ability to successfully manage growth and integrate acquisitions. In
addition, many of our investments are in early-stage companies with limited
operating histories and limited or no revenues. We may not be able to
successfully develop these young companies.
WE FACE COMPETITION FROM OTHER ACQUIRORS OF AND INVESTORS IN
INTERNET-RELATED VENTURES WHICH MAY PREVENT US FROM REALIZING STRATEGIC
OPPORTUNITIES.
Although we create many of our network companies ourselves, we also
acquire or invest in existing companies that we believe are complementary
to our network and further our vision of the Internet. In pursuing these
opportunities, we face competition from other capital providers and
incubators of Internet-related companies, including publicly-traded
Internet companies, venture capital companies and large corporations. Some
of these competitors have greater financial resources than we do. This
competition may limit our opportunity to acquire interests in companies
that could advance our vision of the Internet and fulfillment serviceincrease our value.
OUR GROWTH PLACES STRAIN ON OUR MANAGERIAL, OPERATIONAL AND FINANCIAL
RESOURCES.
Our rapid growth has placed, and is expected to continue to place, a
significant strain on our managerial, operational and financial resources.
Further, as the number of our users, advertisers and other business
partners grows, we will be required to manage multiple relationships with
various customers, strategic partners and other third parties. Our further
growth or an increase in the number of our strategic relationships will
increase this strain on our managerial, operational and financial
resources, inhibiting our ability to achieve the rapid execution necessary
to successfully implement our business plan.
WE MUST DEVELOP AND MAINTAIN POSITIVE BRAND NAME AWARENESS.
We believe that establishing and maintaining our brand names is
essential to expanding our Internet business and attracting new customers.
We also believe that the importance of brand name recognition will increase
in the future because of the growing number of Internet companies that will
need to differentiate themselves. Promotion and enhancement of our brand
names will depend largely on our ability to provide consistently
high-quality products and services. If we are unable to provide
high-quality products and services, the value of our brand names may
suffer.
OUR QUARTERLY RESULTS MAY FLUCTUATE WIDELY.
Our operating results have fluctuated widely on a quarterly basis
during the last several years, and we expect to experience significant
fluctuation in future quarterly operating results. Many factors, some of
which are beyond our control, have contributed to these quarterly
fluctuations in the past and may continue to do so. Such factors include:
o demand for our products and services;
o payment of costs associated with our acquisitions, sales of
assets and investments;
o timing of sales of assets;
o market acceptance of new products and services;
o specific economic conditions in the Internet and direct marketing
industries; and
o general economic conditions.
The emerging nature of the commercial uses of the Internet makes
predictions concerning our future revenues difficult. We believe that
period-to-period comparisons of our results of operations will not
necessarily be meaningful and should not be relied upon as indicative of
our future performance. It is also possible that in some fiscal quarters,
our operating results will be below the expectations of securities analysts
and investors. In such circumstances, the price of our common stock may
decline.
THE PRICE OF OUR COMMON STOCK HAS BEEN VOLATILE.
The market price of our common stock has been, and is likely to
continue to be, volatile, experiencing wide fluctuations. In recent years,
the stock market has experienced significant price and volume fluctuations
which have particularly impacted the market prices of equity securities of
many companies providing Internet-related products and services. Some of
these fluctuations appear to be unrelated or disproportionate to the
operating performance of such companies. CMGI's Internet strategy includesFuture market movements may
adversely affect the market price of our common stock.
OWNERSHIP OF CMGI IS CONCENTRATED.
David S. Wetherell, our chairman, president and chief executive
officer, beneficially owned approximately 12% of our outstanding common
stock as of April 30, 2000. As a result, Mr. Wetherell possesses
significant influence over CMGI on matters, including the election of
directors. Additionally, Compaq Computer Corporation owned approximately
15% of our outstanding common stock as of April 30, 2000. The concentration
of our share ownership may:
o delay or prevent a change in our control;
o impede a merger, consolidation, takeover, or other transaction
involving CMGI; or
o discourage a potential acquirer from making a tender offer or
otherwise attempting to obtain control of CMGI.
WE RELY ON NAVISITE FOR WEB SITE HOSTING.
We and many of our operating companies rely on NaviSite for network
connectivity and hosting of servers. If NaviSite fails to perform such
services, our internal developmentbusiness operations may be interrupted, and operationthe
ability of majority-ownedour operating companies to provide services to customers may
also be interrupted. Such interruptions may have an adverse impact on our
business and revenues and our operating companies.
CMGI LITIGATION.
On February 9, 2000, International Merchandising Corporation and
International Managements, Inc. (collectively, "IMG") filed a complaint in
the United States District Court for the Northern District of Ohio, Eastern
Division, against Signatures SNI, Inc., Signatures Network, Inc.
(collectively "Signatures") subsidiaries of iCAST, iCAST, a subsidiary of
CMGI, and CMGI. The complaint asserted claims against Signatures for breach
of contract, promissory estoppel, and quantum meruit and claims against
CMGI and iCAST for tortious interference with contract and tortious
interference with prospective contractual relations. The complaint sought
compensatory damages of not less than $15,000,000, Signatures stock
options, the unspecified value of alleged services performed by IMG,
unspecified punitive damages, and costs. On February 22, 2000, IMG filed
with the court a motion to compel arbitration. On April 1, 2000, the
parties entered into an Alternative Dispute Resolution Agreement, pursuant
to which IMG voluntarily withdrew its motion to compel arbitration and
agreed to waive its claim for punitive damages. The parties agreed to
submit all claims they may have against each other to mediation and, if
mediation proves to be unsuccessful, to private, binding arbitration. On
April 7, 2000, IMG filed with the court its notice of voluntary dismissal
of the federal court action. The parties are currently mediating the
dispute. The defendants believe that they have valid defenses to IMG's
asserted claims. If we do not prevail, the outcome could adversely affect
our financial condition and results of operations.
On or about March 15, 2000, CMGI and certain of its officers and
directors, as well as certain officers and directors of Engage, a
subsidiary of CMGI, were sued by a shareholder of Engage in what purported
to be a derivative action on behalf of Engage. The lawsuit is captioned
Doris B. Sollod, Plaintiff, v. Edward A. Bennett, Christopher A. Evans,
Craig D. Goldman, Andrew J. Hajducky, III, Frederic D. Rosen, Paul L.
Schaut, David S. Wetherell and CMGI, Inc., Defendants and Engage
Technologies, Inc., Nominal Defendant, Civil Action No. 17886-NC, Court of
Chancery, New Castle County, Delaware. The complaint arose out of the
intended sale by CMGI of its subsidiaries, Flycast and Adsmart, to Engage,
as announced on or about January 20, 2000. The plaintiff alleged, inter
alia, that CMGI and the individual defendants violated their fiduciary
duties, duties of loyalty and good faith, and engaged in self-dealing with
regard to the transaction, which the complaint alleged is unfair to Engage.
The complaint requested, inter alia, that the court (1) enjoin the
defendants from taking strategic positionsany steps in furtherance of the transaction; (2)
award recissory damages to Engage and rescind the transaction if it is
consummated; (3) direct the defendants to account to Engage for its damages
and CMGI's profits; and (4) award the plaintiff her costs, disbursements
and fees. On August 15, 2000, the plaintiff filed a stipulation of
dismissal. The parties expect that the court will endorse the stipulation
and the matter will be dismissed.
Neil Braun, the former president and chief executive officer of iCAST
Corporation, a subsidiary of CMGI, filed a complaint in the United States
District Court, Southern District of New York, on December 22, 1999 against
CMGI, iCAST and David S. Wetherell, chief executive officer and chairman of
CMGI, alleging certain claims arising out of the termination of Mr. Braun's
employment with iCAST. As set forth in the complaint, Mr. Braun is seeking,
among other things, monetary damages in excess of $50 million and specific
performance of certain alleged contractual obligations that would require
iCAST to deliver to Mr. Braun an equity interest in iCAST. On January 31,
2000, an answer to the complaint was filed on behalf of CMGI, iCAST and Mr.
Wetherell. The parties are currently engaged in discovery. The defendants
plan to vigorously defend against these claims. If we do not prevail in
this proceeding, the outcome could adversely affect our financial condition
and results of operations. The parties are currently conducting discovery
in this matter.
RISKS PARTICULAR TO OUR NETWORK COMPANIES
THE SUCCESS OF OUR NETWORK COMPANIES DEPENDS GREATLY ON INCREASED USE OF
THE INTERNET BY BUSINESS AND INDIVIDUALS.
The success of our network companies depends greatly on increased use
of the Internet for advertising, marketing, providing services and
conducting business. Commercial use of the Internet is currently at an
early stage of development and the future of the Internet is not clear. In
addition, it is not clear how effective advertising on the Internet is in
generating business as compared to more traditional types of advertising
such as print, television and radio. The businesses of our network
companies will suffer if commercial use of the Internet fails to grow in
the future.
OUR NETWORK COMPANIES ARE SUBJECT TO INTENSE COMPETITION.
The market for Internet products and services is highly competitive.
Moreover, the market for Internet products and services lacks significant
barriers to entry, enabling new businesses to enter this market relatively
easily. Competition in the market for Internet products and services may
intensify in the future. Numerous well-established companies and smaller
entrepreneurial companies are focusing significant resources on developing
and marketing products and services that will compete with the products and
services of our network companies. In addition, many of the current and
potential competitors of our network companies have greater financial,
technical, operational and marketing resources than those of our network
companies. Our network companies may not be able to compete successfully
against these competitors. Competitive pressures may also force prices for
Internet goods and services down and such price reductions may reduce the
revenues of our network companies.
GROWING CONCERNS ABOUT THE USE OF "COOKIES" MAY LIMIT ENGAGE'S ABILITY TO
DEVELOP USER PROFILES.
Web sites typically place small files of information commonly known as
"cookies" on a user's hard drive, generally without the user's knowledge or
consent. Cookie information is passed to the Web site through the Internet
user's browser software. Engage's technology currently uses cookies to
collect information about an Internet user's movement through the Internet.
Most of the currently available Internet browsers allow users to modify
their browser settings to prevent cookies from being stored on their hard
drive, and a small minority of users currently choose to do so. Users can
also delete cookies from their hard drive at any time. In addition,
Microsoft, the leading provider of computer browser software, has announced
a plan to modify its product to prompt users in certain situations when
cookies are set on a user's computer. Some Internet commentators and
privacy advocates have suggested limiting or eliminating the use of
cookies, and recently, the FTC initiated an informal inquiry into the data
collection practices of DoubleClick, Inc. The effectiveness of Engage's
technology could be limited by any reduction or limitation in the use of
cookies. If the use or effectiveness of cookies is limited, Engage would
likely have to switch to other technology that would allow it to gather
demographic and behavioral information. This could require significant
reengineering time and resources, might not be completed in time to avoid
negative consequences to our business, financial condition or results of
operations, and might not be possible at all.
IF THE UNITED STATES OR OTHER GOVERNMENTS REGULATE THE INTERNET MORE
CLOSELY, THE BUSINESSES OF OUR NETWORK COMPANIES MAY BE HARMED.
Because of the Internet's popularity and increasing use, new laws and
regulations may be adopted. These laws and regulations may cover issues
such as privacy, pricing, taxation and content. The enactment of any
additional laws or regulations may impede the growth of the Internet and
the Internet-related business of our network companies and could place
additional financial burdens on their businesses.
TO SUCCEED, OUR NETWORK COMPANIES MUST RESPOND TO THE RAPID CHANGES IN
TECHNOLOGY AND DISTRIBUTION CHANNELS RELATED TO THE INTERNET.
The markets for the Internet products and services of our network
companies are characterized by:
o rapidly changing technology;
o evolving industry standards;
o frequent new product and service introductions;
o shifting distribution channels; and
o changing customer demands.
The success of our network companies will depend on their ability to
adapt to this rapidly evolving marketplace. They may not be able to
adequately adapt their products and services or to acquire new products and
services that can compete successfully. In addition, our network companies
may not be able to establish and maintain effective distribution channels.
OUR NETWORK COMPANIES FACE SECURITY RISKS.
Consumer concerns about the security of transmissions of confidential
information over public telecommunications facilities is a significant
barrier to electronic commerce and communications on the Internet. Many
factors may cause compromises or breaches of the security systems our
network companies or other Internet sites use to protect proprietary
information, including advances in computer and software functionality or
new discoveries in the field of cryptography. A compromise of security on
the Internet would have a negative effect on the use of the Internet for
commerce and communications and negatively impact our network companies'
businesses. Security breaches of their activities or the activities of
their customers and sponsors involving the storage and transmission of
proprietary information, such as credit card numbers, may expose our
network companies to a risk of loss or litigation and possible liability.
We cannot assure that the security measures of our network companies will
prevent security breaches.
THE SUCCESS OF THE GLOBAL OPERATIONS OF OUR NETWORK COMPANIES IS SUBJECT TO
SPECIAL RISKS AND COSTS.
Our network companies have begun, and intend to continue, to expand
their operations outside of the United States. This international expansion
will require significant management attention and financial resources. The
ability of our network companies to expand their offerings of our products
and services internationally will be limited by the general acceptance of
the Internet and intranets in other Internetcountries. In addition, we and our
network companies have limited experience in such international activities.
Accordingly, we and our network companies expect to commit substantial time
and development resources to customizing the products and services of our
network companies for selected international markets and to developing
international sales and support channels.
We expect that the export sales of our network companies will be
denominated predominantly in United States dollars. As a result, an
increase in the value of the United States dollar relative to other
currencies may make the products and services of our network companies more
expensive and, therefore, potentially less competitive in international
markets. As our network companies increase their international sales, their
total revenues may also be affected to a greater extent by seasonal
fluctuations resulting from lower sales that typically occur during the
summer months in Europe and other parts of the world.
OUR NETWORK COMPANIES COULD BE SUBJECT TO INFRINGEMENT CLAIMS.
From time to time, our network companies have demonstrated synergies with CMGI'S core businesses.
CMGI's strategy also envisionsbeen, and promotes opportunitiesexpect to
continue to be, subject to third party claims in the ordinary course of
business, including claims of our alleged infringement of intellectual
property rights. Any such claims may damage the businesses of our network
companies by:
o subjecting them to significan liability for synergistic
business relationships amongdamages;
o resulting in invalidation of their proprietary rights;
o being time-consuming and expensive to defend even if such claims
are not meritorious; and
o resulting in the diversion of management time and attention.
OUR NETWORK COMPANIES MAY HAVE LIABILITY FOR INFORMATION RETRIEVED FROM THE
INTERNET.
Because materials may be downloaded from the Internet and subsequently
distributed to others, our network companies within its portfolio.may be subject to claims for
defamation, negligence, copyright or trademark infringement, personal
injury or other theories based on the nature, content, publication and
distribution of such materials.
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement contains or incorporates by reference
forward-looking statements. These are statements that relate to future
periods and include statements about our:
o expected operating results;
o market opportunities;
o acquisition opportunities;
o ability to compete; and
o stock price.
In addition, CMGI provides fulfillment services through their wholly owned
subsidiaries, SalesLink Corporation, InSolutions Incorporatedsome cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "could," "potential,"
"continue," "expects," "anticipates," "intends," "plans," "believes,"
"predicts," "estimates" and On-Demand
Solution.
Our principal executive office is located at 100 Brickstone Square,
Andover, Massachusetts 01810,similar expressions, although not all
forward-looking statements are identified by these words. These statements
are based on our current beliefs, expectations and assumptions and are
subject to a number of risks and uncertainties. Actual results and events
may vary significantly from those discussed in the forward-looking
statements. A description of risks that could cause our telephone number is (978) 684-3600.results to vary
appears under the caption "Risk Factors" and elsewhere in this prospectus.
In light of these assumptions, risks and uncertainties, the forward-looking
events discussed in this prospectus may not occur. These cautionary
statements qualify all forward-looking statements attributable to us or
persons acting on our behalf. These forward-looking statements are made as
of the date of this prospectus, and we assume no obligation to update them
even though our situation may change in the future.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed
with the Commission using a "shelf" registration process. Under this shelf
process, wethe selling stockholders may sell any combination of the securities described in this
prospectus in one of more offerings up to a total dollar amount of $1,000,000,000.10,810,911 shares.
This prospectus provides you with a general description of the securities wethey may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. TheA prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus and any
prospectus supplement together with additional information described under
the heading "Where You Can Find More Information About Us."
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth our consolidated ratio of earnings to fixed
charges, the deficiency of our consolidated earnings to cover fixed charges, our
consolidated ratio of earnings to combined fixed charges and preferred stock
dividends and the deficiency of our consolidated earnings to cover combined
fixed charges and preferred stock dividends for the periods indicated.
Three months ended
Years Ended July 31, October 31,
--------------------------------------------------------------------------------- ------------------
1995 1996 1997 1998 1999 1999
-------------- ------------- ------------- -------------- -------------- ------------------
(in thousands of dollars, except ratios)
Consolidated ratio of
earnings to fixed charges 17.50 55.71 N/A 11.58 76.52 N/A
Deficiency of consolidated
earnings to cover fixed
charges N/A N/A $(12,122) N/A N/A $(179,634)
Consolidated ratio of
earnings to combined
fixed charges and
preferred stock dividends 17.50 55.71 N/A 11.58 65.71 N/A
Deficiency of consolidated
earnings to cover
combined fixed charges and
preferred stock dividends N/A N/A $(12,122) N/A N/A $(181,869)
For the purposes of computing the ratios of earnings to fixed charges and
earnings to combined fixed charges and preferred stock dividends, earnings
consist of pretax income (loss) from continuing operations before adjustment for
minority interest in consolidated subsidiaries and income or loss from equity
investees plus fixed charges. Fixed charges consist of interest expense,
amortized premiums, discounts and capitalized expenses related to indebtedness,
an estimate of the interest component within rental expenses and preference
security dividend requirements of consolidated subsidiaries.
USE OF PROCEEDS
Except as otherwise set forth in the applicable prospectus supplement, CMGI
intends to use the proceeds of any securities sold for general corporate
purposes, including working capital, acquisitions, retirement of debt and other
business opportunities.
DESCRIPTION OF SECURITIES
This prospectus contains a summary of the common stock, preferred stock and
debt securities of CMGI. These summaries are not meant to be a complete
description of each security. However, this prospectus and the accompanying
prospectus supplement contain the material terms and conditions for each
security.
DESCRIPTION OF CAPITAL STOCK
The following description of our common stock and preferred stock,
together with the additional information included in any applicable
prospectus supplements, summarizes the material terms and provisions of
these types of securities. For the complete terms of our common stock and
preferred stock, please refer to our restated certificate of incorporation
and restated by-laws that are incorporated by reference into the
registration statement which includes this prospectus.
Our authorized capital stock consists of 405,000,0001,405,000,000 shares. ThoseThese
shares consist of 400,000,0001,400,000,000 shares of common stock, par value $0.01 per
share, and 5,000,000 shares of preferred stock, par value $0.01 per share,
of which 250 shares arehave been designated as Series A convertible preferred stock,
50,000 shares arehave been designated as Series B convertiblepreferred stock, 375,000
shares have been designated as Series C preferred stock and 18,090.45
shares have been designated as Series D preferred stock. On August 11,
2000, CMGI had issued and outstanding:
o approximately 296,690,881 shares of common stock;
o no shares of Series A preferred stock;
o no shares of Series B preferred stock;
o 375,000 shares are
designatedof Series C convertiblepreferred stock (convertible into an
aggregate of approximately 9,645,997 shares of common stock as of
August 11, 2000); and
o no shares of Series D preferred stock. We will describe the specific
terms of any common stock or preferred stock we may offer in a prospectus
supplement. If indicated in a prospectus supplement, the terms of any common
stock or preferred stock offered under that prospectus supplement may differ
from the terms described below.
COMMON STOCK
Voting Rights. Each holder of common stock is entitled to one vote on
all matters to be voted upon by stockholders for each share held on the
record date for such vote.
Dividends. The holders of common stock, after preferences of holders
of preferred stock, are entitled to receive dividends when, as and if
declared by the board of directors out of funds legally available for
dividends.
Liquidation and Dissolution. If we are liquidated or dissolved, the
holders of the common stock will be entitled to share in our assets
available for distribution to stockholders in proportion to the amount of
common stock they own. The amount available for common stockholders is
calculated after payment of liabilities. Holders of preferred stock will
receive their preferential share of our assets before the holders of the
common stock receive any assets.
Other Rights. Holders of the common stock have no right to:
.o convert the common stock into any other security,
.o have the common stock redeemed, or
.o purchase additional shares of common stock to maintain their
proportionate interest.
The common stock does not have cumulative voting rights, which means
that the holders of a majority of the shares can elect all the directors
and that the holders of the remaining shares will not be able to elect any
directors. All outstanding shares of common stock are, and all shares of
common stock offered under a this prospectus supplement when issued will be upon
payment, validly issued, fully paid and nonassessable.
Restriction on Alienability of Securities to be Registered. The common
stock being registered herein is subject to a Trading Day Limit Agreement
between us and each selling stockholder. Under this agreement, the selling
stockholder can, on any single day on which Nasdaq is open for trading,
sell only up to 10% of the total shares issued to the selling stockholder
upon payment of any of the notes. In addition, the selling stockholder can,
beginning on the date on which the selling stockholder is issued shares
upon payment of any of the notes and ending ten trading days thereafter,
enter into a swap, hedge, collar, short sale or other arrangement that
transfers to another any of the consequences of ownership of those shares
for that period.
Transfer Agent. We have appointed Boston EquiServe, L.P. as the transfer agent
and registrar for our common stock.
PREFERRED STOCK
General. Our restated certificate of incorporation authorizes the
board of directors to issue, without any further action by the
stockholders, the preferred stock in one or more series, to establish from
time to time the number of shares to be included in each series, and to fix
the designation, powers, preferences and rights of the shares of each
series and the qualifications, limitations or restrictions thereof,
including voting rights, dividend rights, conversion rights, liquidation
preferences, redemption privileges and sinking fund terms. The rights,
preferences, privileges and restrictions of the preferred stock of each
series will be fixed by the certificate of 2
designation relating to that
series. Any or all of the rights of the preferred stock may be greater than
the rights of the common stock.
Voting Rights. The Delaware corporation statute provides that the holders
of preferred stock will have the right to vote separately as a class on any
proposal involving fundamental changes in the rights of holders of such
preferred stock.
Conversion or Exchange. The prospectus supplement will describe the terms,
if any, on which the preferred stock may be convertible into or exchangeable or
redeemable for our common stock, debt securities or other preferred stock. These
terms will include provisions as to whether conversion, exchange or redemption
is mandatory, at the option of the holder or at our option. These provisions may
allow or require the number of shares of our common stock or other securities to
be received by the holders of preferred stock to be adjusted.
In addition, the preferred stock could have other rights, including
economic rights senior to our common stock, so that the issuance of the
preferred stock could adversely affect the market value of our common
stock. The issuance of the preferred stock may also have the effect of
delaying, deferring or preventing a change in control of us without any
action by the stockholders.
SERIES B CONVERTIBLE PREFERRED STOCK AND SERIES C CONVERTIBLE PREFERRED STOCK
Voting Rights. Holders of shares of Series B convertible preferred stock
and Series C convertible preferred stock have no
voting rights except as otherwise provided by the Delaware corporation
statute and our restated certificate of incorporation. On such matters
where the holders of shares of Series B convertible preferred stock and Series C convertible preferred stock have a right to
vote with the holders of common stock, they are entitled to vote their
shares on an as-converted basis. Our restated certificate of incorporation
also gives the holders of shares of each of Series B convertible preferred stock
and Series C convertible preferred stock the right to
vote on enumerated actions that if taken by us would impair their rights,
preferences and privileges. Prior to us taking any such action, the
affirmative vote of the holders of a majority of the outstanding shares of
the affected series ofSeries C preferred stock is required.
Dividend Rights. Series B convertible preferred stock does not bear any
dividends. Holders of Series C convertible preferred stock are
entitled to receive when, as and if declared by the board of directors, out
of funds legally available for dividends, cumulative dividends equal to two
percent per annum of the stated value of $1,000 per share, payable
semiannually in arrears, either in cash or, at our option, through an
adjustment to the liquidation preference per share. Such adjustments, if
any, will also increase the number of shares of common stock into which
shares of Series C convertible preferred stock is convertible.
Liquidation and Dissolution. In the event of any liquidation or
dissolution of us, . the holders of Series B convertible preferred stock are entitled to
receive, prior to any distribution to holders of common stock or
Series C convertible preferred stock, an amount equal to the stated
value of $1,000 per share plus four percent per annum of the stated
value since the date of issuance, and
. the holders of Series C convertible preferred stock are entitled to
receive, prior to any distribution to holders of common stock, an amount
equal to the stated value of $1,000 per share plus all adjustments to the
liquidation preference plus accrued but unpaid dividends to which no
adjustment has been made (the sum of which is referred to as the
liquidation preference).
Our restated certificate of incorporation specifies that upon the
occurrence of enumerated corporate events, including a consolidation or merger
where we are not the surviving corporation, the holders of Series B convertible
preferred stock may elect to:
. treat as a liquidation event and receive a liquidation distribution
equal to 118% of the stated value plus four percent per annum of the
stated value since the date of issuance; or
. have the conversion price for each share of Series B convertible
preferred stock adjusted accordingly.
3
Our restated certificate of incorporation specifies that upon the
occurrence of enumerated corporate events, including the consummation of a
transaction in which our stockholders do not own at least 50% of the voting
power of the combined company, the holders of two-thirds of the outstanding
shares of Series C convertible preferred stock may elect either:
.o to treat such events as a liquidation event and receive a
liquidation distribution; or
.o to have the conversion price for each share of Series C convertible
preferred
stock adjusted accordingly.
Conversion. Subject to certain limitations described in our restated
certificate of incorporation, the Series B convertible preferred stock is
convertible into common stock, based on the stated value per share plus an
amount equal to four percent per annum of the stated value, at a conversion
price of $26.00 per share, prior to giving effect to the two-for-one stock split
we announced on December 15, 1999, until December 21, 1999 or until the earlier
occurrence of certain events specified in our restated certificate of
incorporation. After December 21, 1999 or the earlier occurrence of such
specified events, the conversion price is based on a formula which is linked to
the market price of our common stock. The maximum number of shares of common
stock into which the outstanding shares of Series B convertible preferred stock
may be converted is 4,166,668, prior to giving effect to the two-for-one stock
split we announced on December 15, 1999, subject to adjustment as set forth in
the restated certificate of incorporation. The Series B convertible preferred
stock automatically converts into common stock on December 22, 2000.
The shares of Series C convertible preferred stock are segregated into
three equal tranches of 125,000 shares each. The shares in each tranche
have identical rights and preferences except as to conversion. The
shares in each
tranche are convertible into common stock, based on the liquidation preference
per share, at prices of $91.43, $75.15 and $75.32 per share, prior to giving
effect to the two-for-one stock split we announced on December 15, 1999,
respectively. The conversion price calculated for each tranche is also subject to adjustment
for certain actions described in our restated certificate of incorporation.
Shares of Series C convertible preferred stock may be converted into common stock at
any time at the option of the holders and automatically convert into common
stock on June 30, 2002, as described in the restated certificate of
incorporation.
The restated certificate of incorporation provides that a holder of
Series C convertible preferred stock may not at its optionchoose to convert such shares into common
stock totallingtotaling more than 9.9% of outstanding shares of common stock
or 4.9% if such holder also owns Series B convertible preferred stock.
Redemption Rights. We are required to redeem shares of Series B
convertible preferred stock upon the occurrence of circumstances specified in
our restated certificate of incorporation, including the assignment of all or
substantially all of our assets or business for the benefit of creditors and the
institution of bankruptcy, insolvency, reorganization or liquidation proceedings
by or against us. In addition, holders of Series B convertible preferred stock
have the right to cause us to redeem their shares under additional specified
circumstances, including our failure either to issue shares of our common stock
upon the conversion of the Series B preferred stock or to maintain the listing
of our common stock on the Nasdaq National Market. The redemption price per
share is the greater of a specified percentage of the stated value of $1,000 per
share of Series B convertible preferred stock plus an amount equal to four
percent per annum of the stated value and the market price of our common stock
during the period specified in our restated certificate of incorporation.
In addition, at any time after December 21, 1999, we have the option to
redeem shares of Series B convertible preferred stock in the event that the
closing price of our common stock is less than $18.25 per share, prior to giving
effect to the two-for-one stock split announced on December 15, 1999, for a
period of ten consecutive trading days. In such event, the redemption price per
share is 115% of the stated value plus an amount equal to four percent per annum
of the stated value. Holders of shares of Series C convertible preferred stock have
the right to cause us to redeem their shares upon the occurrence of events
specified in our restated certificate of incorporation, including our
failure to issue shares of common stock upon conversion by holders of
shares of Series C convertible
preferred stock. The redemption price will be an amount per share equal to the
liquidation preference on the date of notice to us from the holder of Series C
convertible preferred stock
demanding redemption.
CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK
We have shares of common stock and preferred stock available for
future issuance without stockholder approval. These additional shares may
be utilized for a variety of corporate purposes, including future public
offerings to raise additional capital, facilitate corporate acquisitions or
payable as a dividend on the capital stock.
4
The existence of unissued and unreserved common stock and
preferred stock may enable the board of directors to issue shares to
persons friendly to current management or to issue preferred stock with
terms that could render more difficult or discourage an attempt to obtain
control of us by means of a merger, tender offer, proxy contest or
otherwise, thereby protecting the continuity of our management. In
addition, the issuance of preferred stock could adversely affect the voting
power of holders of common stock and the likelihood that such holders will
receive dividend payments and payments upon liquidation.
DELAWARE LAW AND
CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION AND THE
RESTATED BY-LAWS
Our restated certificate of incorporation and restated by-laws include
provisions that could make it more difficult to acquire us by means of a
merger, tender offer, proxy contest or otherwise. These provisions, as
described below, are expected to discourage certain types of coercive
takeover practices and inadequate takeover bids and to encourage persons
seeking to acquire control of us first to negotiate with us. We believe
that the benefits of increased protection of our potential ability to
negotiate with the proponent of an unfriendly or unsolicited proposal to
acquire or restructure us outweigh the disadvantages of discouraging such
proposals because, among other things, negotiations with respect to such
proposals could result in terms more favorable to us.
Our restated certificate of incorporation and restated by-laws provide
that the board of directors will be divided into three classes of
directors, with the term of each class expiring in a different year. Our
restated by-laws provide that the number of directors will be fixed from
time to time exclusively by the board of directors, but shall consist of
not more than fifteen nor less than three directors. A majority of the
board of directors then in office has the sole authority to fill any
vacancies on the board of directors. Our restated certificate of
incorporation provides that directors may be removed only by the
affirmative vote of holders of at least 75% of the voting power of all of
the then outstanding shares of stock entitled to vote generally in the
election of directors, voting together as a single class.
Our restated certificate of incorporation provides that stockholder
action can be taken only at an annual or special meeting of stockholders
and prohibits stockholder action by written consent in lieu of a meeting.
Our restated certificate of incorporation and restated by-laws provide that
special meetings of stockholders can be called by the chairman of the board
of directors, or pursuant to a resolution approved by a majority of the
total number of directors which we would have if there were no vacancies on
the board of directors, or by the stockholders owning at least 20% of the
stock entitled to vote at the meeting. The business permitted to be
conducted at any special meeting of stockholders is limited to the business
brought before the meeting by the chairman of the board, or at the request
of a majority of the whole board of directors, or as specified in the
stockholders' call for such meeting.
Our restated by-laws set forth an advance notice procedure with regard
to the nomination, other than by or at the direction of the board of
directors, of candidates for election to the board of directors and with
regard to business brought before an annual meeting of stockholders.
Our restated certificate of incorporation and restated by-laws contain
provisions requiring the affirmative vote of the holders of at least 75% of
the voting stock, voting together as a single class, to amend certain
provisions of the restated certificate of incorporation relating primarily
to anti-takeover provisions and to the limitation of director liability.
The restated certificate of incorporation empowers the board of
directors, when considering a tender offer or merger or acquisition
proposal, to take into account factors in addition to potential economic
benefits to stockholders. Such factors may include:
.o comparison of the proposed consideration to be received by
stockholders in relation to the then current market price of the
capital stock, our estimated current value in a freely negotiated
5
transaction, and our estimated future value as an independent
entity;
.o the impact of such a transaction on ourou customers and employees,
and its effect on the communities in which we operate; and
.o our ability to fulfill our objectives under applicable statutes
and regulations.
Our restated certificate of incorporation prohibits us from purchasing
any shares of our stock from any person, entity or group that beneficially
owns 5% or more of our voting stock at a price exceeding the average
closing price for the twenty trading business days prior to the purchase
date, unless a majority of our disinterested stockholders approve the
transaction. This restriction on purchases by us does not apply to any
offer to purchase shares of a class of our stock which is made on the same
terms and conditions to all holders of that class of stock, to any purchase
of stock owned by such a 5% stockholder occurring more than two years after
such stockholder's last acquisition of our stock, to any purchase of our
stock in accordance with the terms of any stock option or employee benefit
plan, or to any purchase at prevailing market prices pursuant to a stock
purchase program.
Section 203 of the Delaware General Corporation Law is applicable to
corporations organized under the laws of Delaware. Subject to certain exceptions
set forth in the statute, Section 203 of the Delaware General Corporation Law
provides that a corporation shall not engage in any business combination with
any "interested stockholder" for a three-year period following the date that
such stockholder becomes an interested stockholder unless:
. prior to such date, the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder;
. upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding shares owned by directors, officers and certain
employee plans or
. on or subsequent to such date, the business combination is approved by the
board of directors of the corporation and by the affirmative vote of at least
two-thirds of the outstanding voting stock which is not owned by the interested
stockholder.
Except as specified in the statute, an interested stockholder is defined
to mean any person, together with any affiliates and associates, that:
. is the owner of 15% or more of the outstanding voting stock of the
corporation; or
. is an affiliate or associate of the corporation and was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within three years immediately prior to the relevant date.
Under certain circumstances, Section 203 of the Delaware General Corporation Law
makes it more difficult for an interested stockholder to effect various business
combinations with a corporation for a three-year period, although the
stockholders may, by adopting an amendment to the corporation's certificate of
incorporation or by-laws, elect not to be governed by this section, effective
twelve months after adoption. Our restated certificate of incorporation and
restated by-laws do not exclude us from the restrictions imposed under Section
203 of the Delaware General Corporation Law. It is anticipated that the
provisions of Section 203 of the Delaware General Corporation Law may encourage
companies interested in acquiring us to negotiate in advance with the board of
directors.
Our restated certificate of incorporation contains a provision
requiring the affirmative vote of the holders of at least 75% of the voting
stock, voting together as a single class, to approve any business
combination not approved by the affirmative vote of a majority of the total
number of directors. This requirement is in addition to the requirements of
Section 203 of the Delaware General Corporation Law described above.
DIRECTORS' LIABILITYLaw.
CMGI, INC.
CMGI is a leading global Internet company. Our restated certificatestrategy is to create
or acquire, and then operate, companies that can fulfill our vision of incorporation providesa
personalized, content and service-rich Internet that a memberis easy to use and
accessible globally. We focus on four key areas of the boardInternet from both a
business-to-business and business-to-consumer perspective:
o interactive marketing and advertising solutions;
o enabling tools and infrastructure technologies;
o content and community; and
o e-commerce.
We believe that our network of directors shall notover 75 operating and venture companies
benefit from CMGI's operational expertise, strategic guidance and
resources. They also benefit from the exchange of experiences and best
practices with each other. We foster a collaborative environment that
encourages a sharing of ideas among our companies. We also facilitate
intra-network relationships and seek to leverage our strategic partners to
accelerate the growth of our network companies. We believe that our network
of companies provides us with insights into emerging market needs and
position us to continue to be personally liable to us or our stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability:
. for any breachdriving force behind the evolution of the
director's dutyInternet.
Our principal executive office is located at 100 Brickstone Square,
Andover, Massachusetts 01810 and our telephone number is (978) 684-3600.
References in this prospectus to our Web site address or those of loyalty to usour
network companies are textual references only. The information contained on
these Web sites is not a part of this prospectus supplement.
CMGI, CMGI Solutions, CMGion, @Ventures, CMGI Creating Net Value,
Creating Net Value and Worldwide Points are our servicemarks or those of
our stockholders;
. for actssubsidiaries. This prospectus also contains other trademarks,
servicemarks and trade names that are the property of our network companies
or omissionsother parties.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of
common stock being sold by the director not in good faith or which involve
intentional misconduct or a knowing violation of law;
. under section 174 of the Delaware General Corporation Law relatingselling stockholders pursuant to the
declaration of dividends and purchase or redemption of shares in violation of
the Delaware General Corporation Law; or
. for transactions from which the director derived an improper personal
benefit.
6
Our restated certificate of incorporation also provides for indemnification
of directors and officers to the fullest extent authorized by Delaware law.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the debt securities to which any prospectus supplement may relate. The
particular terms of the debt securities offered by any prospectus supplement and
the extent, if any, to which such general provisions may not apply to the debt
securities so offered will be described in the prospectus supplement relating to
such debt securities. For more information please refer to the indenture among
CMGI and a trustee to be selected, relating to the issuance of the senior notes,
and the indenture among CMGI and a trustee to be selected, relating to issuance
of the subordinated notes. Forms of these documents are filed as exhibits to
the registration statement, which includes this
prospectus. The senior notesselling stockholders will be issued underreceive all of the senior indenturenet proceeds
from any sale of the shares of common stock being sold by the selling
stockholders pursuant to be entered
into between CMGIthis prospectus.
The selling stockholders will pay any underwriting discounts and
commissions and expenses incurred by the trustee namedselling stockholders for
brokerage, accounting, tax or legal services or any other expenses incurred
by the selling stockholders in disposing of the shares. We will bear all
other costs, fees and expenses incurred in effecting the registration of
the shares covered by this prospectus, including, without limitation, all
registration and filing fees, Nasdaq listing fees and fees and expenses of
our counsel and our accountants.
THE SELLING STOCKHOLDERS
The consideration paid to the former stockholders of Tallan, Inc.
for our purchase of a controlling interest in Tallan, Inc. on March 31,
2000 included three promissory notes. One note, in the senior indenture. The
subordinatedprincipal amount of
$241,794,649.00, matures on September 30, 2000 and two notes, will be issued under the subordinated indenture to be entered
into between CMGI and the trustee named in the
subordinated indenture. As used
herein,aggregate principal amount of $135,101,879.00, mature on December 31, 2000.
Each promissory note allows us to extend the term "indentures" refersmaturity date by up to both30
days. We have the senior indentureoption, on or before maturity of the notes, of paying
some or all of the principal and interest owed on the subordinated indenture. The indentures will be qualified undernotes in our common
stock. We put these notes in escrow on behalf of the Trust
Indenture Act. As used herein,former Tallan, Inc.
stockholders, pending payment on or before maturity of the term "debenture trustee" refers to eithernotes and, in
the senior trustee orcase of one of the subordinated trustee, as applicable.notes maturing on December 31, 2000 in the principal
amount of $50,000,000.00, the resolution of indemnification claims, if any.
This prospectus registers for resale by the former stockholders of Tallan,
Inc. the shares of our common stock that we may issue upon repayment of
these notes.
The following summaries of certain material provisions oftable sets forth, to our knowledge, the senior notes,
the subordinated notesname and the Indentures are subject to, and qualified in their
entirety by reference to, all the provisions of the indenture applicable to a
particular series of debt securities, including the definitions therein of
certain terms. Except as otherwise indicated, the terms of the senior indenture
and the subordinated indenture are identical.
GENERAL
Each prospectus supplement will describe the following terms relating to a
series of notes:
. the title;
. any limit on the amount that may be issued;
. whether or not such series of notes will be issued in global form, the
terms and who the depository will be;
. the maturity date(s);
. the annual interest rate(s) (which may be fixed or variable) or the
method for determining the rate(s) and the date(s) interest will begin
to accrue, the date(s) interest will be payable and the regular record
dates for interest payment dates or the method for determining such
date(s);
. the place(s) where payments shall be payable;
. CMGI's right, if any, to defer payment of interest and the maximum
length of any such deferral period;
. the date, if any, after which, and the price(s) at which, such series
of notes may, pursuant to any optional redemption provisions, be
redeemed at CMGI's option, and other related terms and provisions;
7
. the date(s), if any, on which, and the price(s) at which CMGI is
obligated, pursuant to any mandatory sinking fund provisions or
otherwise, to redeem, or at the holder's option to purchase, such
series of notes and other related terms and provisions;
. the denominations in which such series of notes will be issued, if
other than denominations of $1,000 and any integral multiple thereof;
and
. any other terms (which terms shall not be inconsistent with the
Indenture as supplemented).
CONVERSION OR EXCHANGE RIGHTS
The terms on which a series of notes may be convertible into or
exchangeable for common stock or other securities of CMGI will be set forth in
the prospectus supplement relating thereto. Such terms will include provisions
as to whether conversion or exchange is mandatory, at the option of the holder
or at the option of CMGI, and may include provisions pursuant to which the
number of shares of our common stock beneficially owned by each of the
selling stockholders. Beneficial ownership is determined in accordance with
the rules of the SEC, and includes voting or investment power with respect
to shares. Shares of common stock issuable under stock options that are
exercisable within 60 days after August [ ], 2000 are deemed outstanding
for computing the percentage ownership of the person holding the options
but are not deemed outstanding for computing the percentage ownership of
any other securitiesperson. Unless otherwise indicated below, to our knowledge, all
persons named in the table have sole voting and investment power with
respect to their shares of common stock, except to the extent authority is
shared by spouses under applicable law. The inclusion of any shares in this
table does not constitute an admission of beneficial ownership for the
person named below. The table has been prepared on the basis of the
information furnished to us by or on behalf of the selling stockholders. As
of August 11, 2000 there were approximately 296,690,881 shares of CMGI
common stock outstanding.
SHARES OF
SHARES OF NUMBER COMMON STOCK
COMMON STOCK OF SHARES TO BE BENEFICIALLY
OWNED PRIOR TO BEING OWNED AFTER THE
SELLING STOCKHOLDERS THIS OFFERING (1) OFFERED OFFERING (1)
- -------------------- ---------------- ------- ------------
Number Percent Number Percent
------ ------- ------ -------
Mary Abel
Peter A. Bourdon (2)
Canaan Equity
Stephen Clune (2)
Christopher Dearing (2)
Philip Filippelli (2)
James C. Furnivall
R. Nelson Griebel
Gregory P. Hughes
John M. Hughes (2)
Michael Hughes (2)
Robert Hughes (2)
J.B. Ventures LLC
J.H. Whitney III, LP
(J.H.) Whitney Strategic Partners III, LP
Gregory Kopchinsky
Michael R. Lezenski (2)
Bernard Lidestri (2)
Michael A. Logan (2)
Michael Lydon (2)
Eugene McKeown (2)
Earl Mix
Morgan Stanley Venture Partners III, LP
Morgan Stanley Venture Investors III, LP
Morgan Stanley Venture Partners
Entrepreneur Fund, LP
Laurie A. Paternoster (2)
Christopher Reeves Paralysis
Foundation
Regency One LLC
Doug Rivard (2)
Gary St. Jean (2)
David Tanacea (2)
Kevin Williamson (2)
Eric A. Young
The Ryan Anderson Young
Irrevocable Trust DTD 7/28/95
The Connor Erickson Young
Irrevocable Trust DTD 2/11/98
(1) We do not know when or in what amounts a selling stockholder may
offer shares for sale. The selling stockholders may sell any or
all of the shares offered by this prospectus. Because the selling
stockholders may offer all or some of the shares pursuant to this
offering, we cannot estimate the number of the shares that will be
receivedheld by the holdersselling stockholders after completion of such series of notes would bethe offering.
The common stock being registered is subject to adjustment.
CONSOLIDATION, MERGER OR SALE
The indentures do not contain any covenanta Trading Day
Limit Agreement which restricts the abilityamount of CMGIshares any selling
stockholder can sell in one day and which provides a limited time
window in which the selling stockholder can enter into an
arrangement that transfers to merge or consolidate, or sell, convey, transfer or otherwise dispose of
all or substantially all of its assets. However,another any successor or acquirer of
such assets must assume all of the obligationsconsequences of
CMGI underownership of those shares. For purposes of this table, we have
assumed that, after completion of the indenturesoffering, none of the shares
covered by this prospectus will be held by the selling
stockholders.
(2) Except for those individuals designated by reference to this
footnote, none of the selling stockholders has held any position
or office with, or has otherwise had a material relationship with,
us, Tallan, and/or any of our other subsidiaries within the notes, as appropriate.
EVENTSpast
three years, except that the selling stockholders indicated have
been employed by us and/or Tallan.
PLAN OF DEFAULT UNDER THE INDENTUREDISTRIBUTION
The following are eventsconsideration paid to the former stockholders of default under the Indentures with respect to
any seriesTallan, Inc.
for our purchase of notes issued:
. failure to paya controlling interest when due and such failure continues for 90 days
and the time for payment has not been extended or deferred;
. failure to payin Tallan, Inc. on March 31,
2000 included three promissory notes. One note, in the principal (or premium, if any) when due;
. failure to observe or perform any other covenant containedamount of
$241,794,649.00, matures on September 30, 2000 and two notes, in the notes
or the indentures (other than a covenant specifically relating to
another series of notes), and such failure continues for 90 days after
CMGI receives notice from the debenture trustee or holders of at least
25% in
aggregate principal amount of $135,101,879.00, mature on December 31, 2000.
Each promissory note allows us to extend the outstandingmaturity date by up to 30
days. We have the option, on or before the maturity of the notes, of that
series;paying
some or all of the principal and . certain eventsinterest owed on the notes in our common
stock. We put these notes in escrow on behalf of bankruptcy, insolvencythe former Tallan, Inc.
stockholders, pending payment on or reorganizationbefore maturity and, in the case of CMGI.
If an eventone
of default with respect tothe notes of any series occurs and is
continuing,maturing on December 31, 2000 in the debenture trustee or the holders of at least 25% in aggregate principal amount of
$50,000,000.00, the outstanding notesresolution of that series, by noticeindemnification claims, if any. Upon
payment of the note maturing on December 31, 2000 in writing
to CMGI (and to the debenture trustee if notice is given by such holders), may
declare the unpaid principal of, premium, if any, and accrued interest, if any,
due and payable immediately.
The holders of a majority in principal amount
of the outstanding notes$50,000,000.00, shares of an affected series may waiveour common stock equal in value to any
default or event of default with respect to
such series and its consequences, except defaults or events of default regardingindemnification claims then pending will remain in escrow until those
claims are resolved. Additionally, common stock issued in payment of principal, premium, ifall
three notes is subject to a Trading Day Limit Agreement between us and the
selling stockholders. Under this agreement, the selling stockholder can, on
any or interest (unless such default or eventsingle day on which Nasdaq is open for trading, sell only up to 10% of
default has been cured in accordance with the indenture).
Any such waiver shall cure such default or event of default.
8
Subjecttotal shares issued to the terms of the indentures, if an event of default under an
indenture shall occur and be continuing, the debenture trustee will be under no
obligation to exercise any of its rights or powers under such indenture at the
request or directionselling stockholder upon payment of any of
the holdersnotes. In addition, the selling stockholder can, beginning on the date
on which the selling stockholder is issued shares upon payment of any of
the applicable series of notes unless such holders have offered the debenture trustee reasonable indemnity. The
holders ofand ending ten trading days thereafter, enter into a majority in principal amountswap, hedge,
collar, short sale or other arrangement that transfers to another any of
the outstanding notesconsequences of any series
will have the right to direct the time, method and placeownership of conducting any
proceedingthose shares for any remedy availablethat period. This
prospectus relates to the debenture trustee,offer and resale of the shares of our common
stock described herein by the selling stockholders.
For purposes hereof, the term "selling stockholders" includes
donees, pledgees, distributees, transferees or exercising any
trustother
successors-in-interest, including, without limitation, their respective
affiliates and limited or power conferred ongeneral partners, all of which are referred to as
a group below as transferees, or certain counterparties to derivatives
transactions with the debenture trustee,selling stockholders or transferees. The selling
stockholders will act independently of us in making decisions with respect
to the notes of
that series, provided that:
. it is not in conflict with any law or the applicable indenture;
. the debenture trustee may take any other action deemed proper by it
which is not inconsistent with such direction;timing, manner and . subject to its duties under the Trust Indenture Act, the debenture
trustee need not take any action that might involve it in personal
liability or might be unduly prejudicial to the holders not involved
in the proceeding.
A holder of the notes of any series will only have the right to institute a
proceeding under the indentures or to appoint a receiver or trustee, or to seek
other remedies if:
. the holder has given written notice to the debenture trustee of a
continuing event of default with respect to that series;
. the holders of at least 25% in aggregate principal amount of the
outstanding notes of that series have made written request, and such
holders have offered reasonable indemnity to the debenture trustee to
institute such proceedings as trustee; and
. the debenture trustee does not institute such proceeding, and does not
receive from the holders of a majority in aggregate principal amount
of the outstanding notes of that series other conflicting directions
within 60 days after such notice, request and offer.
These limitations do not apply to a suit instituted by a holder of notes if
CMGI defaults in the payment of the principal, premium, if any, or interest on,
the notes.
CMGI will periodically file statements with the debenture trustee regarding
its compliance with certain of the covenants in the indentures.
MODIFICATION OF INDENTURE; WAIVER
CMGI and the debenture trustee may change an indenture without the consent
of any holders with respect to certain matters, including:
. to fix any ambiguity, defect or inconsistency in such Indenture; and
. to change anything that does not materially adversely affect the
interests of any holder of notes of any series.
In addition, under the indentures, the rights of holders of a series of
notes may be changed by CMGI and the debenture trustee with the written consent
of the holders of at least a majority in aggregate principal amount of the
outstanding notessize of each series that is affected. However,sale.
The selling stockholders may sell the following
changes may only be made with the consent of each holder of any outstanding
notes affected:
9
. extending the fixed maturity of such series of notes;
. reducing the principal amount, reducing the rate of or extending theshares offered hereby from
time of payment of interest, or any premium payable upon the
redemption of any such notes; or
. reducing the percentage of notes, the holders of which are required to consent to any amendment.
FORM, EXCHANGE, AND TRANSFER
The notes of each series will be issuable only in fully registered form
without coupons and, unless otherwise specified in the applicable prospectus
supplement, in denominations of $1,000 and any integral multiple thereof. The
indentures will provide that notes of a series may be issuable in temporary or
permanent global form and may be issued as book-entry securities that will be
deposited with, or on behalf of, The Depository Trust Company or another
depository named by CMGI and identified in a prospectus supplement with respect
to such series.
At the option of the holder,time, subject to the terms of the Indentures and the
limitations applicable to global securities described in the applicable
prospectus supplement, notes of any series will be exchangeable for other notes
of the same series, in any authorized denomination and of like tenor and
aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to
global securities set forth in the applicable prospectus supplement, notes may
be presented for exchange or for registration of transfer (duly endorsed or with
the form of transfer endorsed thereon duly executed if so required by CMGI or
the security registrar) at the office of the security registrar or at the office
of any transfer agent designated by CMGI for such purpose. Unless otherwise
provided in the notes to be transferred or exchanged, no service charge will be
made for any registration of transfer or exchange, but CMGI may require payment
of any taxes or other governmental charges. The security registrar and any
transfer agent (in addition to the security registrar) initially designated by
CMGI for any notes will be named in the applicable prospectus supplement. CMGI
may at any time designate additional transfer agents or rescind the designation
of any transfer agent or approve a change in the office through which any
transfer agent acts, except that CMGI will be required to maintain a transfer
agent in each place of payment for the notes of each series.
If the notes of any series are to be redeemed, CMGI will not be required
to:
. issue, register the transfer of, or exchange any notes of that series
during a period beginning at the opening of business 15 days before
the day of mailing of a notice of redemption of any such notes that
may be selected for redemption and ending at the close of business on
the day of such mailing; or
. register the transfer of or exchange any notes so selected for
redemption, in whole or in part, except the unredeemed portion of any
such notes being redeemed in part.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The debenture trustee, other than during the occurrence and continuance of
an event of default under an indenture, undertakes to perform only such duties
as are specifically set forth in the Indentures and, upon an event of default
under an indenture, must use the same degree of care as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the debenture trustee is under no obligation to exercise any of the
powers given it by the indentures at the request of any holder of notes unless
it is offered reasonable security and indemnity against the costs, expenses and
liabilities that it might incur. The debenture trustee is not
10
required to spend or risk its own money or otherwise become financially liable
while performing its duties unless it reasonably believes that it will be repaid
or receive adequate indemnity.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement, payment
of the interest on any notes on any interest payment date will be made to the
person in whose name such notes, or one or more predecessor securities, are
registered at the close of business on the regular record date for such
interest.
Principal of and any premium and interest on the notes of a particular
series will be payable at the office of the paying agents designated by CMGI,
except that unless otherwise indicated in the applicable prospectus supplement,
interest payments may be made by check mailed to the holder. Unless otherwise
indicated in such prospectus supplement, the corporate trust office of the
debenture trustee in The City of New York will be designated as CMGI's sole
paying agent for payments with respect to notes of each series. Any other paying
agents initially designated by CMGI for the notes of a particular series will be
named in the applicable prospectus supplement. CMGI will be required to
maintain a paying agent in each place of payment for the notes of a particular
series.
All moneys paid by CMGI to a paying agent or the debenture trustee for the
payment of the principal of or any premium or interest on any notes which
remains unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to CMGI, and the holder of
the security thereafter may look only to CMGI for payment thereof.
GOVERNING LAW
The indentures and the notes will be governed by and construed in
accordance with the laws of the State of New York except to the extent that the
Trust Indenture Act shall be applicable.
SUBORDINATION OF SUBORDINATED NOTES
The subordinated notes will be unsecured and will be subordinate and junior
in priority of payment to certain of CMGI's other indebtedness to the extent
described in a prospectus supplement. The subordinated indenture does not limit
the amount of subordinated notes which CMGI may issue, nor does it limit CMGI
from issuing any other secured or unsecured debt.
PLAN OF DISTRIBUTION
CMGI may sell common stock, preferred stock or any series of debt
securities being offered hereby in one or more of the following ways from time
to time:
. to underwriters for resale to the public or to institutional investors;
. directly to institutional investors; or
. through agents to the public or to institutional investors.
The prospectus supplements will set forth the terms of the offering of the
securities, including the name or names of any underwriters or agents, the
purchase price of such securities and the proceeds to CMGI from such sale, any
underwriting discounts or agency fees and other item's constituting
underwriters' or agents' compensation, any initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers and any
securities exchanges on which such securities may be listed. Such underwriters
or agents may include Goldman, Sachs & Co.
11
If underwriters are used in the sale, the securities will be acquired by
the underwriters for their own account and may be resold from time to timeTrading Day Limit Agreement, in one or more
transactions including negotiated(which may involve block transactions) on Nasdaq or on any
other market on which our common stock may from time to time be trading, in
privately-negotiated transactions, at a fixedthrough the writing of options on the
shares, short sales or any combination thereof. The sale price to the
public
offering price or prices, which may be changed, atthe market pricesprice for our common stock prevailing at the time
of sale, at pricesa price related to such prevailing market price, at negotiated
prices or such other price as the selling stockholders determine from time
to time. The shares may also be sold pursuant to Rule 144 under the
Securities Act. The selling stockholders will have the sole discretion not
to accept any purchase offer or make any sale of shares if they deem the
purchase price to be unsatisfactory at negotiated prices.
Unless otherwiseany particular time.
The selling stockholders may also sell the shares, subject to the
Trading Day Limit Agreement, directly to market makers acting as principals
and/or broker-dealers acting as agents for themselves or their customers.
Such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). Market makers
and block purchasers purchasing the shares will do so for their own account
and at their own risk. It is possible that a selling stockholder will
attempt to sell shares of common stock in block transactions to market
makers or other purchasers at a price per share which may be below the then
market price. There can be no assurance that all or any part of the shares
offered hereby will be issued to, or sold by, the selling stockholders. The
selling stockholders and any brokers, dealers, or agents, upon effecting
the sale of any of the shares offered hereby, may be deemed "underwriters"
as that term is defined under the Securities Act or the Exchange Act, or
the rules and regulations thereunder.
The selling stockholders may enter into hedging transactions with
broker-dealers with respect to the shares in accordance with the terms of
the Trading Day Limit Agreement. In connection with these transactions,
broker- dealers may engage in short sales of the shares in the course of
hedging the positions they assume with the selling stockholders. The
selling stockholders may also sell the shares short and redeliver the
shares to close out the short positions. The selling stockholders may also
enter into option or other transactions with broker-dealers which require
the delivery to the broker-dealer of the shares. The selling stockholders
may also loan or pledge the shares to a financial institution or a
broker-dealer and the financial institution or the broker-dealer may sell
the shares loaned or upon a default the financial institution or the
broker-dealer may effect sales of the pledged shares.
The selling stockholders, alternatively, may sell all or any part
of the shares, subject to the Trading Day Limit Agreement, offered hereby
through an underwriter. No selling stockholder has entered into any
agreement with a prospective underwriter and there is no assurance that any
such agreement will be entered into. If a selling stockholder enters into
such an agreement or agreements, the relevant details will be set forth in
a supplement or revision to this prospectus.
To the extent required, we will amend or supplement this
prospectus supplement,to disclose material arrangements regarding the obligationsplan of
distribution.
To comply with the securities laws of certain jurisdictions, the
shares offered by this prospectus may need to be offered or sold in such
jurisdictions only through registered or licensed brokers or dealers.
Under applicable rules and regulations under the Securities
Exchange Act of 1934, any person engaged in a distribution of the underwritersshares of
common stock covered by this prospectus may be limited in their ability to
purchase any series of securitiesengage in market activities with respect to such shares. The selling
stockholders, for example, will be subject to certain
conditions precedentapplicable provisions of the
Securities Exchange Act of 1934 and the underwriters will be obligated to purchase allrules and regulations under it,
including, without limitation, Regulation M, which provisions may restrict
certain activities of such seriesthe selling stockholders and limit the timing of
purchases and sales of any shares of common stock by the selling
stockholder. Furthermore, under Regulation M, persons engaged in a
distribution of securities if any are purchased.
Underwritersprohibited from simultaneously engaging in
market making and agents may be entitled under agreements entered into with
CMGI to indemnification by CMGI against certain civil liabilities, including
liabilities under the Securities Act of 1933, or to contributionother activities with respect to paymentssuch securities
for a specified period of time prior to the commencement of such
distributions, subject to specified exceptions or exemptions. The foregoing
may affect the marketability of the shares offered by this prospectus.
We have agreed to pay certain expenses of the offering and
issuance of the shares covered by this prospectus, including the printing,
legal and accounting expenses we incur and the registration and filing fees
imposed by the SEC or Nasdaq. We will not pay brokerage commissions or
taxes associated with sales by the selling stockholders.
We will not terminate the Registration Statement of which the underwriters or agents may be requiredthis
prospectus constitutes a part prior to make in respect
thereof. Underwriters and agents may be customers of, engage in transactions
with, or perform services for CMGI and its affiliatesMarch 31, 2000, except in the ordinary courseevent
that all of business.
Each seriesthe shares covered by this prospectus have been disposed of
securities will be a new issuepursuant to and in accordance with the Registration Statement.
LEGAL MATTERS
The validity of securities and will have
no established trading market other thanthe issuance of the common stock which is listed on
Nasdaq. Any common stock sold pursuant to acovered by this
prospectus supplement will be
eligible for quotation and trading on Nasdaq, subject to official notice of
issuance. Any underwriters to whom securities are sold by CMGI for public
offering and sale may make a market in the securities, but such underwriters
will not be obligated to do so and may discontinue any market making at any time
without notice. The securities, other than the common stock, may or may not be
listed on a national securities exchange or eligible for quotation and trading
on Nasdaq.
LEGAL MATTERS
Certain legal matters in connection with the offered securities will be passed upon for CMGI by Hale and Dorr LLP, Boston, Massachusetts, and for the
underwriter(s), dealer(s) or agent(s) by Skadden, Arps, Slate, Meagher &
Flom LLP, New York, New York.Boston, Massachusetts, counsel for CMGI in this transaction.
EXPERTS
TheOur consolidated financial statements and schedule of CMGI as of July 31, 1999 and
1998, and for each of the years in the three-year period ended July 31,
1999 have been incorporated by reference herein and in the registration
statement in reliance upon the reportsreport of KPMG LLP, independent certified
public accountants, incorporated by reference herein, and upon authority of
said firm as experts in accounting and auditing.
The financial statements of Flycast Communications Corporation as
of December 31, 1999 and for the year then ended, have been incorporated by
reference herein and in the registration statement in reliance on the
report of KPMG LLP, independent certified public accountants, incorporated
by reference herein, and upon authority of said firm as experts in
accounting and auditing.
The financial statements of AdForce, Inc. as of December 31, 1999
and for the year then ended, have been incorporated by reference herein and
in the registration statement in reliance on the report of KPMG LLP,
independent certified public accountants, incorporated by reference herein,
and upon authority of said firm as experts in accounting and auditing.
The financial statements of AltaVista Company as of December 31,
1997 and 1998 and for each of the two years in the three-year period ended December
31, 1997, and for the period from January 1, 1998 through June 11, 1998 and
for the period from June 12, 1998 through December 31, 1998, the financial
statements of Zip2 as of December 31, 1997 and 1998, and for each of the
three years in the three-year period ended December 31, 1998, and the financial
statements of Shopping.com as of January 31, 1998 and 1999 and for each of
the two years in the two-year period ended January 31, 1999, incorporated in this
prospectus by reference to the CMGI, Inc. Current Report on Form 8-K dated
June 29, 1999 have been so incorporated by reference herein in reliance uponon the reports of
PricewaterhouseCoopers LLP, independent accountants, given upon the
authority of said firm as experts in auditing and accounting. The financial
statements of Shopping.com as of the year ended January 31, 1997, have been
incorporated by reference herein in reliance upon the report of Singer
Lewak Greenbaum & Goldstein LLP, independent certified public accountants,
upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements of Flycast Communications
Corporation as of December 31, 1997 and 1998 and for each of the three years in
the three-year period ended December 31, 1998, incorporated by reference
in this
Registration Statementherein, have been audited by Deloitte & Touche LLP, independent auditors,
as stated in their report which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
12
The consolidated balance sheets of yesmail as of December 31, 1998
and 1999, and the related consolidated statements of operations,
stockholders' (deficit) equity and cash flows for each of the years in the
two- year period ended December 31, 1999, have been incorporated by
reference herein and have been audited by Arthur Andersen LLP, independent
certified public accountants, as indicated in their reports with respect
thereto, and are incorporated herein by reference in reliance upon the
authority of said firm as experts in giving said report.
The financial statements of Tallan, Inc. as of December 31, 1998
and 1999 and for each of the three years in the period ended December 31,
1999 incorporated in this prospectus by reference to the CMGI, Inc. Current
Report on Form 8-K dated March 9, 2000 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given upon the authority of said firm as experts in auditing
and accounting.
Ernst & Young LLP, independent auditors, have audited the
consolidated financial statements of AdForce, Inc. at December 31, 1997 and
1998, for the years ended December 31, 1998 and 1997 and for the period
from January 16, 1996 (inception) to December 31, 1996 (not presented
separately herein), as set forth in their report, which is included as an
exhibit to this prospectus and registration statement. AdForce's financial
statements are included as an exhibit in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
Ernst & Young LLP, independent auditors, have audited the
financial statements of uBid, Inc.at December 31, 1998 and 1999 and for the
period from April 1, 1997 (inception) to December 31, 1997 and for the
years ended December 31, 1998 and 1999, included in the Amendment No. 1 to
the CMGI, Inc. Registration Statement on Form S-4 filed on March 27, 2000,
as set forth in their report, which is incorporated by reference in this
prospectus and elsewhere in the registration statement. The financial
statements are incorporated by reference in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file annual, quarterly and special reports, proxy statements,
information statements and other information with the Commission. You can
inspect and copy any such information we file with the Commission at the
public reference facilities the Commission maintains at:
Room 1024, Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
and at the SEC's Regional Offices located at:
Suite 1400, Northwestern Atrium Center
Suite 1400
500 West Madison Street
Chicago, Illinois 60661
and
13th Floor, Seven World Trade Center
13th Floor
New York, New York 10048
and you may also obtain copies of such material by mail, at prescribed
rates, from the Public Reference Section of the Commission at:
450 Fifth Street, N.W.
Washington, D.C. 20549
at prescribed rates.
Please call the Commission at 1-800-SEC-0330 for further
information on the public reference rooms.
The Commission also maintains a Web site on the World Wide Web, the
address of which is http://www.sec.gov. That site also contains our annual,
quarterly and special reports, proxy statements, information statements and
other information.
This prospectus is part of a registration statement filed by us
with the Commission. It does not contain all the information included or
incorporated by reference in the registration statement. The full
registration statement can be obtained from the Commission as indicated
above or from us.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" information
from other documents that we file with them, which means that we can
disclose important information to you by referring to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and information that we file later with the Commission will
automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we make with
the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
prior to the sale of all the shares of the
securitiescommon stock covered by this
prospectus:
.o Annual Report on Form 10-K for the fiscal year ended July
31, 1999, filed with the Commission on October 29, 1999;
13
.o Quarterly Report on Form 10-Q for the fiscal quarter ended
October 31, 1999, filed with the Commission on December 15,
1999;
. Current Reportso Quarterly Report on Form 8-K or amendments of Current Reports10-Q for the fiscal quarter ended
January 31, 2000, filed with the Commission on March 16,
2000;
o Quarterly Report on Form 8-K10-Q for the fiscal quarter ended
April 30, 2000, filed with the Commission on June 14, 2000,
as amended by the Quarterly Report on Form 10-Q/A filed with
the Commission on July 11, 2000;
o Current Report on Form 8-K (June 29, 1999,1999) filed with the
Commission on August 12, 1999,1999;
o Current Report on Form 8-K (August 18, 1999) filed with the
Commission on September 2, 1999, September 3, 1999, September 27, 1999,
October 1, 1999,as amended by the Current
Reports on Form 8-K/A (August 18, 1999) filed with the
Commission on November 1, 1999 and November 17, 19991999;
o Current Report on Form 8-K (September 3, 1999) filed with
the Commission on September 3, 1999;
o Current Report on Form 8-K (September 20, 1999) filed with
the Commission on September 27, 1999;
o Current Report on Form 8-K (September 23, 1999) filed with
the Commission on October 1, 1999; and
o Current Report on Form 8-K (December 15, 1999) filed with
the Commission on December 17, 1999;
o Current Report on Form 8-K (December 17, 1999) filed with
the Commission on December 17, 1999
o Current Report on Form 8-K (January 12, 2000) filed with the
Commission on January 24, 2000;
o Current Report on Form 8-K (February 9, 2000) filed with the
Commission on February 22, 2000;
o Current Report on Form 8-K (February 14, 2000) filed with
the Commission on March 3, 2000;
o Current Report on Form 8-K (March 9, 2000) filed with the
Commission on March 9, 2000;
o Current Report on Form 8-K (March 9, 2000) filed with the
Commission on March 10, 2000;
o Current Report on Form 8-K (April 28, 2000) filed with the
Commission on May 10, 2000;
o Current Report on Form 8-K (March 10, 2000) filed with the
Commission on May 25, 2000;
o Current Report on Form 8-K (August 16, 2000) filed with the
Commission on August 17, 2000;
o Current Report on Form 8-K (August 18, 2000) filed with the
Commission on August 18, 2000;
o All of our filings pursuant to the Exchange Act after the
date of filing the initial registration statement and .prior
to effectiveness of the registration statement; and
o The description of our common stock contained in our
registration statement on Form 8-A, filed with the
Commission on January 11, 1994 (File No. 000-23262).
Any filings made by CMGI pursuant to the Exchange Act after the date of the
initial filing of the registration statement of which this prospectus is a part
and prior to the effective date of the registration statement shall also be
deemed to be incorporated by reference into this prospectus.
You may request a copy of these filings, at no cost, by writing or
telephoning us using the following contact information:
Catherine Taylor
Director, Investor Relations
CMGI, Inc.
100 Brickstone Square
First Floor
Andover, MA 01810
(978) 684-3600
You should rely only on the information incorporated by reference,
provided in this prospectus or any supplement or that we have referred you
to. We have not authorized anyone else to provide you with different
information. 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. However, you should realize that the affairs of
CMGI may have changed since the date of this prospectus. This prospectus
will not reflect such changes. You should not consider this prospectus to
be an offer or solicitation relating to the securities in any jurisdiction
in which such an offer or solicitation relating to the securities is not
authorized. Furthermore, you should not consider this prospectus to be an
offer or solicitation relating to the securities if the person making the
offer or solicitation is not qualified to do so, or if it is unlawful for
you to receive such an offer or solicitation.
14
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION [to be updated with
CMGI and completed at filing]
The following table sets forth the expenses to be borne by CMGI in
connection with the offerings described in this registration statement. All
such expenses other than the Commission registration fee are estimates.
Commission registration fee......................... $264,000
Transfer Agents, Trustees and Depositary's
Fees and Expenses................................. 25,000
Legal fees and expenses............................. 100,000
Accounting fees and expenses........................ 50,000
Printing and engraving fees and expenses............ 10,000
Miscellaneous fees and expenses (including listing
fees, if applicable).............................. 51,000
--------
Total........................................ $500,000
========
Commission registration fee................................ $ 104,003
Legal fees and expenses.................................... $ 35,000
Accounting fees and expenses............................... $ 50,000
Miscellaneous fees and expenses (including listing fees,
if applicable)........................................ $ 15,000
---------
Total.................................................. $ 204,003
---------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law grants the
registrant the power to indemnify each person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he is or was a director, officer,
employee or agent of the registrant, or is or was serving at the request of
the registrant as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgements, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
registrant, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, provided, however, no
indemnification shall be made in connection with any proceeding brought by
or in the right of the registrant where the person involved is adjudged to
be liable to the registrant except to the extent approved by a court.
Article NINTH of the registrant's restated certificate of incorporation and
Article VII of the registrant's restated by-laws providesprovide that the
registrant shall, to the fullest extent permitted by applicable law,
indemnify each person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding by
reason of the fact that he is or was, or has agreed to become, a director
or officer of the registrant, or is or was serving at the written request
of the registrant, as a director, officer, trustee, partner, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise. The indemnification provided for in Article NINTH of the
registrant's restated certificate of incorporation and Article VII of the
registrant's restated by-laws is expressly not exclusive of any other
rights to which those seeking indemnification may be entitled under any
law, agreement or vote of stockholders or disinterested directors or
otherwise, and shall inure to the benefit of the heirs, executors and
administrators of such persons. Article VII of the registrant's restated
by-laws also provides that the registrant shall have the power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the registrant, or is or was serving at the
request of the registrant, as a director, trustee, partner, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against any liability asserted against and incurred by
such person in any such capacity.
Pursuant to Section 102(b)(7) of the Delaware General Corporation
Law, Article EIGHTH of the registrant's restated certificate of
incorporation eliminates a director's personal liability for monetary
damages to II-1
CMGI and its stockholders for breaches of fiduciary duty as a
director, except in circumstances involving a breach of a director's duty
of loyalty to the registrant or its stockholders, acts or omissions not in
good faith, or which involve intentional misconduct or knowing violations
of the law, self-dealing or the unlawful payment of dividends or repurchase
of stock.
The registrant maintains an insurance policy on behalf of itself
and certain of its subsidiaries, and on behalf of the directors and
officers thereof, covering certain liabilities which may arise as a result
of the actions of such directors and officers.
The registrant has entered into agreements with all of its
directors affirming the registrant's obligation to indemnify them to the
fullest extent permitted by law and providing various other protections.
ITEM 16. EXHIBITS
Exhibit No. Description
----------- -----------
1.1 The form of equity underwriting agreement will be filed as an exhibit to a
Current Report of CMGI, Inc. on Form 8-K and incorporated herein by reference.
1.2 The form of debt underwriting agreement will be filed as an exhibit to a
Current Report of CMGI, Inc. on Form 8-K and incorporated herein by reference.
3.1 Restated Certificate of Incorporation of CMGI, Inc. Incorporated by reference
herein from Exhibit 4.1 to CMGI Inc.'s registration statement on Form S-3
(File No. 333-85047) filed with the Commission on August 12, 1999.
3.2 Restated By-laws of CMGI, Inc. Incorporated by reference herein from Exhibit
3.3 to CMGI, Inc.'s registration statement on Form S-4 (File No. 333-92107)
filed with the Commission on December 3, 1999.
4.1 Form of senior indenture.
4.2 Form of subordinated indenture.
4.3 The form of CMGI, Inc. common stock certificate. Incorporated by reference
herein from Exhibit 4.1 to CMGI, Inc.'s Form 10-K filed with the Commission on
October 29, 1999.
4.4 The form of any senior note with respect to each particular series of senior
notes issued hereunder will be filed as an exhibit to a Current Report of
CMGI, Inc. on Form 8-K and incorporated herein by reference.
4.5 The form of any subordinated note with respect to each particular series of
subordinated notes issued hereunder will be filed as an exhibit to a Current
Report of CMGI, Inc. on Form 8-K and incorporated herein by reference.
4.6 The form of any certificate of designation with respect to any preferred stock
issued hereunder and the related form of preferred stock certificate will be
filed as exhibits to a Current Report of CMGI, Inc. on Form 8-K and
incorporated herein by reference.
5.1 Opinion of Hale and Dorr LLP.
II-2
Exhibit No. Description
----------- -----------
12.1 Statement re: Computation of ratio of earnings to fixed charges and preferred
stock dividends.
23.1 Consent of KPMG LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Singer Lewak Greenbaum & Goldstein LLP.
23.4 Consent of Deloitte & Touche LLP.
23.5 Consent of Hale and Dorr LLP (contained in Exhibit 5.1)Exhibit No. Description
----------- -----------
3.1 Restated Certificate of Incorporation of CMGI, Inc. Filed as
Exhibit 4.1 to CMGI Inc.'s registration statement on Form
S-3 (File No. 333-85047) filed with the Commission on August
12, 1999.
3.1(a) Certificate of Designations, Preferences and Rights of
Series D Preferred Stock. Filed as Exhibit 4.1 to CMGI
Inc.'s Form 8-K filed with the Commission on September 2,
1999.
3.1(b) Amendment of Restated Certificate of Incorporation of
CMGI, Inc. (dated May 5, 2000). Filed as Exhibit 3.1 to CMGI
Inc.'s Form 10-Q filed with the Commission on June 14, 2000.
3.2 Restated by-laws of CMGI, Inc. Filed as Exhibit 3.1 to CMGI,
Inc.'s registration statement on Form S-4 (File No.
333-92107) filed with the Commission on December 3, 1999.
4.3 The form of CMGI, Inc. common stock certificate. Filed as
Exhibit 4.1 to CMGI, Inc.'s Form 10-K filed with the
Commission on October 29, 1999.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP to be
filed by amendment.
23.1 Consent of KPMG LLP, independent accountants to CMGI, Inc.
23.2 Consent of KPMG LLP, independent accountants (Flycast
Communications)
23.3 Consent of KPMG LLP, independent accountants (AdForce)
23.4 Consent of PricewaterhouseCoopers LLP, independent
accountants (AltaVista, Zip2, Shopping.com)
23.5 Consent of Singer Lewak Greenbaum & Goldstein LLP,
independent auditors (Shopping.com)
23.6 Consent of Deloitte & Touche LLP, independent auditors
(Flycast Communications)
23.7 Consent of Arthur Andersen LLP, independent auditors
(yesmail.com)
23.8 Consent of PricewaterhouseCoopers LLP, independent
accountants (Tallan)
23.9 Consent of Ernst & Young LLP, independent auditors (AdForce)
23.10 Consent of Ernst & Young LLP, independent auditors (uBid)
23.11 Consent of Skadden, Arps, Slate, Meagher & Flom LLP to be
filed by amendment.
24.1 Power of Attorney (included on the signature page of this
registration statement)
99.1 Audited balance sheets of AdForce, Inc. as of December 31,
1997 and 1998, and the related statements of operations,
stockholders' equity and cash flows for the period from
January 16, 1996 (inception) to December 31, 1996 and for
the years ended December 31, 1997 and 1998 as filed in pages
F-1 through F-25 of the Registrant's Registration Statement
on Form S-4 (File No. 333-92139).
99.2 Audited balance sheets of uBid, Inc. as of December 31, 1998
and 1999, and the related statements of operations, cash
flows and changes in stockholders' equity for the period
from April 1, 1997 (Inception) to December 31, 1997 and the
years ended December 31, 1998 and 1999 as filed in pages F-1
through F-16 of the Registrant's Registration Statement on
Form S-4 (File No. 333-32158).
24.1 Power of Attorney (included on the signature page of this registration
statement).
25.1 The Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of the Trustee under the Senior Indenture will be
incorporated herein by reference from a subsequent filing in accordance with
Section 305(b)(2) of the Trust Indenture Act of 1939.
25.2 The Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of the Trustee under the Subordinated Indenture will be
incorporated herein by reference from a subsequent filing in accordance with
Section 305(b)(2) of the Trust Indenture Act of 1939.
ITEM 17. UNDERTAKINGS
(a) 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 arising after the effective date of the registration
statement (or the most recent post-
effectivepost-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) 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 price represent no more than 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 material information with
respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such
information in the registration statement; provided, however, that
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission 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.
II-3
(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.
(b) 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 that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) 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 provisions referred
to in Item 15 hereof, 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.
CMGI hereby undertakes to file an application for the purpose of
determining the eligibility of the applicable trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act of 1939 ("Act") in accordance with
the rules and regulations of the Commission under Section 305(b)(2) of the Act.
II-4
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 Town of Andover, the
Commonwealth of Massachusetts, on the 16th22nd day of December, 1999.August 2000.
CMGI, INC.
By: /s/ Andrew J. Hajducky III
--------------------------------------
Andrew J. Hajducky III, CPA
Chief Financial Officer and Treasurer
POWER OF ATTORNEY
We, the undersigned officers and directors of CMGI, Inc.,
hereby severally constitute and appoint David S. Wetherell and Andrew J.
Hajducky III, and each of them acting singly, our true and lawful
attorneys-in-fact,attorneys-in- fact, with full power granted to them in any and all
capacities (including substitutions), to execute for us and in our names in
the capacities indicated below this registration statement (including any
pre- and post-effective amendments), and any related Rule 462(b)
registration statement or amendment thereto, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, and generally to do all such things in
our name and behalf in our capacities as officers and directors to enable
CMGI, Inc. to comply with the provisions of the Securities Act and all
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that each of said attorneys-in-fact may do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, as amended, this registration statement has been signed by the
following persons in the capacities indicated as of December 16, 1999.August 22, 2000.
Signature Title
--------- -----
/s/ David S. Wetherell Chairman of the Board, President and Chief Executive
David S. Wetherell- ------------------------------- Officer (Principal Executive Officer)
David S. Wetherell
/s/ Andrew J. Hajducky, III Chief Financial Officer and Treasurer (Principal Financial
- ------------------------------- Officer and Principal Accounting Officer)
Andrew J. Hajducky III, CPA
Financial Officer and Principal Accounting Officer)
/s/ William H. Berkman Director
- -------------------------------
William H. Berkman
/s/ Craig D. Goldman Director
- -------------------------------
Craig D. Goldman
/s/ Avram Miller Director
- -------------------------------
Avram Miller
/s/ Robert J. Ranalli Director
- -------------------------------
Robert J. Ranalli
/s/ William D. StreckerHarold F. Enright, Jr. Director
William D. Strecker- -------------------------------
Harold F. Enright, Jr.
II-5
EXHIBIT INDEX
Exhibit Index
Exhibit No. Description
----------- -----------
1.1 The form of equity underwriting agreement will be filed as an exhibit to a
Current Report of CMGI, Inc. on Form 8-K and incorporated herein by reference.
1.2 The form of debt underwriting agreement will be filed as an exhibit to a
Current Report of CMGI, Inc. on Form 8-K and incorporated herein by reference.
3.1 Restated Certificate of Incorporation of CMGI, Inc. Incorporated by reference
herein from Exhibit 4.1 to CMGI Inc.'s registration statement on Form S-3
(File No. 333-85047) filed with the Commission on August 12, 1999.
3.2 Restated By-laws of CMGI, Inc. Incorporated by reference herein from Exhibit
3.3 to CMGI, Inc.'s registration statement on Form S-4 (File No. 333-92107)
filed with the Commission on December 3, 1999.
4.1 Form of senior indenture.
4.2 Form of subordinated indenture.
4.3 The form of CMGI, Inc. common stock certificate. Incorporated by reference
herein from Exhibit 4.1 to CMGI, Inc.'s Form 10-K filed with the Commission on
October 29, 1999.
4.4 The form of any senior note with respect to each particular series of senior
notes issued hereunder will be filed as an exhibit to a Current Report of
CMGI, Inc. on Form 8-K and incorporated herein by reference.
4.5 The form of any subordinated note with respect to each particular series of
subordinated notes issued hereunder will be filed as an exhibit to a Current
Report of CMGI, Inc. on Form 8-K and incorporated herein by reference.
4.6 The form of any certificate of designation with respect to any preferred stock
issued hereunder and the related form of preferred stock certificate will be
filed as exhibits to a Current Report of CMGI, Inc. on Form 8-K and
incorporated herein by reference.
5.1 Opinion of Hale and Dorr LLP.
12.1 Statement re: Computation of ratio of earnings to fixed charges and preferred
stock dividends.
23.1 Consent of KPMG LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Singer Lewak Greenbaum & Goldstein LLP.
23.4 Consent of Deloitte & Touche LLP.
23.5 Consent of Hale and Dorr LLP (contained in Exhibit 5.1)No. Description
----------- -----------
3.1 Restated Certificate of Incorporation of CMGI, Inc. Filed as
Exhibit 4.1 to CMGI Inc.'s registration statement on Form
S-3 (File No. 333-85047) filed with the Commission on
August 12, 1999.
3.1(a) Certificate of Designations, Preferences and Rights of
Series D Preferred Stock. Filed as Exhibit 4.1 to CMGI
Inc.'s Form 8-K filed with the Commission on September
2, 1999.
3.1(b) Amendment of Restated Certificate of Incorporation of CMGI,
Inc. (dated May 5, 2000). Filed as Exhibit 3.1 to CMGI
Inc.'s Form 10-Q filed with the Commission on June 14,
2000.
3.2 Restated by-laws of CMGI, Inc. Filed as Exhibit 3.1 to CMGI,
Inc.'s registration statement on Form S-4 (File No.
333-92107) filed with the Commission on December 3,
1999.
4.3 The form of CMGI, Inc. common stock certificate. Filed as
Exhibit 4.1 to CMGI, Inc.'s Form 10-K filed with the
Commission on October 29, 1999.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP to be
filed by amendment.
23.1 Consent of KPMG LLP, independent accountants to CMGI, Inc.
23.2 Consent of KPMG LLP, independent accountants (Flycast
Communications)
23.3 Consent of KPMG LLP, independent accountants (AdForce)
23.4 Consent of PricewaterhouseCoopers LLP, independent
accountants (AltaVista, Zip2, Shopping.com)
23.5 Consent of Singer Lewak Greenbaum & Goldstein LLP,
independent auditors (Shopping.com)
23.6 Consent of Deloitte & Touche LLP, independent auditors
(Flycast Communications)
23.7 Consent of Arthur Andersen LLP, independent auditors
(yesmail.com)
23.8 Consent of PricewaterhouseCoopers LLP, independent
accountants (Tallan)
23.9 Consent of Ernst & Young LLP, independent auditors (AdForce)
23.10 Consent of Ernst & Young LLP, independent auditors (uBid)
23.11 Consent of Skadden, Arps, Slate, Meagher & Flom LLP to be
filed by amendment.
24.1 Power of Attorney (included on the signature page of this
registration statement).
99.1 Audited balance sheets of AdForce, Inc. as of December 31,
1997 and 1998, and the related statements of
operations, stockholders' equity and cash flows for the
period from January 16, 1996 (inception) to December
31, 1996 and for the years ended December 31, 1997 and
1998 as filed in pages F-1 through F-25 of the
Registrant's Registration Statement on Form S-4 (File
No. 333-92139).
99.2 Audited balance sheets of uBid, Inc. as of December 31,
1998 and 1999, and the related statements of
operations, cash flows and changes in stockholders'
equity for the period from April 1, 1997 (Inception) to
December 31, 1997 and the years ended December 31, 1998
and 1999 as filed in pages F-1 through F-16 of the
Registrant's Registration Statement on Form S-4 (File
No. 333-32158).
24.1 Power of Attorney (included on the signature page of this registration
statement).
25.1 The Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of the Trustee under the Senior Indenture will be
incorporated herein by reference from a subsequent filing in accordance with
Section 305(b)(2) of the Trust Indenture Act of 1939.
25.2 The Statement of Eligibility on Form T-1 under the Trust Indenture Act of
1939, as amended, of the Trustee under the Subordinated Indenture will be
incorporated herein by reference from a subsequent filing in accordance with
Section 305(b)(2) of the Trust Indenture Act of 1939.