AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 29, 2000
REGISTRATION NO. 333-52112
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO FORM S-3
REGISTRATION STATEMENT
UNDER
THE 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 DAVID T. BREWSTER
VICE PRESIDENT AND GENERAL COUNSEL SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
CMGI, INC. ONE BEACON STREET
100 BRICKSTONE SQUARE BOSTON, MASSACHUSETTS 02108
ANDOVER, MASSACHUSETTS 01810 (617) 573-4825
(978) 684-3600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: At such
time or times on and after the date on which this registration statement
becomes effective as the selling stockholders may determine.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. |_|
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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
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Proposed Maximum Proposed
Title Of Each Class of Amount To Be Offering Price Maximum Aggregate Amount Of
Securities to be Registered Registered (1)(2) Per Share (1) Offering Price (1)(2) Registration Fee (3)
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Common Stock, par value
$0.01 per share 19,448,486 $ 6.20 $ 120,580,613.20 $ 31,690.61
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Total $ 120,580,613.20 $ 31,690.61
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(1) The 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 promissory notes in either cash or common stock or a combination
thereof. The number of shares of common stock being registered
represents 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 as
determined by dividing the aggregate principal amount of the
promissory notes (less the value of the shares described in footnote
(2) below), plus interest thereon through maturity, reflected as the
Proposed Maximum Aggregate Offering Price above, by the conversion
price of the notes approximately reflected as the Proposed Maximum
Offering Price Per Share above.
(2) Does not include an additional 3,560,296 unissued shares of common
stock carried forward to this Registration Statement, pursuant to Rule
429 under the Securities Act. The registration fee for these
additional shares was previously paid with the Registrant's
Registration Statement on Form S-3 (Registration No. 333-44276), as
filed with the Securities and Exchange Commission on August 22, 2000.
(3) A registration fee of $31,690.61 was paid in connection with the
initial filing of this Registration Statement on December 19, 2000. An
additional registration fee of $2,547.84 due with respect to the
increase in the Proposed Maximum Aggregate Offering Price from $110,
389,266.82 to $120,580,613.20 is being paid in connection with the
filing of this Amendment No. 1.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE
PROSPECTUS INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS
WHICH ALSO RELATES TO 3,560,296 UNISSUED SHARES OF COMMON STOCK COVERED BY
REGISTRATION STATEMENT NO. 333-44276 PREVIOUSLY FILED WITH THE COMMISSION
ON AUGUST 22, 2000 AND DECLARED EFFECTIVE ON SEPTEMBER 11, 2000. THIS
REGISTRATION STATEMENT ALSO CONSTITUTES A POST-EFFECTIVE AMENDMENT TO
REGISTRATION STATEMENT NO. 333-44276, AND SUCH POST-EFFECTIVE AMENDMENT
SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF
THIS REGISTRATION STATEMENT IN ACCORDANCE WITH SECTION 8(C) OF THE
SECURITIES ACT OF 1933.
[FLAG]
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 29, 2000
Prospectus
19,448,486 SHARES
COMMON STOCK
CMGI, INC.
100 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 payment
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, matured on, and was fully paid
on, September 30, 2000 and 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 under certain
circumstances. 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. 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 notes 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 date of payment of the respective note.
Our common stock is traded on the Nasdaq under the ticker symbol
"CMGI." On December 27, 2000, the last reported sales price of the common
stock was $6.09 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 17.
We will not receive any proceeds from the sale of the shares.
The selling stockholders will pay all brokerage fees and
commissions and similar sale-related expenses. We are paying expenses
relating to the registration of the shares with the Securities and Exchange
Commission.
We urge you to read this prospectus and the accompanying
prospectus supplement 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.
------------------------------------
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.
TABLE OF CONTENTS
Page
RISK FACTORS...............................................................1
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS ..........................9
ABOUT THIS PROSPECTUS......................................................9
DESCRIPTION OF CAPITAL STOCK ..............................................9
CMGI, INC.................................................................13
USE OF PROCEEDS...........................................................14
THE SELLING STOCKHOLDERS..................................................14
PLAN OF DISTRIBUTION......................................................17
LEGAL MATTERS.............................................................18
EXPERTS .................................................................18
WHERE YOU CAN FIND MORE INFORMATION ABOUT US..............................19
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...........................20
PART II ...............................................................II-1
SIGNATURES..............................................................II-4
EXHIBIT INDEX...........................................................II-5
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 CMGI
WE MAY NOT HAVE OPERATING INCOME OR NET INCOME IN THE FUTURE.
During the fiscal year ended July 31, 2000 and for the three months
ended October 31, 2000, we had operating losses of approximately $2.19
billion and $896.7 million, respectively, and net losses of approximately
$1.38 billion and $636.6 million, 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.
IF WE FAIL TO SUCCESSFULLY EXECUTE ON OUR SEGMENTATION STRATEGY, OUR
REVENUE, EARNINGS PROSPECTS AND BUSINESS MAY BE MATERIALLY AND ADVERSELY
AFFECTED.
On September 7, 2000, we announced that we had formally organized our
majority-owned operating companies and venture capital affiliates into six
segments. These six segments include five operational disciplines -
Interactive Marketing; eBusiness and Fulfillment; Search and Portals;
Infrastructure and Enabling Technologies; and Internet Professional
Services - as well as our affiliated venture capital arm, CMGI@Ventures.
The segmentation strategy includes a focus on:
o market segments in which we can establish a leadership position;
o a planned reduction in the number of operating companies to an
optimal number of five to ten in total;
o improved future financial performance including continued revenue
growth; and
o a significant reduction in cash flow requirements through
improved operating efficiencies in acquisitions, consolidations
and divestitures.
To successfully implement our segmentation strategy, we must achieve
each of the following:
o overcome the difficulties of integrating our operating companies;
o decrease our cash burn rate;
o improve our cash position and revenue run rate; and
o increase our holdings of marketable securities.
If we fail to address each of these factors, our business prospects
for achieving and sustaining profitability, and the market value of our
securities may be materially and adversely affected. Even if our
implementation of this segmentation strategy is successful, the revised
structure and reporting procedures of the new segmentation strategy may not
lead to increased market clarity or stockholder value. In addition, the
execution of the segmentation strategy, including planned reductions in the
number of operating companies, could result in restructuring charges being
recorded by us in future periods.
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 2000 AND THE FIRST THREE MONTHS OF FISCAL 2001, 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, 2000, sales to Cisco
Systems, Inc. accounted for 11% of our consolidated net revenue and 36% of
our net revenue from our eBusiness and Fulfillment segment. During the
three months ended October 31, 2000, sales to Cisco Systems, Inc. accounted
for 8% of our consolidated net revenue and 15% of our net revenue from our
eBusiness and Fulfillment segment. We currently do not have any agreements
with Cisco Systems, Inc. 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 fiscal year ended July 31,
2000, approximately 12% of our consolidated net revenue and 35% of net
revenue from our Search and Portals segment was derived from customer
advertising contracts serviced by DoubleClick, Inc. During the three months
ended October 31, 2000, approximately 4% of our consolidated net revenue
and 27% of our net revenue from our Search and Portals segment was 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, as of December 8,
2000, we, directly or through our @Ventures funds, owned shares of common
stock of Akamai Technologies, Inc., Amazon.com, Inc., divine interVentures,
inc., eBay, Inc., Engage, Inc., Hollywood Entertainment, Inc., Kana
Communications, Inc., marchFirst, Marketing Services Group, Inc.,
MotherNature.com, NaviSite, Inc., Netcentives, Inc., Pacific Century
CyberWorks, Ltd., Primedia, Inc., Terra Lycos, Inc., Tickets.com, Ventro
Corporation, Vicinity Corporation and Yahoo!, Inc., 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
operators 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 increase 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 charges for impairment of lon lived assets in future periods;
o potential structuring charges in connection with our segmentation
strategy;
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. Future 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 11.2% of our outstanding common
stock as of September 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
13.2% of our outstanding common stock as of September 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 business operations may be interrupted, and the
ability of our 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.
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 defendants have vigorously defended against these claims and
plan to continue to vigorously defend against these claims. The parties
engaged in and have completed discovery. On November 30, 2000, the
defendants filed motions for summary judgment requesting that the court
dismiss the claims asserted by Mr. Braun. The court has scheduled oral
argument for the summary judgment motions on February 2, 2001. If we do not
prevail in this proceeding, the outcome could adversely affect our
financial condition and results of operations.
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. 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 countries. 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 been, and expect 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 damages;
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 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 some 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 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 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, the selling stockholders may sell the securities described in this
prospectus in one of more offerings up to a total of 19,448,486 shares.
This prospectus provides you with a description of the securities they may
offer. Each time he, she or it sells securities, the selling stockholder
will provide a prospectus supplement that will contain specific information
about the terms of that offering. The 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."
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 1,405,000,000 shares. These
shares consist of 1,400,000,000 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 have been designated as Series A preferred stock,
50,000 shares have been designated as Series B preferred 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 December 11,
2000, CMGI had issued and outstanding:
o approximately 319,311,017 shares of common stock;
o no shares of Series A preferred stock;
o no shares of Series B preferred stock;
o 375,000 shares of Series C preferred stock (convertible into an
aggregate of approximately 9,652,251 shares of common stock as of
December 11, 2000); and
o no shares of Series D preferred stock.
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 othe 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 when issued will be upon
payment, validly issued, fully paid and nonassessable.
Restriction on Alienability of Securities to be Registered. Certain
shares of common stock being registered herein are subject to a Trading Day
Limit Agreement between us and certain selling stockholders. Under this
agreement, these selling stockholders can, on any single day on which
Nasdaq is open for trading, sell only up to 10% of the total shares issued
to them upon payment of any of the notes. In addition, these selling
stockholders can, beginning on the date on which they are 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 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 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.
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 C PREFERRED STOCK
Voting Rights. Holders of shares of Series C 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 C 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 Series C 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
Series C preferred stock is required.
Dividend Rights. 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 preferred stock is convertible.
Liquidation and Dissolution. In the event of any liquidation or
dissolution of us, the holders of Series C 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 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 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 preferred
stock adjusted accordingly.
Conversion. The shares of Series C 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
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 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 preferred stock may not choose to convert such shares into common
stock totaling more than 9.9% of outstanding shares of common stock.
Redemption Rights. Holders of shares of Series C 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 preferred stock. The redemption price will be an 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.
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.
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
transaction, and our estimated future value as an independent
entity;
o the impact of such a transaction on ou 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.
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.
CMGI, INC.
CMGI and its consolidated subsidiaries develop and operate a network
of Internet companies. CMGI is a Delaware corporation. We previously
operated under the name CMG Information Services, Inc. and were
incorporated in 1986.
CMGI's subsidiaries have been classified in the following five
operating segments:
o Interactive Marketing;
o eBusiness and Fulfillment;
o Search and Portals;
o Infrastructure and Enabling Technologies; and
o Internet Professional Services.
CMGI also manages several venture capital funds that focus on
investing in companies involved in various aspects of the Internet and
technology. Our business strategy includes the internal development and
operation of majority-owned subsidiaries as well as taking strategic
positions in other Internet companies that have demonstrated synergies with
our core businesses. CMGI's strategy also envisions and promotes
opportunities for synergistic business relationships among its companies.
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 our
network companies are textual references only. The information contained on
these Web sites is not a part of this prospectus supplement.
---------------------
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock being sold by the selling stockholders pursuant to this prospectus.
The selling stockholders will receive all of the net proceeds from any sale
of the shares of common stock being sold by the selling stockholders
pursuant to this prospectus.
The selling stockholders will pay any underwriting discounts and
commissions and expenses incurred by the selling 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 principal amount of
$241,794,649.00, matured on, and was fully paid on, September 30, 2000 and
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 under certain circumstances. We have the option, on
or before 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. stockholders, pending payment
on or before maturity of the notes and, in the case of one of the 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 payment of these notes.
The following table sets forth, to our knowledge, the name and 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 December 18, 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 person. 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 December 11, 2000 there were approximately 319,311,017 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 7,483 * 318,383 7,483 *
Peter A. Bourdon (2) 49,407 * 325,524 49,407 *
Canaan Equity 0 * 222,259 0 *
Stephen Clune (2) 61,957 * 325,524 61,957 *
Christopher Dearing (2) 0 * 3,273,515 0 *
Philip Filippelli (2) 31,058 * 14,942 31,058 *
James C. Furnivall 0 * 1,609 0 *
R. Nelson Griebel 0 * 1,609 0 *
Gregory P. Hughes 0 * 1,194,797 0 *
John M. Hughes (2) 0 * 4,431,238 0 *
Michael Hughes (2) 0 * 4,737,828 0 *
Robert Hughes (2) 5,704 * 621,306 5,704 *
J.B. Ventures LLC 0 * 44,909 0 *
J.H. Whitney III, LP 0 * 744,396 0 *
(J.H.) Whitney Strategic Partners III, LP 0 * 17,879 0 *
Gregory Kopchinsky 0 * 3,982 0 *
Michael R. Lezenski (2) 0 * 1,609 0 *
Bernard Lidestri (2) 59,556 * 250,976 59,556 *
Michael A. Logan (2) 31,263 * 250,976 31,263 *
Michael Lydon (2) 43,070 * 325,524 43,070 *
Eugene McKeown (2) 140,759 * 545,554 140,759 *
Earl Mix 0 * 762 0 *
Morgan Stanley Venture Partners III, 0 * 1,055,797 0 *
LP
Morgan Stanley Venture Investors III, 0 * 101,343 0 *
LP
Morgan Stanley Venture Partners 0 * 46,434 0 *
Entrepreneur Fund, LP
Laurie A. Paternoster (2) 60,000 * 1,894,782 60,000 *
Christopher Reeves Paralysis 0 * 1,069,279 0 *
Foundation
Regency One LLC 0 * 160,488 0 *
Doug Rivard (2) 29,108 * 254,505 29,108 *
Gary St. Jean (2) 63,488 * 77,100 63,488 *
David Tanacea (2) 19,448 * 325,524 19,448 *
Kevin Williamson (2) 34,341 * 250,976 34,341 *
Eric A. Young 0 * 2,033 0 *
The Ryan Anderson Young 0 * 1,609 0 *
Irrevocable Trust DTD 7/28/95
The Connor Erickson Young 0 * 423 0 *
Irrevocable Trust DTD 2/11/98
* Less than 1%.
(1) The selling stockholders may sell any or all of the shares offered
by this prospectus. We do not know when or in what amounts a
selling stockholder may offer shares for sale. Because the selling
stockholders may offer all or some of the shares pursuant to the
offering, we cannot estimate the number of the shares that will be
held by the selling stockholders after completion of the offering.
For purposes of this table, we have assumed that, after completion
of the offering, none of the shares covered by this prospectus
will be held by the selling stockholders. In addition, certain of
the common stock registered is subject to a Trading Day Limit
Agreement which restricts the amount of shares certain selling
stockholders can sell in one day and which provides a limited time
window in which such selling stockholders can enter into an
arrangement that transfers to another any of the consequences of
ownership of those shares.
(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, Inc., and/or any of our other subsidiaries within the
past three years, except that the selling stockholders indicated
have been employed by us and/or Tallan, Inc.
PLAN OF DISTRIBUTION
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, matured on, and was fully paid on, September 30, 2000 and
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 under certain circumstances. 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. 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, the resolution
of indemnification claims, if any. Upon payment of the note maturing on
December 31, 2000 in the principal amount of $50,000,000.00, shares of our
common stock equal in value to any indemnification claims then pending will
remain in escrow until those claims are resolved. Additionally, certain
shares of common stock issued in payment of all three notes is subject to a
Trading Day Limit Agreement between us and certain selling stockholders.
Under this agreement, these selling stockholders can, on any single day on
which Nasdaq is open for trading, sell only up to 10% of the total shares
issued to them upon payment of any of the notes. In addition, these selling
stockholders can, beginning on the date on which they are 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. This prospectus relates to the offer and resale of the
shares of our common stock described herein by all the selling
stockholders.
For purposes hereof, the term "selling stockholders" includes donees,
pledgees, distributees, transferees or other successors-in-interest,
including, without limitation, their respective affiliates and limited or
general partners, all of which are referred to as a group below as
transferees, or certain counterparties to derivatives transactions with the
selling stockholders or transferees. The selling stockholders will act
independently of us in making decisions with respect to the timing, manner
and size of each sale.
The selling stockholders may sell the shares offered hereby from time
to time, subject to the Trading Day Limit Agreement where applicable, in
one or more transactions (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, through the writing of
options on the shares, short sales or any combination thereof. The sale
price to the public may be the market price for our common stock prevailing
at the time of sale, a 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 any particular time.
The selling stockholders may also sell the shares, subject to the
Trading Day Limit Agreement where applicable, 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, subject to the terms of the
Trading Day Limit Agreement where applicable. 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 where applicable,
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 to
disclose material arrangements regarding the plan 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 shares of common
stock covered by this prospectus may be limited in their ability to engage
in market activities with respect to such shares. The selling stockholders,
for example, will be subject to applicable provisions of the Securities
Exchange Act of 1934 and the rules and regulations under it, including,
without limitation, Regulation M, which provisions may restrict certain
activities of the 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 are prohibited from simultaneously engaging in market making and
certain other activities with respect to such 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 this
prospectus constitutes a part prior to March 31, 2001, except in the event
that all of the shares covered by this prospectus have been disposed of
pursuant to and in accordance with the Registration Statement.
LEGAL MATTERS
The validity of the issuance of the common stock covered by this
prospectus will be passed upon for CMGI by Skadden, Arps, Slate, Meagher &
Flom LLP, Boston, Massachusetts, counsel for CMGI in this transaction.
EXPERTS
Our consolidated financial statements as of July 31, 2000 and 1999,
and for each of the years in the three-year period ended July 31, 2000 have
been incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG LLP, independent certified public
accountants, incorporated by reference herein, and upon 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.
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
500 West Madison Street
Chicago, Illinois 60661
and
13th Floor, Seven World Trade Center
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
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 common stock covered by this
prospectus:
o Annual Report on Form 10-K for the fiscal year ended July 31,
2000, filed with the Commission on October 30, 2000, as amended
by the Annual Report on Form 10-K/A filed with the Commission on
December 8, 2000;
o Quarterly Report on Form 10-Q for the fiscal quarter ended
October 31, 2000, filed with the Commission on December 15, 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 Current Report on Form 8-K (November 17, 2000) filed with the
Commission on November 17, 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).
You may request a copy of these filings, at no cost, by writing or
telephoning us using the following contact information:
Director, Investor Relations
CMGI, Inc.
100 Brickstone Square
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.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
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 $ 31,690.61
Legal fees and expenses $ 6,650.00
Accounting fees and expenses $ 25,000.00
Miscellaneous fees and expenses (including listing fees,
if applicable) $ 0
-------------
Total $ 63,340.61
=============
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 provide 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 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
----------- -----------
3.1 Restated Certificate of Incorporation of the Registrant is
incorporated herein by reference to Exhibit 4.1 to
Registrant's Registration Statement on Form S-3 (File No.
333-85047).
3.2 Amendment of Restated Certificate of Incorporation of the
Registrant, dated May 5, 2000 is incorporated herein by
reference to Exhibit 3.1 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended April 30,
2000 (File No. 000-23262).
3.3 Restated By-Laws of the Registrant, as amended, are
incorporated herein by reference to Exhibit 3.3 of the
Registrant's Registration Statement on Form S-4 (File No.
333-92107).
4.1 Certificate of Designations, Preferences and Rights of
Series D Preferred Stock of the Registrant is incorporated
herein by reference to Exhibit 4.1 to the Registrant's
Current Report on Form 8-K dated August 18, 1999 (File No.
000-23262).
4.2 Specimen stock certificate representing the Registrant's
Common Stock is incorporated herein by reference to Exhibit
4.1 of the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1999 (File No. 000-23262).
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
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 Skadden, Arps, Slate, Meagher & Flom LLP
(contained in Exhibit 5.1)
24.1 Power of Attorney*
* Previously filed.
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-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; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information
in the registration statement; provided, however, that paragraphs
(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.
(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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Amendment No. 1 to the 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 29th day of December
2000.
CMGI, INC.
By: /s/ Andrew J. Hajducky III
-----------------------------
Andrew J. Hajducky III, CPA
Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 1 to the registration statement has been signed
by the following persons in the capacities indicated as of December 29,
2000.
Signature Title
--------- -----
/s/ David S. Wetherell* Chairman of the Board, President and
- ------------------------------------ Chief Executive Officer (Principal
David S. Wetherell Executive Officer)
/s/ Andrew J. Hajducky III Chief Financial Officer and Treasurer
- ------------------------------------ (Principal Financial Officer and
Andrew J. Hajducky III, CPA Principal Accounting Officer)
/s/ William H. Berkman* Director
- ------------------------------------
William H. Berkman
/s/ Avram Miller* Director
- ------------------------------------
Avram Miller
/s/ Robert J. Ranalli* Director
- ------------------------------------
Robert J. Ranalli
/s/ Harold F. Enright, Jr.* Director
- ------------------------------------
Harold F. Enright, Jr.
* By:
/s/ Andrew J. Hajducky III
- ------------------------------------
Andrew J. Hajducky III, CPA
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
3.1 Restated Certificate of Incorporation of the Registrant is
incorporated herein by reference to Exhibit 4.1 to
Registrant's Registration Statement on Form S-3 (File No.
333-85047).
3.2 Amendment of Restated Certificate of Incorporation of the
Registrant, dated May 5, 2000 is incorporated herein by
reference to Exhibit 3.1 to the Registrant's Quarterly
Report on Form 10-Q for the fiscal quarter ended April 30,
2000 (File No. 000-23262).
3.3 Restated By-Laws of the Registrant, as amended, are
incorporated herein by reference to Exhibit 3.3 of the
Registrant's Registration Statement on Form S-4 (File No.
333-92107).
4.1 Certificate of Designations, Preferences and Rights of
Series D Preferred Stock of the Registrant is incorporated
herein by reference to Exhibit 4.1 to the Registrant's
Current Report on Form 8-K dated August 18, 1999 (File No.
000-23262).
4.2 Specimen stock certificate representing the Registrant's
Common Stock is incorporated herein by reference to Exhibit
4.1 of the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1999 (File No. 000-23262).
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
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 Skadden, Arps, Slate, Meagher & Flom LLP
(contained in Exhibit 5.1)
24.1 Power of Attorney*
* Previously filed.
EXHIBIT 5.1
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
One Beacon Street
Boston, Massachusetts 02108-3194
Telephone No.: (617) 573-4800
Facsimile No.: (617) 573-4822
December 29, 2000
CMGI, Inc.
100 Brickstone Square
Andover, Massachusetts 01810
Re: CMGI, Inc. Form S-3
Ladies and Gentlemen:
We have acted as special counsel to CMGI, Inc., a Delaware
corporation (the "Company"), in connection with the registration for resale
under the Securities Act of 1933, as amended (the "Act"), of a good-faith
estimate of 19,448,486 shares (the "Shares") of common stock, par value
$0.01 per share ("Common Stock"), of the Company. The Shares may be issued
in payment of some or all of the principal and interest owed on the
promissory notes (the "Notes") issued by the Company in connection with the
Company's purchase of a controlling interest in Tallan, Inc., on March 31,
2000.
This opinion is being furnished in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, we have examined originals
or copies, certified or otherwise identified to our satisfaction, of: (i)
the Registration Statement on the Form S-3 as filed with the Securities and
Exchange Commission (the "Commission") on December 19, 2000 under the Act
and the Amendment No. 1 thereto as filed with the Commission on the date
hereof under the Act (collectively, the "Registration Statement"); (ii) the
Notes, each representing a valid and binding obligation, enforceable in
accordance with its terms; (iii) a specimen certificate representing the
Common Stock; (iv) the Restated Certificate of Incorporation of the
Company, as presently in effect; (v) the Restated By-Laws of the Company,
as presently in effect; and (vi) certain resolutions of the Board of
Directors of the Company relating to the issuance and sale of the Shares
and related matters. We have also examined originals or copies, certified
or otherwise identified to our satisfaction, of such records of the Company
and such other documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of
all natural persons, the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified, conformed or
photostatic copies and the authenticity of the originals of such copies. In
making our examination of documents executed or to be executed by parties
other than the Company, we have assumed that such parties had or will have
the power, corporate or other, to enter into and perform all obligations
thereunder and have also assumed the due authorization by all requisite
action, corporate or other, and execution and delivery by such parties of
such documents and the validity and binding effect thereof on such parties.
As to any facts material to the opinions expressed herein which we have not
independently established or verified, we have relied upon statements and
representations of officers and other representatives of the Company and
others.
Members of our firm are admitted to the bar in the State of
Delaware, and we do not express any opinion as to the laws of any other
jurisdiction.
Based upon and subject to the foregoing, we are of the
opinion that the Shares have been duly authorized and when issued in
payment of the Notes will be validly issued and fully paid and
nonassessable.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement, and to the
incorporation by reference of this opinion in any related abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act. We
also consent to the reference to our firm under the caption "Legal Matters"
in the Registration Statement. In giving this consent, we do not thereby
admit that we are included in the category of persons whose consent is
required under Section 7 of the Act or the rules and regulations of the
Commission.
Very truly yours,
/s/ SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
