SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 29, 2001
CMGI, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-23262 04-2921333
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification No.)
100 Brickstone Square, Andover, MA 01810
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (978) 684-3600
N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events.
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On October 29, 2001, CMGI, Inc. (the "Company") entered into an agreement
with Compaq Computer Corporation ("Compaq") and Compaq Financial Services
Corporation ("CFS"). Compaq agreed to deem its $220.0 million in face amount of
notes payable, plus the accrued interest thereon, issued by the Company paid in
full in exchange for $75.0 million in cash, approximately $7.0 million in shares
of the Company's common stock, and the Company's 49% ownership interest in its
affiliate B2E Solutions, LLC. The number of shares of the Company's common
stock to be issued to Compaq will be determined based on the average closing
price of the Company's common stock during the eleven trading day period
beginning five trading days prior to October 29, 2001.
Additionally as part of this agreement, NaviSite, Inc. ("NaviSite"), a
subsidiary of the Company, agreed to purchase certain equipment, which NaviSite
currently leases from CFS, by issuing a note payable in the face amount of
approximately $35.0 million. CFS and the Company also agreed to loan NaviSite
$20.0 million and $10.0 million, respectively, in cash. In exchange for the
cash infusion, NaviSite will issue notes payable in the face amounts of $20.0
million and $10.0 million to CFS and the Company, respectively, making the total
notes payable issued by NaviSite to CFS and the Company, approximately $55
million and $10 million, respectively. The notes will require payment of
interest only, at 12% per annum, for the first three years from the date of
issuance and then repayment of interest and principal, on a straight-line basis,
over the next three years until maturity on the sixth anniversary of the date of
issuance. At NaviSite's option, it may make interest payments (i) 100% in
shares of NaviSite common stock, in the case of the Company and (ii)
approximately 16.67% in shares of NaviSite common stock through December 2003,
in the case of CFS. Subject to NaviSite stockholder approval, the principal
balance may be convertible into NaviSite common stock at the option of the
holders at any time prior to or at maturity at a rate of $0.26 per share. If
this conversion feature is exercised by CFS, the Company's ownership in NaviSite
would drop below 50% and the Company would no longer consolidate NaviSite's
financial results which currently represent a substantial portion of its
Infrastructure and Enabling Technologies segment. The Company also agreed to
convert its $80.0 million in principal amounts of notes receivable from NaviSite
into approximately 14.5 million shares of NaviSite common stock. The Company
also agreed to convert approximately $16.2 million in other amounts receivable
from NaviSite into approximately 9.9 million shares of NaviSite common stock.
Also as part of the agreement with Compaq and CFS, AltaVista Company
("AltaVista"), a subsidiary of the Company, agreed to purchase certain
equipment, which AltaVista currently leases from CFS, for $20.0 million in cash.
The foregoing description of the agreements by and among the Company,
NaviSite, AltaVista and Compaq and its affiliates does not purport to be
complete and is qualified in its entirety by reference to the full text of such
agreements which are filed as exhibits to this Current Report on Form 8-K and
are incorporated herein by reference.
Item 7. Exhibits.
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(c) Exhibits:
Exhibit No. Description
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10.1 Transaction Agreement dated as of October 29, 2001 by and among the
Company, NaviSite, Inc., AltaVista Company, Compaq Computer Corporation,
Compaq Financial Services Corporation, Compaq Financial Services
Company, and Compaq Financial Services Canada Corporation.
10.2 Purchase Agreement dated as of October 29, 2001 by and among the
Company, Compaq Computer Corporation and B2E Solutions, LLC, relating to
the purchase and sale of 34,490,140 Units of B2E Solutions, LLC.
10.3 Note Purchase Agreement dated as of October 29, 2001 by and among the
Company, NaviSite, Inc. and Compaq Financial Services Corporation.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 30, 2001 CMGI, Inc.
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(Registrant)
By: /s/ George A. McMillan
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George A. McMillan
Chief Financial Officer and Treasurer
EXHIBIT INDEX
Exhibit No. Description
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10.1 Transaction Agreement dated as of October 29, 2001 by and among the
Company, NaviSite, Inc., AltaVista Company, Compaq Computer Corporation,
Compaq Financial Services Corporation, Compaq Financial Services
Company, and Compaq Financial Services Canada Corporation.
10.2 Purchase Agreement dated as of October 29, 2001 by and among the
Company, Compaq Computer Corporation and B2E Solutions, LLC, relating to
the purchase and sale of 34,490,140 Units of B2E Solutions, LLC.
10.3 Note Purchase Agreement dated as of October 29, 2001 by and among the
Company, NaviSite, Inc. and Compaq Financial Services Corporation.