<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 8, 2000
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
COACTIVE MARKETING GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------------
<TABLE>
<S> <C> <C>
DELAWARE 06-134048
(STATE OR OTHER JURISDICTION 415 NORTHERN BOULEVARD (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) GREAT NECK, NEW YORK 11021 IDENTIFICATION NO.)
(516) 622-2800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
---------------------
DONALD A. BERNARD
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY
COACTIVE MARKETING GROUP, INC.
415 NORTHERN BOULEVARD
GREAT NECK, NEW YORK 11021
(516) 622-2800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
---------------------
COPY TO:
JOSEPH S. HELLMAN, ESQ.
KRONISH, LIEB, WEINER & HELLMAN LLP
1114 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036-7798
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: FROM TIME TO
TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX.[ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX.[X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(b) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING.[ ]
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(c)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING.[ ]
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX.[ ]
---------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================================
TITLE OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE (1) AGGREGATE PRICE REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, $.001
PAR VALUE PER SHARE 1,486,731 SHARES (2) $2.75 $4,085,510.25 $1,078.57
============================================================================================================================
</TABLE>
(1) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE. THE
AGGREGATE OFFERING PRICE HAS BEEN DETERMINED PURSUANT TO RULE 457(c)
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, ON THE BASIS OF
THE AVERAGE OF THE HIGH AND LOW SALE PRICES OF THE REGISTRANT'S COMMON
STOCK AS REPORTED ON THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.
AUTOMATED QUOTATION SYSTEM ON MARCH 1, 2000.
(2) INCLUDES 1,236,731 OUTSTANDING SHARES AND 250,000 SHARES ISSUABLE UPON
THE EXERCISE OF OUTSTANDING WARRANTS.
---------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE OR DATES AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
PROSPECTUS
COACTIVE MARKETING GROUP, INC.
1,486,731 SHARES OF COMMON STOCK
This prospectus is being used in connection with the resale by certain of
our stockholders of up to:
- 1,236,731 shares of our outstanding common stock
- 250,000 shares of our common stock issuable upon the exercise of
outstanding warrants
The selling stockholders may sell shares either directly to purchasers or
through brokers, dealers or agents. We will receive no proceeds from the sale of
shares by the selling stockholders, although we will receive up to $625,000 from
the exercise of the outstanding warrants before or in connection with the resale
of the underlying shares.
Our common stock is traded on the Nasdaq SmallCap Market under the symbol
"CMKG." On March 7, 2000, the last reported sale price for our common stock on
the Nasdaq SmallCap Market was $3.375 per share.
INVESTMENT IN OUR COMMON STOCK INVOLVES SUBSTANTIAL RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD 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 OR FOREIGN JURISDICTION WHERE THE OFFER OR SALE IS NOT
PERMITTED.
The date of this prospectus is March 8, 2000.
<PAGE> 3
TABLE OF CONTENTS
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Page
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Where You Can Find More Information..................................2
Special Note Regarding Forward-Looking Statements....................3
About CoActive Marketing Group, Inc..................................4
Risk Factors ........................................................5
Use of Proceeds .....................................................8
Selling Stockholders ............................................... 8
Plan of Distribution ................................................11
Legal Matters .......................................................13
Experts..............................................................13
</TABLE>
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling stockholders are offering to sell, and
seeking offers to buy, shares of our common stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of our common stock. In this
prospectus, "CoActive," "we," "us," and "our" refer to CoActive Marketing Group,
Inc., its predecessors and its consolidated subsidiaries.
<PAGE> 4
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference facilities in Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the SEC
located at 7 World Trade Center, Suite 1300, New York, New York 10048, and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the SEC's
web site at http://www.sec.gov. Our Internet address is
http://www.coactivemarketing.com.
This prospectus is part of a registration statement on Form S-3 under the
Securities Act that we filed with the SEC with respect to the securities offered
by this prospectus. This prospectus does not contain all of the information in
the registration statement and the exhibits filed with it. For further
information about us and the securities offered by this prospectus, reference is
made to the registration statement and the exhibits filed with it. Statements in
this prospectus regarding any document are not necessarily complete, and each
such statement is qualified in all respects by reference to such document filed
with the SEC.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this
offering is completed.
(1) Our Annual Report on Form 10-K for the year ended March 31, 1999;
(2) Our Quarterly Reports on Form 10-Q for the quarters ended June 30,
1999, September 30, 1999 and December 31, 1999;
(3) Our Current Report on Form 8-K filed on November 29, 1999;
(4) Our Current Report on Form 8-K filed on February 23, 2000; and
(5) The description of our common stock contained in our registration
statement on Form 8-A under the Exchange Act, filed June 10, 1992
(File No.000-20394).
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<PAGE> 5
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
CoActive Marketing Group, Inc.
Attn: Donald A. Bernard
415 Northern Boulevard
Great Neck, New York 11021
(516) 622-2800
You should rely on the information incorporated by reference or provided in
this prospectus or any prospectus supplement. Any statement contained in a
document incorporated by reference in this prospectus shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any subsequently filed document
which is also incorporated by reference modifies or supersedes such statement.
Any earlier statement so modified or superseded shall not be deemed, except as
so modified or superseded, to constitute a part of this prospectus.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements deal with our
current plans, intentions, beliefs and expectations and statements of future
economic performance. Statements containing terms such as "believes," "does not
believe," "plans," "expects," "intends," "estimates," "anticipates" and other
phrases of similar meaning are considered to contain uncertainty and are
forward-looking statements.
Forward-looking statements involve known and unknown risks and
uncertainties which may cause our actual results in future periods to differ
materially from what is currently anticipated. We make cautionary statements in
certain sections of this prospectus, including under "Risk Factors." You should
read these cautionary statements as being applicable to all related
forward-looking statements wherever they appear in this prospectus, in the
materials referred to in this prospectus, in the materials incorporated by
reference into this prospectus, or in our press releases.
No forward-looking statement is a guarantee of future performance, and you
should not place undue reliance on any forward-looking statement.
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<PAGE> 6
ABOUT COACTIVE MARKETING GROUP, INC.
We are a full service marketing, sales promotion and interactive new media
services provider organization. We design, develop and implement customized
national, regional and local consumer and trade promotion programs. Our clients
are principally Fortune 500 consumer product companies. Our promotional programs
are designed to enhance the value of our clients' budgeted expenditures and
achieve our clients' specific marketing and promotional objectives. In the
industry, these programs are commonly referred to as "account specific" and or
"co-marketing," as they may target the participation and cooperation of a
specific retail chain or groups of retailers or other sources of distribution to
attain results in the form of increased in-store displays of our clients'
products, related consumer purchases and enhanced product brand name
recognition.
We also provide event marketing, entertainment marketing and in-store
promotional services. Our event marketing programs have included the production
of Wheel of Fortune Wheel Mobile Tour, govWorks.com National Tour, and TNN
Nascar Tour. Our entertainment marketing programs have included the production
of HBO's US Comedy Arts Festival, ABC's Politically Incorrect Live!, Fox Family
Kids Tour, and other similar programs that promote our client's products and or
services in connection with live entertainment. Additional event marketing
activities have focused on establishing Brand recognition of, and marketing the
services offered by, Internet search engines and portals, and other clients of
ours that have an Internet presence. Our in-store marketing activities consist
of live demonstrations, sampling and promoting of our clients' products in
retail chain stores, and national drug and grocery stores, and have included
Barney/Wal-Mart in-store events, a Johnnie Walker Scotch Education Program, and
an MCI Calling Plan Launch.
In addition to traditional marketing and sales promotional services, we
provide interactive new media services consisting of Internet web site
development, electronic sales presentations and computer based training. We are
marketing consultants offering Internet related services to businesses. These
services include designing, hosting and updating web sites promoting our
clients' products, and writing the software that enables our clients to conduct
business over the Internet (e-commerce). Some of the web sites we have designed
include www.starkist.com (Starkist Tuna), www.adamsgolf.com (Adams Golf) and
www.campbellhausfeld.com (Campbell Hausfeld, a leading manufacturer of air
tools, air nailers, air compressors, paint sprayers, pressure washers and
portable generators).
By providing a wide range of both traditional and new media programs and
services, our clients are provided with a total solutions resource for strategic
planning, creative development, production and implementation, including
in-store and special event activities.
Our principal executive offices are located at 415 Northern Boulevard,
Great Neck, New York 11021, and our telephone number is 516-622-2800.
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<PAGE> 7
RISK FACTORS
You should consider carefully the following factors relating to our
business and this offering, in addition to other information set forth elsewhere
in this prospectus and in our Annual Report on Form 10-K and other documents
incorporated in this prospectus by reference, before purchasing shares of our
common stock.
WE HAVE A RECENT HISTORY OF LOSSES.
Although we have been profitable for our fiscal years ended March 31, 1997, 1998
and 1999, due to less than anticipated sales in our current fiscal year, we have
incurred a net loss of $537,387 for the nine-month period ending December 31,
1999. Although we were profitable with net income of $58,291 in the three-month
period ending December 31, 1999 and expect to continue to be profitable, any
future losses could depress the price of our common stock.
OUR DEBT CREATES FINANCIAL AND OPERATING RISK; WE HAVE HAD TO SEEK WAIVERS FROM
OUR LENDER TO BE IN COMPLIANCE WITH THE TERMS OF OUR LOAN AGREEMENT.
As of February 15, 2000, we owed our lender $7,810,000. This debt is secured by
our assets and the capital stock of our operating subsidiaries. Due to our
recent poor performance, we have had to obtain waivers from our lender in each
of our last three fiscal quarters to avoid being in default under the terms of
our loan agreement, which requires us to meet certain financial tests as of the
last date of each quarter. In future periods, if we fail to meet these financial
tests and if our lender does not waive our non-compliance with such tests, our
lender could demand that we repay the entire amount of indebtedness immediately.
If that were to happen and we are unable to find alternative means of financing,
we might be forced to curtail or otherwise cease operations.
WE DEPEND ON KEY PERSONNEL.THE LOSS OF A SINGLE KEY EMPLOYEE COULD HARM OUR
BUSINESS.
Our business is managed by a limited number of key management and operating
personnel. In addition, some of our large customer accounts to a large degree
are based on the relationship between the customer and a particular CoActive
executive or employee. The loss of one of those people could harm our business.
We believe that our future success will depend in large part on our continued
ability to attract and retain highly skilled and qualified personnel. Each of
our key executives is a party to an employment agreement that expires in either
2001, 2002 or 2003.
THE LOSS OF A SINGLE CUSTOMER COULD HARM OUR BUSINESS.
Our principal clients are consumer product manufacturers, generally among the
Fortune 500, which are actively engaged in promoting their products both to
specific retail chains, groups of retailers or other sources of distribution,
and to consumers. A substantial portion of our sales
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<PAGE> 8
have been dependent on one client or a limited concentration of clients. The
loss of one or more of these clients could materially and adversely effect our
business.
OUR REVENUE PATTERNS ARE UNPREDICTABLE.
A significant portion of our revenues are derived from large promotional
programs which originate on a project by project basis. Since these projects are
susceptible to change, delay or cancellation as a result of specific client
financial or other circumstantial issues as well as changes in the overall
economy, our revenue is unpredictable and may vary significantly from period to
period.
OUR BUSINESS IS HIGHLY COMPETITIVE.
The market for promotional services is highly competitive, with hundreds of
companies claiming to provide various services in the promotion industry.
Certain of these companies have greater financial and marketing resources than
we do. We believe that we can compete on the basis of the quality and the degree
of comprehensive service which we provide to our clients. However, if our
customers decide to utilize the services of our competitors, our business could
be harmed.
OUR GROWTH STRATEGY INVOLVES RISKS.
An integral part of the our growth strategy involves our acquisition of
complementary businesses and entering into strategic relationships. In addition
to the risk that acquired businesses may not perform as expected, risks we may
encounter in connection with our acquisition strategy include:
- difficulties in integrating the operations, information systems and
personnel of the company we acquire;
- diversion of the attention of our executives from other business
concerns;
- potentially dilutive issuances of our securities;
- amortization of expenses related to goodwill and other intangible
assets; and
- the incurrence of additional debt.
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<PAGE> 9
SHAREHOLDERS MAY BE UNABLE TO EXERCISE CONTROL BECAUSE MANAGEMENT OWNS A LARGE
PERCENTAGE OF OUR COMMON STOCK.
As of February March 1, 2000, our executive officers and directors beneficially
owned approximately 46.2% of our common stock. As a result, our executive
officers and directors will have significant influence to :
- elect or defeat the election of our directors;
- amend or prevent the amendment of our certificate of incorporation or
bylaws;
- effect or prevent a merger, sale of our assets or other significant
corporate transaction; and
- control the outcome of any other matter submitted to shareholders for a
vote.
Management's stock ownership may also delay, prevent or discourage a potential
acquirer from making a tender offer or otherwise attempting to obtain control of
CoActive. In addition, our loan agreement requires our executive officers to
continue to maintain a certain minimum percentage of beneficial ownership of our
common stock during the term of the loan agreement.
FUTURE SALES OF OUR COMMON STOCK BY EXISTING STOCKHOLDERS MAY ADVERSELY AFFECT
THE OUR STOCK PRICE.
Our stock price will likely decline if the supply of our stock being sold in the
open market exceeds the demand for our stock. Substantially all of our shares of
Common Stock, other than shares held by our management, are eligible for sale in
the open market.
BECAUSE WE DO NOT INTEND TO PAY DIVIDENDS, YOUR ABILITY TO PROFIT FROM AN
INVESTMENT IN OUR COMMON STOCK WILL DEPEND SOLELY ON AN INCREASE IN MARKET
PRICE.
We have never declared or paid any cash dividends on our common stock. Payment
of any future dividends will depend on our earnings and capital requirements and
other factors our directors considers appropriate. We intend to retain earnings,
if any, to finance the development and expansion of our business, and do not
anticipate paying any dividends in the foreseeable future. In addition, the
terms of our loan agreement impose limitations on the payment of dividends on
our common stock.
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<PAGE> 10
USE OF PROCEEDS
We will receive no proceeds from the sale of shares by selling
stockholders.
We will receive $2.50 per share from the exercise of outstanding warrants
to purchase an aggregate of 250,000 shares which may be resold pursuant to this
prospectus. If all of these warrants were exercised we would receive gross
proceeds of $625,000. There is no assurance that any of the warrants will be
exercised. Any proceeds from the exercise of the warrants will be added to our
working capital and used for general corporate purposes.
SELLING STOCKHOLDERS
The table on the following page provides, as of March 1, 2000, information
regarding the number and percentage of shares held by the selling stockholders
before and after this offering. The calculations are based on 5,015,981
outstanding shares. If an * appears in a column next to a stockholder's name,
that stockholder owns less than one percent of our common stock. Except as
indicated below, each of the selling stockholders acquired the shares to be sold
by that person in a private placement we completed January 31, 2000, or will
acquire such shares upon the exercise of warrants that were sold in that private
placement. Unless disclosed in the footnotes to the table, no selling
stockholder has held any position or office or had any other material
relationship with us during the past three years.
For purposes of this table, a person is deemed to be the beneficial owner
of our common stock if such person:
- has or shares the power to vote or direct the voting of the common
stock or to dispose or direct the disposition of the common stock; or
- has the right to acquire beneficial ownership of the common stock
within 60 days.
Accordingly, more than one person may be deemed to be a beneficial owner of the
same securities. Except as otherwise indicated in a footnote to this chart, each
stockholder has sole voting and dispositive power with respect to the shares of
common stock he or she holds. The shares of common stock of each stockholder do
not include shares held by that person's spouse or children.
The number of shares offered for sale for the account of a stockholder and
the number and percentage of shares owned by a stockholder before this offering
includes the shares of common stock held by the stockholder as of the date of
this prospectus and shares we are registering that are issuable upon the
exercise of the warrants. The number and percentage of shares beneficially owned
by each stockholder after this offering assumes the sale of all shares offered
for sale for the account of that stockholder.
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<PAGE> 11
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Beneficially Owned Prior
to This Offering
----------------
--------------------------
Number of Percent of Offered Beneficially Owned
Name of Selling Stockholder Shares Shares for Sale(1) After This Offering
- --------------------------- --------- ----------- -------- -------------------
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
JMS LLC, as custodian FBO
Sara Barrett IRA (2) 14,700 * 12,000 2,700
- ------------------------------------------------------------------------------------------------------------------
JMS LLC, as custodian FBO
Sara Barrett Money
Purchase Plan(2) 3,000 * 3,000 0
- ------------------------------------------------------------------------------------------------------------------
JMS LLC, as custodian
FBO William J. Barrett
IRA(3) 37,500 * 37,500 0
- ------------------------------------------------------------------------------------------------------------------
JMS LLC, as custodian
FBO Herbert M. Gardner
IRA-Roll(4) 46,250 * 33,750 12,500
- ------------------------------------------------------------------------------------------------------------------
The Gardner Family
Foundation, Inc.(5) 5,875 * 3,375 2,500
- ------------------------------------------------------------------------------------------------------------------
Mary K. Gardner(6) 23,750 * 11,250 12,500
- ------------------------------------------------------------------------------------------------------------------
Ellen M. Noreen and
Clifford M. Noreen, as joint
tenants 25,750 * 18,750 7,000
- ------------------------------------------------------------------------------------------------------------------
Special Situations Private
Equity Fund, L.P.(7) 630,375 12.1% 630,375 0
- ------------------------------------------------------------------------------------------------------------------
OG Holding Corporation
Liquidation Trust (8) 706,731 14.1% 706,031 0
- ------------------------------------------------------------------------------------------------------------------
Brian Murphy (9) 30,000 * 30,000 0
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</TABLE>
(1) The number of shares being offered by each selling stockholder includes
shares issuable upon the exercise of warrants, as follows: JMS LLC,
as custodian FBO Sara Barrett IRA, 4,000; JMS LLC, AS CUSTODIAN FBO
SARA BARRETT MONEY PURCHASE PLAN, 1,000; JMS LLC, AS CUSTODIAN FBO
WILLIAM J. BARRETT IRA, 12,500; JMS LLC, as custodian FBO Herbert M.
Gardner IRA-Roll, 11,250; The Gardner Family Foundation, Inc.,
1,125; Mary K. Gardner, 3,750; Ellen M. Noreen and Clifford M.
Noreen, as joint tenants, 6,250; and Special Situations Private
Equity Fund, L.P., 210,125.
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<PAGE> 12
(2) Sara Barrett is the wife of William J. Barrett, identified in
footnote (3) below. Mrs. Barrett disclaims beneficial ownership of
the shares of common stock held by her husband.
(3) Mr. Barrett is a Senior Vice President of Janney Montgomery Scott
Inc., an investment banking firm which provides financial advisory
services to the Company. In addition to the shares held in this
account, Mr. Barrett beneficially owns 18,000 shares of our common
stock held in a separate retirement account, and directly owns
immediately exercisable warrants to purchase 37,500 shares of our
common stock. Mr. Barrett disclaims beneficial ownership of the
shares of the common stock held by his wife.
(4) Herbert M. Gardner is a Director of ours and a Senior Vice President
of Janney Montgomery Scott Inc., an investment banking firm which
provides us with financial advisory services. In addition to the
shares beneficially held by Mr. Gardner in this IRA account, Mr.
Gardner beneficially owns 5,000 shares of common stock held in a
different retirement account and directly owns 16,179 shares of
common stock. Mr. Gardner also owns warrants to purchase 37,500
shares of common stock and options to purchase 20,625 shares of
common stock. Mr. Gardner disclaims beneficial ownership of the
shares held by his wife, Mary K. Gardner, and by The Gardner Family
Foundation, Inc., both of whom are selling stockholders listed in
the table above.
(5) This is a charitable organization, of which Mr. Herbert M. Gardner,
one of our directors, is President and a board member, and of which
Mary K. Gardner, Mr. Gardner's wife and a selling stockholder, is
also a director.
(6) Mary K. Gardner is the wife of our director Herbert M. Gardner and
disclaims beneficial ownership of our shares of common stock held by
him. Ms. Gardner also disclaims beneficial ownership of the shares
of common stock held by The Gardner Family Foundation, Inc., of
which she is a director.
(7) The general partner of this entity is MG Advisors, L.L.C. Austin W.
Marxe and David M. Greenhouse control, and are the principal owners of
MG Advisors.
(8) Thomas E. Lachenman who is a director of ours, is the trustee of, and
owns a 59.1% interest in, OG Holding Corporation Liquidation Trust.
Until September 14, 1999, Mr. Lachenman was a director, and the
President and Chief Executive Officer of our subsidiary Optimum Group,
Inc. These shares were acquired by this trust in connection with our
purchase of the assets of OG Holding Corporation, of which Mr.
Lachenman was a majority shareholder. Mr. Lachenman is also the holder
of immediately exercisable options to purchase 6,773 shares of our
common stock.
(9) Mr. Murphy is a director of ours and the Chief Executive Officer of our
subsidiary, U.S. Concepts, Inc., a Delaware corporation. Mr. Murphy
received these shares of common stock in connection with our purchase
of the assets of Murphy Liquidating Corporation (then known as U.S.
Concepts, Inc., a New York corporation) of which he was the sole
shareholder.
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<PAGE> 13
PLAN OF DISTRIBUTION
Sales by selling stockholders may be made pursuant to this prospectus from
time to time as each selling stockholder determines. Sales may be made directly
to purchasers or through brokers, dealers or agents. Brokers, dealers or agents
who participate in sales of shares may receive discounts, concessions or
commissions from the sellers or purchasers.
Since the selling stockholders and any participating brokers, dealers or
agents may be deemed to be underwriters within the meaning of the Securities
Act, any profits they receive on the sale of the shares and any related
discounts, commissions or concessions may be deemed to be underwriting discounts
and commissions under the Securities Act.
The shares may be sold in one or more transactions:
- on any exchange on which the shares may be listed at the time of
the sale
- in the over-the-counter markets
- in negotiated transactions other than on such exchange or in the
over-the counter market; or
- through the writing of options
The selling stockholders may sell the shares from time to time in one or
more transactions at:
- fixed prices
- prevailing market prices at the time of sale
- varying prices determined at the time of sale; or
- negotiated prices
In addition, subject to applicable state and foreign laws, the shares which
qualify for sale under an applicable exemption from registration under the
Securities Act may be sold pursuant to the exemption rather than this
prospectus.
To the best of our knowledge, there are currently no plans, arrangements or
understandings regarding the sale of shares between any of the selling
stockholders and any
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<PAGE> 14
broker, dealer, agent or underwriter. There is no certainty that any selling
stockholder will sell any or all of the shares offered by it under this
prospectus or that any selling stockholder will not transfer, devise or donate
such shares by means not described in this prospectus.
The selling stockholders and any other person participating in the offering
will be subject to applicable provisions of the Securities Exchange Act and the
rules and regulations thereunder, which provisions may limit the timing of
purchases and sales of the shares by the selling stockholders. These
restrictions may affect the marketability of the shares and the ability of any
person to engage in market-making activities with respect to the shares.
We will pay substantially all of the expenses incidental to the
registration, offering and sale of the shares covered by this prospectus, except
expenses for discounts, commissions and concessions of brokers, dealers and
agents participating in sales.
We have entered into an indemnification agreement with each of the selling
stockholders which provides that we and each selling stockholder will be
indemnified by the other against certain liabilities, including certain
liabilities under the Securities Act, or will be entitled to contribution in
connection with any such liabilities.
We will make copies of this prospectus available to the selling
stockholders. At or before the time of any sale of shares by a selling
stockholder pursuant to this prospectus, the selling stockholder must deliver a
copy of this prospectus to the purchaser.
-12-
<PAGE> 15
LEGAL MATTERS
The legality of the securities offered by this prospectus has been passed
upon for us by Kronish Lieb Weiner & Hellman LLP, 1114 Avenue of the Americas,
New York, New York 10036-7798. Joseph S. Hellman, a partner of Kronish Lieb
Weiner & Hellman LLP and a director of CoActive, directly owns 12,000 shares of
our Common Stock. In addition, Kronish Lieb Weiner & Hellman LLP owns of
record and beneficially, and Mr. Hellman may be deemed to own beneficially,
options to purchase 20,625 shares of our Commons Stock, of which 17,188 are
immediately exercisable and 3,438 become exercisable on April 30, 2000. An equal
number of these options are exercisable at prices of $3.375, $4.00 and $10.00.
EXPERTS
Our consolidated financial statements appearing in our Annual Report (Form
10-K) for the year ended March 31, 1999, have been audited by KPMG LLP,
independent certified public accountants, as set forth in their report thereon
included therein and incorporated in this prospectus by reference. Such
consolidated financial statements are incorporated by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
-13-
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
The following statement sets forth the expenses payable in connection with
this Registration Statement (estimated except for the registration fee), all of
which will be borne by CoActive:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee......................$ 1,078.57
Legal fees and expenses............................................$ 15,000.00
Accountant's fees and expenses.....................................$ 5,000.00
Miscellaneous (including printing and distribution costs)..........$ 5,000.00
Total..............................................................$ 26,078,57
===============
</TABLE>
ITEM 15. Indemnification of Directors and Officers.
The Delaware General Corporation Law (the "DGCL") permits a corporation to
indemnify its directors and officers (among others) against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with any action, suit or proceeding
brought (or threatened to be brought) by third parties, if such directors or
officers acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made for expenses (including attorneys'
fees) actually and reasonably incurred by directors and officers in connection
with the defense or settlement of such action if they had acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged liable to the corporation unless and only to the extent that the Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses. The DGCL further provides that, to the
extent any director or officer has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in this paragraph, or in
defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
CoActive's Certificate of Incorporation provides that the directors of the
corporation shall be entitled to the benefits of all limitations on the
liability of directors generally that are now or hereafter become available
under the DGCL. CoActive's Certificate of Incorporation provides
-14-
<PAGE> 17
further that without limiting the generality of the foregoing, no director of
the corporation shall be liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, or (iv) for any transaction from which the director
derived an improper personal benefit.
Article VII of CoActive's By-laws provides in general that CoActive shall
have the power to indemnify any officer or director expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement, actually and
reasonably incurred by such officer or director, to the fullest extent permitted
by law in connection with and including those instances in which such
indemnification as deemed by a majority of a quorum of directors who were not
parties to such action, suit or proceeding or by independent legal counsel,
after due investigation, to be in the best interests of CoActive, with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, brought or threatened to be brought
against him or her by reason of his or her performance as a director, officer,
employee or agent of CoActive or any of its subsidiaries, or in any other
capacity on behalf of CoActive or any of its subsidiaries. Article VII of
CoActive's By-laws also provides that CoActive may advance expenses incurred by
an officer or director in defending a civil, criminal, administrative or
investigative action, suit or proceeding as authorized by CoActive's Board of
Directors upon receipt of an undertaking, by or on behalf of such director or
officer, to repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the corporation as authorized by law.
CoActive has indemnification insurance under which directors and officers are
insured against certain liability that may occur in their capacity as such.
ITEM 16. Exhibits and Financial Data Schedules.
(a) Exhibits
<TABLE>
<S> <C> <C>
4.1 -- Form of Warrant issued to selling stockholders.
5.1 -- Opinion of Kronish, Lieb, Weiner & Hellman LLP.
23.1 -- Consent of Kronish, Lieb, Weiner & Hellman LLP is contained in
their opinion filed as Exhibit 5.1 to this registration statement.
23.2 -- Consent of KPMG LLP
24.1 -- Power of Attorney is set forth on the signature page of this
registration statement.
</TABLE>
(b) Financial Data Schedules
-15-
<PAGE> 18
Financial Data Schedules are not required to be filed since all financial
statements have been previously included in filings with the Commission.
-16-
<PAGE> 19
ITEM 17. Undertakings.
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;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this 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 this 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 a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed or furnished to the Commission
by CoActive pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, 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.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating
-17-
<PAGE> 20
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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by 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
Securities Act and will be governed by the final adjudication of such issue.
-18-
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Great Neck, State of New York, on this 29th day of
February, 2000.
CoACTIVE MARKETING GROUP, INC.
By: /s/ Donald A. Bernard
------------------------------------
Donald A. Bernard
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
authorizes Donald A. Bernard and John P. Benfield, or either of them, as
attorney-in-fact to sign and file in each capacity stated below, all amendments
and post-effective amendments to this registration statement.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
Principal Executive Officer:
President and
Chief Executive Officer February 29, 2000
/s/ John P. Benfield
- --------------------------------------
John P. Benfield
Principal Financial and Accounting
Officer:
Executive Vice President
/s/ Donald A. Bernard and Chief Financial February 29, 2000
- -------------------------------------- Officer
Donald A. Bernard
Other Directors:
/s/ Paul A. Amershadian
- -------------------------------------- Director February 29, 2000
Paul A. Amershadian
</TABLE>
-19-
<PAGE> 22
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Joseph S. Hellman
- -------------------------------------
Joseph S. Hellman Director March 6, 2000
/s/ Thomas E. Lachenman
- -------------------------------------
Thomas E. Lachenman Director February 29, 2000
/s/ Brian Murphy
- -------------------------------------
Brian Murphy Director February 29, 2000
</TABLE>
-20-
<PAGE> 23
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Exhibit
- ------ -------
<S> <C>
4.1 -- Form of Warrant issued to selling stockholders.
5.1 -- Opinion of Kronish, Lieb, Weiner & Hellman LLP.
23.1 -- Consent of Kronish, Lieb, Weiner & Hellman LLP is contained
in their opinion filed as Exhibit 5.1 to this registration
statement.
23.2 -- Consent of KPMG LLP.
24.1 -- Power of Attorney is set forth on the signature page of this
registration statement.
</TABLE>
-21-
<PAGE> 1
Exhibit 4.1
THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR STATE SECURITIES LAW AND MAY NOT
BE TRANSFERRED OR SOLD UNLESS (I) REGISTERED UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS OR (II) AN EXEMPTION FROM
REGISTRATION IS AVAILABLE AT THE TIME OF SUCH TRANSFER OR SALE.
WARRANT, dated as of January 31, 2000, issued by COACTIVE MARKETING
GROUP, INC., a Delaware corporation (the "Company") with principal offices at
415 Northern Boulevard, Great Neck, New York 11021, to__________________________
with an address of _____________________________________ (the "Holder") or
registered assigns.
The Company hereby agrees as follows:
1. Grant. The Company hereby grants to the Holder, the right,
privilege and option to purchase from the Company _______ shares (the "Warrant
Shares") of common stock, par value $.001 per share ("Common Stock"), at the
exercise price of $2.50 per share (the "Exercise Price"), all subject to the
terms and upon the conditions set forth herein.
2. Exercise of Warrant. This Warrant is exercisable commencing on the
date hereof and will expire at 5:00 p.m., New York City time, five years after
the date hereof (the "Expiration Date").
3. Method of Exercise of Warrant. The Holder may exercise this
Warrant at or prior to its expiration on the Expiration Date. This Warrant may
be exercised by the Holder as follows:
(a) This Warrant may be exercised in whole at any time, or in part
from time to time, by delivery of this Warrant to the Company at its principal
place of business, accompanied by a check payable to the Company in payment of
the Exercise Price for the number of Warrant Shares as to which this Warrant is
exercised.
(b) Upon clearance of the check delivered pursuant to Section
3(a), the Company shall make immediate delivery of the shares of Common Stock as
to which this Warrant is exercised, provided that if any law or regulation
requires the Company to take any action with respect to such shares of Common
Stock before the issuance thereof, then the date of delivery of such shares
shall be extended for the period necessary to take such action. In case of the
exercise of this Warrant as to less than all of the Warrant Shares, the Company
shall cancel
<PAGE> 2
this Warrant upon surrender hereof and shall execute and deliver to the Holder a
new Warrant of like tenor and date for the balance of the Warrant Shares.
4. Payment of Taxes. (a) The Company shall pay all documentary
stamp taxes attributable to the issuance of shares of Common Stock upon the
exercise of this Warrant; provided, however, that the Company shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any Warrants, warrant certificates or
certificates for Warrant Shares purchased pursuant hereto in a name other than
that of the Holder, and the Company shall not be required to issue or deliver
such Warrants, warrant certificates or other certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
(b) The Company's obligation to deliver Warrant Shares upon the
exercise of this Warrant or any portion thereof shall be subject to the payment
by the Holder of any applicable federal, state and local withholding tax.
5. Anti-Dilution Provisions.
(a) Exercisable Price Adjustment Formulas. If and whenever after
the date of this Warrant, the Company shall issue or sell any shares of Common
Stock (except as provided in subsection (f) of this Section 5) for a
consideration per share less than the Exercise Price in effect immediately prior
to the time of issue or sale, then forthwith the Exercise Price shall be reduced
to the price (calculated to the nearest tenth of a cent) determined by dividing
(1) an amount equal to the sum of (aa) the number of shares of Common Stock
outstanding immediately prior to such issue or sale (assuming the conversion of
all securities convertible into shares of Common Stock) multiplied by the
Exercise Price in effect immediately prior to such issue or sale, and (bb) the
consideration, if any, received and deemed received by the Company upon such
issue or sale, by (2) the total number of shares of Common Stock outstanding and
deemed outstanding immediately after such issue or sale. No adjustment of the
Exercise Price, however, shall be made in an amount less than $.01 per share,
but any such lesser adjustment shall be carried forward and shall be made at the
time and together with the next subsequent adjustment which together with any
adjustments so carried forward shall amount to $.01 per share or more. Anything
in the foregoing to the contrary notwithstanding no adjustment shall be made in
the Exercise Price in the event of sale within 60 days after the date hereof of
no more than 125,000 shares of Common Stock at a price of no less than $2.00 per
share.
(b) Constructive Issuances of Stock, Convertible Securities;
Rights and Options; Stock Dividends. For the purposes of subsection (a) of this
Section 5, the following provisions (1) to (7), inclusive, shall also be
applicable:
a. In case at any time subsequent to the date hereof, the Company
shall in any manner grant any rights to subscribe for or to purchase, or
any options for the
<PAGE> 3
purchase of, shares of Common Stock or any stock or securities convertible
into or exchangeable for shares of Common Stock (such convertible or
exchangeable stock or securities being hereinafter called "Convertible
Securities") whether or not such rights or options or the right to convert
or exchange any such Convertible Securities are immediately exercisable,
and the consideration per share for which shares of Common Stock are issued
or sold upon the exercise of such Convertible Securities (determined by
dividing (a) the total amount, if any, received or receivable by the
Company as consideration for the granting of such rights or options, plus
the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the exercise of such rights or options, plus, in the
case of any such rights or option, which relate to such Convertible
Securities, the minimum aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities (and, if
such convertible securities constitute obligations of the Company, the
principal amount of such obligations so converted) and upon the conversion
or exchange thereof, by (b) the total maximum number of shares of Common
Stock issuable upon the exercise of such rights or options or upon the
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such rights or options) shall be less than the Exercise Price
in effect immediately prior to the time of the granting of such rights or
options, then the total maximum number of shares of Common Stock issuable
upon the exercise of such rights or options (or upon conversion or exchange
of the total maximum amount of such Convertible Securities issuable upon
the exercise of such rights or options) shall be deemed to be outstanding
and to have been issued for such price per share. Except as provided in
Clause (3) below, no further adjustments of the Exercise Price shall be
made upon the actual issuance of such shares of Common Stock or of such
Convertible Securities upon exercise of such rights or options or upon the
actual issue of such shares of Common Stock upon conversion or exchange of
such Convertible Securities.
b. In case at any time the Company shall in any manner issue or
sell any Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the price per share for
which shares of Common Stock are issuable upon such conversion or exchange
(determined by dividing (a) the total amount received or receivable by the
Company as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the conversion or exchange thereof, by
(b) the total maximum number of shares which would be issuable upon the
conversion or exchange of all such Convertible Securities) shall be less
than the Exercise Price in effect immediately prior to the time of such
issue or sale, then the total maximum number of shares of Common Stock
issuable upon conversion or exchange of all such Convertible Securities
shall (as of the date of the issue or sale of such Convertible Securities)
be deemed to be outstanding and to have been issued for such price per
share; except as otherwise specified in Clause (3) below, no further
adjustments of the Exercise Price shall be made upon the actual issuance of
such shares of Common Stock upon conversion or exchange of such Convertible
Securities.
<PAGE> 4
c. If the purchase price provided for in any right or option
referred to in Clause (1) of this subsection (b) of this Section 5, or the
additional consideration, if any, payable upon the conversion or exchange
of any Convertible Securities referred to in Clause (1) or (2) of this
subsection (b) of this Section 5, or the rate at which any Convertible
Securities referred to in Clauses (1) and (2) of this subsection (b) of
this Section 5 are convertible into or exchangeable for shares of Common
Stock, shall change or a different purchase price or rate shall become
effective at any time or from time to time (other than under or by reason
of provisions designed to protect against dilution) then, upon such change
becoming effective, the Exercise Price then in effect at the time of such
event shall forthwith be increased or decreased to such exercise price as
would have obtained had the rights, options or Convertible Securities still
outstanding provided for such changed purchase price, additional
compensation or rate of commission or exchange, as the case may be, at the
time initially granted, issued or sold. On the expiration of any such
option or right or the termination of any such right to convert or exchange
such Convertible Securities, the Exercise Price then in effect hereunder
shall forthwith be increased to such Exercise Price as would have obtained
at the time of such expiration or termination had such option, right or
convertible securities never been issued. If the purchase price provided
for in any right or option referred to in Clause (1) of subsection (b) of
this Section 5, or the additional consideration payable upon the exchange
or conversion of any Convertible Securities referred to in Clause (1) and
(2) of this Section 5, or the rate at which any Convertible Securities
referred to in Clauses (1) and (2) of subsection (b) of this Section 5 are
convertible into or exchangeable for shares of Common Stock, shall decrease
at any time under or by reason of provisions with respect thereto designed
to protect against dilution, then in the case of the delivery of shares of
Common Stock upon the exercise of any such right or option or upon
conversion or exchange of any such right or option or upon conversion or
exchange of any such Convertible Securities, the Exercise Price then in
effect hereunder shall forthwith be decreased to such Exercise Price as
would have obtained had the adjustments made upon issuance of such right or
option or Convertible Securities been made upon the basis of the issuance
of (and the total consideration computed in accordance with Clause (1) or
(2) of this subsection (b) of Section 5, as the case may be, received for)
the shares of Common Stock delivered as aforesaid.
d. In case of the issuance of shares of Common Stock or
Convertible Securities of the Company as a dividend or distribution upon
any shares of Common Stock of the company, such shares of Common Stock or
Convertible Securities, as the case may be, issuable in payment of such
dividend or distribution shall be deemed to have been issued or sold
without consideration.
e. In case at any time any shares of Common Stock or Convertible
Securities or any rights or options to purchase any such shares of Common
Stock or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be
<PAGE> 5
deemed to be the amount payable to the Company therefor, without deduction
therefrom of any expenses incurred or any underwriting or selling
commissions or concessions paid by the Company in connection therewith and
plus any underwriting or selling discounts allowed by the Company in
connection therewith. In case any shares of Common Stock or Convertible
Securities or any rights or options to purchase any such shares of Common
Stock or Convertible Securities shall be issued or sold for a consideration
other than cash, the amount of the consideration other than cash payable to
the Company shall be deemed to be the fair value of such consideration as
determined by the Company's Board of Directors (the "Board"), without
deduction therefrom of any expenses incurred or any underwriting or selling
commissions or concessions paid by the Company in connection therewith and
plus any underwriting or selling discounts allowed by the Company in
connection therewith. In case any shares of Common Stock or Convertible
Securities shall be issued in connection with any merger of another
corporation into the Company, the amount of consideration therefor shall be
deemed to be the fair value, as determined by the Board, of such portion of
the assets of such merged corporation as such Board shall determine to be
attributable to such shares of Common Stock, Convertible Securities, rights
or options, as the case may be.
f. In case at any time the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them (a) to
receive a dividend or other distribution payable in shares of Common Stock
or in Convertible Securities, or (b) to subscribe for or purchase shares of
Common Stock or Convertible Securities, then such record date shall be
deemed to be the date of the issue or sale of the shares of Common Stock
deemed to have been issued or sold upon the declaration of such dividend or
the making of such other distribution or the date of the granting of such
right or subscription or purchase, as the case may be.
g. The number of shares of Common Stock outstanding at any given
time shall include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall not be considered an
issue or sale of shares of Common Stock for the purposes of subsection (a)
of this Section 5.
(c) Stock Splits and Reverse Splits. In case at any time the
Company shall subdivide its outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of shares
purchasable pursuant to this Warrant immediately prior to such subdivision shall
be proportionately increased, and conversely, in case at any time the Company
shall combine its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination shall
be proportionately increased and the number of shares of Common Stock
purchasable upon the exercise of this Warrant immediately prior to such
combination shall be proportionately reduced. Except as provided in this
subsection (c), no adjustment in the exercise price and no change in the number
of Warrant
<PAGE> 6
Shares so purchasable shall be made pursuant to this Section 5 as a result of or
by reason of any such subdivision or combination.
(d) Effect of Reorganization and Assets Sales. If any capital
reorganization or reclassification of the capital stock of the Company, or
consolidation of the Company with or merger of the Company into another
corporation, or the sale of all or substantially all of its assets to another
corporation, shall be effected in such a way that holders of shares of Common
Stock shall be entitled to receive stock, securities or assets with respect to
or in exchange for shares of Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby the Holder of this Warrant shall
thereafter have the right to receive upon the basis and upon their terms and
conditions specified herein and in lieu of the shares of the shares of Common
Stock of the Company immediately theretofore receivable upon the exercise of
this Warrant, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
Common Stock equal to the number of shares of such stock immediately theretofore
so receivable upon exercise had such reorganization, reclassification,
consolidation, merger or sale not taken place, and in any such case appropriate
provision shall be made with respect to the rights and interests of such holder
to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Exercise Price and of the number of shares issuable upon
exercise) shall thereafter be applicable, as nearly as may be, in relation to
any shares of stock, securities or assets thereafter deliverable upon the
exercise of this Warrant. The Company shall not effect any such consolidation,
merger or sale unless prior to or simultaneously with the consummation thereof
the successor corporation (if other than the company) resulting from such
consolidation or merger, or of the corporation purchasing such assets shall
assume by written instrument executed and mailed or delivered to the Holder, the
obligation to deliver to the Holder such shares of stock, securities or assets
as, in accordance with the foregoing provisions the Holder may be entitled to
receive, and containing the express assumption of such successor corporation of
the performance and observance of the provisions of this Warrant to be performed
and observed by the Company and of all liabilities and obligation of the Company
hereunder.
(e) Accountants' Certificate. Upon each adjustment of the Exercise
Price and upon each change in the number of Warrant Shares, then and in each
such case, the Company will promptly obtain a certificate of a firm of
independent certified public accountants of recognized standing selected by the
Board, who may be the regular auditors of the company, stating, the adjusted
Exercise Price and the new number of Warrant Shares so issuable, or specifying
the other shares of stock, securities or assets and the amount thereof
receivable as a result of such change in rights, and setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is
based. The Company will promptly mail a copy of such accountant's certificate to
the Holder, which certificate shall be conclusive evidence of the correctness of
the computation with respect to any such adjustment of the Exercise Price and
any such change in the number of such Warrant Shares so issuable.
<PAGE> 7
(f) No Adjustments Required. Notwithstanding anything herein to
the contrary, there shall be no adjustment in the Exercise Price in connection
with (i) the grant of any option, or the exercise of any option granted under an
employee benefit plan or stock option plan or (ii) upon the exercise of any
Convertible Security outstanding on the date of this Warrant.
6. Restriction on Transfer of Warrants. The Holder hereof, by the
Holder's acceptance hereof, hereby represents and warrants to, and agrees with,
the Company that (a) the Holder has been informed that neither this Warrant nor
the Warrant Shares have been registered for sale under any federal or state
securities laws and that this Warrant is being offered and sold to the Holder
and, upon the exercise of this Warrant, the Warrant Shares will be sold to the
Holder, pursuant to an exemption from registration under the Securities Act, or
pursuant to a registration statement filed by the Company pursuant to
registration rights granted in connection with the issuance of this Warrant; (b)
the Holder is an "accredited investor" (as defined in Rule 501(a) of Regulation
D under the Securities Act) and is acquiring this Warrant and, if the exercise
of this Warrant is not registered under the Securities Act and applicable state
securities laws, will acquire the Warrant Shares for the Holder's own account
for investment only and not with a view to distribution; (c) this Warrant and
the Warrant Shares may not be transferred or sold, in whole or in part, unless
such transfer or sale is registered under the Securities Act and applicable
state securities laws or exempt from such registration; and (d) if the exercise
of this Warrant is not registered under the Securities Act and applicable state
securities laws, prior to the exercise of this Warrant, the Holder shall provide
to the Company in writing such information as the Company may reasonably request
to establish that the exercise of this Warrant by the Holder is exempt from
registration under the Securities Act and applicable state securities laws.
If a transfer of this Warrant is permitted pursuant to the
preceding paragraph of this Section 6, upon transfer, the Holder shall execute
and deliver to the Company a completed assignment in a form reasonably
satisfactory to the Company. Upon the Company's determination that the
requirements for transfer of this Warrant have been satisfied, receipt of the
completed and duly executed Assignment, and surrender of this Warrant, the
Company shall, as promptly as practicable, deliver to the transferee a new
Warrant of like tenor and date for that portion of the Warrant Shares as to
which this Warrant is being transferred and shall deliver to the Holder a new
Warrant of like tenor and date for the balance, if any, of the Warrant Shares.
7. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of Common Stock upon the
exercise of this Warrant, nor shall it be required to issue scrip or pay cash in
lieu of fractional interests, it being the intent of the parties that all
fractional interests shall be eliminated by the Company by rounding down to the
nearest whole number of shares of Common Stock.
8. Reservation of Securities. The Company shall at all times
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of this Warrant, such number of
shares Common Stock as shall be issuable upon the exercise hereof. The Company
covenants and agrees that, upon exercise of this Warrant
<PAGE> 8
for and payment of the exercise price therefor, all shares of Common Stock
issuable upon such exercise shall be duly authorized, validly issued, fully
paid, nonassessable and not subject to preemptive rights of any stockholder.
9. Registration Rights. The Holder is entitled to the benefit of
the registration rights set forth in the Subscription Agreement pursuant to
which this Warrant has been issued as to the Warrant Shares.
10. No Rights as a Stockholder. Nothing contained in this Warrant
shall be construed as conferring upon the Holder the right to vote or to consent
or to receive notice as a stockholder in respect of any meetings of stockholders
for the election of directors or any other matter, or as having any rights
whatsoever as a stockholder of the Company.
11. Notices. All notices, requests, consents and other
communications hereunder shall be effective only if given in writing and shall
be deemed to have been duly made or given when delivered, or three days after
being mailed by registered or certified mail, return receipt requested:
(a) If to the Holder, to the address of the Holder as shown on
the books of the Company or as otherwise designated or provided
for herein; or
(b) If to the Company, to the address set forth on the first
page of this Warrant or to such other address as the Company may
designate by notice to the Holder.
12. Amendment. This Warrant may not be changed or terminated
orally.
13. Governing Law. This Warrant shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
construed in accordance with the laws of such State (without regard to the
conflict of laws principles thereof).
14. Benefits of This Warrant. Nothing in this Warrant shall be
construed to give to any person other than the Company and the Holder and its
assigns any legal or equitable right, remedy or claim under this Warrant, and
this Warrant shall be for the exclusive benefit of the Company and the Holder
and its assigns.
15. Headings. The headings in this Warrant are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Warrant.
<PAGE> 9
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed on its behalf.
COACTIVE MARKETING GROUP, INC.
By:______________________________
Name: John P. Benfield
Title: President and
Chief Executive Officer
<PAGE> 1
Exhibit 5.1
March 6, 2000
CoActive Marketing Group, Inc.
415 Northern Boulevard
Great Neck, New York 11021
Ladies and Gentlemen:
We have acted as counsel to CoActive Marketing Group, Inc., a
Delaware corporation (the "Company"), in connection with its registration
statement on Form S-3 (the "Registration Statement"), filed pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), relating to the
offering from time to time by certain holders of 1,486,731 shares (the "Shares")
of common stock, $.001 par value per share, of the Company (the "Common Stock").
We have reviewed the Registration Statement, all amendments
thereto, and such other documents and instruments as we have deemed appropriate.
In such review, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted as originals and the conformity to the
original documents of all documents submitted to us as copies.
On the basis of such review, and having regard to such legal
considerations as we have deemed relevant, it is our opinion that the Shares are
duly authorized and, upon exercise of the warrants to purchase the Shares and
upon payment of the exercise price for the Shares, all of the Shares shall be
duly and validly issued, fully paid and nonassessable.
We are members of the Bar of the State of New York and do not
purport to be experts or give any opinion except as to matters involving the
laws of such State, the general corporation laws of the State of Delaware and
the federal laws of the United States.
We hereby consent to the use of our name under the caption
"Legal Matters" in the prospectus included in the Registration Statement and to
the use of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ KRONISH, LIEB, WEINER & HELLMAN LLP
<PAGE> 1
Exhibit 23.2
Consent of Independent Certified Public Accountants
The Board of Directors
CoActive Marketing Group, Inc.
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
KPMG LLP
Melville, New York
March 3, 2000
