<PAGE>
As filed with the Securities and Exchange Commission on August 7, 1998
Registration Statement No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
----------------------
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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OPEN MARKET, INC.
(Exact name of registrant as specified in its charter)
----------------------
DELAWARE 04-3214536
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
ONE WAYSIDE ROAD
BURLINGTON, MASSACHUSETTS 01803
(781) 359-3000
(Address, including zip code, and
telephone number, including area code,
of registrant's principal
executive offices)
----------------------
JOHN H. CHORY, ESQ.
HALE AND DORR LLP
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
(617) 526-6000
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
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. [_] 333-_______.
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. [_] 333-__________.
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================
Proposed Proposed
Amount Maximum Maximum
Title of Each Class of to be Offering Price Aggregate Amount of
Securities to be Registered Registered Per Share(1) Offering Price(1) Registration Fee
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value per share 1,941,423(2) $15.3125 $29,728,040 $8,770
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) under the Securities Act and based upon the average of the
high and low prices on the Nasdaq National Market on August 5, 1998.
(2) Consists of (i) 334,728 shares and 1,004,185 shares of Common Stock of Open
Market, Inc. ("the Company") acquired by CMG Information Services, Inc.
("CMG") and Capital Ventures International ("CVI"), respectively, pursuant
to Securities Purchase Agreements, each dated July 30, 1998, by and between
the Company and each of CMG and CVI (the "Purchase Agreements"), (ii)
83,682 shares and 251,046 shares of Common Stock of the Company issuable to
CMG and CVI, respectively, upon exercise of Stock Purchase Warrants, each
dated July 30, 1998 (each, a "Purchase Warrant") by and between the Company
and each of CMG and CVI, (iii) 66,945 shares and 200,837 shares of Common
Stock of the Company that may be acquired by CMG and CVI, respectively, in
accordance with the Purchase Agreements in the event of a decline in the
closing bid price of the Common Stock of the Company. See "The Investment"
and "The Selling Stockholders."
----------------------
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY 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),
SHALL DETERMINE.
================================================================================
<PAGE>
*******************************************************************************
* Information contained herein is subject to completion or amendment. A *
* registration statement relating to these securities has been filed with *
* the Securities and Exchange Commission. These securities may not be sold *
* nor may offers to buy be accepted prior to the time the registration *
* statement becomes effective. This Prospectus shall not constitute an offer *
* to sell or the solicitation of an offer to buy nor shall there be any sale *
* of these securities in any state in which such offer, solicitation or sale *
* would be unlawful prior to registration or qualification under the *
* securities laws of any such state. *
*******************************************************************************
SUBJECT TO COMPLETION, DATED AUGUST 7, 1998
PROSPECTUS
OPEN MARKET, INC.
1,941,423 SHARES OF COMMON STOCK
_____________________
This prospectus covers the offer and sale (the "Offering") of up to
1,941,423 shares (the "Shares") of common stock, $.001 par value per share (the
"Common Stock"), of Open Market, Inc. (the "Company"). The Shares may be
offered and sold from time to time for the account of certain stockholders of
the Company (the "Selling Stockholders"). See "The Selling Stockholders." The
Shares were acquired by, or are expected to be issued upon the exercise of
certain warrants by, or may be acquired in the event of a decline in the closing
bid price of the Common Stock of the Company by, the Selling Stockholders in
connection with Securities Purchase Agreements, each dated July 30, 1998 (the
"Purchase Agreements"), by and between the Company and each of CMG Information
Systems, Inc. ("CMG") and Capital Ventures International ("CVI"), and Stock
Purchase Warrants, each dated July 30, 1998 (each, a "Purchase Warrant"), by and
between the Company, and each of CMG and CVI. See "The Investment."
The Company will not receive any of the proceeds from the sale of the
Shares covered by this Prospectus. However, to the extent Purchase Warrants are
exercised through payment of the purchase price in cash (rather than a cashless
exercise), the Company will receive the proceeds therefrom. The Company will
bear all costs (excluding any underwriting discounts and commissions), fees and
expenses incurred in effecting the registration of the Shares covered by this
Prospectus, including, without limitation, all registration and filing fees,
additional listing fees, fees and expenses of counsel for the Company,
reasonable fees and expenses of counsel selected by CMG and CVI, fees and
expenses of accountants for the Company, printing expenses and blue sky fees and
expenses.
The Shares covered by this Prospectus may be sold from time to time by the
Selling Stockholders, or by their pledgees, donees, transferees or other
successors in interest, in the over-the-counter market, through the writing of
options on the Shares, in ordinary brokerage transactions, in negotiated
transactions, through the settlement of short sales, or otherwise, at market
prices prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution."
The Selling Stockholders and intermediaries through whom the Shares are
sold may be deemed "underwriters" within the meaning of the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Shares offered
hereby, and any profits realized or commissions received may be deemed
underwriting compensation. See "Plan of Distribution."
<PAGE>
The Company's Common Stock is traded on the Nasdaq National Market
("Nasdaq") under the symbol "OMKT." On August 5, 1998, the closing sale price of
the Common Stock on Nasdaq was $14.75 per share.
______________________
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE
OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 8.
______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
_____________________
The date of this Prospectus is August __, 1998
-2-
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549 and at the Commission's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048, and
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such materials also may be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, reports, proxy and information statements and
other information concerning the Company can be inspected and copied at the
offices of the Nasdaq National Market, Reports Section, 1735 K Street, N.W.,
Washington, D.C. 20006. The Company is required to file electronic versions of
these documents through the Commission's Electronic Data Gathering, Analysis and
Retrieval (EDGAR) system. The Commission maintains a World Wide Web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments, supplements, exhibits and schedules
thereto, the "Registration Statement") under the Securities Act, with respect to
the Shares offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, as certain items are
omitted in accordance with the rules and regulations of the Commission. For
further information pertaining to the Company and the Shares, reference is made
to such Registration Statement. Statements contained in this Prospectus
regarding the contents of any agreement or other document are not necessarily
complete, and in each instance reference is made to the copy of such agreement
or document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference. The Registration
Statement may be inspected without charge at the office of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and copies of all or any part
thereof may be obtained from the Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(i) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997, filed with the Commission on March 31, 1998;
(ii) The proxy statement for the Company's Annual Meeting of
Stockholders held on May 20, 1998;
(iii) The Current Report on Form 8-K of the Company dated April 30,
1998;
(iv) The Quarterly Report on Form 10-Q of the Company for the
quarter ended March 31, 1998;
(v) The Current Report on Form 8-K of the Company dated June 4,
1998;
(vi) The Current Report on Form 8-K of the Company dated July 30,
1998;
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<PAGE>
(vii) The Quarterly Report on Form 10-Q of the Company for the
quarter ended June 30, 1998;
(viii) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, filed with the
Commission on May 3, 1996; and
(ix) The description of the Company's Series A Junior Participating
Preferred Stock contained in the Company's Registration
Statement on Form 8-A, filed with Commission on January 30,
1998.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering of the Shares registered hereby shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the foregoing documents incorporated by reference into this
Prospectus (without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). All such requests shall be
directed to: Open Market, Inc., One Wayside Road, Burlington, Massachusetts
01803, Attention: Legal Counsel, Telephone: (781) 359-3000.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL.
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<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
Certain statements in this Prospectus and in the documents incorporated
herein constitute "forward-looking statements" within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act. For this purpose,
any statements contained herein or incorporated herein that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, the words "believes," "plans," "expects" and similar
expressions are intended to identify forward-looking statements. There are a
number of important factors that could cause the results of the Company to
differ materially from those indicated by such forward-looking statements. These
factors include those set forth in "Risk Factors" herein.
-5-
<PAGE>
THE COMPANY
Open Market, Inc. ("Open Market" or the "Company") develops, markets,
licenses and supports enterprise-class, application software products that allow
its customers to engage in business-to-business and business-to-consumer
Internet commerce, information commerce and commercial publishing. Open
Market's software includes a wide spectrum of functionality required to conduct
business on the Internet effectively, allowing companies to attract customers to
their Web sites, to engage the customers in acting upon an offer, to complete
the transaction and to service these customers once a transaction has been
completed.
Open Market's software products are used by a variety of companies across a
broad spectrum of markets, including telecommunications, financial services,
business-to-business, business-to-consumer (retail) and commercial publishing.
These businesses take advantage of Open Market's solutions either directly by
deploying the software within their own enterprises, or indirectly by procuring
services from commerce service providers ("CSPs") running Open Market software.
These CSPs offer commerce services to small and mid-sized companies that wish to
outsource the cost and complexity associated with implementing and maintaining
this software within their own organizations.
Open Market has a differentiated set of products and services that are
built upon an innovative product architecture, a fully integrated approach to
security and patented technology. Open Market's products are based upon its
distinctive SecureLink architecture which addresses the unique requirements of
doing business over the Web. SecureLink provides a selling company the freedom
to establish its electronic presence using virtually any system platform, any
Web server software and any authorizing software or data repository. Similarly,
SecureLink imposes few constraints on buyers, allowing them to make purchases
from any Web-enabled client. SecureLink also functions over the established Web
communications infrastructure including firewalls and proxy servers.
Since June 30, 1998, the Company has offered a comprehensive suite of
software products, which include Transact, LiveCommerce, ShopSite and the
Folio(R) product.
Open Market's Transact performs comprehensive order management for Internet
commerce, including capturing of orders (item, price, tax and shipping costs),
processing orders (authenticating buyers, determining form of payment,
processing payment and addressing fulfillment) and servicing orders online
(order and shipment status, transaction statements and customer service). The
fourth version of Transact was made generally available on March 31, 1998 and
represents a significant re-architecture of the product. Transact is sold to
two types of customers: (1) enterprise customers which use the product for
their own Web-based business activities and (2) CSPs which use the product to
provide Internet commerce transaction capabilities to their business customers.
Open Market's LiveCommerce allows manufacturers, distributors and retailers
to create and manage large catalogs on the Web. The Company introduced
LiveCommerce in September 1997. In combination with Transact, LiveCommerce
represents a comprehensive Internet commerce solution for both large retailers
and industrial manufacturers in industries such as scientific equipment,
computers, office supplies, replacement parts and electronic components. The
Company first shipped LiveCommerce on October 31, 1997.
In April 1998, Open Market acquired Icentral, Incorporated which developed
ShopSite, an easy to use, store building tool. ShopSite, in conjunction with
Transact, provides small to medium-sized businesses with a cost-effective way to
conduct their business on-line.
-6-
<PAGE>
Open Market's Folio products allow publishers to make information available
electronically on either CD-ROM or the Internet. The products were developed by
ten-year-old Folio Corporation ("Folio") which Open Market acquired in March
1997. The products are widely used by commercial publishers selling business
critical information to industries such as tax, legal, accounting, banking and
insurance. The combination of the Folio product suite with Transact provides a
robust, end-to-end solution for the information commerce market.
Open Market believes that offering a comprehensive suite of professional
services is a critical component of the ultimate success of its customers. In
support of this belief, the Company has invested in service program development
and worldwide delivery capabilities. Open Market offers a full suite of
services to its customers, including maintenance and technical support services,
professional services and education services. The Company supports its products
from service centers in Burlington, Massachusetts, in Provo, Utah and in
Amsterdam, the Netherlands.
The Company was incorporated in Delaware in December 1993. The Company's
executive offices are located at One Wayside Road, Burlington, Massachusetts
01803. Its telephone number is (781) 359-3000, and its internet web site is
located at http:/ www.openmarket.com. "OpenMarket," "LiveCommerce," "Folio,"
"Transact," "ShopSite" and "SecureLink" are all trademarks or registered
trademarks of the Company.
-7-
<PAGE>
RISK FACTORS
The Shares offered hereby involve a high degree of risk. The following
risk factors should be considered carefully in addition to the other information
included or incorporated by reference in this Prospectus before purchasing the
Shares offered hereby.
RAPID TECHNOLOGICAL CHANGE
The computer software industry is characterized by rapid technological
change. As a result, there is uncertainty about the widespread acceptance of
new products which can cause significant delays in the sales cycle. The Company
must continue to upgrade its own technologies and commercialize products and
services incorporating such technologies which may also lengthen the sales
cycle. The introduction of product or service enhancements or new products or
services embodying new technologies, industry standards or customer requirements
could supplant or make obsolete the Company's existing products and services.
DEVELOPING INTERNET MARKET
The market for the Company's Internet products and services has only
recently begun to develop, is rapidly evolving and is characterized by an
increasing number of market entrants that have introduced and developed products
and services for Internet commerce. The Company's future operating results
depend upon the development and growth of the market for Internet-based packaged
software applications, including electronic commerce applications. The
acceptance of electronic commerce in general and, in particular, the Internet as
a sales marketing and order receipt and processing medium are highly uncertain
and subject to a number of risks. Critical issues concerning the commercial use
of the Internet (including security, reliability, cost, ease of use, quality and
service and the effect of government regulation) remain unresolved and may
impact the growth of the Internet. If the market fails to develop or develops
more slowly than expected, the Company's operating results could be materially
adversely affected.
RECENT ACQUISITION
In April 1998, the Company completed the strategic acquisition of Icentral,
Incorporated. The Company faces challenges relating to integration of operations
such as coordinating geographically separate organizations, integrating
personnel with disparate business backgrounds and combining different corporate
cultures. There can be no assurance that the acquired business or its products
will be successful, that the Company will successfully integrate the acquired
business into the Company, or that the Company will achieve the desired
synergies from the transaction.
PRODUCT RELEASE SCHEDULES
Delays in the planned release of the Company's new products may adversely
affect forecasted revenues, and create operational inefficiencies resulting from
staffing levels designed to support the forecasted revenues. The Company's
failure to introduce new products, services or product enhancements on a timely
basis could delay or hinder market acceptance and allow competitors to gain
greater market share than the Company.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES
The Company is not currently subject to direct regulation by any government
agency, other than regulations applicable to businesses generally, and there are
currently few laws or regulations directly applicable to access to, or commerce
on, the Internet. However, due to the increasing popularity and use of the
Internet, it is possible that a number of laws and regulations may be adopted
with respect to the Internet, covering issues such as user privacy, taxation and
the content of products and the nature of services. The adoption of any such
laws or regulations may decrease the growth of the Internet or inhibit
companies' ability to conduct electronic commerce, which could in turn adversely
affect the Company's business, operating results or financial condition.
Moreover, the applicability of the Internet of existing laws governing issues
such as property ownership, libel and personal privacy is uncertain. Further,
due to the encryption technology contained in the Company's products, such
products are subject to U.S. export controls. There can be no assurance that
such export controls, either in their current form or as may be subsequently
enacted, will not delay the introduction of new products or limit the Company's
ability to distribute products outside of the United States. While the Company
intends to take precautions against unlawful exportation, the global nature of
the Internet makes it difficult to effectively control the distribution of the
Company's products. In addition, federal or state legislation or regulation may
further limit levels of encryption or authentication technology. Further,
various countries regulate the import of certain encryption technology and have
adopted laws relating to personal privacy issues which could limit the Company's
ability to distribute products in those countries. Any such export or import
restrictions, new legislation or regulation or government enforcement of
existing regulations could have a material adverse impact on the Company's
business, operating results and financial condition.
COMPLEX PRODUCTS; LENGTHY SALES CYCLES
The Company's products are complex and often involve significant investment
decisions by prospective customers. Accordingly, the license of the Company's
software products can be expected to require the Company to engage in a lengthy
sales cycle to provide a significant level of education to prospective customers
regarding the use and benefits of the Company's products. As a result, the
Company's sales cycles may be subject to a number of significant delays over
which it has little or no control. Delays in such transactions due to lengthy
sales cycles or delays in customer production or deployment of a system could
have a material adverse effect on the Company's business, operating results and
financial condition and could be expected to cause the Company's operating
results to vary significantly from quarter to quarter.
SECURITY
A significant barrier to market acceptance of online commerce and
communication is the concern regarding the secure exchange of valuable and
confidential information over public networks. The Company relies on encryption
and authentication technology to provide the security and authentication
necessary to effect the secure exchange of valuable and confidential
information. There can be no assurance that advances in computer capabilities,
new discoveries in the field of cryptography or other events or developments
(such as break-ins and similar disruptive problems caused by Internet users)
will not result in a compromise or breach of algorithms used by the Company in
its products to protect customer transaction data. If any such compromise or
breach were to occur, it could have a material adverse effect on the Company's
business, financial condition, and operating results.
COMPETITION
The market for electronic commerce software is new, rapidly evolving and
intensely competitive. The Internet is characterized by an increasing number of
market entrants that have introduced or developed products and services for
commerce on the Internet. Many of the Company's competitors have greater
financial, technical and marketing resources and greater name recognition than
does the Company. The market is still new and rapidly evolving, and the
Company's operating results will be affected by the number of competitors and
their pricing strategies and market acceptance of their products.
-8-
<PAGE>
DEPENDENCE ON PERSONNEL
The Company's future success depends in significant part upon the continued
service of its key technical and senior management personnel, and its continuing
ability to attract and retain highly qualified technical and managerial
personnel. The Company's ability to establish and maintain a position of
technology leadership in the industry depends in large part upon the skills of
its development personnel.
PRICING
Future prices that the Company is able to charge for its products may
decline from historical levels due to competitive reasons and other factors. In
the future, the Company may have to reduce the prices of its products
substantially or introduce lower-priced lines of products to gain greater market
share.
LIMITED OPERATING HISTORY
The Company has a limited operating history. The Company's ability to
successfully market its existing products and to develop and market new products
must be considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving markets.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
The Company's expense levels are fixed in advance and based in part on its
expectations as to future revenues. Quarterly sales and operating results will
generally depend on the volume and timing of orders received within the quarter.
The Company may be unable to adjust spending in a timely manner to compensate
for unexpected revenue shortfalls. The Company expects in the future to
experience significant fluctuations in quarterly operating results that may be
caused by many factors, including among other things, the number, timing and
sigificance of product enhancements and new product announcements by the Company
or its competitors, the length of the Company's sales cycle, market acceptance
of and demand for the Company's products, the pace of development of electronic
commerce conducted on the Internet, customer order deferrals in anticipation of
enhancements or new products offered by the Company or its competitors,
nonrenewal of service agreements, software defects and other product quality
problems, the Company's ability to attract and retain key personnel, the extent
of international sales, changes in the level of operating expenses and general
economic conditions. As a result, the Company's operating results in future
quarters may be below the expectations of market analysts and investors.
FOREIGN EXCHANGE
To the extent that foreign currency exchange rates fluctuate in the future,
the Company may be exposed to continued financial risk. Although the Company
attempts to limit this risk by denominating most sales in United States dollars
and limiting the amount of assets in its foreign operations, there can be no
assurance that the Company will be successful in limiting its exposure.
VOLATILITY OF STOCK PRICE
Open Market's Common Stock is quoted on the Nasdaq National Market. The
market price of Open Market's Common Stock, like that for the shares of many
other high technology companies, has been and may continue to be volatile.
Recently, the stock market in general and the shares of software companies in
particular have experienced significant price fluctuations. These broad market
fluctuations, as well as general economic and political conditions in the United
States and internationally and factors such as quarterly fluctuations in results
of operations, the announcement of technological innovations, the introduction
of new products by the Company or its competitors and general conditions in the
computer hardware and software industries may have a significant impact on the
market price of Open Market's Common Stock.
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<PAGE>
DEPENDENCE ON INTELLECTUAL PROPERTY RIGHTS
The Company's success is dependent to a significant degree on its
proprietary software technology. The Company provides its products to end
users generally under nonexclusive, nontransferable licenses for the term of the
agreement, which is usually in perpetuity. The Company's policy is to enter
into confidentiality and assignment agreements with its employees, consultants,
and vendors and generally to control access to and distribution of its software,
documentation, and other proprietary information. Notwithstanding these
precautions, it may be possible for a third party to copy or otherwise obtain
and use the Company's software or other proprietary information without
authorization or to develop similar software independently. Although the Company
holds three patents, issued in March, 1998, covering certain aspects or uses of
electronic commerce software, there can be no assurance as to the degree of
intellectual property protection such patents will provide. Policing
unauthorized use of the Company's products is difficult, particularly because
the global nature of the Internet makes it difficult to control the ultimate
destination or security of software or other data transmitted. The laws of other
countries may afford the Company little or no effective protection of its
intellectual property. There can be no assurance that the steps taken by the
Company will prevent misappropriation of its technology or that agreements
entered into for that purpose will be enforceable.
RISK OF INFRINGEMENT
The Company may, in the future, receive notices of claims of infringement
of other parties' patent, trademark, copyright, and other proprietary rights.
There can be no assurance that claims for infringement or invalidity (or claims
for indemnification from our customers resulting from infringement claims) will
not be asserted or prosecuted against the Company. In particular, claims could
be asserted against the Company for violation of patent, trademark, copyright,
or other laws as a result of the use by the Company, its customers, or other
third parties of the Company's products to transmit, disseminate, or display
information over or on the Internet. Any such claims, with or without merit,
could be time consuming to defend, result in costly litigation, divert
management's attention and resources, cause product shipment delays, or require
the Company to enter into royalty or licensing agreements. There can be no
assurance that such licenses would be available on reasonable terms, if at all,
and the assertion or prosecution of any such claims could have a material
adverse effect on the Company's business, financial condition, and operating
results.
RISKS OF PRODUCT DEFECTS
Sophisticated software products, such as those of the Company, may contain
undetected errors or failures that become apparent when the products are
introduced or when the volume of services provided increases. There can be no
assurance that, despite testing by the Company and potential customers, errors
will not be found in the Company's products, resulting in loss of revenues,
delay in market acceptance, diversion of development resources, damage to the
Company's reputation, or increased service and warranty costs, which would have
a material adverse effect on the Company's business, financial condition, and
operating results.
LITIGATION
Litigation may be necessary in the future to enforce the Company's
intellectual property rights, to protect the Company's patents, copyright or
trade secrets, to determine the validity and scope of the proprietary rights of
others, or to defend against claims of infringement or invalidity. Such
litigation, whether successful or unsuccessful, could result in substantial
costs and diversions of resources, either of which could have a material adverse
effect on the Company's business, financial condition, and operating results.
Litigation regarding intellectual property rights, copyrights, and patents is
increasingly common in the software industry. Intellectual property litigation
is complex and expensive, and the outcome of such litigation is difficult to
predict. In addition, the Company faces risks on other general corporate legal
matters.
YEAR 2000 COMPLIANCE
The Company recognizes that it must ensure that its products and operations
will not be adversely impacted by Year 2000 software failures, which can arise
in time-sensitive software applications which utilize a field of two digits to
define the applicable year. In such applications, a date using "00" as the year
may be recognized as the year 1900 rather than the year 2000. The
-10-
<PAGE>
Company has developed and implemented a detailed Year 2000 test procedure into
the phase review and software release process to ensure that its software
products are Year 2000 compliant. Although management does not expect Year 2000
issues to have a material adverse impact on the Company's business or future
results of operations, there can be no assurance that there will not be
interruptions of operations, other limitations of system or product
functionality or that the Company will not incur significant costs to avoid such
interruptions or limitations. In addition, even if the Company's products are
Year 2000 compliant, other systems or software used by the Company's customers
may not be Year 2000 compliant. The failure of such noncompliant third-party
software or systems could affect the performance of the Company's products,
which could have a material adverse effect on the Company's business, financial
condition and operating results.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Stockholders. The Company will receive proceeds from the exercise
of the Purchase Warrants to the extent Purchase Warrants are exercised through
payment of the purchase price in cash (rather than a cashless exercise) and will
use such proceeds, if any, for working capital purposes which may include
acquiring or investing in other related businesses or technologies or acquiring
the rights to use complementary technologies. The Company will bear all costs
(excluding any underwriting discounts and commissions), fees and expenses
incurred in effecting the registration of the Shares covered by this Prospectus,
including, without limitation, all registration and filing fees, additional
listing fees, fees and expenses of counsel for the Company, reasonable fees and
expenses of counsel selected by CMG and CVI, fees and expenses of accountants
for the Company, printing expenses and blue sky fees and expenses.
THE INVESTMENT
Pursuant to the Purchase Agreements, CMG and CVI (collectively, the
"Selling Stockholders") acquired 334,728 shares and 1,004,185 shares of Common
Stock of the Company, respectively, for an aggregate purchase price of
$20,000,000. In addition, CMG and CVI may acquire up to 66,945 shares and
200,837 shares of Common Stock of the Company, respectively, in connection with
decreases in the closing bid price of the Common Stock of the Company in
accordance with the terms of the Purchase Agreements. See "The Selling
Stockholders."
In connection with the Purchase Agreements, the Company issued Purchase
Warrants to purchase 83,682 shares and 251,046 shares of Common Stock to CMG and
CVI, respectively. The Purchase Warrants provide for the purchase of shares of
the Company's Common Stock at an exercise price of $16.43 per share and are
exercisable at any time or from time to time before July 30, 2003.
THE SELLING STOCKHOLDERS
The following table sets forth, to the knowledge of the Company, certain
information, as of August 6, 1998, with respect to the Selling Stockholders for
whom the Company is registering the Shares for resale to the public. The shares
of Common Stock covered by this Prospectus were issued or are expected to be
issued to the Selling Stockholders in connection with the Purchase Agreements.
See "The Investment."
To the Company's knowledge, none of the Selling Stockholders holds any
position or office with, has been employed by, or has otherwise had a material
relationship with the Company or any of its subsidiaries within the past three
years.
-11-
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF NUMBER OF PERCENTAGE OF
COMMMON SHARES SHARES OF
STOCK NUMBER OF OF COMMON STOCK COMMON STOCK
BENEFICIALLY SHARES BENEFICIALLY BENEFICIALLY
NAME OF SELLING OWNED PRIOR OF COMMON STOCK OWNED AFTER OWNED AFTER
STOCKHOLDER TO OFFERING(1) OFFERED HEREBY OFFERING(1)(2) OFFERING (1)(2)
- ---------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
CMG Information 485,355 (3) 485,355 0 0%
Services, Inc.
Capital Ventures 1,456,068 (4) 1,456,068 0 0%
International
</TABLE>
- -----------------
(1) The number of shares beneficially owned is determined under rules
promulgated by the Commission, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which the individual has
sole or shared voting power or investment power and also any shares which
the individual has the right to acquire within 60 days after July 30, 1998
through the exercise of any stock option or other right. The inclusion
herein of such shares, however, does not constitute an admission that the
Selling Stockholders are direct or indirect beneficial owners of such
shares. The Selling Stockholders have sole voting power and investment
power with respect to all shares listed as owned by the Selling
Stockholders.
(2) It is unknown if, when or in what amounts a Selling Stockholder may offer
Shares for sale and there can be no assurance that the Selling Stockholders
will sell any or all of the Shares offered hereby. Because the Selling
Stockholders may offer all or some of the Shares pursuant to this Offering,
and because there are currently no agreements, arrangements or
understandings with respect to the sale of any of the Shares that will be
held by the Selling Stockholders after completion of the Offering, no
estimate can be given as to the amount of the Shares that will be held by
the Selling Stockholders after completion of the Offering. However, for
purposes of this table, the Company has assumed that, after completion of
the Offering, no Shares will be held by the Selling Stockholders.
(3) Includes up to 66,945 shares which may be acquired if (i) the average
closing bid price of the Common Stock of the Company on the Nasdaq National
Market during the five (5) trading days immediately preceding the effective
date of this registration statement, appropriately adjusted to reflect any
pending stock dividend, stock split or similar transaction or (ii) the
closing bid price of the Common Stock of the Company on the Nasdaq National
Market on the effective date of this registration statement, is less than
$14.94 which was the closing bid price of a share of Common Stock on the
Nasdaq National Market on July 30, 1998, the closing date under the
Purchase Agreements. CMG has agreed that it will not offer to sell, sell,
contract to sell or otherwise dispose of, directly or indirectly, any
shares of Common Stock of the Company, any right to acquire such shares of
Common Stock of the Company or any securities exercisable for or
convertible into shares of Common Stock of the Company, which are
beneficially owned (as defined in Rule 13d-3 of the Rules and Regulations
of the SEC under the Exchange Act) by CMG prior to January 23, 1999.
(4) Includes up to 200,837 shares which may be acquired if (i) the average
closing bid price of the Common Stock of the Company on the Nasdaq National
Market during the five (5) trading days immediately preceding the effective
date of this registration statement, appropriately adjusted to reflect any
pending stock dividend, stock split or similar transaction or (ii) the
closing bid price of the Common Stock of the Company on the Nasdaq National
Market on the effective date of this registration statement, is less than
$14.94.
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may be sold from time to time by the
Selling Stockholders, or by their pledgees, donees, transferees or other
successors in interest, in the over-the-counter market, through the writing of
options on the Shares, in ordinary brokerage transactions, in negotiated
transactions, through the settlement of short sales, or otherwise, at market
prices prevailing at the time of sale or at negotiated prices. The Selling
Stockholders will act independently of the Company in making decisions with
respect to the timing, manner and size of each sale. In effecting sales, broker-
dealers engaged by the Selling Stockholders, or by their pledgees, donees,
transferees or other successors in interest may arrange for other broker-dealers
to participate. Broker-dealers will receive commissions or discounts from the
Selling Stockholders, or from their pledgees, donees, transferees or other
successors in interest in amounts to be negotiated immediately prior to
the sale.
-12-
<PAGE>
In offering the Shares covered hereby, the Selling Stockholders, or their
pledgees, donees, transferees or other successors in interest and any broker-
dealers and any other participating broker-dealers who execute sales for the
Selling Stockholders may be deemed to be "underwriters" within the meaning of
the Securities Act in connection with such sales, and any profits realized by
the Selling Stockholders and the compensation of such broker-dealer may be
deemed to be underwriting discounts and commissions. In addition, any of the
Shares covered by this Prospectus which qualify for sale pursuant to Rule 144
may be sold under Rule 144 rather than pursuant to this Prospectus.
To the extent Purchase Warrants are exercised through payment of the
purchase price in cash (rather than a cashless exercise), the Company will
receive the proceeds therefrom. The Company will not receive any other proceeds
from the sale of the Shares pursuant to this Prospectus.
CMG has agreed that it will not offer to sell, sell, contract to sell or
otherwise dispose of, directly or indirectly, any shares of Common Stock of the
Company, any right to acquire such shares of Common Stock of the Company or any
securities exercisable for or convertible into shares of Common Stock of the
Company, which are beneficially owned (as defined in Rule 13d-3 of the Rules and
Regulations of the SEC under the Exchange Act) by CMG prior to January 23, 1999.
The Company has agreed with the Selling Stockholders to keep the
Registration Statement of which this Prospectus constitutes a part effective
until the earlier of (i) such time as all of the Shares have been disposed of
pursuant to and in accordance with such Registration Statement or (ii) the date
on which all of the Shares (in the reasonable opinion of counsel to the Selling
Stockholder may be immediately sold to the public without registration or
restriction pursuant to Rule 144(k) under the Securities Act.
-13-
<PAGE>
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109. As
of the date of this Registration Statement, certain partners of Hale and Dorr
LLP own in the aggregate approximately 15,000 shares of the Company's Common
Stock.
EXPERTS
The consolidated financial statements of Open Market, Inc. incorporated by
reference in this Prospectus and elsewhere in the Registration Statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
-14-
<PAGE>
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING
STOCKHOLDERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION OF AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS
OF ANY DATE HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... 3
Incorporation of Certain Documents By Reference............................ 3
Special Note Regarding Forward-Looking Information......................... 4
The Company................................................................ 5
Risk Factors............................................................... 6
Use of Proceeds............................................................ 11
The Investment............................................................. 11
The Selling Stockholders................................................... 12
Plan of Distribution....................................................... 13
Legal Matters.............................................................. 14
Experts.................................................................... 14
</TABLE>
----------------
================================================================================
================================================================================
OPEN MARKET, INC.
1,941,423 SHARES OF
COMMON STOCK
----------------
PROSPECTUS
----------------
August __, 1998
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be incurred in
connection with the sale and distribution of the securities being registered
hereby, all of which will be borne by the Company (except expenses incurred by
the Selling Stockholders for brokerage, accounting, tax or legal services or any
other expenses incurred by the Selling Stockholders in taking possession of or
disposing of the Shares). All amounts shown are estimates except the Securities
and Exchange Commission registration fee.
<TABLE>
<S> <C>
Filing Fee - Securities and Exchange Commission... $ 8,770
Legal fees and expenses of the Company............ $10,000
Accounting fees and expenses...................... $ 5,000
Printing expenses................................. $ 2,000
Miscellaneous expenses............................ $ 2,230
-------
Total Expenses............................... $28,000
=======
</TABLE>
II-1
<PAGE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article EIGHTH of the Company's Amended and Restated Certificate of
Incorporation (the "Restated Certificate of Incorporation") provides that no
director of the Company shall be personally liable for any monetary damages for
any breach of fiduciary duty as a director, except to the extent that the
Delaware General Corporation Law prohibits the elimination or limitation of
liability of directors for breach of fiduciary duty.
Article NINTH of the Company's Restated Certificate of Incorporation
provides that a director or officer of the Company (a) shall be indemnified by
the Company against all expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement incurred in connection with any litigation or
other legal proceeding (other than an action by or in the right of the Company)
brought against him by virtue of his position as a director or officer of the
Company 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 Company, and with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful and (b) shall be indemnified by the Company against all
expenses (including attorneys' fees) and amounts paid in settlement incurred in
connection with any action by or in the right of the Company brought against him
by virtue of his position as a director or officer of the Company 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 Company, except that no indemnification shall be made
with respect to any matter as to which such person shall have been adjudged to
be liable to the Company, unless a court determines that, despite such
adjudication but in view of all of the circumstances, he is entitled to
indemnification of such expenses. Notwithstanding the foregoing, to the extent
that a director or officer has been successful, on the merits or otherwise,
including, without limitation, the dismissal of an action without prejudice, he
is required to be indemnified by the Company against all expenses (including
attorneys' fees) incurred in connection therewith. Expenses shall be advanced
to a director or officer at his request, provided that he undertakes to repay
the amount advanced if it is ultimately determined that he is not entitled to
indemnification for such expenses.
Indemnification is required to be made unless the Company determines that
the applicable standard of conduct required for indemnification has not been
met. In the event of a determination by the Company that the director or
officer did not meet the applicable standard of conduct required for
indemnification, or if the Company fails to make an indemnification payment
within 60 days after such payment is claimed by such person, such person is
permitted to petition the court to make an independent determination as to
whether such person is entitled to indemnification. As a condition precedent to
the right of indemnification, the director or officer must give the Company
notice of the action for which indemnity is sought and the Company has the right
to participate in such action or assume the defense thereof.
Article NINTH of the Company's Restated Certificate of Incorporation
further provides that the indemnification provided therein is not exclusive, and
provides that in the event that the Delaware General Corporation Law is amended
to expand the indemnification permitted to directors or officers the Company
must indemnify those persons to the fullest extent by such law as to so amended.
Section 145 of the Delaware General Corporation Law provides that a
corporation has the power to indemnify a director, officer, employee or agent of
the corporation and certain other persons serving at the request of the
corporation in related capacities against amounts paid and expenses incurred in
connection with an action or proceeding to which he is or is threatened to be
made a party by reason of such position, if such person shall have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding, if such person
had no reasonable cause to believe his conduct was unlawful; provided that, in
the case of
II-2
<PAGE>
actions brought by or in the right of the corporation, no indemnification shall
be made with respect to any matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
adjudicating court determines that such indemnification is proper under the
circumstances.
The Company has purchased directors' and officers' liability insurance
which would indemnify the directors and officers of the Company against damages
arising out of certain kinds of claims which might be made against them based on
their negligent acts or omissions while acting in their capacity as such.
II-3
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<C> <S>
4.1 Securities Purchase Agreement, dated as of July 30, 1998, between Open
Market, Inc. and CMG Information Services Inc. (1)
4.2 Securities Purchase Agreement, dated as of July 30, 1998, between Open
Market, Inc. and Capital Ventures International.
4.3 Stock Purchase Warrant, dated as of July 30, 1998, by and between Open
Market, Inc. and CMG Information Services, Inc. (1)
4.4 Stock Purchase Warrant, dated as of July 30, 1998, by and between Open
Market, Inc. and Capital Ventures International. (1)
4.5 Registration Rights Agreement, dated as of July 30, 1998, by and
between Open Market, Inc. and CMG Information Services, Inc. (1)
4.6 Registration Rights Agreement, dated as of July 30, 1998, by and
between Open Market, Inc. and Capital Ventures International. (1)
5 Opinion of Hale and Dorr LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5 filed herewith.
24 Power of Attorney (See page II-4 of this Registration Statement).
</TABLE>
- -----------------
(1) Incorporated by reference to exhibits filed with Open Market's Current
Report on Form 8-K dated July 30, 1998
II-4
<PAGE>
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 of 1933, as amended (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 the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any derivation from the low or high and 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 this Registration
Statement or any material change to such information in this
Registration Statement.
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in this Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at the 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.
The Registrant hereby undertakes 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 15(d) of the Exchange Act of 1934, as
amended (the "Exchange Act") (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein and
the offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the indemnification provisions described herein, 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 Securities Act
II-5
<PAGE>
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 Securities Act and will be governed by the final
adjudication of such issue.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Burlington, Commonwealth of Massachusetts, on this
5th day of August, 1998.
OPEN MARKET, INC.
By: /s/ Regina O. Sommer
---------------------------------
Regina O. Sommer
Senior Vice President and
Chief Financial Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Open Market, Inc., hereby
severally constitute Gary B. Eichhorn, Regina O. Sommer and John H. Chory, and
each of them singly, our true and lawful attorneys with full power to any of
them, and to each of them singly, to sign for us and in our names in the
capacities indicated below the Registration Statement on Form S-3 filed herewith
and any and all pre-effective and post-effective amendments to said Registration
Statement and generally to do all such things in our name and behalf in our
capacities as officers and directors to enable Open Market, Inc. to comply with
the provisions of the Securities Act and all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they may
be signed by our said attorneys, or any of them, to said Registration Statement
and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Gary B. Eichhorn President, Chief Executive August 5, 1998
- ----------------------------- Officer and Director (Principal
Gary B. Eichhorn Executive Officer)
/s/ Regina O. Sommer Senior Vice President and August 5, 1998
- ----------------------------- Chief Financial Officer
Regina O. Sommer (Principal Financial and
Accounting Officer)
II-7
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Gulrez Arshad
- ---------------------------- Director August 5, 1998
Gulrez Arshad
/s/ Thomas H. Bruggere
- ---------------------------- Director August 5, 1998
Thomas H. Bruggere
/s/ Shikhar Ghosh
- ---------------------------- Director August 5, 1998
Shikhar Ghosh
/s/ David K. Gifford
- ---------------------------- Director August 5, 1998
David K. Gifford
/s/ William S. Kaiser
- ---------------------------- Director August 5, 1998
William S. Kaiser
- ---------------------------- Director ________, 1998
Brian J. Knez
/s/ Eugene F. Quinn
- ---------------------------- Director August 5, 1998
Eugene F. Quinn
II-8
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
4.1 Securities Purchase Agreement, dated as of July 30, 1998, between Open
Market, Inc. and CMG Information Services Inc. (1)
4.2 Securities Purchase Agreement, dated as of July 30, 1998, between Open
Market, Inc. and Capital Ventures International. (1)
4.3 Stock Purchase Warrant, dated as of July 30, 1998, by and between Open
Market, Inc. and CMG Information Services, Inc. (1)
4.4 Stock Purchase Warrant, dated as of July 30, 1998, by and between Open
Market, Inc. and Capital Ventures International. (1)
4.5 Registration Rights Agreement, dated as of July 30, 1998, by and
between Open Market, Inc. and CMG Information Services, Inc. (1)
4.6 Registration Rights Agreement, dated as of July 30, 1998, by and
between Open Market, Inc. and Capital Ventures International. (1)
5 Opinion of Hale and Dorr LLP.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Hale and Dorr LLP, included in Exhibit 5 filed herewith.
24 Power of Attorney (See page II-4 of this Registration Statement).
- ---------------
(1) Incorporated by reference to exhibits filed with Open Market's Current
Report on Form 8-K dated July 30, 1998
II-9
<PAGE>
EXHIBIT 5
HALE AND DORR LLP
60 State Street
Boston, Massachusetts 02109
Open Market, Inc. August 6, 1998
One Wayside Road
Burlington, MA 01803
Ladies and Gentlemen:
We have assisted in the preparation of the Registration Statement on Form S-3
(the "Registration Statement") filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, relating to the registration for
resale of (i) an aggregate of 1,338,913 shares of Common Stock, $0.001 par value
per share (the "Initial Shares"), (ii) an aggregate of 267,782 shares of Common
Stock issuable upon the exercise of certain warrants (the "Warrant Shares") and
(iii) an aggregate of 334,728 shares of Common Stock that may be acquired in the
event of a decline in the closing bid price of the Common Stock (the "Adjustment
Shares"), of Open Market, Inc., a Delaware corporation (the "Company").
We have examined the Certificate of Incorporation and By-laws of the Company
and all amendments thereto and have examined and relied on the originals or
copies certified to our satisfaction of such records of meetings, written
actions in lieu of meetings or resolutions adopted at meetings of the directors
of the Company and such other documents and instruments as in our judgment are
necessary or appropriate to enable us to render the opinions expressed below.
In our examination of the foregoing documents, we have assumed (i) the
genuineness of all signatures and authenticity of all documents submitted to us
as originals, (ii) the conformity to the originals of all documents submitted to
us as certified or photostatic copies and (iii) the authenticity of the
originals of the latter documents.
Based upon and subject to the foregoing, we are of the opinion that (i) the
Initial Shares have been duly and validly authorized and issued and are fully
paid and non-assessable and (ii) the Warrant Shares and the Adjustment Shares
have been duly and validly authorized and when issued upon exercise of the
warrants or in the event of decline in the closing bid price of the Common Stock
of the Company, will be validly issued fully paid and non-assessable.
We hereby consent to the use of our name in the Registration Statement and in
the related Prospectus under the caption "Legal Matters" and to the filing of
this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Hale and Dorr LLP
Hale and Dorr LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated February 2, 1998
included in Open Market, Inc.'s Form 10-K for the year ended December 31,1997
and to all references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts
August 6, 1998
