EXHIBIT 10.58
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF ABSENT
REGISTRATION OF SUCH SECURITIES UNDER SAID ACT AND SAID LAWS UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. (Eastern Standard Time), on April 6, 2011
WARRANT
TO PURCHASE COMMON STOCK OF
BREAKAWAY SOLUTIONS, INC.
28,571,429 Shares
THIS CERTIFIES that, SCP Private Equity Partners II, L.P. (herein
called "Holder"), or registered assigns, is entitled to purchase from Breakaway
Solutions, Inc., a corporation organized and existing under the laws of Delaware
(herein called the "Company"), at any time after the date hereof and until 5:00
p.m. (Eastern Standard Time) on April 6, 2011, (the "Expiration Date")
28,571,429 fully paid and non-assessable shares of Common Stock of the Company,
par value $0.000125 per share (the "Common Stock"), at a purchase price per
share of $0.70 (the "Exercise Price").
The number of shares of Common Stock to be received upon the exercise
of this Warrant and the price to be paid for a share of Common Stock are subject
to limitation and adjustment from time to time as hereinafter set forth.
DEFINITIONS
"ADDITIONAL SHARES OF CAPITAL STOCK" shall mean all shares of Capital
Stock issued by the Company, except: shares of Common Stock issued or issuable
upon exercise of options, warrants (other than outstanding warrants granted in
favor of Invest Inc.), convertible securities or other rights outstanding as of
April 6, 2001, and shares of Common Stock issued or issuable by the Company or
any subsidiary to employees, officers, directors or consultants pursuant to
stock option plans that are approved by the Board of Directors of the Company
(with an exercise price not less than the fair market value of the Common Stock
at the time of the grant) and are permitted by Section 7.4 of the Series A
Agreement, unless otherwise approved by the holders of not less than a majority
of the outstanding shares of the Series A Preferred Stock.
"CAPITAL STOCK" shall mean the Company's Common Stock, and any other
stock of any class, whether now or hereafter authorized, which has the right to
participate in the distribution of earnings and assets of the Company without
limit as to amount or percentage.
"INVESTOR RIGHTS AGREEMENT" means the Investor Rights Agreement between
the Company, SCP Private Equity Partners II, L.P., and ICG Holdings, Inc., dated
as of April 6, 2001.
"SERIES A AGREEMENT" means the Series A Preferred Stock Purchase
Agreement between the Company, SCP Private Equity Partners II, L.P., and ICG
Holdings, Inc., dated as of February 16, 2001.
"WARRANT SHARES" means the shares of Common Stock deliverable upon
exercise of this Warrant, as adjusted from time to time.
SECTION 1. EXERCISE OF WARRANT.
(a) This Warrant may be exercised in whole or in part on any
business day (the "Exercise Date") and on or before the Expiration Date by
presentation and surrender hereof to the Company at its principal office at the
following address: 2 Seaport Lane, Boston, MA 02110, or at the office of its
stock transfer or warrant agent, if any, (or at such other address as the
Company may hereafter notify the Holder in writing) with the Purchase Form
annexed hereto duly executed and accompanied by proper payment of the Exercise
Price in lawful money of the United States of America in the form of a check,
subject to collection, for the number of Warrant Shares specified in the
Purchase Form. If this Warrant should be exercised in part only, the Company
shall, upon surrender of this Warrant, execute and deliver a new Warrant
evidencing the rights of the Holder thereof to purchase the balance of the
Warrant Shares purchasable hereunder. Upon receipt by the Company of this
Warrant and such Purchase Form, together with proper payment of the Exercise
Price, at such office, the Holder shall be deemed to be the holder of record of
the Warrant Shares, notwithstanding that the stock transfer books of the Company
shall then be closed or that the certificates representing such Warrant Shares
shall not then be actually delivered to the Holder. The Company shall pay any
and all documentary stamp or similar issue or transfer taxes payable in respect
of the issue or delivery of the Warrant Shares.
(b) Notwithstanding the provisions of paragraph (a), the Holder
may, at its sole option, elect to exercise this Warrant in whole or in part by
receiving Warrant Shares equal to the value (as determined below) of this
Warrant, or any part hereof, upon surrender of the Warrant at the principal
office of the Company together with notice of such election in which event the
Company shall issue to the Holder a number of Warrant Shares calculated on the
basis of the following formula:
X = Y(A-B)
------
A
Where: X = the number of Warrant Shares to be issued to the
Holder
Y = the number of Warrant Shares to be exercised under
this Warrant
A = the current fair market value of one share of
Common Stock calculated (determined in the manner set
forth in Section 3) as of the last business day
immediately preceding the exercise of this Warrant
B = the Exercise Price
SECTION 2. RESERVATION OF SHARES. The Company shall reserve at all
times for issuance and delivery upon exercise or conversion of this Warrant all
shares of its Common Stock or other shares of Capital Stock of the Company from
time to time issuable upon exercise of this Warrant. All such shares shall be
duly authorized and, when issued upon the exercise or conversion of this Warrant
in accordance with the terms hereof, including payment of the applicable
Exercise Price in full, shall be validly issued, fully paid and nonassessable,
free and clear of all liens, security interests, charges and other encumbrances
or restrictions ("Liens") on sale (other than (i) restrictions pursuant to
applicable federal and state securities laws, and (ii) any Liens created by any
action or inaction of the Holder of the Warrant Shares) and free and clear of
all preemptive rights. If the Common Stock is listed on any national securities
exchange or The NASDAQ National Market, the Company shall also list such shares
on such exchange subject to notice of issuance or maintain the listing of its
Common Stock on The NASDAQ National Market, as the case may be.
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SECTION 3. FRACTIONAL INTEREST. The Company will not issue a fractional
share of Common Stock or scrip upon any exercise or conversion of this Warrant.
Instead, the Company will deliver its check for the current market value of the
fractional share. The current market value of a fraction of a share shall be
determined by multiplying the current market price of a full share by the
fraction of the share and rounding the result to the nearest cent.
The current market value of a share of Common Stock for purposes of
this Section shall be determined as follows:
(i) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on The NASDAQ National Market, the current
market value shall be the last reported sale price of the Common Stock
on such exchange or Market on the last business day prior to the date
of exercise or conversion of this Warrant or if no such sale is made
on such day, the average closing bid and asked prices for such day on
such exchange or Market; or
(ii) If the Common Stock is not so listed or admitted to unlisted
trading privileges, the current market value shall be the mean of the
last reported bid and asked prices reported by the National Quotation
Bureau, Inc., on the last business day prior to the date of exercise
or conversion; or
(iii) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so
reported, the current market value per share shall be an amount
determined in such reasonable manner as may be prescribed in good
faith by the Board of Directors of the Company.
SECTION 4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT.
(a) Except as otherwise provided in SECTION 8, the Holder of this
Warrant shall be entitled, at its option, without expense and without obtaining
the consent of the Company, to assign its interest in this Warrant, or any of
the Warrant Shares, in whole or in part, upon presentation and surrender hereof
to the Company or its stock transfer agent, if any; PROVIDED, HOWEVER, that the
transferee, prior to any such transfer, agrees in writing, in form and substance
satisfactory to the Company, to be bound by the terms of this Warrant and
provides the Company with an opinion of counsel in such form reasonably
acceptable to the Company, that such transfer would not be in violation of the
Act or any applicable state securities or blue sky laws.
(b) Subject to the provisions of SECTION 8, upon surrender of this
Warrant to the Company or at the office of its stock transfer agent or warrant
agent, with the Assignment Form annexed hereto duly executed and funds
sufficient to pay any transfer tax, the Company shall, without charge, execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees
named in such instrument of assignment and, if the Holder's entire interest is
not being assigned, in the name of the Holder, and this Warrant shall promptly
be canceled.
(c) This Warrant may be divided by or combined with other Warrants
which carry the same rights upon presentation hereof at the principal office of
the Company or at the office of its stock transfer or warrant agent, if any,
together with a written notice specifying the names and denominations in
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which new Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any warrants into which this Warrant may be
divided or exchanged.
(d) This Warrant is exchangeable, upon the surrender thereof by
the Holder at the principal office of the Company, for new Warrants of like
tenor registered in the Holder's name and representing in the aggregate the
right to purchase the number of shares purchasable under the Warrant being
exchanged, each of such new Warrants to represent the right to subscribe for and
purchase such number of shares as shall be designated by the Holder at the time
of such surrender.
SECTION 5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or equity, and the rights of the Holder are limited to those set forth in this
Warrant.
SECTION 6. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(a) RECLASSIFICATION, CONSOLIDATION OR MERGER. In case of any
reclassification or change of outstanding securities issuable upon exercise or
conversion of this Warrant (other than a change in par value, or from par value
to no par value, or from no par value to par value or as a result of a
subdivision or combination) or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with another
corporation in which the Company is a continuing corporation and which does not
result in any reclassification or change, other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination of outstanding securities issuable upon
the exercise of this Warrant), the Company, or such successor or purchasing
corporation, as the case may be, shall, without payment of any additional
consideration therefor, execute a new warrant providing that the Holder of the
Warrant shall have the right to exercise such new warrant (upon terms not less
favorable to the Holder than those then applicable to this Warrant) and to
receive upon such exercise, in lieu of each share of Common Stock theretofore
issuable upon exercise or conversion of this Warrant, the kind and amount of
shares of stock, other securities, money or property receivable upon such
reclassification, change, consolidation or merger by the Holder of one share of
Common Stock issuable upon exercise or conversion of this Warrant had the
Warrants been exercised or converted immediately prior to such reclassification,
change, consolidation, or merger. Such new warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this SECTION 6. The provisions of this SUBSECTION 6(a) shall
similarly apply to successive reclassifications, changes, consolidations, or
mergers.
(b) SUBDIVISION OR COMBINATION OF SHARES. If the Company at any
time while this Warrant remains outstanding and unexpired, shall subdivide or
combine its Capital Stock, the Exercise Price shall be proportionately reduced,
in case of subdivision of shares, as of the effective date of such subdivision,
or, if the Company shall take a record of holders of its Capital Stock for the
purpose of so subdividing, as of such record date, whichever is earlier, or
shall be proportionately increased, in the case of combination of shares, as of
the effective date of such combination, or, if the Company shall take a record
of holders of its Capital Stock for the purpose of so combining, as of such
record date, whichever is earlier.
(c) CERTAIN DIVIDENDS AND DISTRIBUTIONS. If the Company at any
time while this Warrant is outstanding and unexpired shall:
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(i) STOCK DIVIDENDS. Pay a dividend in shares of, or make another
distribution of shares of, its Capital Stock, then the Exercise Price
shall be adjusted, as of the date the Company shall take a record of
the holders of its Capital Stock for the purpose of receiving such
dividend or other distribution (or if no such record is taken, as at
the date of such payment or other distribution), to that price
determined by multiplying that Exercise Price in effect immediately
prior to such payment or other distribution by a fraction (a) the
numerator of which shall be the total number of shares of Capital
Stock outstanding immediately prior to such dividend or distribution,
and (b) the denominator of which shall be the total number of shares
of Capital Stock outstanding immediately after such dividend or
distribution; or
(ii) LIQUIDATING DIVIDENDS, ETC. Make a distribution of its
assets to the holders of its Capital Stock as a dividend in
liquidation or by way of return of capital or other than as a dividend
payable out of earnings or surplus legally available for dividends
under applicable law, the Holder shall, upon its exercise, be entitled
to receive, in addition to the number of shares of Common Stock
receivable thereupon, and without payment of any additional
consideration therefor, a sum equal to the amount of such assets as
would have been payable to it as owner of that number of shares of
Common Stock receivable by exercise or conversion of the Warrant had
it been the Holder of record of such Common Stock on the record date
for such distribution, or if no such record is taken, as of the date
of such distribution, and an appropriate provision therefor shall be
made a part of any such distribution.
(d) ISSUANCE OF ADDITIONAL SHARES OF CAPITAL STOCK. If the Company
at any time while this Warrant remains outstanding and unexpired shall issue any
Additional Shares of Capital Stock (otherwise than as provided in the foregoing
SUBSECTIONS (6)(a) through (6)(c) above) at a price per share less, or for other
consideration lower, than the Exercise Price, or without consideration, then
upon such issuance the Exercise Price shall be adjusted to the price per share
paid for such Additional Shares of Common Stock (but not less than the par value
of the Common Stock). The provisions of this SUBSECTION 6(d) shall not apply
under any of the circumstances for which an adjustment is provided in
SUBSECTIONS 6(a), 6(b) or 6(c). No adjustment of the Exercise Price shall be
made under this SUBSECTION 6(d) upon the issuance of any Additional Shares of
Capital Stock which are issued pursuant to the exercise of any warrants, options
or other subscription or purchase rights or pursuant to the exercise of any
conversion or exchange rights in any convertible securities if any such
adjustments shall previously have been made upon the issuance of any such
warrants, options or other rights or upon the issuance of any convertible
securities (or upon the issuance of any warrants, options or any rights
therefor) pursuant to SUBSECTIONS 6(e) or 6(f) hereof.
(e) ISSUANCE OF WARRANTS, OPTIONS OR OTHER RIGHTS. In case the
Company shall issue any warrants, options or other rights to subscribe for or
purchase any Additional Shares of Capital Stock and the price per share for
which Additional Shares of Capital Stock may at any time thereafter be issuable
pursuant to such warrants, options or other rights shall be less than the
Exercise Price per share of Common Stock hereunder, then upon such issuance the
Exercise Price shall be adjusted as provided in SUBSECTION 6(d) hereof on the
basis that the aggregate consideration for the Additional Shares of Capital
Stock issuable pursuant to such warrants, options or other rights, shall be
deemed to be the consideration received by the Company for the issuance of such
warrants, options, or other rights plus the minimum consideration to be received
by the Company for the issuance of Additional Shares of Capital Stock pursuant
to such warrants, options, or other rights.
(f) ISSUANCE OF CONVERTIBLE SECURITIES. In case the Company shall
issue any securities (debt or equity) convertible into Additional Shares of
Capital Stock and the consideration per share for which Additional Shares of
Capital Stock may at any time thereafter be issuable pursuant to the
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terms of such convertible securities shall be less than the Exercise Price, then
upon such issuance the Exercise Price shall be adjusted as provided in
SUBSECTION 6(d) hereof on the basis that (i) the maximum number of Additional
Shares of Capital Stock necessary to effect the conversion or exchange of all
such convertible securities shall be deemed to have been issued as of the date
of issuance of such convertible securities, and (ii) the aggregate consideration
for such maximum number of Additional Shares of Capital Stock shall be deemed to
be the minimum consideration received by the Company for the issuance of such
Additional Shares of Capital Stock pursuant to the terms of such convertible
securities. No adjustment of the Exercise Price shall be made under this
subsection upon the issuance of any convertible securities which are issued
pursuant to the exercise of any warrants or other subscription or purchase
rights therefor, if any such adjustment shall previously have been made upon the
issuance of such warrants or other rights pursuant to SUBSECTION 6(e) hereof.
(g) ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment in the
Exercise Price pursuant to any provisions of this SECTION 6, the number of
shares of Common Stock purchasable hereunder shall be adjusted, to the nearest
one hundredth of a whole share, to the product obtained by multiplying such
number of shares purchasable immediately prior to such adjustment by a fraction,
the numerator of which shall be the Exercise Price immediately prior to such
adjustment and the denominator of which shall be the Exercise Price immediately
thereafter.
(h) OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION.
The following provisions will be applicable to the making of adjustments in the
Exercise Price hereinabove provided in this SECTION 6:
(i) COMPUTATION OF CONSIDERATION. To the extent that any
Additional Shares of Capital Stock or any convertible securities (debt
or equity) or any warrants, options or other rights to subscribe for
or purchase any Additional Shares of Capital Stock or any convertible
securities (debt or equity) shall be issued for a cash consideration,
the consideration received by the Company therefor shall be deemed to
be the amount of the cash received by the Company therefor, or, if
such Additional Shares of Capital Stock or convertible securities
(debt or equity) are offered by the Company for subscription, the
subscription price, or, if such Additional Shares of Capital Stock or
convertible securities (debt or equity) are sold to underwriters or
dealers for public offering without a subscription offering, or
through underwriters or dealers for public offering without a
subscription offering, the initial public offering price, in any such
case excluding any amounts paid or incurred by the Company for and in
the underwriting of, or otherwise in connection with the issue
thereof. To the extent that such issuance shall be for a consideration
other than cash, then, except as herein otherwise expressly provided,
the amount of such consideration shall be deemed to be the fair value
of such consideration at the time of such issuance as determined in
good faith by the Company's Board of Directors. The consideration for
any Additional Shares of Capital Stock issuable pursuant to any
warrants, options or other rights to subscribe for or purchase the
same shall be the consideration received by the Company for issuing
such warrants, options or other rights, plus the additional
consideration payable to the Company upon the exercise of such
warrants, options or other rights. The consideration for any
Additional Shares of Capital Stock issuable pursuant to the terms of
any convertible securities (debt or equity) shall be the consideration
paid or payable to the Company in respect of the subscription for or
purchase of such convertible securities, plus the additional
consideration, if any, payable to the Company upon the exercise of the
right of conversion or exchange in such convertible securities. In
case of the issuance at any time of any Additional Shares of Capital
Stock or convertible securities (debt or equity) in payment or
satisfaction of any dividend upon any class of stock preferred as to
dividends in a fixed amount, the Company shall be deemed to have
received for such Additional Shares of Capital Stock or convertible
securities a consideration equal to the amount of such dividend so
paid or satisfied.
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(ii) READJUSTMENT OF EXERCISE PRICE. Upon the expiration of the
right to convert or exchange any convertible securities (debt or
equity), or upon the expiration of any rights, options or warrants,
the issuance of which convertible securities, rights, options or
warrants effected an adjustment in the Exercise Price, if any such
convertible securities shall not have been converted or exchanged, or
if any such rights, options or warrants shall not have been exercised,
the number of shares of Capital Stock deemed to be issued and
outstanding by reason of the fact that they were issuable upon
conversion or exchange of any such convertible securities or upon
exercise of any such rights, options, or warrants shall no longer be
computed as set forth above, and such Exercise Price shall forthwith
be readjusted and thereafter be the price which it would have been
(but reflecting any other adjustments in the Exercise Price made
pursuant to the provisions of this SECTION 6 after the issuance of
such convertible securities, rights, options or warrants) had the
adjustment of the Exercise Price made upon the issuance or sale of
such convertible securities or issuance of rights, options or warrants
been made on the basis of the issuance only of the number of
Additional Shares of Capital Stock actually issued upon conversion or
exchange of such convertible securities, or upon the exercise of such
rights, options or warrants, and thereupon only the number of
Additional Shares of Capital Stock actually so issued shall be deemed
to have been issued and only the consideration actually received by
the Company (computed as in SUBSECTION (6)(h)(i) hereof) shall be
deemed to have been received by the Company.
(iii) TREASURY SHARES. The number of shares of Capital Stock at
any time outstanding shall not include any shares thereof then
directly or indirectly owned or held by or for the account of the
Company.
(iv) OTHER ACTION AFFECTING CAPITAL STOCK. In case after the date
hereof the Company shall take any action affecting the Capital Stock,
other than an action described in any of the foregoing SUBSECTIONS
(6)(a) to (6)(f) hereof, inclusive, which in the opinion of the
Company's Board of Directors would have a materially adverse effect
upon the rights of the Holder to purchase the Warrant Shares, the
Exercise Price shall be adjusted in such manner and at such time as
the Board of Directors may in good faith determine to be equitable in
the circumstances.
(i) NOTICE OF CERTAIN ACTIONS. In the event that:
(i) the Company shall authorize the issuance to all holders of
its Common Stock of rights, warrants, options or convertible
securities to subscribe for or purchase shares of its Common Stock or
of any other subscription rights, warrants, options or convertible
securities; or
(ii) the Company shall authorize the distribution to all holders
of its Common Stock of evidences of its indebtedness or assets (other
than dividends paid in or distributions of the Company's Capital Stock
for which the Exercise Price shall have been adjusted pursuant to
SUBSECTION (6)(a) or cash dividends or cash distributions payable out
of consolidated current or retained earnings as shown on the books of
the Company and paid in the ordinary course of business); or
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(iii) the Company shall authorize any capital reorganization or
reclassification of the Common Stock (other than a subdivision or
combination of the outstanding Common Stock and other than a change in
par value of the Common Stock) or of any consolidation or merger to
which the Company is a party and for which approval of any
shareholders of the Company is required (other than a consolidation or
merger in which the Company is the continuing corporation and that
does not result in any reclassification or change of the Common Stock
outstanding), or of the conveyance or transfer of the properties and
assets of the Company as an entirety or substantially as an entirety;
or
(iv) the Company is the subject of a voluntary or involuntary
dissolution, liquidation or winding-up procedure; or
(v) the Company proposes to take any action (other than actions
of the character described in SUBSECTIONS (6)(a), (6)(b), (6)(c),
(6)(d) or (6)(e) that would require an adjustment of the Exercise
Price pursuant to this SECTION 6; then the Company shall cause to be
mailed by first-class mail to the Holder, at least ten (10) days prior
to the applicable record or effective date hereinafter specified, a
notice stating (x) the date as of which the holders of Common Stock of
record to be entitled to receive any such rights, warrants or
distributions are to be determined, or (y) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding-up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or
other property, if any, deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding-up.
SECTION 7. OFFICERS' CERTIFICATE. Whenever the Exercise Price shall be
adjusted as required by the provisions of SECTION 6, the Company shall forthwith
file in the custody of its secretary or an assistant secretary at its principal
office an officers' certificate showing the adjusted Exercise Price determined
as herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officers'
certificate shall be signed by the chairman, president or chief financial
officer of the Company and by the secretary or any assistant secretary of the
Company. A copy of each such officers' certificate shall be promptly mailed, by
certified mail, to the Holder and the original shall be made available at all
reasonable times for inspection by any other holder of a Warrant executed and
delivered pursuant to SECTION 4 hereof.
SECTION 8. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933;
REGISTRATION RIGHTS; CO-SALE AGREEMENT. No sale, transfer, assignment,
hypothecation or other disposition of this Warrant or of the Warrant Shares
shall be made if such transfer, assignment or other disposition would result in
a violation of the Act, or any state securities laws. Upon exercise of this
Warrant, the Holder shall, if requested by the Company, confirm in writing, in a
form reasonably satisfactory to the Company, that the shares of Common Stock so
purchased are being acquired solely for the Holder's own account, and not as a
nominee thereof, for investment, and not with a view toward distribution or
resale, except as permitted by the Act, and shall provide such other information
to the Company as the Company may reasonably request. Any Warrant and any
Warrants issued upon exercise of, substitution for, or upon assignment or
transfer of this Warrant, as the case may be, and all shares of Common Stock
issued upon exercise hereof or conversion thereof shall bear legends (in
addition to any legend required by state securities laws) in substantially the
form set forth on the first page of this Warrant, unless and until such
securities have been transferred pursuant to an effective registration statement
under the Act or may be freely sold to the public pursuant to Rule 144 (or any
successor rule thereto) or otherwise.
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SECTION 9. REGISTRATION RIGHTS. The Holder and any transferee of the
Warrant or the Warrant Shares issuable hereunder shall have the right to require
the Company to register the Warrant Shares with the Securities and Exchange
Commission for resale as provided in the Investor Rights Agreement.
SECTION 10. MODIFICATION AND WAIVER. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the holder hereof.
SECTION 11. NOTICES. Any notice, request or other document required or
permitted to be given or delivered to the Holder or the Company shall be
delivered or shall be sent by certified mail or documented overnight delivery
service, postage prepaid, or by telecopy, receipt acknowledged, to the Holder at
its address as shown on the books of the Company or to the Company at the
address indicated therefor in SECTION 1 of this Warrant.
SECTION 12. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The descriptive
headings of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the Commonwealth of Pennsylvania.
SECTION 13. NO IMPAIRMENT. The Company will not knowingly avoid or seek
to avoid the observance or performance of any of the terms to be observed or
performed hereunder by it, but will at all times in good faith assist in the
carrying out of all of the provisions of this Warrant.
IN WITNESS WHEREOF, the Company has duly caused this Warrant to be
signed by its duly authorized officer and to be dated as of April 6, 2001
BREAKAWAY SOLUTIONS, INC.
By:/s/ William Loftus
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Name: William P. Loftus
------------------------------------
Title: President and Chief Executive Officer
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PURCHASE FORM
Dated _______________________
The undersigned hereby irrevocably elects to exercise the within
Warrant to purchase _____________ shares of Common Stock and hereby makes
payment of $____________________ in payment of the exercise price thereof.
__________________________________
[PRINT OR TYPE NAME OF ENTITY]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
ASSIGNMENT FORM
Dated ________________________
FOR VALUE RECEIVED, ___________________________________________ hereby
(please type or print in block letters)
sells, assigns and transfers unto _____________________________________________
(please type or print in block letters)
(the "Assignee"), of____________________________________________________________
(Address)
its right to purchase up to _________ shares of Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint
_______________________________ Attorney, to transfer the same on the books of
the Company, with full power of substitution in the premises.
__________________________________
[PRINT OR TYPE NAME OF ENTITY]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------