EXHIBIT 10.23
March 26, 1999
To: ATGF II
Litton Master Trust
James Stableford
Emeric McDonald
Anthony Ciulla
Notwithstanding any provision of that certain Fourth Restated Investors
Rights Agreement (the "Investor Rights Agreement"), dated as of January 7, 1999
and as amended as of the date hereof, among CrossWorlds Software, Inc. (the
"Company") and the other parties thereto, if the Company intends to effect its
initial public offering ("IPO"), each of you ("Investor") shall have a right of
first refusal to purchase in the IPO (excluding any over-allotment option) an
amount of securities which the Company proposes to sell in the IPO equal to 100%
of the amount sufficient to maintain such Investor's proportionate beneficial
ownership interest in the Company (determined without reference to any over-
allotment option) attributable only to the Series E Preferred Stock of the
Company (or Common Stock issued upon conversion of the Series E Preferred Stock,
or a combination thereof) held by such Investor ("Investor Series E Preferred
Stock"), in accordance with the provisions of this letter, or such other
procedure as the Company shall agree upon in writing with the holders of a
majority of all outstanding shares of Investor Series E Preferred Stock (or
Common Stock issuable upon conversion of the Investor Series E Preferred, or a
combination thereof).
The Company shall provide (or cause the underwriters to provide) each of
the Investors with a copy of the preliminary prospectus included in the
registration statement for such IPO at least 10 days prior to the anticipated
effective date of such IPO, and shall at such time provide (or cause the
underwriters to provide) each Investor with reasonable instructions for
contacting the underwriters of the IPO to arrange for the purchase by each such
Investor in the IPO of the securities which such Investor is entitled to
purchase pursuant to this letter. For purposes of determining the pro rata
interest of each Investor, each security holder of the Company shall be treated
as owning that number of shares of Common Stock into which any outstanding
convertible securities may be converted and for which any outstanding options
may be exercised. Any Investor desiring to participate in the IPO pursuant to
this letter shall follow such reasonable instructions and shall inform the
underwriters of its intention to exercise its rights hereunder within 5 days
after receiving such preliminary prospectus.
To the extent that the Investors have not so offered to purchase all of the
shares available to them for purchase pursuant to this letter within 5 days of
the anticipated effective date of the registration statement for the IPO, the
Company or the underwriters shall inform those Investors who have so offered to
participate in the IPO pursuant to this letter of such number of available
shares not so offered to be purchased (the "Excess Shares"), and each of the
Investors who has offered to participate in the IPO shall have the right to
purchase the Excess Shares on a pro rata basis (based upon the number of shares
each such Investor was originally entitled to purchase pursuant to this );
provided, however, that the maximum number of Excess Shares which any Investor
shall be entitled to purchase shall be an amount which results in such Investor
participating in the IPO on a pro rata basis to the extent necessary to
maintain 100% of such Investor's proportionate beneficial interest in the
Company as a Series E Preferred Stock holder (determined as provided above).
The foregoing right may be transferred to any transferee of at least 50,000
shares of Series E Preferred Stock or to any person who is an Amerindo
Affiliate, as such term is defined below. The foregoing right shall be subject
to applicable SEC and NASD rules and regulations and shall be subject to cut
back to the extent deemed necessary by the managing underwriter in the IPO as
being necessary to the success of the offering for reasons which it shall set
forth in writing.
In addition, each Investor agrees that during the one hundred eighty (180)
day period following the effective date of the IPO, it shall not sell, offer to
sell, or otherwise transfer or dispose of the shares of the Company acquired
though exercise of the rights granted to such Investor pursuant to this letter.
To enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the shares held by each Investor (and the shares of
every other person subject to the foregoing restriction) until the end of such
period. Each Investor agrees to execute the form of such market stand-off
agreement as may be reasonably requested by the underwriters.
It is hereby further agreed that Amerindo Investment Advisors Inc. and each
of its affiliated companies under common control with it, as well as each of its
and their respective employees and each of its and their clients with assets
under management by any of them shall be deemed to be "affiliates" of each other
and "affiliated" with each other for all purposes of this letter agreement.
Each such person is herein referred to as an "Amerindo Affiliate."
Finally, it is also understood and agreed that notwithstanding anything
contained in the Stock Purchase Agreement among the Investors, the Company and
the other parties thereto, or Investor Rights Agreements to the contrary or in
any future amendment thereto to which all Amerindo Affiliates then holding
Series E Preferred Stock (including shares of Common Stock issued on conversion
thereof) have not expressly consented in writing), the market stand-off
agreement provided for in Section 1.11 of such Investor Rights Agreement shall
not be deemed to extend to, and no Amerindo Affiliate shall be required to enter
into any such arrangement purporting to extend to, any securities of the Company
acquired by any Amerindo Affiliate in the open market following the IPO, or to
any securities of the Company acquired by any Amerindo Affiliate in the IPO,
other than shares acquired by an Amerindo Affiliate pursuant to the IPO right
provided for in this letter.
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Very truly yours,
CROSSWORLDS SOFTWARE, INC.
By: /s/ K. A. Garnett
_______________________________
Katrina A. Garnett
President and Chief Executive Officer
[Signatures Continue]
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Agreed and Accepted as of the Date Above:
ATGF II
By: /s/ Alberto W. Vilar
___________________________________
Name: Alberto W. Vilar
Title: Director
Litton Master Trust
By: Amerindo Investment Advisors Inc..
Attorney-in-Fact
By: /s/ Alberto W. Vilar
______________________________
Name: Alberto W. Vilar
/s/ James Stableford
______________________________
James Stableford
/s/ Emeric McDonald
_______________________________
Emeric McDonald
/s/ Anthony Ciulla
______________________________
Anthony Ciulla
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