EXHIBIT 10.40
BREAKAWAY SOLUTIONS, INC.
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
JULY 2, 1999
TABLE OF CONTENTS
PAGE
1. RIGHTS OF INVESTOR...........................................................................................1
2. INFORMATION RIGHTS...........................................................................................1
2.1 Financial and Other Information.....................................................................1
2.2 Inspection..........................................................................................2
2.3 Termination of Certain Rights.......................................................................2
2.4 Transfer of Information Rights......................................................................2
3. REGISTRATION RIGHTS..........................................................................................2
3.1 Definitions.........................................................................................2
3.2 Requested Registration..............................................................................4
3.3 Piggyback Registrations.............................................................................6
3.4 Expenses of Registration............................................................................7
3.5 Form S-3 Registration...............................................................................7
3.6 Obligations of the Company..........................................................................8
3.7 Furnish Information.................................................................................9
3.8 Delay of Registration...............................................................................9
3.9 Indemnification.....................................................................................9
3.10 "Market Stand-Off"Agreement........................................................................11
3.11 Rule 144 Reporting.................................................................................12
3.12 Limitations on Subsequent Registration Rights......................................................12
3.13 Assignment of Registration Rights..................................................................12
3.14 Termination of Registration Rights.................................................................13
4. RIGHT OF FIRST OFFER TO SUBSCRIBE TO NEW ISSUANCES..........................................................13
4.1 General............................................................................................13
4.2 Certain Definitions................................................................................13
4.3 Mechanics of Right.................................................................................14
4.4 Termination........................................................................................15
4.5 Assignment.........................................................................................15
5. LEGENDS.....................................................................................................15
6. MISCELLANEOUS...............................................................................................15
6.1 Successors and Assigns.............................................................................15
6.2 Governing Law......................................................................................15
6.3 Counterparts.......................................................................................16
6.4 Titles and Subtitles...............................................................................16
6.5 Stock Splits, etc..................................................................................16
6.6 Notices............................................................................................16
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Table of Contents
(continued)
PAGE
6.7 Attorneys'Fees.....................................................................................16
6.8 Amendments and Waivers.............................................................................16
6.9 Severability.......................................................................................17
6.10 Entire Agreement...................................................................................17
6.11 Further Assurances.................................................................................17
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BREAKAWAY SOLUTIONS, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Amended and Restated Investor Rights Agreement (the "AGREEMENT") is
made and entered into as of July 2, 1999 by and between Breakaway Solutions,
Inc., a Delaware corporation (the "COMPANY"), and the investors listed on
Exhibit A attached hereto (each an "INVESTOR" and together the "INVESTORS").
RECITALS
WHEREAS, upon the terms and subject to the conditions of a Series B
Preferred Stock Purchase Agreement of even date herewith (the "PURCHASE
AGREEMENT"), the purchasers are acquiring shares of the Company's Series B
Preferred Stock, par value $.0001 per Share;
WHEREAS, Internet Capital Group, Inc. ("ICG") and the Company entered
into an Investor Rights Agreement dated as of December 23, 1998 (the "PRIOR
AGREEMENT");
WHEREAS, as an inducement for the purchasers of the Series B Preferred
Stock to enter into the Purchase Agreement, the Company, ICG and all other
Investors desire to amend and restate the Prior Agreement as provided herein.
1. RIGHTS OF INVESTOR
The Company, ICG and all other Investors hereby amend and restate the
Prior Agreement and the Company hereby grants to the Investors the information
rights, registration rights and rights of first offer (collectively the
"INVESTORS' RIGHTS") contained herein. Each Investor accepts the Investors'
Rights, as applicable, and agrees to be bound by the obligations contained
herein.
2. INFORMATION RIGHTS.
2.1 FINANCIAL AND OTHER INFORMATION. The Company will provide
each Investor with the following information:
(a) ANNUAL REPORTS. As soon as practicable after the
end of each fiscal year, and in any event within ninety (90) days thereafter,
consolidated balance sheets of the Company and its subsidiaries, if any, as of
the end of such fiscal year, and consolidated statements of income,
stockholders' equity and cash flows of the Company and its subsidiaries, if any,
for such year, prepared in accordance with generally accepted accounting
principles and setting forth in each case in comparative form the figures for
the previous fiscal year, all in reasonable detail and audited (without
qualification as to scope) by independent auditors of national standing selected
by the Company.
(b) MONTHLY AND QUARTERLY REPORTS. As soon as
practicable after the end of each month and fiscal quarter, and in any event
within thirty (30) days and forty-five (45) days, respectively, thereafter, a
consolidated balance sheet of the Company and its subsidiaries, if any, as of
the end of each such period, consolidated statements of income, consolidated
statements of changes in financial condition, a consolidated statement of cash
flow of the Company and its subsidiaries and a statement of stockholders' equity
for such period and for the current fiscal year to date, and setting forth in
each case in comparative form the figures for corresponding periods in the
previous fiscal year, and setting forth in comparative form the budgeted
figures, prepared in accordance with generally accepted accounting principles
(other than for accompanying notes), subject to changes resulting from year-end
audit adjustments, all in reasonable detail and signed by the principal
financial or accounting officer of the Company.
(c) ANNUAL BUDGET. As soon as practicable, but in any
event thirty (30) days prior to the end of each fiscal year, a projected
operating budget and business plan for the next fiscal year, prepared on a
monthly basis, including balance sheets and sources and applications of funds
statements for such months and, as soon as prepared, any other budgets or
revised budgets prepared by the Company.
2.2 INSPECTION. The Company shall permit the Investor at the
Investor's expense to visit and inspect the Company's properties, to examine its
books of account and records and to discuss the Company's affairs, finances and
accounts with its officers, all at such reasonable times as may be requested by
the Investor; PROVIDED, HOWEVER, that the Company shall not be obligated
pursuant to this Section 2.2 to provide access to any information that it
reasonably considers to be a trade secret or similar confidential information.
2.3 TERMINATION OF CERTAIN RIGHTS. The Company's obligations
under Section 2.1 and 2.2 herein will terminate upon the closing of the
Company's initial public offering of Common Stock pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the
"SECURITIES ACT") with a sales price per share of Common Stock (as adjusted for
combinations, stock dividends, subdivisions or split-ups) of at least $9.75 and
aggregate gross proceeds to the Company of at least $20,000,000 (the "COMPANY'S
INITIAL PUBLIC REGISTRATION").
2.4 TRANSFER OF INFORMATION RIGHTS. The information rights set
forth in this Section 2 shall not be assignable except in connection with a
transfer of Registrable Securities.
3. REGISTRATION RIGHTS.
3.1 DEFINITIONS.
(a) COMMON STOCK. The term "COMMON STOCK" means that
Common Stock of the Company.
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(b) EXCHANGE ACT. The term "EXCHANGE ACT" means the
Securities Exchange Act of 1934, as amended.
(c) FORM S-3. The term "FORM S-3" means such form
under the Securities Act as is in effect on the date hereof or any successor
registration form under the Securities Act subsequently adopted by the SEC which
permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC.
(d) HOLDER. For purposes of this Section 3, the term
"HOLDER" means any person owning of record Registrable Securities or any
transferee of record of such Registrable Securities to whom rights under this
Section 3 have been duly assigned in accordance with this Agreement.
(e) INITIATING HOLDER. The term "INITIATING HOLDER"
shall mean any Holder or Holders who in the aggregate are Holders (i) of not
less than 40% of the then outstanding Registrable Securities or (ii) of not less
than a majority of the Common Stock issued or issuable upon conversion of the
Series B Preferred Stock.
(f) PREFERRED STOCK. The term "PREFERRED STOCK" shall
mean the Series A and Series B Preferred Stock of the Company.
(g) REGISTRABLE SECURITIES. The term "REGISTRABLE
SECURITIES" means: all shares of Common Stock issued or issuable pursuant to the
conversion of Series A and Series B Preferred Stock and any shares of the Common
Stock of the Company or other securities issued or issuable in connection with
any stock split, stock dividend, recapitalization or similar event relating to
the foregoing; EXCLUDING in all cases, however, any such securities sold by a
person in a transaction in which rights under this Section 3 are not assigned in
accordance with this Agreement or any such securities sold to the public or sold
pursuant to Rule 144 promulgated under the Securities Act or eligible for sale
under Section (k) of Rule 144.
(h) REGISTRATION. The terms "REGISTER," "REGISTERED,"
and "REGISTRATION" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement.
(i) REGISTRATION EXPENSES. "REGISTRATION EXPENSES"
shall mean all expenses incurred by the Company in complying with Sections 3.2,
3.3, 3.5 and 3.6 hereof, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
accountants for the Company, fees and expenses of one counsel for all the
Holders, blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company).
(j) SEC. The term "SEC" or "COMMISSION" means the
U.S. Securities and Exchange Commission.
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(k) SELLING EXPENSES. "SELLING EXPENSES" shall mean
all underwriting discounts and selling commissions applicable to the sale of
Registrable Securities.
3.2 REQUESTED REGISTRATION.
(a) REQUEST FOR REGISTRATION BY INITIATING HOLDER. If
the Company shall receive from an Initiating Holder, at any time, a written
request that the Company effect any registration with respect to all or a part
of the Registrable Securities held by such Initiating Holder, the Company will:
(i) promptly give written notice of the
proposed registration, qualification or compliance to all other Holders of
Registrable Securities; and
(ii) as soon as practicable, use its best
efforts to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act) as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request received by the Company within 20 days after written notice
from the Company is given under Section 3.2(a)(i) above; PROVIDED, HOWEVER, that
the Company shall not be obligated to effect, or take any action to effect, any
such registration pursuant to this Section 3.2(a):
(a) In any particular jurisdiction in which
the Company would be required to execute a general consent to service of process
in effecting such registration, qualification or compliance, unless the Company
is already subject to service in such jurisdiction and except as may be required
by the Securities Act or applicable rules or regulations thereunder;
(b) More than once in any one year period;
(c) After the Company has effected two (2)
such registrations pursuant to this Section 3.2 and such registrations have been
declared or ordered effective or withdrawn by such Initiating Holder;
(d) If the Registrable Securities requested
by all Holders to be registered pursuant to such request have an anticipated
aggregate offering price to the public of less than $5,000,000; or
(e) Prior to the earlier of the date that is
(i) three years after the date of this Agreement and (ii) six months after the
Company's Initial Public Registration.
The registration statement filed pursuant
to the request of the Initiating Holders may, subject to the provisions of
Section 3.2(b) below, include other securities of the Company which are held by
officers or directors of the Company or for the Company's own account or which
are held by persons
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who, by virtue of agreements with the Company, are entitled to include their
securities in any such registration, but the Company and such other holders
shall have no absolute right to include any of its Registrable Securities in any
such registration, and such securities shall not be included unless all the
securities requested by the Holders are included.
(b) UNDERWRITING; REQUEST BY INITIATING HOLDER. If
the Initiating Holder intends to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to Section 3.2(a) and the Company shall
include such information in the written notice referred to in Section 3.2(a). In
such event, the right of any Holder to include such Holder's Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holder and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in Section
3.6(e)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holder and reasonably acceptable to the Company.
Notwithstanding any other provision of Section 3.2, if the underwriter advises
the Company and the Initiating Holder in writing that marketing factors require
a limitation of the number of shares to be underwritten, then the Company shall
so advise all Holders of Registrable Securities which would otherwise be
underwritten pursuant hereto, and the number of shares of Registrable Securities
that may be included in the underwriting shall be allocated among all Holders
thereof, including the Initiating Holder, in such proportion (as nearly as
practicable) among the Holders PRO RATA based on the amount of Registrable
Securities owned by each Holder.
(c) DEFERRAL OF FILING. Notwithstanding the
foregoing, if the Company shall furnish to the Holders requesting the filing of
a registration statement pursuant to Section 3.2(a), a certificate signed by the
President or Chief Executive Officer of the Company stating either (i) that in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, or (ii) that the Company intends to file its initial
registration statement for the Company's Initial Public Registration within
ninety (90) days of notice of the Initiating Holder, then the Company shall have
the right to defer such filing for a period of not more than 90 days after
receipt of the request of the Initiating Holder; PROVIDED, HOWEVER, that the
Company may not utilize this right more than once in any twelve (12)-month
period.
(d) WITHDRAWAL BY HOLDER. Notwithstanding the
foregoing, any Holder shall have the right to withdraw from any registration of
Registrable Securities effected by the Company pursuant to this Section 3.2;
PROVIDED, HOWEVER, that such withdrawal shall not prevent such Holder from
participating in any registration in the future pursuant to this Section 3.2
except as such participation is limited by Section 3.2(a)(ii)A and 3.2(a)(ii)B.
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3.3 PIGGYBACK REGISTRATIONS.
(a) NOTICE. The Company shall notify all Holders of
Registrable Securities in writing at least 30 days prior to filing any
registration statement under the Securities Act for purposes of effecting a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding any registration statement relating to any employee
benefit plan or a corporate reorganization) and will afford each such Holder an
opportunity to include in such registration statement all or any part of the
Registrable Securities then held by such Holder. Each Holder desiring to include
in any such registration statement all or any part of the Registrable Securities
held by such Holder shall, within 20 days after receipt of the above-described
notice from the Company, so notify the Company in writing, and in such notice
shall inform the Company of the number of Registrable Securities such Holder
wishes to include in such registration statement. If a Holder decides not to
include all of its Registrable Securities in any registration statement
thereafter filed by the Company, such Holder shall nevertheless continue to have
the right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with respect
to offerings of its securities, all upon the terms and conditions set forth
herein.
(b) UNDERWRITING. If a registration statement under which the
Company gives notice under Section 3.3 is for an underwritten offering, then the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder's Registrable Securities to be included in a
registration pursuant to this Section 3.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the managing underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter(s) determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the managing
underwriter(s) may exclude shares (including Registrable Securities) from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated, FIRST, to the
Company, SECOND, to each of the Holders of Registrable Securities requesting
inclusion of their Registrable Securities in such registration statement, to be
allocated among all Holders thereof PRO RATA based on the amount of Registrable
Securities of the Company owned by each Holder and THIRD, to each of the other
holders, including the officers and directors of the Company, of the Company's
securities, other than the Holders requesting inclusion of their Registrable
Securities in such registration statement, to be allocated among such other
holders thereof PRO RATA based on the number of shares owned by each such other
holder; PROVIDED, HOWEVER, that the right of the underwriters to exclude shares
(including Registrable Securities) from the registration and underwriting as
described above shall be restricted so that the number of Registrable Securities
included in any such registration is not reduced below twenty-five percent (25%)
of the shares included in the registration, except for a registration relating
to the Company's Initial Public Registration from which all Registrable
Securities may be excluded. Any Registrable Securities excluded or withdrawn
from such underwriting shall be excluded and withdrawn from the registration.
For any Holder which is a partnership or corporation, the partners,
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retired partners and stockholders of such Holder, or the estates and family
members of any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a single "HOLDER," and any
PRO RATA reduction with respect to such "HOLDER" shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such "HOLDER," as defined in this sentence.
(c) WITHDRAWAL BY THE COMPANY. The Company shall have
the right to withdraw any registration initiated by it under this Section.
(d) WITHDRAWAL BY HOLDER. Notwithstanding the
foregoing, any Holder shall have the right to withdraw from any registration of
Registrable Securities effected by the Company pursuant to this Section 3.3;
PROVIDED, HOWEVER, that such withdrawal shall not prevent such Holder from
participating in any registration in the future pursuant to this Section 3.3.
3.4 EXPENSES OF REGISTRATION. All Registration Expenses
incurred in connection with two demand registrations (pursuant to Section 3.2),
all piggyback registrations (pursuant to Section 3.3) and four S-3 registrations
(pursuant to Section 3.5) shall be borne by the Company unless the expenses are
in connection with a registration subsequently withdrawn by the Holders in which
case, the Holders agree to reimburse the Company for such Registration Expenses,
and all Selling Expenses shall be borne by the Holders of the securities so
registered pro rata on the basis of the number of their shares so registered.
3.5 FORM S-3 REGISTRATION. In case the Company shall receive
from one or more Holders a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holders,
provided the number of shares requested to be sold would have an aggregate price
to the public of at least $1,000,000, then the Company will:
(a) NOTICE. Promptly give written notice of the
proposed registration and the Holder's request therefor, and any related
qualification or compliance, to all other Holders of Registrable Securities; and
(b) REGISTRATION. As soon as practicable, use its
best efforts to effect such registration and all such qualifications and
compliances as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of the Holder's Registrable Securities
as are specified in such request together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request as are
specified in a written request received by the Company within 20 days after
written notice from the Company is given under Section 3.5(a) above; PROVIDED,
HOWEVER, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 3.5:
(i) if Form S-3 is not available for such
offering by the Holders;
(ii) if the Company shall furnish to the
Holders a certificate signed by the President or Chief Executive Officer of the
Company stating that in the good faith judgment
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of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its stockholders for such Form S-3 Registration to be effected
at such time, in which event the Company shall have the right to defer the
filing of the Form S-3 registration statement for an aggregate of not more than
ninety (90) days after receipt of the request of the Holders; provided, however,
that the Company may not utilize this right more than once in any twelve
(12)-month period;
(iii) in any particular jurisdiction in
which the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance; or
(iv) if the Company has filed a registration
statement on Form S-3 relating to Registrable Securities within the twelve (12)
months preceding the request of the Holders.
Subject to the foregoing, the Company shall use its best efforts to file
a Form S-3 registration statement covering the Registrable Securities and
other securities so requested to be registered pursuant to this Section 3.5
as soon as practicable after receipt of the request the Holders for such
registration.
3.6 OBLIGATIONS OF THE COMPANY. Whenever required to effect
the registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective, and keep such
registration statement effective until the distribution is completed, but not
more than 180 days.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and all amendments and supplements thereto,
and such other documents as they may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by them that are included in
such registration.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, PROVIDED, HOWEVER, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
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(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter(s) of such offering. Each
Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the happening of
any event of which the Company has knowledge as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing and, following such notification,
promptly deliver to each Holder copies of all amendments or supplements referred
to in paragraphs (b) and (c) of this Section 3.6.
(g) Furnish, at the request of any Holder registering
Registrable Securities, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering addressed to the underwriters, if any, and if there are no
underwriters, to the Holders requesting registration of Registrable Securities
and (ii) a "comfort" letter dated as of such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders requesting registration, addressed to the underwriters,
if any, and if there are no underwriters, to the Holders registering Registrable
Securities.
3.7 FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Sections 3.2, 3.3
or 3.5 that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as shall be required to timely effect
the registration of Registrable Securities.
3.8 DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 3.
3.9 INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under Sections 3.2, 3.3 or 3.5:
(a) BY THE COMPANY. To the extent permitted by law,
the Company will indemnify and hold harmless each Holder, the partners, members,
officers and directors of each Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person, if any,
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who controls such Holder or underwriter within the meaning of the Securities Act
or the Exchange Act against any losses, claims, damages, or liabilities (joint
or several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "VIOLATION"):
(i) any untrue statement or alleged untrue
statement of a material fact contained or incorporated by reference in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto;
(ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or
(iii) any violation or alleged violation by
the Company of the Securities Act, the Exchange Act, any federal or state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any federal or state securities law in connection with the
offering covered by such registration statement;
and the Company will reimburse each such Holder, partner, member, officer or
director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED
HOWEVER, that the indemnity agreement contained in this subsection 3.9(a)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished in writing and expressly stated for use in connection
with such registration by such Holder, partner, member, officer, director,
underwriter or controlling person of such Holder.
(b) BY SELLING HOLDERS. To the extent permitted by
law, each selling Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such registration is being effected,
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter
(as defined in the Securities Act) and any other Holder selling securities under
such registration statement or any of such other Holder's partners, members,
directors or officers or any person who controls such underwriter or other
Holder within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, controlling person, underwriter or other such
Holder, member, partner or director, officer or controlling person of such
underwriter or other Holder may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
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information furnished by such Holder and stated to be specifically for use in
such registration; and each such Holder will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or other Holder, partner, member, officer,
director or controlling person of such other Holder or underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action; PROVIDED, HOWEVER, that the indemnity agreement contained in this
subsection 3.9(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld; and
PROVIDED FURTHER, that the total amounts payable in indemnity by a Holder under
this Section 3.9(b) in respect of any Violation shall not exceed the net
proceeds received by such Holder in the registered offering out of which such
Violation arises.
(c) NOTICE. Promptly after receipt by an indemnified
party under this Section 3.9 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under Section 3.9,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if (i) the indemnifying party fails to assume the
defense of such action or (ii) if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate due to
actual or potential conflict of interests between such indemnified party and any
other party represented by such counsel in such proceeding. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 3.9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 3.9.
(d) SURVIVAL. The obligations of the Company and
Holders under this Section 3.9 shall survive the completion of any offering of
Registrable Securities in a registration statement, and otherwise.
3.10 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees
that it shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of any
Registrable Securities or other shares of stock of the Company then owned by
such Holder (other than to donees, members, partners or affiliates of the Holder
who agree to be similarly bound) for up to 180 days following the date of the
final prospectus in connection with the registration statement of the Company
filed under the Securities Act; PROVIDED, HOWEVER, that such agreement shall be
applicable only to the first such registration statement of the Company that
covers securities to be sold on its behalf to the public in an underwritten
offering but not to Registrable Securities sold pursuant to such registration
statement and provided, further, that each officer and director of the Company
also agrees to such restrictions.
-11-
The provisions of this Section 3.10 shall be binding upon any
transferee or assignee of any Registrable Securities, whether or not such
persons are entitled to registration rights pursuant to Section 3.13.
3.11 RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to:
(a) Make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;
(b) Use its best efforts to file with the Commission
in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements); and
(c) So long as a Holder owns any Registrable
Securities, to furnish to the Holder forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to the reporting requirements of the Exchange Act), a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents of the Company as a Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing a Holder to
sell any such securities without registration (at any time after the Company has
become subject to the reporting requirements of the Exchange Act).
3.12 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and
after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of at least a majority of the Common Stock issued
or issuable upon the conversion of the Series B Preferred Stock, enter into any
agreement with any holder or prospective holder of any securities of the Company
that would allow such holder or prospective holder (a) to include such
securities in any registration filed under this Section 3 hereof, unless, under
the terms of such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the inclusion of his
securities will not reduce the amount of the Registrable Securities of the
Holders which is included, or (b) to make a demand registration to the Company.
Notwithstanding the foregoing, this Section 3.12 shall not apply to the grant of
registration rights on no more favourable terms and conditions than those
granted herein in connection with the issuance by the Company of a warrant to
Silicon Valley Bank to purchase up to 26,000 shares of Series B Preferred.
3.13 ASSIGNMENT OF REGISTRATION RIGHTS. The rights of a Holder
under this Section 3 may be assigned by any Holder to any party in a transfer
not involving a distribution or
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offering of such shares to the public and not made pursuant to Rule 144
promulgated under the Securities Act; PROVIDED, however, in each case that such
other party agrees in writing with the Company to be bound by all of the
provisions of this Section 3.
3.14 TERMINATION OF REGISTRATION RIGHTS. The registration
rights granted pursuant to Section 3 will terminate as to any Holder upon the
later to occur of (a) such time as the Company and the Holder are satisfied that
Rule 144(k) is available for the resale by the then-current Holder of the Common
Stock underlying all of the Preferred Stock, (b) the third-year anniversary
following the effective date of the Company's Initial Public Registration or (c)
such time as a Holder has less than one percent of the shares of the outstanding
Common Stock of the Company (assuming conversion of all Preferred Stock into
Common Stock) and can sell all of its remaining Registrable Securities under
Rule 144 during any three (3)-month period.
4. RIGHT OF FIRST OFFER TO SUBSCRIBE TO NEW ISSUANCES.
4.1 GENERAL. The Company hereby grants to each Investor the
right of first offer to purchase such Investor's pro rata share ("PRO RATA
SHARE") of New Securities (as defined in Section 4.2) that the Company may, from
time to time, propose to sell and issue. Such Investor's Pro Rata Share, for
purposes of this right of first offer, is the ratio that the number of shares of
Common Stock (assuming conversion of all Preferred Stock and securities
convertible into Common Stock but not including options or warrants to acquire
Common Stock) held by such Investor bears to the total number of shares of
Common Stock outstanding immediately prior to the time of issuance of such New
Securities (assuming conversion into Common Stock of all outstanding Preferred
Stock and any other securities convertible into Common Stock but not including
options or warrants to acquire Common Stock). This right of first offer shall be
subject to Sections 4.2, 4.3, 4.4 and 4.5 of this Agreement:
4.2 CERTAIN DEFINITIONS. For the purposes of Section 4:
"NEW SECURITIES" shall mean any Common Stock or any Preferred Stock of the
Company, whether or not now authorized, and any rights, options, or warrants to
purchase said Common Stock or Preferred Stock, and securities of any type
whatsoever that are, or may become, convertible into or exchangeable for Common
Stock or Preferred Stock; PROVIDED, HOWEVER, that "NEW SECURITIES" shall not
include (i) securities issuable upon conversion of or with respect to the Series
A or Series B Preferred Stock or upon conversion of or with respect to any other
Preferred Stock subsequently issued; (ii) securities offered to the public
pursuant to a registration statement filed under the Securities Act; (iii)
securities issued pursuant to the acquisition of another unaffiliated
corporation by the Company by merger, purchase of substantially all of the
assets, or other reorganization whereby the Company owns not less than 50% of
the voting power of the surviving corporation; (iv) shares of the Company's
Common Stock (or related options or warrants) issued to employees, officers,
directors, consultants, or other persons performing services for the Company
(including, but not by way of limitation, distributors and sales
representatives) pursuant to any stock offering, plan, or arrangement currently
in place or approved by a majority of the non-employee members of the Board of
Directors of the Company; PROVIDED, HOWEVER, that shares so issued may not
exceed 1,894,534
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shares (as adjusted for any stock dividends, combinations or splits with respect
to the Common Stock) plus such additional number of options as may again become
issuable under any such plan due to termination of options previously issued;
(v) securities issued pursuant to or in connection with any corporate
partnership, joint venture or licensing arrangement with a non-affiliate or in
connection with an unaffiliated equipment lease financing or bank debt into
which the Company may enter, but not exceeding one percent (1%) of the Company's
then outstanding securities; (vi) shares of the Company's Common Stock or
Preferred Stock issued in connection with any stock split, stock dividend, or
recapitalization by the Company; or (vii) securities issued upon exercise or
conversion of any New Securities.
4.3 MECHANICS OF RIGHT.
(a) NOTICES; PRO RATA RIGHTS. In the event that the
Company proposes to issue New Securities, it shall give each such Investor
written notice (the "FIRST NOTICE") of its intention, describing the type of New
Securities, the price, and the general terms upon which the Company proposes to
issue the same. Within 20 days after receipt of the First Notice, the Investor
shall give the Company written notice (the "INVESTOR NOTICE") of its intention
to purchase or obtain, at the price and on the terms specified in the Notice, a
number of shares equal to or less than its Pro Rata Share of the New Securities.
The Investor Notice shall be deemed a binding offer to purchase the number of
New Securities set forth therein. In addition, the Investor Notice shall state
whether an Investor wishes to purchase more than its Pro Rata Share of the New
Securities. The Company shall promptly give written notice to each Investor that
purchases its Pro Rata Share of the New Securities (a "FULL EXERCISING
INVESTOR") of the amount of New Securities, if any, that other Investors do not
elect to purchase in response to the First Notice (the "SECOND NOTICE"). Each
Fully-Exercising Investor shall notify the Company within 10 days of receipt of
the Second Notice if it would like to purchase any of the unsubscribed shares
and indicate the maximum number of unsubscribed shares it would like to
purchase. The Company shall inform the Fully-Exercising Investor of the total
number of unsubscribed shares available and provide the Fully-Exercising
Investor with an allocation of the unsubscribed shares based on the number of
shares of Common Stock (assuming conversion of all Preferred Stock into Common
Stock) held by each Fully-Exercising Investor.
(b) COMPANY RIGHT. To the extent that the Investors
fail to exercise in full the right of first offer as provided in Section 4.3(a)
hereof, the Company shall have 75 days thereafter to sell (or enter into an
agreement pursuant to which the sale of New Securities covered thereby shall be
closed, if at all, within 75 days) the New Securities in respect of which the
Investors' rights were not exercised, at a price and upon general terms no more
favorable to the purchasers thereof than specified in the First Notice. In the
event the Company has not sold the New Securities within said 75-day period (or
sold and issued New Securities in accordance with the foregoing within 75 days
from the date of said agreement), the Company shall not thereafter issue or sell
any New Securities, without first offering such securities to the Investors in
the manner provided above.
-14-
(c) NO IMPAIRMENT. An Investor's failure to exercise
this right of first offer on any issuance of New Securities shall not adversely
affect the Investor's right of first offer to purchase subsequent issuances of
New Securities.
4.4 TERMINATION. The rights of first offer under this Section
4 shall not apply to and shall terminate upon the closing of the Company's
Initial Public Registration.
4.5 ASSIGNMENT. The right of first offer granted under this
Section 4 is nonassignable except to an affiliate or other entity under common
control with an Investor.
5. LEGENDS.
Each Investor understands that the share certificates evidencing any
Registrable Securities shall be endorsed with the following legends (in addition
to any legends required under applicable state securities laws):
(a) "THE SALE, TRANSFER OR ASSIGNMENT OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF AN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OR HIS PREDECESSOR IN
INTEREST. COPIES OF SUCH AGREEMENT MAY BE OBTAINED BY WRITTEN REQUEST MADE BY
THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY."
(b) Any legend required to be place thereon by any
other applicable state securities laws.
6. ADDITIONAL SERIES B PREFERRED STOCK
6.1 ADDITIONAL SERIES B PREFERRED STOCK. The Company may issue
additional shares of Series B Preferred Stock to additional third parties no
later than July 14, 1999 on the terms and conditions contained in the Stock
Purchase Agreement dated July 2, 1999. Such additional purchaser(s) shall
execute a counterpart to the signature page of this Agreement and shall be
deemed to be party to and an Investor under this Agreement and be bound by the
terms hereof.
7. MISCELLANEOUS.
7.1 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and permitted
transferees and permitted assigns of the parties; PROVIDED THAT such permitted
assigns comply with the terms hereof.
7.2 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of Delaware as applied to contracts made and
to be performed entirely within that state between residents of that state.
-15-
7.3 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument.
7.4 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
7.5 STOCK SPLITS, ETC. All share numbers used in this
Agreement are subject to adjustment in the case of any stock split, reverse
stock split, combination or similar events.
7.6 NOTICES. Any notice required or permitted to be given to a
party pursuant to the provisions of this Agreement will be in writing and will
be effective upon (i) the date of delivery by facsimile, or (ii) the business
day after deposit with a nationally-recognized courier or overnight service,
including Express Mail, for United States deliveries or (iii) five (5) business
days after deposit in the United States mail by registered or certified mail for
United States deliveries. All notices not delivered personally or by facsimile
will be sent with postage and other charges prepaid and properly addressed to
the party to be notified at the address set forth below such party's name on
EXHIBIT A to this Agreement or at such other address as such party may designate
by ten (10) days advance written notice to the other parties hereto. All notices
for delivery outside the United States will be sent by facsimile, or by
nationally recognized courier or overnight service. Any notice given hereunder
to more than one person will be deemed to have been given, for purposes of
counting time periods hereunder, on the date given to the last party required to
be given such notice. Notices to the Company will be marked to the attention of
the Chief Financial Officer. The Company may discharge its notice obligation
hereunder by giving notice to a transferor of Registrable Securities if it has
not been given an address of the transferee.
7.7 ATTORNEYS' FEES. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
7.8 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the party against whom
enforcement of such amendment or waiver is sought; provided, however that with
respect to any Investor, the consent of the holders of more than eighty percent
(80%) of the shares of Series B Preferred shall be sufficient to bind any and
all Investors, other than Section 2.3 which shall require the consent of the
holders of at least two-thirds of the shares of Series B Preferred and Section
4.2(iv) which shall require the consent of the holders of a majority of the
shares of Series B Preferred; and provided, further, that where the amendment or
waiver affects a right or creates an obligation that is specific to a party
named herein (whether an individual, trust, partnership or corporation), the
amendment or waiver of such right or creation of such obligation shall require
the consent of such party.
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7.9 SEVERABILITY. If any provision of this Agreement is held
to be unenforceable under applicable law, then such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision was so excluded and shall be enforceable in accordance with its
terms.
7.10 ENTIRE AGREEMENT. This Agreement, together with all
Exhibits hereto, constitute the full and entire understanding and agreement
between the parties with respect to the subject matter hereof and supersedes all
prior negotiations, correspondence, agreements, understandings, duties or
obligations among the parties with respect to the subject matter hereof.
7.11 FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of a party, the other parties shall execute and
deliver such instruments, documents or other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Investors' Rights
Agreement as of the date first above written.
BREAKAWAY SOLUTIONS, INC.
By: /s/ Kevin Comerford
-------------------
Kevin Comerford, Vice President,
Finance
[Signature Page to Breakaway Solutions, Inc. Investors' Rights Agreements]
IN WITNESS WHEREOF, the parties hereto have executed this Investors' Rights
Agreement as of the date first above written.
INTERNET CAPITAL GROUP, INC.
By: /s/ Walter W. Buckley
------------------------------------
Walter W. Buckley, President and CEO
[Signature Page to Breakaway Solutions, Inc. Investors' Rights Agreements]
IN WITNESS WHEREOF, the parties hereto have executed this Investors' Rights
Agreement as of the date first above written.
GE CAPITAL EQUITY INVESTMENTS, INC.
By: /s/ Roger Hurwitz
Name: Roger Hurwitz
Title: Vice President
[Signature Page to Breakaway Solutions, Inc. Investors' Rights Agreements]
IN WITNESS WHEREOF, the parties hereto have executed this Investors' Rights
Agreement as of the date first above written.
MORGAN STANLEY VENTURE INVESTORS III, L.P.
By: Morgan Stanley Venture Partners III, L.L.C.
its General Partner
By: Morgan Stanley Venture Capital III, Inc.
its Institutional Managing Member
By: /s/ Debra Allen
MORGAN STANLEY VENTURE PARTNERS III, L.P.
By: Morgan Stanley Venture Partners III, L.L.C.
its General Partner
By: Morgan Stanley Venture Capital III, Inc.
its Institutional Managing Member
By: /s/ Debra Allen
THE MORGAN STANLEY VENTURE PARTNERS
ENTREPRENEUR FUND, L.P.
By: Morgan Stanley Venture Partners III, L.L.C.
its General Partner
By: Morgan Stanley Venture Capital III, Inc.
its Institutional Managing Member
By: /s/ Debra Allen
MORGAN STANLEY DEAN WITTER EQUITY FUNDING, INC.
By: David Powers
Vice President
By: /s/ David Powers
[Signature Page to Breakaway Solutions, Inc. Investors' Rights Agreements]
IN WITNESS WHEREOF, the parties hereto have executed this Investors' Rights
Agreement as of the date first above written.
INTERNET KATALYST LLC
By: /s/ Johnathan Kalman
Name: Johnathon Kalman
Title: Chairman & CEO
[Signature Page to Breakaway Solutions, Inc. Investors' Rights Agreements]
IN WITNESS WHEREOF, the parties hereto have executed this Investors' Rights
Agreement as of the date first above written.
H & D INVESTMENTS 97
By: /s/ John M. Wescott, Jr.
Name: John M. Wescott, Jr.
Title: General Partner
[Signature Page to Breakaway Solutions, Inc. Investors' Rights Agreements]
IN WITNESS WHEREOF, the parties hereto have executed this Investors' Rights
Agreement as of the date first above written.
INTEL CORPORATION.
By: /s/ Arvind Sodhani
Name: Arvind Sodhani
Title: Vice President and Treasurer
IN WITNESS WHEREOF, the parties hereto have executed this Investors' Rights
Agreement as of the date first above written.
OMEGA VENTURES III, L.L.C.
By: RS Omega III Holdings, L.L.C.,
Authorized Signatory
By: /s/ Illegible
----------------------------------
Managing Member
R.S. & CO. OFFSHORE OMEGA
VENTURES III
By: RS Omega III Holdings, L.L.C.,
Authorized Signatory
By: /s/ Illegible
----------------------------------
Managing Member
OMEGA BAYVIEW, L.L.C.
By: /s/ Terry B. Otter
----------------------------------
Managing Member
CROSSOVER FUND II, L.P.
By: Crossover Investment Management, L.L.C.
Its General Partner
By: /s/ Michael J. Stark
----------------------------------
Michael J. Stark, Managing Member
[Signature Page to Breakaway Solutions, Inc. Investors' Rights Agreements]
EXHIBIT A
SCHEDULE OF INVESTORS
FIRST CLOSING
Name and Address of Investor
- -------------------------------------------------
Internet Capital Group, Inc.
435 Devon Park Drive
Wayne, PA
Attention: Walter Buckley
Telecopier: (610) 989-0112
GE CAPITAL EQUITY INVESTMENTS, INC.
120 Long Ridge Road
2nd Floor
Stamford, CT 06927
Attention: General Counsel
Telecopier: (203) 357-3047
OMEGA VENTURES III, L.L.C.
555 California Street
Suite 2350
San Francisco, CA 94104
Attention: Jason Sanders
Telecopier: (415) 676-2556
RS & CO. OFFSHORE OMEGA VENTURES III
555 California Street
Suite 2350
San Francisco, CA 94104
Attention: Jason Sanders
Telecopier: (415) 676-2556
OMEGA BAYVIEW, L.L.C.
555 California Street
Suite 2350
San Francisco, CA 94104
Attention: Jason Sanders
Telecopier: (415) 676-2556
CROSSOVER FUND II, L.P.
555 California Street
Suite 2350
Name and Address of Investor
- -------------------------------------------------
San Francisco, CA 94104
Attention: Jason Sanders
Telecopier: (415) 676-2556
MORGAN STANLEY VENTURE PARTNERS III, L.P.
1221 Avenue of the Americas
33rd Floor
New York, NY 10020
Attention: Debra Abramovitz, Principal
Telecopier: (212) 762-7770
MORGAN STANLEY VENTURE INVESTORS III, L.P.
1221 Avenue of the Americas
33rd Floor
New York, NY 10020
Attention: Debra Abramovitz, Principal
Telecopier: (212) 762-7770
THE MORGAN STANLEY VENTURE PARTNERS ENTREPRENEUR FUND, L.P.
1221 Avenue of the Americas
33rd Floor
New York, NY 10020
Attention: Debra Abramovitz, Principal
Telecopier: (212) 762-7770
MORGAN STANLEY DEAN WITTER EQUITY FUNDING
1221 Avenue of the Americas
33rd Floor
New York, NY 10020
Attention: Debra Abramovitz, Principal
Telecopier: (212) 762-7770
-20-
Name and Address of Investor
- -------------------------------------------------
INTERNET KATALYST LLC
4 Spring Mill Lane
Haverford, PA 19041
Attention: Jonathan Kalman
Telecopier: (610) 989-0112
H & D INVESTMENTS 97
60 State Street
Boston, MA 02109
Attention: Jay Westcott
Telecopier: (617) 526-5000
SECOND CLOSING
Name and Address of Investor
- -------------------------------------------------
INTEL CORPORATION
2200 Mission College Boulevard
Santa Clara, CA 95052-8199
Attention: Winston Damarillo
Telecopier: (408) 765-1399