EXHIBIT 10.30
BREAKAWAY SOLUTIONS, INC.
Incentive Stock Option Agreement
BREAKAWAY SOLUTIONS, INC. (the "Company") hereby grants the 18th day of
February, 1999 (the "Grant Date") to ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Employee"), an
option to purchase a maximum of two hundred eighty one thousand six hundred and
seventy (281,670) shares (the "Option Shares") of the Company's Common Stock,
par value $.0001 per share ("Common Stock") at the price of one dollar and
forty-two cents ($1.42) per share, on the following terms and conditions:
1. GRANT UNDER 1998 STOCK PLAN.
This option is granted pursuant to and is governed by the Company's
1998 Stock Plan (the "Plan"), the terms and conditions of which are
incorporated herein by reference, and, unless the context otherwise
requires, terms used herein shall have the same meaning as in the Plan.
Determinations made in connection with this option pursuant to the Plan
shall be governed by the Plan as it exists on the Grant Date.
2. GRANT AS INCENTIVE STOCK OPTION; OTHER OPTIONS.
This option is intended to qualify as an incentive stock option ("ISO")
under Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"). However, the foregoing shall not be construed as invalidating
this option to any extent in the event all or part of its falls, for
any reason, to so qualify, and to the extent it does not so qualify
this option shall be treated for all purposes as a Non-Qualified Option
under the Plan. This option is in addition to any other options
heretofore or hereafter granted to the Employee by the Company or any
Related Corporation (as defined in the Plan) but a duplicate original
of this instrument shall not effect the grant of another option.
3. VESTING OF OPTION.
Except as otherwise provided in this Agreement, and subject to all
other terms and conditions of this Agreement, this option may be
exercised prior to the tenth (10th) anniversary of the Grant Date (the
"Expiration Date") in installments for not more than the number of
Option Shares which are vested as herein below provided:
(a) CONTINUED EMPLOYMENT FOR ONE TO FOUR YEARS.
Seventy thousand four hundred and twenty-two (70,422) shares will vest
on the Grant Date, and the balance of the Option Shares will vest in
equal monthly installments of five thousand eight hundred and
sixty-eight (5,868)
shares, each, over the three-year period immediately following the
first anniversary of the grant date.
(b) TRIGGERING EVENT.
All unvested shares shall immediately become vested in full portion
upon the occurrence of any of the following events (each, a "Triggering
Event"): (a) the closing of a public offering by the Company of shares
of its Common Stock, (b) a sale of all or substantially all of the
Company's assets or all or substantially all of the shares of its
capital stock, (c) a consolidation or merger of the Company in which a
majority of outstanding shares of the Company's capital stock are
exchanged for securities, cash or other property of any other
corporation or business entity, (d) a consolidation or merger involving
the Company as a result of which the stockholders of the Company
immediately prior to such event do not own, immediately following the
occurrence of such event, at least a majority of the common stock and
voting power of the entity resulting from such consolidation or
surviving such merger or (e) the liquidation or dissolution of the
Company. In addition, if the Company or stockholders of the Company
enter into an agreement with respect to an event described in (b)
through (e) of the preceding sentence, then upon the consummation of
such event a Triggering Event shall be deemed to have occurred upon the
date of such agreement.
4. TERMINATION OF EMPLOYMENT.
(a) TERMINATION OTHER THAN FOR CAUSE.
If the Employee ceases to be employed by the Company or any Related
Corporation, other than by reason of death or disability as defined in
Section 5 or termination for Cause as defined in Section 4(c) or
termination related to a prohibition by a court of law as set forth in
Section 4(d), no further installments of this option shall vest after
the date Employee ceases employment with the Company or any Related
Corporation and, the Company shall exercise its right pursuant to
Section 17 hereof to purchase any Option Shares held by Employee after
the termination of this option pursuant to this Section 4(a). This
option shall terminate on the earlier of (i) ninety (90) days after the
date of termination of the Employee's employment, or (ii) the
Expiration Date. In such a case, the Employee's only rights hereunder
shall be those which are properly exercised before the termination of
this option.
(b) TERMINATION FOR CAUSE.
If the employment of the Employee is terminated for Cause (as defined
in Section 4(c)), the unvested portion of this option shall terminate
upon the
- 2 -
Employee's receipt of written notice of such termination and shall
thereafter not be exercisable to any extent whatsoever.
(c) DEFINITION OF CAUSE.
"Cause" shall mean that the Employee is terminated for one or more of
the following reasons:
(i) substantial, material and continuing failure, after
written notice thereof, to render services to the
Company in accordance with the terms of Employee's
Employment Agreement;
(ii) gross negligence, willful misconduct, dishonesty or
breach of fiduciary duty to the Company; or
(iii) commission of any act of embezzlement or fraud; or
(iv) deliberate disregard of material rules or material
policies of the Company which results in direct or
indirect loss, damage or injury to the Company; or
(v) wilful or intentional material breach or violation of
Employee's Employment Agreement, including without
unauthorized disclosure of any Confidential
Information of the Company; or
(vi) willful or intentional commission of an act which
constitutes unfair competition with the Company or
which intentionally induces any customer or supplier
to breach a contract with the Company; or
(vii) Employee has been convicted of a felony, or
(viii) Employee has been engaged in the abuse of alcohol,
illegal drugs or controlled substances.
"Cause" shall not include any act or omission of which the President or
any member of the Board of Directors has had actual knowledge for at
least 6 months.
(d) LEGAL PROHIBITION.
If Employee's employment terminates in connection with any prohibition
by a court of law on Employee providing services to the Company (a
"Prohibition"), and if such Prohibition occurs (i) during the 180 day
period commencing on
- 3 -
the Grant Date, this option shall immediately and automatically
terminate, the Company shall refund to Employee the exercise price, if
any, previously paid by Employee upon exercise of any installment of
this option and the Option Shares issued upon such exercise shall be
automatically cancelled, or (ii) during the period commencing on the
181st day after the Grant Date and ending on the 365th day after the
Grant Date, this option shall immediately and automatically terminate
as to such number of shares equal to the product of (A) the difference
between 365 and the actual number of days that have elapsed from the
Grant Date until the date of termination of Employee's employment,
multiplied by (B) a fraction, the numerator of which is 70,422 and the
denominator of which is 365, the Company shall refund to Employee the
exercise price, if any, previously paid by employee upon exercise of
any installment of this option and the Option Shares issued upon such
exercise shall be automatically cancelled.
5. DEATH; DISABILITY.
(a) DEATH.
If the Employee ceases to be employed by the Company and all Related
Corporations by reason of his death, this option may be exercised, to
the extent otherwise exercisable on the date of death, by the estate,
personal representative or beneficiary who has acquires this option by
will or by the laws of descent and distribution, until the earlier of
(i) the Expiration Date or (ii) ninety (90) days from the date of the
Employee's death.
(b) DISABILITY.
If the Employee ceases to be employed by the Company and all Related
Corporations by reason of his or her disability (as defined in
Paragraph 10(B) of the Plan), the Employee shall have the right to
exercise this option from the date of termination of employment through
the earlier of (i) the Expiration Date or (ii) ninety (90) days from
the date of the termination of the Employee's employment.
(c) EFFECT OF TERMINATION.
At the expiration of the ninety (90) day period provided in paragraph
(a) or (b) of this Section 5, or the Expiration Date, whichever is
earlier, this option shall terminate and the only rights hereunder
shall be those as to which the option was properly exercised before
such termination.
- 4 -
6. PARTIAL EXERCISE.
The Employee may exercise this option in part at any time and from time
to time within the above limits, except that the Employee may not
exercise this option for a fraction of a share unless such exercise is
with respect to the final installment of stock subject to this option
and cash in lieu of a fractional share must be paid, in accordance with
Paragraph 13(G) of the Plan, to permit the Employee to exercise
completely such final installment. Any fractional share with respect to
which a installment of this option cannot be exercised because of the
limitation contained in the preceding sentence shall remain subject to
this option and shall be available for later purchase by the Employee
in accordance with the terms hereof.
7. PAYMENT OF PRICE
(a) PAYMENT. The option price shall be paid in the following
manner:
(i) in cash or by check;
(ii) subject to Section 7(b) below, by delivery of shares
of the Company's Common Stock having a fair market
value (as determined by the Committee) equal as of
the date of exercise to the option price;
(iii) by delivery of an assignment satisfactory in form and
substance to the Company of a sufficient amount of
the proceeds from the sale of the Option Shares and
an instruction to the broker or selling agent to pay
that amount to the Company;
(iv) by any combination of the foregoing.
(b) LIMITATIONS ON PAYMENT BY DELIVERY OF COMMON STOCK.
If the Employee delivers Common Stock held by the Employee ("Old
Stock") to the Company in full or partial payment of the option price,
and the Old Stock so delivered is subject to restrictions or
limitations imposed by agreement between the Employee and the Company,
an equivalent number of Option Shares shall be subject to all
restrictions and limitations applicable to the Old Stock to the extent
that the Employee paid for the Option Shares by delivery of Old Stock,
in addition to any restrictions or limitations imposed by this
Agreement. Notwithstanding the foregoing, the Employee may not pay any
part of the exercise price hereof by transferring Common Stock to the
Company unless such Common Stock has been owned by the Employee free of
any substantial risk of forfeiture for at least six months.
- 5 -
8. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, this option may
be exercised by written notice to the Company at is principal executive
office, or to such transfer agent as the Company shall designate. Such
notice shall state the election to exercise this option and the number
of Option Shares for which it is being exercised and shall be signed by
the person or persons exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares, and
the Company shall deliver a certificate or certificates representing
such shares as soon as practicable after the notice shall be received.
Such certificate or certificates shall be registered in the name of the
person or persons so exercising this option (or, if this option is
exercised by the Employee and if the Employee requests in the notice
exercising this option, shall be registered in the name of the Employee
and another person jointly, with right of survivorship). In the event
this option is exercised, pursuant to Section 5 hereof, by any person
or persons other than the Employee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise
this option.
9. OPTION NOT TRANSFERABLE.
This option is not transferable or assignable except by will or by the
laws of descent and distribution. During the Employee's lifetime only
the Employee can exercise this option.
10. NO OBLIGATION TO EXERCISE OPTION.
The grant and acceptance of this option imposes no obligation on the
Employee to exercise it.
11. NO OBLIGATION TO CONTINUE EMPLOYMENT.
Neither the Plan, this Agreement, nor the grant of this option imposes
any obligation on the Company or any Related Corporation to continue
the Employee in employment.
12. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.
The Employee shall have no rights as a stockholder with respect to the
Option Shares until the date of issuance of a stock certificate to the
Employee. Except as is expressly provided in the Plan with respect to
certain changes in the capitalization and stock dividends of the
Company, no adjustment shall be made for dividends or similar rights
for which the record date is before the date such stock certificate is
issued.
- 6 -
13. CAPITAL CHANGES AND BUSINESS SUCCESSIONS.
The Plan contains provisions covering the treatment of options in a
number of contingencies such as stock splits and mergers. Provisions in
the Plan for adjustment with respect to stock subject to options and
the related provisions with respect to successors to the business of
the Company are hereby made applicable hereunder and are incorporated
herein by reference.
14. EARLY DISPOSITION.
The Employee agrees to notify the Company in writing immediately after
the Employee transfers any Option Shares, if such transfer occurs on or
before the late of (a) the date two years after the Grant Date or (b)
the date one year after the date the Employee acquired such Option
Shares. The Employee also agrees to provide the Company with any
information concerning any such transfer required by the Company for
tax purposes.
15. WITHHOLDING TAXES.
If the Company or any Related Corporation in its discretion determines
that it is obligated to withhold any tax in connection with the
exercise of this option, the making of a Disqualifying Disposition (as
defined in Paragraph 18 of the Plan), the vesting or transfer of Option
Shares acquired on the exercise of this option, or the making of a
distribution or other payment with respect to the Option Shares, the
Employee hereby agrees that the Company or any Related Corporation may
withhold from the Employee's wages or other remuneration the
appropriate amount of tax. At the discretion of the Company or Related
Corporation, the amount required to be withheld may be withheld in cash
from such wages or other remuneration or in kind from the Common Stock
or other property otherwise deliverable to the Employee one exercise of
this option. The Employee further agrees that, if the Company or any
Related Corporation does not withhold an amount from the Employee's
wages or other remuneration sufficient to satisfy the withholding
obligation of the Company or Related Corporation, the Employee will
make reimbursement on demand, in cash, for the amount underwithheld.
16. COMPANY'S RIGHT OF FIRST REFUSAL.
(a) EXERCISE OF RIGHT.
If the Employee (or successor and assigns) or his or her legal
representative (the "Transferor") desires to transfer all or any part
of the Option Shares to any person other than the Company (an
"Offeror"), the Transferor shall: (i) obtain in writing a bona fide
offer (the "Offer") for the purchase thereof from the
- 7 -
Offeror; and (ii) give written notice (the "Option Notice") to the
Company setting forth the Transferor's desire to transfer such shares,
which Option Notice shall be accompanied by a photocopy of the Offer
and shall set forth at least the name and address of the Offeror and
the price and terms of the bona fide offer. Upon receipt of the Option
Notice, the Company shall have an assignable option to purchase any or
all of such shares (the "Company Option Shares") specified in the
Option Notice, such option to be exercisable by giving, within ninety
(90) days after receipt of the Option Notice, a written counter-notice
to the Transferor (the "Counter-Notice"). If the Company elects to
purchase any or all of such Company Option Shares, it shall be
obligated to purchase, and the Transferor shall be obligated to sell to
the Company, such Company Option Shares that the Company elects to
purchase as set forth in the Counter-Notice at a per share price equal
to the lesser of (i) the per share price (and, except as set forth
below, on the same terms) indicated in the Offer; or (ii) the Fair
Market Value as defined in section 17(b) and using the date of the
Option Notice as the date of determination, within thirty (30) days of
the date of delivery by the Company of the Counter-Notice. If the
Company elects to purchase any or all of such Company Option Shares, it
may, in its sole discretion, pay the purchase price for such Company
Option Shares in accordance with the terms of a promissory note, in the
form attached hereto as Exhibit A.
(b) SALE OF OPTION SHARES TO OFFEROR.
The Transferor may, for sixty (60) days after the expiration of the
ninety (90)- day period during which the Company may give the
Counter-Notice, sell, pursuant to the terms of the Offer, any or all of
such Company Option Shares not purchased or agreed to be purchased by
the Company or its assignee; PROVIDED, HOWEVER, that the Transferor
shall not sell such Company Option Shares to the Offeror if the Offeror
is a competitor of the Company and the Company gives a written notice
to the Transferor, within ninety (90) days of its receipt of the Option
Notice, stating that the Offeror is a competitor and therefore
Transferor shall not sell such Company Option Shares to such Offeror;
and PROVIDED, FURTHER, that prior to the sale of such Company Option
Shares to the Offeror, the Offeror shall execute an agreement with the
Company pursuant to which the Offeror agrees to be subject to the
restrictions set forth in Sections 16, 17, and 18 hereof. If any or all
of such Company Option Shares are not sold pursuant to an Offer within
the time permitted above, the unsold Company Option Shares shall remain
subject to the terms of this Section 16 and any future proposed
transfer must again comply with the provisions set forth herein.
- 8 -
(c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
If there shall be any change in the Common Stock of the Company through
merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, combination or exchange of shares, or the like,
the restrictions contained in this Section 16 shall apply with equal
force to additional and/or substitute securities, if any, received by
the Employee in exchange for, or by virtue of his or her ownership of,
Option Shares.
(d) FAILURE TO DELIVER COMPANY OPTION SHARES.
If the Transferor fails or refused to deliver on a timely basis duly
endorsed certificates representing Company Option Shares to be sold to
the Company or its assignee pursuant to this Section 16, the Company
shall have the right to deposit the purchase price for such Company
Option Shares in a special account with any bank or trust company in
the Commonwealth of Massachusetts, giving notice of such deposit to the
Transferor, whereupon such Company Option Shares shall be deemed to
have been purchased by the Company. All such moneys shall be held by
the bank or trust company for the benefit of the Transferor. All moneys
deposited with the bank or trust company remaining unclaimed for two
years after the date of deposit shall be repaid by the bank or trust
company to the Company on demand, and the Transferor shall thereafter
look only to the Company for payment.
(e) EXPIRATION OF COMPANY'S RIGHT OF FIRST REFUSAL.
The first refusal rights of the Company set forth in this Section 16
shall remain in effect until such time, if ever, as an underwritten
public offering is made of shares of the Company's Common Stock
pursuant to a registration statement filed under the Securities Act of
1933 or a successor statute or the closing of an Acquisition as defined
in the Plan, at which time this Section 16 and the right of first
refusal set forth herein will automatically expire.
17. COMPANY'S RIGHT OF REPURCHASE.
(a) RIGHT OF REPURCHASE.
The Company shall have the right (the "Repurchase Right") to repurchase
from the holder of any Option Shares (each a "Holder") any or all of
the Option Shares then owned by such Holder at any time by giving such
Holder a written notice (the "Repurchase Notice") at least 30 days
prior to the date of repurchase. The Repurchase Notice shall set forth
the number of Option Shares to be repurchased (the "Repurchase
Shares"), the Fair Market Value per share (determined in accordance
with Section 17(b) below as of the date of the
- 9 -
Repurchase Notice) of the Repurchase Shares and the date (the
"Repurchase Date") on which such Repurchase Shares are to be
repurchased by the Company (such date not to be more than 120 nor less
than 30 days after the date of the Repurchase Notice). On the
Repurchase Date, the Company shall tender to the Holder an amount equal
tot he number of Repurchase Shares multiplied by the Fair Market Value
per share; provided, however, that the Company may pay the repurchase
amount, in its sole discretion, in accordance with the terms of a
promissory notice in the form attached hereto as EXHIBIT A. The Company
may assign the Repurchase Right to one or more persons and may utilize
a promissory note to effect its Repurchase Right. Upon timely exerciser
of the Repurchase Right in the manner provided in this Section 17(a),
the Holder shall deliver to the Company the stock certificate or
certificates representing the Repurchase Shares, duly endorsed and free
and clear of any and all liens, charges and encumbrances.
(b) FAIR MARKET VALUE.
For purposes of this Agreement, the Fair Market Value of an Option
Shares shall be determined in good faith by the Board of Directors of
the Company after taking into account all factors including, without
limitation, the absence of an active trading market for shares of the
Common Stock, restrictions on transfer of Option Shares set forth
herein and the valuation attached to other recent issuances of
securities of the Company. If Employee disputes the Fair Market Value
so determined, Employee shall notify the Company in writing within 5
days after the Company's notice that it intends to repurchase Option
Shares under Section 16 or 17 hereof. In such event, Employee and the
Company shall in good faith choose, within 10 days after Employee's
notice, a mutually acceptable appraiser to determine the Fair Market
Value. If Employee and the Company cannot agree on such appraiser, the
appraiser shall be appointed by the American Arbitration Association in
Boston and shall have expertise in valuing technology companies. Within
30 days after the appointment, the appraiser shall determine the Fair
Market Value of an Option Share and deliver a written report to the
parties as to such appraisal. The appraiser's determination of Fair
Market Value of an Option Share shall be final and binding upon all
parties. The costs of the appraiser shall be borne equally by Employee
and the Company.
(c) ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
If there shall be any change in the Common Stock of the Company through
merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, combination or exchange of shares, or the like,
the restrictions contained in this Section 17 shall apply with equal
force to additional and/or substitute
- 10 -
securities, if any, received by the Employee in exchange for, or by
virtue of his or her ownership of, Option Shares.
(d) FAILURE TO DELIVER REPURCHASE SHARES.
If the Holder fails or refuses to deliver on a timely basis duly
endorsed certificates representing the Repurchase Shares to be
repurchased by the Company or its assignee pursuant to this Section 17,
the Company shall have the right to deposit the repurchase price for
such Repurchase Shares in a special account with any bank or trust
company in the Commonwealth of Massachusetts, giving notice of such
deposit to the Holder, whereupon such Repurchase Shares shall be deemed
to have been purchased by the Company. All such moneys shall be held by
the bank or trust company for the benefit of the Holder. All moneys
deposited with the bank or trust company remaining unclaimed for two
years after the date of deposit shall be repaid by the bank or trust
company to the Company on demand, and the Holder shall thereafter look
only to the Company for payment.
(e) EXPIRATION OF COMPANY'S REPURCHASE RIGHT.
The Repurchase Right of the Company set forth in this Section 17 shall
remain in effect until such time, if ever, as an underwritten public
offering is made of shares of the Company's Common Stock pursuant to a
registration statement filed under the Securities Act or any successor
statute, at which time this Section 17 and the Repurchase Right set
forth herein will automatically terminate.
(f) TRANSFERS EXCLUDED FROM FIRST REFUSAL RIGHTS.
The foregoing first refusal rights of the Company shall not apply to a
transfer by the Employee of all or any part of the Option Shares to the
Employee's spouse, children or grandchildren, or to a trust for the
benefit of any such individuals provided, however, that prior to any
such transfer each transferee shall execute an agreement with the
Company pursuant to which the transferee agrees to be subject to the
restrictions set forth in Sections 16, 17 and 18 hereof.
18. LOCK-UP AGREEMENT.
The Employee agrees that in connection with an underwritten public
offering of Common Stock, upon the request of the Company or the
managing or lead underwriter for such public offering, the Option
Shares may not be sold, offered for sale or otherwise disposed of
without the prior written consent of the Company or such underwriter,
as the case may be, for at least 180 days
- 11 -
after the effectiveness of the registration statement filed in
connection with such offering, or such longer period of time as the
Board of Directors may determine if all of the Company's directors and
officers agree to be similarly bound (but in no event, longer than 270
days). The lock-up agreement established pursuant to this Section 18
shall have perpetual duration.
19. PROVISION OF DOCUMENTATION TO EMPLOYEE.
By signing this Agreement the Employee acknowledges receipt of a copy
of this Agreement and a copy of the Plan.
20. MISCELLANEOUS.
(a) NOTICES.
All notices hereunder shall be in writing and shall be deemed given
when sent by certified or registered mail, postage prepaid, return
receipt requested, to the address set forth below. The addresses for
such notices may be changed from time to time by written notice given
in the manner provided for herein.
(b) ENTIRE AGREEMENT; MODIFICATION.
This Agreement constitutes the entire agreement between the parties
relative to the subject matter hereof, and supersedes all proposals,
written or oral, and all other communications between the parties
relating to the subject matter of this Agreement. This Agreement may be
modified, amended or rescinded only by a written agreement executed by
both parties.
(c) SEVERABILITY.
The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or
enforceability of any other provision.
(d) SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, subject to
the limitations set forth in Sections 9, 16 and 17 hereof.
- 12 -
(e) GOVERNING LAW.
This Agreement shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts, without giving effect to
the principles of the conflicts of laws thereof.
(f) LEGENDS.
The Company may place a legend or legends on any stock certificate
delivered to any holder of Option Shares reflecting the restrictions on
transfer, rights of first refusal and repurchase rights provided in
this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
- 13 -
IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed as of the date first above written.
Breakaway Solutions, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Employee
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------- -----------------------------
Print Name of Employee Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director Human Resources
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇ Zip Code
Attest:
--------------------------
- 14 -
EXHIBIT A
FORM OF
PROMISSORY NOTE
$________________ _____________, 19__
For value received, the undersigned, Breakaway Solutions, Inc., a
Delaware corporation ("Obligor"), hereby promises to pay to the order of
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Lender") at such place as may be designated from time to
time in writing by Lender, the principal sum of _____________ Dollars and ____
Centers ($__________) together with interest in arrears from and including the
date hereof on the unpaid principal balance hereunder, calculated daily, at the
rate of ___ percent (___%) per annum [the prime rate in effect on the date
hereof for major banks as published in the Wall Street Journal], payable as set
forth below. At the option of Lender and to the extent permitted by applicable
law, the rate of interest on any unpaid principal or interest not paid when due
and payable hereunder shall be two percent (2%) per annum above the rate of
interest set forth in the immediately proceeding sentence. Interest shall be
calculated on the basis of actual number of days elapsed over a year of 360
days. Notwithstanding any other provision of this Promissory Note, Lender does
not intend to change and Obligor shall not be required to pay any interest or
other fees or charges in excess of the maximum permitted by applicable law; any
payments in excess of such maximum shall be refunded to Obligor or credited to
reduce principal hereunder. All payments received by lender hereunder will be
applied first to costs of collection, if any, then to interest and the balance
to principal. Principal and interest shall be payable in lawful money of the
United States of America.
Principal shall be paid in sixty (60) equal monthly installments of
__________ Dollars and _____ Cents ($_____) each, commencing on ____________,
199__, and continuing on the same day of each successive month thereafter with a
final payment of all unpaid principal on ___________, 199__; interest shall be
paid monthly commencing on __________, 199__, and continuing on the same day of
each successive month thereafter with a final payment of all unpaid interest at
the time of payment of the principal.
If any day on which a payment is due pursuant to the terms of this
Promissory Note is not a day on which banks in the Commonwealth of Massachusetts
are generally open (a "Business Day"), such payment shall be due on the next
Business Day following.
- 15 -
This Promissory Note may be prepaid at any time, without premium or
penalty, in whole or in part, all such prepayments to be applied upon
installments of most remote maturity. Any prepayment of principal shall be
accompanied by a payment of accrued interest in respect of the principal being
prepaid.
This Promissory Note shall, at the option of the holder hereof, become
due and payable without notice or demand, upon the happening of any one of the
following specified events: (1) failure to pay any amount as herein set forth;
(2) default in the performance of any other obligation to Lender, which default
is not cured within thirty (30) days after written notice of such default from
Lender; (3) insolvency (however evidenced) or the commission of any act of
insolvency; (4) the making of a general assignment for the benefit of creditors;
(5) the filing of any petition or the commencement of any proceeding by Obligor
or any endorse or guarantor of this Promissory Note for any relief under any
bankruptcy or insolvency laws, or any laws relating to the relief of debtors,
readjustment of indebtedness, reorganizations, compositions, or extensions; (6)
the filing of any petition or the commencement of any proceeding against Obligor
or any endorser or guarantor of this Promissory Note for any relief under any
bankruptcy or insolvency laws, or any laws relating to the relief of debtors,
readjustment of indebtedness, reorganizations, compositions, or extensions,
which proceeding is not dismissed within sixty (60) days; (7) suspension of the
transaction of the usual business of Obligor; or (8) the past or future making
of a false representations or warranty by Obligor in connection with any loan or
loans by Lender.
If this Promissory Note is not paid in accordance with its terms,
Obligor shall pay to Lender, in addition to principal and accrued interest
thereon, all costs of collection of the principal and accrued interest,
including, but not limited to, reasonable attorneys' fees, court costs and other
costs for the enforcement of payment of this Promissory Note.
No waiver of any obligation of Obligor under this Promissory Note shall
be effective unless it is in a writing signed by Lender. A waiver by Lender of
any right or remedy under this Promissory Note on any occasion shall not be a
bar to exercise of the same right or remedy on any subsequent occasion or of any
other right or remedy at any time.
Any notice required or permitted under this Promissory Note shall be in
writing and shall be deemed to have been given on the date of delivery, if
personally delivered t the party to whom notice is to be given, or on the fifty
business day after mailing, if mailed to the party to whom notice is to be
given, by certified mail, return receipt requested, postage prepaid, and
addressed to the addressee at the address of the addressee set forth herein, or
to the most recent address, specified by written notice, given to the sender
pursuant to this paragraph.
- 16 -
This Promissory Note is delivered in and shall be enforceable in
accordance with the laws of the Commonwealth of Massachusetts, and shall be
construed in accordance therewith, and shall have the effect of a sealed
instrument.
Obligor hereby expressly waives presentment, demand, and protest,
notice of demand, dishonor and nonpayment of this Promissory Note, and all other
notices or demands of any kind in connection with the delivery, acceptance,
performance, default or enforcement hereof, and hereby consents to any delays,
extensions of time, renewals, waivers or modifications that may be granted or
consented to by the holder with respect with the time of payment or any other
provision hereof.
In the event any one or more of the provisions of this Promissory Note
shall for any reason be held to be invalid, illegal or unenforceable, in whole
or in part or in any respect, or in the event that only one or more of the
provisions of this Promissory Note operate or would prospectively operate to
invalidate this Promissory Note, then and in any such event, such provision(s)
only shall be deemed null and void and shall not affect any other provision of
this Promissory Note and the remaining provisions of this Promissory Note shall
remain operative and in full force and effect and in no way shall be affected,
prejudiced, or distributed thereby.
OBLIGOR:
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Attested:
---------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
- 17 -
--------------------------------------------------------------------------------
Breakaway Solutions, Inc.
Notice of Grant of Stock Options ID: ▇▇-▇▇▇▇▇▇▇
and Option Agreement ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ Option Number: 00000237
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ID: 1185
--------------------------------------------------------------------------------
Effective 2/18/99 (the "Grant Date"), you (the "Employee") have been granted
a(n) Incentive Stock Option to 211,248 shares (the "Option Shares") of common
stock, par value $.0001 per share, of Breakaway Solution (the "Company"), at
$1.4167 per share.
The total option price of the shares granted is $299,275.04.
Shares in each period will become fully vested on the date shown.
Shares Vest Type Full Vest Expiration
----------------- ------------------ ------------------ ------------------
0 On Vest Date 2/18/00 2/18/09
211,248 Monthly 2/18/03 2/18/09
------------------------------------------------------------------------------
By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.
--------------------------------------------------------------------------------
-------------------------------------- -----------------------------------
Breakaway Solutions, Inc. Date
-------------------------------------- -----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ Date
- 18 -
--------------------------------------------------------------------------------
Breakaway Solutions, Inc.
Notice of Grant of Stock Options ID: ▇▇-▇▇▇▇▇▇▇
and Option Agreement ▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ Option Number: 00000236
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ID: 1185
--------------------------------------------------------------------------------
Effective 2/18/99 (the "Grant Date"), you (the "Employee") have been granted
a(n) Incentive Stock Option to 211,248 shares (the "Option Shares") of common
stock, par value $.0001 per share, of Breakaway Solution (the "Company"), at
$1.4167 per share.
The total option price of the shares granted is $99,766.85.
Shares in each period will become fully vested on the date shown.
Shares Vest Type Full Vest Expiration
----------------- ------------------- ------------------ ---------------------
70,422 On Vest Date 2/18/99 2/18/09
--------------------------------------------------------------------------------
By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan as amended and the Option Agreement, all of
which are attached and made a part of this document.
--------------------------------------------------------------------------------
-------------------------------- ---------------------------------
Breakaway Solutions, Inc. Date
-------------------------------- ---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ Date
- 19 -