<PAGE>
As filed with the Securities and Exchange Commission on November 4, 1999
Registration Statement No. 333-88847
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1 to
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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iXL Enterprises, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 7373 58-2234342
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code
organization) Number)
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1900 Emery St., NW
Atlanta, GA 30318
(800) 573-5544
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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U. BERTRAM ELLIS, JR.
Chief Executive Officer
iXL Enterprises, Inc.
1900 Emery St., NW
Atlanta, GA 30318
(404) 267-3800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
JAMES S. ALTENBACH GREGORY C. SMITH
Minkin & Snyder Skadden, Arps, Slate,
One Buckhead Plaza Meagher & Flom LLP
3060 Peachtree Road, Suite 1100 525 University Avenue
Atlanta, GA 30305 Palo Alto, CA 94301
(404) 261-8000 (650) 470-4500
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
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If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [_]
--------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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<PAGE>
EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus: one to be
used in connection with a U.S. and Canadian offering of the registrant's common
stock and one to be used in a concurrent international offering of the common
stock. The international prospectus will be identical to the U.S. prospectus
except that it will have a different front cover page, underwriting section and
back cover page. The U.S. prospectus is included herein and is followed by the
alternate front cover page, underwriting section and back cover page to be used
in the international prospectus, which have each been labeled "Alternative Page
for International Prospectus."
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion
Preliminary Prospectus dated November 4, 1999
P R O S P E C T U S
[Logo of iXL Enterprises, Inc.]
7,000,000 Shares
iXL ENTERPRISES, INC.
Common Stock
-----------
iXL Enterprises, Inc. is offering 2,000,000 shares of its common stock and
selling stockholders are offering 5,000,000 shares of common stock. iXL will
not receive any of the proceeds from the sale of shares by the selling
stockholders. iXL's common stock is quoted on the Nasdaq National Market under
the symbol "IIXL". On November 1, 1999, the last reported sale price of the
common stock was $39.375.
Investing in the common stock involves risks which are described in the
"Risk Factors" section beginning on page 7 of this prospectus.
-----------
<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public offering price .............................. $ $
Underwriting discount .............................. $ $
Proceeds, before expenses, to iXL Enterprises,
Inc. .............................................. $ $
Proceeds to selling stockholders ................... $ $
</TABLE>
The underwriters may also purchase up to an additional 1,050,000 shares
from iXL at the public offering price, less the underwriting discount, within
30 days from the date of this prospectus to cover over-allotments.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
The shares of common stock will be ready for delivery in New York, New
York, on or about , 1999.
-----------
Merrill Lynch & Co.
Donaldson, Lufkin & Jenrette
-----------
Robertson Stephens
First Union Securities, Inc.
The Robinson-Humphrey Company
-----------
The date of this prospectus is , 1999.
<PAGE>
{DIAGRAM PORTRAYING A DESCRIPTION OF THE COMPANY, ITS SERVICES, AND ITS
ENGAGEMENT METHODOLOGY. THE LAYOUT AND TEXT CONTAINED IN THIS DOCUMENT IS AS
FOLLOWS:}
{HEADING: TOP OF PAGE:}
{LEFT SIDE: iXL LOGO}
{RIGHT SIDE: STYLIZED TEXT:}
(Our Vision) "To pioneer the use of digital technology to transform how
business gets done."
{SECTION 1: MIDDLE OF PAGE: LEFT SIDE}
{CAPTION: Services}
Internet Strategy Consulting
Internet-based Business Solutions
. E-commerce
. Enterprise Relationship Management
. Online Learning & Performance
. Digital Media Solutions
. Web Sites & Hosting
Industry Practice Groups
. Financial Services
. Media & Entertainment
. Travel
. Telecommunications & Technology
. Healthcare
. Retail
{SECTION 2: MIDDLE OF PAGE: RIGHT SIDE}
{CAPTION: iXL}
We are a leading Internet services company that provides Internet strategy
consulting and comprehensive Internet-based business solutions to Fortune 1000
companies and other corporate users of information technology.
We help businesses identify how the Internet can be used to their competitive
advantage and then use our expertise in creative design and systems engineering
to help our clients take advantage of that opportunity - fast.
We create success for our clients by identifying and taking advantage of
emerging business opportunities generated through the application and use of
Internet-based technologies. We use that strength to help our clients create
new relationships through previously unimagined uses of technology in their
business.
Our core competencies include E-Commerce Strategy & Applications, Enterprise
Relationship Management, Online Learning & Performance, Digital Media
Solutions, Web Sites and Hosting.
We succeed by shortening the distance between the creation of ideas and the
realization of their economic benefit for our clients. iXL, taking ideas to
action-faster!
{SECTION 3: BOTTOM OF PAGE}
{CAPTION: iD5 Methodology}
{GRAPHIC OF FIVE POLYGONS DEPICTING iXL's FIVE STAGE ENGAGEMENT METHODOLOGY}
1. Discover Collect information relevant to the engagement objective
2. Define Formulate an Internet business strategy
3. Design Refine/document specifications of the Internet business
strategy
4. Develop Build elements required to implement the Internet business
5. Deploy Deliver the final solution
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................. 1
Risk Factors............................................................. 7
Forward-looking Statements............................................... 17
Trademarks............................................................... 17
Information in Prospectus................................................ 17
Use of Proceeds.......................................................... 18
Dividend Policy.......................................................... 18
Price Range of Common Stock.............................................. 19
Capitalization........................................................... 20
Dilution................................................................. 22
Pro Forma Consolidated Financial Information............................. 23
Selected Consolidated Financial Data..................................... 32
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 35
Business................................................................. 51
Management............................................................... 70
Certain Transactions..................................................... 80
Principal and Selling Stockholders....................................... 84
Description of Capital Stock............................................. 90
Shares Eligible for Future Sale.......................................... 93
United States Federal Tax Considerations for Non-U.S. Holders............ 95
Underwriting............................................................. 98
Legal Matters............................................................ 102
Experts.................................................................. 102
Additional Information................................................... 102
Index to Financial Statements............................................ F-1
</TABLE>
i
<PAGE>
SUMMARY
This summary may not contain all the information that may be important to
you. You should read the entire prospectus, including the financial data and
related notes, before making an investment decision.
iXL Enterprises, Inc.
We are a leading Internet services company which provides Internet
strategy consulting and comprehensive Internet-based solutions to Fortune 1000
companies and other corporate users of information technology. We help
businesses identify how the Internet can be used to their competitive advantage
and use our expertise in creative design and systems engineering to design,
develop and deploy advanced Internet applications and solutions.
Our service offerings include:
. Internet strategy consulting;
. e-commerce strategy and applications;
. enterprise relationship management;
. online learning and performance;
. digital media solutions;
. web site development;
. customized hosting;
. proprietary sales presentation systems; and
. Web publishing technology.
We use our extensive engineering capabilities to deliver complex
Internet-based business solutions by employing proven technologies such as
Java, XML, Perl, CGI, C and C++. To foster the best possible solutions and
service, we assembled industry practice groups including professionals with
expertise in the business practices and processes of specific industries. In
addition, we utilize an engagement methodology called iD5, which defines and
delineates business procedures and processes to take full advantage of best
practices developed throughout iXL. We offer our services on both a time-and-
materials and fixed-price basis. Our clients include BellSouth, Chase Manhattan
Bank, Delta Air Lines, General Electric, Merrill Lynch, Sunbeam, Virgin
Atlantic Airways and WebMD.
The Internet represents a revolutionary and powerful new opportunity for
business. Forrester Research expects dramatic growth in total e-commerce
transaction volume, projecting an increase from $51 billion in 1998 to $1.4
trillion in 2003. E-commerce refers to the buying and selling of goods and
services on the Internet. Many companies currently do not have the capabilities
required to conduct e-commerce with suppliers and customers. These companies
are looking to independent service providers that can assist them in taking
full advantage of the Internet's ability to improve their business. We expect
this need to drive growth in the worldwide Internet development services
market, which according to International Data Corporation, will grow from $8
billion in 1998 to $79 billion by 2003.
We have expanded rapidly since our founding in March 1996 through a
combination of acquisitions and internal growth. We have completed 35
acquisitions to gain critical mass, experienced professionals, industry
expertise, technical skills and geographic coverage. We have invested in our
management information systems to create a scalable organization capable of
maximizing the sharing of our knowledge base and the utilization of our staff.
As of September 30, 1999, we had approximately 1,900 employees. Our
headquarters is located in Atlanta, Georgia, and we also have 18 regional
offices located throughout the United States and in England, Germany and Spain.
1
<PAGE>
In addition to our strategic Internet services offerings, we have
developed Consumer Financial Network, Inc., which operates YouDecide.com.
YouDecide.com is a sophisticated e-commerce web site for marketing financial
services and benefits over corporate intranets and the Internet. CFN also
provides these services through a call center. CFN's equity is owned
approximately 76% by iXL, 23% by General Electric and 1% by other stockholders.
CFN has contracted with competing providers of various financial and other
services to create a web site for comparison shopping and purchase of these
services. The YouDecide.com web site currently offers the following services:
. automobile, homeowners and other lines of personal insurance;
. home mortgages;
. home equity loans;
. auto finance;
. long-term care insurance;
. term life insurance;
. prepaid legal services;
.financial planning;
.credit cards; and
.pet insurance.
CFN's services are currently provided to the general public via CFN's
YouDecide.com web site and to large companies and associations for distribution
as a human resources benefit to their employees or members. CFN service
providers include Nationwide Mutual Insurance Co., American Express Property
and Casualty, and BankOne. Member companies include Nextel, Ericsson, General
Electric Capital Corporation, and BellSouth. CFN receives a fee from the
service providers for each sale of their services through CFN.
iXL's goal is to become the leading provider of strategic Internet
services and to become a leader in Internet-delivered financial services and
employee benefits. To achieve this goal, we intend to:
. leverage and expand our industry expertise;
. develop our technology capabilities;
. expand our geographic coverage;
. capture and disseminate our knowledge and best practices;
. expand our client relationships;
. attract, train and retain experienced professionals; and
. enhance and extend the CFN program.
iXL is a Delaware corporation. Our principal executive offices are
located at 1900 Emery St., NW, Atlanta, Georgia 30318, and our telephone number
is (800) 573-5544. We maintain a World Wide Web site, at www.iXL.com. The
reference to our World Wide Web address does not mean we are incorporating by
reference the information contained at the site. In this prospectus, "iXL,"
"we," "us" and "our" refer to iXL Enterprises, Inc. and its subsidiaries, but
not to the underwriters listed in this prospectus. These terms include the
businesses we have acquired, unless the context otherwise requires. "CFN"
refers to iXL's subsidiary, Consumer Financial Network, Inc., and its
subsidiaries.
2
<PAGE>
Proposed Acquisition of Tessera Enterprise Systems, Inc.
On October 4, 1999, we entered into an Agreement and Plan of Merger with
Tessera Enterprise Systems, Inc. Tessera creates, deploys, and maintains
advanced enterprise relationship management solutions. These solutions enable
companies to capture customer profile information to allow those companies to
better understand and target their core customer base. Tessera is headquartered
in Wakefield, Massachusetts and has approximately 130 employees.
The aggregate purchase price for this acquisition is approximately $120
million, to be paid primarily in approximately 3,469,548 shares of iXL's common
stock, the assumption of options under Tessera's stock option plan which will
result in options to purchase approximately 536,000 shares of iXL common stock,
as well as assumption of debt, redemption of certain preferred stock, and
closing-related fees. This proposed acquisition remains subject to applicable
regulatory approval and the approval of Tessera's stockholders, although the
four principal management stockholders have executed a voting agreement
evidencing their agreement to approve such acquisition.
Prospectus Assumptions
Except where otherwise indicated, all information in this prospectus
assumes:
. the sale of 2,000,000 shares of common stock offered by iXL by this
prospectus at an assumed public offering price of $39.375 per share
based on the closing price on November 1, 1999; and
. the underwriters' over-allotment option will not be exercised.
3
<PAGE>
The Offering
<TABLE>
<S> <C>
Common stock offered:
by iXL....................... 2,000,000 shares
by selling stockholders...... 5,000,000 shares
Total...................... 7,000,000 shares
U.S. offering................ 5,600,000 shares
International offering....... 1,400,000 shares
Total...................... 7,000,000 shares
Shares outstanding after the
offering...................... 70,057,526 shares
Over-allotment option.......... 1,050,000 shares
Use of proceeds................ We will not receive any of the proceeds from the sale of
shares by the selling stockholders. We estimate that the
net proceeds to iXL from this offering without exercise
of the over-allotment option will be approximately $74.1
million at an assumed public offering price of $39.375
per share based on the closing price on November 1, 1999.
We intend to use these net proceeds for general corporate
purposes, which may include working capital requirements
and acquisitions. See "Use of Proceeds."
Risk factors................... See "Risk Factors" for a discussion of factors you should
carefully consider before deciding to invest in shares of
the common stock.
Nasdaq National Market symbol.. "IIXL"
</TABLE>
The common stock outstanding after this offering includes:
. 3,469,548 shares of common stock expected to be issued in
connection with the proposed acquisition of Tessera Enterprise
Systems, Inc. by iXL.
The common stock outstanding after this offering excludes:
. 28,152,302 shares of common stock issuable upon exercise of stock
options outstanding as of September 30, 1999 at a weighted average
exercise price of $9.64 per share;
. 12,847,698 shares of common stock issuable upon exercise of stock
options reserved for grant;
. up to approximately 536,000 shares of common stock issuable upon
exercise of stock options outstanding under Tessera Enterprise
Systems, Inc.'s 1995 Stock Option Plan after assumption of such
plan by iXL upon the closing of the acquisition of Tessera by iXL;
. 3,500,000 shares of common stock issuable upon exercise of warrants
with a weighted average exercise price of $12.29 per share;
. 530,452 shares of common stock registered pursuant to a
Registration Statement on Form S-4 for use in future acquisitions;
and
. 6,000,000 shares of common stock expected to be registered pursuant
to an additional Registration Statement which iXL intends to file
on Form S-4 for use in future acquisitions.
See "--Proposed Acquisition," "Capitalization" and "Dilution."
4
<PAGE>
Summary Historical and Pro Forma Consolidated Financial Information
The following summary historical and pro forma consolidated financial
information should be read in conjunction with "Pro Forma Consolidated
Financial Information," "Selected Consolidated Financial Data," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
iXL's audited Consolidated Financial Statements included elsewhere in this
prospectus. The consolidated statement of operations data set forth below for
the years ended December 31, 1997 and 1998 are derived from and qualified by
reference to iXL's audited Consolidated Financial Statements, which appear
elsewhere in this prospectus. The consolidated statement of operations data for
the nine months ended September 30, 1998 and 1999 and the consolidated balance
sheet data at September 30, 1999 are derived from, and are qualified by
reference to, iXL's unaudited Consolidated Financial Statements, which appear
elsewhere in this prospectus and, in the opinion of management, include all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the financial data for such periods. The results of operations
for the nine months ended September 30, 1999 are not necessarily indicative of
the results to be expected for the full year or for any future period. All of
iXL's acquisitions have been accounted for using the purchase method and
accordingly, the actual consolidated statement of operations data reflects the
results of operations of these businesses from their respective acquisition
dates. The summary pro forma information does not purport to represent what our
results actually would have been if these events had occurred at the dates
indicated, nor does this information purport to project our results for any
future period.
We adjust our historical condensed consolidated statement of operations
for the year ended December 31, 1998 and the nine months ended September 30,
1999 to arrive at the unaudited pro forma condensed consolidated statement of
operations for the year ended December 31, 1998 and the nine months ended
September 30, 1999 to reflect:
. the acquisitions made during 1998 as if they occurred on January
1, 1998;
. a reduction in interest expense due to the repayment of $9.4
million of revolving debt from the proceeds of the issuance of
22,825 shares of Class A Convertible Preferred Stock in January
1999;
. a reduction in interest expense due to the repayment of $13.1
million of debt with the proceeds of iXL's initial public
offering;
. accretion on CFN Series B Convertible Preferred Stock as if it
were outstanding for the full year;
. elimination of accretion recorded related to iXL's preferred
stock which was reclassified into common stock upon the closing
of iXL's initial public offering as if such reclassification
occurred on January 1, 1998; and
. our proposed acquisition of Tessera Enterprise Systems, Inc. as
if the acquisition occurred on January 1, 1998.
We adjust our historical condensed consolidated balance sheet as of
September 30, 1999 to arrive at the unaudited pro forma condensed consolidated
balance sheet as of September 30, 1999 as if the following event occurred on
September 30, 1999:
. the closing of our proposed acquisition of Tessera Enterprise
Systems, Inc.
The table is further adjusted on a pro forma as adjusted basis as if the
following occurred on September 30, 1999:
. the sale of 2,000,000 shares of common stock offered by iXL by
this prospectus at an assumed offering price of $39.375 per
share and the application of the resulting estimated net
proceeds of $74.1 million.
5
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended September
Years Ended December 31, 30,
------------------------------ -----------------------------
1997 1998 1998 1998 1999 1999
Actual Actual Pro Forma Actual Actual Pro Forma
-------- -------- ---------- -------- -------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Consolidated Statement
of Operations Data:
Revenues................ $ 18,986 $ 64,767 $107,408 $ 35,507 $142,639 $160,257
Cost of revenues........ 11,343 44,242 70,812 25,613 83,291 93,063
-------- -------- -------- -------- -------- --------
Gross profit.......... 7,643 20,525 36,596 9,894 59,348 67,194
Sales and marketing
expenses............... 3,903 17,325 21,583 9,496 32,418 35,314
General and
administrative
expenses............... 9,114 30,163 43,723 15,839 50,125 54,358
Research and development
expenses............... 4,820 4,408 4,413 3,473 3,489 3,698
Depreciation............ 1,408 5,217 6,176 2,915 8,499 8,818
Amortization............ 5,191 10,590 42,823 5,992 13,013 31,810
-------- -------- -------- -------- -------- --------
Loss from operations.. (16,793) (47,178) (82,122) (27,821) (48,196) (66,804)
Other income (expense),
net.................... 116 (28) (137) 40 (183) (176)
Loss on equity
investment............. (1,443) (1,640) (1,640) (1,287) (65) (65)
Interest income......... 136 750 1,116 551 2,180 2,343
Interest expense........ (238) (770) (1,290) (322) (829) (367)
-------- -------- -------- -------- -------- --------
Loss before income
taxes................ (18,222) (48,866) (84,073) (28,839) (47,093) (65,069)
Income tax benefit
(expense).............. 2,782 -- (47) -- -- (38)
-------- -------- -------- -------- -------- --------
Net loss.............. (15,440) (48,866) (84,120) (28,839) (47,093) (65,107)
Dividends and accretion
on mandatorily
redeemable preferred
stock.................. -- (9,099) (1,808) (5,096) (20,514) (1,356)
-------- -------- -------- -------- -------- --------
Net loss available to
common stockholders.. $(15,440) $(57,965) $(85,928) $(33,935) $(67,607) $(66,463)
======== ======== ======== ======== ======== ========
Basic and diluted net
loss per common share.. $ (2.36) $ (4.92) $ (1.42) $ (3.28) $ (1.85) $ (0.98)
======== ======== ======== ======== ======== ========
Weighted average common
shares outstanding..... 6,540 11,777 60,346 10,348 36,447 67,841
</TABLE>
<TABLE>
<CAPTION>
As of September 30, 1999
-----------------------------
Pro Pro Forma
Actual Forma as Adjusted
-------- -------- -----------
<S> <C> <C> <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents....................... $ 79,320 $ 81,686 $155,772
Working capital................................. 147,506 153,284 227,370
Total assets.................................... 283,392 414,832 488,918
Debt, including current portion................. 1,881 2,064 2,064
Mandatorily redeemable preferred stock of
subsidiary..................................... 48,503 48,503 48,503
Stockholders' equity............................ 194,846 323,616 397,702
</TABLE>
6
<PAGE>
RISK FACTORS
Investing in our common stock will provide you with an equity ownership
interest in iXL. As an iXL stockholder, you may be exposed to risks inherent in
our business. The value of your investment may increase or decline and could
result in a loss. You should carefully consider the following factors as well
as other information contained in this prospectus before deciding to invest in
shares of our common stock.
Risks Related to iXL's Business
Our limited operating history makes it difficult to evaluate our business.
We were founded in March 1996. As a result, we have a limited operating
history on which you can base your evaluation of our business and prospects.
Our business and prospects must be considered in light of the risks and
uncertainties frequently encountered by companies in their early stages of
development. These risks are further amplified by the fact that we are
operating in the new and rapidly evolving strategic Internet services market.
These risks and uncertainties include the following:
. our business model and strategy have evolved and are continually
being reviewed;
. we may not be able to successfully implement our business model
and strategy; and
. our management has not worked together for very long.
We cannot be sure that we will be successful in meeting these challenges
and addressing these risks and uncertainties. If we are unable to do so, our
business will not be successful and the value of your investment in iXL will
decline.
Potential fluctuations in our quarterly results make financial forecasting
difficult and could affect our common stock trading price.
As a result of our limited operating history, rapid growth, numerous
acquisitions and the emerging nature of the markets in which we compete, we
believe that quarter-to-quarter comparisons of results of operations for
preceding quarters are not necessarily meaningful. Also, it is difficult to
forecast our quarterly results due to the difficulty in predicting the amount
and timing of client expenditures, our acquisitions and our employee
utilization. Our quarterly results of operations may fluctuate significantly in
the future as a result of a variety of factors, many of which are outside our
control. You should not rely on the results of any one quarter as an indication
of our future performance. If in some future quarter our results of operations
were to fall below the expectations of securities analysts and investors, the
trading price of our common stock would likely decline. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
We have an accumulated deficit, are not currently profitable and expect to
incur future losses.
We have incurred substantial losses since our inception and we anticipate
continuing to incur substantial losses for the foreseeable future. As of
September 30, 1999, we had an accumulated deficit of approximately $113
million. Additionally, our revenue composition has changed substantially from
inception, and we expect further change as our business develops. Historically,
a substantial majority of our revenue was derived from traditional web site
development and implementation of our Solution Sets(TM). Solution Sets are
templated Internet applications which we customize for our clients. To succeed,
we must take advantage of our existing relationships to substantially increase
our revenue derived from more comprehensive strategic Internet services. To
facilitate this increase in revenues, we intend to continue to invest heavily
in acquisitions,
7
<PAGE>
infrastructure, development and marketing. As a result, we may not be able to
achieve or sustain profitability. If we fail to achieve or sustain
profitability, the value of your investment in iXL will decline. See "Selected
Consolidated Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
We may be unable to continue to grow at our historical growth rates or to
effectively manage our growth.
Continued, planned growth is a key component of increasing the value of
our common stock. In the past two years our business has grown significantly,
and we anticipate future internal growth and growth through acquisitions. From
January 1, 1997 to September 30, 1999, our staff increased from approximately
90 to approximately 1,900 employees. This rapid growth places a significant
demand on management and operational resources. In order to manage growth
effectively, we must implement and improve our operational systems and
controls.
Our growth could also be adversely affected by many other factors,
including economic downturns, as clients would reduce or delay their
expenditures with us. As a result of these concerns, we cannot be sure that we
will continue to grow, or, if we do grow, that we will be able to maintain our
historical growth rate.
Our continued growth is dependent on the successful completion of acquisitions.
Since our inception, we have completed 35 acquisitions. We anticipate
that a portion of our future growth will continue to be accomplished through
acquisitions. The success of this plan depends upon our ability to:
. identify suitable acquisition opportunities;
. effectively integrate acquired personnel, operations, products and
technologies into our organization;
. retain and motivate the personnel of acquired businesses;
. retain customers of acquired businesses; and
. obtain necessary financing on acceptable terms.
Additionally, in pursuing acquisition opportunities we may compete with
other companies with similar growth strategies, some of which may be larger
than we are and have greater financial and other resources than we do.
Competition for acquisition targets could also result in increased prices for
acquisition targets and a diminished pool of companies available for
acquisition. Further, we may not be able to complete or successfully integrate
the proposed acquisition of Tessera Enterprise Systems, Inc. on a timely basis,
or at all, and our inability to do so could harm our operating results.
We may not be able to keep up with the demand for services under our guaranteed
payment services agreements.
We have entered into multi-year services agreements with General Electric
and Delta Air Lines for the delivery of strategic Internet services and may
enter into comparable agreements in the future. These agreements guarantee
minimum payments to iXL. We will be required to commit significant resources to
meet the demands of these contracts. If we are unable to hire enough employees
or deploy sufficient resources to meet these demands, we may not be able to
provide these clients with the services requested by them. This could cause
these clients to become dissatisfied with us and reduce their future demand for
our services. It could also harm our reputation with other clients as well as
decrease the resources available to services those clients. These impacts could
harm our financial condition. We may execute additional agreements of this type
in the future. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Certain Transactions--Other Transactions."
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Our fixed-price contracts involve financial risk.
Many of our existing contracts are on a fixed-price basis, rather than a
time and materials basis. We assume greater financial risk on fixed-price
contracts than on time and materials engagements. We have a limited history in
estimating our costs for our fixed-price engagements. If we fail to estimate
costs on fixed-price contracts accurately or encounter unexpected problems, our
financial performance will be adversely effected. To reduce this financial
risk, we are attempting to price most new contracts on a time and materials
basis. We try to price any fixed-price contracts on a three-phase basis--
strategic review, design and implementation. Each phase is priced separately,
immediately prior to its commencement. We may not be able to price a majority
of our larger fixed-price contracts on a three-phase basis. We have had to
commit unanticipated resources to complete some of our projects, resulting in
lower gross margins. We may experience similar situations in the future. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
If we fail to attract and retain employees, our growth could be limited and our
costs could increase.
Historically we have experienced significant employee turnover. Our
future success will depend in large part upon our ability to attract, train and
retain additional highly skilled executive-level management and creative,
technical, consulting and sales personnel. The competition in the strategic
Internet services industry for such personnel is intense, and we cannot be sure
that we will be successful in attracting, training and retaining such
personnel. Most of our employees and several of our executive officers have
joined us recently, either through acquisitions or otherwise. Our ability to
generate revenues is dependent upon the number and expertise of the personnel
we employ. Most of our employees are not subject to noncompetition agreements
or agreements which condition a portion of acquisition consideration on future
performance of an acquired company's management. High turnover resulting in
additional training expense would decrease our profitability. Also, we may have
difficulty retaining employees who received significant amounts of common stock
in connection with the acquisition by iXL of their previous employer once those
employees are able to sell their shares of common stock through this offering
or otherwise.
We depend on our key management personnel for our future success.
Our success depends largely on the skills of our key management and
technical personnel. The loss of one or more of our key management or technical
personnel may materially and adversely affect our business and results of
operations. Currently, our key management and technical personnel are U.
Bertram Ellis, Jr., our Chief Executive Officer, William C. Nussey, our
subsidiary iXL, Inc.'s Chief Executive Officer and President, C. Cathleen
Raffaeli, our subsidiary CFN's President and Chief Operating Officer, M. Wayne
Boylston, our Executive Vice President, Chief Financial Officer, Treasurer and
Assistant Secretary, Michael Chlan, CFN's Chief Information Officer, Barry
Sikes, iXL, Inc.'s Chief Operating Officer, David Clauson, iXL, Inc.'s
Executive Vice President for Worldwide Marketing, Vincent M. Copeland, iXL,
Inc.'s Executive Vice President for Worldwide Client Development, and Benjamin
Chen, iXL, Inc.'s Chief Technology Officer. We do not maintain key man
insurance for any of our employees other than Mr. Ellis. We cannot guarantee
that we will be able to replace any of these individuals in the event their
services become unavailable. See "Management."
The loss of one or more of our major customers could harm our business.
The loss of one or more of our major customers, the failure to attract
new customers on a timely basis, or a reduction in revenue associated with
existing or proposed customers would harm our business and prospects. GE
comprised approximately 13% of our revenue in the third quarter of 1999, and
may account for a larger portion of our revenue in the future.
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We generally do not have long-term contracts and need to establish
relationships with new clients.
Our clients generally retain us on a project-by-project basis, rather
than under long-term contracts. As a result, a client may or may not engage us
for further services once a project is completed or may unilaterally reduce the
scope of, or terminate, existing projects. To become profitable, we need to
establish and develop relationships with additional Fortune 1000 companies and
other corporate users of information technology. The absence of long-term
contracts and the need for new clients create an uncertain revenue stream,
which could negatively affect our financial condition.
Failure to raise necessary capital could restrict our growth, limit our
development of new products and services and hinder our ability to compete.
We may need to raise significant additional funds in order to achieve our
business objectives. Failure to raise these funds may:
. restrict our growth;
. limit our development of new products and services; and
. hinder our ability to compete.
Any of these consequences would have a material adverse effect on our business,
results of operations and financial condition.
iXL may need to raise significant additional funds sooner in order to
support its growth, develop new or enhanced services and products, respond to
competitive pressures, acquire complementary businesses or technologies or take
advantage of unanticipated opportunities. iXL believes that CFN's available
cash resources will be sufficient to meet its anticipated working capital
expenditure requirements through 1999. If CFN is unable to raise additional
capital funds, CFN may require additional funding from iXL, although iXL is
under no obligation to provide any such funding.
We may be liable for defects or errors in the solutions we develop.
Many of the solutions we develop are critical to the operations of our
clients' businesses. Any defects or errors in these solutions could result in:
. delayed or lost client revenues;
. adverse customer reaction toward iXL;
. negative publicity;
. additional expenditures to correct the problem; and
. claims against us.
Our standard contracts limit our damages arising from our negligent
conduct in rendering our services. These contractual provisions may not protect
us from liability for damages. In addition, large claims may not be adequately
covered by insurance and may raise our insurance costs.
Year 2000 risks may adversely affect our business.
Many currently installed computer systems and software products are coded
to accept only two-digit entries to identify a year in the date code field.
Consequently, on January 1, 2000, many of these systems could fail or
malfunction because they may not be able to distinguish between 20th century
dates and 21st century
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dates. Accordingly, in the coming year, many companies, including our
customers, potential customers, vendors and strategic partners, may need to
upgrade their systems to comply with applicable "Year 2000" requirements. The
computer systems we currently rely on to conduct our business are: programming
software, graphics design software, accounting and billing software, word
processing, spreadsheet, project management and presentation software,
communications software, and network, server and personal computing hardware.
Because we and our clients are dependent, to a very substantial degree,
upon the proper functioning of our and their computer systems, a failure of our
or their systems to correctly recognize dates beyond December 31, 1999 could
materially disrupt our operations, which could materially and adversely affect
our business, results of operations and financial condition. Additionally, our
failure to provide Year 2000 compliant products and services to our clients
could result in financial loss, harm to our reputation and legal liability.
Likewise, the failure of the computer systems and products of the third parties
with which we transact business to be Year 2000 compliant could materially
disrupt their and our operations. For a discussion of our Year 2000 readiness
program, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Year 2000 Risks."
Our ability to protect our intellectual property is important to our business.
We have a variety of copyrights, trademarks, trade secrets and other
intellectual property rights which are important to our business. Patent
applications have been filed for the CFN platform, which may or may not be
granted. If these applications are not granted, our competitors may be able to
copy our technology without compensating us. The steps we take to protect our
intellectual property may not be adequate. Effective protection may not be
available in every country. In addition, although we believe that our
intellectual property rights do not infringe on the intellectual property
rights of others, we cannot be sure that other parties will not assert claims
against us. We may expend significant financial and managerial resources on
these claims. Further, because patent applications are not matters of public
record until approved and issued, we may be using technologies subject to
patent applications by other parties, and we cannot be sure that we will be
entitled to continued use of such technologies if any such third party patent
were approved and issued.
Our investments in iXL Ventures involve risk.
Through iXL Ventures, we have occasionally assisted in the development of
businesses engaged in the "new media and e-commerce" segment of the technology
industry. iXL's relationship with these businesses is typically publicized by
press releases. Accordingly, the failure of these businesses may directly or
indirectly harm our reputation. These businesses are generally unproven,
involve substantial risk and may never be profitable. See "Business--iXL
Ventures."
Our international operations and expansion involve financial and operational
risk.
Revenue from our foreign offices has been minimal to date. We have only
minimal experience in managing international offices and only limited
experience in marketing services to international clients. Revenues from our
international offices may prove inadequate to cover the expenses of
establishing and maintaining our international offices and marketing to
international clients. In addition, there are risks inherent in doing business
on an international level, such as fluctuations in currency exchange rates and
potentially adverse tax consequences, any of which could adversely affect our
international operations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
Risks Related to the Strategic Internet Services Industry
The developing market for strategic Internet services and the level of
acceptance of the Internet as a business medium will affect our business.
The market for strategic Internet services is relatively new and is
evolving rapidly. Our future growth is dependent upon our ability to provide
strategic Internet services that are accepted by our existing and future
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clients as an integral part of their business model. Demand and market
acceptance for recently introduced services are subject to a high level of
uncertainty. The level of demand and acceptance of strategic Internet services
is dependent upon a number of factors, including:
. the growth in consumer access to and acceptance of new interactive
technologies such as the Internet;
. companies adopting Internet-based business models; and
. the development of technologies that facilitate two-way
communication between companies and targeted audiences.
Significant issues concerning the commercial use of these technologies
include security, reliability, cost, ease of use and quality of service. These
issues remain unresolved and may inhibit the growth of Internet business
solutions that utilize these technologies.
Industry analysts and others have made many predictions concerning the
growth of the Internet as a business medium. These predictions should not be
relied upon. If the market for strategic Internet services fails to develop, or
develops more slowly than expected, or if our services do not achieve market
acceptance, our business will not succeed and the value of your investment in
our common stock will decline.
We may not be able to keep up with the continuous technological change in our
market which could harm our business.
Our success will depend, in part, on our ability to respond to
technological advances. We may not be successful in responding quickly, cost-
effectively and sufficiently to these developments. If we are unable, for
technical, financial or other reasons, to adapt in a timely manner in response
to technological advances, we will not be able to compete effectively. In
addition, employee time allocated to responding to technological advances will
not be available for client engagements.
We operate in a highly competitive market with low barriers to entry which
could limit our market share and harm our financial performance.
While the market for strategic Internet services is relatively new, it is
already highly competitive and characterized by an increasing number of
entrants that have introduced or developed products and services similar to
those offered by us. In addition, there are relatively low barriers to entry
into our business. We have no patented or other proprietary technology that
would preclude or inhibit competitors from entering the strategic Internet
services market. We believe that due to the low cost of entering our markets,
competition will intensify and increase in the future. This intense competition
may limit our ability to become profitable or result in the loss of market
share. As a result, our competitors may be better positioned to address
developments in the industry or may react more effectively to industry changes,
which could adversely affect our business.
Most of our employees are not subject to noncompetition agreements. As a
result, we are subject to the risk that our employees may leave us and may
start competing businesses. The emergence of these enterprises will further
increase the level of competition in our markets and could adversely affect our
growth and financial performance. See "Business--Competition."
Risks Related to Our CFN Subsidiary
CFN's business model is new and unproven.
CFN, our 76%-owned subsidiary, has incurred significant losses since
inception and is expected to generate significant losses for the foreseeable
future. As of September 30, 1999, CFN had an accumulated deficit of
approximately $37 million. CFN's business model is new and unproven, and its
success will depend on:
. the willingness of consumers to purchase financial and other
services through the YouDecide.com web site rather than through
traditional distribution methods;
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. CFN's services becoming available to a large number of consumers;
and
. whether providers of services will view participation on the CFN
platform as an attractive opportunity.
To date, the volume of transactions through CFN has been limited and,
accordingly, the revenue recognized by CFN has been minimal. CFN has recently
made its services available to the general public through the YouDecide.com web
site and through its call center. This expansion is in its early stages and
accordingly CFN has little experience marketing to the general public. Also,
none of the CFN services providers has a long-term contract with CFN. The
failure of CFN to successfully implement its business plan could adversely
affect our business results and financial condition. See "Business--Consumer
Financial Network."
CFN must expend significant resources to grow its infrastructure.
CFN's performance will depend in large part upon its ability to estimate
accurately its resource requirements. CFN has expended, and will continue to
expend, significant resources:
. to build electronic data interchange interfaces with its provider
network;
. to grow its technology infrastructure;
. to add participating companies and employees to its program; and
. to establish access to the CFN program for participating
companies' employees and for the general public.
CFN incurs these expenses in advance of any recognition of revenue.
CFN has no control over the prices or other aspects of the services
offered through its program. We do not know if customers will find these
services more attractive than other alternatives available.
The growth of CFN's program will be heavily dependent on its online
relationships.
CFN will increasingly rely on relationships with a variety of Internet
portals, financial institutions, and other online companies to attract
consumers to CFN's web site, YouDecide.com. These relationships may not
generate a substantial amount of new traffic for YouDecide.com, or the revenues
generated by these relationships may be insufficient to justify CFN's payment
obligations. CFN's ability to increase its revenues will depend, in part, on
increased traffic to YouDecide.com that CFN expects to generate through these
online relationships. The termination, nonrenewal or renewal on unfavorable
terms of a relationship from which CFN generates significant traffic to
YouDecide.com would harm CFN's business. Additionally, an online company's
failure to maintain efficient and uninterrupted operation of its computer and
communications hardware systems would likely reduce the amount of traffic CFN
receives from YouDecide.com, harming CFN's business.
If CFN is unable to safeguard the security and privacy of consumers' and
companies' confidential data, consumers and providers may not use CFN's
services and its business may be harmed.
A significant barrier to electronic commerce and communications is the
secure transmission of personally identifiable information of Internet users as
well as other confidential information over public networks. If any compromise
or breach of security were to occur, it could harm CFN's reputation and expose
us to possible liability. A party who is able to circumvent our security
measures could misappropriate proprietary information or cause interruptions in
CFN's operations. CFN may be required to make significant expenditures to
protect against security breaches or to alleviate problems caused by any
breaches. Advances in computer capabilities, new discoveries in the field of
cryptography, or other events or developments could result in a compromise or
breach of the algorithms CFN uses to protect consumers' and providers'
confidential information.
CFN's numerous established competitors could harm its prospects.
CFN competes with other Internet-based providers of financial and other
consumer services, as well as traditional providers of these services. We
expect CFN to face competition from an increasing number of
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sources in the marketplace. If CFN fails to compete successfully against
current or future competitors, it may not become profitable and our financial
condition may be adversely affected. See "Business--Competition."
If CFN is unable to promote its brand and expand its brand recognition, CFN's
ability to draw consumers to its platform will be limited.
Establishing and maintaining CFN's brand, YouDecide.com, is critical to
attracting additional consumers to YouDecide.com, strengthening CFN's
relationships with its providers and attracting new providers. If the
YouDecide.com brand does not achieve positive recognition in the market, CFN's
ability to draw consumers to its web sites will be limited. If CFN's marketing
efforts do not generate a corresponding increase in revenues or CFN otherwise
fails to successfully promote its brand, or if these efforts require excessive
expenditures, CFN's business will be harmed. Moreover, if visitors to
YouDecide.com do not perceive its existing services or the products and
services of CFN's providers to be of high quality, or if CFN alters or modifies
CFN's brand image, introduces new services or enters into new business ventures
that are not favorably received, the value of CFN's brand could be harmed.
Similarly, if CFN's providers do not provide consumers with high-quality
products and services, the value of CFN's brand may be harmed and the number of
consumers using CFN's services may decline.
Government regulation and legal uncertainties related to CFN could adversely
affect our business.
CFN is subject to extensive regulation under the financial services and
insurance laws of the United States and the states in which it offers services.
The failure to comply with these regulatory requirements can lead to
revocation, suspension or loss of licensing status, termination of contracts
and legal and administrative enforcement actions and private litigation.
Licensing laws and regulations often differ materially between states and
within individual states. Moreover, the regulatory agencies governing CFN's
activities have substantial discretion in evaluating the permissibility of
CFN's current and future activities. Many aspects of CFN's operations, however,
have not been subject to federal or state regulatory interpretation. Regulatory
requirements are subject to change from time to time and may in the future
further restrict CFN's ability to conduct its business. See "Business--Consumer
Financial Network--Government Regulation of Insurance, Auto Finance and
Mortgages."
Risks Related to the Offering
You may encounter volatility in the market price for our common stock.
The trading price of our common stock has been and is likely to continue
to be highly volatile. Our stock price could be subject to wide fluctuations in
response to factors such as the following:
. actual or anticipated variations in quarterly results of
operations;
. the addition or loss of affiliates or providers;
. our ability to hire and retain employees;
. additions or departures of key personnel;
. announcements of technological innovations, new products or
services by us or our competitors;
. changes in financial estimates or recommendations by securities
analysts;
. conditions or trends in the Internet and online commerce
industries;
. changes in the market valuations of other Internet or online
service companies;
. our announcements of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;
. sales of our common stock;
. general market conditions; and
. other events or factors, many of which are beyond our control.
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In addition, the stock market in general, and the Nasdaq National Market
and the market for Internet and technology companies in particular, have
experienced extreme price and volume fluctuations that have often been
unrelated or disproportionate to the operating performance of these companies.
These broad market and industry factors may materially and adversely affect our
stock price, regardless of our operating performance. The trading prices of the
stocks of many technology companies are at or near historical highs and reflect
price-earnings ratios substantially above historical levels. These trading
prices and price-earnings ratios may not be sustained.
Further, the existing market for our common stock may not be sustained.
In such circumstances, it may be difficult for you to sell your shares of
common stock at a price that is attractive to you. Also, in connection with our
acquisition strategy and financing activities, we have issued many shares of
our common stock to a large number of people and entities under exemptions from
the relevant securities laws. If the market price of our common stock
significantly decreases, one or more of these investors may file a claim
against us for a refund of their investment or for other damages. These types
of litigation, regardless of the outcome, could result in substantial costs and
a diversion of management's attention and resources, which could adversely
affect our business, results of operations and financial condition.
Kelso and CB Capital Investors will continue to have significant influence over
us.
Upon completion of this offering, the Kelso funds, through Kelso
Investment Associates V, L.P. and Kelso Equity Partners V, L.P., and CB Capital
Investors, L.P., will beneficially own approximately 23.5% and 11.9%,
respectively, of the outstanding common stock, or 23.1% and 11.7%,
respectively, if the underwriters' over-allotment option is exercised in full.
These stockholders have entered into an agreement providing that so long as
they own at least 5% of our common stock, designees of Kelso and CB Capital
Investors will be included on our slate of directors submitted for stockholder
election. As a result of their ownership of common stock and this nomination
agreement, these stockholders will have significant influence over the election
of our directors. Furthermore, given the size of their individual holdings,
these stockholders may be able to exercise significant influence over other
matters requiring stockholder approval, including the approval of significant
corporate transactions. For example, such concentration of ownership may have
the effect of delaying or preventing a change in control of iXL. See
"Management--Amended Stockholders Agreement," "Principal and Selling
Stockholders," "Certain Transactions" and "Description of Capital Stock--
Certain Antitakeover Effects of Provisions of iXL's Certificate of
Incorporation and Bylaws and Delaware Law."
Antitakeover provisions of our Certificate of Incorporation and Bylaws and
Delaware law could prevent or delay a change of control.
Our Board of Directors may issue up to 5,000,000 shares of our preferred
stock and may determine the price, rights, preferences, privileges, and
restrictions, including voting and conversion rights, of these shares of
preferred stock. These determinations may be made without any further vote or
action by our stockholders. The issuance of preferred stock may make it more
difficult for a third party to acquire control of us. In addition, the rights
of the holders of common stock will be subject to, and may be adversely
affected by, the rights of the holders of any preferred stock that may be
issued in the future. Further, provisions of Delaware law, our Certificate of
Incorporation and our Bylaws could delay or impede a merger, tender offer or
proxy contest involving iXL. For example, Section 203 of the Delaware General
Corporation Law could prohibit us from engaging in a business transaction with
large stockholders for a period of three years and our Certificate of
Incorporation and Bylaws require advance notice for stockholder proposals and
director nominations to be considered at a meeting of stockholders. See
"Description of Capital Stock--Blank Check Preferred Stock" and "--Certain
Antitakeover Effects of Provisions of iXL's Certificate of Incorporation and
Bylaws and Delaware Law."
Future sales into the public market could cause the market price of our common
stock to decline.
Our current stockholders hold a substantial number of shares of our
common stock which they will be able to sell in the public market in the near
future. In addition, we have a substantial number of outstanding
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options and expect to continue to issue a substantial number of options to
attract and retain employees. Sales of a substantial number of shares of our
common stock in the public market could adversely affect the market price of
our common stock. For a description of the availability for sale of shares of
our common stock that are already outstanding or that are sold in this
offering, see "Description of Capital Stock" and "Shares Eligible for Future
Sale."
Our management has broad discretion over the use of proceeds to iXL from this
offering.
We have not designated any specific uses for the net proceeds to iXL of
this offering. Therefore, our management will have broad discretion in how we
use these net proceeds, which may include general corporate purposes, such as
working capital requirements and acquisitions. The failure of management to
apply these proceeds effectively would adversely affect our financial condition
and would most likely cause the market price of our common stock to decline. We
will not receive any proceeds from the sale of shares in this offering by
selling stockholders. See "Use of Proceeds."
The net tangible book value of our common stock issued in this offering will be
less than the offering price.
The public offering price for this offering is substantially higher than
the net tangible book value per share of the outstanding common stock
immediately after the offering. If you purchase common stock in the offering,
you will incur immediate and substantial dilution. Dilution is a reduction in
the net tangible book value per share from the price you pay per share for our
common stock. We also have outstanding a large number of stock options and
warrants to purchase common stock with exercise prices significantly below the
public offering price of the common stock. To the extent these options or
warrants are exercised, there will be further dilution. In addition, we have
registered 4,000,000 shares of our common stock, including approximately
3,469,548 shares expected to be issued in connection with the acquisition of
Tessera Enterprise Systems, Inc. by iXL, pursuant to a Registration Statement
on Form S-4 which will be used as acquisition consideration for our continuing
acquisition program. We also expect to register 6,000,000 shares pursuant to an
additional Registration Statement on Form S-4 for use in future acquisitions.
We intend to continue to grant a substantial number of stock options to our
employees which may result in substantial dilution in the future. See
"Dilution" and "Business --Acquisitions."
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FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events, including, among other things:
. implementing our business strategy;
. managing our rapid growth and employee costs;
. managing CFN's expenditures and making CFN profitable;
. expanding CFN's customer base;
. integrating acquired businesses;
. forecasting e-commerce and strategic Internet services market
growth; and
. competing in the strategic Internet services industry.
In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential" or "continue" or the negative of such
terms or other comparable terminology.
Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause our and the strategic Internet
services industry's actual results, levels of activity, performance,
achievements and prospects to be materially different from those expressed or
implied by such forward-looking statements. These risks, uncertainties and
other factors include those identified under "Risk Factors."
We undertake no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise. In light of these risks, uncertainties, and assumptions, the
forward-looking events discussed in this prospectus might not occur. See "Risk
Factors."
TRADEMARKS
iXLTM, the iXL logo, Interactive ExcellenceTM, Internet ExcellenceTM, the
CFN logo, CFNTM, Consumer Financial NetworkTM, CFN.comTM, YouDecide.comTM, the
YouDecide.com logo, Surf Less. Net More.(TM), Ultimate SolutionTM, iD5TM and
the names of products and services offered by iXL and CFN are trademarks,
registered trademarks, service marks or registered service marks of iXL and
CFN. This prospectus also includes product names, trade names and trademarks of
other companies.
INFORMATION IN PROSPECTUS
You should rely only on the information contained in this prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate as of the date on the
front cover of this prospectus only. Our business, financial condition, results
of operations and prospects may have changed since that date.
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USE OF PROCEEDS
The net proceeds to iXL from the sale of shares of common stock in this
offering are estimated to be $74.1 million, based upon an assumed public
offering price of $39.375 per share and after deducting underwriting discounts
and commissions and estimated offering expenses of $4.7 million payable by iXL.
If the underwriters exercise their over-allotment option in full, the net
proceeds to iXL are estimated to be $113.6 million. iXL intends to use the net
proceeds of this offering for general corporate purposes, including working
capital requirements and acquisitions. As of the date of this prospectus, we
cannot specify the particular intended uses for the net proceeds and
accordingly management will have broad discretion in the application of such
proceeds. If CFN is unable to raise sufficient capital to meet its anticipated
working capital requirements, iXL may use a portion of the net proceeds to
increase its investment in CFN. iXL will not receive any of the proceeds from
the sale of common stock by the selling stockholders. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources" and "Principal and Selling Stockholders."
iXL regularly evaluates potential domestic and international acquisition
candidates, and is currently holding preliminary discussions with a number of
candidates. If, after due diligence review and negotiation, companies can be
acquired on a basis considered fair to iXL and its stockholders, iXL may
proceed with an acquisition. Of these potential acquisitions, only the
acquisition of Tessera by iXL is currently considered to be pending or
probable. iXL has registered 4,000,000 shares of its common stock pursuant to a
Registration Statement on Form S-4 for use in future acquisitions, including
approximately 3,469,548 shares expected to be issued in connection with the
acquisition of Tessera Enterprise Systems, Inc. by iXL. We also expect to
register 6,000,000 shares of common stock pursuant to an additional
Registration Statement on Form S-4 for use in future acquisitions. iXL expects
most of its future joint ventures or acquisitions to involve the issuance of
additional shares of its common stock. To the extent iXL chooses to use cash as
consideration for future acquisitions, iXL may use the proceeds from this
offering or it may obtain additional financing.
Pending use of the net proceeds for the above purposes, iXL intends to
invest such funds in short-term, interest-bearing, investment-grade
obligations. See "Risk Factors--Risks Related to the Offering--Our management
has broad discretion over the use of proceeds from this offering."
DIVIDEND POLICY
iXL has never declared or paid any cash dividends on the common stock.
iXL does not expect to pay any cash dividends in the foreseeable future. Under
the terms of its credit agreement, iXL is restricted from paying dividends to
its stockholders. iXL may in the future issue shares of preferred stock which
may have different or superior dividend rights than the common stock.
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PRICE RANGE OF COMMON STOCK
iXL's common stock commenced trading publicly on the Nasdaq National
Market on June 3, 1999 and is traded under the symbol IIXL. Prior to that date,
there was no public market for the common stock. The following table sets forth
for the periods indicated the high and low sales prices of the common stock.
<TABLE>
<CAPTION>
High Low
------ ------
<S> <C> <C>
Year Ended December 31, 1999
Second Quarter (from June 3, 1999
through June 30, 1999)................. $27.00 $13.75
Third Quarter........................... $38.38 $20.00
Fourth Quarter (through November 1,
1999).................................. $47.50 $31.63
</TABLE>
As of September 30, 1999, there were approximately 370 holders of record
of the common stock. On November 1, 1999, the last sales price reported on the
Nasdaq National Market for the common stock was $39.375 per share. See "Risk
Factors--Risks Related to the Offering--You may encounter volatility in the
market price for our common stock."
19
<PAGE>
CAPITALIZATION
The following table sets forth our actual capitalization as of September
30, 1999 adjusted as if the following event occurred on September 30, 1999:
. the closing of our proposed acquisition of Tessera Enterprise
Systems, Inc., including the issuance of approximately 3,469,548
shares of common stock by iXL to the Tessera stockholders.
The table is further adjusted on a pro forma as adjusted basis as if the
following event occurred on September 30, 1999:
. the sale of 2,000,000 shares of common stock offered by iXL by
this prospectus at an assumed public offering price of $39.375
per share and the application of the resulting estimated net
proceeds of $74.1 million.
You should read this capitalization table together with "Selected
Consolidated Financial Data," "Pro Forma Consolidated Financial Information"
and our consolidated financial statements and notes included elsewhere in this
prospectus.
<TABLE>
<CAPTION>
September 30, 1999
---------------------------------
Pro Forma
Actual Pro Forma as Adjusted
--------- --------- -----------
(in thousands except share and
per share data)
<S> <C> <C> <C>
Cash and cash equivalents.. $ 79,320 $ 81,686 $ 155,772
========= ========= =========
Current portion of long-
term debt................. $ 566 $ 640 $ 640
========= ========= =========
Long-term debt............. $ 1,315 $ 1,424 $ 1,424
Mandatorily redeemable
preferred stock:
Series A Convertible
Preferred Stock of CFN... 9,839 9,839 9,839
Series B Convertible
Preferred Stock of CFN... 38,664 38,664 38,664
Stockholders' equity:
Common stock.............. 648 683 703
Additional paid-in
capital.................. 304,345 433,080 507,146
Accumulated deficit....... (105,791) (105,791) (105,791)
Treasury stock............ (888) (888) (888)
Note receivable from
stockholder.............. (900) (900) (900)
Unearned compensation..... (2,568) (2,568) (2,568)
--------- --------- ---------
Total stockholders'
equity................. 194,846 323,616 397,702
--------- --------- ---------
Total capitalization.... $ 244,664 $ 373,543 $ 477,629
========= ========= =========
</TABLE>
The following provides further information regarding iXL's securities
described in the above table:
. CFN's Series A Convertible Preferred Stock, $.01 par value,
includes: 13,333,334 shares authorized, and issued and
outstanding (Actual, Pro Forma and Pro Forma as Adjusted).
. CFN's Series B Convertible Preferred Stock, $.01 per share,
includes: 16,190,475 shares authorized, and issued and
outstanding (Actual, Pro Forma and Pro Forma as Adjusted).
. Common stock, $.01 par value, includes: 200,000,000 shares
authorized (Actual, Pro Forma and Pro Forma as Adjusted), and
64,587,978, 68,057,526 and 70,057,526 shares issued and
outstanding (Actual, Pro Forma and Pro Forma as Adjusted,
respectively). Excludes 3,500,000 shares of common stock subject
to outstanding warrants at a weighted average exercise price of
$12.29 per share, 28,152,302 shares of common stock
20
<PAGE>
reserved for options granted under iXL's stock option plans as
of September 30, 1999 at a weighted average exercise price of
$9.64 per share, and 12,847,698 shares of common stock reserved
for options to be granted under iXL's stock option plans. Also
excludes up to approximately 536,000 shares of common stock
reserved for options granted under Tessera Enterprise Systems,
Inc.'s 1995 Stock Option Plan after assumption of such plan by
iXL upon the closing of the Tessera acquisition. Also excludes
530,452 shares of common stock registered pursuant to a
Registration Statement on Form S-4 for use in future
acquisitions, as well as 6,000,000 shares of common stock
expected to be registered pursuant to an additional Registration
Statement on Form S-4. "See Risk Factors--Risks Related to the
Offering--The net tangible book value of our common stock issued
in this offering will be less than the offering price."
21
<PAGE>
DILUTION
The pro forma net tangible book value of iXL at September 30, 1999 was
$152,455,000, or $2.24 per share of common stock. Pro forma net tangible book
value per share represents the amount of total tangible assets less total
liabilities and mandatorily redeemable preferred stock of subsidiary divided
by 68,057,526, the number of shares of common stock treated as outstanding on
a pro forma basis. This number includes:
. 3,469,548 shares of common stock expected to be issued in
connection with the acquisition of Tessera Enterprise Systems,
Inc. by iXL.
This number excludes:
. 28,152,302 shares of common stock issuable upon exercise of
stock options outstanding as September 30, 1999 at a weighted
average exercise price of $9.64 per share;
. 13,383,698 shares of common stock issuable upon exercise of
stock options reserved for grant, including options to purchase
approximately 536,000 shares of common stock reserved for
options granted under Tessera Enterprise Systems, Inc.'s 1995
Stock Option Plan after assumption of such plan by iXL upon the
closing of the Tessera acquisition;
. 1,000,000 shares of common stock issuable upon exercise of
warrants with an exercise price of $10.00 per share, 1,000,000
shares of common stock issuable upon exercise of warrants with
an exercise price of $15.00 per share, and 1,500,000 shares of
common stock issuable upon exercise of warrants with an
exercise price equal to the initial public offering price of
$12.00 per share;
. 530,452 shares of common stock registered for use in future
acquisitions; and
. 6,000,000 shares of common stock expected to be registered for
use in future acquisitions.
See "Description of Capital Stock" and "Risk Factors--Risks Related to
the Offering--The net tangible book value of our common stock issued in this
offering will be less than the offering price."
After giving effect to the sale by iXL of 2,000,000 shares of common
stock offered by this prospectus at the public offering price of $39.38 per
share and the application of the estimated net proceeds of $74.1 million,
iXL's pro forma net tangible book value at September 30, 1999 would have been
$226,541,000, or $3.23 per share. This represents an immediate increase in net
pro forma tangible book value to existing stockholders of $0.99 per share and
an immediate dilution of $36.15 per share to new investors. The following
table illustrates the per share dilution:
<TABLE>
<S> <C> <C>
Assumed public offering price per share: ........................ $39.38
Pro forma net tangible book value per share as of September 30,
1999.......................................................... $2.24
Increase per share attributable to new investors............... .99
-----
Pro forma net tangible book value per share giving effect to this
offering........................................................ 3.23
------
Dilution per share to new investors.............................. $36.15
======
</TABLE>
22
<PAGE>
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
Our consolidated financial statements are included elsewhere in this
prospectus. The unaudited pro forma consolidated financial information
presented here should be read together with those financial statements and
related notes.
We adjust our historical condensed consolidated statement of operations
for the year ended December 31, 1998 and the nine months ended September 30,
1999 to arrive at the unaudited pro forma condensed consolidated statement of
operations for the year ended December 31, 1998 and the nine months ended
September 30, 1999 to reflect:
. the acquisitions made during 1998 as if they occurred on
January 1, 1998;
. a reduction in interest expense due to the repayment of $9.4
million of revolving debt from the proceeds of the issuance of
22,825 shares of Class A Convertible Preferred Stock in January
1999;
. accretion of the CFN Series B Convertible Preferred Stock as if
it were outstanding for the full year;
. a reduction in interest expense due to the repayment of $13.1
million of debt from the proceeds from the sale of shares of
common stock in iXL's initial public offering;
. elimination of accretion recorded related to iXL's preferred
stock which was reclassified into common stock upon iXL's
initial public offering as though it occurred on January 1,
1998; and
. the results of our proposed acquisition of Tessera Enterprise
Systems, Inc. as if the acquisition occurred on January 1,
1998.
We adjust our historical condensed consolidated balance sheet as of
September 30, 1999 to arrive at the unaudited pro forma condensed consolidated
balance sheet as of September 30, 1999 as if the following event occurred on
September 30, 1999:
. the closing of our proposed acquisition of Tessera Enterprise
Systems, Inc.
All of iXL's acquisitions have been accounted for using the purchase
method and accordingly, each purchase price has been allocated to the tangible
and identifiable intangible assets acquired and liabilities assumed on the
basis of their fair values on the acquisition dates. The historical carrying
amounts of identified net tangible assets, including cash, accounts receivable,
property and equipment, and accounts payable, approximated their fair values.
Identifiable intangible assets and the purchase price in excess of identified
tangible and intangible net assets acquired have been allocated to goodwill and
are being amortized over their estimated useful lives. Identifiable intangible
assets consist primarily of assembled workforce, which is being amortized over
a period of three years. Goodwill is being amortized primarily over five years.
The fair value of the common stock issued as consideration for the
companies acquired by iXL since January 1, 1998 was determined based upon
periodic independent appraisals of the common stock. The fair value for
accounting purposes of the common stock to be issued in connection with the
acquisition of Tessera Enterprise Systems, Inc. was determined based upon iXL's
average closing stock price for the five-day period starting two days before
and ending two days after the terms of the acquisition were agreed to and
announced.
The pro forma condensed consolidated statement of operations are not
necessarily indicative of the results of operations that would have been
achieved had the transactions occurred on January 1, 1998 and should not be
construed as being representative of future results of operations. Upon
consummation of iXL's initial public offering, the reclassification of the
Class D Nonvoting Preferred Stock resulted in a charge to net loss available to
common stockholders equal to the difference between $35.7 million, the
aggregate redemption value of the Class D Nonvoting Preferred Stock, plus
accrued dividends and the carrying value of the Class D Nonvoting Preferred
Stock.
23
<PAGE>
Pro Forma Condensed Consolidated Statement of Operations
for the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Companies
Acquired Proposed
Historical in Pro Forma Tessera Pro Forma
Company 1998(2)(3) Adjustments Pro Forma Acquisition(7) Adjustments Pro Forma
---------- ---------- ----------- --------- -------------- ----------- ---------
(in thousands except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $ 64,767 $ 22,393 $ -- $ 87,160 $20,248 $ -- $107,408
Cost of revenues........ 44,242 14,321 -- 58,563 12,249 -- 70,812
-------- -------- ------- -------- ------- -------- --------
Gross profit.......... 20,525 8,072 -- 28,597 7,999 -- 36,596
Sales and marketing
expenses............... 17,325 1,351 -- 18,676 2,907 -- 21,583
General and
administrative
expenses............... 30,163 9,485 -- 39,648 4,075 -- 43,723
Research and development
expenses............... 4,408 5 -- 4,413 -- -- 4,413
Depreciation............ 5,217 678 -- 5,895 281 -- 6,176
Amortization............ 10,590 -- 7,078 (4) 17,668 -- 25,155 (8) 42,823
-------- -------- ------- -------- ------- -------- --------
(Loss) income from
operations........... (47,178) (3,447) (7,078) (57,703) 736 (25,155) (82,122)
Other income (expense),
net.................... (28) (110) -- (138) 1 -- (137)
Loss on equity invest-
ment................... (1,640) -- -- (1,640) -- -- (1,640)
Interest income......... 750 27 -- 777 339 -- 1,116
Interest expense........ (770) (332) (153)(5) (1,255) (135) 100 (9) (1,290)
-------- -------- ------- -------- ------- -------- --------
(Loss) income before
income taxes......... (48,866) (3,862) (7,231) (59,959) 941 (25,055) (84,073)
Income tax expense...... -- (8) -- (8) (39) -- (47)
-------- -------- ------- -------- ------- -------- --------
Net (loss) income..... (48,866) (3,870) (7,231) (59,967) 902 (25,055) (84,120)
-------- -------- ------- -------- ------- -------- --------
Dividends and accretion
on mandatorily
redeemable preferred
stock.................. (9,099) -- 7,291 (6) (1,808) -- -- (1,808)
-------- -------- ------- -------- ------- -------- --------
Net (loss) income
available to common
stockholders......... $(57,965) $ (3,870) $ 60 $(61,775) $ 902 $(25,055) $(85,928)
======== ======== ======= ======== ======= ======== ========
Basic and diluted net
loss per common
share(1)............... $ (4.92) $ (1.09) $ (1.42)
======== ======== ========
Weighted average common
shares outstanding(1).. 11,777 56,876 60,346(17)
</TABLE>
24
<PAGE>
Pro Forma Condensed Consolidated Statement of Operations
for the Nine Months Ended September 30, 1999
<TABLE>
<CAPTION>
Proposed
Historical Pro Forma Tessera Pro Forma
Company Adjustments Pro Forma Acquisition(12) Adjustments Pro Forma
---------- ----------- --------- --------------- ----------- ---------
(in thousands except per share data)
<S> <C> <C> <C> <C> <C> <C>
Revenues................ $142,639 $ -- $142,639 $17,618 $ -- $160,257
Cost of revenues........ 83,291 -- 83,291 9,772 -- 93,063
-------- ------- -------- ------- -------- --------
Gross profit.......... 59,348 -- 59,348 7,846 -- 67,194
Sales and marketing
expenses............... 32,418 -- 32,418 2,896 -- 35,314
General and
administrative
expenses............... 50,125 -- 50,125 4,233 -- 54,358
Research and development
expenses............... 3,489 -- 3,489 209 -- 3,698
Depreciation............ 8,499 -- 8,499 319 -- 8,818
Amortization............ 13,013 -- 13,013 -- 18,797 (8) 31,810
-------- ------- -------- ------- -------- --------
(Loss) income from
operations........... (48,196) -- (48,196) 189 (18,797) (66,804)
Other (expense) income,
net.................... (183) -- (183) 7 -- (176)
Loss on equity
investment............. (65) -- (65) -- -- (65)
Interest income......... 2,180 -- 2,180 163 -- 2,343
Interest expense........ (829) 493(10) (336) (106) 75 (9) (367)
-------- ------- -------- ------- -------- --------
(Loss) income before
income taxes......... (47,093) 493 (46,600) 253 (18,722) (65,069)
Income tax expense...... -- -- -- (38) -- (38)
-------- ------- -------- ------- -------- --------
Net (loss) income..... (47,093) 493 (46,600) 215 (18,722) (65,107)
-------- ------- -------- ------- -------- --------
Dividends and accretion
on mandatorily
redeemable preferred
stock.................. (20,514) 19,158(11) (1,356) -- -- (1,356)
-------- ------- -------- ------- -------- --------
Net (loss) income
available to common
stockholders......... $(67,607) $19,651 $(47,956) $ 215 $(18,722) $(66,463)
======== ======= ======== ======= ======== ========
Basic and diluted net
loss per common
share(1)............... $ (1.85) $ (0.74) $ (0.98)
======== ======== ========
Weighted average common
shares outstanding(1).. 36,447 64,372 67,841
</TABLE>
25
<PAGE>
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 1999
<TABLE>
<CAPTION>
Proposed
Historical Tessera Pro Forma
Company Acquisition(13) Adjustments Pro Forma
---------- --------------- ----------- ---------
(in thousands)
<S> <C> <C> <C> <C>
Assets:
Cash and cash
equivalents.............. $ 79,320 $ 7,004 $ (4,638)(14) $ 81,686
Marketable securities..... 25,003 -- -- 25,003
Accounts receivable
(net).................... 50,022 5,316 -- 55,338
Unbilled revenues......... 24,144 273 -- 24,417
Prepaid expenses and other
assets................... 7,745 384 -- 8,129
--------- ------- -------- ---------
Total current assets.. 186,234 12,977 (4,638) 194,573
Property and equipment,
net...................... 45,446 1,383 -- 46,829
Intangible assets, net.... 49,476 -- 121,685 (15) 171,161
Other non-current assets.. 2,236 33 -- 2,269
--------- ------- -------- ---------
Total assets.......... $ 283,392 $14,393 $117,047 $ 414,832
========= ======= ======== =========
Liabilities and
Stockholders' Equity:
Accounts payable.......... $ 10,840 $ 373 $ -- $ 11,213
Deferred revenues......... 9,732 183 -- 9,915
Accrued liabilities....... 17,590 1,931 -- 19,521
Current portion of long-
term debt................ 566 563 (489)(16) 640
--------- ------- -------- ---------
Total current
liabilities.......... 38,728 3,050 (489) 41,289
Long-term debt............ 1,315 595 (486)(16) 1,424
--------- ------- -------- ---------
Total liabilities..... 40,043 3,645 (975) 42,713
Mandatorily redeemable
preferred stock of
subsidiary............... 48,503 13,863 (13,863)(17) 48,503
Stockholders' equity
Common stock............ 648 77 (42)(17) 683
Additional paid-in
capital................ 304,345 -- 128,735 (17) 433,080
Accumulated deficit..... (105,791) (674) 674 (17) (105,791)
Treasury stock at cost.. (888) (2,518) 2,518 (17) (888)
Note receivable from
stockholder............ (900) -- -- (900)
Unearned compensation... (2,568) -- -- (2,568)
--------- ------- -------- ---------
Total stockholders'
equity............... 194,846 (3,115) 131,885 323,616
--------- ------- -------- ---------
Total liabilities,
mandatorily
redeemable preferred
stock and
stockholders'
equity............... $ 283,392 $14,393 $117,047 $ 414,832
========= ======= ======== =========
</TABLE>
26
<PAGE>
Notes to Pro Forma Condensed Consolidated Financial Information
The following adjustments were applied to iXL's Consolidated Financial
Statements and the financial data of the companies acquired by iXL since
January 1, 1998 to arrive at the unaudited Pro Forma Consolidated Financial
Information.
(1) Potential common shares consist of Class A, Class B, and Class C
Convertible Preferred Stock using the as-converted method, and stock
options and warrants using the treasury stock method and contingently
issuable shares held in escrow, which are excluded from the computation as
their effect is antidilutive.
(2) During 1998, iXL acquired 24 companies and accounted for them using the
purchase method. The companies acquired and purchase price, including the
shares of common stock and related warrants and options issued, are
presented in the table below individually for those acquisitions with a
purchase price greater than $2.0 million and in the aggregate for those
with a purchase price of less than $2.0 million. The per share fair value
of common stock for each acquisition was determined based upon independent
appraisals obtained by iXL.
<TABLE>
<CAPTION>
Fair Value
Per Share of Net Excess of
Fair Value Shares of Cash Used for Tangible Cost Over
of iXL Common Warrants/ Acquisitions, Total Assets/ Fair Value of
Common Stock Options Net of Cash Purchase (Liabilities) Assembled Net Assets
Business Acquired Stock Issued Issued Acquired Price Acquired Workforce Acquired
----------------- ---------- --------- --------- ------------- -------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Digital Planet, Inc. ... $5.50 259,584 -- $ 1,962 $ 3,550 $ (39) $ 1,012 $ 2,577
Micro Interactive,
Inc. .................. 5.50 740,000 19,500 1,718 5,809 281 999 4,529
CommerceWAVE, Inc. ..... 5.82 877,898 64,434 117 5,459 (1,037) 662 5,134
Image Communications,
Inc. .................. 5.82 378,999 125,054 753 3,324 381 1,213 1,730
Spinners Incorporated
....................... 5.82 674,132 66,495 1,383 5,543 499 1,129 3,915
Tekna, Inc. ............ 4.50 712,622 125,757 611 4,758 527 820 3,411
Larry Miller
Productions, Inc. .... 4.50 113,823 248,135 1,812 3,490 (143) 963 2,670
NetResponse ........... 4.50 701,375 73,625 1,719 5,307 1,312 1,168 2,827
Ionix Development
Corp. ................. 4.50 358,551 -- 1,059 3,013 231 778 2,004
Pequot Systems, Inc. ... 4.50 378,066 -- 792 2,501 154 357 1,990
TwoWay Communications
LLC ................... 4.50 269,421 -- 1,246 2,469 335 713 1,421
Other Acquisitions...... -- 2,295,530 57,215 3,430 14,188 795 6,075 7,318
--------- ------- ------- ------- ------- ------- -------
Total.................. 7,760,001 780,215 $16,602 $59,411 $ 3,296 $15,889 $39,526
========= ======= ======= ======= ======= ======= =======
</TABLE>
27
<PAGE>
(3) For those companies acquired during 1998 that had a purchase price of
greater than $2.0 million, the following table presents the income
statements for the period January 1, 1998 through the date of acquisition.
Acquisitions with a purchase price less than $2.0 million are aggregated in
the Other Acquisitions column.
<TABLE>
<CAPTION>
Micro Image Larry
Inter- Commun- Spinners Miller
Digital active, Commerce- ications, Incorp- Tekna Product-
Planet Inc. WAVE Inc. Inc. orated Inc. ions, Inc.
------- ------- --------- --------- -------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues.............. $1,262 $ 956 $ 563 $ 847 $1,369 $1,990 $ 2,040
Cost of revenues...... 748 536 458 601 871 1,058 2,114
------ ----- ----- ----- ------ ------ -------
Gross profit.......... 514 420 105 246 498 932 (74)
Sales and marketing
expenses............. 168 38 159 61 20 271 314
General and
administrative
expenses............. 397 702 457 564 405 983 1,550
Research and
development
expenses............. -- -- 5 -- -- -- --
Depreciation.......... 30 75 34 65 37 80 47
Amortization.......... -- -- -- -- -- -- --
------ ----- ----- ----- ------ ------ -------
Loss from operations.. (81) (395) (550) (444) 36 (402) (1,985)
Other (expense),
income............... -- 1 -- 50 -- (179) 2
Interest income....... -- 6 4 -- -- 5 6
Interest expense...... (35) (17) (26) (37) (6) (8) (36)
------ ----- ----- ----- ------ ------ -------
Loss before income
taxes................ (116) (405) (572) (431) 30 (584) (2,013)
Income tax expense.... -- -- (1) -- -- -- --
------ ----- ----- ----- ------ ------ -------
Net loss.............. $ (116) $(405) $(573) $(431) $ 30 $ (584) $(2,013)
====== ===== ===== ===== ====== ====== =======
</TABLE>
<TABLE>
<CAPTION>
Two Way Total for all
Pequot Net- Commun- Ionix companies
Systems, Response, ications, Development Other acquired in
Inc. L.L.C. L.L.C. Corporation Acquisitions 1998
-------- --------- --------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Revenues.............. $1,354 $3,293 $1,400 $1,484 $5,835 $22,393
Cost of revenues...... 1,100 1,560 718 1,007 3,550 14,321
------ ------ ------ ------ ------ -------
Gross profit.......... 254 1,733 682 477 2,285 8,072
Sales and marketing
expenses............. 26 4 -- 2 288 1,351
General and
administrative
expenses............. 549 1,540 667 267 1,404 9,485
Research and
development
expenses............. -- -- -- -- -- 5
Depreciation.......... 19 96 8 10 177 678
Amortization.......... -- -- -- -- -- --
------ ------ ------ ------ ------ -------
Loss from operations.. (340) 93 7 198 416 (3,447)
Other (expense),
income............... -- (2) -- 1 17 (110)
Interest income....... 1 -- -- 5 -- 27
Interest expense...... -- (98) (34) (6) (29) (332)
------ ------ ------ ------ ------ -------
Loss before income
taxes................ (339) (7) (27) 198 404 (3,862)
Income tax expense.... (6) -- -- -- (1) (8)
------ ------ ------ ------ ------ -------
Net loss.............. $ (345) $ (7) $ (27) $ 198 $ 403 $(3,870)
====== ====== ====== ====== ====== =======
</TABLE>
(4) To record amortization expense for the year ended December 31, 1998 related
to the identifiable intangible assets and goodwill acquired in connection
with the acquisitions of companies by iXL since January 1, 1998. Such
amounts are amortized over the estimated useful life of each asset.
Identifiable intangible assets consist primarily of assembled workforce,
which is being amortized over a period of three years. Goodwill is being
amortized over five years. Some of the shares issuable at the acquisition
dates were placed in escrow. These shares will either be issued to the
previous owners of these companies or returned to iXL based upon whether or
not performance targets of the respective acquired company are achieved. As
of December 31, 1998, iXL has excluded 237,304 shares of common stock that
had not been earned under the terms of the acquisition agreements from the
recognized purchase price calculations. Any
28
<PAGE>
purchase price adjustments resulting from the issuance of these escrowed
shares to the previous owners of these companies will be recognized as
adjustments to goodwill and will be amortized over the remaining period of
the expected benefit. See Note 3 to iXL's Consolidated Financial Statements
as of and for the year ended December 31, 1998. 50,000 of these shares have
since been earned and have been released from escrow since December 31,
1998. 100,000 of these shares have reverted back to iXL, since the
performance target was not achieved. The remaining 137,304 shares are to
remain in escrow until December 1999, the deadline for meeting the relevant
performance target.
(5) To reflect the following adjustments to interest expense:
. In connection with the acquisition of 14 of the companies acquired
by iXL since January 1, 1998, iXL repaid approximately $7.3
million in debt. Interest expense was reduced by $371,000,
representing the elimination of the interest expense recorded by
the acquired companies as if the repayments had occurred on
January 1, 1998. The amount was calculated based upon the actual
interest expense recorded by the acquired companies on the related
debt from January 1, 1998 to the respective acquisition date.
. In connection with the acquisition of 17 of the companies acquired
by iXL since January 1, 1998, iXL paid approximately $16.9 million
in cash which was used for a combination of repayment of acquired
company debt and as a component of the purchase price. Interest
expense was increased by $1.0 million, representing the interest
expense iXL would have recorded had the acquisition occurred on
January 1, 1998. This interest expense adjustment was calculated
by applying iXL's incremental borrowing rate to the amount of cash
paid for each acquisition from January 1, 1998 to the respective
acquisition date. The interest rate used was prime plus 2%, which
is the interest rate on iXL's current credit agreement which was
entered into during 1998.
. A decrease in interest expense of $43,000 due to the repayment of
$9.4 million of revolving debt from the proceeds of the issuance
of 22,825 shares of Class A Convertible Preferred Stock in January
1999. This debt was outstanding for a period of 17 days in 1998
(from December 14, 1998 through December 31, 1998). The interest
expense adjustment was calculated based on the actual interest
expense incurred by iXL on the revolving debt during the period
noted.
. A decrease in interest expense due to the repayment of $13.1
million of debt upon the closing of iXL's initial public offering
and the related decrease in interest expense. The interest expense
adjustment was calculated based upon the actual interest expense
incurred by iXL. This debt bears interest at the rate of prime
plus 2% under iXL's credit agreement. This debt was outstanding
for 153 days in the year ended December 31, 1998.
(6) To record:
. accretion of $1.8 million on the CFN Series B Convertible
Preferred Stock as if it were outstanding for the full year; the
difference between the carrying value of $38.1 million and the
redemption value of $50.0 million will be accreted on a straight-
line basis up through the mandatory redemption date of
December 31, 2005; and
. elimination of accretion of $9.1 million recorded with respect to
iXL's preferred stock which was reclassified into common stock
upon iXL's initial public offering.
(7) To reflect the historical results of operations for Tessera Enterprise
Systems, Inc. for the year ended December 31, 1998.
29
<PAGE>
(8) To record amortization expense related to the identifiable intangible
assets and goodwill acquired in connection with the proposed acquisition
of Tessera Enterprise Systems, Inc., as though the proposed acquisition
had occurred on January 1, 1998. Such amounts are amortized over the
estimated useful life of each asset. Identifiable intangible assets
consist primarily of assembled workforce, which is being amortized over a
period of three years. Goodwill is being amortized over five years.
(9) In connection with the proposed acquisition of Tessera Enterprise Systems,
Inc., iXL expects to repay approximately $975,000 of Tessera debt. This
adjustment reflects the reversal of the interest expense recorded by
Tessera as if the repayment had occurred on January 1, 1998 and was
calculated based upon the actual interest expense recorded by Tessera for
the year ended December 31, 1998 of $100,000 and the nine months ended
September 30, 1999 of $75,000.
(10) To reflect:
. A decrease in interest expense due to the repayment of $9.4
million of revolving debt. This amount of debt was outstanding for
a period of 19 days in 1999 (from January 1, 1999 through
January 20, 1999). The interest expense adjustment was calculated
based on the actual interest expense incurred by iXL on the
revolving debt during the period noted.
. A decrease in interest expense due to the repayment of $13.1
million of debt upon the closing of iXL's initial public offering
and the related decrease in interest expense. The interest expense
adjustment was calculated based upon the actual interest expense
incurred by iXL. This debt bears interest at the rate of prime
plus 2% under iXL's credit agreement. This debt was outstanding
for 158 days in the nine months ended September 30, 1999.
(11) To record:
. additional accretion of $753 on the CFN Series B Convertible
Preferred Stock as if it were outstanding for the full nine-month
period ended September 30, 1999; and
. elimination of accretion of $19.9 million recorded with respect to
iXL's preferred stock which was reclassified into common stock
upon iXL's initial public offering.
(12) To reflect the historical results of operations for Tessera Enterprise
Systems, Inc. for the nine months ended September 30, 1999.
(13) Represents the balance sheet of Tessera Enterprise Systems, Inc. as of
September 30, 1999.
(14) To reflect the following adjustments to cash:
. repayment of Tessera Enterprise Systems, Inc.'s bank borrowings of
$975,000.
. payment of $1.1 million of Tessera's legal, accounting and
investment banker fees in connection with the proposed
acquisition;
. payment of transaction costs incurred by iXL of $400,000; and
. cash redemption of $2.2 million related to a portion of Tessera's
preferred stock, including accrued dividends. Tessera's class B
preferred stock will be fully redeemed for $1.2 million including
accrued dividends. Tessera's series C preferred stock will be
partially redeemed for $1.0 million. Tessera's remaining series A,
C and D preferred stock will be converted into Tessera common
stock, which will be exchanged for iXL common stock upon closing
of the acquisition.
30
<PAGE>
(15) The fair value of the net tangible assets to be acquired by iXL in the
proposed acquisition of Tessera Enterprise Systems, Inc. approximates the
net book value of such assets. The excess of purchase price over the fair
value of net assets acquired will be allocated to assembled workforce and
goodwill. Approximately $6.1 million of the intangible assets has been
allocated to assembled workforce and will be amortized over three years.
The remainder has been allocated to goodwill and will be amortized over
five years.
(16) Represents the repayment of bank borrowings of Tessera Enterprise Systems,
Inc. at closing.
(17) Represents the elimination of Tessera Enterprise Systems, Inc.'s
stockholders equity, the recording of the issuance of 3,469,548 shares of
iXL stock in connection with the proposed acquisition of Tessera and the
assumption of Tessera's stock options by iXL. The purchase price for
Tessera was computed as follows:
<TABLE>
<CAPTION>
<S> <C>
Value of shares of common stock issued in the proposed
acquisition................................................ $113,628(a)
Value of options assumed in the proposed acquisition........ 15,141(b)
Cash paid in conjunction with acquisition................... 4,638(c)
--------
Total Purchase Price....................................... $133,407
========
</TABLE>
--------
(a) The value of the shares of iXL common stock issued in the
acquisition is based on the expected number of shares to be
issued of 3,469,548 times a share price of $32.75. The share
price used in this computation is based upon the average
closing stock price for the five day period beginning two days
before and ending two days after the terms of the transaction
were agreed to and announced (October 4, 1999).
(b) The value of the Tessera options assumed in the acquisition is
based on the number of iXL options issued to replace the
Tessera options outstanding as of the date the transaction was
announced. Such options have been valued using the Black
Scholes option pricing model. The variables and assumptions
used in computing the fair value of options assumed are as
follows: the exercise prices range from $0.04 per option to
$2.83 per option; the fair value of the underlying stock
equals $32.75; a dividend yield of 0%, expected volatility of
85%, risk free interest rate of 5.73% and an expected life of
3 to 4 years.
(c) See Note 14 above.
31
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
You should read the following selected Consolidated Financial Data with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and iXL's audited Consolidated Financial Statements included
elsewhere in this prospectus. iXL commenced operations effective May 1, 1996.
All of iXL's acquisitions have been accounted for using the purchase method,
and accordingly, the statement of operations data of iXL for all periods
presented reflect the results of operations from these businesses from their
respective acquisition dates. The consolidated statement of operations data set
forth below for the eight months ended December 31, 1996, the years ended
December 31, 1997 and 1998, and the consolidated balance sheet data at December
31, 1996, 1997 and 1998 are derived from and qualified by reference to iXL's
audited Consolidated Financial Statements, which appear elsewhere in this
prospectus. The consolidated statement of operations data for the nine months
ended September 30, 1998 and 1999 and the consolidated balance sheet data at
September 30, 1999 are derived from and are qualified by reference to, iXL's
unaudited Consolidated Financial Statements, which appear elsewhere in this
prospectus and, in the opinion of management, include all adjustments,
consisting only of normal recurring adjustments, necessary to present fairly
the financial data for such periods. The results of operations for the nine
months ended September 30, 1999 are not necessarily indicative of the results
to be expected for the full year or for any future period.
<TABLE>
<CAPTION>
Eight Months Years Ended Nine Months Ended
Ended December 31, September 30,
December 31, ------------------ ------------------
1996 1997 1998 1998 1999
------------ -------- -------- -------- --------
Consolidated Statement of
Operations Data: (in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Revenues.................. $ 5,379 $ 18,986 $ 64,767 $ 35,507 $142,639
Cost of revenues.......... 3,577 11,343 44,242 25,613 83,291
------- -------- -------- -------- --------
Gross profit............ 1,802 7,643 20,525 9,894 59,348
Sales and marketing
expenses................. 812 3,903 17,325 9,496 32,418
General and administrative
expenses................. 1,247 9,114 30,163 15,839 50,125
Research and development
expenses................. -- 4,820 4,408 3,473 3,489
Depreciation.............. 372 1,408 5,217 2,915 8,499
Amortization.............. 928 5,191 10,590 5,992 13,013
------- -------- -------- -------- --------
Loss from operations.... (1,557) (16,793) (47,178) (27,821) (48,196)
Other income (expense),
net...................... 48 116 (28) 40 (183)
Loss on equity
investment............... (249) (1,443) (1,640) (1,287) (65)
Interest income........... 32 136 750 551 2,180
Interest expense.......... (30) (238) (770) (322) (829)
------- -------- -------- -------- --------
Loss before income
taxes.................. (1,756) (18,222) (48,866) (28,839) (47,093)
Income tax benefit........ 302 2,782 -- -- --
------- -------- -------- -------- --------
Net loss................ (1,454) (15,440) (48,866) (28,839) (47,093)
Dividends and accretion on
mandatorily redeemable
preferred stock.......... -- -- (9,099) (5,096) (20,514)
------- -------- -------- -------- --------
Net loss available to
common stockholders.... $(1,454) $(15,440) $(57,965) $(33,935) $(67,607)
======= ======== ======== ======== ========
Basic and diluted net loss
per common share......... $ (0.37) $ (2.36) $ (4.92) $ (3.28) $ (1.85)
======= ======== ======== ======== ========
Weighted average common
shares outstanding....... 3,972 6,540 11,777 10,348 36,447
</TABLE>
<TABLE>
<CAPTION>
As of December 31, As of
-------------------------- September 30,
1996 1997 1998 1999
------- -------- --------- -------------
Consolidated Balance Sheet Data: (in thousands)
<S> <C> <C> <C> <C>
Cash and cash equivalents............ $ 409 $ 23,038 $ 19,259 $ 79,320
Working capital...................... 217 23,879 27,119 147,506
Total assets......................... 16,472 57,612 142,951 283,392
Debt, including current portion...... 691 1,273 21,420 1,881
Mandatorily redeemable preferred
stock............................... -- 29,930 65,679 --
Mandatorily redeemable preferred
stock of subsidiary................. -- -- 9,839 48,503
Stockholders' equity................. 12,989 21,950 25,560 194,846
</TABLE>
32
<PAGE>
iXL operates in two business segments: strategic Internet services, which
includes Internet strategy consulting, Internet business solutions and solution
sets; and CFN, an e-commerce platform for marketing financial services and
employee benefits. Information concerning the results of operations in these
business segments is as follows:
<TABLE>
<CAPTION>
iXL, Inc. Statement of Operations Data
------------------------------------------------------------
Year Ended Nine Months Ended Three Months Ended
December 31, September 30, September 30,
------------------ ------------------ --------------------
1997 1998 1998 1999 1998 1999
-------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue (1)............. $ 19,131 $ 64,658 $ 35,534 $141,782 $ 18,172 $ 63,548
Cost of revenue (2)..... 11,343 41,530 23,710 80,810 11,927 35,661
-------- -------- -------- -------- --------- ---------
Gross profit.......... 7,788 23,128 11,824 60,972 6,245 27,887
Sales and marketing
expenses (2)........... 3,220 13,555 7,473 24,779 3,696 9,568
General and
administrative expenses
(2).................... 6,958 25,396 12,759 43,550 5,622 16,784
Research and development
expenses............... 3,282 2,720 1,933 762 935 86
Depreciation............ 1,328 4,542 2,483 7,386 1,071 2,769
Amortization............ 5,135 10,534 5,950 12,963 3,087 4,311
-------- -------- -------- -------- --------- ---------
Loss from operations.. (12,135) (33,619) (18,774) (28,468) (8,166) (5,631)
Other (expenses) income,
net.................... 116 (28) 40 (182) (13) (69)
Loss on equity
investment............. (1,443) (1,640) (1,287) (65) (384) --
Interest income......... 136 713 551 1,386 181 919
Interest expense........ (234) (750) (308) (821) (266) (133)
-------- -------- -------- -------- --------- ---------
Loss before income
taxes................ (13,560) (35,324) (19,778) (28,150) (8,648) (4,914)
Income tax expense...... -- -- -- -- -- --
-------- -------- -------- -------- --------- ---------
Net loss.............. $(13,560) $(35,324) $(19,778) $(28,150) $ (8,648) $ (4,914)
======== ======== ======== ======== ========= =========
- --------
(1) Includes intercompany revenues of $145 and $142 for the years ended
December 31, 1997 and 1998, of $124 and $159 for the three months ended
September 30, 1998 and 1999, and of $124 and $344 for the nine months ended
September 30, 1998 and 1999 earned on services performed for Consumer
Financial Network, Inc. which are eliminated in consolidation.
(2) Includes non-cash stock compensation expense as follows:
<CAPTION>
Year Ended Nine Months Ended Three Months Ended
December 31, September 30, September 30,
------------------ ------------------ --------------------
1997 1998 1998 1999 1998 1999
-------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Cost of revenue....... -- 133 -- 355 -- 290
Sales and marketing
expenses............. -- 115 -- 939 -- 464
General and
administrative
expenses............. -- 1,393 -- 1,425 -- 158
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Consumer Financial Network, Inc. Statement of
Operations Data
------------------------------------------------------------
Year Ended Nine Months Ended Three Months Ended
December 31, September 30, September 30,
----------------- ------------------- --------------------
1997 1998 1998 1999 1998 1999
------- -------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue................. $ -- $ 251 $ 97 $ 1,201 $ 75 $ 342
Cost of revenue......... -- 2,712 1,903 2,481 701 1,003
------- -------- -------- --------- --------- ---------
Gross profit.......... -- (2,461) (1,806) (1,280) (626) (661)
Sales and marketing
expenses (1)(2)........ 683 3,770 2,023 7,843 877 3,459
General and
administrative expenses
(1)(3)................. 2,301 4,767 3,080 6,586 1,399 2,307
Research and development
expenses (1)(4)........ 1,538 1,830 1,664 2,856 433 1,089
Depreciation............ 80 675 432 1,113 190 515
Amortization............ 56 56 42 50 14 18
------- -------- -------- --------- --------- ---------
Loss from operations.. (4,658) (13,559) (9,047) (19,728) (3,539) (8,049)
Other (expenses) income,
net.................... -- -- (1) -- --
Loss on equity
investment............. -- -- -- -- --
Interest income......... -- 37 -- 794 -- 528
Interest expense........ (4) (20) (14) (8) (9) (3)
------- -------- -------- --------- --------- ---------
Loss before income
taxes................ (4,662) (13,542) (9,061) (18,943) (3,548) (7,524)
Income tax expense...... -- -- -- -- -- --
------- -------- -------- --------- --------- ---------
Net loss.............. $(4,662) $(13,542) $ (9,061) $ (18,943) $ (3,548) $ (7,524)
======= ======== ======== ========= ========= =========
- --------
(1) Includes non-cash stock compensation expense as follows:
<CAPTION>
Year Ended Nine Months Ended Three Months Ended
December 31, September 30, September 30,
----------------- ------------------- --------------------
1997 1998 1998 1999 1998 1999
------- -------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Cost of revenue....... -- -- -- 188 -- 138
Sales and marketing
expenses............. -- -- -- 427 -- 227
General and
administrative
expenses............. -- -- -- 67 -- 8
</TABLE>
(2) Includes intercompany expenses of $145 and $142 for the years ended
December 31, 1997 and 1998, of $124 and $67 for the three months ended
September 30, 1998 and 1999 and of $124 and $204 for the nine months ended
September 31, 1998 and 1999 related to work performed for Consumer
Financial Network, Inc. by iXL, Inc. which are eliminated in consolidation.
(3) Includes intercompany expenses of $11 for the three and nine months ended
September 30, 1999 related to work performed for Consumer Financial
Network, Inc. by iXL, Inc. which are eliminated in consolidation.
(4) Includes intercompany expenses of $81 and $129 for the three and nine
months ended September 30, 1999 related to work performed for Consumer
Financial Network, Inc. by iXL, Inc. which are eliminated in consolidation.
34
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
You should read the following discussion of the financial condition and
results of operations of iXL with "Selected Consolidated Financial Data," "Pro
Forma Consolidated Financial Information" and iXL's Consolidated Financial
Statements, including the Notes included elsewhere in this prospectus.
Overview
iXL is a leading Internet services company which provides Internet
strategy consulting and comprehensive Internet-based solutions to Fortune 1000
companies and other corporate users of information technology. iXL helps
businesses identify how the Internet can be used to their competitive advantage
and uses its expertise in creative design and systems engineering to design,
develop and deploy advanced Internet applications and solutions.
iXL was founded in March 1996, and since that time has acquired a total
of 35 companies. All of iXL's acquisitions have been accounted for using the
purchase method. Therefore, the historical financial data include the results
of operations of companies acquired from their respective acquisition dates.
iXL has incurred substantial losses since its inception and anticipates
continuing to incur substantial losses for the foreseeable future. As of
September 30, 1999, iXL had an accumulated deficit of approximately $113
million. Although iXL has experienced revenue growth, this growth may not be
sustainable or indicative of future results of operations.
iXL's customers generally retain iXL on a project-by-project basis. iXL
typically does not have material contracts that commit a customer to use its
services on a long-term basis. Revenue is recognized primarily using the
percentage of completion method on a contract-by-contract basis. iXL's use of
the percentage of completion method of revenue recognition requires management
to estimate the degree of completion of each project. To the extent these
estimates prove to be inaccurate, the revenues and gross profits reported for
periods during which work on the project is ongoing may not accurately reflect
the final results of the project. Any anticipated losses on projects are
charged to earnings when identified. Historically, iXL has primarily priced its
projects on a fixed-price basis, rather than on a time-and-materials basis, and
it typically assumes the fixed-price contracts of companies it acquires. In
order to mitigate risks associated with fixed-price contracts, where possible
iXL is negotiating new contracts on a time-and-materials basis. iXL has
implemented an internally developed estimation process to determine the fixed
price for an engagement, and standardize pricing throughout its offices. This
methodology incorporates standard personnel billing rates, project
implementation risks and the overall technical complexity of the project. We
believe that the standardization of pricing throughout our network of offices
will decrease project pricing risk. iXL attempts to price larger, fixed-price
contracts on a three-phase basis--strategic review, design and implementation.
Each phase is priced separately, immediately prior to its commencement.
Currently, less than a third of iXL's revenues are derived from contracts
priced on a three-phase basis. See "Risk Factors--Risks Related to iXL's
Business--Our fixed-price contracts involve financial risk."
Through both acquisitions and its directed marketing efforts, iXL has
established a diversified base of clients in a wide range of industries,
including the industries targeted by iXL's marketing efforts. However, we
derive a significant portion of our revenue from a small number of clients,
including General Electric which represented approximately 13% of our revenue
in the third quarter of 1999, and may account for a larger portion of our
revenue in the future.
iXL's revenues are comprised of fees from Internet strategy consulting,
Internet-based business solutions and iXL Solution Sets. iXL's revenue
composition has changed substantially from inception, and iXL expects further
change as its business develops. Historically, a substantial majority of iXL's
revenues have been derived from traditional web site development and the
implementation of iXL's Solution Sets. To succeed, iXL must leverage its
existing relationships and establish new relationships in order to
substantially increase the revenues derived from more comprehensive strategic
Internet services.
35
<PAGE>
We have entered into multi-year services agreements with General Electric
and Delta Air Lines under which we have agreed to provide strategic Internet
services. These agreements guarantee minimum payments to iXL for services
provided by iXL. In connection with these agreements, we have issued warrants
to General Electric and Delta Air Lines which will result in non-cash charges
that will reduce our reported revenue. For Delta Air Lines, this charge will be
approximately $1.2 million, reducing the $10 million of guaranteed revenue from
Delta Air Lines in 1999 and early 2000 to $8.8 million, and for General
Electric this charge will be approximately $4.8 million, reducing the $20
million of guaranteed revenue from General Electric in 1999 and early 2000 to
$15.2 million.
iXL's expenses include cost of revenues, sales and marketing, general and
administrative, and research and development expenses. Cost of revenues
includes salaries, benefits and related overhead expenses associated with the
generation of revenues. Sales and marketing expenses include promotion, new
business generation expenses and the salary and benefit costs of personnel in
these functions. General and administrative expenses include management,
accounting, legal and human resources costs. Research and development expenses
include salary and benefit costs of technical personnel developing Solution
Sets and component frameworks. iXL's expenses also include non-cash charges
related to option grants and warrant issuances.
In connection with (1) the reasonable efforts of GE Capital Equity
Investments, Inc. to provide the CFN program to its employees and (2) the
marketing agreement among iXL and General Electric, iXL has issued warrants to
purchase 1,500,000 shares of common stock to General Electric. iXL believes the
value of these marketing services to be $1.2 million and accordingly this
marketing campaign is expected to result in $1.2 million of marketing expenses
to be recorded in the 12 month period from April 1999 through March 2000. Net
loss available to common stockholders and stockholders' equity will also be
impacted by non-cash charges related to this warrant issuance.
iXL's future success will depend in large part upon its ability to
attract, train and retain additional highly skilled executive-level management
and creative, technical, consulting and sales personnel. Competition for such
personnel is intense, and iXL is unsure that it will be successful in
attracting, training and retaining such personnel. Historically, iXL has
experienced significant employee turnover, and its ability to control employee
turnover will have a significant impact on its profitability.
CFN has expended and will continue to expend significant resources to
build electronic data interchange interfaces with participating institutions,
to grow its technology infrastructure, to add additional participating
companies and employees to the program and to establish access to the
YouDecide.com web site. In addition, CFN has expended and will continue to
expend significant resources to promote its YouDecide.com brand and web site.
Each of these expenditures must be incurred in advance of the recognition of
revenue. None of these expenses is incurred under long-term vendor contracts.
As a result, these expenses are expensed as incurred, except for fixed asset
purchases which are depreciated over their expected useful lives. CFN
recognizes revenue upon completion of an end-user transaction through the CFN
operating network, which also will require the realization of expenses in
advance of related revenue. To date, the volume of transactions on CFN has been
limited and, accordingly, the revenue recognized has been minimal. As a result,
iXL may not be able to achieve or sustain profitability. CFN incurred an
operating loss of $19.7 million for the nine months ended September 30, 1999.
See "Risk Factors--Risks Related to Our CFN Subsidiary--CFN's business model is
new and unproven" and "--CFN must expend significant resources to grow its
infrastructure."
iXL incurred non-cash stock compensation expense related to its option
grants for the year ended December 31, 1998, totaling $1.6 million and for the
nine months ended September 30, 1999, totaling $3.4 million. iXL expects to
recognize approximately $3.7 million in 1999, $1.0 million in 2000, $780,000 in
2001, $406,000 in 2002 and $76,000 in 2003 in stock compensation expense
relating to the grant of options in 1998 and 1999.
36
<PAGE>
Acquisition Program
iXL has acquired a total of 35 businesses since its inception and intends
to continue acquiring similar businesses. iXL evaluates acquisitions based on
numerous quantitative and qualitative factors. Quantitative factors include
historical and projected revenues and profitability, geographic coverage and
contract backlog. Qualitative factors include strategic and cultural fit,
management skills, customer base and technical proficiency. Most of the
consideration paid by iXL for prior acquisitions has been in the form of common
stock. iXL anticipates that common stock and options to acquire common stock
will continue to constitute most of the consideration used to make future
acquisitions. iXL's acquisition program will result in additional ownership
dilution to investors participating in this offering. See "Risk Factors--Risks
Related to the Offering--The net tangible book value of our common stock issued
in this offering will be less than the offering price."
On October 4, 1999, we entered into an Agreement and Plan of Merger with
Tessera Enterprise Systems, Inc., a Wakefield, Massachusetts enterprise
relationship management solutions firm, for a purchase price of $120 million.
The acquisition is expected to provide enterprise relationship management
expertise and expand our workforce by approximately 130 employees.
All of iXL's acquisitions have been accounted for using the purchase
method. The results of operations of the acquired entities are consolidated
with those of iXL from the date of the acquisition. For each acquisition, a
portion of the purchase price is allocated to the tangible and identifiable
intangible assets acquired and liabilities assumed based on their respective
fair market values on the acquisition date. A portion of the purchase price in
excess of tangible and identifiable intangible assets and liabilities assumed
is allocated to goodwill and amortized on a straight-line basis over the
estimated period of benefit, which is primarily five years. Identifiable
intangible assets consist primarily of assembled workforce and are being
amortized over a period of three years. iXL expects additional acquisition-
related amortization expense as a result of its acquisition program.
We believe our historical acquisitions have contributed to our growth by
rapidly expanding our employee base, geographic coverage, client base, industry
expertise and technical skills. Our acquisitions with a purchase price
exceeding $5 million are as follows:
In May 1997, we acquired BoxTop Interactive, Inc., a Los Angeles creative
design firm, for a purchase price of $10 million and the assumption of $1.5
million of debt, which was subsequently repaid. The acquisition of BoxTop
provided media and entertainment industry expertise and geographic presence in
California, and expanded our workforce by approximately 60 employees.
In May 1998, we acquired Micro Interactive, Inc., a New York interactive
media firm, for a purchase price of $5.8 million including the repayment of
$426,000 of debt. The acquisition of Micro Interactive provided interactive
multimedia technical skills and expanded our workforce by approximately 35
employees.
In July 1998, we acquired CommerceWAVE, Inc., a San Diego e-commerce
firm, for a purchase price of $5.5 million and the assumption of $450,000 of
debt, which was subsequently repaid. The acquisition of CommerceWAVE provided
e-commerce strategy consulting expertise and engineering capabilities and
geographic presence in San Diego, and expanded our workforce by approximately
22 employees.
In July 1998, we also acquired Spinners Incorporated, a Boston,
Massachusetts software engineering and creative design firm, for a purchase
price of $5.5 million. The acquisition provided software engineering and
creative design expertise, financial service industry knowledge and added to
iXL's client base. The acquisition also added 31 employees.
37
<PAGE>
In September 1998, we acquired NetResponse L.L.C., an Arlington, Virginia
strategy consulting, software engineering and creative design firm, for a
purchase price of $5.3 million including the repayment of $1.8 million of debt.
The acquisition provided strategy consulting expertise, software engineering
skills and 36 skilled employees, and added to iXL's client base.
iXL anticipates that a material portion of its future growth will be
accomplished by acquiring existing businesses. A significant portion of iXL's
growth in personnel has been through acquisitions. The success of this plan
depends upon, among other things, iXL's ability to integrate acquired
personnel, operations, products and technologies into its organization
effectively, to retain and motivate key personnel of acquired businesses and to
retain customers of acquired firms. iXL cannot guarantee that it will be able
to identify suitable acquisition opportunities, obtain any necessary financing
on acceptable terms to finance such acquisitions, consummate such acquisitions
or successfully integrate acquired personnel and operations. See "Risk
Factors--Risks Related to iXL's Business--We may be unable to continue to grow
at our historical growth rates or to effectively manage our growth" and "--Our
continued growth is dependent on the successful completion of acquisitions."
Quarterly Historical Results of Operations
The following table presents the unaudited historical quarterly results
of operations. We believe that our historical financial statements are not
necessarily indicative of future results of operations. You should read these
quarterly historical results of operations with the historical audited
financial statements of iXL and certain of the companies acquired by iXL since
January 1, 1998 and related Notes.
<TABLE>
<CAPTION>
Three Months Ended
---------------------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31, June 30, September 30,
1998 1998 1998 1998 1999 1999 1999
--------- -------- ------------- ------------ --------- -------- -------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $ 6,864 $ 10,520 $ 18,123 $ 29,260 $ 33,012 $ 45,896 $ 63,731
Cost of revenues........ 4,899 8,086 12,628 18,629 19,583 27,044 36,664
------- -------- -------- -------- -------- -------- --------
Gross profit............ 1,965 2,434 5,495 10,631 13,429 18,852 27,067
Sales and marketing
expenses............... 2,036 2,887 4,573 7,829 8,150 11,308 12,960
General and
administrative
expenses............... 2,956 5,862 7,021 14,324 15,725 15,320 19,080
Research and development
expenses............... 907 1,322 1,244 935 1,058 1,337 1,094
Depreciation............ 699 955 1,261 2,302 2,284 2,931 3,284
Amortization............ 1,182 1,709 3,101 4,598 4,351 4,333 4,329
------- -------- -------- -------- -------- -------- --------
Loss from operations.... $(5,815) $(10,301) $(11,705) $(19,357) $(18,139) $(16,377) $(13,680)
======= ======== ======== ======== ======== ======== ========
</TABLE>
Comparison of Nine Months Ended September 30, 1999 and September 30, 1998
Revenues. Revenues increased $107.1 million, or 302%, to $142.6 million
for the nine months ended September 30, 1999 from $35.5 million for the nine
months ended September 30, 1998. The increase was primarily attributable to a
series of acquisitions and to an aggressive hiring initiative which expanded
our client base and headcount. The growth was also due to an increase in the
number and size of client engagements and the development and growth of
industry practice groups.
Cost of revenues. Cost of revenues increased $57.7 million, or 225%, to
$83.3 million for the nine months ended September 30, 1999 from $25.6 million
for the nine months ended September 30, 1998. As a percentage of revenues, cost
of revenues decreased to 58% for the nine months ended September 30, 1999, down
from 72% for the nine months ended September 30, 1998. The dollar increase was
primarily attributable to an increase in headcount due to the integration of
the companies acquired by iXL, organic growth in billable
38
<PAGE>
headcount, as well as to employee training and the development of CFN. Also
included in this increase was $543,000 of non-cash expense related to stock
compensation charges. The decrease as a percentage of revenues was primarily
attributable to increases in billing rates and improvements in revenue per
billable employee.
Sales and marketing expenses. Sales and marketing expenses increased
$22.9 million, or 241%, to $32.4 million for the nine months ended September
30, 1999 from $ 9.5 million for the nine months ended September 30, 1998. As a
percentage of revenues, sales and marketing expenses decreased to 23% for the
nine months ended September 30, 1999, down from 27% for the nine months ended
September 30, 1998. The dollar increase was primarily attributable to the
increase in headcount due to the development of iXL's sales and marketing
infrastructure and staff. Also included in this increase was $1.4 million of
non-cash expense related to stock compensation charges.
General and administrative expenses. General and administrative expenses
increased $34.3 million, or 216%, to $50.1 million for the nine months ended
September 30, 1999 from $15.8 million for the nine months ended September 30,
1998. As a percentage of revenues, general and administrative expenses
decreased to 35% for the nine months ended September 30, 1999, from 45% for the
nine months ended September 30, 1998. The dollar increase was primarily
attributable to the increase in headcount due to the integration of the
companies acquired by iXL since January 1, 1998, as well as the expansion of
management infrastructure to support the growth in iXL's operations. Also
included in this increase was $1.5 million of non-cash expense related to stock
compensation charges.
Research and development expenses. Research and development expenses
remained constant at $3.5 million for the nine months ended September 30, 1999
from the nine months ended September 30, 1998. As a percentage of revenues,
research and development expenses decreased to 2% for the nine months ended
September 30, 1999, from 10% for the nine months ended September 30, 1998.
Depreciation. Depreciation expenses increased $5.6 million, or 192%, to
$8.5 million for the nine months ended September 30, 1999 from $2.9 million for
the nine months ended September 30, 1998. The increase primarily related to the
depreciation of assets of the companies acquired by iXL since January 1, 1998
and the investments in physical infrastructure at these companies after
acquisition.
Amortization. Amortization expenses increased $7.0 million, or 117%, to
$13.0 million for the nine months ended September 30, 1999 from $6.0 million
for the nine months ended September 30, 1998. The increase was a result of the
amortization of goodwill and assembled workforce recorded in connection with
the acquisitions which took place during 1998.
Comparison of Three Months Ended September 30, 1999 and June 30, 1999
Revenues. Revenues increased $17.8 million, or 39%, to $63.7 million for
the quarter ended September 30, 1999 from $45.9 million for the quarter ended
June 30, 1999. The increase was attributable to an aggressive hiring initiative
that expanded our client base and headcount. The growth was also due to an
increase in the number and size of client engagements and the development and
growth of industry practice groups. Specifically, averaged annualized revenue
from our top ten clients increased from $7.1 million during the quarter ended
June 30, 1999 to $9.2 million during the quarter ended September 30, 1999. iXL
may not experience a comparable increase in revenue growth in the future.
Cost of revenues. Cost of revenues increased $9.6 million, or 36%, to
$36.7 million for the quarter ended September 30, 1999 from $27.0 million for
the quarter ended June 30, 1999. As a percentage of revenues, cost of revenues
decreased from 59% for the quarter ended June 30, 1999 to 58% for the quarter
ended September 30, 1999. The dollar increase was primarily attributable to an
increase in headcount due to organic growth in billable headcount, as well as
to employee training and the development of the CFN
39
<PAGE>
platform. The decrease as a percentage of revenues was primarily attributable
to increases in billing rates and improvements in revenue per billable
employee.
Sales and marketing expenses. Sales and marketing expenses increased $1.7
million, or 15%, to $13.0 million for the quarter ended September 30, 1999 from
$11.3 million for the quarter ended June 30, 1999. As a percentage of revenues,
sales and marketing expenses decreased from 25% for the quarter June 30, 1999
to 20% for the quarter ended September 30, 1999. While this decrease in percent
of revenues demonstrates the company's ability to sustain substantial growth
without a corresponding increase in expense, iXL does expect its sales and
marketing expenses to increase as it continues to grow. The dollar increase was
primarily attributable to the increase in headcount due to the development of
iXL's sales and marketing infrastructure and staff.
General and administrative expenses. General and administrative expenses
increased $3.8 million, or 25%, to $19.1 million for the quarter ended
September 30, 1999 from $15.3 million for the quarter ended June 30, 1999. As a
percentage of revenues, general and administrative expenses decreased from 33%
for the quarter ended June 30, 1999 to 30% for the quarter ended September 30,
1999. While this decrease in percent of revenues demonstrates the company's
ability to sustain substantial growth without a corresponding increase in
expenses, iXL does expect its general and administrative expenses to increase
as it continues to grow. The dollar increase was primarily attributable to the
expansion of management infrastructure to support the growth in iXL's
operations.
Research and development expenses. Research and development expenses
decreased $243,000, or 18%, to $ 1.1 million for the quarter ended September
30, 1999 from $ 1.34 million for the quarter ended June 30, 1999. As a
percentage of revenues, research and development expenses decreased from 3% for
the quarter ended June 30, 1999 to 2% for the quarter ended September 30, 1999.
Depreciation. Depreciation expenses increased $353,000 to $3.3 million
for the quarter ended September 30, 1999 from $2.9 million for the quarter
ended June 30, 1999. The increase related to the depreciation of assets was
attributable to the investments in physical infrastructure required by iXL's
continued growth.
Amortization. Amortization expense remained at $4.3 million for the
quarter ended September 30, 1999 from the quarter ended June 30, 1999.
Comparison of Three Months Ended June 30, 1999 and March 31, 1999
Revenues. Revenues increased $12.9 million, or 39%, to $45.9 million for
the quarter ended June 30, 1999 from $33.0 million for the quarter ended March
31, 1999. This increase was primarily attributable to an increased number and
size of engagements for existing and new customers, and to a significant
increase in newly hired billable consultants. Specifically, averaged annualized
revenue for our top ten clients increased from $3.6 million during the quarter
ended March 31, 1999 to $7.1 million during the quarter ended June 30, 1999,
while billable employees for the same time periods increased from 810 to 1,060.
Cost of revenues. Cost of revenues increased $7.4 million, or 38%, to
$27.0 million for the quarter ended June 30, 1999 from $19.6 million for the
quarter ended March 31, 1999. As a percentage of revenues, cost of revenues
remained at 59% for the quarter ended June 30, 1999, the same as for the
quarter ended March 31, 1999. The dollar increase was directly attributable to
a significant increase in newly hired billable consultants and number and size
of engagements.
Sales and marketing expenses. Sales and marketing expenses increased $3.1
million, or 39%, to $11.3 million for the quarter ended June 30, 1999 from $8.2
million for the quarter ended March 31, 1999. As a percentage of revenues,
sales and marketing expenses remained at 25% for the quarter ended June 30,
1999, the
40
<PAGE>
same as for the quarter ended March 31, 1999. A 13% increase in sales and
marketing professionals coupled with an increase in sales commissions
associated with iXL's increased revenues resulted in the increased sales and
marketing expenses for the quarter ended June 30, 1999. The quarter ended June
30, 1999 also included $500,000 non-cash marketing expense related to warrant
issuances compared to zero in the quarter ended March 31, 1999.
General and administrative expenses. General and administrative expenses
decreased $405,000, or 3%, to $15.3 million for the quarter ended June 30, 1999
from $15.7 million for the quarter ended March 31, 1999. As a percentage of
revenues, general and administrative expenses decreased from 48% for the
quarter ended March 31, 1999 to 33% for the quarter ended June 30, 1999.
Additionally, the quarter ended March 31, 1999 included a donation of $1.0
million to fund the iXL Center for Electronic Commerce in the DuPree College of
Management at Georgia Tech.
Research and development expenses. Research and development expenses
increased $279,000, or 26%, for the quarter ended June 30, 1999, to $1.3
million for the quarter ended June 30, 1999 from $1.1 million for the quarter
ended March 31, 1999. As a percentage of revenues, research and development
expenses remained relatively constant for the quarters ended June 30, 1999 and
March 31, 1999.
Depreciation. Depreciation expenses increased $647,000, or 28%, to $2.9
million for the quarter ended June 30, 1999 from $2.3 million for the quarter
ended March 31, 1999. This increase is primarily attributable to expansion of
iXL's Atlanta, Chicago and Boston offices and CFN and the purchase of computers
and equipment to support the increased number of iXL employees.
Amortization. Amortization expense decreased slightly to $4.3 million for
the quarter ended June 30, 1999 from $4.4 million for the quarter ended March
31, 1999 related to the sale of certain intangible assets.
Comparison of Three Months Ended March 31, 1999 and December 31, 1998
Revenues. Revenues increased $3.7 million, or 13%, to $33.0 million for
the quarter ended March 31, 1999 from $29.3 million for the quarter ended
December 31, 1998. This increase was primarily attributable to an increased
number of engagements for existing and new customers, as well as an increased
engagement size. The percentage increase was lower than in prior quarters
because revenues in the fourth quarter of 1998 were favorably impacted by
several large engagements during this period. Annualized revenue for our top
100 clients increased from 62% of total revenue in the quarter ended December
31, 1998 to 71% for the quarter ended March 31, 1999.
Cost of revenues. Cost of revenues increased $1.0 million, or 5%, to
$19.6 million for the quarter ended March 31, 1999 from $18.6 million for the
quarter ended December 31, 1998. As a percentage of revenues, cost of revenues
decreased from 64% for the quarter ended December 31, 1998 to 59% for the
quarter ended March 31, 1999. The percentage decrease in the first quarter of
1999 to 59% was primarily attributable to iXL's emphasis on obtaining contracts
with higher gross margins. The first quarter of 1999 included in cost of
revenues $78,000 of non-cash stock option expense whereas the fourth quarter of
1998 included $133,000 of non-cash stock option expense.
Sales and marketing expenses. Sales and marketing expenses increased by
$321,000, or 4%, to $8.1 million for the quarter ended March 31, 1999 from $7.8
million for the quarter ended December 31, 1998. As a percentage of revenues,
sales and marketing expenses decreased from 27% for the quarter ended
December 31, 1998 to 25% for the quarter ended March 31, 1999. This dollar
increase was primarily attributable to an increase in our sales and marketing
headcount by over 25 professionals during the three months ended March 31,
1999. The first quarter of 1999 included in sales and marketing expenses
$418,000 of non-cash stock option expense and the fourth quarter of 1998
included $115,000 of non-cash stock option expense. Additionally, the fourth
quarter of 1998 included in sales and marketing expenses $813,000 of non-cash
expense related to warrant issuances.
41
<PAGE>
General and administrative expenses. General and administrative expenses
increased $1.4 million, or 10%, to $15.7 million for the quarter ended March
31, 1999 from $14.3 million for the quarter ended December 31, 1998. As a
percentage of revenues, general and administrative expenses decreased from 49%
for the quarter ended December 31, 1998 to 48% for the quarter ended March 31,
1999. The dollar increase was primarily attributable to a donation of $1.0
million to fund the iXL Center for Electronic Commerce in the DuPree College of
Management at Georgia Tech as well as the expansion of management
infrastructure to support the growth in iXL's operations, including the
development of CFN. We increased our general and administrative headcount by
over 30 professionals during the three months ended March 31, 1999. The first
quarter of 1999 included in general and administration expenses $978,000 of
non-cash stock option expense and the fourth quarter of 1998 included $1.4
million of non-cash stock option expense.
Research and development expenses. Research and development expenses
increased $123,000, or 13%, to $1.1 million for the quarter ended March 31,
1999 from $935,000 for the quarter ended December 31, 1998. As a percentage of
revenues, research and development expenses remained constant for the quarters
ended March 31, 1999 and December 31, 1998, respectively.
Depreciation. Depreciation expenses decreased $18,000 in the quarter
ending March 31, 1999 from the previous quarter.
Amortization. Amortization expense decreased slightly to $4.4 million for
the quarter ended March 31, 1999 from $4.6 million for the quarter ended
December 31, 1998. The decrease was a result of the sale of certain intangible
assets.
Comparison of Three Months Ended December 31, 1998 and September 30, 1998
Revenues. Revenues increased $11.2 million, or 61%, to $29.3 million for
the quarter ended December 31, 1998 from $18.1 million for the quarter ended
September 30, 1998. The majority of the increase was attributable to iXL's
acquisition program which expanded our headcount and client base. The increase
was also attributable to an increase in the size of client engagements and the
development and growth of industry practice groups.
Cost of revenues. Cost of revenues increased $6.0 million, or 48%, to
$18.6 million for the quarter ended December 31, 1998 from $12.6 million for
the quarter ended September 30, 1998. As a percentage of revenues, cost of
revenues decreased from 70% for the quarter ended September 30, 1998 to 64% for
the quarter ended December 31, 1998. The dollar increase was primarily
attributable to the integration of the companies acquired by iXL since January
1, 1998, as well as to employee training and the increased operating expenses
of CFN.
Sales and marketing expenses. Sales and marketing expenses increased $3.2
million, or 71%, to $7.8 million for the quarter ended December 31, 1998 from
$4.6 million for the quarter ended September 30, 1998. As a percentage of
revenues, sales and marketing expenses increased from 25% for the quarter ended
September 30, 1998 to 27% for the quarter ended December 31, 1998. The increase
in dollar and percentage terms was primarily attributable to the development of
iXL's sales and marketing infrastructure and staff. We increased our sales and
marketing headcount by approximately 3 professionals during the three months
ended December 31, 1998. Also included in this increase was $813,000 of non-
cash expense related to warrant issuances.
General and administrative expenses. General and administrative expenses
increased $7.3 million, or 104%, to $14.3 million for the quarter ended
December 31, 1998 from $7.0 million for the quarter ended September 30, 1998.
As a percentage of revenues, general and administrative expenses increased from
39% for the quarter ended September 30, 1998 to 49% for the quarter ended
December 31, 1998. The increase in dollar and percentage terms was primarily
attributable to the expansion of management infrastructure to support the
42
<PAGE>
growth in iXL's operations, the general and administrative costs of the
companies acquired by iXL since January 1, 1998 and associated integration
costs. Also included in this increase was $1.4 million of non-cash stock option
expense.
Research and development expenses. Research and development expenses
decreased $309,000, or 25%, to $935,000 for the quarter ended December 31, 1998
from $1.2 million for the quarter ended September 30, 1998. As a percentage of
revenues, research and development expenses decreased from 7% for the quarter
ended September 30, 1998 to 3% for the quarter ended December 31, 1998. The
decrease in dollar and percentage terms was primarily due to the completion of
the final phases of development of Solution Set products.
Depreciation. Depreciation expenses increased $1.0 million to $2.3
million for the quarter ended December 31, 1998 from $1.3 million for the
quarter ended September 30, 1998. The increase related to the depreciation of
assets of the companies acquired by iXL since January 1, 1998 and investments
in physical infrastructure at these companies after acquisition.
Amortization. Amortization expenses increased $1.5 million to $4.6
million for the quarter ended December 31, 1998 from $3.1 million for the
quarter ended September 30, 1998. The increase was a result of the goodwill and
assembled workforce recorded in connection with the 17 acquisitions which took
place during the third quarter of 1998.
Comparison of Three Months Ended September 30, 1998 and June 30, 1998
Revenues. Revenues increased $7.6 million, or 72%, to $18.1 million for
the quarter ended September 30, 1998 from $10.5 million for the quarter ended
June 30, 1998. The majority of the increase was attributable to iXL's
acquisition program which expanded our headcount and client base. The increase
was also attributable to an increase in the size of client engagements.
Cost of revenues. Cost of revenues increased $4.5 million, or 56%, to
$12.6 million for the quarter ended September 30, 1998 from $8.1 million for
the quarter ended June 30, 1998. As a percentage of revenues, cost of revenues
decreased from 77% for the quarter ended June 30, 1998 to 70% from the quarter
ended September 30, 1998. The dollar increase was primarily attributable to the
integration of the companies acquired by iXL since January 1, 1998, as well as
to the increased operating expenses of CFN.
Sales and marketing expenses. Sales and marketing expenses increased $1.7
million, or 58%, to $4.6 million for the quarter ended September 30, 1998 from
$2.9 million for the quarter ended June 30, 1998. As a percentage of revenues,
sales and marketing expenses decreased from 27% for the quarter ended June 30,
1998 to 25% for the quarter ended September 30, 1998. The dollar increase was
primarily attributable to the development of iXL's sales and marketing
infrastructure and staff.
General and administrative expenses. General and administrative expenses
increased $1.1 million, or 20%, to $7.0 million for the quarter ended September
30, 1998 from $5.9 million for the quarter ended June 30, 1998. As a percentage
of revenues, general and administrative expenses decreased from 56% for the
quarter ended June 30, 1998 to 39% for the quarter ended September 30, 1998.
The dollar increase was primarily attributable to the expansion of management
infrastructure to support the growth in iXL's operations, the general and
administrative costs of the companies acquired by iXL since January 1, 1998 and
associated integration costs.
Research and development expenses. Research and development expenses
decreased $78,000, or 6%, to $1.2 million for the quarter ended September 30,
1998 from $1.3 million for the quarter ended June 30, 1998. As a percentage of
revenues, research and development expenses decreased from 13% for the quarter
ended June 30, 1998 to 7% for the quarter ended September 30, 1998.
43
<PAGE>
Depreciation. Depreciation expenses increased $306,000 to $1.3 million
for the quarter ended September 30, 1998 from $955,000 for the quarter ended
June 30, 1998. The increase related to the depreciation of assets of the
companies acquired by iXL since January 1, 1998 and the investments in physical
infrastructure at these companies after acquisition.
Amortization. Amortization expense increased $1.4 million to $3.1 million
for the quarter ended September 30, 1998 from $1.7 million for the quarter
ended June 30, 1998. The increase was a result of the goodwill and assembled
workforce recorded in connection with the 17 acquisitions which took place
during the third quarter of 1998.
Quarterly Pro Forma Results of Operations
The following table presents the unaudited pro forma quarterly results of
operations, which include adjustments to give effect to the acquisitions of
companies, including the proposed acquisition of Tessera Enterprise Systems,
Inc., by iXL since January 1, 1998 as if they had occurred on January 1, 1998.
Primarily because of iXL's large number of acquisitions in 1998, iXL has
included its quarterly results of operations on a pro forma basis to facilitate
the understanding of the effects of business acquisitions on iXL's operations.
Management believes that the pro forma quarterly results of operations may be
useful to investors in evaluating the financial performance of iXL. The pro
forma quarterly results of operations are not necessarily indicative of the
results of operations that would have been achieved had the transactions
occurred at the beginning of the periods presented and should not be construed
as being representative of future results of operations. These pro forma
amounts include the same adjustments that are reflected in the pro forma
consolidated statement of operations. You should read these pro forma quarterly
results of operations with the unaudited pro forma condensed consolidated
statement of operations and the historical audited financial statements of iXL
and related notes included elsewhere in this prospectus. See "Pro Forma
Consolidated Financial Information."
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------------------------------------------------------
March 31, June 30, September 30, December 31, March 31, June 30, September 30,
1998 1998 1998 1998 1999 1999 1999
--------- -------- ------------- ------------ --------- -------- -------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $ 20,237 $ 23,666 $ 28,839 $ 34,666 $38,390 $ 51,996 $ 69,871
Cost of revenues........ 13,032 16,125 19,795 21,860 22,840 30,334 39,889
-------- -------- -------- -------- -------- -------- --------
Gross profit.......... 7,205 7,541 9,044 12,806 15,550 21,662 29,982
Sales and marketing
expenses............... 3,162 4,150 5,714 8,557 9,002 12,303 14,009
General and
administrative
expenses............... 7,185 9,926 11,197 15,415 17,046 16,784 20,528
Research and development
expenses............... 907 1,327 1,244 935 1,058 1,431 1,209
Depreciation............ 1,042 1,263 1,489 2,382 2,390 3,034 3,394
Amortization............ 10,620 10,619 10,697 10,887 10,616 10,599 10,595
-------- -------- -------- -------- -------- -------- --------
Loss from operations.. $(15,711) $(19,744) $(21,297) $(25,370) $(24,562) $(22,489) $(19,753)
======== ======== ======== ======== ======== ======== ========
</TABLE>
Annual Historical Results of Operations
Years Ended December 31, 1998 and December 31, 1997
The following discussion relates to iXL's actual operating results for
the periods noted. These operating results include the operations of the
companies acquired by iXL during the periods referenced from the date of
acquisition only. As a result, we believe the operating results for the year
ended December 31, 1998 are not comparable to the operating results for the
year ended December 31, 1997. See "Pro Forma Consolidated Financial
Information."
44
<PAGE>
Revenues. Revenues increased $45.8 million, or 241%, to $64.8 million for
the year ended December 31, 1998 from $19.0 million for the year ended December
31, 1997. This increase was attributable to iXL's acquisition program, an
increase in the size and number of client engagements, and, to a lesser extent,
the development and growth of industry practice groups. CFN had no revenue in
1997 and accounted for $251,000 of iXL's 1998 revenues.
Cost of revenues. Cost of revenues increased $32.9 million, or 290%, to
$44.2 million for the year ended December 31, 1998 from $11.3 million for the
year ended December 31, 1997. As a percentage of revenues, cost of revenues
increased from 60% for the year ended December 31, 1997 to 68% for the year
ended December 31, 1998. The increase in dollar and percentage terms was
primarily attributable to the integration of the companies acquired by iXL
since January 1, 1998 and, to a lesser extent, employee training and the
development of CFN. CFN had no revenues or cost of revenues during 1997.
Sales and marketing expenses. Sales and marketing expenses increased
$13.4 million, or 344%, to $17.3 million for the year ended December 31, 1998
from $3.9 million for the year ended December 31, 1997. As a percentage of
revenues, sales and marketing expenses increased from 21% for the year ended
December 31, 1997 to 27% for the year ended December 31, 1998. This increase in
dollar and percentage terms was primarily attributable to the continued
development and expansion of iXL's sales and marketing infrastructure and
staff. Through acquisition and internal growth, iXL's sales staff increased
from 40 employees at the end of 1997 to 105 employees at the end of 1998. In
addition, we hired the Executive Vice President for Worldwide Marketing of iXL,
Inc. During 1998 we expanded the corporate sales and marketing departments and
related support staff to provide corporate oversight and additional support for
the iXL offices. We also hired specialized salespeople in iXL's key industry
groups. Also included in this increase was $813,000 of non-cash expense related
to warrant issuances.
General and administrative expenses. General and administrative expenses
increased $21.1 million, or 231%, to $30.2 million for the year ended December
31, 1998 from $9.1 million for the year ended December 31, 1997. As a
percentage of revenues, general and administrative expenses decreased from 48%
for the year ended December 31, 1997 to 47% for year ended December 31, 1998.
The dollar increase was primarily attributable to the companies acquired by iXL
since January 1, 1998, associated integration costs and the expansion of
management infrastructure to support the growth in iXL's operations. Also
included in this increase was $1.4 million of non-cash stock option expense.
Research and development expenses. Research and development expenses
decreased $412,000, or 9%, to $4.4 million for the year ended December 31, 1998
from $4.8 million for the year ended December 31, 1997. As a percentage of
revenues, research and development expenses decreased from 25% for the year
ended December 31, 1997 to 7% for the year ended December 31, 1998. Research
and development costs in 1998 were primarily related to the continued
development of an automated quote system at CFN. The purchase price of BoxTop
Interactive, Inc. included a $2.4 million charge to in-process research and
development expenses in 1997 relating to an Internet-based videoconferencing
product under development which had not reached technological feasibility.
Certain related core technology was valued as existing technology and not
included in the value of the acquired in-process technology. The value of the
purchased in-process technology was determined by estimating the present value
of the projected net cash flows to be generated by the development efforts
completed as of the acquisition. Revenue, expenses, and other cash flow items
associated with commercialization of the product were estimated for a discrete
projection period. Strong revenue growth was projected for this product through
1999; thereafter, revenue was expected to increase moderately each year through
2001. The cash flows were then discounted to present value at 35%, a rate of
return that considers the relative risk of achieving the projected cash flows
and the time value of money. Finally, a stage of completion factor was applied
to the sum of the present values of the cash flows in the discrete projection
period. Application of the stage of completion factor correctly excludes from
the value of in-process technology that value associated with remaining
development tasks (which are not in-process). The stage of completion factor
was calculated giving consideration to the costs incurred to date on the in-
process technology relative to the
45
<PAGE>
total anticipated costs for the project. Additionally, consideration of the
level of difficulty of completed development tasks relative to those remaining
was also made. In the fourth quarter of 1998, due to the introduction of
competing products utilizing alternative technologies into the market,
management decided to cease further investment in the development of this
product.
Depreciation. Depreciation expenses increased $3.8 million to $5.2
million for the year ended December 31, 1998 from $1.4 million for the year
ended December 31, 1997. The increase related to the depreciation of assets of
the companies acquired by iXL since January 1, 1997 and investments in physical
infrastructure at these companies after acquisition.
Amortization. Amortization expenses increased $5.4 million to $10.6
million for the year ended December 31, 1998 from $5.2 million for the year
ended December 31, 1997. The increase was a result of the goodwill and
assembled workforce recorded in connection with the 24 acquisitions which took
place during 1998 and the four acquisitions which took place during 1997.
Interest expense. Interest expense increased $500,000 to approximately
$800,000 in 1998 primarily due to borrowings under the iXL's credit facility.
Years Ended December 31, 1997 and Eight Months Ended December 31, 1996
The operating results for the eight months ended December 31, 1996 date
from iXL's inception in March 1996. Due to this shorter operating period, iXL's
early stage of development during this period, and the numerous acquisitions
effected during 1996 and 1997, iXL believes the operating results for the year
ended December 31, 1997 are not comparable to the operating results in the
eight months ended December 31, 1996.
Revenues. Revenues increased $13.6 million, or 253%, to $19.0 million for
the year ended December 31, 1997 from $5.4 million for the eight months ended
December 31, 1996. The acquisitions of BoxTop Interactive, Inc., Swan
Interactive Media, Inc. and The Whitley Group, Inc. during 1997 accounted for
$5.1 million of the increase in revenues. A full year of operations and growth
in iXL's Atlanta and Memphis offices accounted for the remaining increase.
Cost of revenues. Cost of revenues increased $7.7 million, or 217%, to
$11.3 million for the year ended December 31, 1997 from $3.6 million for the
eight months ended December 31, 1996. As a percentage of revenues, cost of
revenues decreased from 66% for the eight months ended December 31, 1996 to 60%
for the year ended December 31, 1997. The acquisitions of BoxTop Interactive,
Inc., Swan Interactive Media, Inc. and The Whitley Group, Inc. during 1997
accounted for $2.9 million of the increase in cost of revenues. A full year of
operations and growth in iXL's Atlanta and Memphis offices accounted for the
remaining dollar increase.
Sales and marketing expenses. Sales and marketing expenses increased $3.1
million, or 381%, to $3.9 million for the year ended December 31, 1997 from
$812,000 for the eight months ended December 31, 1996. As a percentage of
revenues, sales and marketing expenses increased from 15% for the eight months
ended December 31, 1996 to 21% for the year ended December 31, 1997. The
acquisitions of BoxTop Interactive, Inc., Swan Interactive Media, Inc. and The
Whitley Group, Inc. during 1997 and CFN in late 1996 accounted for $2.3 million
of the increase in sales and marketing expenses. A full year of operations and
growth in iXL's Atlanta and Memphis offices accounted for the remaining
increase in dollar and percentage terms.
General and administrative expenses. General and administrative expenses
increased $7.9 million, or 631%, to $9.1 million for the year ended December
31, 1997 from $1.2 million for the eight months ended December 31, 1996. As a
percentage of revenues, general and administrative expenses increased from 23%
for the eight months ended December 31, 1996 to 48% for the year ended December
31, 1997. The acquisitions of BoxTop Interactive, Swan Media, The Whitley Group
and CFN during 1997 accounted for $5.5 million of the increase in general and
administrative expenses. A full year of operations and growth in iXL's Atlanta
and Memphis offices accounted for the remaining increase in dollar and
percentage terms.
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Research and development expenses. Research and development expenses were
$4.8 million for the year ended December 31, 1997 and zero for the eight months
ended December 31, 1996. This included $2.4 million from the acquisition of
BoxTop Interactive, Inc. which was allocated to in-process technology. The
remaining expense is primarily related to the development of CFN's
infrastructure.
Depreciation. Depreciation expenses increased $1.0 million to $1.4
million for the year ended December 31, 1997 from $372,000 for the eight months
ended December 31, 1996. The increase was related to the depreciation of assets
of the companies acquired by iXL since January 1, 1997 and investments in
physical infrastructure at the companies acquired by iXL since January 1, 1997
after acquisition. iXL made significant investments in the acquired companies
after their acquisition to expand and improve office space and combine multiple
acquisitions within metropolitan areas. We also invested in computer and
telecommunications equipment at the newly acquired offices to provide
interoffice connectivity.
Amortization. Amortization expenses increased $4.3 million to $5.2
million for the year ended December 31, 1997 from $928,000 for the eight months
ended December 31, 1996. The increase primarily was attributable to the
amortization of goodwill and intangible assets and assembled workforce recorded
in
connection with the four 1997 acquisitions. The increase is also attributable
to a charge related to the discontinued use of a brand name and the result of a
full year of operations in 1997. In connection with the acquisition of BoxTop
Interactive, Inc., in May 1997, $2.1 million of the purchase price was
allocated to a brand name. In December 1998, iXL discontinued use of this brand
name and wrote off the remaining unamortized balance of $1.7 million.
Interest expense. Interest expense from capital leases, building mortgage
and loans from stockholders resulted in the increase in interest expense of
$208,000 in 1997 compared to 1996.
Income tax. The recognition of the income tax benefit of $2.8 million for
1997 is due to the net operating losses incurred by iXL which were utilized to
offset certain long-term deferred tax liabilities acquired in the acquisitions.
As of December 31, 1997 and 1998, iXL had net operating loss
carryforwards for federal income tax purposes of approximately $11.2 million
and $46.6 million, respectively. iXL acquired loss carryforwards of
approximately $1.6 million in 1997 and $3.5 million in 1998. The carryforwards
expire in varying amounts through 2018. The use of acquired net operating loss
carryforwards is restricted in accordance with Internal Revenue Service
regulations. A valuation allowance has been recorded against iXL's net deferred
tax asset as management believes it is more likely than not that they will not
be realized. See Note 10 to iXL's Consolidated Financial Statements.
Liquidity and Capital Resources
On June 8, 1999, iXL completed its initial public offering and received
net proceeds of approximately $61.7 million from the sale of 6,000,000 shares
of common stock. On June 14, 1999, the underwriters exercised their over-
allotment option resulting in the sale of 900,000 additional shares of common
stock for net proceeds of approximately $10.0 million. On June 8, 1999, CFN
received net proceeds of approximately $49.3 million from the sale of
16,190,475 shares of CFN's Series B Convertible Preferred Stock. Also on June
8, 1999, iXL received net proceeds of approximately $23.3 million from the sale
of 2,000,000 shares of common stock in a private placement. Prior to its
initial public offering, iXL financed its operations primarily through private
sales of capital stock, which totaled approximately $132.2 million in aggregate
net proceeds, and borrowings under its credit facility and other loans.
On July 29, 1998, iXL entered into a credit facility with Chase Manhattan
Bank providing for borrowings of up to $20 million. At December 31, 1998,
approximately $20.0 million of borrowings were outstanding under this credit
facility. In January 1999, iXL repaid all of the approximately $9.4 million
then outstanding under the revolving facility of the credit facility with a
portion of the proceeds of a private placement of iXL's Series A Preferred
Stock. Additionally, in June 1999 iXL repaid all remaining amounts
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<PAGE>
outstanding under the credit facility (approximately $13.1 million) with a
portion of the net proceeds of its initial public offering. The $10 million
term facility commitment terminated upon this payment, and only the revolving
commitment of $10 million remains available under the credit facility. iXL's
obligations under the credit facility are secured by substantially all of the
assets of iXL and its domestic subsidiaries other than CFN and CFN's
subsidiaries. These obligations are also secured by all of the stock of iXL's
domestic subsidiaries, other than CFN's subsidiaries, and 65% of the stock of
iXL's foreign subsidiaries. Borrowings under the credit facility accrue
interest at a rate of 2% plus the greater of Chase Manhattan Bank's prime rate
or .5% plus the weighted average of the rates on overnight Federal funds
transactions. As of September 30, 1999, there were no amounts outstanding under
the credit facility although letters of credit totalling approximately $3
million have been issued under this facility, reducing the revolver
availability by such amount.
iXL is currently negotiating a new credit facility. iXL anticipates that
this new facility will provide a $50 million revolving credit facility which
will mature three years after execution. iXL expects borrowings to accrue
interest either (a) at a rate of 2% plus the greater of the administration
agent's prime rate or .5% plus the weighted average of the rates on overnight
Federal funds transactions, or (b) at a rate of 2.75% plus an adjusted LIBOR
rate. We cannot be sure that this credit facility will be consummated at all,
or on these terms.
At September 30, 1999, iXL had approximately $79.3 million in cash and
cash equivalents. For the period from inception to September 30, 1999, iXL used
approximately $102.2 million, $27.9 million and $53.4 million to fund operating
activities, acquisition activities, and capital expenditures, respectively.
These expenditures were financed primarily with proceeds of sales of iXL's
capital stock.
In addition, at September 30, 1999, iXL had outstanding commitments for
capital expenditures totaling approximately $4.8 million, primarily related to
the expansion and improvement of its Washington, D.C., Chicago, and Consumer
Financial Network offices. The remainder of iXL's significant commitments
consist of obligations outstanding under operating leases.
iXL is currently negotiating the lease of its new headquarters in Atlanta
which would contain approximately 300,000 square feet. iXL anticipates capital
expenditures of up to approximately $18 million related to the improvement of
this new headquarters. We cannot be sure that this lease agreement will be
executed.
At December 31, 1998, the approximate future minimum lease payments for
noncancelable operating leases are:
<TABLE>
<CAPTION>
Year Amount
---- ------
(in thousands)
<S> <C>
1999....................................................... $ 6,586
2000....................................................... 5,862
2001....................................................... 5,485
2002....................................................... 5,264
2003....................................................... 4,112
Thereafter................................................. 15,832
-------
$43,141
=======
</TABLE>
iXL believes its available cash resources and credit facilities, combined
with the net proceeds of this offering, will be sufficient to meet its
anticipated working capital and capital expenditure requirements for at least
the next 12 months. However, iXL may need to raise significant additional funds
sooner in order to support its growth, develop new or enhanced services and
products, respond to competitive pressures, acquire complementary businesses or
technologies or take advantage of unanticipated opportunities. iXL believes
that CFN's available cash resources will be sufficient to meet its anticipated
working capital expenditure requirements through 1999. If CFN is unable to
raise additional capital funds prior to such period, CFN may require additional
funding from iXL, although iXL is under no obligation to provide any such
funding. See "Risk Factors--Risks Related to iXL's Business--Failure to raise
necessary capital could restrict our growth, limit our development of new
products and services and hinder our ability to complete."
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Year 2000 Risk
Many currently installed computer systems and software products are coded
to accept only two-digit entries to identify a year in the date code field.
Consequently, on January 1, 2000, many of these systems could fail or
malfunction because they may not be able to distinguish between 20th century
dates and 21st century dates. Accordingly, many companies, including iXL and
iXL's customers, potential customers, vendors and strategic partners, may need
to upgrade their systems to comply with applicable "Year 2000" requirements.
Because iXL and its clients are dependent, to a very substantial degree,
upon the proper functioning of its and their computer systems, a failure of its
or their systems to correctly recognize dates beyond December 31, 1999 could
materially disrupt operations, which could materially and adversely affect
iXL's business, results of operations and financial condition. Additionally,
iXL's failure to provide Year 2000 compliant products and services to our
clients could result in financial loss, reputation harm and legal liability.
In 1998, iXL formed a Year 2000 Assessment and Contingency Planning
Committee to review both its information technology systems, hardware and
software, and its non-information technology systems, and where necessary to
plan for and supervise the remediation of those systems. The Y2K Committee is
headed by the Chief Information Officer of iXL, Inc. Other members of the Y2K
Committee include two full-time outside consultants and one full-time and four
part-time company employees. The Y2K Committee, utilizing iXL's iD5 engagement
methodology, has divided iXL's Year 2000 efforts into five phases: discovery,
definition, design, development and deployment. Each of these phases has been
completed. iXL believes it has identified its mission critical systems. iXL has
obtained confirmations from the providers of these systems that they are Year
2000 compliant. iXL has conducted internal tests of such systems as part of its
Year 2000 efforts.
iXL has confirmed Year 2000 compliance of all material existing iXL
systems supplied by third party providers. iXL has already obtained written
certification regarding the critical hardware and software systems used to
assemble client solutions or to support iXL's internal electronic
infrastructure. iXL has also obtained written certification regarding
facilities items such as elevators and other non-standard applications and
systems that are not prevalent throughout all iXL offices.
iXL has not identified any older systems of the varieties more likely
susceptible to Year 2000 problems. Consequently, iXL believes its greatest
potential exposure will be presented by the failure of external systems such as
utilities and telecommunications. Further, if iXL's clients experience Year
2000 problems, iXL may be precluded from continuing to provide services for
these clients until the problems are resolved. Internally, iXL believes its
greatest potential exposure would be presented by its accounting systems,
although these functions can be handled manually without interrupting iXL's
business.
iXL does not intend to examine third party readiness, although CFN is
examining the readiness of third parties that provide date sensitive
information critical to CFN's business. iXL is also not researching its
clients' readiness, except to the extent clients request iXL to examine
solutions delivered by iXL.
iXL is finalizing contingency plans for critical individual information
technology systems and non-information technology systems for implementation,
if required, due to Year 2000 risks not fully resolved by iXL's Year 2000
program. Management currently believes that the Year 2000 risk will not pose
significant operational problems for iXL's computer systems. However, there is
no guarantee that iXL's Year 2000 program, including consulting with third
parties, will avoid any material adverse effect on iXL's operations, customer
relations or financial condition. iXL estimates the total cost of its Year 2000
program to be approximately $165,000, $146,000 of which has been incurred as of
September 30, 1999. However, there is no guarantee that the actual costs
incurred will not be materially higher than this estimate. See "Risk Factors--
Risks Related to iXL's Business--Year 2000 risks may adversely affect our
business."
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New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (FAS 133). This statement establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. In June 1999, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 137, which postpones the
mandatory adoption of FAS 133 by iXL until January 1, 2001. iXL has not entered
into any derivative financial instruments.
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BUSINESS
Overview
We are a leading Internet services company which provides Internet
strategy consulting and comprehensive Internet-based solutions to Fortune 1000
companies and other corporate users of information technology. We help
businesses identify how the Internet can be used to their competitive advantage
and use our expertise in creative design and systems engineering to design,
develop and deploy advanced Internet applications and solutions.
iXL was founded in March 1996 and in May 1996 made its first acquisitions
through the consolidation of four complimentary multimedia and interactive
services companies. Later in 1996, to implement iXL's move into the Internet
services industry, iXL acquired its first Internet-related business. iXL
acquired four additional complimentary services companies in 1997 and 24 more
in 1998. These acquisitions, as well as substantial hiring of new employees,
resulted in iXL's current composition. iXL is a Delaware corporation.
In late 1996, iXL also acquired CFN, which at that time resembled a
traditional insurance agency that allowed corporate executives to comparison
shop for insurance and mortgages. Under iXL's direction, CFN quickly adopted
Internet strategies which have resulted in CFN's current composition as an e-
commerce platform for marketing financial services and benefits via corporate
intranets and the Internet.
Industry Background
Growth of the Internet
The Internet has grown rapidly in recent years, spurred by developments
such as easy-to-use Web browsers, a large and growing installed base of
advanced personal computers, the adoption of faster and more cost-efficient
networks, the emergence of compelling Web-based content and commerce
applications, and the growing sophistication of the user base. According to
International Data Corporation, a leading research firm, the number of Internet
users was 98 million worldwide at the end of 1998, and will continue to grow to
320 million by the end of 2002. The broad acceptance of the Internet has also
led to the emergence of intranets and extranets as new global communications
and commerce environments, representing a significant opportunity for
enterprises to interact in new and different ways with customers, employees,
suppliers and partners. Intranets are secure web sites accessible only within a
given company, and extranets are intranets also available to select outsiders.
Growth of E-Commerce
The initial commercial use of the Internet was as an informational and
advertising medium, commonly referred to as "brochureware." From this origin
the Internet is evolving into a platform for conducting transactions and
establishing virtual storefronts and trading networks. Companies have also
begun to expand their use of efficient and low-cost Internet-based technologies
to enhance traditional operations such as customer service, supply chain
management, employee training and communication. In addition, companies such as
eBay, Amazon.com and E*Trade have extended beyond conventional models for the
sale and delivery of goods and services by operating an Internet-only business
and maintaining a limited physical presence. Forrester Research expects
dramatic growth in total e-commerce transaction volume, projecting an increase
from $51 billion in 1998 to $1.4 trillion in 2003.
Market for Strategic Internet Services
The Internet represents a revolutionary and powerful new opportunity for
business. Many companies that do not currently utilize the Internet are being
forced to reevaluate their business models and to adopt or supplement existing
Internet-based business solutions. The development and implementation of
Internet-based
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solutions require the successful integration of strategy consulting, creative
design and systems engineering skills. Historically, expertise in these areas
either has not existed within an organization or has been located in disparate
functional areas. Accordingly, many businesses have chosen to outsource a
significant portion of the development, design and maintenance of their
intranets, extranets, web sites and e-commerce applications to independent
service providers who can capitalize on their accumulated strategic, creative
and technical expertise. Such outsourcing needs have generated worldwide demand
for Internet professional services, which International Data Corporation
estimates will grow from $8 billion in 1998 to $79 billion in 2003. See "Risk
Factors--Risks Related to the Strategic Internet Services Industry--The
developing market for strategic Internet services and the level of acceptance
of the Internet as a business medium will affect our business."
Companies increasingly are discovering that many traditional service
providers lack the requisite expertise to implement comprehensive Internet-
based solutions. Many information technology services providers lack the
creative and marketing skills required to build audiences and deliver unique
and compelling content and also lack Internet expertise and implementation
capabilities. Advertising and marketing communications firms typically lack the
extensive technical skills and systems integration expertise required to
produce the increasingly complex solutions demanded by clients. Many strategy
consulting firms lack Internet expertise, marketing perspective and
implementation capabilities to deliver comprehensive solutions.
A number of Internet services firms have emerged to address these needs.
However, many of these smaller providers tend to develop expertise in a limited
number of industry segments because of the relatively small number of Internet
solution engagements they have completed. Furthermore, the ability of many of
these firms to service clients is constrained by their smaller size, limited
geographic scope and lack of capital resources. In addition, many of these
firms lack the depth, management and infrastructure necessary to develop the
capability required to meet the increasingly larger and more complex needs of
an expanding, sophisticated client base. See "Risk Factors--Risks Related to
the Strategic Internet Services Industry--We operate in a highly competitive
market with low barriers to entry which could limit our market share and harm
our financial performance" and "--The developing market for strategic Internet
services and the level of acceptance of the Internet as a business medium will
affect our business."
We believe that as businesses' familiarity and sophistication with
Internet technologies grow, so will the need for Internet services providers
who can help formulate a focused, strategic and integrated approach to the
implementation of Internet-based business solutions that enhance their clients'
businesses. We believe that the rapidly increasing demand for Internet
solutions, combined with the inability of many current providers to integrate
the strategic, creative and technical skills required by clients, has created
significant market opportunities for strategic Internet services providers such
as iXL.
iXL Solution
iXL uses its expertise in strategy consulting, creative design and
systems engineering to provide services that help clients identify and
capitalize on Internet-driven opportunities to improve and expand their
businesses. Key elements of the iXL solution are:
. Comprehensive Strategic Internet Services. We provide a
comprehensive set of strategic Internet services to clients
looking to enhance their existing business model by integrating
their business processes with an Internet strategy. We believe our
advantage lies in our ability to assist clients in the development
of an appropriate Internet strategy and then to deploy the
appropriate Internet services necessary to implement that
strategy. Typical iXL engagements include the strategic
application of e-commerce solutions to enhance existing business
processes, the identification of new business processes and
opportunities created by the Internet, the use of creative design
and marketing to acquire, cross-sell and retain consumers online,
and the integration of Web-based applications with our client's
existing systems. We
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<PAGE>
believe that the breadth and focus of our service offerings allow
us to meet our clients' Internet needs from strategy to deployment
in an efficient and cohesive manner.
. Sophisticated Technology Solutions. We use our extensive
engineering capabilities to deliver complex Internet-based
business solutions. Our engineers provide application development
and systems integration services by employing proven Internet
technologies such as Java, XML, Perl, CGI, C and C++. Typical
solutions include developing Internet-enabled business
applications, integrating web-based applications with our client's
existing systems and databases, and building sophisticated e-
commerce platforms. To support our growing technology development
capability, we substantially increased our engineering staff from
approximately 50 to over 300 individuals through acquisitions and
new hires. We have also established strategic affiliations with
leading technology vendors such as Microsoft, Intel, Sun, Oracle
and Broadvision. These affiliations typically allow us early
access to training, product support and technology developed by
these companies.
. Geographic Coverage and Benefits of Scale. We believe our
geographic coverage allows us to better serve our clients on a
local basis, helping to forge strong, long-term client
relationships and service the widespread offices of its clients
and their customers and vendors. As of September 30, 1999, iXL had
offices in Atlanta, Georgia; New York, New York; Los Angeles, San
Francisco, San Diego, and Santa Clara, California; Washington,
D.C.; Chicago, Illinois; Boston, Massachusetts; Denver, Colorado;
Charlotte and Raleigh, North Carolina; Richmond, Virginia;
Memphis, Tennessee; Norwalk, Connecticut; London, England; Berlin
and Hamburg, Germany; and Madrid, Spain. Our internal information
technology infrastructure links our various offices and leverages
the expertise of our professionals throughout the organization.
Our scale enables us to handle larger, more complex engagements,
expand our base of knowledge and best practices and employ more
experts, spreading their cost and expertise over a larger
enterprise.
. Use of Engagement Methodology (iD5) to Deliver Solutions. We
utilize an engagement methodology known as iD5 which has five
stages: Discover, Define, Design, Develop, Deploy. iD5 governs and
directs all phases of project management from initial engagement
definition to final solutions delivery. These procedures are
updated periodically to reflect new best practices identified
throughout iXL. The goal of iD5 is to provide consistent
procedures for all engagement phases which encourage usage of best
practices, while providing clients with greater clarity of
expectations, regular progress reports, and a higher degree of
project organization. Accordingly, we believe iD5 helps us achieve
on-time and on-budget solutions, capture our best practices and
integrate acquired businesses.
. Multidisciplined Team Approach. We staff engagements with a
multidisciplined team of professionals including project managers,
strategic consultants, creative designers, information
architects--professionals whose expertise includes both artistic
design and technology-- industry experts and software engineers.
By assembling these multidisciplined teams of professionals, we
believe that we provide comprehensive Internet-based solutions to
clients.
. Experienced Senior Executives. Our senior management team is
highly experienced in a variety of disciplines relevant to our
ability to grow and to service the needs of our clients. Our
senior executives have managed both emerging and mature businesses
in a variety of industries, including media and entertainment,
technology, travel and financial services. Our management also
includes an experienced acquisition team that has successfully
acquired and integrated a large number of businesses in various
industries.
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iXL Strategy
iXL's goal is to become the leading provider of strategic Internet
services to Fortune 1000 companies and other corporate users of information
technology. To achieve this objective, we are pursuing the following
strategies:
. Leverage and Expand Industry Expertise. We have assembled industry
practice groups including experienced professionals with expertise
in the business practices and
processes of specific industries. We believe our industry
expertise enables us to provide effective Internet strategy
consulting and services tailored to the special needs of our
clients in these industries. In addition, industry expertise
reduces the learning curve on new engagements, improving
efficiency of implementation and reducing project delivery times.
Our strategy is to expand our existing industry practice groups by
recruiting senior professionals from major consulting firms and
companies in the relevant industries. We also acquire companies
with specific industry expertise. We have established practice
groups, which are in varying stages of development and staffing,
in the Banking & Financial Services, Media & Entertainment,
Travel, Telecommunications & Technology, Healthcare and Retail
industries. We believe that these industries have been leaders in
the utilization of Internet-enabled technologies. See "--iXL
Industry Practice Groups."
. Continue to Develop Technology Capabilities. We have significant
capabilities in systems engineering and applications development
which we use to deliver complex Internet-based business solutions.
We intend to hire additional software engineers and develop new
technology skill-sets to deliver the best possible solutions and
meet the evolving needs of clients. Our research and development
team is dedicated to identifying, testing and defining new
Internet-based technologies. We have developed software
applications that can be re-used for more than one client or for
more than one engagement. This library of reusable applications
continues to grow as projects are completed. We intend to use
these software applications to deliver solutions rapidly and cost-
effectively.
. Expand Geographic Coverage. Since our inception, we have expanded
our geographic presence aggressively through a combination of
acquisitions and internal growth. iXL has 19 offices located
throughout the United States and in England, Germany and Spain. We
believe our broad geographic coverage allows us to serve our
clients on a local basis, helping to forge strong, long-term
client relationships, and to serve the widespread offices of our
clients and their customers and vendors. Our strategy is to
continue our geographic expansion through additional acquisitions
and external hiring.
. Capture and Disseminate Knowledge and Best Practices. Our
employees have developed a broad base of knowledge and best
practices through numerous strategic Internet services engagements
and from prior experience. Our strategy is to capture this broad
range of knowledge and best practices for dissemination throughout
iXL, and to continue to expand these capabilities through
acquisitions and external hiring. During the course of our client
engagements, we also identify distinct solutions which can be
developed into and distributed as new iXL Solution Sets. We
accomplish this dissemination in part through frequent iXL
Summits, where employees within a given discipline meet in person
to receive education and share best practices. Our Technical
Operations Center also plays a critical role in the dissemination
process, linking all of our local offices via a comprehensive
Internet protocol-based network combined with a centralized
knowledge management system.
. Expand Client Relationships. We have established business
relationships with a diverse base of clients. Our strategy is to
leverage our industry expertise, technology skills, and scale by
expanding the scope of existing client relationships into broader
engagements, including
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Internet strategy consulting, creative design, systems engineering
and application development services.
. Attract, Train and Retain Experienced Professionals. Our growth
and our ability to provide strategic Internet services are based
in large part on our ability to attract, train and retain
experienced professionals. Our strategy is to expand our existing
expertise by recruiting senior professionals from major consulting
firms, creative design firms and information technology services
firms as well as from other strategic Internet services companies.
We maintain an informal, team-driven and results-oriented culture
that is attractive to energetic, talented professionals and
provides incentives for our employees through a competitive
compensation plan, equity ownership and our stock option plans. We
provide training on a continuing basis for our employees through
our iXL University programs, which are designed to address the
rapidly changing technological environment in which our employees
are engaged.
. Pursue Strategic Acquisitions. We intend to continue to pursue
strategic acquisitions that provide additional skilled management,
technical and creative personnel, client relationships,
technological skills, industry expertise and geographic coverage.
iXL Engagement Methodology (iD5)
We have developed an engagement methodology known as "iD5" which governs
and directs all phases of project management from initial engagement
definition to final solutions delivery. iD5 consists of five distinct, clearly
delineated stages which provide our clients with clear expectations of both
the engagement process and the solutions to be provided. The five stages are:
. Discover. Collect information relevant to the engagement
objective.
. Define. Formulate an Internet business strategy.
. Design. Refine and document specifications of the Internet
business strategy.
. Develop. Build elements required to implement the Internet
business strategy.
. Deploy. Deliver final solution(s).
iD5 enables us to effectively serve our clients by:
. clarifying client expectations;
. promoting consistent and efficient service;
. combining strategic, creative and technical capabilities;
. minimizing the time it takes to deliver our services; and
. establishing best practices to be followed throughout iXL.
iD5 is periodically revised and improved to assimilate and deploy new
tools and new best practices developed in the course of iXL's many engagements
throughout all of our offices. Through this process, all iXL offices benefit
from the knowledge gained in the course of engagements by any iXL office.
iXL Services
We believe we offer clients a single source for the comprehensive range
of services required to identify, design, develop and deploy Internet-based
business solutions which complement or expand conventional business processes.
Our services include Internet strategy consulting, Internet-based business
solutions, and our iXL Solution Sets.
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Internet Strategy Consulting
We offer consulting services to our clients with the objective of
developing Internet solutions that augment a client's overall business
strategy. We offer Internet strategy consulting that combines our knowledge of
industry dynamics and business processes with an understanding of the client's
specific needs. We have established industry practice groups, which are in
varying stages of development and staffing, in the Banking & Financial
Services, Media & Entertainment, Travel, Telecommunications & Technology,
Healthcare and Retail industries. We also employ strategy consultants with
general business and Internet expertise. As of September 30, 1999, we employed
approximately 170 professionals who provide strategy consulting services.
While Internet strategy consulting directly generates only a small
percentage of our revenues, we believe that Internet strategy consulting will
be an important service offering which will differentiate iXL from many of our
competitors. By offering strategy consulting services, we believe we can
leverage the consulting and strategy planning expertise of our various industry
experts into engagements which will utilize the services provided by other iXL
practice groups.
Internet-Based Business Solutions
Our revenues are principally derived from the design and delivery of
Internet-based business solutions. These solutions typically are Web-based
applications, many of which integrate with a client's existing computer
systems. These solutions can incorporate multiple capabilities including
Internet strategy consulting, creative design, information architecture,
software engineering, project management, and audio, video and animation
production.
Among our Internet-based business solutions, we offer e-commerce systems
and services, business information management systems, interactive learning
environments, digital media management services, and web site development and
hosting services.
. E-Commerce Strategy and Applications. We design, develop and
deploy sophisticatede-commerce applications for bringing buyers
and sellers together via the Internet. We have created a broad
range of e-commerce applications on behalf of our clients, ranging
from online retail sites to electronic procurement systems. Our
strength in e-commerce lies in our ability to integrate third-
party software with a client's existing computing and network
infrastructure to create a robust e-commerce environment for the
client's customers and prospects. Our technology group utilizes a
set of core e-commerce enabling technologies from companies,
including:
. Microsoft and Netscape, for e-commerce server applications;
. Oracle and Broadvision, for database platform development;
and
. Sun and Hewlett-Packard, for networking products and
services.
We have created our own e-commerce applications for specific
client needs. We also work with many third-party software
companies, such as CyberCash and NetGravity which have developed
more general applications for conducting different aspects of
e-commerce ranging from security to online transaction payments
processing.
. Enterprise Relationship Management. We design and develop
sophisticated computer based business information management
systems. These include database-driven websites that help clients
manage their customer, supplier, and vendor relationships more
effectively and provide secure database access. Some of these web
sites also have the capacity to recognize and profile the types of
information a user is typically interested in, and to provide that
information automatically to the user during future visits to the
site. As part of our Enterprise Relationship Management
capability, we develop intranets and extranets which enable our
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clients to communicate with employees, customers, suppliers and
vendors, as well as track and store critical business data and
other information.
. Online Learning and Performance. We have developed expertise in
providing education and training using interactive multimedia and
Web technology. We employ instructional designers who create and
adapt training materials for use in multimedia and online
environments. Interactive learning environments have been
attractive to service industry organizations which are
geographically dispersed, rely on employees with a common base of
skill sets and experience high turnover. We have developed several
customized solutions to meet the needs of our clients and are
developing an additional iXL Solution Set to facilitate the
creation and publication of interactive training courses. iXL's
learning environments utilize RealNetworks G-2 streaming,
Microsoft Media Technologies, Macromedia Dreamweaver, Flash,
TopClass and Podium Web-based training systems. See "--iXL
Solution Sets" and "--Employees."
. Digital Media Solutions. We have developed solutions that combine
video, audio, animation, graphics and content into digital media
presentations. These media are also frequently utilized to create
Internet-based presentations. We possess expertise in numerous
post-production editing technologies. These technologies are used
for the assembly of video and audio content used in many of our
clients' Internet applications. We also provide video production
services including the design, scripting, production, testing and
distribution of audio and video clips and full broadcast-quality
presentations. In addition, we own the worldwide perpetual rights
to a comprehensive stock video library of over 500,000 clips.
Examples of our work in this area include the development of new
capabilities for delivering audio and video content via the
Internet for Real Networks, developing specialized data management
software for Object Design and the delivery of high resolution
imagery via the Internet for Live Pictures. We also have an
Enhanced Television (E-TV) group that is developing technology,
applications, content and expertise for use in the emerging
industry of digitally delivered Internet Protocol-based
information and entertainment. Currently, we are working with
media, technology and telecommunications companies to design and
build the navigational infrastructures, business models and
strategic relationships required for success in the E-TV
marketplace.
. Web Sites and Hosting. To provide complete Internet solutions, we
offer development of traditional web sites and state-of-the-art
website hosting services through our Memphis, Tennessee, and San
Jose, California, hosting facilities. Our hosting capabilities are
offered primarily to clients who require unique and specific
hosting technology.
iXL Solution Sets
iXL uses its technology development capabilities to create custom
applications based on a common, reusable framework and component library.
These "iXL Solution Sets" can be customized and implemented quickly and cost-
effectively. We believe that our iXL Solution Sets meet the needs of clients
for fast, replicable and easily implemented solutions for computer-based
presentations and multiple web site deployment and content management. iXL's
Solution Sets include:
. Pitchman(R). Pitchman is a presentation tool which combines high-
end graphics, animation, video and audio in an easy-to-transport
and easy-to-display laptop computer format which allows the user
to synchronize with the latest version of the presentation via a
corporate intranet or the Internet. Sales and marketing
professionals are the primary market for Pitchman. We have sold
over 500 Pitchman laptop presentations to various clients
including British Airways, News Corporation and Trigon.
. Siteman(TM). Siteman is a state-of-the-art browser-based system
for creating and managing up to thousands of web sites that share
a common style and similar look. Siteman allows novice
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users to quickly design and build custom web sites by selecting
from a library of templates and adding content. It also enables
users to easily edit content online, yet restricts them from
modifying specified content areas and the overall style of the
sites. iXL also provides support for end users who need assistance
in creating sites with this product. We developed Siteman as part
of our iXL Solution Sets strategy. Recently, we sold Siteman to a
software manufacturer, retaining a perpetual, worldwide, royalty-
free license on a non-transferable, non-exclusive basis. This
license permits us to continue to offer Siteman as one of our
Solution Sets. Siteman clients have included AutoConnect, Carlson
Wagonlit Travel and WebMD.
iXL Industry Practice Groups
iXL has established practice groups in the Banking & Financial Services,
Media & Entertainment, Travel, Telecommunications & Technology, Healthcare and
Retail industries. These practice groups are in varying stages of development,
staffing and activity. To build our industry practice group expertise, we
leverage the experience of our employees who have previously worked for major
consulting firms or companies in the relevant industries. We have utilized our
industry expertise in serving the clients listed below. These clients,
included for illustrative purposes, are not intended to be representative of
our clients generally.
<TABLE>
<CAPTION>
Industry Clients
-------- -------
<S> <C>
Banking & Financial Services................. Chase Manhattan Bank
General Electric
Merrill Lynch
Media & Entertainment........................ Warner Brothers
21e Web Network
Travel....................................... Budget Rent a Car
Delta Air Lines
Virgin Atlantic Airways
Telecommunications & Technology.............. BellSouth
Diamond Multimedia RioPort
Healthcare................................... DuPont
HBOC
Trigon Blue Cross/Blue Shield
WebMD
Retail....................................... Shop At Home
Wherehouse.com
</TABLE>
Sales and Marketing
The role of iXL's marketing program is to create and sustain preference
and loyalty for the iXL brand as a leading provider of strategic Internet
services. Marketing occurs at the corporate and local levels. The corporate
marketing department has overall responsibility for communications,
advertising, public relations and our web site, and also engineers and
oversees central marketing and communications programs for use by each of our
local offices. Regional marketing representatives are responsible for building
brand awareness within each geographic region. These representatives report to
the Executive Vice President for Worldwide Marketing of iXL, Inc.
As part of its continuing relationship with iXL and CFN, General
Electric has agreed to implement a mutually satisfactory marketing campaign
regarding iXL and CFN. This campaign is expected to emphasize
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General Electric's relationships with iXL and CFN and to improve awareness of
iXL and CFN's services. General Electric will also use its reasonable efforts
to provide access to CFN's platform to its employees and to employees of its
affiliates.
iXL's sales force is split into two units, one of which deals with
generation of new clients, and the other which focuses on sales to existing
clients. Existing clients are managed by local project managers who report to
the general managers of the local offices, which then report to the Regional
Vice Presidents for Operations on sales- and client development-related issues.
The Regional Vice Presidents then report to the Executive Vice President for
Worldwide Client Development of iXL, Inc. New clients are targeted by iXL's
business development staff which operates regionally, reporting to the Regional
Vice Presidents for Operations, which in turn report to the Executive Vice
President for Worldwide Client Development of iXL, Inc.
Acquisitions
The strategic Internet services industry is highly fragmented, consisting
of a large number of small companies providing limited service offerings.
Therefore, an important element of iXL's growth strategy is the acquisition of
selected companies with complementary technologies and capabilities. Our
strategy has been to augment our growth through acquisitions of small, regional
strategic Internet services companies. By obtaining critical mass in a
particular regional market, we believe we are able to provide the
responsiveness and quality of service of a small company with the greater depth
and breadth of services of a large organization. The acquisitions have resulted
in a broad geographic presence, allowing us to compete more effectively for
national accounts. Our post-acquisition strategy is to enhance the
competitiveness and profitability of each acquired company.
We identify acquisition candidates through our ongoing industry searches,
through our business network and through contact initiated by companies seeking
to be purchased. Potential targets are evaluated on numerous quantitative and
qualitative factors. Quantitative factors include historical and projected
revenues and profitability, geographic coverage and contract backlog.
Qualitative factors include strategic and cultural fit, management skill,
customer base and technical proficiency.
These factors are evaluated as part of a four-part assessment process:
. a detailed audit and operating assessment is initiated;
. acquisition pricing models are carefully evaluated;
. specific technology skills and capabilities are ascertained; and
. management qualifications and compatibility are appraised.
Our post-acquisition process includes the integration of all financial
reporting systems, operating procedures, and training programs into the iXL
culture and infrastructure. Integration typically begins before the acquisition
transaction has been closed, with a goal of total integration promptly
following closing. Our Technical Operations Center plays a critical role in
this process, connecting the acquired business's systems to our central
systems. Our goal is to provide each of our offices with all tools and
resources needed to attain the maximum possible growth and profitability.
Accordingly, we have rarely based the purchase price for a company we acquired
on the post-acquisition performance of that company because we believe such
arrangements can impede the integration of multiple acquired businesses in the
same city by motivating them to compete against one another.
Historically, we have used our common stock for substantially all of the
consideration for our acquisitions. We anticipate that this will continue in
the future and have registered 4,000,000 shares of common stock pursuant to a
"shelf" Registration Statement on Form S-4 for this purpose, and expect to
register 6,000,000 shares of common stock for this purpose pursuant to an
additional Registration Statement on Form S-4. By maximizing the use of stock
as acquisition consideration, we believe that the acquired companies'
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management has a greater incentive to focus on iXL's long-term growth through
the appreciation of its stock price. We also generally grant stock options to
employees of newly acquired companies as a means of increasing employee and
management retention.
On October 4, 1999, we executed an Agreement and Plan of Merger with
Tessera Enterprise Systems, Inc. Tessera creates, deploys, and maintains
advanced customer relationship management solutions. These solutions enable
companies to capture customer profile information to allow those companies to
better understand and target their core customer base. Tessera is headquartered
in Wakefield, Massachusetts and has approximately 130 employees.
The aggregate purchase price for this acquisition is $120 million, to be
paid primarily in approximately 3,469,548 shares of iXL's common stock, the
assumption of options under Tessera's stock option plan which will result in
options to purchase approximately 536,000 shares of its common stock, as well
as assumption of debt, redemption of certain preferred stock, and closing-
related fees. This price includes a cash payment of approximately $2.2 million
in connection with the redemption of certain of Tessera's preferred stock that
is redeemable by its terms upon an acquisition. As a condition of this
transaction, the Tessera stockholders acquiring iXL common stock will be
subject to a contractual prohibition on resale of their iXL common stock.
Tessera's founding stockholders will be prohibited from selling any of their
iXL common stock for a period of 90 days after this offering. After this
initial 90 day period, one-third of each such stockholder's shares will be
available for sale, one-third will be available for sale 180 days after this
offering, and the remaining one-third will be available for sale 270 days after
this offering. The remaining Tessera stockholders will also be prohibited from
selling any of their iXL common stock for a period of 90 days after this
offering. After this initial 90 day period, all of such stockholder's shares
will be available for sale.
Although this acquisition remains subject to Tessera stockholder
approval, the four principal management stockholders have agreed to vote in
favor of this acquisition. Certain aspects of this proposed acquisition remain
subject to applicable regulatory approval.
We began our acquisitions in May 1996 when we acquired iXL Interactive
Excellence, Inc., Creative Video Library, Inc., Creative Video Inc., and
Entrepreneur Television, Inc., companies whose focus was to assist corporate
clients in the design and creation of multimedia and video communication
projects. In December 1996, we acquired CFN, which at such time, was a
traditional insurance agent that allowed corporate executives to comparison
shop for insurance and mortgages. CFN was seeking iXL's strategic and technical
assistance to sell insurance services over corporate intranets. Since the CFN
acquisition, iXL has developed and implemented the sophisticated CFN e-commerce
platform for marketing financial services and employee benefits electronically
over the Internet and corporate intranets. iXL has acquired 29 other companies
all engaged in related businesses and CFN has acquired one complementary
business. See "Risk Factors--Risks Related to iXL's Business--Our continued
growth is dependent on the successful completion of acquisitions" and "--We may
be unable to continue to grow at our historical growth rates or to effectively
manage our growth."
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The following table summarizes iXL's acquisitions since June 1996 other
than CFN acquisitions, listed in chronological order. This information includes
137,304 shares of common stock held in escrow that have not been earned under
the terms of the relevant acquisition agreements. See Note 4 to the Pro Forma
Consolidated Financial Information.
<TABLE>
<CAPTION>
Number of Shares issued in
Employees at connection with
Businesses Acquired Primary Capabilities Date Acquired Acquisition Date Acquisition
------------------- -------------------- ------------- ---------------- ----------------
<C> <S> <C> <C> <C>
Memphis On-Line, Inc. ........... Hosting June 5, 1996 15 none
Memphis, TN
Webbed Feet, LLC................. Creative design February 14, 1997 1 40,000
Atlanta, GA
The Whitley Group, Inc. ......... Interactive multimedia April 4, 1997 20 454,400
Charlotte, NC
BoxTop Interactive Inc. ......... Creative design May 30, 1997 60 3,416,700
Los Angeles, CA
Swan Interactive Media, Inc. .... Software engineering July 28, 1997 15 283,900
Atlanta, GA
Small World Software, Inc. ...... Software engineering and January 26, 1998 26 271,356
New York, NY creative design
Green Room Productions, L.L.C. .. Travel expertise, February 5, 1998 28 344,270
San Francisco, CA creative design and
engineering
CCG Online....................... Travel expertise, March 27, 1998 23 266,000
Denver, CO creative design and
software engineering
Spin Cycle Entertainment......... Creative design and May 8, 1998 20 155,200
Los Angeles, CA software engineering
Digital Planet................... Creative design and May 12, 1998 31 259,584
Los Angeles, CA software engineering
InTouch Interactive, Inc. ....... Software engineering May 12, 1998 11 195,834
Charlotte, NC
Micro Interactive, Inc. ......... Interactive multimedia May 14, 1998 35 740,000
New York, NY
CommerceWAVE, Inc. .............. E-commerce July 2, 1998 22 877,898
San Diego, CA
Wissing & Laurence, Inc. ........ Video production July 8, 1998 2 50,000
New York, NY
601 Design, Inc. ................ Video production July 16, 1998 7 200,000
New York, NY
Image Communications, Inc. ...... Creative design July 22, 1998 40 378,999
Vienna, VA
Campana New Media, S.L. and
The Other Media, S.L. .......... Creative design July 28, 1998 8 37,107
Madrid, Spain
Spinners Incorporated............ Creative design, July 30, 1998 31 674,132
Boston, MA software engineering and
financial
services expertise
Tekna, Inc. ..................... Software engineering and September 4, 1998 27 762,622
Richmond, VA creative design
LAVA Gesellschaft fur Digitale
Medien GmbH..................... Software engineering September 7, 1998 28 321,428
Hamburg, Germany
Larry Miller Productions, Inc.... Creative design September 9, 1998 33 113,823
Boston, MA
Denovo New Media Limited......... Creative design September 10, 1998 5 42,852
London, England
Exchange Place Solutions, Inc.... Financial services September 10, 1998 4 275,000
Atlanta, GA consulting
Pantheon Interactive, Inc........ Software engineering September 18, 1998 15 271,787
Santa Clara, CA
Two-Way Communications, L.L.C. .. Creative design and September 18, 1998 23 269,421
Chicago, IL healthcare expertise
NetResponse, L.L.C............... Strategy consulting, September 22, 1998 36 701,375
Arlington, VA software engineering and
creative design
Ionix Development Corporation.... Software engineering September 23, 1998 22 358,551
Chicago, IL
Pequot Systems, Inc.............. Financial services September 24, 1998 12 378,066
Norwalk, CT expertise and software
engineering
</TABLE>
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Strategic Alliances and Affiliations
We have entered into, and intend to continue entering into, strategic
alliances and affiliations with a select group of technology service providers.
The primary goals of our strategic alliances and affiliations are:
. to enhance iXL's overall service offerings;
. to create or identify new revenue opportunities through referrals
and the creation of new service offerings; and
. to increase iXL's credibility and visibility in the marketplace
through collaboration in joint marketing.
We have established strategic affiliations with, among others, Microsoft,
Intel, Sun and Oracle. These strategic affiliations provide us early access to
training, product support and technology.
We have also established strategic alliances with companies offering
technologies which serve important roles in the deployment or delivery of iXL
services. These alliances focus on the joint development of integrated
solutions which utilize the technologies offered by iXL's partners to deliver
the services designed by iXL. Our strategic alliances include alliances with
RealNetworks and Broadvision. Through our strategic alliance with RealNetworks,
a leading provider of media streaming technologies, we will be presented as a
preferred provider of content for events streamed via RealNetworks
technologies. Through our strategic alliance with Broadvision, which
specializes in personalized electronic commerce software applications for
businesses and consumers, we have gained access to Broadvision software,
maintenance, support, and training on a preferred basis. We are also engaging
in joint marketing, sales, and development efforts with Broadvision.
The contracts governing the strategic affiliations and alliances
generally do not have long durations or minimum requirements. In addition, they
are generally terminable by iXL or the other party at will.
Technology
Our Technical Operations Center is our computer systems center which
links all of our local offices with a centralized knowledge management system.
The Technical Operations Center facilitates the integration of operations of
local offices into all facets of iXL, including, financial reporting, e-mail,
and dissemination of knowledge and best practices. The Technical Operations
Center allows for the rapid integration of acquired businesses, facilitates
collection and dissemination of knowledge and best practices throughout iXL and
supports enterprise business systems. The Technical Operations Center maintains
its network operations and monitoring in Atlanta, with central data center and
intellectual property transit support from its data center in Memphis,
Tennessee, and co-location facilities in San Jose, California. The Technical
Operations Center manages our general ledger accounting systems, global project
and time tracking systems, sales force automation, electronic messaging,
central data warehouse repository services, wide area network infrastructure,
intellectual property transport services and global digital security. These
functions are closely integrated in a worldwide iXL intranet that additionally
supports human resources and distance learning. We view the Technical
Operations Center as a key strategic asset, providing a platform to permit
rapid growth and a working model of the solutions we can design for our
clients. See "Risk Factors--Risks Related to iXL's Business--We may be unable
to continue to grow at our historical growth rates or to effectively manage our
growth."
While readily available third-party technologies are used to develop
nearly all iXL solutions, iXL does not believe it is dependent on any given
technology to deliver its solutions. Typically, iXL chooses among multiple
software products to select the most appropriate product for a given use. If
any one product ceased to be available to iXL, other similar products are
generally available. Further, the third-party providers generally license their
products directly to iXL's clients. Consequently, iXL is not at risk of loss of
individual licenses.
Consumer Financial Network
Consumer Financial Network, Inc., or CFN, operates YouDecide.com, which
is a sophisticated e-commerce web site for marketing financial services and
benefits over corporate intranets and the Internet.
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CFN also offers its services through a call center. CFN's equity is owned 76%
by iXL,, 23% by General Electric, and 1% by other stockholders. CFN has
contracted with competing providers of financial services and employee benefits
to create a platform for the comparison shopping and purchase of these
services. The CFN program is provided to the general public via its
YouDecide.com web site and to large companies and associations, many with 5,000
or more employees, for distribution as a human resources benefit to their
employees or members. Currently, CFN provides access to the following services:
<TABLE>
<CAPTION>
Financial Services Benefits
------------------ --------
<S> <C>
Auto Insurance Long-Term Care
Homeowners and Renters Insurance Individual Life Insurance
Mortgages Vision Services
Home Equity Loans Legal Services
Auto Finance Pet Insurance
Financial Planning
Credit Cards
</TABLE>
Traditionally, the services currently offered by CFN have not been
presented on a standardized or comparable basis. Accordingly, consumers have
often been deterred from obtaining meaningful price comparisons from competing
services providers. Many consumers have been unable or unwilling to devote the
time required to compile comparative quotes and have instead relied on other
factors unrelated to the price or the terms provided in purchasing these
services.
We believe YouDecide.com is an attractive offering for consumers because
it enables consumers to receive explanatory information and an unbiased
comparison of products, services and quotes based on equivalent terms from
multiple providers of financial services and employee benefits. In addition,
because CFN aggregates the general public and employees of multiple major
companies and members of associations, and aggregates a nationwide network of
services providers who compete for each individual member's business, CFN is
often able to negotiate discounted pricing for certain products for its
customers. Consumers can access CFN online, by telephone or by fax.
We believe YouDecide.com is attractive to services providers because it
is designed to:
. provide directed access through corporate intranets to employed
consumers, a highly desirable customer market segment, as well as
to the general public;
. allow each provider to directly access its preferred target market
by including multiple providers of similar services;
. provide a lower cost of customer acquisition than traditional
distribution channels due to automated consumer access and bulk
acquisition of consumers through access to the general public and
the participation of large employers and associations;
. allow providers to expand geographically; and
. allow providers to utilize Internet-enabled payments and automatic
payroll deduction to secure payment for services sold.
As a result of the benefits outlined above as well as the aggregated
customer base available through CFN, providers contracting with CFN may offer
discounted rates and other features that are more competitive than the
individual rates and features they otherwise may offer through traditional
distribution channels.
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CFN earns fees on each sale of services made through its online and call
center platforms. Currently, a significant portion of consumer inquiries to CFN
for services offered by CFN's providers are made through CFN's call center. Our
goal is for the relative volume of online inquiries as well as the automation
of the entire process from inquiry to completed transaction to increase
significantly in the future as intranets become more widespread and as
consumers become more familiar with the Internet. We believe that such an
increase in online inquiries in proportion to call center inquiries will reduce
CFN's support costs. CFN's performance will depend in large part upon CFN's
ability to estimate accurately the resource requirements and the revenues
generated by customers engaging in the transactions with service providers on
the CFN web sites. Expenses and investments must be incurred well in advance of
the potential transactions intended to generate revenue to justify this cost
structure. See "Risk Factors--Risks Related to Our CFN Subsidiary--CFN's
business model is new and unproven" and "--CFN must expend significant
resources to grow its infrastructure."
Member Companies
We believe CFN is attractive to employers because CFN enables employers
to offer to their employees, at no cost to the employer, access to a wide range
of financial services and employee benefits at generally discounted rates.
Initially, CFN has chosen to provide its program to large companies and
associations as a no cost human resources benefit for their employees or
members. Current CFN member companies include:
<TABLE>
<S> <C>
Advantica Ryder Corporation
Amerigas Society for Human Resource Management
BellSouth Texas A&M University
Ericsson Thomson Corporation
General Williams Companies
Electric
Capital
Corporation
Nextel
</TABLE>
Once CFN has established a relationship with a participating employer,
CFN's strategy is to become part of the payroll deduction system of the
employer. This arrangement allows employers more flexibility in their payroll
deduction systems, while enabling CFN to provide multiple services to
employees. Becoming part of the payroll deduction system also enhances CFN's
ability to retain employees as customers for its providers. Automatic payroll
deduction allows services providers to offer payment plans that are structured
around the frequency of payroll deductions and is the most desirable form of
payment for CFN's participating services providers.
Provider Network
CFN's offerings include property and casualty insurance, home finance,
automobile finance, legal services, long-term care, term life insurance and
vision plans. Providers available through CFN include:
. Allied Insurance Company, American Express Property Casualty
companies, Amica Mutual Insurance Company, Chubb Group of
Insurance Cos., Electric Insurance Company, and Nationwide Mutual
Insurance Co. in property and casualty insurance;
. BankOne, Countrywide, First Union National Bank, GMAC Mortgage
Corporation and Travelers Home Mortgage Service in home finance;
. debis Financial Services in automobile finance;
. Law Phone in legal services;
. Mass Casualty and Transamerica in long-term care;
. Empire General Life in life insurance;
. Premier Pet Insurance a provider of pet insurance;
. Vision Care Advantage in vision services;
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. Ernst & Young in financial planning; and
. First USA in credit card services.
The terms of these contracts range from one to three years. Most
contracts terminate either on or before December 31, 1999 or December 31,
2000, and some contracts are on a trial basis only. The contracts specify the
terms of the agreement with CFN, generally including information on terms of
pricing to be provided, the fulfillment process, compensation to CFN,
necessary regulatory requirements, restrictions on use of consumer information
provided by CFN, indemnification, and intellectual property protection for
CFN. There are no minimum volume requirements required from CFN to providers.
CFN is currently working to obtain non-residential mortgage brokerage licenses
where necessary. In jurisdictions where CFN is currently not so licensed, CFN
provides access to mortgages through one of its appropriately licensed
providers.
Market Expansion
CFN has expanded its business to make its program available to the
general public over the Internet via its YouDecide.com web site and through
its call center. This expansion has been effected to date primarily by
entering into agreements with selected Internet retail and informational sites
to expand awareness of the YouDecide.com web site including agreements with
Hoover's Online, Earthlink and smartmoney.com. This expansion into the general
public arena is intended to broaden the prospective customer base for both CFN
and its services providers. The service offerings and the corresponding prices
offered to the general public are sometimes different from those offered to
CFN's corporate participants. See "Risk Factors--Risks Related to Our CFN
Subsidiary--CFN's business model is new and unproven."
Technology
CFN's e-commerce platform consists of three component layers. The first,
or top, layer is the YouDecide.com Internet web site accessed by the consumer
which gathers and displays information. The second component layer is decision
software which takes the consumer information and chooses applicable services
from the provider information maintained in this second layer. The third
component layer stores consumer information and integrates with CFN providers'
systems.
The e-commerce technology developed by CFN, for which CFN has multiple
utility patents pending, is a flexible multi-function comparative quoting
system. While the current application is for the dissemination of information
about financial services and employee benefits, the quoting system has uses in
many industries. CFN believes this technology could be applied to other
situations to allow consumers to compare multiple products from different
providers. CFN expanded its technology resources by its acquisition of
iExpert, Inc. in October 1999. iExpert is one of the leading providers of
knowledge-based human resource software solutions for large corporations.
CFN's acquisition of iExpert enhances CFN's product offering to corporate
human resources departments and CFN's ability to gain access to large
corporate employee populations.
For a discussion of risks related to CFN, see "Risk Factors--Risks
Related to Our CFN Subsidiary."
Government Regulation of Insurance, Auto Finance and Mortgages
In most states, there are two broad categories of insurance agency
licenses, one for property and casualty insurance and the other for life and
health insurance. CFN's wholly owned subsidiary, CFN Agency, Inc., a Delaware
corporation, is licensed as a resident insurance agency for both property and
casualty insurance and life and health insurance by the state of Georgia. For
property and casualty insurance business, CFN Agency is licensed as a
nonresident corporate insurance agency or at least one employee of CFN Agency
is individually licensed as a nonresident insurance agent in 49 states. For
life and health insurance business, CFN Agency is licensed as a nonresident
corporate insurance agency or at least one CFN employee agent is individually
licensed as a nonresident insurance agent in 49 states.
Because of the lack of uniformity in state insurance agency licensing
laws, a corporate insurance agency cannot obtain an insurance agency license
in all fifty states. Some states do not issue insurance agency
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licenses to corporations but only issue insurance agent licenses to
individuals. Other states issue corporate insurance agency licenses only if the
state of residence of the applicant for a corporate insurance agency license
applicant reciprocates by issuing corporate insurance agency licenses to
insurance agencies resident in the foreign state. In some states where CFN
Agency does not have a nonresident corporate insurance agency license, a CFN
employee agent is individually licensed in those states as a nonresident
insurance agent and the CFN employee agent transacts the business of CFN Agency
where permitted. If any CFN employee agent's employment with CFN is terminated,
CFN Agency may not be able to transact its business unless and until it has
another employee who is individually licensed as a nonresident insurance agent
in the states where CFN Agency does not hold a nonresident corporate insurance
agency license. If a state in which CFN Agency does not hold a nonresident
corporate insurance agency license determines that CFN Agency is transacting
business in such state as an unlicensed insurance agency, CFN Agency could be
subject to fines and prohibited from engaging in its insurance agency business
in that state.
Some states regulate prepaid legal plan companies as an insurance company
or their products as specialized legal expense products, while other states
regulate prepaid insurance plans as non-insurance services. In states that
regulate prepaid legal plan companies as insurance companies, the product is
usually classified as casualty insurance. Certain states' bar associations
require prepaid legal plans to file periodic information statements. CFN does
not believe it is subject to such requirements.
It is not guaranteed that a state in which CFN Agency does not hold a
nonresident corporate insurance agency license will not assert that CFN Agency
is transacting business in such state as an unlicensed insurance agency.
Generally, commissions payable for the sale of insurance products in a given
state cannot be paid to, or received by, a person or entity that is not
licensed as an insurance agent or agency in such state, as applicable. There is
no guarantee that a state in which CFN Agency does not hold a nonresident
corporate insurance agency license will not assert that commissions assigned by
the CFN employee agent to CFN Agency are an assignment of insurance commissions
occurring in such state to an unlicensed corporate insurance agency. In the
states in which CFN Agency does not hold a nonresident corporate insurance
agency license, the insurance companies that have contracted with CFN Agency
pay commissions to the CFN employee agent, who then assigns such commissions to
CFN Agency. If a state in which CFN Agency does not hold a nonresident
corporate insurance agency license determines that CFN Agency is wrongfully
receiving an assignment of insurance commissions in, or with respect to
insurance policies sold in, that state as an unlicensed insurance agency, both
CFN Agency and the subject CFN employee agent could be subject to fines and
prohibited from doing business in that state.
CFN Agency operates a telephone call center located in Duluth, Georgia.
Some of the CFN employee agents work in this telephone call center. These call
center agents provide information and education to consumers who are employees
of client companies or members of client affinity groups and the general public
regarding the insurance products described on YouDecide.com. Some of the call
center agents are also licensed in states other than Georgia as nonresident
insurance agents; however, each call center agent is not licensed as an
insurance agent in all 50 states. There is no guarantee that a state in which a
call center agent is not licensed as a nonresident insurance agent will not
assert that such call center agent is, by providing information and education
to consumers resident in such state about insurance products on YouDecide.com,
transacting insurance agent activities without being licensed by such state as
a nonresident insurance agent. If a state in which a call center agent does not
hold a nonresident insurance agent license determines that a call center agent
has transacted the business of an insurance agent in that state, both CFN
Agency and such call center agent could be subject to fines and prohibited from
doing insurance business in that state.
CFN operates its residential mortgage and auto finance business through
its wholly owned subsidiary, CFN Finance, Inc., a Delaware corporation. There
are numerous federal and state statutes and regulations affecting these
activities including licensing requirements and laws that prohibit
discrimination, unfair and deceptive trade practices, and require disclosure of
basic information to consumers concerning credit terms and settlement costs,
limit fees and charges paid by consumers and lenders, and otherwise regulate
terms and conditions of credit and the procedures by which credit is offered
and administered and that impose fiduciary
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duties on a person acting as a broker. CFN Finance is in the process of
applying, where necessary, for broker licenses to permit it to operate its
residential mortgage finance and, where required, its auto finance programs.
There is the possibility that some states may not grant such a license to CFN
Finance. Until these licenses are granted, CFN Finance has entered into a
licensing agreement with a Federal savings and loan association to operate CFN
Finance's residential mortgage finance program and auto finance program in
those states which require licenses. CFN Finance's residential mortgage and
auto finance programs are being offered in states where no licenses are
required. Federal law governing federal savings banks preempts the ability of
states to require that a Federal savings bank be licensed under state law in
order to conduct a finance broker business. There is no guarantee that the
residential mortgage program and auto finance program licensing agreement will
be renewed upon its expiration date of December 31, 1999, or that such
agreement will not be terminated sooner and that CFN Finance will have acquired
the appropriate license or that CFN Finance will be able to find another way to
conduct its business in any state that requires a license if the license
agreement terminates in that state. There also is no guarantee that a state
regulatory agency or a consumer will not challenge the operation of the
business under the license agreement. See "Risk Factors--Risks Related to Our
CFN Subsidiary--Government regulation and legal uncertainties related to CFN
could adversely affect our business."
iXL Ventures
As a complement to iXL's core business, iXL assists in the development of
other Internet-related businesses. Through its subsidiary iXL Ventures, iXL
lends its management experience to early stage and developing Internet-related
businesses. iXL Ventures relationships frequently include many of the following
facets:
. executive-level introductions of the developing business to other
businesses in the same market;
. advice to the developing business with respect to the development
of its business plan;
. inclusion of the developing business in preferred provider
programs for executive search services; and
. designation by iXL of one member of the developing business' board
of directors.
In return for its assistance, iXL receives a minority equity interest in the
developing business. iXL has not recognized any revenue related to these
activities because of the difficulty in valuing such services. In addition,
because of the high degree of uncertainty surrounding these businesses, any
equity interests acquired by iXL in connection with this program to date are
recorded at no value in the Financial Statements.
In some circumstances, these developing businesses are created from
existing non-core iXL business units that are beyond the scope of iXL's
principal business. In such circumstances, iXL seeks strategic investors to
assist in the full development of these projects into viable stand-alone
businesses, while retaining an equity interest in the project. CFN was the
first major stand-alone business to emerge from this process.
Current iXL Ventures companies include:
. Student Advantage, Inc., which maintains a series of commercial
Internet sites for leading colleges and universities;
. Kinzan, Inc., a software and services company that develops,
distributes and hosts Siteman; and
. eCandy.com, Inc., an online retailer of confections.
iXL's policy is to not make cash investments in third party companies or
to guarantee any obligations of third party companies. However, participants in
the iXL Ventures program are often referred to Mercury
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Investors, LLC or NeoCarta Ventures Partners, L.P. as a potential source for
cash investments. Our Chief Executive Officer and certain directors of iXL are
investors in Mercury, which in turn is expected to invest in NeoCarta.
Competition
While the market for strategic Internet services is relatively new, it is
already highly competitive and characterized by an increasing number of
entrants that have introduced or developed products and services similar to
those offered by iXL. We believe that competition will intensify and increase
in the future. Our target market is rapidly evolving and is subject to
continuous technological change. As a result, iXL's competitors may be better
positioned to address these developments or may react more favorably to these
changes, which could have a material adverse effect on iXL's business, results
of operations and financial condition. iXL competes on the basis of a number of
factors, including the attractiveness of the strategic Internet services
offered, the breadth and quality of these services, creative design,
engineering expertise, pricing, technological innovation, and understanding
clients' strategies and needs. Many of these factors are beyond our control.
Existing or future competitors may develop or offer strategic Internet services
that provide significant technological, creative, performance, price or other
advantages over the services offered by us.
iXL's competitors can be divided into several groups:
. strategic Internet services providers;
. large information technology consulting services providers;
. computer hardware and service vendors;
. strategic consulting firms; and
. interactive advertising agencies.
Although most of these types of competitors to date have not offered a
full range of Internet professional services, several have announced their
intention to do so. These competitors at any time could elect to focus their
resources in iXL's target markets, which could adversely affect our business,
results of operations and financial condition. Many of iXL's current and
potential competitors have longer operating histories, larger installed
customer bases, longer relationships with clients and significantly greater
financial, technical, marketing and public relations resources than iXL.
Competitors that have established relationships with large companies but
limited expertise in providing Internet solutions may nonetheless be able to
successfully use their client relationships to enter iXL's target market or
prevent iXL's penetration into their client accounts. We believe that our
primary competitors currently are International Business Machines Corporation,
Proxicom, Inc., Sapient Corporation, Scient Corp., USWeb Corporation, Viant
Corp. and smaller professional Internet services firms.
Additionally, in pursuing acquisition opportunities we may compete with
other companies with similar growth strategies, certain of which competitors
may be larger and have greater financial and other resources than we have.
Competition for these acquisition targets likely could also result in increased
prices of acquisition targets and a diminished pool of companies available for
acquisition.
There are relatively low barriers to entry into the strategic Internet
services industry. iXL has no patented or other proprietary technology that
would preclude or inhibit competitors from entering the Internet professional
services market. Therefore, iXL must rely on the skill of its personnel and the
quality of its client service. The costs to develop and provide Internet
services are low. Therefore, iXL expects that it will continually face
additional competition from new entrants into the market in the future, and iXL
is subject to the risk that its employees may leave iXL and start competing
businesses. The emergence of these enterprises could have a material adverse
effect on our business, results of operations and financial condition. See
"Risk Factors--Risks Related to the Strategic Internet Services Industry--We
operate in a highly competitive market with low barriers to entry which could
limit our market share and harm our financial performance."
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The success of CFN will be highly dependent upon CFN's services becoming
available to a large number of consumers. CFN expects to face competition from
an increasing number of sources in the marketplace. CFN competes with other
Internet-based providers of insurance and other financial services, as well as
traditional insurance companies providing group rates to corporate employees.
CFN believes that its primary and more direct competitors currently are Answer
Financial, Rewards Plus, Quicken, Insuremarket, Quicken Mortgage, InsWeb, E-
Loan, iOwn, CarFinance.com, People First and Giggo.com. CFN also may compete
with Microsoft Corporation, which currently provides comparative quotes from
home mortgages on the web. If CFN fails to compete successfully against current
or future competitors, CFN's business results of operations and financial
conditions will be materially and adversely affected. See "Risk Factors--Risks
Related to Our CFN Subsidiary--CFN's numerous established competitors could
harm its prospects".
Employees
As of September 30, 1999, iXL had approximately 1,900 employees,
including approximately 170 strategy consultants, 410 engineers and 270
creative designers. None of iXL's employees is represented by a labor union.
iXL has experienced no work stoppages and believes its relationship with its
employees is good.
In an ongoing effort to train and develop its professionals, iXL has
established iXL University, a forum to educate its employees on issues ranging
from new technologies to office protocol. Employees may attend iXL University
by attending live presentations in Atlanta, by viewing the live webcast of such
presentations, or by viewing at any time archived versions of presentations
through the iXL University web site. In addition, iXL holds regular company-
wide meetings among leaders in specific practice areas. iXL also takes
advantage of its corporate intranet to foster company-wide communications and
knowledge management. See "Risk Factors--Risks Related to iXL's Business--If we
fail to attract and retain employees our growth could be limited and our costs
could increase."
Properties and Facilities
iXL's executive offices are located in Atlanta, consisting of
approximately 138,000 square feet of leased space, the lease for which expires
in 2007. iXL is currently negotiating a lease for its new headquarters in
Atlanta which would contain approximately 300,000 square feet. With the
exception of IXL-Memphis, Inc., which owns an approximately 15,000 square foot
office building and an approximately 5,600 square foot warehouse, iXL leases
space for its regional offices in the following metropolitan areas: New York,
NY; Los Angeles, San Francisco, San Diego, and Santa Clara, CA; Chicago, IL;
Boston, MA; Washington, D.C.; Charlotte and Raleigh, NC; Richmond, VA; Denver,
CO; Norwalk, CT; Hamburg and Berlin, Germany; London, England; and Madrid,
Spain. CFN leases space for its executive offices in Atlanta, Georgia and its
operations offices in Duluth, Georgia.
Legal Proceedings
iXL currently and from time to time is involved in litigation incidental
to the conduct of its business. iXL is not a party to any lawsuit or proceeding
that, in the opinion of management of iXL, is likely to have a material adverse
effect on iXL.
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MANAGEMENT
Executive Officers and Directors
Certain information regarding the executive officers and directors of iXL
as of September 30, 1999 is set forth below:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
U. Bertram Ellis, Jr.(1) 46 Chief Executive Officer and Chairman of the
Board of Directors
Kevin M. Wall(2) 46 Vice Chairman and Director
James R. Rocco 45 Vice Chairman
William C. Nussey 33 Chief Executive Officer and President of iXL,
Inc. and Director
C. Cathleen Raffaeli 42 President and Chief Operating Officer of CFN
Barry T. Sikes 46 Chief Operating Officer of iXL, Inc.
M. Wayne Boylston 41 Executive Vice President, Chief Financial
Officer, Treasurer, and Assistant Secretary
David E. Clauson 44 Executive Vice President for Worldwide
Marketing of iXL, Inc.
Vincent M. Copeland 40 Executive Vice President for Worldwide Client
Development of iXL, Inc.
Thomas R. Wall, IV(3) 40 Director
Frank K. Bynum, Jr.(1)(3)(4) 36 Director
Jerome D. Colonna 36 Director
Thomas G. Rosencrants(4) 50 Director
Jeffrey T. Arnold 29 Director
Gary C. Wendt 57 Director
Jeffrey C. Walker(1)(3) 44 Director
</TABLE>
- --------
(1) Member of the Executive Committee.
(2) Mr. Wall has indicated to iXL his intention to resign as an officer and
director of iXL on or about January 1, 2000 to pursue other ventures.
(3) Member of the Compensation Committee.
(4) Member of the Audit Committee.
U. Bertram (Bert) Ellis, Jr. founded iXL in March 1996 and has served as
Chairman of the Board of Directors and Chief Executive Officer since that time.
Prior to founding iXL, Mr. Ellis founded Ellis Communications, Inc., an owner
of television and radio stations, in 1993, and served as its President from
1993 to 1996. Prior to founding Ellis Communications, Inc., Mr. Ellis served as
President, Chief Executive Officer, and Chief Operating Officer of Act III
Broadcasting, Inc., an owner of television stations, from 1986 to 1992. Mr.
Ellis received a Bachelor of Arts degree in Economics from the University of
Virginia and an MBA from the University of Virginia Graduate School of Business
Administration. Mr. Ellis also serves as a Director of WebMD, Inc.
Kevin M. Wall has served as Vice Chairman since April 1998 and, as a
director since May 1997. Mr. Wall joined iXL in May 1997 upon the acquisition
by iXL of BoxTop Interactive, Inc., and served as the President and Chief
Executive Officer of BoxTop Interactive, Inc. from its founding in 1995 until
1998. Prior to founding BoxTop Interactive, Inc., Mr. Wall served as Chairman
of BoxTop Entertainment, Inc., a television production company specializing in
network specials, from 1990 until 1995. Prior to forming BoxTop Entertainment,
Inc., Mr. Wall founded Radio Vision International, Inc., a television
production company specializing in network specials and syndication of
television specials, and served as its Chairman from its founding until 1990.
Mr. Wall attended Indiana University-Purdue University Fort Wayne. Mr. Kevin
Wall is not related to Mr. Thomas R. Wall, IV.
James R. Rocco has served as Vice Chairman since August 1998. Mr. Rocco
previously served as a director from April 1996 to February 1999 and as the
President and Chief Operating Officer from April 1996 until August 1998. Mr.
Rocco founded Creative Video, Inc. and served as its President from July 1986
until it
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was acquired by iXL in April 1996. Mr. Rocco graduated cum laude from St.
John's University in New York in 1976 with Bachelor degrees in Communications
and Business.
William C. Nussey has served as a Director of iXL since December 1997, as
Chief Executive Officer of iXL, Inc. since July 1999, and as the President of
iXL, Inc. since joining iXL in May 1998. Mr. Nussey also previously served as
Chief Operating Officer of iXL, Inc. since joining iXL in May 1998 until July
1999. From 1996 to May 1998 Mr. Nussey served as an associate with Greylock
Ventures, a private investment firm. From 1994 to 1996, Mr. Nussey attended
Harvard Business School. In 1985, Mr. Nussey co-founded Da Vinci Systems, Inc.,
a software and application design company, and served as its Chief Executive
Officer from its founding until its sale in 1994 to ON Technology, Inc. After
its sale, Mr. Nussey served as a consultant to ON Technology while attending
Harvard Business School. Mr. Nussey received a Bachelor of Science degree in
Electrical Engineering from North Carolina State University and an MBA from
Harvard Business School.
C. Cathleen Raffaeli is the President and Chief Operating Officer of CFN,
and has served in such capacity since joining CFN in November 1998. From 1994
through 1998, Ms. Raffaeli held positions of increasing responsibility with
Citicorp, most recently as the Executive Director, Commercial Card Division.
From 1988 through 1994, Ms. Raffaeli held positions of increasing
responsibility with Chemical Bank, last serving as the Senior Vice President,
Mortgage Banking Division. Ms. Raffaeli received a Bachelor of Science degree
in Finance from the University of Baltimore and an MBA from New York
University.
Barry T. Sikes has served as Chief Operating Officer of iXL, Inc. since
June 1999 and as Executive Vice President for Worldwide Operations since August
1998. Mr. Sikes previously served as Vice President--Operations from April 1996
until August 1998. From 1991 until 1996, Mr. Sikes served as the Chief
Operating Officer of Creative Video, Inc. Mr. Sikes received a degree in
Electronics Engineering from The Cape Fear Institute.
M. Wayne Boylston has served as Chief Financial Officer, Executive Vice
President, Treasurer and Assistant Secretary since joining iXL in August 1998.
From 1990 to 1995, Mr. Boylston served as Vice President and Corporate
Controller of Healthdyne, Inc. and from 1995 until February 1998, Mr. Boylston
served as Vice President--Finance, Chief Financial Officer and Treasurer of
Healthdyne Technologies, Inc. From February 1998 until July 1998 Mr. Boylston
served as a consultant to Healthdyne Technologies, Inc. following its merger
with Respironics, Inc. Mr. Boylston is a Certified Public Accountant and has a
Bachelor of Business Administration degree from Emory University.
David E. Clauson has served as Executive Vice President for Worldwide
Marketing of iXL, Inc. since joining iXL in August 1998. From 1991 until July
1998, Mr. Clauson served in various positions of increasing responsibility with
subsidiaries of True North Communications, Inc., most recently as the Senior
Vice President/Worldwide Account Director of its Foote, Cone & Belding
subsidiary. Mr. Clauson has a Bachelor of Arts degree in American Urban History
from the University of California at Los Angeles.
Vincent M. Copeland has served as the Executive Vice President for
Worldwide Client Development of iXL, Inc. since July 1999. From 1984 to 1999,
Mr. Copeland served in positions of increasing responsibility with Gartner
Group, Inc. Most recently, from 1997 to 1999 Mr. Copeland served as Senior Vice
President for North American Sales for Gartner Group and from 1994 to 1997
managed Gartner Group's Asia Pacific and Latin American Operations. Mr.
Copeland received a Bachelor of Arts degree in economics from Tufts University.
Thomas R. Wall, IV has served as a Director of iXL since April 1996. Mr.
Wall has held various positions of increasing responsibility with Kelso &
Company, a private investment firm, since 1983, and currently serves as one of
its Managing Directors. Mr. Wall also serves as a director of AMF Bowling,
Inc., Consolidated Vision Group, Inc., Cygnus Publishing, Inc., Mitchell
Supreme Fuel Company, Mosler, Inc.,
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Peebles Inc., and 21st Century Newspapers, Inc. Mr. Wall received a Bachelor of
Science degree in Business Administration from Washington & Lee University. Mr.
Thomas Wall is not related to Mr. Kevin M. Wall.
Frank K. Bynum, Jr. has served as a Director of iXL since April 1996. Mr.
Bynum has held various positions of increasing responsibility with Kelso &
Company since 1987, and currently serves as one of its Managing Directors. Mr.
Bynum also serves as a director of CDT Holdings, plc, Cygnus Publishing, Inc.,
Hosiery Corporation of America, Inc., 21st Century Newspapers, Inc. and MJD
Communications, Inc. Mr. Bynum received a Bachelor of Arts degree in History
from the University of Virginia.
Jerome D. Colonna has served as a Director of iXL since December 1997.
Mr. Colonna co-founded Flatiron Partners, LLC in August 1996 and has served as
a partner in Flatiron since its founding. Previously, Mr. Colonna co-founded
CMG @ Ventures L.P. in February 1995 and served as a partner until July 1996.
From 1985 to 1995, Mr. Colonna served in various positions with CMP Media,
Inc., including Editorial Director, Interactive Media Group. From 1985 to 1993,
he served in a variety of roles at Information Week, including that of Editor.
Mr. Colonna received a Bachelor of Arts degree from Queens College, City
University of New York. Mr. Colonna serves as a Director of GeoCities, Inc.
Thomas G. Rosencrants has served as a Director of iXL since January 1999.
Mr. Rosencrants founded Greystone Capital Group, LLC in April 1997 and serves
as its Chairman and Chief Executive Officer. Greystone Capital Group, LLC is
the General Partner for Greystone Capital Partners I, L.P. From 1991 to April
1997 he served as Senior Vice President and head of the Insurance Research
Group of The Robinson-Humphrey Company, Inc. Mr. Rosecrants is also a director
of CompuCredit Corporation and several private companies. Mr. Rosencrants is a
Chartered Financial Analyst, has an MBA from the Roosevelt University in
Chicago and a Bachelor of Arts degree from the University of Dayton.
Jeffrey T. Arnold has served as a Director since February 1999. Mr.
Arnold founded and has served as Chairman of the Board and Chief Executive
Officer of WebMD, Inc. since its inception in October 1996. In addition, Mr.
Arnold served as the President of WebMD, Inc. from its inception until
September 1997. From April 1994 until Endeavor Technologies, Inc.'s merger with
WebMD, Inc. in March 1997, Mr. Arnold served in various capacities at Endeavor
Technologies, Inc., including as Chairman and Chief Executive Officer.
Mr. Arnold received a Bachelor of Arts degree from the University of Georgia.
Gary C. Wendt has served as a director since June 1999. From 1986 to
1998, Mr. Wendt served as Chairman, Chief Executive Officer and President of
General Electric Capital Services, Inc. and served as a consultant through July
1, 1999. Currently, Mr. Wendt is involved in investments. Mr. Wendt is a
director of Sanchez Computer Associates. Mr. Wendt received a Bachelor of
Science degree from the University of Wisconsin and an MBA from Harvard
Business School.
Jeffrey C. Walker has served as a director since July 1999. Mr. Walker
has been Managing Partner of Chase Capital Partners, the private equity
investment arm of The Chase Manhattan Corporation, since 1988, and a General
Partner thereof since 1984. Mr. Walker is a director of 1-800 Flowers, Guitar
Center, House of Blues, Doane Pet Care Products, Metakote and other private
companies. Mr. Walker received a Bachelor of Science degree from the University
of Virginia and an MBA from the Harvard Business School.
iXL believes retention of its management is critical to its success. See
"Risk Factors--Risks Related to iXL's Business--We depend on our key management
personnel for our future success" and "Risk Factors--Risks Related to iXL's
Business--If we fail to attract and retain employees our growth could be
limited and our costs could increase."
Board Committees
The Board of Directors has established an Executive Committee, a
Compensation Committee and an Audit Committee. The Executive Committee,
consisting of Mr. Ellis, Mr. Bynum, and Mr. Walker, is empowered to exercise
all powers and authority of the Board as determined by the Board in the
authorizing
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resolution. The Compensation Committee, consisting of Mr. Thomas R. Wall, IV,
Mr. Bynum, and Mr. Walker, administers iXL's stock option plans, including
approval of all options granted. The Audit Committee, consisting of Mr. Bynum
and Mr. Rosencrants, recommends the selection of independent public accountants
to the Board of Directors, reviews the scope and results of the audit and other
services provided by iXL's independent accountants, and reviews iXL's
accounting practices and its systems of internal accounting controls.
Director Compensation
iXL reimburses its directors for all out-of-pocket expenses incurred in
the performance of their duties as directors of iXL. iXL currently does not pay
fees to its directors for attendance at meetings.
Amended Stockholders Agreement
The Third Amended Stockholders Agreement entitles certain stockholders to
designate nominees to iXL's board of directors as follows. The Third Amended
Stockholders Agreement entitles Kelso Investment Associates V, L.P. and Kelso
Equity Partners V, L.P. to jointly designate two individuals to be included as
nominees on the board of directors' slate of nominees so long as Kelso
Investment Associates V, L.P. and Kelso Equity Partners V, L.P. together hold
at least 5% of our outstanding common stock. CB Capital Investors, L.P. has the
right to designate as a nominee one member so long as it owns at least 5% of
our outstanding common stock. The Third Amended Stockholders Agreement does not
obligate any stockholder to vote its common stock in favor of any nominated
directors.
Compensation Committee Interlocks and Insider Participation
No member of iXL's Compensation Committee serves as a member of the board
of directors or compensation committee of any entity that has one or more
executive officers serving as a member of iXL's Board of Directors or
Compensation Committee. See "Certain Transactions" for a description of
transactions between iXL and entities affiliated with members of the
Compensation Committee.
Employment Agreements
iXL has assumed the employment agreement originally executed as of August
1, 1996 between Mr. Kevin Wall and BoxTop Interactive, Inc. Mr. Kevin Wall's
employment agreement was assumed by iXL in April 1998. This agreement has a
four-year term expiring July 31, 2000. Under this agreement, Mr. Kevin Wall's
base annual salary was $302,500 for the one-year period from August 1, 1998
through July 31, 1999, and is $332,750 for the one-year period from August 1,
1999 through July 31, 2000. Under this agreement, Mr. Kevin Wall is entitled to
an automobile allowance of $1,000 per month and has received grants of options
to purchase 635,900 shares of common stock.
iXL, Inc. has entered into an employment agreement with Mr. Nussey.
Pursuant to this employment agreement, if iXL, Inc. terminates Mr. Nussey's
employment without cause at any time or if Mr. Nussey resigns for good cause,
(i) iXL, Inc. shall, for a period of eighteen months after such termination or
resignation or earlier if Mr. Nussey begins employment with any other company,
continue to pay his salary and bonus as severance pay and continue to provide
benefits to him, and (ii) the vesting of unvested stock options granted to Mr.
Nussey pursuant to his employment agreement shall be immediately accelerated by
twelve months, and all options which remain unvested after such acceleration
shall terminate. Upon a termination of his employment by virtue of his death,
Mr. Nussey's estate shall be entitled to all salary payable to him for the
remainder of the year of his death. In addition, upon a termination of
Mr. Nussey's employment by virtue of his death or disability, Mr. Nussey or his
estate shall be entitled to the pro rata portion of his bonus with respect to
the portion of the year prior to his death or disability. The base salary for
Mr. Nussey pursuant to his employment agreement is $250,000 per year, and the
target bonus is $50,000 per year. The base salary and target bonus are
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to be reviewed annually, and may be increased from time to time by iXL, Inc.
Once increased, the base salary may not be decreased and the target bonus may
not be set at less than $50,000 per full fiscal year. The employment agreement
also provides that Mr. Nussey shall not compete with iXL, Inc. for a period of
one year following the termination of his employment.
Limitation on Liability and Indemnification Matters
Section 145 of the Delaware General Corporation Law permits the
indemnification of directors, officers, employees and agents of Delaware
corporations. iXL's Certificate of Incorporation and By-Laws provide that iXL
shall indemnify its directors and officers to the fullest extent permitted by
the Delaware General Corporation Law. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers or persons controlling iXL pursuant to the foregoing
provisions, the opinion of the Securities and Exchange Commission is that such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
As permitted by the Delaware General Corporation Law, iXL's Certificate
of Incorporation also limits the liability of directors of iXL for damages in
derivative and third party lawsuits for breach of a director's fiduciary duty
except for liability:
. for any breach of the director's duty of loyalty to iXL or its
stockholders;
. for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
. for unlawful payments of dividends or unlawful stock purchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law; or
. for any transaction for which the director derived improper
personal benefit.
The limitation of liability applies only to monetary damages and,
presumably, would not affect the availability of equitable remedies such as
injunction or rescission. The limitation of liability applies only to the acts
of omission of directors as directors and does not apply to any such act or
omission as an officer of iXL or to any liabilities imposed under federal
securities laws.
The purchase agreements between iXL and the underwriters with respect to
the offering made hereby provide for indemnification by the underwriters and
their controlling persons, on the one hand, and of iXL and its controlling
persons on the other hand, for certain liabilities arising under the Securities
Act of 1933 and the Securities Exchange Act of 1934 or otherwise.
iXL has obtained directors' and officers' insurance providing
indemnification for certain of iXL's directors, officers, affiliates, partners
or employees for certain liabilities.
iXL has entered into agreements to indemnify its directors and executive
officers, in addition to indemnification provided for in iXL's Bylaws. These
agreements, among other things, indemnify iXL's directors and executive
officers for certain expenses, including attorneys' fees, judgments, fines and
settlement amounts incurred by any such person in any action or proceeding,
including any action by or in the right of iXL, arising out of such person's
services as a director or executive officer of iXL, any subsidiary of iXL or
any other company or enterprise to which the person provides services at the
request of iXL. iXL believes that these provisions and agreements are necessary
to attract and retain qualified directors and executive officers.
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent of iXL where indemnification is expected
to be required or permitted. iXL is not aware of any threatened litigation or
proceeding that might result in a claim for such indemnification.
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Executive Compensation
The following table sets forth information concerning the compensation
paid by iXL during the fiscal years ended December 31, 1996, 1997 and 1998 to
iXL's Chief Executive Officer and each of iXL's four other highest paid
executive officers in 1998:
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
------------ -------------
Name and Options
Principal Position Year Salary Bonus (# of Shares)
------------------ ---- ------ ----- -------------
<S> <C> <C> <C> <C>
U. Bertram Ellis, Jr...................... 1998 $247,000 $100,000 338,889
Chairman and Chief 1997 232,300 -- 550,000
Executive Officer 1996 -- -- 1,000,000
Kevin M. Wall............................. 1998 276,000 -- --
Vice Chairman 1997 167,800 -- 170,000
1996 -- -- --
James R. Rocco............................ 1998 180,600 50,000 106,056
Vice Chairman 1997 163,900 25,000 297,900
1996 105,600 -- --
William C. Nussey......................... 1998 166,500 50,000 1,844,276
Chief Executive Officer and President 1997 -- -- --
of iXL, Inc. 1996 -- -- --
Barry T. Sikes............................ 1998 163,300 45,000 140,500
Chief Operating Officer 1997 137,700 25,000 165,000
of iXL, Inc. 1996 103,600 -- 255,000
</TABLE>
The above table excludes certain executive officers of iXL whose 1998 annual
base salaries exceed salaries reported in the table, but who were hired during
1998, and consequently during 1998 earned less than the officers reported in
the table above. The 1996 figures are for the eight months ended December 31,
1996. The 1996 annual base salaries for Mr. Ellis, Mr. Rocco, and Mr. Sikes
were $0, $175,000 and $140,000, respectively. The figures listed represent
payment for actual employment during the eight months ended December 31, 1996.
Mr. Nussey's fiscal year 1998 salary is for approximately seven months
endedDecember 31, 1998. Mr. Nussey's annual base salary for fiscal year 1998
was $250,000. Bonuses are determined at the discretion of the Compensation
Committee.
75
<PAGE>
Option Grants and Exercises During Fiscal Year 1998
No stock options were exercised by the Chief Executive Officer or the
four other highest paid executive officers during fiscal year 1998. The
following table below sets forth individual grants of stock options made during
fiscal year 1998 to each of the Chief Executive Officer and the four other
highest paid executive officers:
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual
Rates of Stock
Price Appreciation
Annual Compensation for Option Term
----------------------------- -------------------
Number of
Securities % of Total Options
Underlying Granted to Exercise or
Named Executive Officer Options Employees in Base Price Expiration
and Principal Position Granted Fiscal Year Per Share Date 5% 10%
- ----------------------- ---------- ------------------ ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
U. Bertram Ellis, Jr. .. 50,000 0.4% $3.00 02/26/08 $ 171,707 $ 362,264
Chairman and Chief 88,889 0.6% 3.00 02/26/08 305,257 644,026
Executive Officer 50,000 0.4% 3.50 02/26/08 146,707 337,264
50,000 0.4% 4.00 02/26/08 121,707 312,264
50,000 0.4% 4.50 02/26/08 96,707 287,264
50,000 0.4% 5.00 02/26/08 71,707 262,264
--------- ----
338,889 2.6%
========= ====
Kevin M. Wall .......... -- -- -- -- -- --
Vice Chairman
James R. Rocco ......... 500 * 1.00 02/26/08 2,717 4,623
Vice Chairman 5,556 * 3.00 02/26/08 19,080 40,255
100,000 0.8% 3.50 02/26/08 293,413 674,528
--------- ----
106,056 0.8%
========= ====
William C. Nussey ...... 5,176 * 3.50 05/01/08 24,040 49,010
Chief Executive Officer
and 389,100 2.9% 4.00 05/01/08 1,612,614 3,489,726
President of iXL, Inc. 900,000 6.8% 4.50 05/01/08 3,280,028 7,261,841
550,000 4.1% 10.00 05/01/08 -- 1,632,792
--------- ----
1,844,276 13.8%
========= ====
Barry T. Sikes.......... 500 * 1.00 02/26/08 2,717 4,623
Chief Operating Officer 100,000 .8% 3.50 02/26/08 293,413 674,528
of iXL, Inc. 40,000 .3% 10.00 11/25/08 -- 118,748
--------- ----
140,500 1.1%
========= ====
</TABLE>
The options described in the above table were granted under iXL's 1996 Stock
Option Plan and generally provide for vesting over either four or five years.
The columns headed "Potential Realizable Value at Assumed Annual Rates of Stock
Price Appreciation for Option Term" show the hypothetical gains or option
spreads of options granted based on 5% or 10% assumed annual rates of
compounded stock price appreciation and do not represent iXL's estimates or
projections of iXL's future common stock prices.
76
<PAGE>
Year-End Option Values
The following table sets forth the number and value of exercisable and
unexercisable options held at December 31, 1998 by each of the Chief Executive
Officer and the four other highest paid executive officers:
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
December 31, 1998 December 31, 1998
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
U. Bertram Ellis, Jr. .... 1,330,000 558,889 $6,925,000 $2,225,001
Chairman and Chief
Executive Officer
Kevin Wall ............... 703,900 102,000 4,505,145 510,000
Vice Chairman
James R. Rocco............ 178,740 225,216 683,070 883,632
Vice Chairman
William C. Nussey......... 521,009 1,323,267 1,153,327 2,929,228
Chief Executive Officer
and President
of iXL, Inc.
Barry T. Sikes............ 252,000 308,500 1,203,000 1,205,250
Chief Operating Officer
of iXL, Inc.
</TABLE>
In the above table, the value of unexercised in-the-money options at
December 31, 1998 are calculated by determining the difference between the
deemed fair market value of the securities on December 31, 1998 underlying the
options and the exercise price. The fair market value of the securities as of
December 31, 1998 was based on preliminary valuations of iXL performed by
independent appraisers at the request of iXL. Information for Mr. Kevin Wall
includes 635,900 options granted to him prior to the acquisition of BoxTop
Interactive, Inc. at an exercise price of $0.95 per share.
Stock Option Plans
1996 Stock Option Plan
General. iXL's 1996 Stock Option Plan was established to promote the
success of iXL by providing an additional means to attract and retain key
personnel through added long-term incentives for high levels of performance and
for significant efforts to improve the financial performance of iXL. The 1996
Stock Option Plan authorizes the granting of options for up to an aggregate
maximum of 25 million shares of iXL's common stock to employees of iXL. As
options lapse or terminate without exercise, any unpurchased shares previously
subject to such lapsed or terminated options may be available for further
options under the 1996 Stock Option Plan.
Administration. The 1996 Stock Option Plan is administered by the
Compensation Committee, which as of the date of this prospectus is comprised of
Mr. Thomas R. Wall, Mr. Bynum and Mr. Walker. The Compensation Committee may
delegate administrative functions to individuals who are officers or employees
of iXL.
77
<PAGE>
The Compensation Committee has the authority to construe and interpret
the 1996 Stock Option Plan and any agreements defining the rights and
obligations of iXL and eligible employees who receive options awards under the
1996 Stock Option Plan, to further define the terms used in the 1996 Stock
Option Plan, to prescribe, amend and rescind rules and regulations relating to
administration of the 1996 Stock Option Plan, to determine the duration and
purposes of leaves of absence which may be granted to Participants without
constituting a termination of their employment for purposes of the 1996 Stock
Option Plan and to make all other determinations necessary or advisable for the
administration of the 1996 Stock Option Plan. Determinations of the
Compensation Committee on the foregoing matters are conclusive.
Grant of Options. Awards of options to purchase common stock under the
1996 Stock Option Plan may be granted only to employees of iXL Enterprises,
Inc. and its subsidiaries. Members of the Board of Directors who are not iXL
employees are not eligible to receive awards. Options may be granted to
employees by action of the Compensation Committee. The Compensation Committee
determines the terms of each option and the number of shares of common stock
subject to each option. The terms of each option need not be identical. Each
option is subject to the terms and conditions set forth in the 1996 Stock
Option Plan and such other terms and conditions established by the Compensation
Committee as are not inconsistent with the purpose and provisions of the 1996
Stock Option Plan. Each option granted is designated as either a nonqualified
stock option or an incentive stock option.
iXL expects that most options granted pursuant to the 1996 Stock Option
Plan will be subject to vesting over a period of years, such as 20% increments
each year over a period of five years, during which the optionholder must
continue to be an employee of iXL or one of its subsidiaries. The Compensation
Committee, however, may choose to impose different vesting requirements or none
at all. An optionholder has no rights as a stockholder with respect to any
shares covered by his or her option until the date a stock certificate is
issued for such shares following his or her exercise of such option.
Exercise of Options. Except as otherwise provided in the 1996 Stock
Option Plan, an option may be exercised, in whole or in part, on the date or
dates specified in the Award Agreement executed by and between iXL and an
eligible employee and thereafter shall remain exercisable until the expiration
or earlier termination of the option. Not less than 10 shares of common stock
may be purchased at one time unless the number purchased is the total number at
the time available for purchase under the terms of the option. No option
granted pursuant to the 1996 Stock Option Plan is transferable by an
optionholder other than by will or by the applicable laws of descent and
distribution, and such option is exercisable during the eligible employee's
lifetime only by the eligible employee.
1998 Non-Employee Stock Option Plan
iXL's 1998 Non-Employee Stock Option Plan contains essentially the same
terms as the 1996 Stock Option Plan, except that the 1998 Non-Employee Stock
Option Plan was established for grants to persons who are not employees of the
Company. Persons who may receive grants under the 1998 Non-Employee Stock
Option Plan include outside consultants and members of the Board of Directors
who are not employees of iXL and other non-employees who the Compensation
Committee determines have provided services to iXL. The 1998 Non-Employee Stock
Option Plan authorizes the granting of options for up to an aggregate maximum
of 1 million shares of iXL's common stock.
1999 Employee Stock Option Plan
The Board of Directors has adopted and the stockholders of iXL have
approved the 1999 iXL Enterprises, Inc. Stock Option Plan. The 1999 Stock
Option Plan provides for the grant of stock options, including incentive stock
options.
78
<PAGE>
Grant of Options. Stock options may be granted to key employees,
including executive officers of iXL, its subsidiaries and affiliates as
determined by the Compensation Committee. The number of employees participating
in the 1999 Stock Option Plan will vary from year to year. The shares to be
granted with respect to options under the 1999 Stock Option Plan shall be
shares of common stock, which may consist, in whole or in part, of treasury
stock or authorized but unissued stock not reserved for any other purpose and
may not exceed 5 million shares, as such number may be adjusted to reflect
changes in iXL's capitalization.
If shares subject to an option under the 1999 Stock Option Plan cease to
be subject to the option, such shares will again be available for future grant
under the 1999 Stock Option Plan. In the event of certain changes in iXL's
capital structure affecting the common stock, the Compensation Committee may
make appropriate adjustments in the number and kinds of shares that may be
awarded and in the number and kinds of shares covered by options then
outstanding under the 1999 Stock Option Plan, and, where applicable, exercise
price of outstanding options under the 1999 Stock Option Plan. The 1999 Stock
Option Plan will be administered by the Compensation Committee.
The Compensation Committee may grant options to purchase shares of common
stock that are either "qualified," which includes those awards that satisfy the
requirements of Section 422 of the Internal Revenue Code for incentive stock
options, or "nonqualified," which includes those awards that are not intended
to satisfy the requirements of Section 422 of the Internal Revenue Code. Under
the terms of the 1999 Stock Option Plan, the exercise price of the options
will, unless the Compensation Committee determines otherwise, not be less than
such common stock's fair market value at the time of grant. The exercise price
of the options is payable in cash or its equivalent or by exchanging shares of
common stock owned by the participant, through an arrangement with a broker
approved by iXL where payment of the exercise price is accomplished with the
proceeds of the sale of common stock, or by a combination of the foregoing.
Exercise of Options. The options will generally have a term of ten years,
unless the Compensation Committee specifies a shorter term, and will become
exercisable following the performance of a minimum period of service or the
satisfaction of performance goals, as determined by the Compensation Committee.
If an option holder ceases employment with iXL as a result of the holder's
death, disability or retirement, the holder, or his or her beneficiary or legal
representative, may exercise any then exercisable option for a period of one
year, or a greater or lesser period as determined by the Compensation Committee
at grant, but in no event after the date the option otherwise expires. If an
option holder's employment is terminated for any other reason, the holder may
exercise any then exercisable option for a period of 30 days, or such greater
period not exceeding 90 days as determined by the Compensation Committee, but
in no event after the date the option otherwise expires; provided that if the
holder's employment is terminated for cause all of his or her options will
immediately terminate, regardless of whether then exercisable.
If there is a "change in control," all options that are not then vested
will become vested unless the options are either assumed or substituted for
equivalent options by the new controlling entity following the change in
control.
1999B Employee Stock Option Plan
The Board of Directors has adopted the 1999B iXL Enterprises, Inc. Stock
Option Plan. This plan will be presented to iXL's stockholders for ratification
at the next annual stockholder meeting. This plan is identical to the 1999
Stock Option Plan, except that directors, executive officers and certain other
officers will not be eligible for grants of options thereunder until such plan
is ratified by the stockholders. If this plan is not ratified by the
stockholders, grants under this plan will not be eligible to be incentive stock
options. Options to purchase no more than 10 million shares of common stock may
be granted under this plan.
79
<PAGE>
CERTAIN TRANSACTIONS
iXL Equity Investments
The following table sets forth the purchases of iXL's capital stock by
iXL's executive officers, directors, five percent stockholders and their
respective affiliates and certain related parties since January 1, 1998:
<TABLE>
<CAPTION>
Aggregate
Date of Purchase
Purchaser Transaction Securities Purchased Price
--------- ----------- -------------------- ---------
<S> <C> <C> <C>
CB Capital Investors, August 14, 1998 9,000 shares of Class D Nonvoting $9,000,000
L.P.
Preferred Stock
General Electric Capital August 31, 1998 2,500 shares of Class D Nonvoting 2,500,000
Corporation Preferred Stock
General Electric Capital January 15, 1999 5,000 shares of Class A Convertible 5,000,000
Assurance Company Preferred Stock
GE Capital Equity June 8, 1999 1,500,000 shares of common stock 18,000,000
Investments, Inc.
General Electric Pension
Trust June 8, 1999 500,000 shares of common stock 6,000,000
Greystone Capital January 15, 1999 10,000 shares of Class A Convertible 10,000,000
Partners I,
L.P. (affiliate of Preferred Stock
Thomas G.
Rosencrants, director of
iXL)
Kelso Equity Partners V, August 14, 1998 1,000 shares of Class D Nonvoting 1,000,000
L.P.
(affiliate of Kelso Preferred Stock
Investment
Associates V, L.P.)
Kelso Investment August 14, 1998 9,000 shares of Class D Nonvoting 9,000,000
Associates V,
L.P. Preferred Stock
David E. Clauson September 18, 1998 1,000 shares of Class A Convertible 1,000,000
Preferred Stock
U. Bertram Ellis, Jr. August 28, 1998 1,000 shares of Class D Nonvoting 1,000,000
Preferred Stock
William C. Nussey August 25, 1998 100 shares of Class A Convertible 100,000
Preferred Stock
John Rocco (brother of February 20, 1998 615 shares of Class A Convertible 199,875
James R.
Rocco) Preferred Stock
</TABLE>
In connection with each of the issuances described above, the purchasers
listed above were required to execute iXL's stockholders' agreement and
registration rights agreement. Each issuance described above was valued based
on iXL's estimate of its fair market value at the time of each issuance. In the
case of the sales of common stock to GE Capital Equity Investments, Inc. and
General Electric Pension Fund, the purchase occurred simultaneous with the
closing of iXL's initial public offering at a purchase price equal to the
initial public offering price of $12.00 per share. The business purpose of each
issuance was to raise working capital, except for the issuance to Mr. Clauson,
which was made as a condition to his employment with iXL. As payment of a
portion of the purchase price for his shares, Mr. Clauson executed in favor of
iXL a promissory note in the original principal amount of $900,000. This note
is a non-recourse note secured by a pledge of the 1,000 shares of Class A
Convertible Preferred Stock held by Mr. Clauson. This note accrues simple
interest at a
80
<PAGE>
rate of 5.48% per annum, and matures on the earlier of September 18, 2001 or
the date on which Mr. Clauson transfers any of the 1,000 shares of Class A
Convertible Preferred Stock held by him.
Each of the issuances described above, other than the issuance to Mr.
Clauson, was made contemporaneous with, and on identical terms as, issuances to
unaffiliated persons. The issuance to Mr. Clauson was also made at about the
same time and on identical terms as issuances made to unaffiliated persons,
with the sole exception that Mr. Clauson, as a condition of the initiation of
his employment, was permitted to pay a portion of the purchase price through
execution of the promissory note described above. This 5.48% interest rate of
the promissory note was determined with reference to the standard federal rate
in effect at the time of the execution of the note.
In connection with iXL's initial public offering, certain executive
officers and directors of iXL purchased shares of iXL's common stock in such
offering through iXL's directed share program. Certain of these purchases
exceeded $60,000. All such purchases were made at the initial public offering
price of $12.00 per share.
CFN Equity Investments
On November 3, 1998, General Electric Capital Corporation purchased
13,333,334 shares of CFN's Series A Convertible Preferred Stock for an
aggregate purchase price of $10,000,000. In connection with this issuance, CFN,
iXL, and General Electric Capital Corporation executed a Stockholders Agreement
and a Registration Rights Agreement with respect to CFN capital stock. This
issuance was valued based on CFN's estimate of its fair market value at the
time of such issuance. The business purpose of this issuance was to raise
working capital for CFN and to establish a relationship between General
Electric Capital Corporation and CFN. iXL believes that this issuance was
negotiated at arm's length and was made on terms no less favorable to iXL and
CFN than could have been obtained from unaffiliated third parties. At the time
of this transaction, General Electric beneficially owned less than 5% of the
outstanding common stock of iXL, on an as-converted basis.
On June 8, 1999, GE Capital Equity Investments, Inc. purchased 16,190,475
shares of CFN's Series B Convertible Preferred Stock for an aggregate purchase
price of $50 million. In connection with this issuance, CFN, iXL, and General
Electric executed amendments to the existing CFN Stockholders Agreement and to
the existing CFN Registration Rights Agreement, and an Investor Agreement with
CFN. Under the Registration Rights Agreement, iXL and General Electric have the
right to force a registration of CFN's capital stock. The business purpose of
this issuance was to raise working capital and to expand the relationship
between General Electric and CFN. This issuance was valued based on a
negotiated estimate of CFN's fair market value. iXL believes that this issuance
was negotiated at arm's length and was made on terms no less favorable to iXL
and CFN than could have been obtained from unaffiliated third parties. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Overview."
Loans
From February 1997 to August 1998, Mr. Ellis and/or his wife made nine
separate loans to iXL in an aggregate principal amount of $12 million. The
maximum principal balance of these loans at any one time was $6 million. All
such loans accrued interest at a rate of either 10% or 12% per annum. All such
loans have been repaid in full with accrued interest. From September 1997 to
December 1997, Mr. James R. Rocco loaned iXL $300,000. These loans accrued
interest at a rate of 12% per annum, and have been repaid in full with accrued
interest. The purpose of each of the loans described in this paragraph was to
provide working capital to iXL.
From May 30, 1997 to March 30, 1998, Mr. Kevin Wall borrowed, from time
to time, amounts never exceeding $268,753 under a revolving line of credit from
iXL, at an interest rate of 8% per annum. The purpose of this loan was to
provide personal funds to Mr. Wall. This loan was repaid on March 30, 1998 from
the proceeds of the sale by Mr. Kevin Wall to iXL of 184,616 shares of common
stock for a purchase price of $3.25 per share. The valuation of these shares
was determined by negotiation on an arm's length basis.
81
<PAGE>
Chase Manhattan Bank is the Administrative Agent and sole lender under
iXL's credit facility. Chase Manhattan Bank is a limited partner of CB Capital
Investors, L.P. For a description of the material terms of iXL's credit
facility, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources."
Other Transactions
In April 1996, iXL paid Kelso & Company a fee of $150,000 for financial
advisory services and reimbursed Kelso & Company for out-of-pocket expenses
incurred in connection with rendering such services. In addition, iXL agreed to
pay Kelso & Company an annual fee of $15,000 for continuing financial advisory
services and to reimburse Kelso & Company for out-of-pocket expenses incurred,
which in 1998 totaled approximately $85,000 and through September 30, 1999
totaled approximately $30,000 for 1999. iXL has also agreed to indemnify Kelso
& Company against certain claims, losses, damages, liabilities and expenses
which may arise in connection with rendering such financial advisory services.
On June 8, 1999, Kelso & Company terminated its annual financial services
agreement other than with respect to such indemnification and expenses
provisions. In connection with consulting services regarding iXL's initial
public offering, on June 8, 1999 iXL paid Kelso & Company a fee equal to
$750,000. This fee was paid in 62,500 shares of common stock (based on the
gross offering price of $12.00 per share prior to underwriting and other
selling discounts). The business purpose of these transactions was to secure
the advisory services of Kelso & Company.
On April 7, 1999, iXL has issued to General Electric Capital Corporation
warrants to purchase 500,000 shares of common stock at an exercise price of
$10.00 per share in exchange for marketing services. The business purpose of
this transaction was to promote awareness of iXL's services.
On June 8, 1999, iXL issued to GE Capital Equity Investments, Inc.
warrants to purchase 1,500,000 shares of common stock at an exercise price per
share equal to the initial public offering price of $12.00 per share. These
warrants were issued in exchange for the implementation of a mutually
satisfactory marketing campaign and as an incentive to make CFN's platform
available to GE Capital Equity Investments, Inc. employees. The marketing
campaign is governed by a marketing agreement which provides for the delivery
by General Electric of marketing services expected to advertise General
Electric's relationships with iXL and CFN and to improve awareness of iXL's and
CFN's services. iXL believes these services to be valued at $1.2 million. The
business purpose of this transaction was to promote awareness of iXL's services
and to secure additional eligible employees to CFN's member base. CFN and
General Electric are also discussing other expansions of this relationship,
including co-marketing, data sharing, cross selling, technology licensing and
other similar arrangements.
Mr. Ellis is a limited partner in the partnership that owns the building
in which iXL began leasing space in May 1997. Pursuant to the terms of the
lease, iXL currently pays rent of approximately $134,000 per month, and the
lease expires December 31, 2008. In 1998, iXL paid total rent of approximately
$628,000. In 1999 iXL has paid approximately $1 million in rental payments
through September 30, 1999. iXL believes its lease of such space is at fair
market value and was negotiated on an arm's-length basis. iXL's effective lease
rate is $15.50 per square foot, compared to a range of $12.50 to $16.50 per
square foot for comparable space.
In June 1998, iXL, Inc. created a new wholly owned subsidiary,
Permit.Com, Inc., a Delaware corporation. In exchange for additional stock of
Permit.Com, Inc., iXL, Inc. then transferred all of the assets related to the
Permit.Com division and operations of iXL, Inc. to Permit.Com, Inc.
Subsequently, the sole director of iXL, Inc. approved and declared a dividend
of all of the outstanding common stock (100,000 shares) of Permit.Com, Inc. to
iXL as the sole stockholder of iXL, Inc. On June 26, 1998, the Board of
Directors of iXL approved and declared a dividend of the common stock of
Permit.Com, Inc. payable to stockholders of iXL of record as of June 1, 1998.
The aggregate value of this dividend was approximately $420,000, based on an
independent appraisal of the Permit.Com assets.
82
<PAGE>
Each of iXL and CFN provides services in the ordinary course of business
to WebMD, Inc., for which Mr. Jeffrey T. Arnold serves as Chairman and Chief
Executive Officer and Mr. Ellis serves as a Director and is also a shareholder,
CB Capital Investors, L.P., General Electric Capital Corporation, and Kelso &
Company, or their respective affiliates. In 1998, iXL recognized revenues of
approximately $1.4 million from CB Capital Investors, L.P. or its affiliates as
well as approximately $8.4 million from such companies for 1999 through
September 1999. In 1998, iXL recognized revenues of approximately $200,000 from
General Electric Capital Corporation or its affiliates, as well as
approximately $10.9 million of revenues from such companies for 1999 through
September 1999. In 1998, iXL recognized revenues of approximately $5.5 million
from WebMD, Inc., as well as approximately $2.5 million of revenues from WebMD,
Inc. for 1999 through September 1999. In 1998, iXL recognized revenues of
approximately $300,000 from Kelso & Company or its affiliates.
iXL-New York, Inc., a wholly owned subsidiary of iXL, and General
Electric have executed a Master Services Agreement under which iXL will provide
services in the ordinary course of business to General Electric. Under this
agreement, General Electric will be obligated to pay to iXL, for the first year
of the term of the contract, the greater of $20 million or the actual billed
value of the services provided by iXL. If at the end of the first year, General
Electric has not used $20 million worth of services, it will have an additional
three months to use the remaining balance. There are no guaranteed minimum
payments after this initial period. This contract has a five-year term and is
terminable by General Electric after the first anniversary of the contract. In
partial consideration of this contract, iXL issued to GE Capital Equity
Investments, Inc. warrants to purchase 1,000,000 shares of common stock for an
exercise price of $15.00 per share. The business purpose of this transaction
was to help solidify and expand its relationship with General Electric. The
terms of this arrangement are similar to the terms of iXL's arrangement with
Delta Air Lines, Inc. See "Relationship with General Electric."
iXL has entered into a Stockholders' Agreement with some of its
stockholders. iXL has also entered into a Registration Rights Agreement with
some of its stockholders. See "Management--Amended Stockholders Agreement" and
"Description of Capital Stock--Registration Rights Agreement."
iXL believes that all of the transactions set forth above were negotiated
at arm's length and were made on terms no less favorable to iXL than could have
been obtained from unaffiliated third parties.
83
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information known to iXL with
respect to the beneficial ownership of the common stock as of September 30,
1999, and as adjusted to reflect the sale of common stock offered by iXL hereby
and (a) by each stockholder who is known by iXL to beneficially own more than
5% of the outstanding shares of common stock, (b) each of iXL's directors,
(c) iXL's Chief Executive Officer and the other four highest paid executive
officers, (d) all directors and executive officers of iXL as a group and (e)
other stockholders selling common stock in this offering:
<TABLE>
<CAPTION>
Shares of
Common Stock Shares of Common
Beneficially Stock Beneficially
Owned Prior to Owned After the
the Offering(1) Number of Offering(1)
--------------------- Shares ----------------------
Number Percentage being Offered Number Percentage
---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C>
5% Stockholders, Named
Executive Officers
and Directors:
Kelso Investment
Associates V, L.P. and
Kelso Equity Partners V,
L.P.(2) ................. 15,656,096 24.2% -- 15,656,096 23.5%
Joseph S. Schuchert..... 15,656,096 24.2% -- 15,656,096 23.5%
Frank T. Nickell........ 15,661,061 24.2% -- 15,661,061 23.5%
Thomas R. Wall, IV...... 15,918,276 24.6% -- 15,918,276 23.9%
George E. Matelich...... 15,713,046 24.3% -- 15,713,046 23.6%
Michael B. Goldberg..... 15,660,261 24.2% -- 15,660,261 23.5%
David I. Wahrhaftig..... 15,667,786 24.3% -- 15,667,786 23.5%
Frank K. Bynum, Jr. .... 15,683,096 24.3% -- 15,683,096 23.6%
Philip E. Berney........ 15,678,596 24.3% -- 15,678,596 23.6%
c/o Kelso & Company
320 Park Avenue
24th Floor
New York, NY 10022
CB Capital Investors,
L.P.(3) ................. 7,939,427 12.3% -- 7,939,427 11.9%
CB Capital Investors,
Inc.................... -- -- -- -- --
Jeffrey Walker.......... -- -- -- -- --
380 Madison Avenue
12th Floor
New York, NY 10017-2591
General Electric Capital
Corporation, General
Electric Capital
Assurance Company, GE
Capital Equity
Investments, Inc. and
General Electric Pension
Trust(4)................. 5,204,159 8.1% 692,588 4,511,571 6.8%
120 Long Ridge Road
Stamford, CT
U. Bertram Ellis,
Jr.(5) ................... 2,929,486 4.5% -- 2,929,486 4.4%
Kevin M. Wall(6)........... 2,292,884 3.6% 503,702 1,789,182 2.5%
James R. Rocco(7).......... 1,207,040 1.9% 302,219 904,821 1.4%
William C. Nussey(8)....... 853,759 1.3% -- 853,759 1.3%
Barry T. Sikes(9).......... 473,100 * 111,368 361,732 *
Thomas G.
Rosencrants(10)........... 1,000,000 1.5% -- 1,000,000 1.5%
Jerome D. Colonna(11)...... 882,169 1.4% -- 882,169 1.3%
Gary C. Wendt.............. 5,000 * -- 5,000 *
All Directors and
Executive Officers as a
Group (11 persons)........ 33,952,959 52.6% 967,659 32,985,300 49.3%
Selling Stockholders Not
Listed Above:
@radical.media, Inc.(12).. 2,000 * 1,007 993 *
Karen Booth Adams+........ 290,963 * 73,279 217,684 *
Karen Booth Adams Irrevo-
cable Trust+............. 200,000 * 50,370 149,630 *
</TABLE>
84
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common Stock Shares of Common
Beneficially Stock Beneficially
Owned Prior to Owned After the
the Offering(1) Number of Offering(1)
------------------ Shares ------------------
Stockholder Number Percentage being Offered Number Percentage
----------- ------- ---------- ------------- ------- ----------
<S> <C> <C> <C> <C> <C>
James S. Altenbach(13).... 145,587 * 25,185 120,402 *
Steven P. Amedio++ ....... 62,500 * 7,555 54,945 *
Jay Amos.................. 10,000 * 2,518 7,482 *
Claire Lewis Arnold....... 30,000 * 5,037 24,963 *
Ashish Bahl++ ............ 275,000 * 138,517 136,483 *
Steven C. Baum++.......... 407,000 * 93,184 313,816 *
Jens Bley++............... 79,357 * 6,044 73,313 *
Robert Bowman++........... 130,000 * 32,740 97,260 *
Robert Burk (Trustee of
the Burk Family Trust
dated 8/17/82)..............4,178 * 1,853 2,325 *
Burton Technology Part-
ners, Ltd................ 5,161 * 2,600 2,561 *
Eric Butz++............... 34,188 * 5,037 29,151 *
David M. Carroll(14)...... 40,000 * 5,037 34,963 *
Steven E. Chamberlain..... 2,500 * 1,259 1,241 *
Stefan Chopin++........... 226,840 * 25,185 201,655 *
David E. Clauson(15)...... 353,500 * 50,370 303,130 *
Steven K. Conine++........ 337,066 * 50,934 286,132 *
Barbara B. Cook++......... 75,613 * 25,185 50,428 *
Cox Technology Invest-
ments, Inc............... 200,000 * 100,740 99,260 *
Larry Culbertson++........ 106,900 * 22,666 84,234 *
Josiah Cushing............ 4,553 * 1,286 3,267 *
Richard M. Cyert (Estate
of)...................... 40,000 * 13,600 26,400 *
Guy Davidson++............ 907,760 1.4% 37,777 869,983 1.3%
Kevin Davis+.............. 30,200 * 3,803 26,397 *
Burton F. Dodd............ 10,000 * 2,518 7,482 *
Anne Nancy Donohue........ 4,000 * 2,015 1,985 *
David E. Easterly......... 2,500 * 1,259 1,241 *
Dennis S. Ferraro......... 14,700 * 2,518 12,182 *
Finn Partners............. 200,000 * 100,740 99,260 *
William Stephen Floyd++... 868,200 1.3% 201,479 661,921 1.0%
Mary M. Fowlkes+.......... 266,659 * 67,158 199,501 *
Joelle G. Fox+++.......... 20,600 * 5,339 15,261 *
Eric H. Freedman++........ 333,000 * 50,370 282,630 *
James P. Ganley+++........ 77,000 * 6,044 70,956 *
Robert Gear++............. 35,923 * 756 35,167 *
Michael Gilles............ 4,553 * 2,293 2,260 *
Juergen Goersch++......... 75,613 * 7,617 67,996 *
Henry Goldberg............ 40,000 * 2,015 37,985 *
Glenn Golenberg........... 191,200 * 7,555 183,645 *
Jeffrey R. and Pamela
Gordon, tenants by the
entirety++............... 141,184 * 15,111 126,073 *
William A. Grana, Jr.++... 9,339 * 1,007 8,332 *
Paul Grand+............... 93,748 * 44,450 49,298 *
David Greeley++........... 68,924 * 5,733 63,191 *
Joshua Greer+............. 144,114 * 58,072 86,042 *
Guren Family Trust+....... 104,000 * 2,015 101,985 *
Lisa L. Hendricks+........ 173,400 * 87,341 86,059 *
</TABLE>
85
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common Stock Shares of Common
Beneficially Stock Beneficially
Owned Prior to Owned After the
the Offering Number of Offering
-------------------- Shares --------------------
Stockholder Number Percentage being Offered Number Percentage
----------- --------- ---------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C>
Mark W. Hennessy........ 20,000 * 3,526 16,474 *
Peter R. Hennessy....... 20,000 * 3,022 16,978 *
Michael Hettwer++....... 358,551 * 75,555 282,996 *
Jeffrey S. Hosley....... 10,500 * 302 10,198 *
Frank W. Hulse.......... 7,500 * 1,247 6,253 *
Investar Burgeon Venture
Capital, Inc........... 118,277 * 5,958 112,319 *
Stephen P. Jackson++.... 100,800 * 9,139 91,661 *
Mark Jacobstein+........ 135,678 * 51,255 84,423 *
Jeffrey Janer+.......... 182,117 * 51,599 130,518 *
Teresa Joel++........... 195,000 * 40,296 157,704 *
Kurt A. Keilhacker...... 15,400 * 7,757 7,643 *
Robert H. Kriebel (Es-
tate of)............... 14,200 * 7,153 7,047 *
William A. Lackey++..... 66,667 * 2,518 64,149 *
William M. Lackey+...... 66,667 * 7,555 59,112 *
John Laurence+.......... 24,166 * 6,086 18,080 *
Lazarus Family Invest-
ments, LLC............. 2,000 * 1,007 993 *
M.R.W. Ventures, LLC.... 22,002 * 5,541 16,461 *
Norman S. Matthews...... 40,000 * 20,148 19,852 *
Robert H. McEver........ 2,500 * 756 1,744 *
John P. McEvoy.......... 10,000 * 5,037 4,963 *
John F. McGillicuddy.... 35,000 * 17,629 17,371 *
Jacob McGowan........... 103,279 * 16,811 86,468 *
Mellon Ventures II,
L.P.................... 2,987,296 4.6% 151,110 2,836,186 4.3%
William Melton.......... 118,277 * 59,576 58,701 *
MKA Partners, L.P....... 45,000 * 22,666 22,334 *
Colin Morris++.......... 65,229 * 2,518 62,711 *
Mario M. Morino Trust... 21,730 * 10,945 10,785 *
Scott Murphy+........... 135,678 * 49,362 86,316 *
Richard Nailling++...... 490,000 * 98,725 391,275 *
Matthias Oelmann++...... 83,357 * 3,778 79,579 *
Robert O'Leary.......... 2,500 * 1,259 1,241 *
Robert Ortiz++.......... 100,000 * 10,074 89,926 *
Manfred Ottenbreit++.... 79,357 * 7,555 71,802 *
Pete T. Patterson....... 2,500 * 1,007 1,493 *
N. Blake Patton++....... 10,000 * 2,770 7,230 *
Lisa Peddy+++........... 50,300 * 25,185 25,115 *
Stephanie A.H. Peter-
sen++.................. 4,669 * 831 3,838 *
Randall M. Pipp+........ 264,039 * 32,933 231,106 *
Michel Rapoport......... 28,160 * 5,037 23,123 *
John Rocco.............. 61,500 * 3,526 57,974 *
David M. Roderick....... 40,000 * 5,037 34,963 *
James V. Sandry......... 205,100 * 12,592 192,508 *
Derek Scanlon+++........ 42,852 * 1,007 41,845 *
Michael E. Schaefer+++.. 73,000 * 15,111 57,889 *
F. Blair Schmidt-
Fellner................ 26,700 * 2,690 24,010 *
Janet E. Schoff......... 60,000 * 10,074 49,926 *
Michael Schwartz+++..... 39,200 * 5,037 34,163 *
</TABLE>
86
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common Stock Shares of Common
Beneficially Stock Beneficially
Owned Prior to Owned After the
the Offering Number of Offering
-------------------- Shares ------------------
Stockholder Number Percentage being Offered Number Percentage
----------- --------- ---------- ------------- ------- ----------
<S> <C> <C> <C> <C> <C>
Niraj S. Shah++......... 337,066 * 50,370 286,696 *
Mary Jane Shapiro....... 28,900 * 7,278 21,622 *
Melissa Shenkin+........ 12,200 * 6,145 6,055 *
Stephen D. Silbert...... 75,600 * 6,296 69,304 *
Gary E. Snyder(16)...... 10,000 * 2,015 7,985 *
Mark Swanson++.......... 255,400 * 50,370 205,030 *
Thomson U.S. Inc. ...... 1,077,172 1.7% 542,573 534,599 *
John Tierney++.......... 100,000 * 10,074 89,926 *
Gregory Waldbaum++...... 80,152 * 9,874 70,278 *
Leonard N. Waldbaum..... 63,077 * 7,203 55,874 *
Scott Walker++.......... 20,000 * 5,037 14,963 *
WebListing Corporation
Profit Sharing Plan+... 115,600 * 29,114 86,486 *
Weissmann, Wolff,
Bergman, Coleman &
Silverman, LLP......... 31,948 * 16,092 15,856 *
James L. Whims.......... 15,400 * 7,757 7,643 *
William C. Whitley(17).. 360,400 * 90,766 269,634 *
Armistead Whitney++..... 21,300 * 471 20,829 *
Garland Wong+........... 261,535 * 98,801 162,734 *
Harold B. Wright........ 10,000 * 5,037 4,963 *
Wyler Irrevocable Trust
FBO Molly Wyler, Emily
Wyler, Talli Wyler..... 100,000 * 5,037 94,963 *
David Wyler............. 845,450 1.3% 100,740 744,710 1.1%
Charles Zug+............ 5,157 * 2,598 2,559 *
</TABLE>
- --------
* Less than 1% of the outstanding shares of common stock.
+ denotes a former employee of iXL who was an employee and/or officer of a
company acquired by iXL.
++ denotes a current employee of iXL who was an employee and/or officer of a
company acquired by iXL.
+++ denotes a current employee of iXL not otherwise mentioned below (not
associated with a company acquired by iXL).
(1)Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Except as indicated by footnote, and subject
to community property laws where applicable, the persons named in the table
above have sole voting and investment power with respect to all shares of
common stock. The number of shares beneficially owned includes shares of common
stock issuable upon the exercise of options or warrants that are currently
exercisable or exercisable within 60 days of September 30, 1999. Percentage of
beneficial ownership is based on 64,587,978 shares of common stock outstanding
as of September 30, 1999 and 66,587,978 shares of common stock outstanding
after completion of this offering.
(2)Messrs. Schuchert, Nickell, Wall, Matelich, Goldberg, Wahrhaftig, Bynum and
Berney may be deemed to share beneficial ownership of shares of common stock
owned of record by Kelso Investment Associates V, L.P. and Kelso Equity
Partners V, L.P., by virtue of their status as general partners of the general
partner of Kelso Investment Associates V, L.P. and as general partners of Kelso
Equity Partners V, L.P. Messrs. Schuchert, Nickell, Wall, Matelich, Goldberg,
Wahrhaftig, Bynum and Berney share investment and voting power with respect to
securities owned by Kelso Investment Associates V, L.P. and Kelso Equity
Partners V, L.P., but disclaim beneficial ownership of such securities.
Information for Kelso Investment Associates V, L.P. and Kelso Equity
Partners V, L.P. includes 14,673,227 shares held by Kelso Investment Associates
V, L.P. and 982,869 shares held by Kelso Equity Partners V, L.P. Kelso
Investment Associates V, L.P. and Kelso Equity Partners V, L.P., due to their
common
87
<PAGE>
control, could be deemed to beneficially own each of the other's shares, but
disclaim such beneficial ownership. Information for Mr. Nickell includes 4,965
shares of common stock owned by trusts of which he is the trustee. Mr. Nickell
disclaims beneficial ownership of such securities. Information for Mr. Goldberg
includes 4,165 shares of common stock that are owned directly by him.
Information for Mr. Matelich includes 56,950 shares of common stock that are
owned directly by him. Information for Mr. Bynum includes 27,000 shares of
common stock that are owned directly by him. Information for Mr. Thomas Wall
includes 42,410 shares of common stock that are owned directly by him.
Information for Mr. Wahrhaftig includes 11,690 shares of common stock that are
owned directly by him. Information for Mr. Berney includes 22,500 shares of
common stock that are owned directly by him.
(3)CB Capital Investors, Inc. is the general partner of CB Capital Investors,
L.P., and accordingly may be deemed to beneficially own the shares owned by CB
Capital Investors, L.P. Mr. Walker is a general partner of Chase Capital
Partners, a New York general partnership, which is the sole limited partner and
investment advisor of CB Capital Investors, L.P. Accordingly, Mr. Walker could
be deemed to beneficially own the shares beneficially owned by CB Capital
Investors, L.P. However, Mr. Walker disclaims beneficial ownership of all
common stock owned by CB Capital Investors, L.P., except an indeterminate
number thereof in which he has a continuing pecuniary interest as a former
general partner of Chase Capital Partners. The Chase Manhattan Bank is the sole
stockholder of CB Capital Investors, Inc., and accordingly may be deemed to
beneficially own the shares owned by CB Capital Investors, L.P. However, The
Chase Manhattan Bank disclaims this beneficial ownership. The Chase Manhattan
Corporation is the sole stockholder of The Chase Manhattan Bank, and
accordingly may be deemed to beneficially own the shares owned by CB Capital
Investors, L.P. However, The Chase Manhattan Corporation disclaims this
beneficial ownership.
(4)Information for General Electric Capital Corporation, General Electric
Capital Assurance Company, GE Capital Equity Investments, Inc. and General
Electric Pension Trust includes (a) 2,204,159 shares currently held by General
Electric Capital Corporation and 500,000 shares of common stock issuable to
General Electric Capital Corporation upon the exercise of warrants exercisable
within 60 days of September 30, 1999; (b) 500,000 shares held by General
Electric Capital Assurance Company; (c) 1,500,000 shares held by GE Capital
Equity Investments, Inc.; and (d) 500,000 shares held by General Electric
Pension Trust. Excludes 2,500,000 shares of common stock issuable to GE Capital
Equity Investments, Inc. upon the exercise of warrants which are not
exercisable within 60 days of September 30, 1999. Number of shares being
offered for sale in this offering include (a) 503,701 shares to be offered by
GE Capital Equity Investments, Inc., (b) 62,962 shares to be offered by General
Electric Capital Assurance Company, and (c) 125,925 shares to be offered by
General Electric Pension Trust. Affiliates of General Electric Capital
Corporation, General Electric Capital Assurance Company, GE Capital Equity
Investments, Inc. and General Electric Pension Trust are significant clients of
iXL and have had other material relationships with iXL. See "Certain
Transactions--iXL Equity Investments," "--CFN Equity Investments," "--Other
Transactions."
(5)Information for U. Bertram Ellis, Jr. includes 1,330,000 shares of common
stock issuable upon exercise of options exercisable within 60 days of September
30, 1999. Excludes 2,058,889 shares of common stock issuable upon exercise of
options which are not exercisable within 60 days of September 30, 1999.
(6)Information for Kevin M. Wall includes 703,900 shares of common stock
issuable upon exercise of options exercisable within 60 days of September 30,
1999. Excludes 102,000 shares of common stock issuable upon exercise of options
which are not exercisable within 60 days of September 30, 1999. Mr. Wall is a
director and Vice Chairman of iXL. Mr. Wall was also a stockholder and
executive officer of Boxtop Interactive, Inc., which was acquired by iXL in
1997. Shares to be sold in this offering are sold by the Wall 1999 Family Trust
of which Mr. Wall is a trustee.
(7)Information for James R. Rocco includes 178,740 shares of common stock
issuable upon exercise of options exercisable within 60 days of September 30,
1999. Excludes 319,160 shares of common stock issuable upon exercise of options
which are not exercisable within 60 days of September 30, 1999. Mr. Rocco is
Vice Chairman of iXL and a former member of the board of directors of iXL.
Mr. Rocco was also a stockholder and executive officer of Creative Video, Inc.,
Video Library, Inc., and Entrepreneur Television, Inc., all of which were
acquired by iXL in 1996.
88
<PAGE>
(8)Information for William C. Nussey includes 843,759 shares of common stock
issuable upon exercise of options exercisable within 60 days of September 30,
1999. Excludes 1,000,517 shares of common stock issuable upon exercise of
options which are not exercisable within 60 days of September 30, 1999.
(9)Information for Barry T. Sikes includes 252,000 shares of common stock
issuable upon exercise of options exercisable within 60 days of September 30,
1999. Excludes 333,500 shares of common stock issuable upon exercise of options
which are not exercisable within 60 days of September 30, 1999. Mr. Sikes is
the Chief Operating Officer of iXL, Inc. Mr. Sikes was also a stockholder and
executive officer of Creative Video, Inc., Video Library, Inc., and
Entrepreneur Television, Inc., all of which were acquired by iXL in 1996.
(10)Thomas G. Rosencrants is a general partner of Greystone Capital Partners I,
L.P., which holds 1,000,000 shares of common stock. Mr. Rosencrants disclaims
beneficial ownership of such shares.
(11)Jerome D. Colonna is a partner in Flatiron Partners, LLC, which
beneficially owns 195,769 shares of common stock held by Flatiron Fund 1998/99,
LLC and 686,400 shares of common stock held by Flatiron Fund, LLC. Mr. Colonna
disclaims beneficial ownership of such shares.
(12)@radical.media, Inc. has had a strategic alliance relationship with iXL
since 1998 pursuant to which iXL is @radical.media, Inc.'s vendor of choice for
interactive services.
(13)James S. Altenbach is the Secretary of iXL and is a member of Minkin &
Snyder, a Professional Corporation, which serves as outside legal counsel to
iXL. See "Legal Matters."
(14)David M. Carroll is an officer of First Union National Bank, an affiliate
of First Union Securities, Inc.
(15)David E. Clauson is the Executive Vice-President for Worldwide Marketing of
iXL, Inc.
(16)Gary E. Snyder is a member of Minkin & Snyder, a Professional Corporation,
which serves as outside legal counsel to iXL. See "Legal Matters."
(17)William C. Whitley is a former executive officer and director of iXL. Mr.
Whitley was also an executive officer and stockholder of The Whitley Group,
Inc. which was acquired by iXL in 1997.
89
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The following description of the capital stock of iXL and material
provisions of iXL's Certificate of Incorporation and Bylaws is a summary and is
qualified by reference to the provisions of the Certificate of Incorporation
and Bylaws, which have been filed as exhibits to iXL's Registration Statement
of which this prospectus is a part.
The authorized capital stock of iXL is 205,000,000 shares, consisting of
200,000,000 shares of common stock, par value $0.01 per share, and 5,000,000
shares of undesignated preferred stock, par value $0.01 per share.
Common Stock
As of September 30, 1999, there were 64,587,978 shares of common stock
outstanding.
Common stock is entitled to one vote per share on all matters on which
stockholders are entitled to vote. Common stock does not have cumulative voting
rights or other preemptive or subscription rights, and is not redeemable by
iXL. Holders of shares of common stock are entitled to any dividends as may be
declared by the Board of Directors out of legally available funds. Upon
liquidation, dissolution or winding-up of iXL, after required payments to
creditors, the assets of iXL will be divided pro rata on a per share basis
among the holders of the common stock.
Blank Check Preferred Stock
The Board of Directors has the authority, without further action by the
stockholders, to issue up to 5,000,000 shares of preferred stock in one or more
series, and to fix the rights, designations, preferences, privileges,
qualifications and restrictions of the preferred stock, including dividend
rights, conversion rights, voting rights, rights and terms of redemption,
liquidation preferences and sinking fund terms, any or all of which may be
greater than the rights of the common stock. No shares of preferred stock are
currently outstanding. The issuance of preferred stock could adversely affect
the voting power of holders of common stock and the likelihood that such
holders will receive dividend payments and payments upon liquidation. Such
issuance could have the effect of decreasing the market price of the common
stock. The issuance of preferred stock may have the effect of delaying,
deterring or preventing a change in control of iXL without any further action
by the stockholders. iXL has no present plans to issue any shares of preferred
stock.
Registration Rights Agreement
iXL, Kelso Investment Associates V, L.P., Kelso Equity Partners V, L.P.
and CB Capital Investors, L.P. and most other stockholders of iXL prior to
iXL's initial public offering are parties to an Amended and Restated
Registration Rights Agreement, dated as of October 28, 1999, as amended on
November 2, 1999. All shares of common stock outstanding prior to iXL's initial
public offering, as well as (1) all shares of common stock issued upon exercise
of warrants outstanding prior to iXL's initial public offering, (2) all shares
of common stock issued upon the reclassification of iXL's preferred stock upon
the closing of iXL's initial public offering, and (3) all shares of common
stock held by Kelso Equity Partners V, L.P. that were issued in connection with
the fee paid to Kelso & Company upon the closing of iXL's initial public
offering, are subject to the Registration Rights Agreement. The Registration
Rights Agreement provides that, at any time and from time to time, the holder
or holders of 50% or more of the common stock may request that iXL effect a
demand registration under the Securities Act of the common stock held by the
majority stockholders. After this request, iXL must use its best efforts to
effect such a registration of all common stock held by the majority
stockholders and all other holders of common stock.
In addition to the demand registration, if iXL at any time proposes to
effect a registration of its equity securities and the type of registration
permits, all holders of common stock who are parties to the Registration
90
<PAGE>
Rights Agreement may include their shares in that registration. The number of
shares to be registered under a demand registration or a piggyback registration
may be reduced on a pro rata basis if the managing underwriter in an
underwritten offering or the investment banker in a non-underwritten offering
advises iXL that the number of shares requested to be so included exceeds the
number which can be sold in the offering. The registration rights agreement
provides for cross-indemnification by iXL and the sellers of common stock for
losses, claims and damages incurred by the other resulting from untrue
statements or omissions contained in the registration statement. All expenses
incurred in connection with each registration under the Registration Rights
Agreement, other than underwriting commissions, will be paid by iXL.
Additionally, pursuant to the Registration Rights Agreement, all stockholders
who purchased iXL's capital stock prior to iXL's initial public offering have
agreed not to effect any public sale or distribution of their stock during the
90 days after the closing of this offering. For a description of the fee paid
to Kelso & Company described above, see "Certain Transactions."
Certain Antitakeover Effects of Provisions of iXL's Certificate of
Incorporation and Bylawsand Delaware Law
General. Provisions of the Delaware General Corporation Law and iXL's
Certificate of Incorporation and Bylaws could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party to
acquire, control of iXL. These provisions could limit the price that investors
might be willing to pay in the future for shares of iXL's common stock. These
provisions of Delaware law and iXL's Certificate of Incorporation and Bylaws
may also have the effect of discouraging or preventing certain types of
transactions involving an actual or threatened change of control of iXL,
including unsolicited takeover attempts, even though such a transaction may
offer iXL's stockholders the opportunity to sell their stock at a price above
the prevailing market price. iXL's Certificate of Incorporation allows iXL to
issue preferred stock with rights senior to those of the common stock and other
rights that could adversely affect the interests of holders of common stock,
which could decrease the amount of earnings or assets available for
distribution to the holders of common stock or could adversely affect the
rights and powers, including voting rights, of the holders of common stock. In
some circumstances, this type of issuance could have the effect of decreasing
the market price of the common stock, as well as having the antitakeover effect
discussed above. See "Risk Factors--Risks Related to the Offering--Antitakeover
provisions of our Certificate of Incorporation and Bylaws, and Delaware law
could prevent or delay a change of control."
Delaware Takeover Statute. iXL is subject to Section 203 of the Delaware
General Corporation Law, which prohibits a Delaware corporation from engaging
in a "business combination" with some persons for three years following the
date any of these persons becomes an interested stockholder. Interested
stockholders generally include persons who are the beneficial owners of 15% or
more of the outstanding voting stock of the corporation and persons who are
affiliates or associates of the corporation and who hold 15% or more of the
corporation's outstanding voting stock at any time within three years before
the date on which that person's status as an interested stockholder is
determined. A business combination includes:
. a merger or consolidation;
. the sale, lease, exchange, mortgage, pledge, transfer or other
disposition of assets having an aggregate market value equal to
10% or more of either the aggregate market value of all assets of
the corporation determined on a consolidated basis or the
aggregate market value of all the outstanding stock of the
corporation;
. any transaction that results in the issuance or transfer by the
corporation of any stock of the corporation to the interested
stockholder, except in a transaction that effects a pro rata
distribution to all stockholders of the corporation;
. any transaction involving the corporation that has the effect of
increasing the proportionate share of the stock of any class or
series, or securities convertible into the stock of any class or
series, of the corporation that is owned directly or indirectly by
the interested stockholder; or
91
<PAGE>
. any receipt by the interested stockholder of the benefit of any
loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation.
Section 203 of the Delaware General Corporation Law does not apply to a
business combination if before a person becomes an interested stockholder, the
board of directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved the
business combination, or upon completion of the transaction that resulted in
the interested stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, other than the affirmative
vote of the holders of at least two-thirds of the outstanding voting stock of
the corporation not owned by the interested stockholder.
Certificate of Incorporation and Bylaws. iXL's Bylaws also require that
special meetings of the stockholders of iXL may be called only by the Board of
Directors, the Chairman of the Board or the Chief Executive Officer of iXL or
by any person or persons holding shares representing at least 20% of the
outstanding capital stock. iXL's Bylaws also require advance written notice,
which must be received by the Secretary of iXL not less than 90 days prior to
the meeting, by a stockholder of a proposal or directors nomination which such
stockholder desires to present at an annual or special meeting of
stockholders. iXL's Certificate of Incorporation does not include a provision
for cumulative voting in the election of directors. Under cumulative voting, a
minority stockholder holding a sufficient number of shares may be able to
ensure the election of one or more directors. The absence of cumulative voting
may have the effect of limiting the ability of minority stockholders to effect
changes in the Board of Directors and, as a result, may have the effect of
deterring a hostile takeover or delaying or preventing changes in control or
management of iXL.
iXL's Bylaws provide that the authorized number of directors may be
changed only by a resolution adopted by a majority of the entire Board of
Directors. Vacancies in the Board of Directors may be filled by a majority of
directors in office, although less than a quorum. See "Risk Factors--Risks
Related to the Offering--Anti-takeover provisions of our Certificate of
Incorporation and Bylaws, and Delaware law could prevent or delay a change of
control."
No Shareholder Action by Written Consent. The Certificate of
Incorporation prohibits stockholders from taking action by written consent in
lieu of an annual or special meeting, and thus stockholders may only take
action at an annual or special meeting called in accordance with the Bylaws.
Transfer Agent and Registrar
SunTrust Bank, Atlanta acts as transfer agent and registrar for the
common stock.
Listing
The common stock is quoted on the Nasdaq National Market under the
trading symbol "IIXL."
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<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
No prediction can be made as to the effect, if any, that the market sales
of shares or the availability of shares for sale will have on the market price
of the common stock from time to time. Nevertheless, sales of substantial
amounts of common stock in the public market could have an adverse impact on
the market price of our common stock and our ability to raise additional
capital.
Upon completion of the offering, iXL will have outstanding an aggregate
of 66,587,978 shares of common stock, assuming no exercise of the underwriters'
over-allotment option and no exercise of outstanding options and excluding the
acquisition of Tessera Enterprise Systems, Inc. Of these shares, all of the
shares sold in this offering (7,000,000 shares) and in iXL's initial public
offering (6,900,000 shares) will be freely tradeable, unless such shares are
purchased by affiliates of iXL, as that term is defined in Rule 144 under the
Securities Act of 1933. The remaining 52,687,978 shares of common stock held by
stockholders are "restricted securities," as that term is defined in Rule 144
under the Securities Act. Restricted securities may be sold in the public
market only if registered or if they qualify for an exemption from registration
under Rule 144 promulgated under the Securities Act.
The holders of 52,528,100 shares of common stock and the holders of
outstanding options and warrants to purchase 21,034,999 shares of common stock,
including all executive officers and directors of iXL, have agreed with iXL
that for a period of 90 days after the date of this prospectus they will not
offer, sell or otherwise dispose of, any shares of common stock, options or
warrants to acquire shares of common stock or securities exchangeable for or
convertible into common stock. In addition to the lock-ups with iXL, holders of
48,139,697 shares of common stock and holders of options and warrants to
purchase 15,519,230 shares of common stock are also subject to a similar lock-
up agreement in favor of Merrill Lynch. Each of Merrill Lynch and iXL may, in
its sole discretion, release shares from its respective lock-up agreements, in
whole or in part, at any time without notice.
As a result of the 90-day lock-ups described above and the provisions of
Rule 144, Rule 144(k) and Rule 701, additional shares will be available for
sale in the public market as follows:
<TABLE>
<CAPTION>
Date of Availability for Sale Number of Shares
----------------------------- ----------------
<S> <C>
As of the date of this prospectus......................... 49,500
November 30, 1999......................................... 705,078
90 days after the date of this prospectus................. 52,528,100
At various times afterwards upon expiration of applicable
holding periods.......................................... 1,370,374
</TABLE>
In addition, there are outstanding warrants to purchase 3,500,000 shares
of common stock. Of these, 3,000,000 shares are subject to the 90-day lock-ups
described above, while the remaining 500,000 shares could be available for sale
at any time, assuming expiration of the applicable holding periods.
As of September 30, 1999, options to purchase approximately 28,152,302
shares of common stock were outstanding under iXL's stock option plans. Of
these, options to purchase approximately 20,044,218 shares of common stock
cannot be exercised until iXL registers the shares of common stock subject to
such options. iXL may file a registration statement under the Securities Act to
register shares of common stock reserved for issuance under its stock option
plans at any time after November 29, 1999, thus permitting the resale of such
shares by non-affiliates in the public market without restriction under the
Securities Act to the extent vested and not otherwise subject to lock-up
agreements. See "Management--Stock Option Plans." Such registration statement
would become effective immediately upon filing. Assuming the filing of such a
registration statement on November 30, 1999, the earliest time allowed by iXL's
existing lock-up agreement
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<PAGE>
with Merrill Lynch, and as a result of the 90-day lock-ups described above,
additional option shares will be available for sale in the public market as
follows:
<TABLE>
<CAPTION>
Number of Shares
Subject to
Date of Availability for Sale Vested Options
----------------------------- ----------------
<S> <C>
As of the date of this prospectus......................... 39,128
November 30, 1999......................................... 6,692,882
Shares subject to options vesting from December 1, 1999
through January 31, 2000................................. 1,979,888
90 days after the date of this prospectus................. 4,270,023
At various times afterwards upon further vesting.......... 15,170,381
</TABLE>
In general, under Rule 144 as currently in effect, a person, including an
affiliate, who has beneficially owned restricted shares for at least one year
from the later of the date the restricted securities were acquired from iXL or,
if applicable, from an affiliate of iXL, or on the date on which they were
fully paid, is entitled to sell, within any three-month period, a number of
shares that does not exceed the greater of 1% of the then-outstanding shares of
common stock or the average weekly trading volume of the common stock in the
public market as reported through the Nasdaq National Market during the four
calendar weeks preceding such sale. Sales under Rule 144 are also subject to
requirements as to the manner and notice of sale and the availability of public
information about iXL.
Restricted securities held by affiliates of iXL are subject to the
foregoing volume limitations, holding period and other restrictions under Rule
144. Affiliates may sell shares other than restricted securities in accordance
with the foregoing volume limitations and other restrictions, but without
regard to any holding period.
Further, under Rule 144(k), if a period of at least two years has elapsed
since the later of the date restricted securities were acquired from iXL or
from an affiliate of iXL or the date on which they were fully paid, a holder of
restricted securities who is not an affiliate of iXL at the time of sale, and
has not been an affiliate of iXL for at least three months prior to the sale,
would be entitled to sell the shares immediately without regard to volume
limitations and the other conditions described above.
Following the expiration of the lock-up periods, certain shares issued
upon exercise of options granted by iXL prior to the date of this prospectus
will also be available for sale in the public market pursuant to Rule 701 under
the Securities Act. Rule 701 permits resales of such shares in reliance upon
Rule 144 but without compliance with certain restrictions, including the
holding period requirement, imposed under Rule 144.
iXL has registered 4,000,000 shares of common stock pursuant to a "shelf"
Registration Statement on Form S-4 for use in future acquisitions and expects
to register 6,000,000 shares pursuant to an additional Registration Statement
on Form S-4. After issuance, these shares could be sold in the public markets,
although it is anticipated that these shares acquired within 90 days of the
date of this prospectus would be subject to the 90-day lock-up agreements
discussed above.
The holders of approximately 52,528,100 shares of common stock, as well
as approximately 14,383,335 shares of common stock issuable upon exercise of
outstanding options and warrants, are entitled to certain rights with respect
to the registration of such shares under the Securities Act. See "Description
of Capital Stock--Registration Rights Agreement."
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<PAGE>
UNITED STATES FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS
The following is a summary of certain United States federal income and
estate tax consequences of the ownership and disposition of our common stock by
non-U.S. holders. As used herein, "non-U.S. holder" means any person or entity
that holds our common stock, other than:
. an individual citizen or resident of the United States;
. a corporation created or organized in or under the laws of the
United States, or of any state of the United States or the District
of Columbia; or
. a partnership, trust or estate treated, for United States federal
income tax purposes, as a domestic partnership, trust or estate.
This summary is based on provisions of the U.S. Internal Revenue Code of
1986, as amended, existing, temporary and proposed United States Treasury
regulations promulgated thereunder and administrative and judicial
interpretations of each, all as of the date hereof and all of which are subject
to change, possibly on a retroactive basis.
This summary is for general information only. The tax treatment of a
particular non-U.S. holder may vary depending on the holder's particular
situation. In addition, this summary does not include any description of the
tax laws of any state, local or non-U.S. government that may be applicable to a
particular non-U.S. holder.
Prospective purchasers are urged to consult their own tax advisors with
respect to the particular U.S. federal income and estate tax consequences to
them of the ownership and disposition of our common stock, as well as the tax
consequences under state, local, non-U.S. and other U.S. federal income tax
laws and the possible effects of changes in tax laws.
Income Tax
Dividends
Generally, dividends, if any, paid on our common stock to a non-U.S.
holder will be subject to U.S. federal income tax. Except for dividends that
are effectively connected with a non-U.S. holder's conduct of a trade or
business within the United States, this tax is imposed and collected by
withholding at the rate of 30% of the amount of the dividend, unless reduced by
an applicable income tax treaty. Currently, dividends paid to an address in a
country other than the United States are presumed to be paid to a resident of
that country in determining whether a non-U.S. holder can benefit from a
reduced withholding tax rate pursuant to a tax treaty. For U.S. federal income
tax purposes, a distribution on our common stock will be considered to be a
dividend only to the extent it is paid out of current or accumulated earnings
and profits. To the extent that a distribution exceeds current and accumulated
earnings and profits, it will be applied against and will reduce the non-U.S.
holder's tax basis in its common stock and, to the extent in excess of such tax
basis, will be treated as gain from a sale or exchange of such common stock
(which gain will be capital gain if the non-U.S. holder holds the common stock
as a capital asset).
However, under United States Treasury regulations applicable to dividend
and other payments made after December 31, 2000, a non-U.S. holder who is the
beneficial owner (within the meaning of the regulations) of dividends paid on
our common stock and who wishes to claim the benefit of an applicable treaty is
generally required to satisfy certification and documentation requirements,
including (in certain cases) the need to make recertifications for periods
after December 31, 2000. Special rules apply to claims for treaty benefits made
by non-U.S. persons that are entities rather than individuals and to beneficial
owners (within the meaning of the regulations) of dividends paid to entities in
which the beneficial owners are interest holders.
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<PAGE>
Except as may be otherwise provided in an applicable income tax treaty,
dividends paid on our common stock to a non-U.S. holder that are effectively
connected with the holder's conduct of a trade or business within the United
States are subject to tax at ordinary U.S. federal income tax rates. This tax
is not collected by withholding (except as described below under "Backup
Withholding and Information Reporting"). All or part of any effectively
connected dividends received by a non-U.S. corporation may also, under certain
circumstances, be subject to an additional branch profits tax which will be
imposed at a 30% rate or, possibly, a reduced rate under an applicable income
tax treaty. A non-U.S. holder who wishes to claim an exemption from withholding
for effectively connected dividends is generally required to satisfy certain
certification and documentation requirements.
A non-U.S. holder that is eligible for a reduced rate of U.S. withholding
tax pursuant to a tax treaty may obtain a refund of any excess amounts withheld
by filing an appropriate claim for refund with the Internal Revenue Service.
Disposition of Our Common Stock
Generally, non-U.S. holders will not be subject to U.S. federal income
tax (or withholding thereof) in respect of gain recognized on a disposition of
our common stock unless:
<TABLE>
<C> <S>
(i) the gain is effectively connected with the holder's conduct of a
trade or business within the United States (in which case the
branch profits tax described above may also apply if the holder is
a non-U.S. corporation);
(ii) in the case of a holder who is a non-resident alien individual and
holds our common stock as a capital asset, the holder is present in
the United States for 183 or more days in the taxable year of the
sale and other conditions are met;
(iii) we are or have been a "United States real property holding
corporation" for U.S. federal income tax purposes (which we do not
believe we are or have been and do not expect to become in the
future) and certain other conditions are met; or
(iv) the holder is subject to tax pursuant to United States federal
income tax provisions applicable to certain United States
expatriates.
</TABLE>
Estate Tax
If an individual non-U.S. holder owns, or is treated as owning, our
common stock at the time of his or her death, such stock would be includable in
the individual's gross estate for U.S. federal estate tax purposes and may be
subject to U.S. federal estate tax imposed on the estates of nonresident
aliens, in the absence of a contrary provision contained in an applicable tax
treaty.
Backup Withholding and Information Reporting
Dividends
Under current law, dividends paid on our common stock to a non-U.S.
holder at an address outside the United States are generally exempt from backup
withholding tax and U.S. information reporting requirements (but not from
regular withholding tax as discussed above). Under the Treasury regulations
that are applicable to dividends paid after December 31, 2000, a non-U.S.
person must generally provide proper documentation indicating the person's non-
U.S. status to a withholding agent in order to avoid backup withholding tax;
however, dividends paid to certain exempt recipients (not including
individuals) will not be subject to backup withholding even if documentation is
not provided if the withholding agent is allowed to rely on presumptions
concerning the recipient's non-U.S. status (including payment to an address
outside the United States).
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<PAGE>
Broker Sales
Payments of proceeds from the sale of our common stock by a non-U.S.
holder made to or through a U.S. office of a broker are generally subject to
both information reporting and backup withholding at a rate of 31% unless the
holder certifies its non-U.S. status under penalties of perjury or otherwise
establishes entitlement to an exemption. Payments of proceeds from the sale of
our common stock by a non-U.S. holder made to or through a non-U.S. office of a
broker generally will not be subject to information reporting or backup
withholding. However, payments made to or through certain non-U.S. offices,
including the non-U.S. offices of a U.S. broker, are generally subject to
information reporting (but not backup withholding) unless the holder certifies
its non-U.S. status under penalties of perjury or otherwise establishes
entitlement to an exemption.
A non-U.S. holder may obtain a refund of any excess amounts withheld
under the backup withholding rules by filing an appropriate claim for refund
with the I.R.S.
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<PAGE>
UNDERWRITING
General
Merrill Lynch, Pierce, Fenner & Smith Incorporated, is acting as
representative of each of the underwriters named below. Subject to the terms
and conditions set forth in a U.S. purchase agreement among iXL, the selling
stockholders and the U.S. underwriters, and concurrently with the sale of
1,400,000 shares of common stock to the international managers, iXL and the
selling stockholders have agreed to sell to the U.S. underwriters, and each of
the U.S. underwriters severally and not jointly has agreed to purchase from iXL
and the selling stockholders the number of shares of common stock set forth
opposite its name below.
<TABLE>
<CAPTION>
Number of
Underwriter Shares
----------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................
Donaldson, Lufkin & Jenrette Securities Corporation..............
BancBoston Robertson Stephens Inc................................
First Union Securities, Inc......................................
The Robinson-Humphrey Company, LLC...............................
---------
Total....................................................... 5,600,000
=========
</TABLE>
iXL and the selling stockholders have also entered into an international
purchase agreement with certain underwriters outside the United States and
Canada for whom Merrill Lynch International is acting as lead manager. Subject
to the terms and conditions set forth in the international purchase agreement,
and concurrently with the sale of 5,600,000 shares of common stock to the U.S.
underwriters pursuant to the U.S. purchase agreement, iXL and the selling
stockholders have agreed to sell to the international managers, and the
international managers severally have agreed to purchase from iXL and the
selling stockholders, an aggregate of 1,400,000 shares of common stock. The
public offering price per share and the total underwriting discount per share
of common stock are identical under the U.S. purchase agreement and the
international purchase agreement.
In the U.S. purchase agreement and the international purchase agreement,
the several U.S. underwriters and the several international managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of common stock being sold pursuant to
each such agreement if any of the shares of common stock being sold pursuant to
such agreement are purchased. In the event of a default by an underwriter, the
U.S. purchase agreement and the international purchase agreement provide that,
in certain circumstances, the purchase commitments of non-defaulting
underwriters may be increased or the purchase agreements may be terminated. The
closings with respect to the sale of shares of common stock to be purchased by
the U.S. underwriters and the international managers are conditioned upon one
another.
The representative has advised iXL and the selling stockholders that the
U.S. underwriters propose initially to offer the shares of common stock to the
public at the public offering price set forth on the cover page of this
prospectus and to certain dealers at such price less a concession not in excess
of $ per share of common stock. The U.S. underwriters may allow, and such
dealers may reallow, a discount not in excess of $ per share of common stock
to certain other dealers. After the public offering, the public offering price,
concession and discount may change.
Over-allotment Option
iXL has granted options to the U.S. underwriters, exercisable for 30 days
after the date of this prospectus, to purchase up to an aggregate of 840,000
additional shares of common stock at the public offering price set forth on the
cover page of this prospectus, less the underwriting discount. The U.S.
underwriters may exercise these options solely to cover over-allotments, if
any, made on the sale of the common stock offered in
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<PAGE>
this prospectus. To the extent that the U.S. underwriters exercise these
options, each U.S. underwriter will be obligated, subject to certain
conditions, to purchase a number of additional shares of common stock
proportionate to that U.S. underwriter's initial amount reflected in the above
table. iXL has granted options to the international managers, exercisable for
30 days after the date of this prospectus, to purchase up to an aggregate of
210,000 additional shares of common stock to cover over-allotments, if any, on
terms similar to those granted to the U.S. underwriters.
Commissions and Discounts
The following table shows the per share and total underwriting discounts
and commissions to be paid by iXL and the selling stockholders to the
underwriters and the proceeds to iXL and the selling stockholders. This
information is presented assuming either no exercise or full exercise by the
underwriters of their over-allotment options.
<TABLE>
<CAPTION>
Per Share Without Option With Option
--------- -------------- -----------
<S> <C> <C> <C>
Public Offering Price......................
Underwriting Discount......................
Proceeds, before expenses, to iXL..........
Proceeds to Selling Stockholders...........
</TABLE>
iXL will not receive any of the proceeds from the sale of shares by the
selling stockholders. The expenses of the offering, exclusive of the
underwriting discount, are estimated at $ million and are payable by iXL.
The shares of common stock are being offered by the several underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the underwriters and
certain other conditions. The underwriters reserve the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part.
No Sales of Common Stock or Similar Securities
iXL, the selling stockholders, iXL's executive officers and directors and
certain other stockholders have agreed, subject to certain exceptions, for a
period of 90 days from the date of this prospectus, not to directly or
indirectly, without the prior written consent of Merrill Lynch:
. offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any
option--other than options granted by iXL pursuant to its stock
options plans--right or warrant for the sale of or otherwise
dispose of or transfer any shares of common stock or securities
convertible into exchangeable or exercisable for common stock,
whether now owned or thereafter acquired by the person executing
the agreement or with respect to which the person executing the
agreement thereafter acquires the power of disposition, or file a
registration statement under the Securities Act with respect to the
foregoing, other than registration statements by iXL on Form S-4
covering up to 10,000,000 shares of common stock to be issued in
connection with acquisitions, and other than registration
statements by iXL on Form S-8 covering up to 41,000,000 shares of
common stock subject to options under iXL's stock option plans,
plus additional shares to be registered under the Tessera Stock
Option Plan to be assumed by iXL upon the closing of the Tessera
acquisition; or
. enter into any swap or other agreement that transfers, in whole or
in part, the economic consequences of ownership of the common stock
whether any such swap or transaction is to be settled by delivery
of common stock or other securities, in cash or otherwise.
See "Shares Eligible for Future Sale."
Intersyndicate Agreement
The U.S. underwriters and the international managers have entered into an
intersyndicate agreement that provides for the coordination of their
activities. Pursuant to the intersyndicate agreement, the U.S. underwriters and
the international managers are permitted to sell shares of common stock to each
other for
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<PAGE>
purposes of resale at the initial public offering price, less an amount not
greater than the selling concession. Under the terms of the intersyndicate
agreement, the U.S. underwriters and any dealer to whom they sell shares of
common stock will not offer to sell or sell shares of common stock to persons
who are non-U.S. or non-Canadian persons or to persons they believe intend to
resell to persons who are non-U.S. or non-Canadian persons, and the
international managers any dealer to whom they sell shares of common stock will
not offer to sell or sell shares of common stock to U.S. persons or to Canadian
persons or to persons they believe intend to resell to U.S. or Canadian
persons, except in the case of transactions pursuant to the intersyndicate
agreement.
iXL and the selling stockholders have agreed to indemnify the
underwriters against certain liabilities, including certain liabilities under
the Securities Act, or to contribute to payments the underwriters may be
required to make for those liabilities.
Price Stabilization and Short Positions
Until the distribution of the common stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the underwriters
and certain selling group members to bid for and purchase the common stock. As
an exception to these rules, the representatives are permitted to engage in
certain transactions that stabilize the price of the common stock. Those
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the common stock.
The underwriters may create a short position in the common stock in
connection with the offering. This means that if they sell more shares of
common stock than are set forth on the cover page of this prospectus, the
representatives and lead managers, respectively, may reduce that short position
by purchasing common stock in the open market. The representatives and lead
managers, respectively, may also elect to reduce any short position by
exercising all or part of the over-allotment option described above.
Penalty Bids
The representatives and lead managers, respectively, may also impose a
penalty bid on certain underwriters and selling group members. This means that
if the representatives and lead managers, respectively, purchase shares of
common stock in the open market to reduce the underwriters' short position or
to stabilize the price of the common stock, they may reclaim the amount of the
selling concession from the underwriters and selling group members who sold
those shares.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of the common stock to the extent
that it discourages resales of the common stock.
Neither iXL nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
iXL nor any of the underwriters makes any representation that the
representatives or lead managers will engage in such transactions or that such
transactions, once commenced, will not be discontinued without notice.
Other Relationships
iXL provides services to Merrill Lynch and certain of its affiliates in
the ordinary course of business. Donaldson, Lufkin & Jenrette from time to time
provides investment banking services to Kelso and Company and its affiliates.
On June 8, 1999 General Electric purchased an aggregate of 2,000,000
shares of common stock directly from iXL in a private placement transaction.
This investment was completed concurrently with the closing of iXL's initial
public offering, at a price per share equal to the initial public offering
price. iXL
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<PAGE>
retained Merrill Lynch, Pierce, Fenner & Smith Incorporated and Donaldson,
Lufkin & Jenrette Securities Corporation to act as advisors for this private
placement and paid advisory fees of $250,000 to each of them. iXL also
indemnified these advisors against certain liabilities relating to this private
placement, including liabilities under the Securities Act.
DLJ Fund Investment Partners, an affiliate of Donaldson, Lufkin &
Jenrette Securities Corporation, is a limited partner in Kelso Investment
Associates V, L.P., which owns common stock of iXL. DLJ Fund Investment
Partners owns less than 1% of Kelso Investment Associates V, L.P.
In 1999, iXL retained Merrill Lynch to conduct a valuation of CFN for a
fee of $500,000.
iXL is negotiating an amendment and restatement of its credit facility.
First Union National Bank, an affiliate of First Union Securities, Inc., is
expected to act as syndication agent and as a lender for this amended facility.
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<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the validity of the issuance of the
shares of common stock offered hereby will be passed upon for iXL by Minkin &
Snyder, a Professional Corporation, Atlanta, Georgia. As of September 30, 1999,
attorneys employed by Minkin & Snyder held 153,978 shares of common stock and
options to purchase 11,449 shares of common stock. Attorneys employed by Minkin
& Snyder are selling 27,200 shares of common stock in this offering. From
September 1997 to December 17, 1997, Mr. James S. Altenbach, a member of Minkin
& Snyder, loaned $100,000 to iXL at an interest rate of 12% per annum.
Mr. Altenbach currently serves as Secretary of iXL and its subsidiaries
including CFN. Certain legal matters in connection with this offering will be
passed upon for the underwriters by Skadden, Arps, Slate, Meagher & Flom LLP,
Palo Alto, California.
EXPERTS
The financial statements included in this prospectus have been audited by
PricewaterhouseCoopers LLP, independent accountants. The companies and periods
covered by these audits are indicated in the individual reports of
PricewaterhouseCoopers LLP. Such financial statements have been so included in
reliance on the reports of PricewaterhouseCoopers LLP given on the authority of
said firm as experts in auditing and accounting.
ADDITIONAL INFORMATION
iXL has filed with the Securities and Exchange Commission a Registration
Statement on Form S-1 under the Securities Act, and the rules and regulations
promulgated thereunder, with respect to the common stock offered hereby. This
prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules to the Registration Statement. For further information
with respect to iXL and the common stock, reference is hereby made to such
Registration Statement and the exhibits and schedules to the Registration
Statement, which may be inspected and copied at the principal office of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located at Seven World Trade Center, Suite 1300, New
York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and copies of all or any part thereof may be obtained
at prescribed rates from the Commission's Public Reference Section at such
addresses. Also, the Commission maintains a World Wide Web site on the
Internet, at http://www.sec.gov, that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. Statements contained in the prospectus as to the contents
of any contract or other document that is filed as an exhibit to the
Registration Statement are qualified by reference to the full text of the
relevant contract or document.
iXL intends to furnish its stockholders with annual reports containing
financial statements audited by an independent public accounting firm and make
available to its stockholders quarterly reports for the first three quarters of
each fiscal year containing interim unaudited financial information.
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<PAGE>
iXL ENTERPRISES, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
iXL ENTERPRISES, INC.
Report of Independent Accountants.......................................... F-2
Consolidated Balance Sheet................................................. F-3
Consolidated Statement of Operations....................................... F-4
Consolidated Statement of Changes in Stockholders' Equity.................. F-5
Consolidated Statement of Cash Flows....................................... F-6
Notes to Consolidated Financial Statements................................. F-7
BOXTOP INTERACTIVE, INC.
Report of Independent Accountants.......................................... F-30
Balance Sheet.............................................................. F-31
Statement of Operations.................................................... F-32
Statement of Shareholders' Deficit......................................... F-33
Statement of Cash Flows.................................................... F-34
Notes to Financial Statements.............................................. F-35
TESSERA ENTERPRISE SYSTEMS, INC.
Report of Independent Accountants.......................................... F-42
Consolidated Balance Sheets................................................ F-43
Consolidated Statement of Operations....................................... F-44
Consolidated Statement of Changes in Stockholders' Deficit................. F-45
Consolidated Statement of Cash Flows....................................... F-46
Notes to Consolidated Financial Statements................................. F-47
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
iXL Enterprises, Inc.
In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of operations, of changes in stockholders'
equity and of cash flows present fairly, in all material respects, the
financial position of iXL Enterprises, Inc. and its subsidiaries at December
31, 1997 and 1998, and the results of their operations and their cash flows for
the period from May 1, 1996 (commencement of operations) through December 31,
1996 and the years ended December 31, 1997 and 1998, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Atlanta, Georgia
February 5, 1999
F-2
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
December 31, September 30,
----------------- -------------
1997 1998 1999
------- -------- -------------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents................... $23,038 $ 19,259 $79,320
Marketable securities....................... -- -- 25,003
Accounts receivable less allowance for
doubtful accounts of $138, $796, and
$2,155..................................... 3,259 17,737 50,022
Unbilled revenues........................... 1,858 8,089 24,144
Prepaid expenses and other assets........... 616 3,355 7,745
------- -------- --------
Total current assets...................... 28,771 48,440 186,234
Property and equipment, net................. 9,178 27,975 45,446
Intangible assets, net...................... 18,205 64,217 49,476
Equity investment in affiliate, net......... 1,115 -- --
Other non-current assets.................... 343 2,319 2,236
------- -------- --------
Total assets.............................. $57,612 $142,951 $283,392
======= ======== ========
LIABILITIES, MANDATORILY REDEEMABLE PREFERRED
STOCK AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable............................ $ 2,242 $ 6,438 $ 10,840
Deferred revenues........................... 471 6,072 9,732
Accrued liabilities......................... 1,746 7,943 17,590
Current portion of long-term debt........... 433 868 566
------- -------- --------
Total current liabilities................. 4,892 21,321 38,728
Long-term debt................................ 840 20,552 1,315
------- -------- --------
Total liabilities........................... 5,732 41,873 40,043
------- -------- --------
Mandatorily redeemable preferred stock........ 29,930 65,679 --
Mandatorily redeemable preferred stock of
subsidiary................................... -- 9,839 48,503
------- -------- --------
29,930 75,518 48,503
------- -------- --------
Commitments and contingencies (Note 13)
Stockholders' equity
Class A Convertible Preferred Stock, par
value $.01, 250,000 shares authorized;
issued and outstanding 169,260, 177,291,
and 0; aggregate liquidation preference of
$25,590, $31,103, and $0................... 2 2
Class A Common Stock, par value $.01,
75,000,000 shares authorized; issued and
outstanding 0, 0, and 0....................
Class B Common Stock, par value $.01,
200,000,000 shares authorized; issued and
outstanding 8,229,800, 16,334,905 and
64,840,394 (including 0, 252,416, and
252,416 shares held in treasury)........... 82 163 648
Additional paid-in capital.................. 38,760 94,820 304,345
Accumulated deficit......................... (16,894) (65,760) (112,853)
Accumulated other comprehensive income...... -- (10) 7,062
Note receivable from stockholder............ -- (900) (900)
Unearned compensation....................... -- (1,867) (2,568)
Treasury stock at cost; 0, 252,416, and
252,416 shares............................. -- (888) (888)
------- -------- --------
Total stockholders' equity................ 21,950 25,560 194,846
------- -------- --------
Total liabilities, mandatorily redeemable
preferred stock and
stockholders' equity..................... $57,612 $142,951 $283,392
======= ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
<TABLE>
<CAPTION>
For the period
May 1, 1996 Years ended Nine Months ended
through December 31, September 30,
December 31, ------------------ ------------------
1996 1997 1998 1998 1999
-------------- -------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues................ $ 5,379 $ 18,986 $ 64,767 $ 35,507 $142,639
Cost of revenues........ 3,577 11,343 44,242 25,613 83,291
------- -------- -------- -------- --------
Gross profit.......... 1,802 7,643 20,525 9,894 59,348
Sales and marketing
expenses............... 812 3,903 17,325 9,496 32,418
General and
administrative
expenses............... 1,247 9,114 30,163 15,839 50,125
Research and development
expenses............... -- 4,820 4,408 3,473 3,489
Depreciation............ 372 1,408 5,217 2,915 8,499
Amortization............ 928 5,191 10,590 5,992 13,013
------- -------- -------- -------- --------
Loss from operations.. (1,557) (16,793) (47,178) (27,821) (48,196)
Other income (expense),
net.................... 48 116 (28) 40 (183)
Loss on equity
investment............. (249) (1,443) (1,640) (1,287) (65)
Interest income......... 32 136 750 551 2,180
Interest expense........ (30) (238) (770) (322) (829)
------- -------- -------- -------- --------
Loss before income
taxes................ (1,756) (18,222) (48,866) (28,839) (47,093)
Income tax benefit...... 302 2,782 -- -- --
------- -------- -------- -------- --------
Net loss.............. (1,454) (15,440) (48,866) (28,839) (47,093)
Dividends and accretion
on mandatorily
redeemable preferred
stock.................. -- -- (9,099) (5,096) (20,514)
------- -------- -------- -------- --------
Net loss available to
common stockholders.. $(1,454) $(15,440) $(57,965) $(33,935) $(67,607)
======= ======== ======== ======== ========
Basic and diluted net
loss per common
share................ $ (0.37) $ (2.36) $ (4.92) $ (3.28) $ (1.85)
======= ======== ======== ======== ========
Weighted average
common shares
outstanding.......... 3,972 6,540 11,777 10,348 36,447
======= ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
F-4
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands, except share data)
<TABLE>
<CAPTION>
Accumulated Note
Additional Other Receivable
Class A Class B Paid-in Accumulated Comprehensive Comprehensive from
Preferred Stock Common Stock Capital Deficit Income Income Stockholder
------------------- ----------------- ---------- ----------- ------------- ------------- -----------
Shares Value Shares Value
---------- ------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Initial capital
contribution..... 101,500 $ 1 300 $ -- $ 10,149 $ -- $ -- $ -- $--
Stock issuance... 10,000 -- 25,000 -- 1,025 -- -- -- --
Stock issuance in
connection with
acquisitions..... -- -- 4,009,500 40 3,228 -- -- -- --
Net loss......... -- -- -- -- -- (1,454) -- -- --
---------- ----- ---------- ---- -------- --------- ------- ------ ------
Balance, December
31, 1996......... 111,500 1 4,034,800 40 14,402 (1,454) -- -- --
Stock issuance... 57,760 1 13,619 -- -- -- --
Stock issuance in
connection with
acquisitions..... -- -- 4,195,000 42 10,739 -- -- -- --
Net loss......... -- -- -- -- -- (15,440) -- -- --
---------- ----- ---------- ---- -------- --------- ------- ------ ------
Balance, December
31, 1997......... 169,260 2 8,229,800 82 38,760 (16,894) -- -- --
---------- ----- ---------- ---- -------- --------- ------- ------ ------
Stock issuance... 8,031 -- -- -- 5,512 -- -- -- (900)
Stock issuance in
connection with
acquisitions..... -- -- 8,047,305 81 41,663 -- -- -- --
Treasury stock
acquired......... -- -- (252,416) -- -- -- -- -- --
Stock options ex-
ercised.......... -- -- 57,800 -- -- -- -- -- --
Dividends and ac-
cretion on
mandatorily re-
deemable pre-
ferred stock..... -- -- -- -- (8,671) -- -- -- --
Common Stock to
be issued in con-
nection with
Class D Pre-
ferred........... -- -- -- -- 13,235 -- -- -- --
Issuance of stock
options and war-
rants............ -- -- -- -- 3,508 -- -- -- --
Stock compensa-
tion and warrant
expenses......... -- -- -- -- 813 -- -- -- --
Comprehensive in-
come:
Net loss........ -- -- -- -- -- (48,866) (48,866) -- --
Foreign currency
translation ad-
justment........ -- -- -- -- -- -- (10) (10) --
-------
Other comprehen-
sive income..... -- -- -- -- -- -- (10) -- --
-------
Comprehensive in-
come............. (48,876)
---------- ----- ---------- ---- -------- --------- ------- ------ ------
Balance, December
31, 1998......... 177,291 2 16,082,489 163 94,820 (65,760) (10) (900)
---------- ----- ---------- ---- -------- --------- ------- ------ ------
Stock issuance
(unaudited)...... (177,291) (2) 41,518,870 415 170,573 -- -- -- --
Conversion and
accretion of
mandatorily re-
deemable pre-
ferred stock (un-
audited)......... -- -- 6,986,619 70 18,159 -- -- -- --
Issuance of stock
options (unau-
dited)........... -- -- -- -- 4,102 -- -- -- --
Stock compensa-
tion and warrant
expenses (unau-
dited)........... -- -- -- -- 16,691 -- -- -- --
Comprehensive in-
come:
Net loss (unau-
dited).......... -- -- -- -- -- (47,093) (47,093) -- --
Foreign currency
translation ad-
justment (unau-
dited).......... -- -- -- -- -- -- (65) (65) --
Unrealized gain
on marketable
securities (un-
audited)........ -- -- -- -- -- -- 7,137 7,137 --
-------
Other comprehen-
sive income (un-
audited)........ -- -- -- -- -- -- 7,072 -- --
-------
Comprehensive in-
come (unau-
dited)........... -- -- -- -- -- -- (40,021) -- --
---------- ----- ---------- ---- -------- --------- ------- ------ ------
Balance, Septem-
ber 30, 1999 (un-
audited)......... -- -- 64,587,978 $648 $304,345 $(112,853) $7,062 $(900)
========== ===== ========== ==== ======== ========= ====== ======
<CAPTION>
Total
Unearned Treasury Stockholders'
Compensation Stock Equity
------------ -------- -------------
<S> <C> <C> <C>
Initial capital
contribution..... $ -- $ -- $ 10,150
Stock issuance... -- -- 1,025
Stock issuance in
connection with
acquisitions..... -- -- 3,268
Net loss......... -- -- (1,454)
------------ -------- -------------
Balance, December
31, 1996......... -- -- 12,989
Stock issuance... -- -- 13,620
Stock issuance in
connection with
acquisitions..... -- -- 10,781
Net loss......... -- -- (15,440)
------------ -------- -------------
Balance, December
31, 1997......... -- -- 21,950
------------ -------- -------------
Stock issuance... -- -- 4,612
Stock issuance in
connection with
acquisitions..... -- -- 41,744
Treasury stock
acquired......... -- (888) (888)
Stock options ex-
ercised.......... -- -- --
Dividends and ac-
cretion on
mandatorily re-
deemable pre-
ferred stock..... -- -- (8,671)
Common Stock to
be issued in con-
nection with
Class D Pre-
ferred........... -- -- 13,235
Issuance of stock
options and war-
rants............ (3,508) -- --
Stock compensa-
tion and warrant
expenses......... 1,641 -- 2,454
Comprehensive in-
come:
Net loss........ -- -- (48,866)
Foreign currency
translation ad-
justment........ -- -- (10)
Other comprehen-
sive income..... -- -- --
Comprehensive in-
come.............
------------ -------- -------------
Balance, December
31, 1998......... (1,867) (888) 25,560
------------ -------- -------------
Stock issuance
(unaudited)...... -- -- 170,986
Conversion and
accretion of
mandatorily re-
deemable pre-
ferred stock (un-
audited)......... -- -- 18,229
Issuance of stock
options (unau-
dited)........... (4,102) -- --
Stock compensa-
tion and warrant
expenses (unau-
dited)........... 3,401 -- 20,092
Comprehensive in-
come:
Net loss (unau-
dited).......... -- -- (47,093)
Foreign currency
translation ad-
justment (unau-
dited).......... -- -- (65)
Unrealized gain
on marketable
securities (un-
audited)........ -- -- 7,137
Other comprehen-
sive income (un-
audited)........ -- -- --
Comprehensive in-
come (unau-
dited)...........
------------ -------- -------------
Balance, Septem-
ber 30, 1999 (un-
audited)......... $(2,568) $(888) $194,846
============ ======== =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the period
May 1, 1996 Years ended Nine Months ended
through December 31, September 30,
December 31, ------------------ ------------------
1996 1997 1998 1998 1999
-------------- -------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operat-
ing activities
Net loss................ $(1,454) $(15,440) $(48,866) $(28,839) $(47,093)
Adjustments to reconcile
net loss to net cash
used in operating
activities
Depreciation ......... 372 1,408 5,217 2,915 8,499
Amortization.......... 928 5,191 10,590 5,992 13,013
Provision for bad
debts................ 134 118 1,227 665 2,571
Acquired in-process
technology........... -- 2,400 -- -- --
Deferred income tax-
es................... (344) (2,782) -- -- --
Non-cash investment
and losses in equity
affiliate and
amortization......... (168) 807 1,365 1,012 65
Stock option and war-
rant expense......... -- -- 2,454 -- 8,292
Changes in assets and
liabilities, net of
effects from purchase
of subsidiaries
Accounts receiv-
able............... (249) (1,538) (9,840) (6,016) (34,856)
Unbilled revenues... (112) (1,597) (5,328) (3,476) (16,055)
Prepaid expenses and
other assets....... (5) (684) (4,669) (3,871) (5,579)
Accounts payable and
accrued liabili-
ties............... (332) 1,534 5,523 3,393 14,527
Deferred revenues... 195 (156) 4,888 2,515 3,660
------- -------- -------- -------- --------
Net cash used in op-
erating activi-
ties............... (1,035) (10,739) (37,439) (25,710) (52,956)
------- -------- -------- -------- --------
Cash flows from invest-
ing activities
Purchases of property
and equipment........ (666) (6,704) (20,304) (13,693) (25,733)
Purchases of subsidi-
aries, net of cash
acquired............. (7,833) (3,433) (16,602) (16,611) --
Purchases of commer-
cial paper........... -- -- -- -- (17,704)
Investment in equity
affiliate............ (1,129) (625) -- -- --
Loan to equity affili-
ate.................. -- (250) -- -- --
Gain on sale of fixed
and intangible as-
sets................. -- -- -- -- 1,892
------- -------- -------- -------- --------
Net cash used in in-
vesting activi-
ties............... (9,628) (11,012) (36,906) (30,304) (41,545)
------- -------- -------- -------- --------
Cash flows from financ-
ing activities
Proceeds from
borrowings........... 250 6,849 23,428 14,000 --
Repayment of
borrowings........... (119) (6,259) (6,729) (6,276) (19,946)
Proceeds from issuance
of mandatorily
redeemable preferred
stock................ -- 29,930 40,314 40,560 --
Proceeds from issuance
of stock............. 10,941 13,860 4,612 4,613 125,312
Proceeds from issuance
of mandatorily
redeemable preferred
stock of subsidiary.. -- -- 9,839 -- 49,261
Acquisition of trea-
sury stock........... -- -- (888) (888) --
------- -------- -------- -------- --------
Net cash provided by
financing activi-
ties 11,072 44,380 70,576 52,009 154,627
------- -------- -------- -------- --------
Effect of exchange rate
changes on cash and
cash
equivalents............ -- -- (10) -- (65)
Net increase (de-
crease) in cash and
cash
equivalents........ 409 22,629 (3,779) (4,005) 60,061
Cash and cash equiva-
lents at beginning of
period................. -- 409 23,038 23,038 19,259
------- -------- -------- -------- --------
Cash and cash equiva-
lents at end of peri-
od..................... $ 409 $ 23,038 $ 19,259 $ 19,033 $ 79,320
======= ======== ======== ======== ========
Supplemental disclosure
of cash flow informa-
tion
Cash paid for inter-
est.................. $ 29 $ 168 $ 797 $ 377 $ 871
======= ======== ======== ======== ========
Non-cash investing and
financing activities
Acquisition of
equipment through
capital leases....... $ 112 $ 289 $ 569 $ 382 $ 407
Unrealized gain on
marketable
securities........... -- -- -- -- $ 7,137
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
1. Background and Summary of Significant Accounting Policies
iXL Enterprises, Inc. (the "Company") is an Internet services company,
which provides Internet strategy consulting and comprehensive Internet-based
solutions to Fortune 1000 companies and other corporate users of information
technology. The Company helps businesses identify how the Internet can be used
to their competitive advantage and provides expertise in creative design and
systems engineering to design, develop and deploy advanced Internet
applications and solutions. In addition to its Internet services offerings, the
Company operates Consumer Financial Network, Inc. ("CFN"), a sophisticated e-
commerce platform for marketing financial services and employee benefits over
corporate intranets and the Internet, as well as through a telesales center.
iXL Enterprises, Inc. is a Delaware corporation formed in March 1996.
Since its inception, iXL Enterprises, Inc. has acquired 34 companies (see Note
3).
Principles of consolidation
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries after the elimination of all significant
intercompany accounts and transactions. The Company accounts for its investment
in University Netcasting, Inc. ("UNI") using the equity method.
The Company owns 100% of the common stock of CFN. In addition to its
common stock, CFN has mandatorily redeemable convertible preferred stock of
which 13,333,334 shares are issued and outstanding as of December 31, 1998 and
are owned by a third party. The Company owns 88% of CFN on an as-converted
basis. As the Company owns 100% of the common stock of CFN, it will continue to
reflect in its consolidated financial statements all of the operating results
of CFN until such time the CFN mandatorily redeemable convertible preferred
stock is converted into CFN common stock.
Revenue recognition
Revenues are recognized for fixed fee contracts using the percentage of
completion method based on costs incurred. Revenues are recognized as services
are performed for time and materials contracts. CFN recognizes revenues upon
completion of an end-user transaction through the CFN operating network.
Revenues related to software development contracts, including planning,
installation, implementation and training that require significant
customization or modification are recognized using the percentage of completion
method. Revenues from sales of software that do not require customization or
modification are recognized upon delivery, or when all essential elements have
been delivered, in accordance with the American Institute of Certified Public
Accountants ("AICPA") Statement of Position 97-2, "Software Revenue
Recognition."
Unbilled revenues represent revenues earned under contracts in advance of
billings. Such amounts are normally converted into accounts receivable within
90 days. Deferred revenues represent billings made or cash received in advance
of services performed or costs incurred under contracts. Any anticipated losses
on contracts are charged to earnings when identified. Revenues from post-
contract support are recorded as services are provided.
Cash and cash equivalents
The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.
Property and equipment
Property and equipment is recorded at cost, less accumulated
depreciation. Expenditures for renewals and improvements that significantly add
to the productive capacity or extend the useful life of an asset are
F-7
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
capitalized. Expenditures for maintenance and repairs are charged to operations
as incurred. Depreciation expense is provided using the straight-line method
over the estimated useful lives for purchased assets. Equipment held under
capital leases is amortized using the straight-line method over the lesser of
the useful life or the lease term. Leasehold improvements are amortized over
the shorter of the useful lives of the assets or the remaining term of the
lease.
Intangible assets
Intangible assets consist primarily of assembled workforce and excess of
cost over fair value of net assets acquired ("goodwill") and are stated at cost
less accumulated amortization. Identifiable intangible assets consist primarily
of assembled workforce, which is being amortized over its estimated future life
of three years. Goodwill is being amortized over its estimated future life of
five to fifteen years, primarily five years.
The carrying value of the excess of cost over fair value of net assets
acquired and other intangible assets are reviewed if facts and circumstances
suggest that they may be impaired. If this review indicates goodwill or other
intangibles will not be recoverable, as determined based on future expected
cash flows or other fair market value determinations, the Company's carrying
value of the goodwill or other intangibles is reduced to fair value.
Software developments costs
In accordance with Statement of Financial Accounting Standards No. 86,
"Accounting for the Costs of Computer Software to Be Sold, Leased or Otherwise
Marketed," software development costs are expensed as incurred until
technological feasibility has been established, at which time such costs are
capitalized until the product is available for general release to customers. To
date, the establishment of technological feasibility of the Company's products
and general release of such software have substantially coincided. As a result,
software development costs qualifying for capitalization have been
insignificant and therefore, have not been capitalized.
Internal use computer software
The Company adopted the AICPA Statement of Position 98-1 "Accounting for
the Costs of Computer Software Developed or Obtained for Internal Use"
effective January 1, 1998. The Company capitalizes external costs related to
software and implementation services in connection with its internal use
software systems.
Income taxes
The Company has applied the asset and liability approach of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes," for
financial accounting and reporting purposes. The Company accounts for certain
items of income and expense in different time periods for financial reporting
and income tax purposes. Provisions for deferred income taxes are made in
recognition of such temporary differences, where applicable. A valuation
allowance is established against deferred tax assets unless the Company
believes it is more likely than not that the benefit will be realized.
Stock-based compensation plans
The Company accounts for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and related
Interpretations and elects the disclosure option of Statement of Financial
Accounting Standards No. 123,
F-8
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
"Accounting for Stock-Based Compensation" ("FAS 123"). Accordingly,
compensation cost for stock options is measured as the excess, if any, of the
fair value of the Company's stock at the date of the grant over the amount an
employee must pay to acquire the stock.
Basic and diluted net loss per share
Basic net loss per common share is based on the weighted average number
of shares of Common Stock outstanding during the period. No potential common
shares have been included in the diluted earnings per share calculation as they
would have been antidilutive due to the net loss reported by the Company. The
convertible securities outstanding and the number of common shares into which
they are convertible are as follows:
<TABLE>
<CAPTION>
Number of Common Shares into
which they are convertible at
each year-end
--------------------------------
Security 1996 1997 1998
-------- ---------- ---------- ----------
<S> <C> <C> <C>
Stock Options.......................... 1,915,500 5,549,200 18,226,112
Warrants............................... -- 1,295,900 2,486,006
Class A Convertible Preferred Stock.... 11,150,000 16,926,000 17,729,100
Class B Mandatorily Redeemable
Convertible Preferred................. -- 8,307,500 9,876,700
Class C Mandatorily Redeemable
Convertible Preferred ................ -- 923,200 923,200
</TABLE>
The Class D Mandatorily Redeemable Nonvoting Preferred Stock is not a
convertible security, but provides for certain amounts of Common Stock to be
issued upon redemption. The minimum aggregate number of shares to be issued
upon redemption is 3,722,502.
CFN has outstanding mandatorily redeemable preferred stock that is
exchangeable into Common Stock of the Company upon the occurrence of certain
events ("CFN Mandatorily Redeemable Preferred") (see Note 8). These
contingently issuable shares have not been included in diluted earnings per
share as they would be antidilutive.
Net loss available to common stockholders used in calculating basic and
diluted earnings per share includes charges related to dividends and accretion
on mandatorily redeemable preferred stock.
Stock split
In January 1998, the Board of Directors declared a stock split of the
Class B Common Stock effected in the form of a dividend distribution of 99
shares of Class B Common Stock for each share of Class B Common Stock held as
of January 9, 1998. The accompanying consolidated financial statements give
retroactive effect for this stock dividend as if it occurred at inception of
the Company.
Foreign currency translation
The financial position and results of operations of foreign subsidiaries
are measured using the currency of the respective countries as the functional
currency. Assets and liabilities are translated into the reporting currency
(U.S. dollars) at the foreign exchange rate in effect at the balance sheet
date, while revenue and expenses for the year are translated at the average
exchange rate in effect during the year. Translation gains and losses are not
included in determining net income or loss but are accumulated and reported as
a separate component of stockholders' equity. The Company has not entered into
any hedging contracts during any of the periods presented.
F-9
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
Fair value of financial instruments
The carrying amounts of financial instruments, including cash, cash
equivalents, accounts receivable, accounts payable and accrued expenses,
approximate fair value. The carrying amount of long-term debt approximates fair
value based on current rates of interest available to the Company for loans of
similar maturities.
Comprehensive income
Effective January 1, 1998, the Company implemented Statement of Financial
Accounting Standards No. 130 "Reporting Comprehensive Income." This standard
requires that the total changes in equity resulting from revenue, expenses, and
gains and losses, including those which do not affect the accumulated deficit,
be reported. Accordingly, those amounts which are comprised solely of foreign
currency translation adjustments, are included in other comprehensive income in
the consolidated statements of stockholders' equity.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses and disclosure of contingent assets and liabilities. The estimates
and assumptions used in the accompanying consolidated financial statements are
based upon management's evaluation of the relevant facts and circumstances as
of the date of the financial statements. Actual results could differ from those
estimates.
Unaudited information
The interim financial information as of and for the nine months ended
September 30, 1999 and 1998 is unaudited. However, in the opinion of
management, such information has been prepared on the same basis as the audited
financial statements and includes all adjustments, consisting solely of normal
recurring adjustments, necessary for a fair presentation of the financial
position and results of operations for the periods presented. The interim
results, however, are not necessarily indicative of results for any future
period.
New accounting pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (FAS 133). This statement establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. In June 1999, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 137, which postpones the
mandatory adoption of FAS 133 by the Company until January 1, 2001. The Company
has not entered into any significant derivative financial instrument
transactions.
F-10
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
2. Property and Equipment
Property and equipment are summarized as follows:
<TABLE>
<CAPTION>
Estimated
Useful December 31,
Lives In ---------------
Years 1997 1998
--------- ------ -------
<S> <C> <C> <C>
Land.......................................... N/A $ 100 $ 100
Building...................................... 40 550 550
Improvements.................................. 5-10 1,456 4,852
Furniture and fixtures........................ 5-7 1,286 5,472
Computer equipment and software............... 3-5 5,496 19,883
Equipment..................................... 5-10 2,247 6,068
------ -------
11,135 36,925
Less: Accumulated depreciation and
amortization................................. (1,957) (8,950)
------ -------
$9,178 $27,975
====== =======
</TABLE>
At December 31, 1997 and 1998, the Company had approximately $961 and
$2,570, respectively, of vehicles and equipment under capital leases included
in property and equipment and related accumulated amortization of approximately
$335 and $889, respectively. Amortization of these assets recorded under
capital leases is included in depreciation expense.
F-11
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
3. Acquisitions
During the two-year period ended December 31, 1998, the Company acquired
28 companies. The companies acquired and purchase price, including the shares
of Class B Common Stock and related warrants and options issued are as follows:
<TABLE>
<CAPTION>
Fair Value
Per Share of Net
Fair Value Shares of Cash Used for Tangible
of iXL Common Warrants/ Acquisitions, Total Assets
Date Common Stock Options Net of Cash Purchase (Liabilities) Assembled Other
Acquired Stock Issued Issued(1) Acquired Price Acquired Workforce Intangibles (2)
Business Acquired -------------- ---------- --------- --------- ------------- -------- ------------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BoxTop
Interactive,
Inc.-- Los
Angeles, CA(4).. May 1997 $2.10 3,416,700 1,236,800 $ 1,182 $10,044 $(1,635) $ 1,946 $3,562
Other
Acquisitions
(aggregated
1997)........... Various 778,300 179,800 2,251 2,804 (447) 1,213 --
============== ===== ========= ========= ======= ======= ======= ======= ======
Total of 1997
Acquisitions... 4,195,000 1,416,600 $ 3,433 $12,848 $(2,082) $ 3,159 $3,562
============== ===== ========= ========= ======= ======= ======= ======= ======
Digital Planet,
Inc.--
Los Angeles,
CA(4)(5)........ May 1998 5.50 259,584 -- $ 1,962 $ 3,550 $ (39) $ 1,012 --
Micro
Interactive,
Inc.--
New York,
NY(3)........... May 1998 5.50 740,000 19,500 1,718 5,809 281 999 --
CommerceWAVE,
Inc.-- San
Diego, CA(7).... July 1998 5.82 877,898 64,434 117 5,459 (1,037) 662 700
Image
Communications,
Inc.--
Vienna, VA(4)... July 1998 5.82 378,999 125,054 753 3,324 381 1,213 --
Spinners
Incorporated--
Boston,
MA(4)(5)(9)..... July 1998 5.82 674,132 66,495 1,383 5,543 499 1,129 --
Tekna, Inc.--
Richmond,
VA(4)(5)........ September 1998 4.50 712,622 125,757 611 4,758 527 820 --
Larry Miller
Productions,
Inc.--
Boston, MA(4)... September 1998 4.50 113,823 248,135 1,812 3,490 (143) 963 --
NetResponse--
Arlington,
VA(4)(5)(11).... September 1998 4.50 701,375 73,625 1,719 5,307 1,312 1,168 --
Ionix Development
Corp.
-- Chicago,
IL(5)........... September 1998 4.50 358,551 -- 1,059 3,013 231 778 --
Pequot Systems,
Inc.--
Norwalk,
CT(5)(9)........ September 1998 4.50 378,066 -- 792 2,501 154 357 --
TwoWay
Communications
LLC--Chicago,
IL(4)(10) September 1998 4.50 269,421 -- 1,246 2,469 335 713 --
Other
Acquisitions
(aggregated
1998)........... Various 2,295,530 57,215 3,430 14,188 795 6,075 --
-------------- ----- --------- --------- ------- ------- ------- ------- ------
Total of 1998
acquisitions... 7,760,001 780,215 $16,602 $59,411 $ 3,296 $15,889 $ 700
============== ===== ========= ========= ======= ======= ======= ======= ======
<CAPTION>
Excess of
Cost Over
Fair Value of
Net Assets
Acquired
Business Acquired -------------
<S> <C>
BoxTop
Interactive,
Inc.-- Los
Angeles, CA(4).. 6,171
Other
Acquisitions
(aggregated
1997)........... 2,038
=============
Total of 1997
Acquisitions... $ 8,209
=============
Digital Planet,
Inc.--
Los Angeles,
CA(4)(5)........ $ 2,577
Micro
Interactive,
Inc.--
New York,
NY(3)........... 4,529
CommerceWAVE,
Inc.-- San
Diego, CA(7).... 5,134
Image
Communications,
Inc.--
Vienna, VA(4)... 1,730
Spinners
Incorporated--
Boston,
MA(4)(5)(9)..... 3,915
Tekna, Inc.--
Richmond,
VA(4)(5)........ 3,411
Larry Miller
Productions,
Inc.--
Boston, MA(4)... 2,670
NetResponse--
Arlington,
VA(4)(5)(11).... 2,827
Ionix Development
Corp.
-- Chicago,
IL(5)........... 2,004
Pequot Systems,
Inc.--
Norwalk,
CT(5)(9)........ 1,990
TwoWay
Communications
LLC--Chicago,
IL(4)(10) 1,421
Other
Acquisitions
(aggregated
1998)........... 7,318
-------------
Total of 1998
acquisitions... $39,526
=============
</TABLE>
- --------
(1) Amounts equal the number of Class B Common Stock shares to be issued upon
exercise of the warrants and options.
(2) Other intangibles include in-process research and development at BoxTop,
the BoxTop brandname and non-compete agreements.
Primary capabilities: (3)Interactive multimedia; (4)Creative design;
(5)Software engineering; (6)Travel expertise; (7)E-Commerce; (8)Video
production; (9)Financial Services Consulting; (10)Healthcare expertise;
(11)Strategy consulting.
F-12
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
Individual acquisitions with a purchase price of $2,000 or less have been
aggregated in Other Acquisitions in the schedule above and consist of the
following:
<TABLE>
<CAPTION>
Per Share
Fair Value
of iXL
Date Common
Business Acquired Acquired Stock
- ----------------- -------------- ----------
<S> <C> <C>
Webbed Feet, LLC--Atlanta, GA(3).................... February 1997 $2.00
The Whitley Group, Inc.--Charlotte, NC(2)........... April 1997 2.00
Swan Interactive Media, Inc.--Atlanta, GA(4)........ July 1997 2.25
Small World Software, Inc.--New York, NY(3)(4)...... January 1998 3.23
Green Room Productions, L.L.C.--San Francisco,
CA(3)(4)(5)........................................ February 1998 3.23
CCG Online--Denver, CO(3)(4)(5)..................... March 1998 4.60
Spin Cycle Entertainment, Inc.--Los Angeles,
CA(3)(4)........................................... May 1998 5.50
InTouch Interactive, Inc.--Charlotte, NC(4)......... May 1998 5.50
Campana New Media, S.L. and The Other Media, S.L.--
Madrid, Spain(3)................................... July 1998 5.82
601 Design, Inc.--New York, NY(7)................... July 1998 5.82
Wissing & Laurence, Inc.--New York, NY(7)........... July 1998 5.82
LAVA--Hamburg, Germany(4)........................... September 1998 4.50
Denovo New Media, Ltd.--London, England(3).......... September 1998 4.50
Exchange Place Solutions, Inc.--Atlanta, GA(8)...... September 1998 4.50
Pantheon Interactive, Inc.--Santa Clara, CA(4)...... September 1998 4.50
</TABLE>
All acquisitions have been accounted for using the purchase method, and
accordingly, the purchase price has been allocated to the tangible and
identifiable intangible assets acquired and liabilities assumed on the basis of
their fair value on the acquisition dates. The historical carrying amounts of
tangible net assets acquired approximated their fair values. The fair value of
identifiable intangible assets acquired were based on independent appraisals or
management estimates. Since the date of acquisition, the results of operations
of the acquired companies have been included in the Consolidated Statement of
Operations.
The allocation of the purchase price of BoxTop Interactive, Inc. resulted
in a $2,400 charge to in-process research and development expenses in 1997
relating to an Internet-based video conferencing product under development
which had not reached technological feasibility. Such charge has been included
in research and development expenses in the Consolidated Statement of
Operations. Certain related core technology was valued as existing technology
and not included in the value of the acquired technology in-process. The value
of the purchased in-process technology was determined by estimating the present
value of the projected net cash flows to be generated by the development
efforts completed as of the acquisition. Revenue, expenses, and other cash flow
items associated with commercialization of the product were estimated for a
discrete projection period. Strong revenue growth was projected for this
product through 1999; thereafter, revenue was expected to increase moderately
each year through 2001. The cash flows were then discounted to present value at
35%, a rate of return that considers the relative risk of achieving the
projected cash flows and the time value of money. Finally, a stage of
completion factor was applied to the sum of the present values of the cash
flows in the discrete projection period. Application of the stage of completion
factor correctly excludes from the value of in-process technology that value
associated with remaining development tasks (which are not in-process). The
stage of completion factor was calculated giving consideration to the costs
incurred to date on the in-process technology relative to the total anticipated
costs for the project. Additionally, consideration of the level of difficulty
of completed development tasks relative to those remaining was also made. In
the fourth quarter of 1998, due to the introduction of competing products
utilizing alternative technologies into the market, management decided to cease
further investment in the development of this product.
F-13
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
For acquisitions made in 1997 and 1998, the purchase price in excess of
identifiable tangible and intangible assets acquired and liabilities assumed of
$8,209 and $39,526, respectively, was allocated to goodwill and is being
amortized over estimated useful lives of five years. Approximately $3,159 and
$15,889 of the aggregate purchase price was allocated to assembled workforce in
place for acquisitions made in 1997 and 1998, respectively, and is being
amortized over its estimated useful life of three years.
The Company discontinued the use of a brandname acquired in the purchase
of BoxTop Interactive, Inc. and charged the remaining book value of that
intangible asset, approximately $1,700, to amortization expense in 1997.
The purchase price of the acquisitions consists of the consideration
provided to the selling stockholders, which includes Common Stock, options,
warrants and cash. The fair value of the Company's Common Stock issued as
consideration for the acquisitions was determined based primarily upon
independent appraisals. The fair value of options and warrants issued in
connection with the 1997 and 1998 acquisitions was determined using the Black-
Scholes option pricing model using the following assumptions: dividend yield of
0%, expected volatility 60%, risk free interest rate of 5.00% and an expected
life of 2 to 5 years, depending on the terms of the specific acquisition.
The terms of three of the Company's 1998 acquisition agreements provide
for additional consideration if the acquired entities' revenues exceed certain
levels. Such additional consideration is payable in shares of the Company's
Common Stock and will be recorded, if earned, as additional purchase price. For
two of the acquired companies, the contingency period ended December 31, 1998;
for the other entity, the contingency period ends October 31, 1999. As of
December 31, 1998, a total of 287,304 shares of the Company's Class B Common
Stock were held in escrow in relation to these agreements.
The targeted revenues were achieved at one of the acquired entities whose
contingency period ended December 31, 1998. As such, 50,000 shares of the
Company's Common Stock will be released from escrow in March 1999 and have been
accounted for as additional purchase price as of December 31, 1998.
For those acquisitions that have been structured as tax-free exchanges of
stock, the differences between the fair value of the acquired assets, including
intangible assets, and their historical tax bases are not deductible for income
tax purposes.
The following unaudited pro forma financial information reflects the
results of operations for the years ended December 31, 1997 and 1998, as if the
acquisitions had occurred on January 1, 1997. These unaudited pro forma results
have been prepared for comparative purposes only and do not purport to be
indicative of what operating results would have been had the acquisitions
actually taken place on January 1, 1997 and may not be indicative of future
operating results. The unaudited pro forma results are summarized as follows:
<TABLE>
<CAPTION>
Years ended
December 31,
------------------
1997 1998
-------- --------
<S> <C> <C>
Revenues.............................................. $ 55,301 $ 87,160
======== ========
Net loss.............................................. $(31,364) $(60,417)
======== ========
Net loss available to common stockholders............. $(31,364) $(71,130)
======== ========
Basic and diluted net loss per common share........... $ (1.93) $ (4.42)
======== ========
</TABLE>
F-14
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
4. Intangible Assets
Intangible assets are comprised of the following:
<TABLE>
<CAPTION>
December 31,
----------------
1997 1998
------- -------
<S> <C> <C>
Excess of cost over fair
value of net assets ac-
quired................. $15,540 $55,066
Assembled work force.... 4,027 19,916
Other................... 2,629 3,816
------- -------
22,196 78,798
Less--accumulated amor-
tization............... (3,991) (14,581)
------- -------
$18,205 $64,217
======= =======
</TABLE>
5.Equity Investment in Affiliate
Effective August 27, 1996, the Company acquired a 22% equity interest in
the outstanding convertible preferred stock of UNI for $750 in cash. UNI
develops and manages sports information websites for colleges, universities and
athletic associations. Pursuant to agreements with UNI, the Company performed
Internet development and financial consulting services and payment for these
services has been made in shares of UNI convertible preferred stock valued at
$1 per share.
The Company accounts for its investment in UNI under the equity method.
The Company's investments in UNI have been accounted for as excess of cost over
fair value of net assets acquired and were being amortized over five years as a
reduction to the investment account together with the Company's share of UNI
losses. The Company's investment balance in UNI reached zero in the fourth
quarter of 1998. Because the Company has no obligation to fund UNI's operations
or deficit, the Company has discontinued recording its share of UNI's losses.
The Company will not recognize its share of any future earnings from UNI until
UNI earnings are sufficient to recover the unrecognized losses.
The following is a summary of the activity in the investment in UNI:
<TABLE>
<CAPTION>
For the
period
May 1, 1996 Years Ended
through December 31,
December 31, ----------------
1996 1997 1998
------------ ------- -------
<S> <C> <C> <C>
Net investment in UNI balance, beginning
of period............................... $ -- $ 1,298 $ 1,115
Additional investment in UNI............. 1,547 1,260 525
Equity in UNI net loss................... (174) (1,001) (1,010)
Amortization of goodwill................. (75) (442) (630)
------ ------- -------
Net investment in UNI balance, end of pe-
riod.................................... $1,298 $ 1,115 $ --
====== ======= =======
</TABLE>
F-15
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
The following is a summary of certain unaudited financial information of
UNI as of and for the years ended December 31, 1997 and 1998:
<TABLE>
<CAPTION>
December 31,
--------------
1997 1998
------ ------
<S> <C> <C>
Current assets............................................. $ 467 $2,703
Non current assets......................................... 176 333
Current liabilities........................................ 543 1,295
Non current liabilities.................................... 560 --
Stockholders' equity....................................... (460) 1,741
Net revenues............................................... 795 1,559
Net loss................................................... (2,919) (5,071)
</TABLE>
As of December 31, 1998, the Company owned a 23% interest in UNI. UNI has
certain outstanding stock options and warrants which, if exercised, would not
materially reduce the Company's investment ownership percentage in UNI.
6. Accrued Liabilities
Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
December 31,
-------------
1997 1998
------ ------
<S> <C> <C>
Accrued compensation and related costs...................... $ 709 $3,244
Other accrued liabilities................................... 1,037 4,699
------ ------
$1,746 $7,943
====== ======
</TABLE>
7. Long-Term Debt
The Company's long-term debt is comprised of the following:
<TABLE>
<CAPTION>
December 31,
--------------
1997 1998
----- -------
<S> <C> <C>
Borrowings under Credit Agreement........................ $ -- $19,328
8.25% note payable to bank in monthly installments
through January 2002, collateralized by land and
building................................................ 484 465
Notes payable to banks and a former shareholder at
interest rates from 8.9% to 10.4%; all repaid in 1998... 183 --
Capital lease obligations, at interest rates from 4% to
24% expiring from 1998 to 2003.......................... 606 1,627
----- -------
Total debt............................................. 1,273 21,420
Less current portion of long-term debt................... (433) (868)
----- -------
Long-term debt........................................... $ 840 $20,552
===== =======
</TABLE>
In July 1998, the Company entered into a credit agreement (the "Credit
Agreement") with a bank providing for borrowings of up to $20,000. The Credit
Agreement expires June 30, 2001. The Credit Agreement includes a $10,000 term
loan and a $10,000 revolving line of credit and bears interest payable
quarterly at the higher of the prime rate plus 2% or the federal funds
effective rate plus 2.5%. The Credit Agreement is secured by liens on
substantially all of the assets of the Company's domestic subsidiaries, except
F-16
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
CFN, including a pledge of the capital stock of the same subsidiary companies.
The Credit Agreement provides for borrowings based upon a borrowing base
formula. Borrowings under the term loan portion of the Credit Agreement are
payable $50 each quarter, commencing September 30, 1998, with the balance due
upon expiration. A 0.5% annual commitment fee is charged on the average unused
portion of the revolving line of credit. At December 31, 1998, the Company's
borrowing rate under the Credit Agreement was 9.75%.
Under the terms of the Credit Agreement and notes payable to banks, the
Company is required to maintain certain financial covenants related to
consolidated earnings, consolidated debt to capital and working capital, among
others. At December 31, 1998, the Company was in compliance with, or has
received a waiver of all covenants.
As of December 31, 1998, the Company had letters of credit outstanding,
totaling $1,740. Certificates of deposits in the same amount, which are
included in prepaid expenses and other assets, are pledged as collateral for
these letters of credit.
As of December 31, 1998, aggregate principal maturities of notes payable
and capital lease obligations are as follows:
<TABLE>
<CAPTION>
December 31,
Year 1998
---- ------------
<S> <C>
1999.......................................................... $ 868
2000.......................................................... 674
2001.......................................................... 19,220
2002.......................................................... 627
2003.......................................................... 31
-------
$21,420
=======
</TABLE>
8. Mandatorily Redeemable Preferred Stock; Mandatorily Redeemable Preferred
Stock of Subsidiary; and Warrants
A total of 265,000 shares of mandatorily redeemable convertible preferred
stock have been designated for issuance; 200,000, 15,000 and 50,000 of such
shares have been designated as Class B, Class C and Class D, respectively.
In December 1997, for net consideration of approximately $26,900 and
$2,990, the Company issued 83,075 shares of Class B Preferred, par value $.01,
and 9,232 shares of Class C Preferred, par value $.01. In conjunction with this
equity transaction, the Company issued warrants to purchase 10,650 shares of
Class B Preferred for $458 per share.
In February 1998, for net consideration of approximately $4,935 the
Company issued 15,692 shares of Class B Preferred and warrants to purchase
1,810 shares of Class B Preferred for $458 per share.
In August 1998, for net consideration of approximately $35,400, the
Company issued 35,700 shares of Class D Preferred, $.01 par value.
In November 1998, the Company issued warrants to purchase 500,000 shares
of Class A Common Stock at $10 per share. The warrants expire three years from
the date of grant and were issued upon the Company's approval of a marketing
plan. The fair value of the warrants was measured on the date the warrants
F-17
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
were earned, using the Black-Scholes option pricing model and was recorded as
an expense of approximately $815 in the fourth quarter of 1998. The assumptions
utilized by the Company in determining the fair value of these warrants were as
follows: dividend yield 0%, risk-free interest rate 5.0%, expected volatility
72%, and expected life of 3 years.
In December 1998, the Company issued warrants to purchase 500,000 shares
of Class B Common Stock at $10 per share. The warrants expire the later of
eighteen months from the date of grant or twelve months after an initial public
offering of the Company's Common Stock. The warrants were granted in
conjunction with a contract that will generate revenue for the Company
beginning in 1999 and are exercisable immediately. The fair value of the
warrants of $1,200 was measured at the grant date using the Black-Scholes
option pricing model and the related charge will be recorded as contra-revenue
as the services are provided to the customer over the next twelve to eighteen
months. The assumptions utilized by the Company in determining the fair value
of these warrants were as follows: dividend yield 0%, risk free interest rate
5.0%, expected volatility 82%, and expected life of 18 months.
The Company has accounted for the Class B, Class C and Class D Preferred
as mandatorily redeemable preferred stock. Accordingly, the Company is accruing
dividends and amortizing any difference between the carrying value and the
redemption value over the redemption period with a charge to additional paid-in
capital ("APIC").
The Class D Preferred provides that, upon redemption the holders will
receive $1,000 per share plus any accrued and unpaid dividends and a certain
number of shares of Class B Common Stock of the Company. The aggregate number
of shares of Class B Common Stock to be issued varies based on the timing of a
Qualified Public Offering, but at a minimum, equals 3,722,502 shares. The
proceeds from the issuance of the Class D Preferred have been allocated to the
Class D Preferred (included in mandatorily redeemable preferred stock) and
Class B Common Stock to be issued (included in additional paid-in-capital),
based on the relative fair values of the securities as of the date of issuance.
Of the approximately $35,400 total proceeds from the issuance of the Class D
Preferred, $22,165 was allocated to the Class D Preferred and the remaining
$13,235 was allocated to Class B Common Stock to be issued. The amount
allocated to the Class B Common Stock to be issued was based on the fair value
of the guaranteed minimum number of shares (3,722,502) to be issued. The number
of shares of Class B Common Stock to be issued increases depending on the
timing of a Qualified Public Offering, up to a maximum of 5,279,293 shares. The
fair value of the additional 1,556,791 potentially issuable shares of Class B
Common Stock is determined at the end of each reporting period and is ratably
charged to net loss available to common stockholders, over the 7-year
redemption period. The Company is accruing the 12% dividend on the Class D
Preferred and accreting any difference between the carrying value and the
redemption value over the 7-year redemption period with a charge to APIC.
The amount charged to APIC related to the Class B and Class C Preferred
was $5,449 and $926, respectively, for the year ended December 31, 1998. The
Company has reserved 18,817 Class B Preferred shares for exercise of warrants
and conversion of 10,799,020 Class A Common Shares.
The rights, preferences and privileges with respect to the Class B, Class
C and Class D Preferred are as follows:
Voting
Class B Preferred has the same number of votes as each share of Class A
Common Stock into which such preferred stock may be converted. Class C and
Class D Preferred have no voting rights.
F-18
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
Dividends
The Company may make distributions to Class B and Class C Preferred;
however, there is no requirement for dividends. If a distribution is made to
common stockholders, Class A, Class B and Class C Preferred stockholders will
receive a similar per share amount based on the number of shares of Class A
Common Stock into which the Class A, Class B and Class C Preferred will
convert. The Class D Preferred accrues dividends at the rate of 12% per annum.
Conversion
Each share of Class B and Class C Preferred is convertible at the option
of the holder into 100 shares of Class A Common Stock. This conversion rate is
subject to change if certain events occur that would otherwise dilute the
conversion rights of the Class B and Class C Preferred. Such conversion is
automatic upon the effective date of an initial public offering of the
Company's Common Stock with a per share price of at least $7 and for which the
aggregate proceeds to the Company equal at least $30,000 (a "Qualified Public
Offering"). The Class D Preferred is not convertible.
Redemption
The Company has the right to redeem the Class B and Class C Preferred
prior to December 31, 2004 only upon a change in control. The Class B and Class
C Preferred stockholders have the right, at their option, to require the
Company to redeem any or all of the stock on or after December 31, 2004. The
redemption amount will be the fair value per share of the Class B and Class C
Preferred, as of the date of redemption, plus an amount equal to all declared
and unpaid dividends. The Company is accreting the carrying value of the Class
B and Class C Preferred up to the redemption price over the period from
issuance until December 31, 2004.
The Company has the right to redeem the Class D Preferred at any time
prior to its mandatory redemption date of August 2005. The Class D Preferred
stockholders have the right to require the Company to redeem the shares only
upon the occurrence of certain events. Holders of Class D Preferred have the
right at their option to require the Company to redeem the Class D Preferred
held by them at any time after August 2005, or at any time after one of the
following redemption events, if earlier: a breach of the dividend payment
provisions of the Class D Preferred; a bankruptcy of the Company or any of its
subsidiaries; a judgment for payment of money in an amount exceeding $5,000;
the acceleration of indebtedness in an amount exceeding $5,000; a breach of the
documents governing the issuance of the Class D Preferred; or a change of
control. The redemption amount is equal to the liquidation preference amount
plus all accrued and unpaid dividends plus a certain number of shares of Class
B Common Stock, which varies depending on the timing of a Qualified Public
Offering, as follows:
<TABLE>
<CAPTION>
Number of Class B
Common Stock Shares
Date of Qualified Public Offering to be issued
--------------------------------- -------------------
<S> <C>
prior to or on August 14, 1999......................... 3,722,502
August 15, 1999-February 14, 2000...................... 4,647,602
after February 14, 2000................................ 5,279,293
</TABLE>
Liquidation
The Class D Preferred has liquidation preference over the Class A, Class
B and Class C Preferred, which all have the same liquidation preference based
on their respective liquidation values. All classes of preferred stock have
liquidation preference over the Class A and Class B Common Stock. The
liquidation value equals $325 per share for the Class B and Class C Preferred
and $1,000 per share for the Class D Preferred plus any declared and unpaid
dividends, subject to adjustment.
F-19
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
The following is a summary of the carrying value of the mandatorily
redeemable preferred stock:
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------
1997 1998
------------------- -------------------
Redemption Carrying Redemption Carrying
Value Value Value Value
---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Class B Preferred............... $27,000 $26,937 $93,829 $37,683
Class C Preferred............... 3,000 2,993 8,770 3,523
Class D Preferred............... -- -- 50,552 24,473
------- -------
$29,930 $65,679
======= =======
</TABLE>
The rights, preferences and privileges with respect to the mandatorily
redeemable preferred stock of subsidiary, CFN Mandatorily Redeemable Preferred,
are as follows:
Authorized number of shares
As of December 31, 1998, there were 24,900,000, 13,333,334 and 13,333,334
shares of CFN Mandatorily Redeemable Preferred shares authorized, issued and
outstanding, respectively. There were no shares authorized, issued or
outstanding as of December 31, 1997.
Voting
Each share of CFN Mandatorily Redeemable Preferred is entitled to one
vote on issues that are subject to a vote of the CFN stockholders.
Dividends
CFN may make distributions to CFN Mandatorily Redeemable Preferred
stockholders; however, there is no requirement for dividends. If a distribution
is made to the common stockholder of CFN, CFN Mandatorily Redeemable Preferred
stockholders will receive a similar per share amount based on the number of CFN
common shares into which the CFN Mandatorily Redeemable Preferred is then
convertible.
Conversion
Each share of CFN Mandatorily Redeemable Preferred is convertible into
one share of CFN Common Stock. This conversion rate is subject to change if
certain events occur that would otherwise dilute the conversion rights of the
CFN Mandatorily Redeemable Preferred stockholders. Such conversion is at the
option of the holder and is also automatic upon the effective date of an
initial public offering of at least 15% of CFN's Common Stock with a per share
price of at least $2 (the "CFN Qualified Public Offering").
Liquidation
The CFN Mandatorily Redeemable Preferred has liquidation preference over
the CFN Common Stock. The Liquidation Value is equal to $0.75 per share and is
subject to adjustment if certain events occur that would otherwise dilute the
liquidation rights of the CFN Mandatorily Redeemable Preferred. The amount to
be paid to the CFN Mandatorily Redeemable Preferred stockholders equals the
liquidation value plus any declared and unpaid dividends as of the liquidation
date. CFN Mandatorily Redeemable Preferred stockholders will not participate in
any balance remaining after such amounts have been paid.
F-20
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
Redemption
CFN Mandatorily Redeemable Preferred stockholders have the right at their
option, to require CFN to redeem any or all of the CFN Mandatorily Redeemable
Preferred on or after December 31, 2005. Such redemption will be a redemption
price per share equal to the Liquidation Value plus all declared and unpaid
dividends. As of December 31, 1998, the carrying value of the CFN Mandatorily
Redeemable Preferred equaled its redemption value.
Exchange into Common Stock of the Company
Pursuant to the terms of the CFN stockholders' agreement each of the CFN
Mandatorily Redeemable Preferred stockholders has the right to exchange all,
but not less than all, of their CFN Mandatorily Redeemable Preferred into the
Company's Common Stock under two separate exchange rights. First, an exchange
may be made upon a change in control of CFN, unless (a) the change in control
occurs in the context of a tag-along, drag-along, or sale of CFN governed by
the CFN stockholders agreement, (b) the change in control transaction involves
the issuance of securities of CFN and the holders of CFN Mandatorily Redeemable
Preferred choose to exercise their preemptive rights with respect to such
issuance, or (c) the transaction effecting the change in control is a CFN
Qualified Public Offering. Second, the CFN Mandatorily Redeemable Preferred
stockholders have a one-time right to exchange on November 3, 2001, unless the
Company is no longer a stockholder of CFN and no CFN Qualified Public Offering
has occurred. In either case, the exchange rate will be based on the relative
fair values of CFN and the Company. The value of CFN Mandatorily Redeemable
Preferred upon a change in control transaction will be the price per share paid
in connection with such transaction. The value of CFN Mandatorily Redeemable
Preferred under the exchange right available on November 3, 2001 will be the
greater of the Liquidation Value of such stock or the appraised fair market
value of such stock assuming a conversion of such stock into the Common Stock
of CFN. CFN Mandatorily Redeemable Preferred will then be exchanged into an
equivalent value of the Company's Common Stock based on a trailing average of
closing prices of the Company's Common Stock, if such stock is publicly traded,
or the most recent appraisal of the Company, if such stock is not publicly
traded.
Commitment to Purchase CFN Mandatorily Redeemable Preferred
If as of November 3, 1999, CFN has sold fewer than 24,900,000, shares of
CFN Mandatorily Redeemable Preferred (including the 13,333,334 sold as of
December 31, 1998), the Company will purchase the number of shares of CFN
Mandatorily Redeemable Preferred equal to the difference between 24,900,000 and
the number of shares theretofore sold by CFN for $0.75 per share.
9. Stockholders' Equity
The Company's capital stock consists of $.01 par value Class A Common
Stock, $.01 par value Class B Common Stock, and $.01 par value Class A
Preferred. At December 31, 1997 and 1998, there were no outstanding shares of
Class A Common Stock.
During the year ended December 31, 1998, for consideration of
approximately $5,510, which includes a $900 note receivable, the Company issued
8,031 shares of Class A Preferred.
The rights, preferences and privileges with respect to the Common Stock
and Class A Preferred are as follows:
Voting
Holders of shares of Class A Common Stock are entitled to ten votes per
share, holders of Class B Common Stock are entitled to one vote per share and
holders of Class A Preferred are entitled to voting rights as if the stock had
been converted into Class A Common Stock.
F-21
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
Dividends
Holders of shares of Class A and Class B Common Stock are entitled to
share, on an as converted basis with the Class A Preferred, Class B Preferred
and Class C Preferred any dividends declared by the Board of Directors.
Conversion
Holders of shares of Class A Common Stock are entitled to convert their
shares into Class B Common Stock at any time on a share-for-share basis. Each
share of Class A Preferred is convertible into 100 shares of Class A Common
Stock. This conversion rate is subject to change if certain events occur that
would otherwise dilute the conversion rights of the Class A Preferred. Such
conversion is automatic upon the effective date of a Qualified Public Offering.
The Company has reserved 25,000,000 shares of Class B Common Stock for issuance
upon conversion of Class A Preferred.
Redemption
The Class A Preferred stockholders have no option to require the Company
to redeem their stock. The Company has the right to an early redemption, at the
liquidation value, only upon a change in control, as defined.
Liquidation
The Class A Preferred has liquidation preference over the Class A and
Class B Common Stock. The liquidation value for the Class A Preferred will
equal the amount invested, which ranges from $100 to $1,000 per share, plus any
declared and unpaid dividends.
Other
Under certain limited circumstances as described in the Stockholders'
Agreement ("Agreement"), management can put their preferred and/or common
shares back to the Company at fair value, as defined in the Agreement. The
Company is obligated to pay for the shares in cash, or at the option of the
Board of the Directors, with a promissory note. The Agreement terminates upon
the effective date of a Qualified Public Offering.
Treasury stock
During February and March 1998, the Company purchased a total of 242,416
shares of Class B Common Stock from two employees at a purchase price of $3.25
per share. During September 1998, the Company purchased a total of 10,000
shares of Class B Common Stock from one employee at a price of $10 per share.
F-22
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
10. Income Taxes
The components of the benefit (provision) for income taxes consist of the
following:
<TABLE>
<CAPTION>
For the period
May 1, 1996 Years ended
through December 31,
December 31, --------------
1996 1997 1998
-------------- ------- ------
<S> <C> <C> <C>
Current:
State....................................... $(42) $ -- $ --
---- ------- -----
Deferred:
State....................................... 101 --
Federal..................................... 243 2,782 --
---- ------- -----
344 2,782 --
---- ------- -----
$302 $ 2,782 $ --
==== ======= =====
</TABLE>
As of December 31, 1997 and 1998, the Company had net operating loss
carryforwards for federal income tax purposes of approximately $11,200 and
$46,560, respectively. The Company acquired loss carryforwards of approximately
$1,100 in 1996, $1,560 in 1997 and $3,510 in 1998. The carryforwards expire in
varying amounts through 2018. The use of acquired net operating loss
carryforwards is restricted in accordance with Internal Revenue Service
regulations.
In addition, under the Tax Reform Act of 1986, the amounts of, and the
benefits from, net operating loss carryforwards may be impaired or limited in
certain circumstances. These circumstances include, but are not limited to, a
cumulative stock ownership change of greater than 50% over a three-year period.
A valuation allowance has been recorded against the Company's net deferred tax
asset as management believes it is more likely than not that they will not be
realized.
A reconciliation of the federal statutory rate and the effective income
tax rate follows:
<TABLE>
<CAPTION>
For the period
May 1, 1996 Years ended
through December 31,
December 31, -----------------
1996 1997 1998
-------------- ------- --------
<S> <C> <C> <C>
Statutory federal tax rate (34%)....... $ 597 $ 6,195 $ 16,614
Nondeductible amortization............. (315) (1,684) (2,667)
State income tax....................... 24 252 743
Losses of foreign subsidiaries......... -- -- (860)
Change in valuation allowance,
including effect of acquisitions...... (312) (2,159) (13,427)
Other.................................. 308 178 (403)
----- ------- --------
$ 302 $ 2,782 $ --
===== ======= ========
</TABLE>
F-23
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
Deferred tax (assets) liabilities are comprised of the following:
<TABLE>
<CAPTION>
December 31,
-----------------
1997 1998
------- --------
<S> <C> <C>
Gross deferred tax assets
Allowance for doubtful accounts...................... $ (28) $ (349)
Loss in equity investment............................ (643) (750)
Intangibles.......................................... -- (967)
Net operating loss carryforward...................... (4,330) (16,923)
Valuation allowance.................................. 2,711 11,400
------- --------
$(2,290) $ (7,589)
======= ========
Gross deferred tax liabilities
Property and equipment............................... 242 842
Intangible assets.................................... 1,832 6,570
Conversion from S Corporation to C Corporation....... 116 77
Other................................................ 100 100
------- --------
2,290 7,589
------- --------
Net deferred tax asset................................. $ -- $ --
======= ========
</TABLE>
11. Stock-Based Compensation
The Company's 1996 Stock Option Plan (the "1996 Stock Option Plan") was
established to promote the success of the Company by providing an additional
means to attract and retain key personnel. Pursuant to the terms of the 1996
Stock Option Plan, a committee of the Board of Directors is authorized to grant
options to purchase Class B Common Stock not to exceed an aggregate maximum of
25,000,000 shares to officers and employees. The committee is further
authorized to establish the exercise price and the vesting terms.
In December 1998, the Board of Directors of the Company adopted the 1998
Non-Employee Stock Option Plan (the "1998 Stock Option Plan"), which contains
essentially the same terms as the 1996 Stock Option Plan, except that the 1998
Stock Option Plan was established for grants to persons who are not employees
of the Company. The 1998 Stock Option Plan authorizes the granting for up to an
aggregate maximum of 1,000,000 options, of which 290,464 were outstanding as of
December 31, 1998.
The Company expects that most options granted pursuant to the plans will
be subject to vesting over a period of 4 to 5 years, such as 20% increments
each year over a period of five years, during which the optionee must continue
to be an employee of the Company. The committee, however, may choose to impose
different vesting requirements or none at all. Options outstanding under the
Plan generally have a term of ten years.
The Company applies APB 25 and related Interpretations in accounting for
the Plan. During 1997 and 1998, $0 and $1,641, respectively, of compensation
expense was recognized. Stock options issued in connection with acquisitions
were accounted for as purchase price.
F-24
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
Had compensation expense for the Company's Plan been determined under the
provisions of FAS 123 based on the fair value at the grant date, the Company's
net loss and loss per share would have been increased to the pro forma amounts
indicated below:
<TABLE>
<CAPTION>
For the period
May 1, 1996 For the years ended
through December 31,
December 31, --------------------
1996 1997 1998
-------------- --------- ---------
<S> <C> <C> <C>
Net loss
As reported....................... $(1,454) $ (15,440) $ (48,866)
Pro forma......................... $(1,481) $(15,501) $(50,388)
Basic and diluted net loss per
common share
As reported....................... $ (0.37) $ (2.36) $ (4.92)
Pro forma......................... $ (0.37) $ (2.37) $ (5.05)
</TABLE>
The minimum value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted-
average assumptions used for grants during the 1996, 1997 and 1998 periods,
respectively; dividend yield of 0% for all periods; expected volatility of 0%
for all periods, risk free interest rate of 6.3%, 5.7% and 5.0%, expected life
of 5 years, 4 years and 4 years.
A summary of stock options as of December 31, 1996, 1997 and 1998 and
activity during the period ending on those dates is as follows:
<TABLE>
<CAPTION>
1996 1997 1998
------------------- ------------------- --------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Options Price Options Price Options Options
--------- -------- --------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning
of period.............. -- -- 1,915,500 $1.77 5,549,200 $2.35
Granted................. 1,920,500 $1 .77 3,847,200 $2.59 13,310,331 $7.31
Exercised............... -- -- -- -- (57,800) $0.01
Forfeited............... (5,000) $ 1.00 (213,500) $1.03 (575,619) $5.39
--------- ------ --------- ----- ---------- -----
Outstanding at the end
of period.............. 1,915,500 $ 1.77 5,549,200 $2.35 18,226,112 $5.89
--------- ------ --------- ----- ---------- -----
Options exercisable at
end of period.......... 1,183,100 $ 1.93 3,045,300 $2.03 7,833,247 $3.88
--------- ------ --------- ----- ---------- -----
Weighted average fair
value of options
granted during the
period.................
<CAPTION>
1996 1997 1998
------------------- ------------------- --------------------
Weighted Weighted Weighted Weighted Weighted Weighted
Average Fair Average Fair Average Fair
Options Granted During Exercise Market Exercise Market Exercise Market
the Year Price Value Price Value Price Price
---------------------- --------- -------- --------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Option price greater than
fair market value $ 0.70 $ 1.77 $ 2.13 $3.45 $ 9.91 $ --
Option price=fair market
value -- -- $ 2.50 $2.50 $ 5.00 $0.91
Option price less than
fair market value -- -- $ 2.13 $0.90 $ 3.49 $2.10
</TABLE>
F-25
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
The following table summarizes information about stock options
outstanding at December 31, 1998:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
-------------------------------- --------------------
Number Number
Outstanding Weighted Weighted Exercisable Weighted
at Average Average at Average
December Remaining Exercise December Exercise
Range of 31, Contractual Price 31, Price
Exercise Prices 1998 Life $ 1998 $
--------------- ----------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$0.01-$0.75 537,954 9.30 $ 0.19 531,460 $ 0.18
$0.95-$1.32 1,423,665 8.15 $ 0.97 1,217,835 $ 0.97
$1.84-$2.60 2,533,004 7.91 $ 2.18 1,866,974 $ 2.12
$3.00-$4.50 4,575,339 9.05 $ 3.97 2,102,997 $ 3.87
$5.00-$6.00 1,904,351 9.18 $ 5.08 818,487 $ 5.06
$8.00-$10.00 7,251,799 9.78 $10.00 1,295,494 $10.00
---------- ---------
18,226,112 7,833,247
========== =========
</TABLE>
12. Employee Benefit Plans
Employees of the Company can elect to participate in the iXL
Enterprises, Inc. Savings Plan (the "Plan") which is intended to be qualified
and exempt from tax under Section 401(k) of the Internal Revenue Code.
Employees are eligible to participate in the Plan after one month of service
and can elect to invest 1% to 16% of their pre-tax earnings. All employee
contributions are fully vested and there have not been material contributions
to the Plan by the Company.
13. Commitments and Contingencies
Certain operating facilities and equipment are leased under non-
cancelable agreements. Operating lease expense charged to operations was
approximately $184 in 1996, $956 in 1997 and $3,844 in 1998. As of December
31, 1998, the approximate future minimum lease payments for noncancelable
operating leases are as follows:
<TABLE>
<S> <C>
1999............................................................... $ 6,586
2000............................................................... 5,862
2001............................................................... 5,485
2002............................................................... 5,264
2003............................................................... 4,112
Thereafter......................................................... 15,832
-------
$43,141
=======
</TABLE>
As of December 31, 1998, the Company has commitments for capital
expenditures of approximately $5,400, primarily in connection with expansion
and improvement of its Atlanta, New York and Denver offices.
The Company is subject to legal proceedings and claims that arise in the
ordinary course of its business. In the opinion of the management, the amount
of the ultimate outcome of these actions will not materially affect the
Company's financial position, results of operations or cash flows.
F-26
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
14. Business Segments
The Company operates in two business segments: strategic Internet
services, which includes Internet strategy consulting, Internet-based business
solutions and solution sets; and CFN, an e-commerce platform for marketing
financial services and employee benefits.
iXL's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
segment requires different technology, strategic competencies, and marketing
strategies.
A summary of the Company's two business segments for the two years ended
December 31, 1998 is set forth below.
<TABLE>
<CAPTION>
Strategic
Internet
1998 Services CFN Eliminations Total
---- --------- ------- ------------ -------
<S> <C> <C> <C> <C>
Revenues.......................... $64,658 $ 251 (142) $64,767
Loss from operations.............. (33,619) (13,559) -- (47,178)
Loss on equity investment......... (1,640) -- -- (1,640)
Interest income................... 713 37 -- 750
Interest expense.................. 750 20 -- 770
Amortization...................... 10,534 56 -- 10,590
Depreciation...................... 4,542 675 -- 5,217
Identifiable assets............... 86,207 9,696 -- 95,903
Capital expenditures.............. 18,082 2,222 -- 20,304
<CAPTION>
1997
----
<S> <C> <C> <C> <C>
Revenues.......................... $19,131 $ -- (145) $18,986
Loss from operations.............. (12,135) (4,658) -- (16,793)
Loss on equity investment......... (1,443) -- -- (1,443)
Interest income................... 136 -- -- 136
Interest expense.................. 234 4 -- 238
Amortization...................... 5,135 56 -- 5,191
Depreciation...................... 1,328 80 -- 1,408
Identifiable assets............... 42,795 1,454 -- 44,249
Capital expenditures.............. 5,795 909 -- 6,704
</TABLE>
15. Related Party Transactions
In January 1997, the Company entered into an agreement to lease its
headquarters office space from Park Place Emery, L.L.C. ("PPE") commencing
April 1, 1997 for a term of eleven years. The Chief Executive Officer and
Chairman of the Board of Directors (the "Chairman") of the Company is a limited
partner in PPE. The Company paid $347 and $628 under this lease in 1997 and
1998, respectively.
During 1997, certain executive officers of the Company loaned the Company
a total of $6,600. The loans bore interest at 12% and were repaid during the
year. Interest expense recognized in 1997 related to these borrowings was
approximately $88. In June 1998, the Chairman's spouse loaned the Company
$4,000 at an interest rate of 10%. The principal and interest on this note were
repaid in July 1998.
F-27
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
In April 1996, the Company paid Kelso & Company a fee of $150 for
financial advisory services. In addition, the Company agreed to pay Kelso &
Company an annual fee of $15 for financial advisory services. The Company has
also agreed to indemnify Kelso & Company against certain claims, losses,
damages, liabilities and expenses which may arise in connection with rendering
such financial advisory services.
In June 1998, the Company created a wholly owned subsidiary, Permit.Com,
Inc. On June 26, 1998, the Board of Directors of the Company approved and
declared a dividend of the common stock of Permit.Com, Inc. payable to
stockholders of the Company of record as of June 1, 1998. The carrying value of
the assets of Permit.Com, Inc. were $0.
The Company recognized revenues in 1996, 1997 and 1998 from providing
services to certain of its investors, and entities related to its investors, of
$0, $100 and $2,177, respectively.
16. Subsequent Events
In January 1999, for net consideration of $22,718, the Company issued
22,825 shares of Class A Preferred. A portion of the proceeds were used to
repay approximately $9,430 of the borrowings under the revolving line of credit
portion of the Credit Agreement.
The Company's Board of Directors authorized the Company to file a Form S-
1 with the Securities and Exchange Commission under the Securities Act of 1933
with respect to an initial public offering of the Company's Common Stock. In
connection with the offering, the Company has agreed to pay Kelso & Company a
fee equal to $750 payable in shares of Common Stock, valued at the offering
price.
In February 1999, the Company's Board of Directors adopted the 1999
Employee Stock Option Plan (the "1999 Stock Option Plan"). The 1999 Stock
Option Plan authorizes the granting of options to purchase up to an aggregate
maximum of 5,000,000 shares of Class B Common Stock.
Prior to the closing of the Company's initial public offering, the
Company's shareholders approved an amendment to the Company's Certificate of
Incorporation which took effect upon such closing. Pursuant to such amendment,
upon the closing of the initial public offering, all outstanding shares of
Class A, Class B and Class C Convertible Preferred Stock, Class D Nonvoting
Preferred Stock, and Class A and Class B Common Stock was reclassified as
common stock. This reclassification precluded the automatic conversion feature
of the Class A, Class B and Class C Convertible Preferred Stock.
The Class D Preferred Stockholders, as a result of the reclassification,
received in the aggregate 3,722,502 shares of common stock plus a number of
shares equal to the Class D Preferred Stock liquidation value of $35,700 plus
accrued dividends divided by the gross initial public offering price of common
stock before deducting any underwriting or other selling discounts. This
transaction will result in a charge to net loss available to common
shareholders equal to the difference between $35,700 plus accrued dividends and
the carrying value of the Class D Preferred Stock.
Subsequent Events (unaudited)
In April 1999, the Company entered into several agreements with
affiliates of the General Electric Company ("GE") whereby (1) GE committed to
purchase 16,190,475 shares of CFN series B mandatorily redeemable convertible
preferred stock (12.5% of CFN, on an as converted basis) for a purchase price
of approximately $50,000 payable upon the earlier of the initial public
offering date or August 31, 1999 (2) GE entered into a services agreement that
provides that GE will purchase $20,000 of services from the Company
F-28
<PAGE>
iXL ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands, except share and per share data)
and in exchange for entering into such agreement the Company will grant GE
warrants to purchase 1 million shares of the Company's common stock at an
exercise price of $15 per share (3) GE committed to purchase 2 million shares
of the Company's common stock at a price per share equal to the initial public
offering price in a private placement that will be concurrent with the proposed
initial public offering and (4) the Company will grant GE warrants to purchase
1.5 million shares of the Company's common stock at an exercise price equal to
the initial public offering price in consideration for GE (a) implementing a
mutually acceptable marketing campaign to advertise its relationships with the
Company and CFN, and (b) entering into an agreement to use reasonable efforts
to provide access to CFN's platform to employees of GE Capital Equity
Investments, Inc.
All the warrants issued in connection with the April 1999 transactions
with GE are 100% vested on the date of grant, nonforfeitable, and are
exercisable after one year subsequent to the date of grant. The fair value of
the warrants to purchase 1 million shares of common stock issued in connection
with the $20 million services agreement is $4.8 million. The related charge
will be recorded as contra-revenue as the services are provided to GE. The fair
value of the warrants was determined using the Black-Scholes option pricing
model. The assumptions utilized in determining the fair value are as follows:
life of warrant=three years; expected volatility=85%; dividend yield=0%; risk
free rate=5%; fair market value of underlying stock on date of grant=$10.00.
The fair value of the warrants to purchase 1.5 million shares of common
stock of $12.6 million has been calculated using the Black Scholes option
pricing model. The assumptions utilized in determining this fair value are as
follows: life of warrant=five years; expected volatility=85%; dividend
yield=0%; risk free rate=5%; fair market value of underlying stock on date of
grant=$12.00 (based on the assumed initial public offering price); exercise
price=$12.00.
In conjunction with the above agreements, the exchangeability feature of
the CFN Mandatorily Redeemable Preferred, as described in Note 8, was
eliminated. In addition, the commitment of the Company to purchase additional
shares of CFN Mandatorily Redeemable Preferred, as described in Note 8, was
also eliminated.
On June 8, 1999, the Company completed its initial public offering and
received net proceeds of approximately $61.7 million from the sale of 6,000,000
shares of common stock. Also on June 8, 1999, the Company received net proceeds
of approximately $23.5 million from the sale of 2,000,000 shares of common
stock in the private placement with GE. On June 14, 1999, the underwriters
exercised their overallotment option resulting in the sale of 900,000
additional shares of common stock for net proceeds of approximately $10.0
million. On June 8, 1999, CFN received net proceeds of approximately $49.3
million from the sale of 16,190,475 shares of CFN's Series B Convertible
Preferred Stock.
F-29
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholder of
BoxTop Interactive, Inc.
In our opinion, the accompanying balance sheet and the related statements
of operations, of changes in shareholders' deficit and of cash flows present
fairly, in all material respects, the financial position of BoxTop Interactive,
Inc. (the "Company") at September 30, 1996 and May 31, 1997, and the results of
its operations and its cash flows for the period November 6, 1995 (inception)
through September 30, 1996 and the period October 1, 1996 through May 31, 1997,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
PricewaterhouseCoopers LLP
Atlanta, Georgia
October 3, 1997
F-30
<PAGE>
BOXTOP INTERACTIVE, INC.
BALANCE SHEET
<TABLE>
<CAPTION>
September 30, May 31,
1996 1997
------------- -----------
<S> <C> <C>
ASSETS
Current assets
Cash.............................................. $ 2,288 $ --
Accounts receivable............................... 241,007 319,869
Prepaid expenses and other assets................. 2,255 81,139
---------- -----------
Total current assets............................ 245,550 401,008
---------- -----------
Property and equipment, net......................... 313,876 391,454
Advances to shareholder............................. 18,945 79,565
Intangible asset, net of accumulated amortization of
$10,415 at May 31, 1997............................ -- 239,585
Other noncurrent assets............................. 25,751 27,373
---------- -----------
Total assets.................................... $ 604,122 $ 1,138,985
========== ===========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities
Accounts payable.................................. $ 502,476 $ 604,007
Accrued expenses.................................. 606,663 319,861
Current portion of long-term debt................. 223,718 1,493,836
Current portion of capital lease obligations...... 37,024 41,351
Due to affiliate.................................. 60,052 208,835
---------- -----------
Total current liabilities....................... 1,429,933 2,667,890
---------- -----------
Long-term debt...................................... 36,620 24,413
Capital lease obligations........................... 81,844 50,854
---------- -----------
Total liabilities............................... 1,548,397 2,743,157
---------- -----------
Shareholders' deficit
Common stock, $.01 par value; Authorized
50,000,000 shares; issued and outstanding
3,200,000 and 3,350,000 shares, respectively..... 32,000 33,500
Additional paid-in capital........................ 2,490 89,490
Accumulated deficit............................... (978,765) (1,727,162)
---------- -----------
Total shareholders' deficit..................... (944,275) (1,604,172)
---------- -----------
Total liabilities and shareholders' deficit..... $ 604,122 $ 1,138,985
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-31
<PAGE>
BOXTOP INTERACTIVE, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the period
November 6, 1995 For the period
(inception) October 1, 1996
through through
September 30, 1996 May 31, 1997
------------------ ---------------
<S> <C> <C>
Revenues..................................... $1,746,022 $2,759,993
---------- ----------
Costs and expenses
Direct cost of revenues.................... 684,013 1,113,615
Selling, general and administrative........ 1,935,205 2,231,895
Depreciation and amortization.............. 74,234 114,467
---------- ----------
Total operating expenses................. 2,693,452 3,459,977
---------- ----------
Loss from operations..................... (947,430) (699,984)
---------- ----------
Interest expense............................. (30,535) (56,338)
Other income................................. -- 8,725
---------- ----------
Loss before income taxes................. (977,965) (747,597)
Income taxes................................. (800) (800)
---------- ----------
Net loss................................. $ (978,765) $ (748,397)
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-32
<PAGE>
BOXTOP INTERACTIVE, INC.
STATEMENT OF SHAREHOLDERS' DEFICIT
<TABLE>
<CAPTION>
Common stock Additional Total
----------------- Paid-in Accumulated Shareholders'
Shares Amount Capital Deficit Deficit
--------- ------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Initial capital
contribution........... 1,000 $ 10 $ 2,490 $ -- $ 2,500
Issuance of common
stock................ 3,199,000 31,990 -- -- 31,990
Net loss.............. -- -- -- (978,765) (978,765)
--------- ------- ------- ----------- -----------
Balance, September 30,
1996................... 3,200,000 32,000 2,490 (978,765) (944,275)
Issuance of common
stock................ 150,000 1,500 17,000 -- 18,500
Issuance of stock
options and
warrants............. -- -- 70,000 -- 70,000
Net loss.............. -- -- -- (748,397) (748,397)
--------- ------- ------- ----------- -----------
Balance, May 31, 1997... 3,350,000 $33,500 $89,490 $(1,727,162) $(1,604,172)
========= ======= ======= =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-33
<PAGE>
BOXTOP INTERACTIVE, INC.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the period
November 6, 1995 For the period
(inception) October 1, 1996
through through
September 30, 1996 May 31, 1997
------------------ ---------------
<S> <C> <C>
Cash flows from operating activities
Net loss................................... $(978,765) $ (748,397)
Adjustments to reconcile net loss to net
cash used for operating activities
Stock compensation expense................ 31,990 88,500
Depreciation and amortization............. 74,234 114,467
Changes in assets and liabilities
Accounts receivable...................... (241,007) (78,862)
Prepaid expenses and other assets........ 13,745 (78,884)
Advances to shareholder.................. (18,945) (60,620)
Other noncurrent assets.................. (25,751) (1,622)
Accounts payable......................... 502,476 101,531
Accrued expenses......................... 606,663 (286,802)
Due to affiliate......................... (5,854) (101,217)
--------- ----------
Net cash used for operating activities.. (41,214) (1,051,906)
--------- ----------
Cash flows from investing activities
Purchase of property and equipment......... (135,409) (181,630)
--------- ----------
Net cash used for investing activities.. (135,409) (181,630)
--------- ----------
Cash flows from financing activities
Borrowings from long-term debt............. 200,000 1,375,000
Repayments of long-term debt............... (15,770) (117,089)
Repayments of capital lease obligations.... (7,819) (26,663)
--------- ----------
Net cash provided by financing
activities............................. 176,411 1,231,248
--------- ----------
Net decrease in cash.................... (212) (2,288)
Cash, beginning of period................... 2,500 2,288
--------- ----------
Cash, end of period......................... $ 2,288 $ --
========= ==========
Supplemental disclosure of cash flow
information
Cash paid during the period for interest... $ 16,655 $ 17,334
========= ==========
Cash paid during the period for income
taxes..................................... $ 800 $ --
========= ==========
Non-cash activities
Cost of licensing agreement................ $ -- $ 250,000
Assets acquired under capital lease........ $ 126,686 $ --
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-34
<PAGE>
BOXTOP INTERACTIVE, INC.
NOTES TO FINANCIAL STATEMENTS
1. Business
BoxTop Interactive, Inc. (the "Company") develops, maintains and hosts
interactive web sites for clients in a variety of industries. The Company also
develops interactive audio and visual communication applications for use with
personal and business computers. The Company is a California corporation and
was incorporated on November 6, 1995.
2. Summary of Significant Accounting Policies
Revenue recognition
Revenues from website development, hosting and maintenance services are
recognized as the services are performed. Sales to customers representing 10%
or more of revenues for the eight months ended May 31, 1997 are as follows:
customer A--$900,000 and customer B--$451,000. Sales to customers representing
10% or more of revenues for the eleven months ended September 30, 1996 are as
follows: customer C--$262,000, customer D--$175,000, customer E--$248,000, and
customer F--$168,000.
Property and equipment
Property and equipment are recorded at cost, less accumulated
depreciation and amortization. Expenditures for renewals and improvements that
significantly add to the productive capacity or extend the useful life of an
asset are capitalized. Expenditures for maintenance and repairs are charged to
operations as incurred. Depreciation expense is provided using the straight-
line method over the estimated useful lives of the assets, which ranges from
three to five years. Leasehold improvements are amortized using the straight-
line method over the lesser of the lease term or the estimated useful life.
Equipment held under capital lease is recorded at the lower of the fair market
value of the lease or the present value of future minimum lease payments. These
leased assets are amortized using the straight-line method over the lesser of
the lease term or the estimated useful life.
Intangible asset
The intangible asset balance represents the cost of a licensing agreement
between BoxTop Entertainment, Inc. (an affiliate company) and the Company. The
licensing agreement is for the indefinite use of the BoxTop tradename and logo.
The intangible asset is stated at cost less accumulated amortization.
Amortization expense is provided using the straight-line method over ten years.
The carrying value of the intangible asset is reviewed periodically for
impairment based on future expected cash flows. Based on its review, the
Company does not believe that an impairment has occurred.
Software development costs
Software development costs incurred in connection with the Company's
licensed software products are accounted for in accordance with the provisions
of Financial Accounting Standards No. 86, "Accounting for the Costs of Computer
Software to be Sold, Leased, or Otherwise Marketed" (FAS 86). Capitalization of
such costs begins only upon establishment of technological feasibility as
defined in FAS 86 and ends when the resulting product is available for sale.
All costs incurred to establish the technological feasibility of software
products are classified as research and development and are expensed as
incurred. No products had reached technological feasibility during the period
from November 6, 1995 (inception) through May 31, 1997. Research and
development costs included in selling, general and administrative expense
approximated $78,000 and
F-35
<PAGE>
BOXTOP INTERACTIVE, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
$224,000 for the period November 6, 1995 (inception) through September 30,
1996, and the period October 1, 1996 through May 31, 1997, respectively.
Income taxes
The Company has applied the asset and liability approach of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (FAS
109), for financial accounting and reporting purposes. The Company accounts for
certain items of income and expense in different time periods for financial
reporting and income tax purposes. Provisions for deferred income taxes are
made in recognition of such temporary differences, where applicable. A
valuation allowance is established against deferred tax assets unless the
Company believes it is more likely than not that the benefit will be realized.
Stock-based compensation
The Company has elected to continue to account for stock-based
compensation using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
(APB 25), and related Interpretations and to elect the disclosure option of
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation" (FAS 123). Accordingly, compensation cost for stock options
is measured as the excess, if any, of the fair market value of the Company's
stock at the date of the grant over the amount an employee must pay to acquire
the stock.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Fair value of financial instruments
The carrying amounts of financial instruments including cash, accounts
receivable, accounts payable and accrued expenses approximate fair value. The
carrying amount of long-term debt approximates fair value based on current
rates of interest available to the Company for loans of similar maturities.
3. Property and Equipment
Property and equipment consist of the following:
<TABLE>
<CAPTION>
September 30, May 31,
1996 1997
------------- ---------
<S> <C> <C>
Furniture and fixtures............................. $ 16,394 $ 31,388
Computer equipment................................. 376,017 502,826
Leasehold improvements............................. 1,438 21,260
Computer software.................................. -- 20,005
-------- ---------
393,849 575,479
Less accumulated depreciation and amortization..... (79,973) (184,025)
-------- ---------
Property and equipment, net...................... $313,876 $ 391,454
======== =========
</TABLE>
F-36
<PAGE>
BOXTOP INTERACTIVE, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
At September 30, 1996 and May 31, 1997, the Company had approximately
$127,000 of equipment under capital lease included in property and equipment in
the accompanying financial statements.
4. Accrued Expenses
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
September 30, May 31,
1996 1997
------------- --------
<S> <C> <C>
Payroll taxes payable................................ $402,972 $ --
Customer advances.................................... 165,419 180,994
Accrued vacation..................................... 28,000 40,952
Deferred rent........................................ -- 31,603
Accrued interest..................................... -- 36,016
Other................................................ 10,272 30,296
-------- --------
$606,663 $319,861
======== ========
</TABLE>
5. Long-term Debt
Long-term debt consists of the following:
<TABLE>
<CAPTION>
September 30, May 31,
1996 1997
------------- -----------
<S> <C> <C>
Notes payable to shareholders (see Note 11),
accruing monthly interest based on an annual rate
of 8%. Outstanding principal and accrued interest
are due 120 days after demand. These notes are
secured by substantially all of the assets of the
Company and are guaranteed by the principal
shareholder of the Company. These notes require a
late payment penalty of 5.0% of the outstanding
principal and accrued interest should payment not
be received within 120 days after demand........... $200,000 $ 100,000
Notes payable accruing monthly interest based on an
annual rate of 8%. Outstanding principal and
accrued interest are due on the earlier of demand
or July 1, 1997. These notes are secured by
substantially all of the assets of the Company and
are guaranteed by the principal shareholders of the
Company............................................ -- 750,000
Notes payable accruing monthly interest based on an
annual rate of 15%. Outstanding principal and
accrued interest are due on July 1, 1997. These
notes are secured by substantially all of the
assets of the Company and are guaranteed by the
principal shareholder of the Company. In connection
with these borrowings the Company issued warrants
to acquire 375,000 shares of the Company's common
stock at $1.00 per share exercisable on demand..... -- 375,000
Note payable to IXL Enterprises, Inc. (see note 12),
accruing monthly interest based on an annual rate
of 8%. Outstanding principal and accrued interest
are due on June 17, 1997. The note is guaranteed by
the principal shareholder of the Company........... -- 250,000
Bank equipment note payable bearing interest at the
Bank's prime rate plus 2%. This note requires
monthly principal payments of $1,526 plus interest
through September 1999............................. 54,930 42,723
Other............................................... 5,408 526
-------- -----------
Total debt...................................... 260,338 1,518,249
Less current portion of long-term debt............ (223,718) (1,493,836)
-------- -----------
Long-term debt.................................... $ 36,620 $ 24,413
======== ===========
</TABLE>
F-37
<PAGE>
BOXTOP INTERACTIVE, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
Future maturities of principal payments under long-term debt are as
follows:
<TABLE>
<CAPTION>
Year ending
May 31,
-----------
<S> <C>
1998............................................................ $1,493,836
1999............................................................ 24,413
----------
$1,518,249
==========
</TABLE>
In June 1997, the Company was acquired by iXL Enterprises, Inc. (see Note
12). A portion of the proceeds from the acquisition was used to repay the
Company's outstanding debt and accrued interest of approximately $1,600,000 at
the date of acquisition.
6. Shareholders' deficit
Stock
The Company is authorized to issue two classes of stock designated
respectively as "common stock" and "preferred stock." The number of shares of
common stock and preferred stock authorized for issuance is 50,000,000 and
5,000,000, respectively.
Any liquidation preferences, dividends, voting rights and convertible
features of the preferred stock are to be determined by the Company's Board of
Directors at the time of issuance. From November 6, 1995 (inception) through
May 31, 1997, there was no preferred stock issued or outstanding.
During the period November 6, 1995 (inception) through September 30, 1996
and the period October 1, 1996 through May 31, 1997, the Company recognized
stock compensation expense of approximately $32,000 and $19,000, respectively,
related to the issuance of its common stock to employees and consultants. The
Company estimated the fair value of its stock at the date it was issued to
employees and consultants taking into consideration the Company's results of
operations, a stock repurchase, the sale of the Company to iXL and certain
other transactions.
Warrants
In connection with borrowings made by the Company during the period
October 1, 1996 through May 31, 1997, the Company issued warrants to acquire
375,000 shares of the Company's common stock at $1.00 per share exercisable on
demand. The fair value of the warrants at the date of grant was estimated to be
less than $1,000 and accordingly no amounts were allocated to them.
In December 1996 and May 1997, the Company issued warrants to consultants
to acquire 30,000 shares of the Company's common stock at an exercise price of
$1.10 per share and 40,000 shares of the Company's common stock at an exercise
price of $1.50 per share, respectively. Such warrants were exercisable
immediately. The Company recognized expense of approximately $38,000 in
connection with the issuance of warrants in May 1997. These warrants remained
outstanding as of May 31, 1997.
In connection with a customer making a $500,000 cash deposit with the
Company in October 1996 for future services, the Company issued warrants to
acquire 712,500 shares of the Company's common stock at $.90 per share
exercisable on demand. As of May 31, 1997, the Company has customer advances of
approximately $180,000 related to remaining services to be performed under the
agreement. These warrants remained outstanding as of May 31, 1997. The fair
value of the warrants at the date of grant was estimated to be less than $1,000
and accordingly no amounts were allocated to them.
F-38
<PAGE>
BOXTOP INTERACTIVE, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
The fair value of each warrant issued during the period October 1, 1996
through May 31, 1997 was estimated on the date of the grant using the Black-
Scholes option pricing model with the following weighted-average assumptions:
dividend yield of 0%; expected volatility of 20%; risk free interest rate of
6%; expected life of 3 years.
7. Income Taxes
The Company's income tax expense for the period November 6, 1995
(inception) through September 30, 1996 and the period October 1, 1996 through
May 31, 1997, consists entirely of the California State minimum income tax of
$800.
The Company had net deferred tax assets consisting primarily of federal
and state net operating loss carryforwards. The Company has no items which give
rise to significant deferred tax liabilities. At September 30, 1996 and May 31,
1997, the Company has recorded a full valuation allowance offsetting the net
deferred tax assets as management believes it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
At May 31, 1997, the Company had net operating loss carryforwards for
federal income tax purposes of approximately $1,560,000 expiring in 2012. The
Internal Revenue Code can impose certain limitations on the future availability
of net operating loss carryforwards, including annual limitations on the amount
of the carryforwards which could be utilized following substantial changes in a
company's ownership.
The difference between the Company's effective income tax rate and
multiplying the Company's loss before income taxes by the Federal statutory
income tax rate for each of the periods presented in the financial statements
is due primarily to the recording of a valuation allowance to offset the
Company's net deferred tax asset.
8. Stock Option Plan
The Board of Directors has adopted a stock option plan (the Plan).
Pursuant to the terms of the Plan, the Board of Directors is authorized to
grant options to purchase common stock not to exceed 3,000,000 shares to
officers, employees and nonemployees. The Board of Directors is further
authorized to establish the exercise price and the vesting terms.
Pro forma information regarding net loss is required by FAS 123, and has
been determined as if the Company had accounted for its employee stock options
under the fair value method. Had compensation cost for the Company's Plan been
determined based on the fair value at the grant date consistent with the
provisions of FAS 123, the Company's net loss would have been increased to the
pro forma amounts indicated below:
<TABLE>
<CAPTION>
September 30, May 31,
1996 1997
------------- ---------
<S> <C> <C>
Net loss
As reported....................................... $(978,765) $(748,397)
Pro forma......................................... (978,865) (810,397)
</TABLE>
The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted-
average assumptions used for grants during the 1996 and 1997 periods,
respectively: dividend yield of 0% for both periods; expected volatility of 0%
for both periods; risk free interest rate of 6.3% for both periods; expected
life of 3.2 years and 3.0 years.
F-39
<PAGE>
BOXTOP INTERACTIVE, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
A summary of stock options as of September 30, 1996 and May 31, 1997,
and changes during the periods ending on those dates is as follows:
<TABLE>
<CAPTION>
September 30, 1996 May 31, 1997
-------------------- ----------------
Weighted Weighted
Average Average
Exercise Exercise
Options Price Options Price
---------- --------- ------- --------
<S> <C> <C> <C> <C>
Outstanding at beginning of period.. -- $ -- 405,000 $0.97
Granted............................. 405,000 $ 0.97 465,000 $1.10
---------- -------
Outstanding at end of period........ 405,000 $ 0.97 870,000 $1.04
========== =======
Weighted average fair value of
options granted during the period:
Exercise price exceeds fair value
of stock......................... $ -- $0.13
Exercise price equals fair value
of stock......................... $ -- $ --
Exercise price is less than fair
value of stock................... $ -- $0.99
</TABLE>
No options were exercised or forfeited during the period from November
6, 1995 (inception) through May 31, 1997.
The following table summarizes information about stock options
outstanding at May 31, 1997:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
----------------------------------------- --------------------
Weighted
Weighted Average Weighted
Number Average Remaining Number Average
Exercise Outstanding Exercise Contractual Exercisable Exercise
Prices at 5/31/97 Price Life at 5/31/97 Price
-------- ----------- -------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
$1.10 550,000 $1.10 9.60 250,000 $1.10
$1.10 270,000 $1.10 4.50 145,000 $1.10
$0.01 50,000 $0.01 4.20 16,668 $0.01
</TABLE>
In May 1997, the Company granted certain employees options to acquire
40,000 shares of the Company's common stock at $1.10 per share. These options
vested immediately. The Company recognized approximately $32,000 of stock
compensation expense related to the issuance of these options.
9. Commitments
The Company is obligated under various capital leases for computer
equipment that expire at various dates through 1999. The gross amount of
computer equipment and related accumulated amortization included in property
and equipment and recorded under capital lease is as follows:
<TABLE>
<CAPTION>
September 31, May 31,
1996 1997
------------- --------
<S> <C> <C>
Computer Equipment................................. $126,686 $126,686
Less accumulated amortization.................... (23,226) (40,117)
-------- --------
$103,460 $ 86,569
======== ========
</TABLE>
Amortization of assets held under capital lease for the period November
6, 1995 (inception) through September 30, 1996 and the period October 1, 1996
through May 31, 1997 of approximately $23,000 and $17,000, respectively, is
included with depreciation expense.
F-40
<PAGE>
BOXTOP INTERACTIVE, INC.
NOTES TO FINANCIAL STATEMENTS--(Continued)
Future minimum lease payments under non-cancelable operating leases and
future minimum capital lease payments as of May 31, 1997 are as follows:
<TABLE>
<CAPTION>
Year Ending Capital Operating
May 31, Leases Leases
----------- -------- ---------
<S> <C> <C>
1998.................................................. $ 52,500 $212,208
1999.................................................. 52,500 212,208
2000.................................................. 4,015 212,208
2001.................................................. -- 123,788
-------- --------
Total minimum lease payments........................... $109,015 $760,412
======== ========
</TABLE>
Rental expense under operating leases, primarily the Company's office
facility, for the period November 6, 1995 (inception) through September 30,
1996 and the period October 1, 1996 through May 31, 1997 totaled approximately
$96,000 and $154,000, respectively.
10. Employee Benefit Plan
During the period October 1, 1996 through May 31, 1997, the Company
established a 401(k) plan (the Plan) under Section 401(k) of the Internal
Revenue Code. The Plan permitted the Company to make discretionary
contributions to employees' 401(k) accounts, subject to IRS limitations on
maximum contributions. During the period from October 1, 1996 through May 31,
1997, the Company made no contributions to this plan.
11. Related Party Transactions
The amounts due to affiliate represent monies owed to BoxTop
Entertainment, Inc., an affiliated company who provided non-interest bearing
advances to the Company. During the period November 6, 1995 through September
30, 1996, certain shared operating expenses including payroll, rent and other
costs were allocated between BoxTop Entertainment, Inc. and the Company. Costs
allocated to the Company were approximately $280,000, and are reflected in
general and administrative expenses in the accompanying financial statements.
The Company made non-interest bearing advances to its principal
shareholder. Amounts outstanding at September 30, 1996 and May 31, 1997 were
$18,945 and $79,565, respectively.
At September 30, 1996 and May 31, 1997, the Company had outstanding loans
of $200,000 and $100,000, respectively, due to certain of its shareholders. The
loans bear interest at 8% per annum.
12. Subsequent Events
On May 30, 1997, the Company was acquired by iXL Enterprises, Inc.
F-41
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
of Tessera Enterprise Systems, Inc.
In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of operations, of stockholders' deficit and of
cash flows present fairly, in all material respects, the financial position of
Tessera Enterprise Systems, Inc. and its subsidiary at December 31, 1998 and
1997, and the results of their operations and their cash flows for the years
ended December 31, 1997 and 1998, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
May 4, 1999
F-42
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
------------------------ September 30,
1997 1998 1999
----------- ----------- -------------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............. $ 8,287,200 $ 8,341,400 $ 7,004,300
Accounts receivable................... 2,755,900 3,877,000 5,315,600
Costs and estimated earnings in excess
of billings on uncompleted
contracts............................ 671,800 845,100 273,000
Prepaid expenses and other current
assets............................... 153,400 217,700 384,100
----------- ----------- -----------
Total current assets............... 11,868,300 13,281,200 12,977,000
Fixed assets, net...................... 1,476,600 1,547,300 1,382,700
Other assets........................... 32,500 32,100 32,800
----------- ----------- -----------
Total assets....................... $13,377,400 $14,860,600 $14,392,500
=========== =========== ===========
LIABILITIES, REDEEMABLE PREFERRED STOCK
AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of capital lease
obligations.......................... $ 218,800 $ 85,900 $ 74,500
Current portion of long-term debt..... 248,400 502,000 488,700
Accounts payable...................... 182,500 470,900 373,200
Accrued expenses...................... 945,600 1,747,200 1,931,500
Billings in excess of costs and
estimated earnings on uncompleted
contracts............................ 680,600 107,000 182,900
----------- ----------- -----------
Total current liabilities.......... 2,275,900 2,913,000 3,050,800
Capital lease obligations.............. 267,600 165,300 108,500
Long-term debt......................... 644,300 673,500 486,000
----------- ----------- -----------
Total liabilities.................. 3,187,800 3,751,800 3,645,300
----------- ----------- -----------
Commitments and contingencies
(Note 12)............................. -- -- --
Redeemable preferred stock:
Redeemable preferred stock, $.01 par
value; 158,077 shares authorized,
149,577 shares issued and outstanding
at December 31, 1997; 169,435 shares
authorized, 158,095 shares issued and
outstanding at December 31, 1998 and
September 30, 1999 (unaudited);
stated at issuance price plus accrued
dividends (liquidation preference of
$13,796,700 and $13,833,300 at
December 31, 1998 and September 30,
1999 (unaudited), respectively)...... 11,888,800 13,826,100 13,862,600
----------- ----------- -----------
Stockholders' deficit:
Common stock, no par value; 7,500,000
shares authorized; 2,984,841 shares
issued and outstanding at
December 31, 1997; 3,055,391 shares
issued and 2,602,466 shares
outstanding at December 31, 1998;
3,116,891 shares issued and 2,512,991
shares outstanding at September 30,
1999 (unaudited)..................... 5,400 28,300 76,700
Accumulated other comprehensive income
(loss)............................... (10,700) (4,200) 500
Accumulated deficit................... (1,693,900) (852,700) (674,300)
Cost of 452,925 and 603,900 shares of
common stock held in treasury at
December 31, 1998 and September 30,
1999 (unaudited), respectively....... -- (1,888,700) (2,518,300)
----------- ----------- -----------
Total stockholders' deficit........ (1,699,200) (2,717,300) (3,115,400)
----------- ----------- -----------
Total liabilities, redeemable
preferred stock and stockholders'
deficit........................... $13,377,400 $14,860,600 $14,392,500
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-43
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended
Year Ended December 31, September 30,
------------------------ ------------------------
1997 1998 1998 1999
----------- ----------- ----------- -----------
(unaudited)
<S> <C> <C> <C> <C>
Revenue.................... $16,212,400 $20,248,100 $14,842,400 $17,618,300
----------- ----------- ----------- -----------
Costs and expenses:
Cost of revenue........... 10,642,800 12,249,200 9,019,000 9,772,600
Selling, general and
administrative........... 5,033,700 7,262,900 5,363,300 7,657,200
----------- ----------- ----------- -----------
15,676,500 19,512,100 14,382,300 17,429,800
----------- ----------- ----------- -----------
Income from
operations............ 535,900 736,000 460,100 188,500
----------- ----------- ----------- -----------
Other income (expense):
Interest income........... 36,500 339,000 259,100 163,000
Interest expense.......... (141,900) (135,100) (96,300) (105,600)
Other income (expense),
net...................... (3,200) 800 800 7,200
----------- ----------- ----------- -----------
(108,600) 204,700 163,600 64,600
----------- ----------- ----------- -----------
Income before income
taxes................. 427,300 940,700 623,700 253,100
Provision for income
taxes..................... 10,000 38,900 25,200 38,200
----------- ----------- ----------- -----------
Net income............. $ 417,300 $ 901,800 $ 598,500 $ 214,900
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-44
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
Common Stock Treasury Stock
----------------- Accumulated ---------------------
Other Number Total
Number of Comprehensive Accumulated Comprehensive of Stockholders'
Shares Amount Income (Loss) Deficit Income (Loss) Shares Cost Deficit
--------- ------- ------------- ----------- ------------- -------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1996...... 2,951,460 $ 1,000 $ -- $(2,023,000) -- $ -- $(2,022,000)
Issuance costs of Series
D preferred stock...... (39,500) (39,500)
Issuance of common stock
pursuant to exercise of
stock options.......... 33,381 4,400 4,400
Accrual of cumulative
dividends on redeemable
preferred stock........ (48,700) (48,700)
Comprehensive income:
Net income............. 417,300 $417,300 417,300
Foreign currency
translation
adjustment............ (10,700) (10,700) (10,700)
--------
Comprehensive income... 406,600
--------- ------- -------- ----------- ======== -------- ----------- -----------
Balance at
December 31, 1997...... 2,984,841 5,400 (10,700) (1,693,900) -- -- (1,699,200)
Repurchase of common
stock.................. (452,925) (1,888,700) (1,888,700)
Issuance costs of Series
D preferred stock...... (11,900) (11,900)
Issuance of common stock
pursuant to exercise of
stock options.......... 70,550 22,900 22,900
Accrual of cumulative
dividends on redeemable
preferred stock........ (48,700) (48,700)
Comprehensive income:
Net income............. 901,800 901,800 901,800
Foreign currency
translation
adjustment............ 6,500 6,500 6,500
--------
Comprehensive income... 908,300
--------- ------- -------- ----------- ======== -------- ----------- -----------
Balance at
December 31, 1998...... 3,055,391 28,300 (4,200) (852,700) (452,925) (1,888,700) (2,717,300)
Repurchase of common
stock (unaudited)...... (150,975) (629,600) (629,600)
Issuance of common stock
pursuant to exercise of
stock options
(unaudited)............ 61,500 48,400 48,400
Accrual of cumulative
dividends on redeemable
preferred stock
(unaudited)............ (36,500) (36,500)
Comprehensive income:
Net income
(unaudited)........... 214,900 214,900 214,900
Foreign currency
translation adjustment
(unaudited)........... 4,700 4,700 4,700
--------
Comprehensive income
(unaudited)........... $219,600
--------- ------- -------- ----------- ======== -------- ----------- -----------
Balance at September 30,
1999 (unaudited)....... 3,116,891 $76,700 $ 500 $ (674,300) (603,900) $(2,518,300) $(3,115,400)
========= ======= ======== =========== ======== =========== ===========
</TABLE>
F-45
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
Year Ended December 31, September 30,
------------------------ ------------------------
1997 1998 1998 1999
----------- ----------- ----------- -----------
(unaudited)
<S> <C> <C> <C> <C>
Increase (Decrease) in
Cash and Cash Equivalents
Cash flows from operating
activities:
Net income............... $ 417,300 $ 901,800 $ 598,500 $ 214,900
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities:
Depreciation and
amortization.......... 547,400 767,300 552,700 634,500
Amortization of gain on
sale leaseback
transactions.......... (17,400) (10,300) (8,200) (800)
Changes in assets and
liabilities:
Accounts receivable... (273,500) (1,121,100) (1,850,000) (1,438,600)
Costs and estimated
earnings in excess of
billings on
uncompleted
contracts............ (555,000) (173,300) (171,400) 572,100
Prepaid expenses and
other current
assets............... (117,900) (64,300) (54,600) (166,400)
Advances to
affiliate............ 72,100 -- -- --
Other assets.......... (4,400) 400 -- (700)
Accounts payable...... (135,200) 288,400 345,500 (97,700)
Accrued expenses...... 559,600 798,600 456,400 184,300
Billings in excess of
costs and estimated
earnings on
uncompleted
contracts............ (1,116,100) (573,600) (302,800) 75,900
----------- ----------- ----------- -----------
Net cash provided by
(used in) operating
activities.......... (623,100) 813,900 (433,900) (22,500)
----------- ----------- ----------- -----------
Cash flows from investing
activities:
Purchases of fixed
assets.................. (819,100) (827,700) (667,100) (459,700)
----------- ----------- ----------- -----------
Net cash used in
investing
activities.......... (819,100) (827,700) (667,100) (459,700)
----------- ----------- ----------- -----------
Cash flows from financing
activities:
Proceeds from line of
credit.................. 975,000 -- -- --
Payments on line of
credit.................. (1,275,000) -- -- --
Payments on capital lease
obligations............. (264,000) (235,200) (191,900) (68,200)
Proceeds from issuance of
long-term debt.......... 934,300 553,600 542,800 167,200
Payments on long-term
debt.................... (41,600) (270,800) (218,000) (368,000)
Proceeds from issuance of
preferred stock, net of
issuance costs.......... 7,160,400 1,876,700 1,876,700 --
Proceeds from issuance of
common stock............ 4,400 22,900 11,000 48,400
Repurchase of common
stock................... -- (1,888,700) (1,888,700) (629,600)
----------- ----------- ----------- -----------
Net cash provided by
(used in) financing
activities.......... 7,493,500 58,500 131,900 (850,200)
----------- ----------- ----------- -----------
Effect of exchange rate
changes on cash and cash
equivalents.............. (10,700) 9,500 (3,800) (4,700)
----------- ----------- ----------- -----------
Net increase (decrease) in
cash and cash
equivalents.............. 6,040,600 54,200 (972,900) (1,337,100)
Cash and cash equivalents
at beginning of period... 2,246,600 8,287,200 8,287,200 8,341,400
----------- ----------- ----------- -----------
Cash and cash equivalents
at end of period......... $ 8,287,200 $ 8,341,400 7,314,300 $ 7,004,300
=========== =========== =========== ===========
Supplemental disclosure of
cash flow information:
Cash paid for interest... $ 141,900 $ 135,100 $ 96,300 $ 105,600
Cash paid for income
taxes................... $ -- $ 28,400 $ 25,200 $ 28,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-46
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Formation and Operations of the Company
Tessera Enterprise Systems, Inc. (the "Company") was incorporated in
Massachusetts on February 15, 1995. The Company provides design, delivery,
implementation and operation of large scale marketing information systems
primarily for financial services organizations, telecommunications companies
and direct marketers throughout the United States and Europe.
2. Summary of Significant Accounting Policies
Basis of Consolidation
The consolidated financial statements include the accounts of the Company
and its wholly owned German subsidiary, Tessera, GmbH. All intercompany
balances and transactions have been eliminated.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. The Company
invests its excess cash in money market funds of major financial institutions
that are subject to minimal credit and market risk. At December 31, 1997 and
1998, the Company held cash equivalents totaling $7,285,200 and $6,960,700,
respectively, which are classified as available-for-sale and carried at
amortized cost which approximates fair market value.
Revenue Recognition
Revenue from fixed-fee contracts is recognized using the percentage-of-
completion method, measured by the percentage of labor hours incurred to date
to estimated total labor hours for each contract, provided that collection of
the related receivable is probable. Adjustments to contract cost estimates are
made in periods in which the facts which require such revisions become known.
When the estimate indicates a loss, such loss is provided for currently in its
entirety. Costs and estimated earnings in excess of billings on uncompleted
contracts represent revenue recognized in excess of amounts billed. Billings in
excess of costs and estimated earnings on uncompleted contracts represent
billings in excess of revenue recognized. Revenue from contracts based on time
and materials is recognized as the services are performed.
Concentration of Credit Risk and Major Customers
Financial instruments which potentially expose the Company to
concentrations of credit risk include trade accounts receivable and costs and
estimated earnings in excess of billings on uncompleted contracts. Management
believes its credit policies are prudent and reflect normal industry terms and
business risk. The Company does not anticipate nonperformance by the
counterparties and, accordingly, does not require collateral.
At December 31, 1997 and 1998, approximately $1,982,000 and $2,275,500,
respectively, of the Company's accounts receivable are from five customers. At
December 31, 1997 and 1998, approximately $653,000 and $825,200, respectively,
of the Company's costs and estimated earnings in excess of billings on
uncompleted contracts are from four and two customers, respectively.
Fixed Assets
Fixed assets are recorded at cost and depreciated using the straight-line
method over their estimated useful lives. Fixed assets held under capital
leases are initially recorded at the lower of the fair market value of the
related asset or the present value of the minimum lease payments at the
inception of the lease and are amortized on a straight-line basis over the
shorter of the life of the related asset or the lease term.
F-47
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Foreign Currency
Assets and liabilities of the Company's foreign subsidiary are translated
into U.S. dollars at exchange rates in effect at the balance sheet date. Income
and expense items are translated at average exchange rates for the period.
Cumulative translation adjustments are included as a component of stockholders'
equity.
Accounting for Stock-Based Compensation
The Company accounts for stock-based awards to employees using the
intrinsic value method as prescribed by Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. Accordingly, no compensation expense is recorded for options
issued to employees in fixed amounts and with exercise prices equal to the fair
market value of the Company's common stock at the date of grant. The Company
has adopted the provisions of Statement of Financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation," through disclosure
only (Note 9).
Comprehensive Income
The Company adopted SFAS No. 130, "Reporting Comprehensive Income," in
1998. SFAS No. 130 requires that a full set of general purpose financial
statements be expanded to include the reporting of "comprehensive income."
Comprehensive income is comprised of two components, net income and other
comprehensive income. Other comprehensive income includes certain changes in
equity that are excluded from net income, such as foreign currency translation
adjustments and unrealized holding gains and losses on available-for-sale
marketable securities and certain derivative instruments. The individual
components of comprehensive income are reflected in the Consolidated Statement
of Stockholders' Deficit. At December 31, 1997 and 1998, accumulated other
comprehensive income was comprised solely of cumulative foreign currency
translation adjustments.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Areas particularly subject to estimation include the
allowance for doubtful accounts, revenue recognition under the percentage-of-
completion method, the deferred tax valuation allowance and the fair values of
equity instruments issued by the Company. Actual results could differ from
these estimates.
Reclassifications
Certain prior year amounts have been reclassified to conform with the
current year's presentation. Such reclassifications had no effect on the
Company's results of operations.
Unaudited Interim Financial Statements
The financial statements and related notes as of September 30, 1999 and
for the nine months ended September 30, 1998 and 1999 are unaudited. In the
opinion of the Company's management, the unaudited interim financial statements
include all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the financial position and results of
operations for these interim periods. The results of
F-48
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
operations for the nine months ended September 30, 1999 are not necessarily
indicative of the results of operations for the year ended December 31, 1999 or
any other future period.
3. Fixed Assets
Fixed assets consist of the following:
<TABLE>
<CAPTION>
December 31,
Useful life ---------------------
in years 1997 1998
----------- ---------- ----------
<S> <C> <C> <C>
Computers and equipment................ 3-5 $1,824,600 $2,164,000
Furniture and fixtures................. 5 204,000 400,300
Leasehold improvements................. 10 173,600 217,200
---------- ----------
2,202,200 2,781,500
Less--Accumulated depreciation and
amortization.......................... 725,600 1,234,200
---------- ----------
$1,476,600 $1,547,300
========== ==========
</TABLE>
During 1995 and 1996, the Company sold certain equipment with a total net
book value of $473,100 to a leasing company for cash of $516,500 and then
leased the same equipment back under the terms of a lease line of credit. The
gains on these sale leaseback transactions were deferred and amortized over the
related lease lives of 2.5 years. At December 31, 1997 and 1998, computers and
equipment held under capital lease totaled $894,400 and $635,200, respectively.
Amortization expense on computers and equipment held under capital lease
totaled, $282,200 and $237,100 during, 1997 and 1998, respectively. Accumulated
amortization on computers and equipment held under capital lease totaled
$418,000 and $396,000 at December 31, 1997 and 1998, respectively.
4. Accrued Expenses
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
December 31,
-------------------
1997 1998
-------- ----------
<S> <C> <C>
Employee compensation and benefits.................... $651,400 $1,280,400
Commissions........................................... 211,800 204,200
Other................................................. 82,400 262,600
-------- ----------
$945,600 $1,747,200
======== ==========
</TABLE>
5. Borrowings
Revolving Line of Credit
In July 1996, the Company entered into an agreement with a bank to
establish a revolving line of credit. The line of credit agreement, as amended,
allows for total borrowings up to $4,000,000 for working capital purposes and
expires in July 1999. Borrowings are based on eligible accounts receivable, as
defined by the agreement, and are collateralized by the Company's accounts
receivable. Borrowings bear interest at the prime rate plus 0.50% (8.25% at
December 31, 1998). Under the terms of the facility, the Company is required to
comply with certain covenants, including the maintenance of certain financial
ratios. At December 31, 1998, no borrowings were outstanding and $4,000,000 was
available under this line of credit.
F-49
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Long-Term Debt
During 1997, the Company amended its equipment line of credit agreement
to allow for additional borrowings of up to $1,750,000 for equipment purchase
purposes. During 1998, the Company further amended the agreement to allow for
additional borrowings of up to $2,000,000 in addition to the original
$1,750,000. Borrowings outstanding for equipment purchases bear interest at
the prime rate plus 1.00% to 1.75% (8.75% to 9.50% at December 31, 1998).
After a nine-month draw down period, borrowings outstanding are converted into
term loans payable in 36 equal monthly principal installments. Availability
under the 1997 amendment expired in April 1998. Availability under the 1998
amendment expired in February 1999. Borrowings outstanding under the equipment
line of credit totaled $1,175,500 and $1,529,200 remained available at
December 31, 1998.
At December 31, 1998, future aggregate principal payments due on long-
term debt are as follows:
<TABLE>
<S> <C>
1999............................................................ $ 502,000
2000............................................................ 454,300
2001............................................................ 206,100
2002............................................................ 13,100
----------
$1,175,500
==========
</TABLE>
6. Income Taxes
The components of income before income taxes are as follows:
<TABLE>
<CAPTION>
Year Ended
December 31,
-----------------
1997 1998
-------- --------
<S> <C> <C>
Domestic................................................. $405,000 $854,200
Foreign.................................................. 22,300 86,500
-------- --------
$427,300 $940,700
======== ========
</TABLE>
F-50
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
Year Ended December
31,
--------------------
1997 1998
--------- ---------
<S> <C> <C>
Current:
Federal................................................. $ -- $ --
State................................................... -- --
Foreign................................................. 10,000 38,900
--------- ---------
10,000 38,900
--------- ---------
Deferred:
Federal................................................. 95,800 276,500
State................................................... 87,400 40,700
Foreign................................................. -- --
--------- ---------
183,200 317,200
Change in deferred tax asset valuation allowance.......... (183,200) (317,200)
--------- ---------
-- --
--------- ---------
$ 10,000 $ 38,900
========= =========
No current federal or state income taxes were payable in the year ended
December 31, 1998 due to the utilization of net operating loss carryforwards.
No current federal or state income taxes were payable in the year ended
December 31, 1997 as a result of taxable losses incurred.
Deferred tax assets are comprised of the following:
<CAPTION>
December 31,
--------------------
1997 1998
--------- ---------
<S> <C> <C>
Net operating loss carryforwards.......................... $ 529,700 $ 27,200
Accrued expenses.......................................... 17,200 197,600
Other..................................................... 3,500 8,400
--------- ---------
Deferred tax assets....................................... 550,400 233,200
Less: valuation allowance................................. (550,400) (233,200)
--------- ---------
$ -- $ --
========= =========
</TABLE>
The Company has provided a valuation allowance for the full amount of its
net deferred tax assets since realization of these future benefits is not
sufficiently assured. Realization is dependent primarily on generating
sufficient taxable income in future periods to offset the deductions underlying
the deferred tax assets when they reverse.
F-51
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
A reconciliation between the amounts of reported income tax expense and
the amounts computed using the U.S. federal statutory rate of 35% are as
follows:
<TABLE>
<CAPTION>
Year ended December 31,
------------------------
1997 1998
----------- -----------
<S> <C> <C>
Income tax expense at statutory rates............... $ 149,600 $ 299,000
State taxes, net of federal income tax benefit...... 57,700 26,900
Foreign income taxed at different rates............. 2,500 9,500
Permanent differences............................... 18,300 8,700
Other............................................... (34,900) 12,000
Increase (decrease) in deferred tax valuation
allowance.......................................... (183,200) (317,200)
----------- -----------
$ 10,000 $ 38,900
=========== ===========
</TABLE>
At December 31, 1998, the Company has federal and state net operating
loss carryforwards of approximately $68,000 and $62,000, respectively,
available to reduce future taxable income. If not used, these carryforwards
will expire at various dates between 2002 and 2012.
Under the provisions of the Internal Revenue Code, certain substantial
changes in the Company's ownership may limit the amount of net operating loss
carryforwards which could be utilized annually to offset future taxable income.
The amount of any annual limitation would be determined, in part, based upon
the Company's value prior to an ownership change.
7. Redeemable Preferred Stock
The Company's redeemable preferred stock is comprised of the following:
<TABLE>
<CAPTION>
December 31,
-----------------------
1997 1998
----------- -----------
<S> <C> <C>
Series B redeemable preferred stock, $.01 par value;
48,700 shares authorized, issued and outstanding at
December 31, 1997 and 1998; stated at issuance price
plus accrued dividends (liquidation preference of
$1,177,600 at December 31, 1998)..................... $ 1,128,900 $ 1,177,600
Series A redeemable convertible preferred stock, $.01
par value; 58,700 shares authorized, 50,200 shares
issued and outstanding at December 31, 1997 and 1998;
stated at issuance price (liquidation preference of
$1,030,600 at December 31, 1998)..................... 1,060,000 1,060,000
Series C redeemable convertible preferred stock, $.01
par value; 18,204 shares authorized, issued and
outstanding at December 31, 1997 and 1998; stated at
issuance price (liquidation preference of $2,500,000
at December 31, 1998)................................ 2,500,000 2,500,000
Series D redeemable convertible preferred stock, $.01
par value; 32,473 and 43,831 shares authorized at
December 31, 1997 and 1998, respectively; 32,473 and
40,991 shares issued and outstanding at December 31,
1997 and 1998, respectively; stated at issuance price
(liquidation preference of $9,088,500 at December 31,
1998)................................................ 7,199,900 9,088,500
----------- -----------
$11,888,800 $13,826,100
=========== ===========
</TABLE>
F-52
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
At December 31, 1998, the redeemable preferred stock has the following
characteristics:
Voting Rights
Holders of Series A, Series C and Series D preferred stock are each
entitled to one vote for each share of common stock into which the Series A,
Series C and Series D preferred stock is convertible. Holders of Series B
preferred stock are not entitled to voting rights.
Dividend Rights
Series A, Series C and Series D preferred stockholders are not entitled
to receive dividends unless declared by the Board of Directors; however, no
dividends may be declared or paid on the common stock without first declaring a
preferential dividend on the Series A, Series C and Series D preferred stock.
Holders of Series B preferred stock are entitled to a dividend of $1 per share
per annum (subject to adjustment for stock splits) payable when, as and if
declared by the Board of Directors. These dividends are cumulative and accrue
on a daily basis from the date of issuance whether or not declared. Cumulative
and unpaid dividends on Series B preferred stock have been charged to
accumulated deficit and are included in the carrying value of the Series B
preferred stock.
The Company shall not declare or pay any distributions on shares of
common stock until the holders of Series B preferred stock have first received
a distribution.
Liquidation Rights
In the event of dissolution, liquidation, sale or winding up of the
Company, holders of Series A, Series B, Series C and Series D preferred stock
are entitled to receive, prior to and in preference to holders of common stock,
an amount equal to $20.53, $20.53, $137.33 and $221.72 per share, respectively,
plus any accrued but unpaid dividends.
In the event of any merger, consolidation or sale of the Company deemed
to be a liquidation, the holders of the Series C preferred stock shall be
entitled to be paid, after preferential payments to the holders of the Series B
preferred stock, an amount per share equal to the greater of the Series C
liquidation preference of $137.33 or the sum of (i) 40% of the Series C
liquidation preference and (ii) the amount that would have been payable upon
such liquidation assuming conversion of each share of Series C preferred stock
into thirty shares of common stock.
Conversion Rights
Holders of Series B preferred stock are not entitled to conversion
rights. Each share of Series A, Series C and Series D preferred stock may be
converted at any time, at the option of the stockholder, into common shares
currently at a ratio of thirty shares of common stock for each share of Series
A, Series C and Series D preferred stock, subject to certain anti-dilution
adjustments.
The Series A and Series C preferred stock is automatically convertible
into common stock upon the closing of an initial public stock offering in which
net proceeds equal or exceed $7,500,000, and in which the price per common
share to the public is at least $2.74 and $9.15 per share, respectively. The
Series D preferred stock is automatically convertible into common stock upon
the closing of an initial public stock offering in which net proceeds equal or
exceed $15,000,000, and in which the price per common share to the public is at
least $14.78 per share. If mandatory conversion occurs due to the closing of a
qualified initial public offering,
F-53
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
the holders of the Series C preferred stock are also entitled to receive
additional common shares, the number of which shall be calculated as 40% of the
Series C liquidation preference in effect at that time divided by the initial
public offering price.
Redemption Rights
On September 30, 2001, each holder of the Series A, Series C and Series D
preferred stock shall have the right to cause the Company to redeem up to half
of the shares of their respective series of preferred stock outstanding and, on
the first anniversary thereof, redeem the remaining shares at a price equal to
$20.53, $137.33 and $221.72, respectively, plus any declared but unpaid
dividends. On September 30, 2001, each holder of shares of Series B preferred
stock shall have the right to cause the Company to redeem half of the shares of
Series B preferred stock outstanding and, on the first anniversary thereof,
redeem the remaining shares at a price equal to $20.53, plus all accrued but
unpaid dividends.
Right of First Refusal
During 1995, the preferred stockholders entered into a stockholder
agreement with the holders of the Company's common stock under which the
Company first, the common stockholders second and the preferred stockholders
third, retain the right of first refusal to purchase any such shares of common
stock offered for sale. These rights terminate upon (1) the liquidation or
dissolution of the Company, or (2) a public offering of the Company's common
stock.
Warrants
In connection with a lease agreement entered into during 1995, the
Company issued warrants to purchase 653 shares of Series A preferred stock at
an exercise price of $65 per share. These warrants were fully exercisable upon
issuance and expire on November 30, 2002. The value ascribed to these warrants
was not significant.
8. Common Stock
Each share of common stock entitles the holder to one vote on all matters
submitted to a vote of the Company's stockholders. Common stockholders are
entitled to receive dividends, if any, as may be declared by the Board of
Directors, subject to any preferential dividend rights of the preferred
stockholders.
Stock Split
In February 1998, the Company authorized a three-for-one stock split
whereby three shares of common stock were exchanged for each share of common
stock outstanding. All share and per share data appearing in the financial
statements and notes thereto have been retroactively restated to reflect this
stock split.
Repurchase of Common Stock
During 1998, the Company repurchased 452,925 shares of common stock from
a shareholder for $1,888,700 and obtained a six-month option to repurchase an
additional 150,975 shares at a price equal to the lower of $4.17 per share or
the fair market value as determined at the time the option is exercised. This
option was exercised in March 1999 at the $4.17 per share price. At December
31, 1998, the shares repurchased by the Company during 1998 are held in
treasury and carried at cost.
F-54
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Reserved Shares
At December 31, 1998, the Company had 4,369,440 shares of its common
stock reserved for issuance upon conversion of the Series A, Series C and D
preferred stock, the exercise and conversion of the Series A preferred stock
warrant and the exercise of outstanding stock options.
9. 1995 Stock Option Plan
During 1995, the Board of Directors adopted the 1995 Stock Option Plan
(the "Option Plan"). The Option Plan provides for the grant of incentive stock
options ("ISOs") as well as non-statutory options. The Board of Directors
administers the Option Plan and has sole discretion to grant options to
purchase shares of the Company's common stock. The Board of Directors
determines the term of each option, option price, number of shares for which
each option is granted, whether restrictions will be imposed on the shares
subject to options, and the rate at which each option is exercisable. The
exercise price for options granted will be determined by the Board of
Directors, except that for ISOs the exercise price shall not be less than the
fair market value per share of the underlying common stock on the date granted
(110% of fair market value for ISOs granted to holders of more than 10% of the
voting stock of the Company). The term of the options shall be set forth in
the applicable option agreement, except that in the case of ISOs the option
term shall not exceed ten years (five years for ISOs granted to holders of
more than 10% of the voting stock of the Company). A maximum of 1,068,000
shares of common stock have been reserved for issuance upon the exercise of
options granted under the Option Plan.
Activity under the Option Plan during the years ended December 31, 1997
and 1998 was as follows:
<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------------------------
1997 1998
------------------------- -------------------------
Weighted-average Weighted-average
Shares exercise price Shares exercise price
------- ---------------- ------- ----------------
<S> <C> <C> <C> <C>
Outstanding at beginning
of year.................. 428,100 $0.13 645,330 $0.93
Granted................. 319,420 $1.81 184,660 $4.25
Exercised............... (33,381) $0.14 (70,550) $0.33
Canceled................ (68,809) $0.39 (87,000) $2.10
------- -------
Outstanding at end of
year..................... 645,330 $0.93 672,440 $1.76
======= =======
Options exercisable at
year end................. 179,760 279,790
======= =======
Weighted-average fair
value of options granted
during the period........ $ 0.33 $ 0.91
======= =======
</TABLE>
At December 31, 1998, an aggregate of 291,629 options were available for
future grant under the Option Plan.
F-55
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The following table summarizes information about stock options
outstanding at December 31, 1998:
<TABLE>
<CAPTION>
Weighted-average
remaining
Range of Number Weighted-average contractual life Number Weighted-average
exercise prices outstanding exercise price (in years) exercisable exercise price
- --------------- ----------- ---------------- ---------------- ----------- ---------------- ---
<S> <C> <C> <C> <C> <C> <C>
$0.07 160,500 $0.07 7.1 133,250 $0.07
$0.20-$0.33 139,080 $0.24 7.9 77,840 $0.23
$1.67-$2.17 204,240 $2.06 8.6 68,080 $2.06
$3.33 1,860 $3.33 8.8 620 $3.33
$4.17-$4.75 166,760 $4.25 9.3 -- $ --
------- -------
672,440 $1.76 8.3 279,790 $0.61
======= =======
</TABLE>
No compensation expense was recognized under APB Opinion No. 25 for
grants made to employees under the Option Plan during 1997 or 1998. Had
compensation cost been determined based on the fair value of the options
granted to employees at the grant date consistent with the provisions of SFAS
No. 123, the Company's net income for 1997 and 1998 would have been as
follows:
<TABLE>
<CAPTION>
Year ended
December 31
-----------------
1997 1998
-------- --------
<S> <C> <C>
Net income:
As reported................................................. $417,300 $901,800
Pro forma................................................... 400,300 837,300
</TABLE>
The fair value of each option grant under SFAS No. 123 was estimated on
the date of grant using the Black-Scholes option pricing model with the
following assumptions for grants during the applicable period.
<TABLE>
<CAPTION>
Year
ended
December
31,
----------
1997 1998
---- ----
<S> <C> <C>
Dividend yield...................................................... 0.0% 0.0%
Risk free interest rate............................................. 5.9% 5.1%
Expected term (years)............................................... 3.5 5.0
Volatility.......................................................... 0.0% 0.0%
</TABLE>
10. Defined Contribution Plan
The Company sponsors a defined contribution retirement savings plan (the
"Savings Plan") under Section 401(k) of the Internal Revenue Code. The Savings
Plan covers substantially all employees and allows participants to defer a
portion of their annual compensation on a pre-tax basis. The Company may make
discretionary contributions to the Savings Plan. The Company has made no
contributions to the Savings Plan through December 31, 1998.
11. Segment Information and Significant Customers
The Company operates and reports internally in one business segment:
information systems design and implementation. For each of the three years in
the period ended December 31, 1998, substantially all revenues from
unaffiliated customers were generated in the United States and there were no
revenues from affiliated customers. As of December 31, 1997 and 1998,
substantially all long-lived assets were held in the United States.
F-56
<PAGE>
TESSERA ENTERPRISE SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Revenues from four customers represented 18%, 14%, 11% and 11%,
respectively, of total revenues during the year ended December 31, 1997.
Revenues from four customers represented 19%, 14%, 14% and 12%, respectively,
of total revenues during the year ended December 31, 1998.
12. Commitments and Contingencies
Leases
The Company leases its office space and certain office equipment under
noncancelable operating leases which expire at various times through July 2006.
Rent expense under these leases was $618,000 and $715,200 during the years
ended December 31, 1997 and 1998, respectively. In addition, the Company leases
certain computer and office equipment under capital leases which expire at
various times through November 2001.
Future minimum lease payments as of December 31, 1998 are summarized as
follows:
<TABLE>
<CAPTION>
Operating Capital
Year Ending December 31, Leases Leases
------------------------ ---------- --------
<S> <C> <C>
1999..................................................... $ 530,000 $118,800
2000..................................................... 554,800 91,100
2001..................................................... 554,800 76,700
2002..................................................... 568,300 800
2003..................................................... 583,300 --
Thereafter............................................... 1,507,400 --
---------- --------
Total minimum lease payments............................. $4,298,600 287,400
==========
Less: Amount representing interest....................... 36,200
--------
Present value of minimum lease payments.................. $251,200
========
</TABLE>
Letter of Credit
In September 1996, the Company entered into an irrevocable letter of
credit with a bank which serves as the security deposit on leased office space.
This letter of credit, in the amount of $66,300, expires on October 31, 1999
and is automatically renewable at the option of the bank over the term of the
lease, which expires in the year 2006.
F-57
<PAGE>
[MIDDLE OF PAGE: iXL LOGO]
[MIDDLE OF PAGE: STYLIZED TEXT]
Taking Ideas To Action . . . Faster
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7,000,000 Shares
[LOGO OF IXL ENTERPRISES, INC. APPEARS HERE]
iXL ENTERPRISES, INC.
Common Stock
----------------
PROSPECTUS
----------------
Merrill Lynch & Co.
Donaldson, Lufkin & Jenrette
Robertson Stephens
First Union Securities, Inc.
The Robinson-Humphrey Company
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion
Preliminary Prospectus dated November 4, 1999
PROSPECTUS
7,000,000 Shares
[Logo of iXL Enterprises, Inc.]
iXL ENTERPRISES, INC.
Common Stock
-----------
iXL Enterprises, Inc. is offering 2,000,000 shares of its common stock, and
selling stockholders are offering 5,000,000 shares of common stock. iXL will
not receive any of the proceeds from the sale of shares by the selling
stockholders.
iXL's common stock is quoted on the Nasdaq National Market under the symbol
"IIXL." On November 1, 1999, the last reported sale price of the common stock
was $39.375 per share.
Investing in the common stock involves risks which are described in the
"Risk Factors" section beginning on page 7 of this prospectus.
-----------
<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public offering price .......................... $ $
Underwriting discount .......................... $ $
Proceeds, before expenses, to iXL Enterprises,
Inc. .......................................... $ $
Proceeds to selling stockholders................ $ $
</TABLE>
The managers may also purchase up to an additional 1,050,000 shares from
iXL at the public offering price, less the underwriting discount, within 30
days from the date of this prospectus to cover over-allotments.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
The shares of common stock will be ready for delivery in New York, New
York, on or about , 1999.
-----------
Merrill Lynch International
Donaldson, Lufkin & Jenrette
-----------
Robertson Stephens International
The Robinson-Humphrey Company
-----------
The date of this prospectus is , 1999.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................. 1
Risk Factors............................................................. 7
Forward-looking Statements............................................... 17
Trademarks............................................................... 17
Information in Prospectus................................................ 17
Use of Proceeds.......................................................... 18
Dividend Policy.......................................................... 18
Price Range of Common Stock.............................................. 19
Capitalization........................................................... 20
Dilution................................................................. 22
Pro Forma Consolidated Financial Information............................. 23
Selected Consolidated Financial Data..................................... 32
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 35
Business................................................................. 51
Management............................................................... 70
Certain Transactions..................................................... 80
Principal and Selling Stockholders....................................... 84
Description of Capital Stock............................................. 90
Shares Eligible for Future Sale.......................................... 93
United States Federal Tax Considerations for Non-U.S. Holders............ 95
Underwriting............................................................. 98
Legal Matters............................................................ 102
Experts.................................................................. 102
Additional Information................................................... 102
Index to Financial Statements............................................ F-1
</TABLE>
i
<PAGE>
UNDERWRITING
General
Merrill Lynch International is acting as lead manager for each of the
international managers named below. Subject to the terms and conditions set
forth in an international purchase agreement among iXL, the selling
stockholders and the international managers, and concurrently with the sale of
5,600,000 shares of common stock to the U.S. underwriters, iXL and the selling
stockholders have agreed to sell to the international managers, and each of the
international managers severally and not jointly has agreed to purchase from
iXL and the selling stockholders the number of shares of common stock set forth
opposite its name below.
<TABLE>
<CAPTION>
Number of
International Manager Shares
--------------------- ---------
<S> <C>
Merrill Lynch International.........................................
Donaldson, Lufkin & Jenrette International..........................
BancBoston Robertson Stephens International Ltd.....................
The Robinson-Humphrey Company, LLC..................................
---------
Total.......................................................... 1,400,000
=========
</TABLE>
iXL and the selling stockholders have also entered into a U.S. purchase
agreement with certain underwriters in the United States and Canada for whom
Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as representative.
Subject to the terms and conditions set forth in the U.S. purchase agreement,
and concurrently with the sale of 1,400,000 shares of common stock to the
international managers pursuant to the international purchase agreement, iXL
and the selling stockholders have agreed to sell to the U.S. underwriters, and
the U.S. underwriters severally have agreed to purchase from iXL and the
selling stockholders, an aggregate of 5,600,000 shares of common stock. The
public offering price, and the total underwriting discount per share of common
stock are identical under the international purchase agreement and the U.S.
purchase agreement.
In the international purchase agreement and the U.S. purchase agreement,
the several international managers and the several U.S. underwriters,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of common stock being sold pursuant to
each such agreement if any of the shares of common stock being sold pursuant to
such agreement are purchased. In the event of a default by an underwriter, the
international purchase agreement and the U.S. purchase agreement provide that,
in certain circumstances, the purchase commitments of non-defaulting
underwriters may be increased or the purchase agreements may be terminated. The
closings with respect to the sale of shares of common stock to be purchased by
the international managers and the U.S. underwriters are conditioned upon one
another.
The lead manager has advised iXL and the selling stockholders that the
international managers propose initially to offer the shares of common stock to
the public at the public offering price set forth on the cover page of this
prospectus and to certain dealers at such price less a concession not in excess
of $ per share of common stock. The international managers may allow, and
such dealers may reallow, a discount not in excess of $ per share of common
stock to certain other dealers. After the public offering, the public offering
price, concession and discount may change.
Over-allotment Option
iXL has granted options to the international managers, exercisable for 30
days after the date of this prospectus, to purchase up to an aggregate of
210,000 additional shares of common stock at the public offering price set
forth on the cover page of this prospectus, less the underwriting discount. The
international managers may exercise these options solely to cover over-
allotments, if any, made on the sale of the common stock offered hereby. To the
extent that the international managers exercise these options, each
international
98
<PAGE>
manager will be obligated, subject to certain conditions, to purchase a number
of additional shares of common stock proportionate to that international
manager's initial amount reflected in the above table. iXL has granted options
to the U.S. underwriters, exercisable for 30 days after the date of this
prospectus, to purchase up to an aggregate of 840,000 additional shares of
common stock to cover over-allotments, if any, on terms similar to those
granted to the international managers.
Commissions and Discounts
The following table shows the per share and total underwriting discounts
and commissions to be paid by iXL and the selling stockholders to the
underwriters and the proceeds to iXL and the selling stockholders. This
information is presented assuming either no exercise or full exercise by the
underwriters of their over-allotment options.
<TABLE>
<CAPTION>
Per Share Without Option With Option
--------- -------------- -----------
<S> <C> <C> <C>
Public Offering Price...................... $ $ $
Underwriting Discount...................... $ $ $
Proceeds, before expenses, to iXL.......... $ $ $
Proceeds to Selling Stockholders........... $ $ $
</TABLE>
iXL will not receive any of the proceeds from the sale of shares by the
selling stockholders. The expenses of the offering, exclusive of the
underwriting discount, are estimated at $ million and are payable by iXL.
The shares of common stock are being offered by the several underwriters,
subject to prior sale, when, as and if issued to and accepted by them, subject
to approval of certain legal matters by counsel for the underwriters and
certain other conditions. The underwriters reserve the right to withdraw,
cancel or modify such offer and to reject orders in whole or in part.
No Sales of Common Stock or Similar Securities
iXL, the selling stockholders, iXL's executive officers and directors and
certain other stockholders have agreed, subject to certain exceptions, for a
period of 90 days from the date of this prospectus, not to directly or
indirectly, without the prior written consent of Merrill Lynch:
. offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any
option -- other than options granted by iXL pursuant to its stock
options plans -- right or warrant for the sale of or otherwise
dispose of or transfer any shares of common stock or securities
convertible into exchangeable or exercisable for common stock,
whether now owned or thereafter acquired by the person executing the
agreement or with respect to which the person executing the
agreement thereafter acquires the power of disposition, or file a
registration statement under the Securities Act with respect to the
foregoing -- other than registration statements by iXL on Form S-4
covering up to 10,000,000 shares of common stock to be issued in
connection with acquisitions, and other than registration statements
by iXL on Form S-8 covering up to 41,000,000 shares of common stock
subject to options under iXL's stock option plans, plus additional
shares to be registered under the Tessera Stock Option Plan to be
assumed by iXL upon the closing of the Tessera acquisition; or
. enter into any swap or other agreement that transfers, in whole or
in part, the economic consequences of ownership of the common stock
whether any such swap or transaction is to be settled by delivery of
common stock or other securities, in cash or otherwise.
See "Shares Eligible for Future Sale."
Intersyndicate Agreement
The U.S. underwriters and the international managers have entered into an
intersyndicate agreement that provides for the coordination of their
activities. Pursuant to the intersyndicate agreement, the U.S.
99
<PAGE>
underwriters and the international managers are permitted to sell shares of
common stock to each other for
purposes of resale at the public offering price, less an amount not greater
than the selling concession. Under the terms of the intersyndicate agreement,
the U.S. underwriters and any dealer to whom they sell shares of common stock
will not offer to sell or sell shares of common stock to persons who are non-
U.S. or non- Canadian persons or to persons they believe intend to resell to
persons who are non-U.S. or non-Canadian persons, and the international
managers and any dealer to whom they sell shares of common stock will not offer
to sell or sell shares of common stock to U.S. persons or to Canadian persons
or to persons they believe intend to resell to U.S. or Canadian persons, except
in the case of transactions pursuant to the intersyndicate agreement.
iXL and the selling stockholders have agreed to indemnify the
underwriters against certain liabilities, including certain liabilities under
the Securities Act, or to contribute to payments the underwriters may be
required to make in respect of those liabilities.
Price Stabilization and Short Positions
Until the distribution of the common stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the underwriters
and certain selling group members to bid for and purchase the common stock. As
an exception to these rules, the lead managers are permitted to engage in
certain transactions that stabilize the price of the common stock. Those
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the common stock.
The underwriters may create a short position in the common stock in
connection with the offering. This means that if they sell more shares of
common stock than are set forth on the cover page of this prospectus, the
representatives and lead managers, respectively, may reduce that short position
by purchasing common stock in the open market. The representatives and lead
managers, respectively, may also elect to reduce any short position by
exercising all or part of the over-allotment option described above.
Penalty Bids
The representatives and lead managers, respectively, may also impose a
penalty bid on certain underwriters and selling group members. This means that
if the representatives and lead managers, respectively, purchase shares of
common stock in the open market to reduce the underwriters' short position or
to stabilize the price of the common stock, they may reclaim the amount of the
selling concession from the underwriters and selling group members who sold
those shares.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of the common stock to the extent
that it discourages resales of the common stock.
Neither iXL nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
iXL nor any of the underwriters makes any representation that the
representatives or lead managers will engage in such transactions or that such
transactions, once commenced, will not be discontinued without notice.
Sales in Certain Jurisdictions
Each international manager has agreed that:
. it has not offered or sold and, prior to the expiration of the
period of six months from the closing date, will not offer or sell
any shares of common stock to persons in the United Kingdom, except
to persons whose ordinary activities involve them in acquiring,
holding,
100
<PAGE>
managing or disposing of investments, as principal or agent, for the
purposes of their businesses or otherwise in circumstances which do
not constitute an offer to the public in the United Kingdom for the
purposes of the Public Offers of Securities Regulations 1995;
. it has complied and will comply with all applicable provisions of
the Public Offers of Securities Regulations 1995 and of the
Financial Services Act 1986 with respect to anything done by it in
relation to the shares of Common Stock in, from or otherwise
involving the United Kingdom; and
. it has only issued or passed on and will only issue or pass on in
the United Kingdom any document received by it in connection with
the issue or sale of shares of common stock to a person who is of a
kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 (as amended) or
is a person to whom such document may otherwise lawfully be issued
or passed on.
No action has been or will be taken in any jurisdiction -- except in the
United States -- that would permit a public offering of the shares of common
stock, or the possession, circulation or distribution of this prospectus or any
other material relating to iXL or shares of common stock in any jurisdiction
where action for that purpose is required. Accordingly, the shares of common
stock may not be offered or sold, directly or indirectly, and neither this
prospectus nor any other offering material or advertisements in connection with
the shares of common stock may be distributed or published, in or from any
country or jurisdiction except in compliance with any applicable rules and
regulations of any such country or jurisdiction.
Purchasers of the shares offered hereby may be required to pay stamp
taxes and other charges in accordance with the laws and practices of the
country of purchase in addition to the offering price set forth on the cover
page hereof.
Other Relationships
iXL provides services to Merrill Lynch and certain of its affiliates in
the ordinary course of business. Donaldson, Lufkin & Jenrette from time to time
provides investment banking services to Kelso and Company and its affiliates.
On June 8, 1999 General Electric purchased an aggregate of 2,000,000
shares of common stock directly from iXL in a private placement transaction.
This investment was completed concurrently with the closing of iXL's initial
public offering, at a price per share equal to the initial public offering
price. iXL retained Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Donaldson, Lufkin & Jenrette Securities Corporation to act as advisors for this
private placement and paid advisory fees of $250,000 to each of them. iXL also
indemnified these advisors against certain liabilities relating to this private
placement, including liabilities under the Securities Act.
DLJ Fund Investment Partners, an affiliate of Donaldson, Lufkin &
Jenrette Securities Corporation, is a limited partner in Kelso Investment
Associates V, L.P., which owns common stock of iXL. DLJ Fund Investment
Partners owns less than 1% of Kelso Investment Associates V, L.P.
In 1999, iXL retained Merrill Lynch to conduct a valuation of CFN for a
fee of $500,000.
101
<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the validity of the issuance of the
shares of common stock offered hereby will be passed upon for iXL by Minkin &
Snyder, a Professional Corporation, Atlanta, Georgia. As of September 30, 1999,
attorneys employed by Minkin & Snyder held 153,978 shares of common stock and
options to purchase 11,449 shares of common stock. Attorneys employed by Minkin
& Snyder are selling 27,200 shares of common stock in this offering. From
September 1997 to December 17, 1997, Mr. James S. Altenbach, a member of Minkin
& Snyder, loaned $100,000 to iXL at an interest rate of 12% per annum.
Mr. Altenbach currently serves as Secretary of iXL and its subsidiaries
including CFN. Certain legal matters in connection with this offering will be
passed upon for the underwriters by Skadden, Arps, Slate, Meagher & Flom LLP,
Palo Alto, California.
EXPERTS
The financial statements included in this prospectus have been audited by
PricewaterhouseCoopers LLP, independent accountants. The companies and periods
covered by these audits are indicated in the individual reports of
PricewaterhouseCoopers LLP. Such financial statements have been so included in
reliance on the reports of PricewaterhouseCoopers LLP given on the authority of
said firm as experts in auditing and accounting.
ADDITIONAL INFORMATION
iXL has filed with the Securities and Exchange Commission a Registration
Statement on Form S-1 under the Securities Act, and the rules and regulations
promulgated thereunder, with respect to the common stock offered hereby. This
prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules to the Registration Statement. For further information
with respect to iXL and the common stock, reference is hereby made to such
Registration Statement and the exhibits and schedules to the Registration
Statement, which may be inspected and copied at the principal office of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional
offices of the Commission located at Seven World Trade Center, Suite 1300, New
York, New York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and copies of all or any part thereof may be obtained
at prescribed rates from the Commission's Public Reference Section at such
addresses. Also, the Commission maintains a World Wide Web site on the
Internet, at http://www.sec.gov, that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. Statements contained in the prospectus as to the contents
of any contract or other document that is filed as an exhibit to the
Registration Statement are qualified by reference to the full text of the
relevant contract or document.
iXL intends to furnish its stockholders with annual reports containing
financial statements audited by an independent public accounting firm and make
available to its stockholders quarterly reports for the first three quarters of
each fiscal year containing interim unaudited financial information.
102
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7,000,000 Shares
[LOGO OF IXL ENTERPRISES, INC. APPEARS HERE]
iXL ENTERPRISES, INC.
Common Stock
----------------
PROSPECTUS
----------------
Merrill Lynch International
Donaldson, Lufkin & Jenrette
Robertson Stephens
The Robinson-Humphrey Company
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
Item 13. Other Expenses of Issuance and Distribution.
The following table indicates the expenses to be incurred in connection
with the offering described in this Registration Statement, all of which will
be paid by iXL. All amounts are estimates, other than the registration fee, the
NASD fee, and the NASDAQ listing fee.
<TABLE>
<S> <C>
Registration fee................................................. $ 76,648
NASD fee......................................................... 15,000
NASDAQ listing fee............................................... 17,500
Accounting fees and expenses..................................... 40,000
Legal fees and expenses.......................................... 250,000
Director and officer insurance expenses.......................... --
Printing and engraving........................................... 500,000
Transfer Agent fees and expenses................................. 15,000
Blue sky fees and expenses....................................... 5,000
Miscellaneous expenses........................................... 200,852
----------
Total.......................................................... $1,120,000
==========
</TABLE>
Item 14. Indemnification of Directors and Officers.
iXL's Certificate of Incorporation and Bylaws provide that officers and
directors who are made a party to or are threatened to be made a party to or is
otherwise involved in any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she, or a person of whom he or she is the legal representative,
is or was an officer or a director of iXL or is or was serving at the request
of iXL as a director or an officer of another corporation or of a partnership,
joint venture, trust, or other enterprise, including service with respect to an
employee benefit plan (an "indemnitee"), whether the basis of such proceeding
is alleged action in an official capacity as a director or officer or in any
other capacity while serving as a director or officer, shall be indemnified and
held harmless by iXL to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits iXL
to provide broader indemnification rights than permitted prior thereto),
against all expense, liability, and loss (including, without limitation,
attorneys' fees, judgments, fines, excise taxes or penalties, and amounts paid
or to be paid in settlement) incurred or suffered by such indemnitee in
connection therewith and such indemnification shall continue with respect to an
indemnitee who has ceased to be a director or officer and shall inure to the
benefit of the indemnitee's heirs, executors and administrators; provided,
however, that iXL shall indemnify any such indemnitee in connection with a
proceeding initiated by such indemnitee only if such proceeding was authorized
by the Board of Directors. The right to indemnification includes the right to
be paid by iXL for expenses incurred in defending any such proceeding in
advance of its final disposition. Officers and directors are not entitled to
indemnification if such persons did not meet the applicable standard of conduct
set forth in the Delaware General Corporation Law for officers and directors.
Section 145 of the Delaware General Corporation Law provides, among other
things, that iXL may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of iXL) by reason
of the fact that the person is or was a director, officer, agent or employee of
iXL or is or was serving at the iXL's request as a director, officer, agent, or
employee of another corporation, partnership, joint venture, trust or other
enterprise, against expenses, including attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding. The power to indemnify
II-1
<PAGE>
applies if such person is successful on the merits or otherwise in defense of
any action, suit or proceeding, or if such person acted in good faith and in a
manner he reasonably believed to be in the best interest, or not opposed to the
best interest, of iXL, and with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The power to
indemnify applies to actions brought by or in the right of iXL as well, but
only to the extent of defense expenses (including attorneys' fees but excluding
amounts paid in settlement) actually and reasonably incurred and not to any
satisfaction of a judgment or settlement of the claim itself, and with the
further limitation that in such actions no indemnification shall be made in the
event of any adjudication of negligence or misconduct in the performance of his
duties to iXL, unless the court believes that in light of all the circumstances
indemnification should apply.
The indemnification provisions contained in iXL's Certificate of
Incorporation and Bylaws are not exclusive of any other rights to which a
person may be entitled by law, agreement, vote of stockholders or disinterested
directors or otherwise. In addition, iXL maintains insurance on behalf of its
directors and executive officers insuring them against any liability asserted
against them in their capacities as directors or officers or arising out of
such status.
Item 15. Recent Sales of Unregistered Securities.
The following is a summary of transactions by iXL since its inception
involving sales of iXL's securities that were not registered under the
Securities Act of 1933.
1. On April 12, 1996, iXL issued and sold 300 shares of common stock in a
private placement to U. Bertram Ellis, Jr., James V. Sandry and James S.
Altenbach, each a founder of iXL for an aggregate of $300 in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
2. On April 30, 1996, iXL issued and sold 101,500 shares of its Class A
Convertible Preferred Stock, in a private placement to eight investors for an
aggregate of $10,150,000 in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act and Rule 506 of Regulation D
promulgated thereunder. The eight investors were Kelso Investment Associates
V, L.P., Kelso Equity Partners V, L.P., U. Bertram Ellis, Jr., James V. Sandry,
James S. Altenbach and three other investors.
3. On April 30, 1996, iXL issued and sold 3,959,500 shares of common
stock in a private placement to ten investors in connection with the
acquisition of iXL Interactive Excellence, Inc., Creative Video Library, Inc.,
Creative Video, Inc. and Entrepreneur Television, Inc. Each of the investors
was a stockholder of one of the acquired corporations. The issuance of common
stock was made in reliance on Section 4(2) of the Securities Act and Rule 506
of Regulation D promulgated thereunder.
4. During the period from April 30, 1996 through September 30, 1999, iXL
granted for no cash consideration options to purchase an aggregate of
26,955,164 shares of common stock to 1,589 employees pursuant to the IXL
Holdings, Inc. 1996 Stock Option Plan in reliance on Rule 701 promulgated under
the Securities Act and under Section 4(2) of the Securities Act. Options issued
for 17,414,662 shares of common stock cannot be exercised prior to the earlier
of the registration of the underlying common stock under the Securities Act or
six years from the date of issuance.
5. On September 30, 1996, iXL issued and sold 10,000 shares of its Class
A Convertible Preferred Stock for $1,000,000 in a private placement to U.
Bertram Ellis, Jr., James V. Sandry and James S. Altenbach, and 25,000 shares
of common stock for $25,000 in a private placement to one additional executive
officer of iXL, each in reliance on the exemption from registration provided by
Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated
thereunder.
6. On December 16, 1996, iXL issued and sold 50,000 shares of common
stock in a private placement to one stockholder of Consumer Financial Network,
Inc. in connection with the acquisition of that corporation by iXL. This
issuance of common stock was made in reliance on Section 4(2) of the Securities
Act and Rule 506 of Regulation D promulgated thereunder.
II-2
<PAGE>
7. On February 15, 1997, iXL issued and sold 40,000 shares of common
stock in a private placement to two members of Webbed Feet, LLC in connection
with the acquisition of that company by iXL. This issuance of common stock was
made in reliance on Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder.
8. On April 4, 1997, iXL issued and sold 454,400 shares of its common
stock in a private placement to one stockholder of The Whitley Group, Inc. in
connection with the acquisition of that corporation by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
9. From April 4, 1997 through August 29, 1997, iXL issued and sold an
aggregate of 57,760 shares of its Class A Convertible Preferred Stock for an
aggregate of $14,440,000 to 38 investors in reliance on Section 4(2) of the
Securities Act and Rule 506 of Regulation D promulgated thereunder. The 38
investors were Kelso Investment Associates V, L.P., Kelso Equity Partners V,
L.P., six directors or executive officers of iXL and 30 other persons.
10. On May 31, 1997, iXL issued and sold 3,416,700 shares of common
stock, and warrants to purchase 230,900 shares of common stock in a private
placement to 11 stockholders of BoxTop Interactive, Inc. in connection with the
acquisition of that corporation by iXL. This issuance of securities was made in
reliance on Section 4(2) of the Securities Act and Rule 506 of Regulation D
promulgated thereunder.
11. On July 28, 1997, iXL issued and sold 283,900 shares of common stock
in a private placement to five stockholders of Swan Interactive Media, Inc. in
connection with the acquisition of that corporation by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
12. From December 17, 1997 through December 23, 1997, iXL issued and sold
in a private placement to four investors (i) 83,075 shares of its Class B
Convertible Preferred Stock, and warrants to purchase 10,650 shares of Class B
Convertible Preferred Stock for an aggregate of $26,999,375 and (ii) 9,232
shares of its Class C Convertible Preferred Stock, for an aggregate of
$3,000,400 in reliance on Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder. The investors were Chase Venture Capital
Associates, L.P., Flatiron Partners, LLC, Greylock IX Limited Partnership and
General Electric Capital Corporation.
13. On January 23, 1998, iXL issued and sold 271,356 shares of common
stock in a private placement to two stockholders of Small World Software, Inc.
in connection with the acquisition of that corporation. This issuance of common
stock was made in reliance on Section 4(2) of the Securities Act and Rule 506
of Regulation D promulgated thereunder.
14. On February 5, 1998, iXL issued and sold 344,270 shares of common
stock in a private placement to 18 members of Green Room Productions, L.L.C. in
connection with the acquisition of that company by iXL. This issuance of common
stock was made in reliance on Section 4(2) of the Securities Act and Rule 506
of Regulation D promulgated thereunder.
15. From February 19, 1998 through February 27, 1998, iXL issued and sold
in a private placement an aggregate of (a) 3,192 shares of its Class A
Convertible Preferred Stock and (b) 15,692 shares of its Class B Convertible
Preferred Stock plus warrants to purchase 1,810 shares of Class B Convertible
Preferred Stock for an aggregate of $6,137,300 to 13 investors in reliance on
the exemption from registration provided by Section 4(2) of the Securities Act
and Rule 506 of Regulation D promulgated thereunder. The investors were Mellon
Ventures II, L.P., Thomson U.S. Inc. and 11 other persons who were either then
executive officers or employees of iXL, family members of executive officers or
employees of iXL or existing stockholders of iXL.
16. On March 27, 1998, iXL issued and sold 266,000 shares of common stock
in a private placement to Continental Communications Group, Inc. in connection
with the acquisition of certain assets of that corporation by iXL. This
issuance of common stock was made in reliance on Section 4(2) of the Securities
Act and Rule 506 of Regulation D promulgated thereunder.
II-3
<PAGE>
17. On May 8, 1998, iXL issued and sold 155,200 shares of common stock in
a private placement to five stockholders of Spin Cycle Entertainment, Inc. in
connection with the acquisition of that corporation by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
18. On May 12, 1998, iXL issued and sold 195,834 shares of common stock
in a private placement to three stockholders of InTouch Interactive, Inc. in
connection with the acquisition of that corporation by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
19. On May 12, 1998, iXL issued and sold 359,584 shares of common stock
in a private placement to four stockholders of Digital Planet in connection
with the acquisition of that corporation by iXL. This issuance of common stock
was made in reliance on Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder.
20. On May 14, 1998, iXL issued and sold 740,000 shares of common stock
in a private placement to two stockholders of Micro Interactive, Inc. in
connection with the acquisition of that corporation by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
21. On May 20, 1998, iXL issued and sold an aggregate of 539 shares of
Class A Convertible Preferred Stock in a private placement to four investors
for an aggregate consideration of $175,175. This issuance of common stock was
made in reliance on Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder.
22. From June 29, 1998 through September 18, 1998, iXL issued and sold an
aggregate of 4,300 shares of Class A Convertible Preferred Stock in a private
placement to 53 investors, including David E. Clauson and William C. Nussey,
for an aggregate consideration of $4,300,000. This issuance was made in
reliance on Section 4(2) of the Securities Act and Rule 506 of Regulation D
promulgated thereunder.
23. On July 2, 1998, iXL issued and sold 877,898 shares of common stock
in a private placement to six stockholders of CommerceWAVE, Inc. in connection
with the acquisition of that corporation by iXL. This issuance of common stock
was made in reliance on Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder.
24. On July 8, 1998, iXL issued and sold 50,000 shares of common stock in
a private placement to two stockholders of Wissing & Laurence, Inc. in
connection with the acquisition of that corporation by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
25. On July 16, 1998, iXL issued and sold 200,000 shares of common stock
in a private placement to two stockholders of 601 Design, Inc. in connection
with the acquisition by iXL of certain assets of the 601 Design business. This
issuance of common stock was made in reliance on Section 4(2) of the Securities
Act and Rule 506 of Regulation D promulgated thereunder.
26. On July 22, 1998, iXL issued and sold 378,999 shares of common stock
in a private placement to six stockholders of Image Communications, Inc. in
connection with the acquisition of that corporation by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
27. On July 28, 1998, iXL issued and sold 37,107 shares of common stock
in a private placement to two Spanish stockholders of Campana New Media, S.L.
and The Other Media, S.L. This issuance of common stock was made in reliance on
Section 4(2) of the Securities Act or, in the alternative, on the Securities
Act not being applicable to this transaction.
II-4
<PAGE>
28. On July 30, 1998, iXL issued and sold 674,132 shares of common stock
in a private placement to two stockholders of Spinners Incorporated in
connection with the acquisition of that corporation by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
29. From August 14, 1998 through August 31, 1998, iXL issued and sold an
aggregate of 35,700 shares of Class D Nonvoting Preferred Stock, par value $.01
per share, in a private placement to 10 accredited investors for an aggregate
consideration of $35,700,000 in reliance on Section 4(2) of the Securities Act.
The investors were CB Capital Investors, LP, The Flatiron Fund 1998/99, LLC,
Friends of Flatiron, LLC, Mellon Ventures II, L.P., Thomson U.S. Inc., General
Electric Capital Corporation, Kelso Investment Associates V, L.P., Kelso Equity
Partners V, L.P., U. Bertram Ellis, Jr. and James S. Altenbach.
30. On September 4, 1998, iXL issued and sold 762,622 shares of common
stock in a private placement to two stockholders of Tekna, Inc. in connection
with the acquisition of that corporation by iXL. This issuance of common stock
was made in reliance on Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder.
31. On September 7, 1998, iXL issued and sold 321,428 shares of common
stock in a private placement to four German stockholders of LAVA Gesellschaft
fur Digitale Medien GmbH in connection with the acquisition of that corporation
by iXL. This issuance of common stock was made in reliance on Section 4(2) of
the Securities Act or, in the alternative, on the Securities Act not being
applicable to this transaction.
32. On September 9, 1998, iXL issued and sold 113,823 shares of common
stock and warrants to purchase 9,106 shares of common stock in a private
placement to four securities holders of Larry Miller Productions, Inc. in
connection with the acquisition of that corporation by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
33. On September 10, 1998, iXL issued and sold 42,852 shares of common
stock in a private placement to one British stockholder of Denovo New Media
Limited in connection with the acquisition of that corporation by iXL. This
issuance of common stock was made in reliance on Section 4(2) of the Securities
Act or in the alternative, on the Securities Act not being applicable to this
transaction.
34. On September 10, 1998, iXL issued and sold 275,000 shares of common
stock in a private placement to one stockholder of Exchange Place Solutions,
Inc. in connection with the acquisition of that corporation by iXL. This
issuance of common stock was made in reliance on Section 4(2) of the Securities
Act and Rule 506 of Regulation D promulgated thereunder.
35. On September 18, 1998, iXL issued and sold 271,787 shares of common
stock in a private placement to three stockholders of Pantheon Interactive,
Inc. in connection with the acquisition of that corporation by iXL. This
issuance of common stock was made in reliance on Section 4(2) of the Securities
Act and Rule 506 of Regulation D promulgated thereunder.
36. On September 18, 1998, iXL issued and sold 269,421 shares of common
stock in a private placement to six members of Two-Way Communications, L.L.C.
in connection with the acquisition of that company by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
37. On September 22, 1998, iXL issued and sold 701,375 shares of common
stock in a private placement to one member of NetResponse, L.L.C. in connection
with the acquisition of that company by iXL. This issuance of common stock was
made in reliance on Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder.
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<PAGE>
38. On September 23, 1998, iXL issued and sold 358,551 shares of common
stock in a private placement to one stockholder of Ionix Development
Corporation in connection with the acquisition of that corporation by iXL. This
issuance of common stock was made in reliance on Section 4(2) of the Securities
Act and Rule 506 of Regulation D promulgated thereunder.
39. On September 24, 1998, iXL issued and sold 378,066 shares of common
stock in a private placement to three stockholders of Pequot Systems, Inc. in
connection with the acquisition of that corporation by iXL. This issuance of
common stock was made in reliance on Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
40. On October 15, 1998, iXL issued and sold 2,000 shares of common stock
in a private placement to one investor in connection with a joint marketing
relationship. This issuance of common stock was made in reliance on Section
4(2) of the Securities Act.
41. On December 14, 1998, iXL issued for no cash consideration warrants
to purchase 500,000 shares of common stock in a private placement to General
Electric Capital Corporation in reliance on Section 4(2) of the Securities Act.
42. During the period from December 10, 1998 through September 30, 1999,
iXL granted for no cash consideration options to purchase an aggregate of
665,964 shares of common stock to 33 non-employee directors or consultants of
iXL pursuant to the iXL Enterprises, Inc. 1998 Non-Employee Stock Option Plan
in reliance on the exemption from registration provided by Section 4(2) of the
Securities Act. Options issued for 451,064 shares of common stock cannot be
exercised prior to the earlier of the registration of the underlying common
stock under the Securities Act or six years from the date of issuance.
43. On December 31, 1998, iXL issued for no cash consideration warrants
to purchase 500,000 shares of common stock in a private placement to Delta Air
Lines, Inc., in reliance on the exemption from registration provided by Section
4(2) of the Securities Act. These warrants were issued in connection with a
services agreement between iXL, Inc. and Delta Air Lines, Inc.
44. From January 15, 1999 through January 19, 1999, iXL issued and sold
22,825 shares of Class A Convertible Preferred Stock in a private placement to
Greystone Capital Partners I, L.P., Trigon Healthcare, Inc., Cox Technology
Investments, Inc., General Electric Capital Assurance Company and 23 other
investors, for an aggregate consideration of $22,825,000 in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act and
Rule 506 of Regulation D promulgated thereunder.
45. On May 3, 1999, iXL issued for no cash consideration warrants to
purchase 1,000,000 shares of common stock in a private placement to GE Capital
Equity Investments, Inc. in reliance on the exemption from registration
provided by Section 4(2) of the Securities Act and Rule 506 of Regulation D
promulgated thereunder. These warrants were issued in connection with a
services agreement between iXL-New York, Inc. and General Electric Capital
Corporation.
46. On June 8, 1999, iXL issued to GE Capital Equity Investments, Inc.
and General Electric Pension Trust (1) 2,000,000 shares of common stock for
cash consideration of $24,000,000 and (2) warrants to purchase 1,500,000 shares
of common stock (for no cash consideration), each in reliance on the exemption
from registration provided by Section 4(2) of the Securities Act and Rule 506
of Regulation D promulgated thereunder.
47. During the period from February 3, 1999 through September 30, 1999,
iXL granted for no cash consideration options to purchase an aggregate of
5,188,267 shares of common stock to 759 employees pursuant to the iXL
Enterprises, Inc. 1999 Stock Option Plan in reliance on the exemption from
registration provided by Section 4(2) of the Securities Act. These options
cannot be exercised prior to the registration of the underlying common stock
under the Securities Act.
II-6
<PAGE>
Item 16. Exhibits and Financial Statement Schedules.
a. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1 Form of U.S. Purchase Agreement*
1.2 Form of International Purchase Agreement*
2.1 Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
Inc., Creative Video Library, Inc. and its stockholders for the
purchase of all of the issued and outstanding capital stock of
Creative Video Library, Inc.+
2.2 Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
Inc., Creative Video, Inc. and its stockholders for the purchase of
all of the issued and outstanding capital stock of Creative Video,
Inc.+
2.3 Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
Inc., IXL Interactive Excellence, Inc. and its stockholders for the
purchase of all of the issued and outstanding Stock of IXL Interactive
Excellence, Inc.+
2.4 Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
Inc., Entrepreneur Television, Inc. and its stockholders for the
purchase of all of the issued and outstanding capital stock of
Entrepreneur Television, Inc.+
2.5 Purchase and Sale Agreement, dated as of June 5, 1996, by and among
IXL Acquisition Corp., Memphis On Line, Inc. Southern On Line Systems,
Inc., and Southern Tel Supply, Inc.+
2.6 Agreement and Plan of Merger, dated as of December 13, 1996, by and
among IXL Merger Corp., the Registrant, Consumer Financial Network,
Inc., Mellett, Reene & Smith, LLC, Derek V. Smith, Michael W. Reene
and Edwin R. Mellett.+
2.7 Asset Purchase Agreement, dated as of February 14, 1997, by and
between iXL Enterprises, Inc., iXL, Inc., Webbed Feet, LLC, F. Blair
Schmidt-Fellner and Michael Brendon Dowdle.+
2.8 Agreement and Plan of Merger, dated as of April 4, 1997, by and
between iXL Enterprises, Inc., IXL Merger Corp. II, Inc., The Whitley
Group, Inc. and William C. Whitley.+
2.9 Agreement of Plan of Merger, dated as of May 30, 1997, by and between
iXL Enterprises, Inc., IXL Merger Corp. III, Inc., BoxTop Interactive,
Inc., and the Shareholders of Boxtop Interactive, Inc.+
2.10 Agreement and Plan of Merger, dated as of July 28, 1997, by and
between iXL Enterprises, Inc., IXL Merger Corp. IV, Inc., Mark
Swanson, N. Blake Patton, Marc Sirkin, Edwin Davis, Estate of
Robert H. Kriebel and Swan Interactive Media, Inc.+
2.11 Agreement and Plan of Merger, dated as of January 23, 1998, by and
between iXL Enterprises, Inc., iXL-New York, Inc., Small World
Software, Inc., and the Shareholders of Small World.+
2.12 Asset Purchase Agreement, dated as of February 5, 1998, by and between
iXL Enterprises, Inc., iXL-San Francisco, Inc., Green Room
Productions, L.L.C. and the Controlling Members.+
2.13 Asset Purchase Agreement, dated as of March 27, 1998, by and between
iXL Enterprises, Inc., iXL-Denver, Inc., Continental Communications
Group, Inc., d/b/a Customer Communications Group, Inc. and John R.
Klug.+
2.14 Agreement and Plan of Merger, dated as of May 4, 1998, by and between
iXL Enterprises, Inc., iXL-New York, Inc., Micro Interactive, Inc. and
the Micro Shareholders.+
2.15 Agreement and Plan of Merger, dated as of May 8, 1998, by and between
iXL Enterprises, Inc., iXL-Los Angeles, Inc., Spin Cycle Entertainment
and the SCE Shareholders.+
2.16 Agreement and Plan of Merger, dated as of May 12, 1998, by and between
iXL Enterprises, Inc., iXL-Los Angeles, Inc., Digital Planet and the
Digital Shareholders.+
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
2.17 Agreement and Plan of Merger, dated as of May 12, 1998, by and between
InTouch Interactive, Inc., iXL Enterprises, Inc., iXL-Charlotte, Inc.,
and the InTouch Shareholders.+
2.18 Share Sale and Purchase Agreement dated as of 11 May, 1998 between,
iXL London Limited, and Derek Scanlon.+
2.19 Agreement and Plan of Merger, dated as of July 2, 1998, by and between
CommerceWAVE, Inc., iXL Enterprises, Inc., iXL-San Diego, Inc., and
the CommerceWAVE shareholders.+
2.20 Agreement and Plan of Merger, dated as of July 8, 1998, by and between
iXL Enterprises, Inc., iXL-New York, Inc., Wissing & Laurence, Inc.
and the W&L Shareholders.+
2.21 Asset Purchase Agreement, dated as of July 16, 1998, by and among
Robert Ortiz and John Tierney, iXL Enterprises, Inc. and iXL-New York,
Inc.+
2.22 Agreement and Plan of Merger, dated as of July 22, 1998, by and
between Image Communications, Inc., iXL Enterprises, Inc., iXL-DC,
Inc., and the Image Shareholders.+
2.23 Share Purchase Agreement, dated as of July 28, 1998, by and among iXL
Enterprises, Inc., iXL-Madrid, S.A., Campana New Media, S.L, The Other
Media, S.L., the Campana Companies Beneficial Owners and the Campana
Companies Shareholders.+
2.24 Agreement and Plan of Merger, dated as of July 30, 1998, by and among
Spinners Incorporated, iXL Enterprises, Inc., iXL-Boston, Inc. and the
Spinners Shareholders.+
2.25 Agreement and Plan of Merger, dated as of September 4, 1998, by and
among iXL Enterprises, Inc., iXL-Richmond, Inc., Tekna, Inc., and the
Tekna Shareholders.+
2.26 Share Sale and Purchase Agreement, dated as of September 7, 1998, by
and between iXL Enterprises, Inc., Jens Bley, Manfred Otterbreit,
Stephan Balzerand Matthias Oelmann.+
2.27 Agreement and Plan of Merger dated as of September 9, 1998 by and
among iXL Enterprises, Inc., iXL-Boston, Inc., Larry Miller
Productions, Inc., and the LMP Principals.+
2.28 Agreement and Plan of Merger, dated as of September 10, 1998, by and
between iXL Enterprises, Inc., iXL, Inc., Exchange Place Solutions,
Inc., and the Exchange Place Shareholder.+
2.29 Agreement and Plan of Merger, dated as of September 18, 1998, by and
among iXL Enterprises, Inc., iXL-San Francisco, Inc., Pantheon
Interactive, Inc., and the Pantheon Shareholders.+
2.30 Agreement and Plan of Merger, dated as of September 18, 1998, by and
among iXL Enterprises, Inc., iXL-Chicago, Inc., Two-Way
Communications, L.L.C., and the TWC Members.+
2.31 Agreement and Plan of Merger, dated as of September 22, 1998, by and
between iXL Enterprises, Inc., iXL-DC, Inc., NetResponse, L.L.C., and
Next Century Communications Corp.+
2.32 Agreement and Plan of Merger, dated as of September 23, 1998, by and
among iXL Enterprises, Inc., iXL-Chicago, Inc., Ionix Development,
Corporation, and the Ionix Shareholder.+
2.33 Agreement and Plan of Merger, dated as of September 24, 1998, by and
between iXL Enterprises, Inc., iXL-Connecticut, Inc., Pequot Systems,
Inc. and the Pequot Shareholders.+
2.34 Agreement and Plan of Merger, dated as of October 4, 1999, by and
between iXL Enterprises, Inc., iXL-Massachusetts, Inc. and Tessera
Enterprise Systems, Inc.+++
3.1 Amended and Restated Certificate of Incorporation.++
3.2 Amended and Restated Bylaws.++
4.1 Form of Common Stock Certificate.+
4.2 Form of Mandatorily Exercisable Common Stock Warrant Agreement.+
4.3 Form of Class B Convertible Preferred Stock Warrant Agreement.+
4.4 Form of Class A Common Stock Warrant Agreement.+
4.5 Form of Class B Common Stock Warrant Agreement.+
4.6 Investor Stockholders Agreement, dated as of April 30, 1996, as
amended.+
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
4.7 Third Amended and Restated Stockholders' Agreement.++
5.1 Opinion of Minkin & Snyder, a Professional Corporation.**
10.1 Employment Agreement between Boxtop Interactive, Inc. and Kevin Wall,
dated as of August 1, 1996, as amended, together with related
agreements.+
10.2 Employment Agreement dated as of May 1, 1998 between iXL, Inc. and
William C. Nussey.+
10.3 Employment Agreement dated August 17, 1998 between iXL, Inc. and David
Clauson.+
10.4 Employment Agreement dated November 28, 1999 between Consumer
Financial Network, Inc. and C. Cathleen Raffaeli.+
10.5 iXL Enterprises, Inc. 1996 Stock Option Plan, together with related
agreements.+
10.6 iXL Enterprises, Inc. 1998 Non-Employee Stock Option Plan, together
with related agreements.+
10.7 iXL Enterprises, Inc. 1999 Employee Stock Option Plan.+
10.8 Advisory Agreement dated as of April 30, 1996 by and between IXL
Holdings, Inc. and Kelso & Company, together with form of amendment.+
10.9 Consulting Agreement dated as of February 5, 1999 by and between iXL
Enterprises, Inc. and Kelso & Company.+
10.10 Promissory Note, dated as of January 14, 1997, made by IXL-Memphis,
Inc. in favor of First Tennessee Bank National Association, in the
original principal amount of $499,000 and agreements related thereto.+
10.11 Promissory Note, dated as of May 30, 1997, in the principal aggregate
amount of $50,000 in favor of the Registrant from Kevin Wall.+
10.12 Promissory Note, dated as of September 15, 1997, in the principal
aggregate amount of $500,000 in favor of U. Bertram Ellis from iXL
Enterprises, Inc.+
10.13 Promissory Note, dated as of September 18, 1997, in the principal
aggregate amount of $300,000 in favor of James Rocco from iXL
Enterprises, Inc.+
10.14 Promissory Note, dated as of September 29, 1997, in the principal
aggregate amount of $100,000 in favor of James S. Altenbach from iXL
Enterprises, Inc.+
10.15 Promissory Note, dated as of October 10, 1997, in the principal
aggregate amount of $1,000,000 in favor of U. Bertram Ellis, Jr. from
iXL Enterprises, Inc.+
10.16 Promissory Note, dated as of October 30, 1997, in the principal
aggregate amount of $1,000,000 in favor of U. Bertram Ellis, Jr. from
iXL Enterprises, Inc.+
10.17 Promissory Note, dated as of November 25, 1997, in the principal
aggregate amount of $1,000,000 in favor of U. Bertram Ellis, Jr. from
iXL Enterprises, Inc.+
10.18 Promissory Note, dated as of December 3, 1997, in the principal
aggregate amount of $1,300,000 in favor of U. Bertram Ellis, Jr. from
iXL Enterprises, Inc.+
10.19 Promissory Note, dated as of June 19, 1998, in the principal aggregate
amount of $4,000,000 in favor of Deborah Hicks Ellis from iXL
Enterprises, Inc. and certain of its subsidiaries and related
agreements.+
10.20 Promissory Note, dated as of July 20, 1998, in the principal aggregate
amount of $2,000,000 in favor of U. Bertram Ellis, Jr. from iXL
Enterprises, Inc.+
10.21 Credit Agreement, dated as of July 29, 1998, as amended and restated
as of November 30, 1998, among iXL Enterprises, Inc., the Lenders
party thereto and The Chase Manhattan Bank as Administrative Agent and
related agreements.+
10.22 Promissory Note, dated as of September 18, 1998, between David Clauson
(as Maker) and iXL Enterprises, Inc. together with Stock Pledge
Agreement.+
10.23 Subscription Agreement for Common Stock dated April 12, 1996 between
iXL Enterprises, Inc. and U. Bertram Ellis, Jr.+
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.24 Subscription Agreement for Common Stock dated April 12, 1996 between
iXL Enterprises, Inc. and James S. Altenbach.+
10.25 Subscription Agreement for Class A Convertible Preferred Stock dated
April 30, 1996 between iXL Enterprises, Inc. and U. Bertram Ellis,
Jr.+
10.26 Subscription Agreement for Class A Convertible Preferred Stock dated
April 30, 1996 between iXL Enterprises, Inc. and U. Bertram Ellis,
Jr., James V. Sandry and James S. Altenbach.+
10.27 Subscription Agreement for Class A Convertible Preferred Stock dated
June 3, 1996 between iXL Enterprises, Inc. and James S. Altenbach.+
10.28 Subscription Agreement for Class A Convertible Preferred Stock dated
April 4, 1997 between iXL Enterprises, Inc. and Kelso Investment
Associates V, L.P.+
10.29 Subscription Agreement for Class A Convertible Preferred Stock dated
April 4, 1997 between iXL Enterprises, Inc. and Kelso Equity Partners
V, L.P.+
10.30 Subscription Agreement for Class A Convertible Preferred Stock dated
April 4, 1997 between iXL Enterprises, Inc. and U. Bertram Ellis, Jr.+
10.31 Subscription Agreement for Class A Convertible Preferred Stock dated
April 4, 1997 between iXL Enterprises, Inc. and James S. Altenbach.+
10.32 Intentionally Omitted.
10.33 Subscription Agreement for Class A Convertible Preferred Stock dated
August 25, 1998 between iXL Enterprises, Inc. and William C. Nussey.+
10.34 Subscription Agreement for Class A Convertible Preferred Stock dated
September 18, 1998 between iXL Enterprises, Inc. and David Clauson.+
10.35 Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
Inc., Creative Video Library, Inc. and its stockholders for the
purchase of all of the issued and outstanding capital stock of
Creative Video Library, Inc. (contained in Exhibit 2.1).+
10.36 Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
Inc., Creative Video, Inc. and its stockholders for the purchase of
all of the issued and outstanding capital stock of Creative Video,
Inc. (contained in Exhibit 2.2).+
10.37 Exchange Agreement, dated April 30, 1996, between iXL Enterprises,
Inc., Entrepreneur Television, Inc. and its stockholders for the
purchase of all of the issued and outstanding capital stock of,
Entrepreneur Television, Inc. (contained in Exhibit 2.3).+
10.38 Agreement and Plan of Merger, dated May 30, 1997, by and among iXL
Enterprises, Inc., iXL Merger Corp. III, Inc., Boxtop Interactive,
Inc., and the Stockholders of Boxtop Interactive, Inc. (contained in
Exhibit 2.9).+
10.39 Securities Purchase Agreement, dated December 17, 1997, among iXL
Enterprises, Inc. and Chase Venture Capital Associates, L.P., Flatiron
Partners, LLC and Greylock IX Limited Partnership and related
agreement.+
10.40 Warrant Agreement, dated as of December 17, 1997, by and among iXL
Enterprises, Inc., Chase Venture Capital Associates, L.P., Flatiron
Partners, L.L.C., and Greylock IX Limited Partnership.+
10.41 Securities Purchase Agreement, dated December 23, 1997, among iXL
Enterprises, Inc. and General Electric Capital Corporation.+
10.42 Warrant Award Agreement dated as of December 23, 1997 by and between
iXL Enterprises, Inc. and General Electric Capital Corporation.+
10.43 Warrant Agreement, dated as of December 23, 1997, by and between iXL
Enterprises, Inc. and General Electric Capital Corporation.+
10.44 Warrant Award Agreement dated as of March 12, 1998 by and between iXL
Enterprises, Inc. and Chase Venture Capital Associates, L.P., and
related agreement.+
</TABLE>
II-10
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.45 Securities Purchase Agreement, dated March 30, 1998, between iXL
Enterprises, Inc. and Kevin Wall for the purchase of shares of iXL
Enterprises, Inc.'s Common Stock.+
10.46 Securities Purchase Agreement, dated August 14, 1998, among iXL
Enterprises, Inc. and CB Capital Investors, L.P., The Flatiron Fund
1998/99, LLC, Friends of Flatiron, LLC, and Mellon Ventures II, L.P.+
10.47 Securities Purchase Agreement, dated January 15, 1999, among iXL
Enterprises, Inc. and the Purchasers listed therein for the purchase
of shares of iXL Enterprises, Inc.'s Class A Convertible Preferred
Stock.+
10.48 Stock Purchase Agreement dated November 3, 1998, between Consumer
Financial Network, Inc. and General Electric Capital Corporation for
the purchase of shares of Series A Convertible Preferred Stock, $.01
par value per share, of Consumer Financial Network, Inc.+
10.49 Warrant Agreement, dated as of November 3, 1998, among iXL
Enterprises, Inc. and General Electric Capital Corporation.+
10.50 Stockholders' Agreement dated November 3, 1999 among Consumer
Financial Network, Inc., iXL Enterprises, Inc. and General Electric
Capital Corporation.+
10.51 Guaranty of License Agreement dated April 27, 1998 between Consumer
Financial Network, Inc. and Charter Federal Savings & Loan Association
of West Point, Georgia.+
10.52 Lease Agreement dated January 8, 1997 between Park Place Emery, L.L.C.
and iXL, Inc., as amended.+
10.53 Amended and Restated Registration Rights Agreement dated as of October
28, 1999 among iXL Enterprises, Inc. and Kelso Investment Associates
V, L.P., Kelso Equity Partners V, L.P., and certain other stockholders
of iXL Enterprises, Inc., together with the First Amendment to such
agreement, dated November 2, 1999.
10.54 Indemnification Agreement dated June 8, 1999 by and among iXL
Enterprises, Inc. and the Indemnitees named therein.++
10.55 Amended and Restated Registration Rights Agreement by and among iXL
Enterprises, Inc., Consumer Financial Network, Inc., GE Capital Equity
Investments, Inc., General Electric Pension Trust and General Electric
Capital Corporation.++
10.56 Master Services Agreement dated April 7, 1999 by and between iXL-New
York, Inc. and General Electric Capital Corporation.+
10.57 Warrant Agreement dated April 7, 1999 by and between iXL Enterprises,
Inc. and GE Capital Equity Investments, Inc.+
10.58 Stock Purchase Agreement dated April 7, 1999 by and between Consumer
Financial Network, Inc., GE Capital Equity Investments, Inc., and
General Electric Pension Trust.+
10.59 Securities Purchase Agreement dated April 7, 1999 by and among iXL
Enterprises, Inc., GE Capital Equity Investments, Inc., and the
General Electric Pension Trust.+
10.60 Warrant Agreement dated June 8, 1999 by and between iXL Enterprises,
Inc. and GE Capital Equity Investments, Inc.++
10.61 Investor Agreement dated June 8, 1999 by and between GE Capital Equity
Investments, Inc., the General Electric Pension Trust, iXL
Enterprises, Inc., and Consumer Financial Network, Inc.++
10.62 Amended and Restated Stockholders' Agreement among Consumer Financial
Network, Inc., iXL Enterprises, Inc., GE Capital Equity Investments,
Inc., the General Electric Pension Trust and General Electric Capital
Corporation, as amended.++
10.63 Information Services Agreement dated June 30, 1997 among Consumer
Financial Network, Inc., CFN Agency, Inc. and Electric Insurance
Company.+
10.64 Master Service Agreement dated as of December 31, 1998 by and between
iXL, Inc. and Delta Air Lines, Inc.+
</TABLE>
II-11
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
10.65 Warrant Agreement dated December 31, 1998 by and between iXL
Enterprises, Inc. and Delta Air Lines, Inc.+
10.66 Letter Agreement for Marketing Services dated May 11, 1999 by and
between iXL Enterprises, Inc. and GE Capital Equity Investments, Inc.+
10.67 U.S. Purchase Agreement dated as of June 2, 1999 by and among iXL
Enterprises, Inc. and the underwriters listed therein.++
10.68 International Purchase Agreement dated as of June 2, 1999 by and among
iXL Enterprises, Inc. and the underwriters listed therein.++
10.69 iXL Enterprises, Inc. 1999B Employee Stock Option Plan.
21.1 Subsidiaries of the Company.*
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Minkin & Snyder, a Professional Corporation (contained in
Exhibit 5.1).**
24.1 Power of Attorney.***
27.1 Financial Data Schedule.+
</TABLE>
- --------
+ Incorporated by reference to iXL's Registration Statement on Form S-1 (No.
333-71937).
++ Incorporated by reference to iXL's Registration Statement on Form S-4 (No.
333-81731).
+++ Incorporated by reference to iXL's Form 8-K dated October 12, 1999.
* Filed previously.
** To be filed by amendment.
*** Included on the signature pages to the initial filing of this Form S-1
filed October 12, 1999.
b. Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts
Item 17. Undertakings.
The undersigned registrant hereby undertakes to provide to the
underwriters at the closing certificates in such denominations and registered
in such names as required by the underwriters to permit prompt delivery to each
purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the provisions described in Item 14, or otherwise,
the registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. In the event that a claim
for indemnification by the registrant against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer,
or controlling person of the registrant in the successful defense of any
action, suit, or proceeding) is asserted by such director, or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or
(4) or 497 (h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Atlanta,
State of Georgia, on November 4, 1999.
iXL Enterprises, Inc.,
a Delaware corporation
/s/ M. Wayne Boylston
By: _________________________________
Name:M. Wayne Boylston
Title:Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ U. Bertram Ellis, Jr.* Chief Executive Officer
______________________________________ (Principal Executive
U. Bertram Ellis, Jr. Officer)
/s/ M. Wayne Boylston Chief Financial Officer November 4, 1999
______________________________________ (Principal Financial
M. Wayne Boylston Officer)
/s/ Jeffrey T. Arnold* Director
______________________________________
Jeffrey T. Arnold
/s/ Frank K. Bynum, Jr.* Director
______________________________________
Frank K. Bynum, Jr.
/s/ Jerome D. Colonna* Director
______________________________________
Jerome D. Colonna
/s/ William C. Nussey* Director
______________________________________
William C. Nussey
</TABLE>
II-13
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Thomas G. Rosencrants* Director
______________________________________
Thomas G. Rosencrants
/s/ Jeffrey C. Walker* Director
______________________________________
Jeffrey C. Walker
/s/ Kevin M. Wall* Director
______________________________________
Kevin M. Wall
/s/ Thomas R. Wall, IV* Director
______________________________________
Thomas R. Wall, IV
/s/ Gary C. Wendt* Director
______________________________________
Gary C. Wendt
/s/ M. Wayne Boylston Director November 4, 1999
______________________________________
*By: M. Wayne Boylston
Attorney-in-Fact
</TABLE>
II-14
<PAGE>
EXHIBIT 10.53
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
among
iXL ENTERPRISES, INC.
and
KELSO INVESTMENT ASSOCIATES V, L.P.,
KELSO EQUITY PARTNERS V, L.P.
and
CERTAIN OTHER STOCKHOLDERS OF
iXL ENTERPRISES, INC.
Dated as of October 28, 1999
<PAGE>
EXHIBIT 10.53
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
--------------------------------------------------
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of
October 28, 1999, among iXL Enterprises, Inc., a Delaware corporation (the
"Company"), Kelso Investment Associates V, L.P., a Delaware limited partnership
("KIA V"), Kelso Equity Partners V, L.P., a Delaware limited partnership ("KEP
V", together with KIA V, "Kelso"), and certain other stockholders of the Company
listed on Exhibit A attached hereto (collectively, the "Other Stockholders").
Capitalized terms used herein without definition are defined in Section 10.
1. Registrations Upon Request.
--------------------------
1.1. Requests. At any time after the first anniversary hereof, the
--------
Majority Stockholder shall have the right at any time and from time to time to
request that the Company effect the registration under the Securities Act of any
of the Registrable Securities of the Majority Stockholder, each such request to
specify the intended method or methods of disposition thereof. Upon any request
by the Majority Stockholder pursuant to this Section 1.1, the Company will
promptly, but in any event within 15 days, give written notice of such request
to all holders of Registrable Securities and thereupon the Company will use its
best efforts to effect the registration under the Securities Act of:
(i) the Registrable Securities which the Company has been so
requested to register by the Majority Stockholder, and
(ii) all other Registrable Securities which the Company has been
requested to register by the other holders of Registrable Securities by
written request given to the Company within 20 days after the giving of
such written notice by the Company,
all to the extent required to permit the disposition (in accordance with the
Majority Stockholder's intended method or methods of disposition) of the
Registrable Securities so to be registered. Notwithstanding the foregoing, but
subject to the rights of holders of Registrable Securities under Section 2, (a)
-
if the Board determines in its good faith judgment, after consultation with a
firm of nationally recognized underwriters, that there will be an adverse effect
on a then contemplated initial public offering of the Company's equity
securities, the Company may defer the filing (but not the preparation) of the
registration statement which is required to effect any registration pursuant to
this Section 1.1, during the period starting with the 30th day immediately
preceding the date of anticipated filing by the Company of, and ending on a date
60 days following the effective date of, the registration statement relating to
such initial public offering, provided that at all times the Company is in good
--------
faith using all reasonable efforts to cause such registration statement to
become effective.
1.2. Registration Statement Form. Each registration requested
---------------------------
pursuant to Section 1.1 shall be effected by the filing of a registration
statement on a form agreed to by the Majority Stockholder.
<PAGE>
1.3. Expenses. The Company will pay all Registration Expenses in
--------
connection with any registrations requested under Section 1.1; provided that any
--------
seller thereunder shall pay all Registration Expenses to the extent required to
be paid by such seller under applicable law.
1.4. Priority in Demand Registrations. If a registration pursuant to
--------------------------------
this Section 1 involves an underwritten offering, and the managing underwriter
(or, in the case of an offering which is not underwritten, an investment banker)
shall advise the Company in writing (with a copy to each Person requesting
registration of Registrable Securities) that the number of securities requested
and otherwise proposed to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting such offering,
the Company will include in such registration to the extent of the number which
the Company is so advised can be sold in such offering, first, the Registrable
-----
Securities of the Majority Stockholder requested to be included in such
registration, together with the Registrable Securities (other than any
Registrable Securities issued pursuant to a stock option plan or similar
arrangement (the "Option Shares")) requested to be sold by the Other
Stockholders, pro rata, among all such holders, on the basis of the number of
--- ----
Registrable Securities (other than any Option Shares) requested to be included
in such registration by such holders, second, any Option Shares, pro rata, among
------ --- ----
such holders, on the basis of the number of such Option Shares requested to be
included in such registration by such holders and third, the securities, if any,
-----
being sold by the Company. Notwithstanding the foregoing, no employee
stockholder will be entitled to participate in any such registration requested
by the Majority Stockholder if the managing underwriter (or, in the case of an
offering that is not underwritten, an investment banker) shall determine in good
faith that the participation of such employee stockholder would adversely affect
the marketability of the securities being sold by the Majority Stockholder in
such registration.
1.5. No Company Initiated Registration. After receipt of notice of a
---------------------------------
requested registration pursuant to Section 1.1, the Company shall not initiate a
registration of any of its securities for its own account until 90 days after
such registration has been effected or such registration has been terminated.
2. Incidental Registrations. If the Company at any time proposes to
------------------------
register any of its equity securities under the Securities Act (other than
pursuant to Section 1 or a registration on Form S-4 or S-8 or any successor
form), and the registration form to be used may be used for the registration of
Registrable Securities, it will give prompt written notice to all holders of
Registrable Securities of its intention to do so. Upon the written request of
any such holder made within 15 days after the receipt of any such notice (which
request shall specify the number of Registrable Securities intended to be
disposed of by such holder and the intended method or methods of disposition
thereof), the Company will use its best efforts to effect the registration under
the Securities Act of all such Registrable Securities in accordance with such
intended method or methods of disposition, provided that:
--------
(a) Intentionally omitted;
(b) if, at any time after giving written notice of its intention to
register any equity securities and prior to the effective date of the
registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such equity
<PAGE>
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon,
shall not be obligated to register any Registrable Securities in connection
with such registration (but shall nevertheless pay the Registration
Expenses in connection therewith), without prejudice, however, to the
rights of the Majority Stockholder to request that a registration be
effected under Section 1; and
(c) if a registration pursuant to this Section 2 involves an
underwritten offering, and the managing underwriter (or, in the case of an
offering that is not underwritten, an investment banker) shall advise the
Company in writing (with a copy to each holder of Registrable Securities
requesting registration thereof) that the number of securities requested
and otherwise proposed to be included in such registration exceeds the
number which can be sold in such offering without adversely affecting such
offering, the Company will include in such registration to the extent of
the number which the Company is so advised can be sold in such offering,
first, the securities if any, being sold by the Company, and second, the
----- ------
Registrable Securities of Kelso requested to be included in such
registration, together with the Registrable Securities (other than Option
Shares) of the Other Stockholders requested to be included in such
registration, pro rata, among all such holders, on the basis of the number
--- ----
of Registrable Securities (other than Option Shares) requested to be
included by such holders and third, Option Shares, pro rata, among such
----- --- ----
holders, on the basis of the number of such Option Shares requested to be
included in such registration by such holders. Notwithstanding the
foregoing, no employee stockholder will be entitled to participate in any
such registration if the managing underwriter (or, in the case of an
offering that is not underwritten, an investment banker) shall determine in
good faith that the participation of such employee stockholder would
adversely affect the marketability of the securities being sold by the
Company in such registration.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 2,
provided that each seller of Registrable Securities shall pay all Registration
- --------
Expenses to the extent required to be paid by such seller under applicable law.
No registration effected under this Section 2 shall relieve the Company from its
obligation to effect registrations under Section 1.
3. Registration Procedures. If and whenever the Company is required
-----------------------
to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 1 and 2, the Company will
promptly:
(a) prepare, and within 60 days thereafter file with the Commission,
a registration statement with respect to such Registrable Securities, make
all required filings with the NASD and use best efforts to cause such
registration statement to become effective;
(b) prepare and promptly file with the Commission such amendments and
post-effective amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep
such registration statement effective for so long as is required to comply
with the provisions of the Securities Act and to complete the disposition
of all securities covered by such registration statement in
<PAGE>
accordance with the intended method or methods of disposition thereof, but
in no event for a period of more than six months after such registration
statement becomes effective;
(c) furnish to counsel selected by the Majority Stockholder (whether
or not such Majority Stockholder is participating as a selling stockholder
and which counsel may also be counsel to the Company) and each seller of
Registrable Securities copies of all documents proposed to be filed with
the Commission in connection with such registration (or in the case of the
initial filing of a registration statement with the Commission, within five
business days of such initial filing), which documents will be subject to
the review of such counsel and each seller and the Company shall not file
any amendment and post-effective amendments or supplement to such
registration statement or the prospectus used in connection therewith which
any such seller shall have reasonably objected in writing within two days
of receipt of such registration statement, prospectus, amendment or
supplement on the grounds that such amendment or supplement does not comply
(explaining why) in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder;
(d) furnish to each seller of Registrable Securities, without charge,
such number of conformed copies of such registration statement and of each
such amendment and supplement thereto (in each case including all exhibits
and documents filed therewith) and such number of copies of the prospectus
included in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under
Rule 424 under the Securities Act, in conformity with the requirements of
the Securities Act, and such other documents, as such seller may reasonably
request in order to facilitate the disposition of the Registrable
Securities owned by such seller in accordance with the intended method or
methods of disposition thereof;
(e) use its best efforts to register or qualify such Registrable
Securities covered by such registration statement under the securities or
blue sky laws of such jurisdictions as each seller shall reasonably
request, and do any and all other acts and things which may be necessary or
advisable to enable such seller to consummate the disposition of such
Registrable Securities in such jurisdictions in accordance with the
intended method or methods of disposition thereof, provided that the
--------
Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it is not
so qualified, subject itself to taxation in any jurisdiction wherein it is
not so subject, or take any action which would subject it to general
service of process in any jurisdiction wherein it is not so subject;
(f) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of
the business and operations of the Company to enable the seller or sellers
thereof to consummate the disposition of such Registrable Securities in
accordance with the intended method or methods of disposition thereof;
(g) furnish to any seller of Registrable Securities who requests in
writing a signed counterpart, addressed to the seller, of
<PAGE>
(i) an opinion of counsel for the Company experienced in
securities law matters, dated the effective date of the registration
statement (and, if such registration includes an underwritten public
offering, the date of the closing under the underwriting agreement),
and
(ii) a "comfort" letter (unless the registration is pursuant to
Section 2 and such a letter is not otherwise being furnished to the
Company), dated the effective date of such registration statement (and
if such registration includes an underwritten public offering, dated
the date of the closing under the underwriting agreement), signed by
the independent public accountants (the "Accountants") who have issued
an audit report on the Company's financial statements included in the
registration statement, provided that such comfort letter shall be
delivered only to a seller of Registrable Securities which represents
to the Accountants in a form satisfactory to the Accountants that such
seller of Registrable Securities (a) is an underwriter, or (b) has
performed the due diligence customarily performed by an underwriter,
covering such matters as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and such other matters as the
Majority Stockholder may reasonably request;
(h) notify each seller of any 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 or existence of any fact 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 any material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and, as promptly as
is practicable, prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light
of the circumstances then existing;
(i) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement of the
Company (in form complying with the provisions of Rule 158 under the
Securities Act) covering the period of at least 12 months, but not more
than 18 months, beginning with the first month after the effective date of
the registration statement;
(j) notify each seller of any Registrable Securities covered by such
registration statement (i) when the prospectus or any prospectus
-
supplement or post-effective amendment has been filed, and, with respect to
such registration statement or any post-effective amendment, when the same
has become effective, (ii) of any request by the
--
<PAGE>
Commission for amendments or supplements to such registration statement or
to amend or to supplement such prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
---
effectiveness of such registration statement or the initiation of any
proceedings for that purpose and (iv) of the suspension of the
--
qualification of such securities for offering or sale in any jurisdiction,
or of the institution of any proceedings for any of such purposes;
(k) use every reasonable effort to obtain the lifting of any stop
order that might be issued suspending the effectiveness of such
registration statement at the earliest possible moment;
(l) use its best efforts (i) (A) to list such Registrable Securities
- -
on any securities exchange on which the equity securities of the Company
are then listed or, if no such equity securities are then listed, on an
exchange selected by the Company, if such listing is then permitted under
the rules of such exchange, or (B) if such listing is not practicable, to
-
secure designation of such securities as a NASDAQ "national market system
security" within the meaning of Rule 11Aa2-1 under the Exchange Act or,
failing that, to secure NASDAQ authorization for such Registrable
Securities, and, without limiting the foregoing, to arrange for at least
two market makers to register as such with respect to such Registrable
Securities with the NASD, and (ii) to provide a transfer agent and
--
registrar for such Registrable Securities not later than the effective date
of such registration statement;
(m) enter into such agreements and take such other actions as the
sellers of Registrable Securities or the underwriters reasonably request in
order to expedite or facilitate the disposition of such Registrable
Securities, including, without limitation, preparing for, and participating
in, such number of "road shows" and all such other customary selling
efforts as the underwriters reasonably request in order to expedite or
facilitate such disposition; and
(n) use its reasonable best efforts to take all other steps necessary
to effect the registration of such Registrable Securities contemplated
hereby.
The Company may require each seller of any Registrable Securities as
to which any registration is being effected to execute powers-of-attorney,
custody agreements and other customary agreements appropriate to facilitate the
offering and to furnish to the Company such information regarding such seller,
its ownership of Registrable Securities and the disposition of such Registrable
Securities as the Company may from time to time reasonably request in writing
and as shall be required by law in connection therewith. Each such holder
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such holder not materially misleading.
The Company agrees not to file or make any amendment to any
registration statement with respect to any Registrable Securities, or any
amendment of or supplement to the prospectus used in connection therewith, which
refers to (in a capacity as a selling stockholder) any seller of any Registrable
Securities covered thereby by name, or otherwise identifies such seller as
<PAGE>
the holder of any Registrable Securities, without the consent of such seller,
such consent not to be unreasonably withheld, unless such disclosure is required
by law.
By acquisition of Registrable Securities, each holder of such
Registrable Securities shall be deemed to have agreed that upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 3(h), such holder will promptly discontinue such holder's disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(h). If so directed
by the Company, each holder of Registrable Securities will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
in such holder's possession of the prospectus covering such Registrable
Securities at the time of receipt of such notice. In the event that the Company
shall give any such notice, the period mentioned in Section 3(b) shall be
extended by the number of days during the period from and including the date of
the giving of such notice to and including the date when each seller of any
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
Section 3(h).
4. Underwritten Offerings.
----------------------
4.1. Underwriting Agreement. If requested by the underwriters for
----------------------
any underwritten offering by holders of Registrable Securities pursuant to a
registration requested under Section 1 or Section 2, the Company shall enter
into an underwriting agreement with the underwriters for such offering, such
agreement to be reasonably satisfactory in substance and form to the Majority
Stockholder and to the underwriters and to contain such representations and
warranties by the Company and such other terms and provisions as are customarily
contained in agreements of this type, including, without limitation, indemnities
to the effect and to the extent provided in Section 9. The holders of
Registrable Securities to be distributed by such underwriters shall be parties
to such underwriting agreement and may, at their option, require that any or all
of the representations and warranties by, and the agreements on the part of, the
Company to and for the benefit of such underwriters be made to and for the
benefit of such holders of Registrable Securities and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement shall also be conditions precedent to the obligations of
such holders of Registrable Securities. No underwriting agreement (or other
agreement in connection with such offering) shall require any holder of
Registrable Securities, other than any selling stockholder who is an executive
officer of the Company or is otherwise named in the "Management Section" of the
registration statement, , (i) to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such holder, the ownership of such holder's
Registrable Securities, such holder's intended method or methods of disposition,
such other customary representations, warranties and agreements with respect to
such holder and such holder's securities as requested by the underwriters, and
any other representation required by law or (ii) to furnish any indemnity to any
Person including the underwriters, their directors and officers and each Person,
if any, who controls (within Section 15 of the Securities Act or Section 20 of
the Exchange Act) such underwriters which is broader than the indemnity
furnished by such holder in Section 9.2.
<PAGE>
4.2. Selection of Underwriters. If the Company at any time proposes
-------------------------
to register any of its securities under the Securities Act for sale for its own
account pursuant to an underwritten offering, the Company will have the right to
select the managing underwriter (which shall be of nationally recognized
standing) to administer the offering, but only with the approval of the Majority
Stockholder, such approval not to be unreasonably withheld and which must be
obtained no later than ten business days after the initial filing of such
registration statement, provided that whenever a registration requested pursuant
--------
to Section 1 is for an underwritten offering, the Majority Stockholder will have
the right to select the managing underwriter (which shall be of nationally
recognized standing) to administer the offering, but only with the approval of
the Company, such approval not to be unreasonably withheld.
5. Holdback Agreements. (a) If and whenever the Company proposes to
-------------------
register any of its equity securities under the Securities Act for its own
account (other than on Form S-4 or S-8 or any successor form) or is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act pursuant to Section 1 or 2, each holder of Registrable
Securities agrees by acquisition of such Registrable Securities not to effect
any public sale or distribution, including any sale pursuant to Rule 144 under
the Securities Act, of any Registrable Securities within seven days prior to and
90 days (unless advised in writing by the managing underwriter that a longer
period, not to exceed 180 days, is required) after the effective date of the
registration statement relating to such registration, except as part of such
registration.
(b) The Company agrees not to effect any public sale or distribution
of its equity securities or securities convertible into or exchangeable or
exercisable for any of such securities within seven days prior to and 90 days
(unless advised in writing by the managing underwriter that a longer period, not
to exceed 180 days, is required) after the effective date of such registration
statement (except (i) as part of such registration, (ii) as permitted by the
related underwriting agreement, (iii) pursuant to an employee equity
compensation plan, (iv) pursuant to an acquisition or strategic relationship,
bank or equipment financing, or similar transaction, or (v) pursuant to a
registration on Form S-4 or S-8 or any successor form). In addition, the
Company shall cause each holder of its equity securities or any securities
convertible into or exchangeable or exercisable for any of such securities,
whether outstanding on the date of this Agreement or issued at any time after
the date of this Agreement (other than any such securities acquired in a public
offering), to agree not to effect any such public sale or distribution of such
securities during such period, except as part of any such registration if
permitted, and to cause each such holder to enter into a similar agreement to
such effect with the Company.
6. Preparation; Reasonable Investigation. In connection with the
-------------------------------------
preparation and filing of each registration statement (other than the initial
registration statement filed with the Commission) registering Registrable
Securities under the Securities Act, the Company will give the holders of such
Registrable Securities so to be registered and their underwriters, if any, and
their respective counsel and accountants the opportunity to participate in the
preparation of such registration statement (other than the initial registration
statement filed with the Commission), each prospectus included therein or filed
with the Commission (other than the initial registration statement filed with
the Commission), and each amendment thereof or supplement thereto, and will give
each of them such access to the financial and other records, pertinent corporate
documents and properties
<PAGE>
of the Company and its subsidiaries and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have issued audit reports on its financial statements as shall be reasonably
requested by such holders in connection with such registration statement.
7. No Grant of Future Registration Rights. The Company shall not
--------------------------------------
grant any other demand or incidental registration rights to any other Person
without the prior written consent of the Majority Stockholder.
8. Kelso Designees and Permitted Transferees. The Majority
-----------------------------------------
Stockholder shall have the right to have included in any registration pursuant
to Section 1 or Section 2 any shares of Class B Common Stock owned by any of the
Kelso Designees as though such shares were Registrable Securities owned by the
Majority Stockholder.
9. Indemnification.
---------------
9.1. Indemnification by the Company. In the event of any
------------------------------
registration of any Registrable Securities pursuant to this Agreement, the
Company will indemnify and hold harmless (a) the seller of such Registrable
-
Securities, (b) the directors, officers, partners, employees, agents and
-
Affiliates of such seller, (c) each Person who participates as an underwriter in
-
the offering or sale of such securities and (d) each person, if any, who
-
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) any such seller, partner or underwriter against any and all
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof), joint or several, directly or indirectly based upon or arising out of
(i) any untrue statement or alleged untrue statement of a fact contained in any
-
registration statement under which such Registrable Securities were registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein or used in connection with the offering of
securities covered thereby, or any amendment or supplement thereto, or (ii) any
--
omission or alleged omission to state a fact required to be stated therein or
necessary to make the statements therein not misleading; and the Company will
reimburse each such indemnified party for any legal or any other expenses
reasonably incurred by them in connection with investigating, preparing,
pursuing or defending any such loss, claim, damage, liability, action or
proceeding, except insofar as any such loss, claim, damage, liability, action,
proceeding or expense arises out of or is based upon an untrue statement or
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
seller expressly for use in the preparation thereof. Such indemnity shall
remain in full force and effect, regardless of any investigation made by such
indemnified party and shall survive the transfer of such Registrable Securities
by such seller. The indemnity agreement contained in this Section 9.1 shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
action or proceeding if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld).
9.2. Indemnification by the Sellers. The Company may require, as a
------------------------------
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 1 or 2 that the Company shall have received an
undertaking satisfactory to it from each of the prospective
<PAGE>
sellers of such Registrable Securities to indemnify and hold harmless,
severally, not jointly, in the same manner and to the same extent as set forth
in Section 9.1, the Company, its directors and officers and each person, if any,
who controls (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) the Company with respect to any statement or alleged
statement in or omission or alleged omission from such registration statement,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such seller
expressly for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Company or any such director, officer or controlling
Person and shall survive the transfer of such Registrable Securities by such
seller. The indemnity agreement contained in this Section 9.2 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, action or
proceeding if such settlement is effected without the consent of such seller
(which consent shall not be unreasonably withheld). The Company and the holders
of Registrable Securities hereby acknowledge and agree that for all purposes of
this Agreement the only information furnished or to be furnished to the Company
for use in any such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement are statements
specifically relating to (a) transactions between such holder and its
-
Affiliates, on the one hand, and the Company, on the other hand, (b) the
-
beneficial ownership of shares of Common Stock by such holder and its
Affiliates, (c) the name and address of such holder and (d) other information
- -
with respect to such holder as required by law. The indemnity provided by each
seller of Registrable Securities under this Section 9.2 shall be limited in
amount to the net amount of proceeds actually received by such seller from the
sale of Registrable Securities pursuant to such registration statement.
9.3. Notices of Claims, etc. Promptly after receipt by an
----------------------
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding paragraphs of this Section 9,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party, give written notice to the latter of the commencement of
such action or proceeding, provided that the failure of any indemnified party to
--------
give notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 9, except to the
extent that the indemnifying party is materially prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate therein and to assume the
defense thereof, jointly with any other indemnifying party similarly notified,
to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof except for the reasonable fees and expenses of any counsel
retained by such indemnified party to monitor such action or proceeding.
Notwithstanding the foregoing, if such indemnified party and the indemnifying
party reasonably determine, based upon advice of their respective independent
counsel, that a conflict of interest may exist between the indemnified party and
the indemnifying party with respect to such action and that it is advisable for
such indemnified party to be represented by separate counsel, such indemnified
party may retain
<PAGE>
other counsel, reasonably satisfactory to the indemnifying party, to represent
such indemnified party, and the indemnifying party shall pay all reasonable fees
and expenses of such counsel. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of such indemnified party,
which consent shall not be unreasonably withheld, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.
9.4. Other Indemnification. Indemnification similar to that
---------------------
specified in the preceding paragraphs of this Section 9 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration (other than under the
Securities Act) or other qualification of such Registrable Securities under any
federal or state law or regulation of any governmental authority.
9.5. Indemnification Payments. Any indemnification required to be
------------------------
made by an indemnifying party pursuant to this Section 9 shall be made by
periodic payments to the indemnified party during the course of the action or
proceeding, as and when bills are received by such indemnifying party with
respect to an indemnifiable loss, claim, damage, liability or expense incurred
by such indemnified party.
9.6. Other Remedies. If for any reason the foregoing indemnity is
--------------
unavailable, or is insufficient to hold harmless an indemnified party, other
than by reason of the exceptions provided therein, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities, actions, proceedings or
expenses in such proportion as is appropriate to reflect the relative benefits
to and faults of the indemnifying party on the one hand and the indemnified
party on the other in connection with the offering of Registrable Securities
(taking into account the portion of the proceeds of the offering realized by
each such party) and the statements or omissions or alleged statements or
omissions which resulted in such loss, claim, damage, liability, action,
proceeding or expense, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statements or omissions. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. No party shall be liable for
contribution under this Section 9.6 except to the extent and under such
circumstances as such party would have been liable to indemnify under this
Section 9 if such indemnification were enforceable under applicable law.
10. Definitions. For purposes of this Agreement, the following terms
-----------
shall have the following respective meanings:
"Affiliate": A Person that directly, or indirectly through one or
---------
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified.
<PAGE>
"Board": The Board of Directors of the Company.
-----
" Common Stock": The Company's Common Stock, par value $.01 per
-------------
share.
"Commission": The Securities and Exchange Commission.
----------
"Exchange Act": The Securities Exchange Act of 1934, as amended, or
------------
any successor federal statute, and the rules and regulations thereunder which
shall be in effect at the time.
"Kelso Designees": Any of the following individuals or entities:
---------------
Louis and Patricia Kelso Trust, William A. Marquard, John F. McGillicuddy and
each of the other members of the board of directors of Kelso & Companies, Inc.,
and any of their permitted assigns under the Stockholders Agreement.
"Majority Stockholder": Any holder or holders of at least 50% of the
--------------------
Registrable Securities then outstanding, including for purposes of such
calculation any shares of preferred stock or common stock convertible into or
exchangeable into Registrable Securities.
"NASD": National Association of Securities Dealers, Inc.
----
"NASDAQ": The Nasdaq National Market.
------
"Permitted Transferees": As defined in the Stockholders Agreement.
---------------------
"Person": An individual, corporation, partnership, joint venture,
------
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Registrable Securities": The shares of Common Stock (or any
----------------------
successor class of common stock) beneficially owned (within the meaning of
Section 13d-3 of the Exchange Act) by Kelso, the Other Stockholders or any other
Person made a party hereto pursuant to Section 11.2 or 11.3. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale of such
-
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (ii) they shall have been sold to the public pursuant to Rule 144
--
under the Securities Act, (iii) they shall have been otherwise transferred and
---
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act of or any similar state law then in force or
(iv) they shall have ceased to be outstanding.
--
"Registration Expenses": All expenses incident to the Company's
---------------------
performance of or compliance with Section 1 and Section 2, including, without
limitation, (i) registration, filing and NASD fees, (ii) fees and expenses of
- --
complying with securities or blue sky laws, (iii) fees and expenses associated
---
with listing securities on an exchange or NASDAQ, (iv) word processing,
--
duplicating and printing expenses, (v) messenger and delivery expenses,
-
(vi) fees and disbursements
--
<PAGE>
of counsel for the Company and of its independent public accountants, including
the expenses of any special audits or "cold comfort" letters, (vii) reasonable
---
fees and disbursements of any one counsel retained by the sellers of Registrable
Securities, which counsel shall be designated by the Majority Stockholder, and
(viii) any fees and disbursements of underwriters customarily paid by issuers or
----
sellers of securities, but excluding underwriting discounts and commissions and
transfer taxes, if any.
"Securities Act": The Securities Act of 1933, as amended, or any
--------------
successor federal statute, and the rules and regulations thereunder which shall
be in effect at the time.
"Stockholders Agreement": The Stockholders Agreement, dated as of the
----------------------
date hereof, as the same shall be amended from time to time, among the Company,
KIA V, KEP V and certain other stockholders of the Company.
11. Miscellaneous.
-------------
11.1. Rule 144 etc. If the Company shall have filed a registration
------------
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act
relating to any class of equity securities, the Company will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder, and will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
-
as such rule may be amended from time to time, or (b) any successor rule or
-
regulation hereafter the commission. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
11.2. Successors, Assigns and Transferees. This Agreement shall be
-----------------------------------
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. In addition, and provided that an
express assignment shall have been made, and a copy of which shall have been
delivered to the Company, the provisions of this Agreement which are for the
benefit of a holder of Registrable Securities shall be for the benefit of and
enforceable by any subsequent holder of any Registrable Securities, provided
--------
that each Other Stockholder may only assign such Other Stockholder's rights
hereunder to one or more of such Other Stockholder's Permitted Transferees.
Notwithstanding anything herein to the contrary, the Other Stockholders shall
exercise all rights hereunder on behalf of any such Permitted Transferees and
the Company and Kelso shall be entitled to deal exclusively with the Other
Stockholders and rely on the consent, waiver or any other action by the Other
Stockholders as the consent, waiver or other action, as the case may be, of any
such Permitted Transferee.
11.3. Other Stockholders. In the event that any Person shall become a
------------------
party to the Stockholders Agreement after the date hereof pursuant to Sections
13.5 or 13.6 thereof, then upon the execution and delivery of a signature page
hereto, such Person shall be deemed to be an Other
<PAGE>
Stockholder for all purposes of this Agreement and the Company shall amend
Exhibit A to reflect such additional Other Stockholder.
11.4. Stock Splits, etc. Each holder of Registrable Securities
-----------------
agrees that it will vote to effect a stock split or combination with respect to
any Registrable Securities in connection with any registration of such
Registrable Securities hereunder, or otherwise, if the managing underwriter
shall advise the Company in writing (or, in connection with an offering that is
not underwritten, if an investment banker shall advise the Company in writing)
that in its opinion such a stock split or combination would facilitate or
increase the likelihood of success of the offering.
11.5. Amendment and Modification. This Agreement may be amended,
--------------------------
modified or supplemented by the Company with the written consent of the Majority
Stockholder. Notwithstanding the foregoing, Exhibit A may be amended
unilaterally by the Company as provided in Section 11.3.
11.6. Governing Law. This Agreement and the rights and obligations
-------------
of the parties hereunder and the persons subject hereto shall be governed by,
and construed and interpreted in accordance with, the law of the State of
Delaware, without giving effect to the choice of law principles thereof.
11.7. Invalidity of Provision. The invalidity or unenforceability of
-----------------------
any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
11.8. Notices. All notices, requests, demands, letters, waivers and
-------
other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a) delivered
-
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
- -
sent by next-day or overnight mail or delivery or (d) sent by fax as follows:
-
(i) If to the Company, to it at:
iXL Enterprises, Inc.
1900 Emery Street
Atlanta, Georgia 30318
Attention: U. Bertram Ellis, Jr.
(ii) If to Kelso, to it at:
Kelso Investment Associates V, L.P.
Kelso Equity Partners V, L.P.
c/o Kelso & Company
320 Park Avenue, 24th Floor
New York, New York 10022
Attention: James J. Connors, II, Esq.
<PAGE>
(iii) If to any other holder of Registrable Securities, to the address
of such holder as set forth in the books and records of the Company
or to such other person or address as any party shall specify by notice in
writing to the Company. All such notices, requests, demands, letters, waivers
and other communications shall be deemed to have been received (w) if by
-
personal delivery on the day after such delivery, (x) if by certified or
-
registered mail, on the fifth business day after the mailing thereof, (y) if by
-
next-day or overnight mail or delivery, on the day delivered or (z) if by fax,
-
on the next day following the day on which such fax was sent, provided that a
copy is also sent by certified or registered mail.
11.9. Headings; Execution in Counterparts. The headings and captions
-----------------------------------
contained herein are for convenience and shall not control or affect the meaning
or construction of any provision hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument.
11.10. Injunctive Relief. Each of the parties recognizes and agrees
-----------------
that money damages may be insufficient and, therefore, in the event of a breach
of any provision of this Agreement the aggrieved party may elect to institute
and prosecute proceedings in any court of competent jurisdiction to enforce
specific performance or to enjoin the continuing breach of this Agreement. Such
remedies shall, however, be cumulative and not exclusive, and shall be in
addition to any other remedy which such party may have.
11.11. Entire Agreement. This Agreement, together with the
----------------
Stockholders Agreement, is intended by the parties hereto as a final expression
of their agreement and intended to be a complete and exclusive statement of
their agreement and understanding in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
11.12. Term. This Agreement shall be effective as of the date hereof
----
and shall continue in effect thereafter until the earlier of (a) its termination
-
by the consent of the parties hereto or their respective successors in interest
and (b) the date on which no Registrable Securities remain outstanding.
-
[SIGNATURES ON FOLLOWING PAGES]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
iXL Enterprises, Inc.
By: /s/ M. Wayne Boylston
---------------------------------------------
Name: M. Wayne Boylston
Title: Executive Vice President and
Chief Financial Officer
[Signatures Continued on Following Pages]
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
-----------------------------------
Signature
------------------------------------
If Corporation, Partnership or Trust:
@radical.media, inc.
----------------------------------------------
Print or Type Name of Entity
By: /s/ D. Jonathan Kamen
-----------------------------------------
D. Jonathan Kamen
----------------------------------------------
Print Name of Authorized Signatory
President
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
-----------------------------------
Signature
------------------------------------
If Corporation, Partnership or Trust:
The Booth and Adams Familly Irrevocable Trust
----------------------------------------------
Print or Type Name of Entity
By: /s/ Marc S. Robinson
-----------------------------------------
Marc S. Robinson
----------------------------------------------
Print Name of Authorized Signatory
Trustee
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name James Altenbach
-----------------------------------
Signature /s/ James S. Altenbach
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Steven P. Amedio
-----------------------------------
Signature /s/ Steven P. Amedio
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Jay Amos
-----------------------------------
Signature /s/ Jay Amos
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Claire Lewis Arnold
-----------------------------------
Signature /s/ Claire Lewis Arnold
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Ashish Bahl
-----------------------------------
Signature /s/ Ashish Bahl
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Steven C. Baum
-----------------------------------
Signature /s/ Steven C. Baum
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Jens Bley
-----------------------------------
Signature /s/ Jens Bley
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Robert D. Bowman
-----------------------------------
Signature /s/ Robert D. Bowman
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
-----------------------------------
Signature
------------------------------------
If Corporation, Partnership or Trust:
The Burk Family Trust Dated 8/17/82
----------------------------------------------
Print or Type Name of Entity
By: /s/ Robert Burk, Trustee
-----------------------------------------
Robert Burk
----------------------------------------------
Print Name of Authorized Signatory
Trustee
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Burton Technology Partners, Ltd.
-----------------------------------
Signature /s/ John Burton
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Eric Butz
-----------------------------------
Signature /s/ Eric Butz
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Gordon Campbell
-----------------------------------
Signature /s/ Gordon Campbell
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name David M. Carroll
-----------------------------------
Signature /s/ David M. Carroll
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
-----------------------------------
Signature
------------------------------------
If Corporation, Partnership or Trust:
CB CAPITAL INVESTORS, L.P.
----------------------------------------------
Print or Type Name of Entity
By: CHASE CAPITAL PARTNERS
-----------------------------------------
its General Partner
By: /s/ Jeffrey C. Walker
----------------------------------------
Jeffrey C. Walker
----------------------------------------------
Print Name of Authorized Signatory
Managing Partner
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Steve Chamberlain
-----------------------------------
Signature /s/ Steve Chamberlain
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Stefan Chopin
-----------------------------------
Signature /s/ Stefan Chopin
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name David Eric Clauson
-----------------------------------
Signature /s/ David Eric Clauson
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Steven Conine
-----------------------------------
Signature /s/ Steven Conine
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Barbara B. Cook
-----------------------------------
Signature /s/ Barbara B. Cook
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
-----------------------------------
Signature
------------------------------------
If Corporation, Partnership or Trust:
Coppersmith Family Trust
----------------------------------------------
Print or Type Name of Entity
By: /s/ Elizabeth May Coppersmith
-----------------------------------------
Elizabeth May Coppersmith
----------------------------------------------
Print Name of Authorized Signatory
Executor
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
-----------------------------------
Signature
------------------------------------
If Corporation, Partnership or Trust:
Cox Technology Investment, Inc.
----------------------------------------------
Print or Type Name of Entity
By: /s/ Richard J. Jacobson
-----------------------------------------
Richard J. Jacobson
----------------------------------------------
Print Name of Authorized Signatory
Treasurer
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Larry B. Culbertson
-----------------------------------
Signature /s/ Larry B. Culbertson
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name O Anderson Currie, Jr.
-----------------------------------
Signature /s/ O. Anderson Currie, Jr.
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Betty Jo L. Currie
-----------------------------------
Signature /s/ Betty Jo L. Currie
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Josiah Cushing
-----------------------------------
Signature /s/ Josiah Cushing
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Estate of Richard M. Cyert
Print Name Margaret S. Cyert, Executrix
-----------------------------------
/s/ Estate of Richard M. Cyert
Signature Margaret S. Cyert, Executrix
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Guy Davidson
-----------------------------------
Signature /s/ Guy Davidson
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Kevin Davis
-----------------------------------
Signature /s/ Kevin Davis
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Norwood Davis
-----------------------------------
Signature /s/ Norwood Davis
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Burton F. Dodd
-----------------------------------
Signature /s/ Burton F. Dodd
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name David E. Easterly
-----------------------------------
Signature /s/ David E. Easterly
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Ralph G. Edwards, Jr.
-----------------------------------
Signature /s/ Ralph G. Edwards, Jr.
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Robert A. Ellis
-----------------------------------
Signature /s/ Robert A. Ellis
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name U. Bertram Ellis, Jr.
-----------------------------------
Signature /s/ U. Bertram Ellis, Jr.
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Urchie B. Ellis &
Print Name Joyce A. Ellist Jt. Ten
-----------------------------------
Signature /s/ Joyce A. Ellis
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Dennis S. Ferraro
-----------------------------------
Signature /s/ Dennis S. Ferraro
------------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By:
-----------------------------------------
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate.
When signing as attorney, executor, administrator, trustee or guardian,
fill in the full title. If your securities are registered in the name of
a corporation, sign the full corporate name, followed by the signature
and title of the authorized signatory. If your securities are registered
in the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
-----------------------------------
Signature
------------------------------------
If Corporation, Partnership or Trust:
Finn Partners
----------------------------------------------
Print or Type Name of Entity
By: /s/ Finn Partners, Jolino J. Rissanen G.P.
------------------------------------------
Jolino J. Rissanen
----------------------------------------------
Print Name of Authorized Signatory
Managing General Partner
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill
in the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
-----------------------------------
Signature
------------------------------------
If Corporation, Partnership or Trust:
Flatiron Assoc., LLC
----------------------------------------------
Print or Type Name of Entity
By: /s/ Jerry Colonna
------------------------------------------
Jerry Colonna
----------------------------------------------
Print Name of Authorized Signatory
Managing Member
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
-----------------------------------
Signature
------------------------------------
If Corporation, Partnership or Trust:
Flatiron Fund 1998/1999
----------------------------------------------
Print or Type Name of Entity
By: /s/ Jerry Colonna
------------------------------------------
Jerry Colonna
----------------------------------------------
Print Name of Authorized Signatory
Managing Member
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Flatiron Fund
-------------
Print or Type Name of Entity
By: /s/ Jerry Colonna
-----------------
Jerry Colonna
-------------
Print Name of Authorized Signatory
Managing Partner
----------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Steve Floyd
-----------
Signature /s/ Steve Floyd
---------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Mary Fowlkes
------------
Signature /s/ Mary Fowlkes
----------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Eric H. Freedman
----------------
Signature /s/ Eric H. Freedman
--------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Michael Fuchs
-------------
Signature /s/ Michael Fuchs
-----------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name J. Rex Fuqua
------------
Signature /s/ J. Rex Fuqua
----------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name James Ganley
------------
Signature /s/ James Ganley
----------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Robert Gear
-----------
Signature /s/ Robert Gear
---------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
General Electric Capital Assurance Company
------------------------------------------
Print or Type Name of Entity
By: /s/ Victor C. Moses
-------------------
Victor C. Moses
---------------
Print Name of Authorized Signatory
Senior Vice President
---------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
---------------------------------------
If Corporation, Partnership or Trust:
General Electric Capital Corporation
------------------------------------
Print or Type Name of Entity
By: /s/ Brian S. Graff
------------------
Brian S. Graff
--------------
Print Name of Authorized Signatory
Region Operations Manager
-------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
---------------------------------------
If Corporation, Partnership or Trust:
G.E. Capital Equity Investments, Inc.
-------------------------------------
Print or Type Name of Entity
By: /s/ Brian S. Graff
------------------
Brian S. Graff
--------------
Print Name of Authorized Signatory
Vice President
--------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
---------------------------------------
If Corporation, Partnership or Trust:
General Electric Pension Trust
by General Electric Investment
Corporation as Investment Advisor
---------------------------------
Print or Type Name of Entity
By: /s/ Patrick McNeela
-------------------
Patrick McNeela
---------------
Print Name of Authorized Signatory
Vice President
--------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Michael Gilles
--------------
Signature /s/ Michael Gilles
------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name S. Taylor Glover
----------------
Signature /s/ S. Taylor Glover
--------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Henry Goldberg
--------------
Signature /s/ Henry Goldberg
------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Glenn Golenberg
---------------
Signature /s/ Glenn Golenberg
-------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Glenn Golenberg Tr U/A 4/27/93
Glenn Golenberg Inter Vivos Trust
---------------------------------
Print or Type Name of Entity
By: /s/ Glenn Golenberg Trustee
---------------------------
Glenn Golenberg
---------------
Print Name of Authorized Signatory
Trustee
-------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name should
be exactly as it appears on the applicable stock certificate. When signing as
attorney, executor, administrator, trustee or guardian, fill in the full title.
If your securities are registered in the name of a corporation, sign the full
corporate name, followed by the signature and title of the authorized signatory.
If your securities are registered in the name of a partnership, sign the
partnership name followed by the signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Susan E. Grana Living Trust
---------------------------
Print or Type Name of Entity
By: /s/ Susan E. Grana
------------------
Susan E. Grana
--------------
Print Name of Authorized Signatory
Susan E. Grana Living Trust
---------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name William A. Grana, Jr.
---------------------
Signature /s/ William A. Grana, Jr.
-------------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Paul M. Grand
-------------
Signature /s/ Paul M. Grand
-----------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name David Greeley
-------------
Signature /s/ David Greeley
-----------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Joshua Greer
------------
Signature /s/ Joshua Greer
----------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Greylock IX Limited Partnership by Greylock
IX GP Limited Partnership, its General Partner
----------------------------------------------
Print or Type Name of Entity
/s/ Greylock IX GP Limited Partnership
By: Henry F. McCance
--------------------------------------
Henry F. McCance
----------------
Print Name of Authorized Signatory
General Partner
---------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Greystone Capital Partners I, LP
--------------------------------
Print or Type Name of Entity
By: /s/ Thomas G. Rosencrants
-------------------------
Thomas G. Rosencrants, Chairman and CEO
---------------------------------------
Print Name of Authorized Signatory
Greystone Capital Group, LLC, the General
Partner for Greystone Capital Partners I, LP
--------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Guren Family Trust
------------------
Print or Type Name of Entity
By: /s/ Marc D. Guren, trustee
--------------------------
Marc D. Guren, Trustee
----------------------
Print Name of Authorized Signatory
-----------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Adam M. Guren, Marc D. Guren
Print Name Custodian, CA UTMA
----------------------------
Signature /s/ Marc D. Guren, custodian
----------------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Jula V. Guren, Marc D. Guren
Print Name Custodian, CA UTMA
----------------------------
Signature /s/ Marc D. Guren, custodian
----------------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Web Listing Corp. Profit Sharing
Plan U/A 06-07-1999
--------------------------------
Print or Type Name of Entity
By: /s/ Philip R. Gustlin
---------------------
Philip R. Gustlin
-----------------
Print Name of Authorized Signatory
Trustee
-------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Patricia Hardesty Trust
-----------------------
Print or Type Name of Entity
By: /s/ Barry T. Sikes
------------------
Barry T. Sikes
--------------
Print Name of Authorized Signatory
Trustee
-------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Helfrich Family Limited Partnership, LLP
----------------------------------------
Print or Type Name of Entity
By: /s/ Carl P. Helfrich
--------------------
Carl P. Helfrich
----------------
Print Name of Authorized Signatory
-----------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Hennessy Cadillac, Inc.
-----------------------
Print or Type Name of Entity
By: /s/ Stephen R. Hennessy
-----------------------
Stephen R. Hennessy
-------------------
Print Name of Authorized Signatory
Vice President
--------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Mark W. Hennessy
----------------
Signature /s/ Mark W. Hennessy
--------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Peter Robert Hennessy
---------------------
Signature /s/ Peter Robert Hennessy
-------------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Stephen R. Hennessy
-------------------
Signature /s/ Stephen R. Hennessy
-----------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Thom J. Hodgson
---------------
Signature /s/ Thom J. Hodgson
-------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Jeffrey Steven Hosley
---------------------
Signature /s/ Jeffrey Steven Hosley
-------------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Frank W. Hulse
--------------
Signature /s/ Frank W. Hulse
------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
InveStar Burgeon Venture Capital, Inc.
--------------------------------------
Print or Type Name of Entity
By: /s/ Kenneth Tai
---------------
Kenneth Tai
-----------
Print Name of Authorized Signatory
Managing Director
-----------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Mark Jacobstein
---------------
Signature /s/ Mark Jacobstein
-------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Jeffrey Janer
-------------
Signature /s/ Jeffrey Janer
-----------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Lisa Janzen (Hendricks)
-----------------------
Signature /s/ Lisa Janzen (Hendricks)
---------------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Teresa Joel
-----------
Signature /s/ Teresa Joel
---------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Kurt Keilhacker
---------------
Signature /s/ Kurt Keilhacker
-------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Kelso Equity Partners V, L.P.
-----------------------------
Print or Type Name of Entity
By: /s/ Phillip E. Berney
---------------------
Phillip E. Berney
-----------------
Print Name of Authorized Signatory
As General Partner
------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Kelso Investment Associates V, L.P.
-----------------------------------
Print or Type Name of Entity
By: /s/ Phillip E. Berney
---------------------
Phillip E. Berney
-----------------
Print Name of Authorized Signatory
As General Partner of Kelso Partners V, L.P.,
the General Partner of KIA V, L.P.
---------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name James C. Kennedy
----------------
Signature /s/ James C. Kennedy
--------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Kenneth R. Kilroy
-----------------
Signature /s/ Kenneth R. Kilroy
---------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Nancy B. Krieble, Executrix
Print Name Estate of Robert H. Krieble
---------------------------
Signature /s/ Nancy B. Krieble
--------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name William Allan Lackey
--------------------
Signature /s/ W. Allan Lackey
-------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name William M. Lackey
-----------------
Signature /s/ William M. Lackey
---------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Lazarus Family Investments, LLC
-------------------------------
Print or Type Name of Entity
By: /s/ Jonathan D. Lazarus
-----------------------
Johnathan D. Lazarus
--------------------
Print Name of Authorized Signatory
Manager
-------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name James F. Lipscomb, Jr.
----------------------
Signature /s/ James F. Lipscomb, Jr.
--------------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Love Family Partnership VI
--------------------------
Print or Type Name of Entity
By: /s/ Dennis M. Love
------------------
Dennis M. Love
--------------
Print Name of Authorized Signatory
General Partner
---------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Dan Lynch
---------
Signature /s/ Dan Lynch
-------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
MRW Ventures, LLC
-----------------
Print or Type Name of Entity
By: /s/ Nicholas Perrins
--------------------
Nicholas Perrins
----------------
Print Name of Authorized Signatory
Manager
-------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Marilyn R. Marks
----------------
Signature /s/ Marilyn R. Marks
--------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Marquard Family Partnership, Ltd.
---------------------------------
Print or Type Name of Entity
By: /s/ William A. Marquard
-----------------------
General Partner William A. Marquard
-----------------------------------
Print Name of Authorized Signatory
General Partner
---------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Norman S. Matthews
------------------
Signature /s/ Norman S. Matthews
----------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Robert H. McEver
----------------
Signature /s/ Robert H. McEver
--------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name John P. McEvoy
--------------
Signature /s/ John P. McEvoy
------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name John F. McGillicuddy
--------------------
Signature /s/ John F. McGillicuddy
------------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Jacob Hayden McGowan
--------------------
Signature /s/ Jacob Hayden McGowan
------------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Mellon Ventures II, L.P.
------------------------
Print or Type Name of Entity
By: /s/ Lawrence E. Mock, Jr.
-------------------------
Mock
----
Print Name of Authorized Signatory
General Partner, Mellon Ventures II, L.P.
-----------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name William N. Melton
-----------------
Signature /s/ William N. Melton
---------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Colin Morris
------------
Signature /s/ Colin Morris
----------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Nantucket Associates, L.L.P.
----------------------------
Print or Type Name of Entity
By: /s/ Mark M. Gambill
-------------------
Mark M. Gambill, Genl. Ptr.
---------------------------
Print Name of Authorized Signatory
General Partner
---------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Mathhias Oelmann
----------------
Signature /s/ Matthias Oelmann
--------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Robert C. O'Leary
-----------------
Signature /s/ Robert C. O'Leary
---------------------
If Corporation, Partnership or Trust:
--------------------------------------------------
Print or Type Name of Entity
By:
----------------------------------------------
--------------------------------------------------
Print Name of Authorized Signatory
--------------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------------
Signature
----------------------------------------
If Corporation, Partnership or Trust:
Daniella Ortiz Trust
--------------------
Print or Type Name of Entity
By: /s/ Barry T. Sikes
------------------
Barry T. Sikes
--------------
Print Name of Authorized Signatory
Trustee
-------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
--------------------------------
Signature
---------------------------------
If Corporation, Partnership or Trust:
Justin Ortiz Trust
---------------------------------------------
Print or Type Name of Entity
By: /s/ Barry T. Sikes
-----------------------------------------
Barry T. Sikes
---------------------------------------------
Print Name of Authorized Signatory
Trustee
---------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Manfred Ottenbreit
--------------------------------
Signature /s/ Manfred Ottenbreit
---------------------------------
If Corporation, Partnership or Trust:
---------------------------------------------
Print or Type Name of Entity
By: _________________________________________
---------------------------------------------
Print Name of Authorized Signatory
---------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Pete Patterson
----------------------------
Signature /s/ Pete Patterson
----------------------------
If Corporation, Partnership or Trust:
----------------------------------------
Print or Type Name of Entity
By: ____________________________________
----------------------------------------
Print Name of Authorized Signatory
----------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Lisa S. Peddy
----------------------------
Signature /s/ Lisa S. Peddy
----------------------------
If Corporation, Partnership or Trust:
----------------------------------------
Print or Type Name of Entity
By:_____________________________________
________________________________________
Print Name of Authorized Signatory
________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Stephanie A.M. Petersen
----------------------------------
Signature /s/ Stephanie Petersen
----------------------------------
If Corporation, Partnership or Trust:
----------------------------------------------
Print or Type Name of Entity
By: __________________________________________
----------------------------------------------
Print Name of Authorized Signatory
----------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name _____________________________
Signature ______________________________
If Corporation, Partnership or Trust:
Redloh Capital, LLC
----------------------------------------
Print or Type Name of Entity
By: /s/ J.C. Pendrey, Jr. - Member
------------------------------------
J.C. Pendrey, Jr.
----------------------------------------
Print Name of Authorized Signatory
Member
----------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name ________________________________
Signature _________________________________
If Corporation, Partnership or Trust:
Anthony Rocco Trust
-------------------------------------------
Print or Type Name of Entity
By: /s/ Barry T. Sikes
---------------------------------------
Barry T. Sikes
-------------------------------------------
Print Name of Authorized Signatory
Trustee
-------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name ________________________________
Signature _________________________________
If Corporation, Partnership or Trust:
Christopher Rocco Trust
-------------------------------------------
Print or Type Name of Entity
By: /s/ Barry T. Sikes
---------------------------------------
Barry T. Sikes
-------------------------------------------
Print Name of Authorized Signatory
Trustee
-------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Randall Pipp
------------------------------
Signature /s/ Randall Pipp
-------------------------------
If Corporation, Partnership or Trust:
-----------------------------------------
Print or Type Name of Entity
By: _____________________________________
_________________________________________
Print Name of Authorized Signatory
_________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Michel Rapoport
-------------------------------
Signature /s/ Michel Rapoport
--------------------------------
If Corporation, Partnership or Trust:
__________________________________________
Print or Type Name of Entity
By: ______________________________________
__________________________________________
Print Name of Authorized Signatory
__________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name James Rocco
------------------------------
Signature /s/ James Rocco
-------------------------------
If Corporation, Partnership or Trust:
----------------------------------------
Print or Type Name of Entity
By:_____________________________________
________________________________________
Print Name of Authorized Signatory
________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name _______________________________
Signature ________________________________
If Corporation, Partnership or Trust:
James Rocco Trust
-----------------------------------------
Print or Type Name of Entity
By: /s/ Barry T. Sikes
-------------------------------------
Barry T. Sikes
-----------------------------------------
Print Name of Authorized Signatory
Trustee
-----------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name _______________________________
Signature ________________________________
If Corporation, Partnership or Trust:
Marge Rocco Trust
------------------------------------------
Print or Type Name of Entity
By: /s/ Barry T. Sikes
--------------------------------------
Barry T. Sikes
------------------------------------------
Print Name of Authorized Signatory
Trustee
------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name _______________________________
Signature ________________________________
If Corporation, Partnership or Trust:
Mario Rocco Trust
------------------------------------------
Print or Type Name of Entity
By: /s/ Barry T. Sikes
--------------------------------------
Barry T. Sikes
------------------------------------------
Print Name of Authorized Signatory
Trustee
------------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name ____________________________
Signature _____________________________
If Corporation, Partnership or Trust:
Patricia Ann Rocco Trust
---------------------------------------
Print or Type Name of Entity
By: /s/ Barry T. Sikes
-----------------------------------
Barry T. Sikes
---------------------------------------
Print Name of Authorized Signatory
Trustee
---------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name D.M. Roderick
-----------------------------
Signature /s/ D.M. Roderick
------------------------------
If Corporation, Partnership or Trust:
----------------------------------------
Print or Type Name of Entity
By: ____________________________________
________________________________________
Print Name of Authorized Signatory
________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Arthur W. Rollins
-------------------------------
Signature /s/ Arthur W. Rollins
--------------------------------
If Corporation, Partnership or Trust:
------------------------------------------
Print or Type Name of Entity
By: ______________________________________
__________________________________________
Print Name of Authorized Signatory
__________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name _____________________________
Signature ______________________________
If Corporation, Partnership or Trust:
John Rutledge, IRA
----------------------------------------
Print or Type Name of Entity
By: /s/ John Rutledge
------------------------------------
________________________________________
Print Name of Authorized Signatory
________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name James V. Sandry
-----------------------------
Signature /s/ James V. Sandry
------------------------------
If Corporation, Partnership or Trust:
________________________________________
Print or Type Name of Entity
By: ____________________________________
________________________________________
Print Name of Authorized Signatory
________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Michael E. Schaeffer
--------------------------------
Signature /s/ Michael E. Schaeffer
---------------------------------
If Corporation, Partnership or Trust:
--------------------------------------------
Print or Type Name of Entity
By: ________________________________________
--------------------------------------------
Print Name of Authorized Signatory
____________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name F. Blair Schmidt-Fellner
-------------------------------
Signature /s/ F. Blair Schmidt Fellner
--------------------------------
If Corporation, Partnership or Trust:
------------------------------------------
Print or Type Name of Entity
By: ______________________________________
__________________________________________
Print Name of Authorized Signatory
__________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Michael Schwartz
----------------------------
Signature /s/ Michael Schwartz
-----------------------------
If Corporation, Partnership or Trust:
_______________________________________
Print or Type Name of Entity
By: ___________________________________
---------------------------------------
Print Name of Authorized Signatory
---------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Nira J. Shah
-------------------------------
Signature /s/ Nira J. Shah
--------------------------------
If Corporation, Partnership or Trust:
------------------------------------------
Print or Type Name of Entity
By: ______________________________________
__________________________________________
Print Name of Authorized Signatory
__________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name William M. Shaw
------------------------------
Signature /s/ William M. Shaw
-------------------------------
If Corporation, Partnership or Trust:
-----------------------------------------
Print or Type Name of Entity
By: _____________________________________
_________________________________________
Print Name of Authorized Signatory
_________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Melissa Shenkin
------------------------------
Signature /s/ Melissa Shenkin
-------------------------------
If Corporation, Partnership or Trust:
_________________________________________
Print or Type Name of Entity
By: _____________________________________
_________________________________________
Print Name of Authorized Signatory
_________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Barry T. Sikes
-----------------------------
Signature /s/ Barry T. Sikes
------------------------------
If Corporation, Partnership or Trust:
----------------------------------------
Print or Type Name of Entity
By: ____________________________________
----------------------------------------
Print Name of Authorized Signatory
----------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Stephen D. Silbert
-----------------------------
Signature /s/ Stephen D. Silbert
------------------------------
If Corporation, Partnership or Trust:
----------------------------------------
Print or Type Name of Entity
By: ____________________________________
________________________________________
Print Name of Authorized Signatory
----------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Robert L. Silverman
-------------------------------
Signature /s/ Robert L. Silverman
--------------------------------
If Corporation, Partnership or Trust:
------------------------------------------
Print or Type Name of Entity
By: ______________________________________
__________________________________________
Print Name of Authorized Signatory
__________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Garnett A. Smith
-------------------------------
Signature /s/ Garnett A. Smith
--------------------------------
If Corporation, Partnership or Trust:
------------------------------------------
Print or Type Name of Entity
By: ______________________________________
__________________________________________
Print Name of Authorized Signatory
__________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Gary E. Snyder
-----------------------------
Signature /s/Gary E. Snyder
------------------------------
If Corporation, Partnership or Trust:
----------------------------------------
Print or Type Name of Entity
By: ____________________________________
________________________________________
Print Name of Authorized Signatory
________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Michael J. Stern
------------------------------
Signature /s/ Michael J. Stern
-------------------------------
If Corporation, Partnership or Trust:
----------------------------------------
Print or Type Name of Entity
By: ____________________________________
________________________________________
Print Name of Authorized Signatory
________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Mark E. Swanson
-----------------------------
Signature /s/ Mark E. Swanson
------------------------------
If Corporation, Partnership or Trust:
----------------------------------------
Print or Type Name of Entity
By: ____________________________________
________________________________________
Print Name of Authorized Signatory
________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name ___________________________
Signature ____________________________
If Corporation, Partnership or Trust:
Thomson U.S. Inc.
--------------------------------------
Print or Type Name of Entity
By: /s/ James R. Shurr
----------------------------------
James R. Schurr
--------------------------------------
Print Name of Authorized Signatory
Vice President
--------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amended and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Timothy E. Thompson
------------------------------
Signature /s/ Timothy E. Thompson
-------------------------------
If Corporation, Partnership or Trust:
-----------------------------------------
Print or Type Name of Entity
By: _____________________________________
_________________________________________
Print Name of Authorized Signatory
_________________________________________
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
Amened and Restated Registration Rights Agreement
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name ______________________________
Signature _______________________________
If Corporation, Partnership or Trust:
U.B. Ellis Family LLC
-----------------------------------------
Print or Type Name of Entity
By: /s/ U. Bertram Ellis, Jr.
-------------------------------------
U. Bertram Ellis, Jr.
-----------------------------------------
Print Name of Authorized Signatory
-----------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
COUNTERPART SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Gregory S. Waldbaum
-------------------------
Signature /s/ Gregory S. Waldbaum
-------------------------
If Corporation, Partnership or Trust:
Print or Type Name of Entity
By:
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
COUNTERPART SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Leonard N. Waldbaum
-------------------------
Signature /s/ Leonard N. Waldbaum
-------------------------
If Corporation, Partnership or Trust:
-------------------------------------
Print or Type Name of Entity
By:
----------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
COUNTERPART SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Scott Walker
-------------------------
Signature /s/ Scott Walker
-------------------------
If Corporation, Partnership or Trust:
-------------------------------------
Print or Type Name of Entity
By:
----------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
COUNTERPART SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Helen B. Weeks
-------------------------
Signature /s/ Helen B. Weeks
-------------------------
If Corporation, Partnership or Trust:
-------------------------------------
Print or Type Name of Entity
By:
----------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
COUNTERPART SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name
--------------------------
Signature
--------------------------
If Corporation, Partnership or Trust:
Weissmann, Wolff, Bergman,
Colemon & Silverman, LLP
-------------------------------------
Print or Type Name of Entity
By: /s/ Daniel H. Wolff
-------------------
Daniel H. Wolff
-------------------------------------
Print Name of Authorized Signatory
Partner
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
COUNTERPART SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name James L. Whims
-------------------------
Signature /s/ James L. Whims
-------------------------
If Corporation, Partnership or Trust:
-------------------------------------
Print or Type Name of Entity
By:
---------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
COUNTERPART SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Armistead Whitney
-------------------------
Signature /s/ Armistead Whitney
-------------------------
If Corporation, Partnership or Trust:
-------------------------------------
Print or Type Name of Entity
By:
----------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
COUNTERPART SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Gary Williams
-------------------------
Signature /s/ Gary Williams
-------------------------
If Corporation, Partnership or Trust:
-------------------------------------
Print or Type Name of Entity
By:
----------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
COUNTERPART SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Harold Wright
-------------------------
Signature /s/ Harold Wright
-------------------------
If Corporation, Partnership or Trust:
Print or Type Name of Entity
By:
----------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
COUNTERPART SIGNATURE PAGE TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
(for attachment to Amended and Restated Registration Rights Agreement as
executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Registration Rights Agreement as of the date first above written.
STOCKHOLDER*:
If Individual:
Print Name Charles Zug
-------------------------
Signature /s/ CK Zug 10-25-99
-------------------------
If Corporation, Partnership or Trust:
-------------------------------------
Print or Type Name of Entity
By:
----------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
First Amendment to
-------------------
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
--------------------------------------------------
THIS FIRST AMENDMENT TO AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT,
dated as of November 2, 1999, amends that certain Amended and Restated
Registration Rights Agreement dated as of October 28, 1999 (the "Registration
Rights Agreement") among iXL Enterprises, Inc., a Delaware corporation (the
"Company"), Kelso Investment Associates V, L.P., a Delaware limited partnership
("KIA V"), Kelso Equity Partners V, L.P., a Delaware limited partnership ("KEP
V", together with KIA V, "Kelso"), and certain other stockholders of the Company
listed on Exhibit A attached hereto (collectively, the "Other Stockholders").
Capitalized terms used herein without definition are defined in the Registration
Rights Agreement.
1. Amendments of the Registration Rights Agreement. Section 3(c) of the
-----------------------------------------------
Registration Rights Agreement shall be amended by deleting such Section in its
entirety and substituting the following in lieu thereof:
(c) furnish to counsel selected by the Majority Stockholder
(whether or not such Majority Stockholder is participating as a
selling stockholder and which counsel may also be counsel to the
Company) and each seller of Registrable Securities copies of all
documents filed with the Commission in connection with such
registration (or in the case of the initial filing of a registration
statement with the Commission, within five business days of such
initial filing), which documents will be subject to the review of such
counsel and each seller and the Company shall take such actions
necessary to correct any such filing if any such seller shall have
reasonably objected in writing within two days of receipt of such
registration statement, prospectus, amendment or supplement on the
grounds that such amendment or supplement does not comply (explaining
why) in all material respects with the requirements of the Securities
Act or of the rules or regulations thereunder;
2. No Further Amendments. Except as expressly provided herein, the
---------------------
Registration Rights Agreement shall not be amended or modified hereby.
3. Execution in Counterparts. This Amendment may be executed in any
-------------------------
number of counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument.
[SIGNATURES ON FOLLOWING PAGES]
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
iXL Enterprises, Inc.
By: /s/ U. Bertram Ellis
------------------------------------
Name: U. Bertram Ellis
----------------------------------
Title: Chairman & CEO
---------------------------------
[Signatures Continued on Following Pages]
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name U. Bertram Ellis
--------------------------
Signature /s/ U. Bertram Ellis
---------------------------
If Corporation, Partnership or Trust:
-------------------------------------
Print or Type Name of Entity
By:
----------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name Steve Floyd
--------------------------
Signature /s/ Steve Floyd
--------------------------
If Corporation, Partnership or Trust:
-------------------------------------
Print or Type Name of Entity
By:
----------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name
--------------------------
Signature
--------------------------
If Corporation, Partnership or Trust:
CB CAPITAL INVESTORS, L.P.
-------------------------------------
Print or Type Name of Entity
By: CHASE CAPITAL PARTNERS
----------------------------------
its General Partner
By: /s/ Jeffrey C. Walker
----------------------------------
Jeffrey C. Walker
-------------------------------------
Print Name of Authorized Signatory
Managing Partner
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name
--------------------------
Signature
--------------------------
If Corporation, Partnership or Trust:
Greylock IX Limited Partnership
-------------------------------------
Print or Type Name of Entity
By: /s/ Henry F. McCance
----------------------------------
Henry F. McCance
-------------------------------------
Print Name of Authorized Signatory
General Partner
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name
--------------------------
Signature
--------------------------
If Corporation, Partnership or Trust:
Greystone Capital Partners I, L.P.
-------------------------------------
Print or Type Name of Entity
By: /s/ Thomas G. Rosencrants
----------------------------------
Thomas G. Rosencrants
-------------------------------------
Print Name of Authorized Signatory
Chairman and CEO, Greystone Capital
Group, LLC, The General Partner
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name
--------------------------
Signature
--------------------------
If Corporation, Partnership or Trust:
Thomson U.S. Inc.
-------------------------------------
Print or Type Name of Entity
By: /s/ James R. Schurr
----------------------------------
James R. Schurr
-------------------------------------
Print Name of Authorized Signatory
Vice President
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name
--------------------------
Signature
--------------------------
If Corporation, Partnership or Trust:
Kelso Investment Associates V, L.P.
-------------------------------------
Print or Type Name of Entity
By: /s/ Philip E. Berney
----------------------------------
Philip E. Berney
-------------------------------------
Print Name of Authorized Signatory
General Partner of General Partner
(Kelso Partners V, L.P.)
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name
--------------------------
Signature
--------------------------
If Corporation, Partnership or Trust:
Kelso Equity Partners V, L.P.
-------------------------------------
Print or Type Name of Entity
By: /s/ Philip E. Berney
---------------------------------
Philip E. Berney
-------------------------------------
Print Name of Authorized Signatory
General Partner
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name Philip E. Berney
--------------------------
Signature /s/ Philip E. Berney
---------------------------
If Corporation, Partnership or Trust:
-------------------------------------
Print or Type Name of Entity
By:
----------------------------------
-------------------------------------
Print Name of Authorized Signatory
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name
--------------------------
Signature
--------------------------
If Corporation, Partnership or Trust:
Peter F. Schweinfurth Family Trust,
u/t/a dated 12-20-96
-------------------------------------
Print or Type Name of Entity
By: /s/ Thomas R. Wall IV
---------------------------------
Thomas R. Wall IV
-------------------------------------
Print Name of Authorized Signatory
Trustee
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name
---------------------------------
Signature
---------------------------------
If Corporation, Partnership or Trust:
Frank T. Nickell Retained Trust 1296-C-iXL,
u/t/a dated 12/20/96
--------------------------------------------
Print or Type Name of Entity
By: /s/ Thomas R. Wall, IV
-----------------------------------------
Thomas R. Wall, IV
--------------------------------------------
Print Name of Authorized Signatory
Trustee
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
Counterpart Signature Page to
First Amendment to
Amended and Restated Registration Rights Agreement
(for attachment to First Amendment to Amended and Restated Registration Rights
Agreement as executed by iXL Enterprises, Inc.)
IN WITNESS WHEREOF, the undersigned have executed this First Amendment to
Amended and Restated Registration Rights Agreement as of the date first above
written.
STOCKHOLDER*:
If Individual:
Print Name
--------------------------
Signature
--------------------------
If Corporation, Partnership or Trust:
Mellon Ventures II, L.P.
-------------------------------------
Print or Type Name of Entity
By: /s/ Jeff Anderson
---------------------------------
Jeff Anderson
-------------------------------------
Print Name of Authorized Signatory
Principal
-------------------------------------
Print Title of Authorized Signatory
* A separate counterpart signature page must be executed by each separate
stockholder. The signature of the stockholder and the corresponding name
should be exactly as it appears on the applicable stock certificate. When
signing as attorney, executor, administrator, trustee or guardian, fill in
the full title. If your securities are registered in the name of a
corporation, sign the full corporate name, followed by the signature and
title of the authorized signatory. If your securities are registered in
the name of a partnership, sign the partnership name followed by the
signature of the authorized signatory.
<PAGE>
EXHIBIT 10.69
iXL ENTERPRISES, INC.
1999B Employee Stock Option Plan
1. Purposes.
The purpose of the iXL Enterprises, Inc. 1999B Employee Stock Option Plan
(the "Plan") is to foster and promote the long-term financial success of the
Company and materially increase shareholder value by (a) motivating superior
-
performance by means of performance-related incentives, (b) encouraging and
-
providing for the acquisition of an ownership interest in the Company by
Employees and (c) enabling the Company to attract and retain the services of an
-
outstanding management team upon whose judgment, interest and special effort the
successful conduct of its operations is largely dependent.
2. Definitions.
(a) Certain Definitions. Capitalized terms used herein without definition
-------------------
shall have the respective meanings set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
---
"Board" means the Board of Directors of the Company.
-----
"Cause" means (i) the willful failure by the Participant (other than
----- -
due to physical or mental illness) to perform substantially his duties as
an employee of the Company or any Subsidiary after reasonable notice to the
Participant of such failure, (ii) the Participant's engaging in serious
--
misconduct that is injurious to the Company or any Subsidiary, (iii) the
---
Participant's having been convicted of, or entered a plea of nolo
----
contendere to, a crime that constitutes a felony or (iv) the breach by the
----------
Participant of any written covenant or agreement with the Company or any
Subsidiary not to disclose any information pertaining to the Company or any
Subsidiary or not to compete or interfere with the Company or any
Subsidiary.
"Change in Control" means the occurrence of any of the following
-----------------
events:
(1) the members of the Board at the beginning of any consecutive
twenty-four calendar month period (the "Incumbent Directors") cease
-------------------
for any reason to constitute at least a majority of the members of the
Board, provided that any director whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at
least a majority of the members of the Board then still in office who
were members of the Board at the beginning of such twenty-four
calendar month period other than as a result of a proxy contest, or
any agreement arising out of an actual or threatened proxy contest,
shall be treated as an Incumbent Director; or
-1-
<PAGE>
(2) any "person," including a "group" (as such terms are used in
Sections 13(d) and 14(d)(2) of the Act, but excluding Kelso, the
Company, any Subsidiary or any employee benefit plan of the Company or
any Subsidiary is or becomes the "beneficial owner" (as defined in
Rule 13(d)(3) under the Act), directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power of
the Company's then outstanding securities; or
(3) the stockholders of the Company shall approve a definitive
agreement (A) for the merger or other business combination of the
-
Company with or into another corporation, a majority of the directors
of which were not directors of the Company immediately prior to the
merger and in which the stockholders of the Company immediately prior
to the effective date of such merger own a percentage of the voting
power in such corporation that is less than one-half of the percentage
of the voting power they owned in the Company immediately prior to
such transaction or (B) for the sale or other disposition of all or
-
substantially all of the assets of the Company to any other entity;
provided, in each case, that such transaction shall have been
--------
consummated; or
(4) the purchase of Stock pursuant to any tender or exchange
offer made by any "person," including a "group" (as such terms are
used in Sections 13(d) and 14(d)(2) of the Act), other than Kelso, the
Company, any Subsidiary, or an employee benefit plan of the Company or
any Subsidiary, for 20% or more of the Stock of the Company.
Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to occur in the event the Company files for bankruptcy, liquidation
or reorganization under the United States Bankruptcy Code.
"Change in Control Price" means the highest price per share of Stock
-----------------------
offered in conjunction with any transaction resulting in a Change in
Control (as determined in good faith by the Committee if any part of the
offered price is payable other than in cash) or, in the case of a Change in
Control occurring solely by reason of a change in the composition of the
Board, the highest Fair Market Value of the Stock on any of the 30 trading
days immediately preceding the date on which a Change in Control occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Committee" means the Compensation Committee of the Board or such
---------
other committee as the Board may from time to time designate to administer
the Plan (or in the absence of any such designation, the Board), provided
--------
that such committee shall consist of two or more members, each of whom
----
shall be a "Non-Employee Director" within the meaning of Rule 16b-3, as
promulgated under the Act.
"Company" means iXL Enterprises, Inc., a Delaware corporation, and any
-------
successor thereto.
-2-
<PAGE>
"Disability" means, unless otherwise determined by the Committee with
----------
respect to a particular Option, disability of the Participant within the
meaning of any long-term disability plan maintained by the Company.
"Employee" means any employee of the Company or any Subsidiary;
--------
provided that, "Employee" shall not include any employee of the Company or
any Subsidiary that is an "officer or director" of the Company or any
Subsidiary, within the meaning of Nasdaq Marketplace Rule 4460(i)(1)(A).
"Fair Market Value" means, on any date, the closing price of the Stock
-----------------
on a national securities exchange (or on such other recognized quotation
system on which the trading prices of the Stock are quoted at the relevant
time) on such date, provided that in the event that there are no Stock
-------------
transactions reported on such exchange (or such other system) on such date,
Fair Market Value shall mean the closing price on the immediately preceding
date on which Stock transactions were so reported.
"Kelso" means Kelso Investment Associates V, L.P., together with Kelso
-----
Equity Partners V, L.P.
"Option" means the right to purchase Stock at a stated price for a
------
specified period of time. For purposes of the Plan, an Option may be
either (i) an "Incentive Stock Option" (ISO) within the meaning of Section
-
422 of the Code or (ii) a "Nonstatutory Stock Option" (NSO). Unless the
--
Committee shall otherwise specify at the time of grant, any Option granted
hereunder shall be a Nonstatutory Stock Option.
"Participant" means any Employee designated by the Committee to
-----------
receive an Option under the Plan.
"Retirement" means termination of a Participant's employment on or
----------
after the normal retirement date or, with the Committee's approval, on or
after any early retirement date established under any retirement plan
maintained by the Company, or any Subsidiary in which the Participant
participates.
"Stock" means the common stock of the Company, par value $0.01 per
-----
share.
"Subsidiary" means any corporation in which the Company owns, directly
----------
or indirectly, stock representing 50% or more of the voting power of all
classes of stock entitled to vote and any other business organization,
regardless of form, in which the Company possesses directly or indirectly
50% or more of the total combined equity interests in such organization.
(b) Gender and Number. Except when otherwise indicated by the context,
-----------------
words in the masculine gender used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.
-3-
<PAGE>
3. Powers of The Committee
The Committee shall be responsible for the administration of the Plan,
including, without limitation, determining which Employees receive Options, what
kind of Options are granted under the Plan and for what number of shares, and
the other terms and conditions of each such Option. The Committee may establish
different terms and conditions for different types of Options, for different
Participants receiving the same type of Option and for the same Participant for
each Option such Participant may receive, whether or not granted at different
times. The Committee shall have the responsibility of construing and
interpreting the Plan and of establishing and amending such rules and
regulations as it may deem necessary or desirable for the proper administration
of the Plan. Any decision or action taken or to be taken by the Committee,
arising out of or in connection with the construction, administration,
interpretation and effect of the Plan and of its rules and regulations, shall,
to the maximum extent permitted by applicable law, be within its absolute
discretion (except as otherwise specifically provided herein) and shall be
conclusive and binding upon the Company, all Participants and any person
claiming under or through any Participant.
4. Stock Subject to Plan
(a) Number. Subject to the provisions of Section 4(b) and (c), the number
------
of shares of Stock subject to Options under the Plan may not exceed 10,000,000
shares of Stock, plus any shares which, after the effective date of the Plan,
become available for Options under this Plan in accordance with Section 4(b)
below. Without limiting the generality of the foregoing, whenever shares are
received by the Company in connection with the exercise of any Option granted
under the Plan, only the net number of shares actually issued shall be counted
against the foregoing limit. The shares to be delivered under the Plan may
consist, in whole or in part, of treasury Stock or authorized but unissued Stock
not reserved for any other purpose.
(b) Canceled, Terminated, or Forfeited Options. Any shares of Stock
------------------------------------------
subject to any Option granted hereunder which for any reason is canceled,
terminated or otherwise settled without the issuance of any Stock shall be
available for further Options under the Plan.
(c) Adjustment in Capitalization. In the event of any Stock dividend or
----------------------------
Stock split, recapitalization (including, without limitation, the payment of an
extraordinary cash dividend), merger, consolidation, combination, spin-off,
distribution of assets to stockholders, exchange of shares, or other similar
corporate change or other similar event that affects the Stock such that an
adjustment is required to preserve, or to prevent enlargement of, the benefits
or potential benefits made available under this Plan, then the Committee shall,
in such manner as the Committee shall deem equitable, adjust any or all of (i)
-
the number and kind of shares which thereafter may be optioned and sold under
the Plan (including, without termination, adjusting the limits on the number and
types of Options that may be made under the Plan), (ii) the number and kinds of
--
shares subject to outstanding Options and (iii) the exercise price with respect
---
to any of the foregoing. Additionally, the Committee may make provisions for a
cash payment to a Participant or a person who has an outstanding Option.
However, the number of shares subject to any Option shall always be a whole
number.
-4-
<PAGE>
5. Stock Options
(a) Grant of Options. Options may be granted to Participants at such time
----------------
or times as shall be determined by the Committee. Options granted under the
Plan may be of two types: (i) Incentive Stock Options and (ii) Nonstatutory
- --
Stock Options, provided that no Incentive Stock Option shall be granted to any
--------
Employee who is not eligible to receive such an Option under Section 422 of the
Code and the regulations thereunder. The Committee shall have complete
discretion in determining the number of Options, if any, to be granted to a
Participant. Without limiting the foregoing, the Committee may grant Options
containing provisions for the issuance to the Participant, upon exercise of such
Option and payment of the exercise price therefor with previously owned shares
of Stock, of an additional Option for the number of shares so delivered. Each
Option shall be evidenced by an Option agreement that shall specify the type of
Option granted, the exercise price, the duration of the Option, the number of
shares of Stock to which the Option pertains, and such other terms and
conditions not inconsistent with the Plan as the Committee shall determine.
(b) Option Price. Unless otherwise determined by the Committee at the time
------------
of grant, Options granted pursuant to the Plan shall have an exercise price
which is not less than the Fair Market Value of a share of Stock on the date the
Option is granted.
(c) Exercise of Options. Options awarded under the Plan shall be
-------------------
exercisable at such times and shall be subject to such restrictions and
conditions including the performance of a minimum period of service or the
satisfaction of performance goals, as the Committee may impose, either at or
after the time of grant of such Options; provided that no Option shall be
-------------
exercisable for more than 10 years after the date on which it is granted.
(d) Payment. The Committee shall establish procedures governing the
-------
exercise of Options. No shares shall be delivered pursuant to any exercise of
an Option unless arrangements satisfactory to the Committee have been made to
assure full payment of the option price therefor. Without limiting the
generality of the foregoing, the Committee may provide, on such terms and
conditions as the Committee determines appropriate, that payment of the option
price may be made (i) in cash or its equivalent, (ii) by exchanging shares of
- --
Stock owned by the optionee (which are not the subject of any pledge or other
security interest), (iii) through an arrangement with a broker approved by the
---
Company whereby payment of the exercise price is accomplished with the proceeds
of the sale of Stock or (iv) by any combination of the foregoing, provided that
-- -------------
the combined value of all cash and cash equivalents paid and the Fair Market
Value of any such Stock so tendered to the Company, valued as of the date of
such tender, is at least equal to such option price.
(e) Termination of Employment Due to Death, Disability or Retirement.
----------------------------------------------------------------
Unless otherwise determined by the Committee at the time of grant, in the event
a Participant's employment terminates by reason of death, Disability or
Retirement, any Options granted to such Participant which are exercisable at the
date of his or her death, Disability or Retirement may be exercised at any time
prior to the earlier of the expiration of the term of the Options or within one
(1) year (or such other period as the Committee shall determine at the time of
grant) following the Participant's termination of employment. Unless otherwise
determined by the Committee at the time of grant,
-5-
<PAGE>
and Options which have not become exercisable in accordance with the terms
thereof shall be cancelled upon the Participant's termination of employment.
(f) Termination of Employment for Any Other Reason. Unless otherwise
----------------------------------------------
determined by the Committee at or after the time of grant, in the event the
employment of the Participant shall terminate for any reason other than those
described in Section 5(e), any Options granted to such Participant which are
exercisable at the date of the Participant's termination of employment shall be
exercisable at any time prior to the earlier of the expiration of the term of
the Options or the sixtieth day following the Participant's termination of
employment; provided that, if a Participant's employment is terminated for
-------------
Cause, all Options granted to such Participant which are then outstanding shall
be immediately forfeited (whether or not then exercisable).
(g) Incentive Stock Options. The terms of this Plan relating to Incentive
-----------------------
Stock Options shall be interpreted so as to qualify the Plan under Section 422
of the Code to the fullest extent possible.
(h) Buyout. The Committee may at any time offer to buy out an Option
------
previously granted for a payment in cash, based on such terms and conditions as
the Committee shall establish and communicate to the optionee at the time that
such offer is made.
6. Change in Control
(a) Accelerated Vesting and Payment. Subject to the provisions of Section
-------------------------------
6(b) below, in the event of a Change in Control, each Option shall be, at the
discretion of the Committee, either canceled in exchange for a payment in cash
of an amount equal to the excess, if any, of the Change in Control Price over
the exercise price for such Option, or fully exercisable regardless of the
exercise schedule otherwise applicable to such Option.
(b) Alternative Options. Notwithstanding Section 6(a), no cancellation,
-------------------
acceleration of exercisability, vesting, cash settlement or other payment shall
occur with respect to any Option if the Committee reasonably determines in good
faith prior to the occurrence of a Change in Control that such Option shall be
honored or assumed, or new rights substituted therefor (such honored, assumed or
substituted option hereinafter called an "Alternative Option"), by a
Participant's employer (or the parent or a Subsidiary of such employer)
immediately following the Change in Control, provided that any such Alternative
Option must:
(i) provide such Participant (or each Participant in a class of
Participants) with rights and entitlements substantially equivalent to or
better than the rights, terms and conditions applicable under such Option,
including, but not limited to, an identical or better exercise or vesting
schedule and identical or better timing and methods of payment;
(ii) have substantially equivalent economic value to such Option
(determined at the time of the Change in Control);
-6-
<PAGE>
(iii) have terms and conditions which provide that in the event that
the Participant's employment is involuntarily terminated or constructively
terminated, any conditions on a Participant's rights under, or any
restrictions on transfer or exercisability applicable to, each such
Alternative Option shall be waived or shall lapse, as the case may be.
For this purpose, a constructive termination shall mean a termination by a
Participant following a material reduction in the Participant's base salary or a
Participant's incentive compensation opportunity or a material reduction in the
Participant's responsibilities, in any such case without the Participant's
written consent.
7. Amendment, Modification, And Termination of Plan
The Board at any time may terminate or suspend the Plan, and from time to
time may amend or modify the Plan, except that no amendment, modification, or
-----------
termination of the Plan shall in any manner adversely affect any Option
theretofore granted under the Plan, without the consent of the Participant to
whom such Option was granted. Notwithstanding the foregoing, the Board may not
increase the total number of shares of Stock subject to the Plan without such
shareholder approval as is necessary to preserve any applicable Incentive Stock
Option treatment (except pursuant to Section 4(c)).
8. Miscellaneous Provisions
(a) Nontransferability of Options. Unless the Committee shall permit (on
-----------------------------
such terms and conditions as it shall establish) an Option to be transferred to
a member of the Participant's immediate family or to a trust or similar vehicle
for the benefit of such immediate family members (collectively, the "Permitted
Transferees"), no Option shall be assignable or transferable except by will or
the laws of descent and distribution, and except to the extent required by law,
no right or interest of any Participant shall be subject to any lien, obligation
or liability of the Participant. All rights with respect to Options granted to
a Participant under the Plan shall be exercisable during his lifetime only by
such Participant or, if applicable, the Permitted Transferees. The rights of a
Permitted Transferee shall be limited to the rights conveyed to such Transferee,
who shall be subject to and bound by the terms of the agreement or agreements
between the Participant and the Company.
(b) Beneficiary Designation. Each Participant under the Plan may from time
-----------------------
to time name any beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid or by whom any
right under the Plan is to be exercised in case of his death. Each designation
will revoke all prior designations by the same Participant, shall be in a form
prescribed by the Committee, and will be effective only when filed by the
Participant in writing with the Committee during his lifetime. In the absence
of any such designation, benefits remaining unpaid at the Participant's death
shall be paid to or exercised by the Participant's surviving spouse, if any, or
otherwise to or by his or her estate.
(c) No Guarantee of Employment or Participation. Nothing in the Plan shall
-------------------------------------------
interfere with or limit in any way the right of the Company, or any Subsidiary
to terminate any Participant's
-7-
<PAGE>
employment at any time, nor to confer upon any Participant any right to continue
in the employ of the Company, or any Subsidiary. No Employee shall have a right
to be selected as a Participant, or, having been so selected, to receive any
future Options.
(d) Tax Withholding. The Company shall have the right to deduct from all
---------------
amounts paid to a Participant in cash (whether under this Plan or otherwise) any
taxes required by law to be withheld in respect of Options under this Plan. No
shares shall be issued pursuant to any Option unless and until arrangements
satisfactory to the Committee shall have been made to satisfy any withholding
tax obligations applicable with respect to such Option. Without limiting the
generality of the foregoing, the Company shall have the right to retain, or the
Committee may, subject to such terms and conditions as it may establish from
time to time, permit Participants to elect to tender, Stock (including Stock
issuable in respect of an Option) to satisfy, in whole or in part, the amount
required to be withheld.
(e) Compliance with Legal and Exchange Requirements. The Plan, the
-----------------------------------------------
granting and exercising of Options thereunder, and the other obligations of the
Company under the Plan, shall be subject to all applicable Federal and State
laws, rules, and regulations, and to such approvals by any regulatory or
governmental agency as may be required. The Company, in its discretion, may
postpone the granting and exercising of Options, the issuance or delivery of
Stock under any Option or any other action permitted under the Plan to permit
the Company, with reasonable diligence, to complete such stock exchange listing
or registration or qualification of such Stock or other required action under
any Federal or State law, rule, or regulation and may require any Participant to
make such representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of Stock in compliance
with applicable laws, rules, and regulations. The Company shall not be
obligated by virtue of any provision of the Plan to recognize the exercise of
any Option or to otherwise sell or issue Stock in violation of any such laws,
rules, or regulations; and any postponement of the exercise of any Option under
this provision shall not extend the term of such Options, and neither the
Company nor its directors or officers shall have any obligation or liability to
the Participant with respect to any Option (or Stock issuable thereunder) that
shall lapse because of such postponement.
(f) Indemnification. Each person who is or shall have been a member of the
---------------
Committee or of the Board shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be made a party or in which he may
be involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him in settlement thereof, with the
Company's approval, or paid by him in satisfaction of any judgment in any such
action, suit, or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive and shall be independent of any other
rights of indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or By-laws, by contract, as a matter of law,
or otherwise.
-8-
<PAGE>
(g) Effective Date. The Plan shall be effective on November 1, 1999.
--------------
No Options may be granted under the Plan after November 1, 2009.
(h) No Limitation on Compensation. Nothing in the Plan shall be construed
-----------------------------
to limit the right of the Company to establish other plans or to pay
compensation to its employees, in cash or property, in a manner which is not
expressly authorized under the Plan.
(i) Deferrals. The Committee may postpone the exercising of Options, the
---------
issuance or delivery of Stock under any Option or any action permitted under the
Plan to prevent the Company or any Subsidiary from being denied a Federal income
tax deduction with respect to any Option other than an Incentive Stock Option.
(j) Governing Law. The Plan shall be construed in accordance with and
-------------
governed by the laws of the State of New York, without reference to principles
of conflict of laws which would require application of the law of another
jurisdiction, except to the extent that the corporate law of the State of
Delaware specifically and mandatorily applies.
(k) No Impact On Benefits. Except as may otherwise be specifically stated
---------------------
under any employee benefit plan, policy or program, no amount payable in respect
of any Option shall be treated as compensation for purposes of calculating an
Employee's right under any such plan, policy or program.
(l) No Constraint on Corporate Action. Nothing in this Plan shall be
---------------------------------
construed (i) to limit, impair or otherwise affect the Company's right or power
-
to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure, or to merge or consolidate, or dissolve,
liquidate, sell, or transfer all or any part of its business or assets or (ii)
--
except as provided in Section 7, to limit the right or power of the Company, or
any Subsidiary to take any action which such entity deems to be necessary or
appropriate.
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<PAGE>
EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our reports as of the dates and relating
to the financial statements of the companies listed below.
Company Date of Report
------- --------------
iXL Enterprises, Inc. February 5, 1999
BoxTop Interactive, Inc. October 3, 1997
We also consent to the application of our report on iXL Enterprises, Inc. to the
Financial Statement Schedules for the period from May 1, 1996 (commencement of
operations) through December 31, 1996 and the years ended December 31, 1997 and
1998 listed under Item 16(b) of this Registration Statement when such schedules
are read in conjunction with the financial statements referred to in our report.
The audits referred to in such report also included these schedules. We also
consent to the references to us under the heading "Experts" in such Prospectus.
PricewaterhouseCoopers LLP
Atlanta, Georgia
November 4, 1999
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the use in this Amendment No. 1 to the Registration
Statement on Form S-1 of our report dated May 4, 1999, relating to the financial
statements of Tessera Enterprise Systems, Inc., which appears in such
Registration Statement. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 4, 1999
