<PAGE>
As filed with the Securities and Exchange Commission on March 15, 2000
Registration Statement No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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INTRALINKS, INC.
(Exact name of registrant as specified in its charter)
Delaware 7374 13-3899047
(Primary Standard Industrial (I.R.S. Employer
(State or other Classification Code Number) Identification Number)
jurisdiction of
incorporation or
organization)
----------------
1372 Broadway, 12A
New York, New York 10018
(212) 543-7700
(Address, including zip code, and telephone number,including area code, of
registrant's principal executive offices)
Mark S. Adams
Chairman and Chief Executive Officer
IntraLinks, Inc.
1372 Broadway, 12A
New York, New York 10018
(212) 543-7700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Stephen M. Davis, Esq. Alan Dean, Esq.
Heller Ehrman White & McAuliffe LLP Davis Polk & Wardwell
711 Fifth Avenue 450 Lexington Avenue
New York, New York 10022 New York, New York 10017
(212) 832-8300 (212) 450-4000
Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after the effective date of the Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
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, as amended (the "Securities Act"), other than securities being offered
only in connection with dividend or interest reinvestment plans, 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 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. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of Each Class of Securities Proposed Maximum Amount of
to be Registered Aggregate Offering Price Registration Fee
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<S> <C> <C>
Common Stock, par value $.01 per
share........................... $50,000,000 (1) $13,200
</TABLE>
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act.
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 THE 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>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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 we are not soliciting offers to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Prospectus
Subject to Completion
Dated , 2000
[LOGO OF INTRALINKS/TM/]
Shares
Common Stock
IntraLinks, Inc. is offering shares of our common stock. This is our
initial public offering and no public market currently exists for our common
stock. We estimate that the initial public offering price will be between $
and $ per share.
We have filed an application to qualify the common stock for quotation on the
Nasdaq National Market under the symbol "ILNX."
Investing in our common stock involves risks. See "Risk Factors" beginning on
page 5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
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<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Public Discounts IntraLinks
- --------------------------------------------
<S> <C> <C> <C>
Per Share $ $ $
- --------------------------------------------
Total $ $ $
</TABLE>
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IntraLinks has granted the underwriters the right to purchase up to an
additional shares of common stock to cover overallotments.
J.P. Morgan & Co.
Banc of America Securities LLC
William Blair & Company
, 2000
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Prospectus Summary......................... 1
Risk Factors............................... 5
Use of Proceeds............................ 15
Dividend Policy............................ 15
Forward-looking Statements................. 15
Capitalization............................. 16
Dilution................................... 18
Selected Consolidated Financial
Information............................... 19
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................ 22
Business................................... 27
</TABLE>
<TABLE>
<S> <C>
Management......................... 41
Certain Relationships and Related
Transactions...................... 47
Principal Stockholders............. 51
Description of Capital Stock....... 53
Underwriting....................... 56
Shares Eligible For Future Sale.... 58
Legal Matters...................... 60
Experts............................ 60
Available Information.............. 60
Index to Consolidated Financial
Statements........................ F-1
</TABLE>
----------------
In deciding whether to buy our common stock, you should rely only on the
information contained in this prospectus. To understand this offering fully,
you should read this entire prospectus carefully, including the consolidated
financial statements and related notes. We have not authorized anyone to
provide you with information different from that contained in this prospectus.
We are offering to sell, and seeking offers to buy, shares of common stock only
in jurisdictions where offers and sales are permitted. The information
contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any
sale of the common stock.
Until , 2000, all dealers that buy, sell or trade IntraLinks common
stock, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
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DealSpace(TM) , IntraLoan(TM), IntraTrials(TM), IntraLinks ASAP(TM), DealSpace
AT(TM), Aquisition Trustee(TM), DataRoom(TM), IntraAgency(TM),
PharmaSource(TM), PharmaSpace(TM) and Is it work if you love it?(TM) are
trademarks of IntraLinks. Other marks used in this prospectus belong to their
respective indicated owners.
<PAGE>
Prospectus Summary
This summary may not contain all of the information that may be important to
you. You should read the entire prospectus, especially the discussion of "Risk
Factors" and the consolidated financial data and related notes, before making
an investment decision. The terms "we" and "IntraLinks" mean IntraLinks, Inc.
and its subsidiaries. Unless otherwise indicated, all information in this
prospectus assumes that the underwriters do not exercise their over-allotment
option and assumes that all outstanding shares of our preferred stock are
converted into common stock and all warrants to purchase shares of preferred
stock become exercisable for common stock, immediately prior to the closing of
this offering.
Overview
IntraLinks provides services that enable business-to-business collaboration and
secure messaging over the Internet. We provide Internet-based, secure
environments in which members of a community of interest--for example bankers,
lawyers and accountants working together on a public financing--can exchange
information and communicate within a framework that enhances collaboration and
more rapid completion of high-value projects. Our services integrate our
software applications designed for managing critical business-to-business
communication with high levels of security and global 24-hour customer support
to provide a comprehensive and easily outsourced service.
To accelerate adoption of our services, we work with industry leaders to design
and promote our services. We seek to establish our services as industry
standards within the markets we target. We have established our services as a
standard for syndicated corporate loan transactions, where our services were
used to help manage approximately 35% of all domestically originated loan
syndications in the fourth quarter of 1999. During 1999, 22 of the top 25
syndicated lenders, as ranked by Loan Pricing Corporation, used IntraLinks to
facilitate their transactions. Our goal is to become the leading provider of
Internet-based services for business-to-business collaboration and secure
messaging across a broad range of markets.
Each secure environment we establish has the capability to address business
processes of varying degrees of complexity. For example, our DealSpace service
facilitates the complex business processes underlying global corporate finance
or public financings, while IntraLinks ASAP enables secure transmission of
basic business-to-business messaging. Our initial target market for IntraLinks
ASAP is the 56 million worldwide users of Lotus Notes.
By fostering enhanced collaboration and stronger links among communities of
interest, our solutions enable substantial increases in employee productivity
and decreases in project cycle time. In addition, our clients report that the
use of our services results in significant cost savings by reducing the
inefficiencies and administrative burdens associated with paper-based and other
traditional means of communication.
Our solutions enable businesses to:
. rapidly exchange and efficiently manage large volumes of business-
critical information;
. enhance collaboration among dispersed project group members and
communities of interest;
. combine standard Internet access with high levels of security;
. control and monitor users' access to information; and
. manage project assignments and monitor progress and completion.
Our services can best benefit markets with business processes characterized by:
. multiple collaborating parties;
. large volumes of information;
. repeated cycles of revision and review of documents; and
. need for high levels of security.
We currently serve the financial services, legal, technology and professional
services markets. In 1999, we entered the pharmaceutical market, and we have
targeted the insurance sector as another market that can benefit from our
services. We distribute our services through our direct sales force and through
remarketers. As of February 29, 2000, we had 98 customers, including our
strategic partners The Chase Manhattan Corporation, Ernst & Young LLP and The
R.W. Johnson Pharmaceutical Research Institute, or RWJ-PRI, an affiliate of
Johnson & Johnson.
1
<PAGE>
The Offering
<TABLE>
<C> <S>
Common Stock Offered............. shares
Common Stock to be Outstanding shares
after the Offering..............
Over-allotment Option............ shares
Use of Proceeds.................. For general corporate purposes, including
working capital, expansion of sales and
marketing capabilities and capital
expenditures.
Proposed Nasdaq National
Market Symbol................... "ILNX"
</TABLE>
The outstanding share information above is based on shares outstanding as of
December 31, 1999 and excludes:
. 2,379,488 shares of common stock issuable as of December 31, 1999 upon
exercise of outstanding options granted pursuant to our stock incentive
plan, 402,544 of which are exercisable;
. 1,120,512 additional shares of common stock reserved for future option
grants under our stock incentive plan;
. 1,111,262 shares of stock issuable as of December 31, 1999 upon exercise
of outstanding warrants, 986,988 of which will be exercisable upon
consummation of this offering; and
. shares of common stock issuable upon exercise of the underwriters'
over-allotment option in connection with this offering.
Our principal executive office is located at 1372 Broadway, New York, New York
10018, and our telephone number is (212) 543-7700. Our corporate Internet site
address is www.intralinks.com. We also maintain primary Internet sites at
www.intralinkspharma.com and www.loaninvestor.com. Information contained on any
of our Internet sites is not part of this prospectus.
2
<PAGE>
Summary Consolidated Financial Information
The following table contains summary consolidated financial information. You
should read this information together with our consolidated financial
statements and related notes beginning on page F-1 of this prospectus and the
information under "Selected Consolidated Financial Information" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
The following data is presented:
. on an actual basis;
. on a pro forma basis to give effect to:
. the recognition of approximately $5,054,000 of expense at the closing
of the offering in connection with the immediate vesting of
previously contingent warrants to purchase 468,000 common shares.
Such amount will be recorded as a non-cash dividend to the Company's
Series D preferred stockholder. For purposes of the pro forma data,
the amount of the dividend using a Black-Scholes pricing model is
based on a value of $17.00 per share, which is the price paid in the
Company's recent private placement of Series F redeemable convertible
preferred stock. The actual amount of the dividend will be determined
using the initial public offering price upon the consummation of the
offering. Each $1 change in the initial public offering price will
affect this dividend by approximately $426,000;
. the issuance of 882,354 shares of Series F redeemable convertible
preferred stock at $17.00 per share during the first quarter of 2000
for net proceeds of $14.9 million;
. the issuance of 1,050,000 fully vested Series F warrants granted to
The Chase Manhattan Corporation in connection with the Series F
financing in January 2000 and the execution of an enterprise service
agreement. The $7.5 million value ascribed to the warrants,
calculated using a Black-Scholes pricing model, will be recorded as a
partner advance;
. the automatic conversion on a one-for-one basis of all of our
outstanding shares of convertible preferred stock into 7,093,974
shares of common stock upon the closing of this offering; and
. on a pro forma as adjusted basis to give effect to the sale of, and the
application of the net proceeds from, shares of common stock in
this offering, assuming an initial public offering price of $ per
share.
3
<PAGE>
---------------------------------------
<TABLE>
<CAPTION>
Period from
June 13, 1996
(inception) Years Ended December 31,
to December ----------------------------------
31, 1996 1997 1998 1999
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Dollars in thousands, except
share and per share data
Consolidated Statements of
Operations Data
Revenues.................... $ -- $ 112 $ 980 $ 4,450
Cost of revenues............ -- 374 1,776 4,659
-------- ---------- ---------- ----------
Gross loss................ -- (262) (796) (209)
-------- ---------- ---------- ----------
Operating expenses:
General and
administrative........... 202 1,143 2,179 5,542
Sales and marketing....... -- 208 2,155 5,338
Product development....... 300 439 1,956 3,036
Amortization of intangible
assets................... -- -- -- 336
-------- ---------- ---------- ----------
Total operating
expenses............... 502 1,790 6,290 14,252
-------- ---------- ---------- ----------
Loss from operations.. (502) (2,052) (7,086) (14,461)
Interest income (expense),
net ....................... -- (33) 11 943
-------- ---------- ---------- ----------
Net loss.............. (502) (2,085) (7,075) (13,518)
Cumulative dividends on
redeemable convertible
preferred stock............ -- (14) (702) (3,279)
Dividends in connection with
modification of dividend
rights of Series C
preferred stockholders..... -- -- -- (1,370)
Dividends in connection with
the beneficial conversion
feature associated with
Series D preferred stock... -- -- -- (1,855)
-------- ---------- ---------- ----------
Net loss attributable to
common shareholders........ $ (502) $ (2,099) $ (7,777) $ (20,022)
======== ========== ========== ==========
Basic and diluted net loss
per common share........... $ (0.97) $ (1.90) $ (6.62) $ (16.54)
======== ========== ========== ==========
Weighted average shares
outstanding used in basic
and diluted net loss per
common share calculation... 515,000 1,102,500 1,175,000 1,210,584
======== ========== ========== ==========
Pro forma:
Net loss attributable to
common stockholders...... $ (20,022)
Cumulative dividends in
connection with the
vesting of contingent
Series D preferred stock
warrants................. (5,054)
----------
Pro forma net loss
attributable to common
stockholders............. $ (25,076)
==========
Pro forma basic and
diluted net loss per
common share............. $ (3.94)
==========
Shares used in pro forma
basic and diluted net
loss per common share
calculation.............. 6,363,963
==========
</TABLE>
Shares used in computing pro forma basic and diluted net loss per common share
include the shares used in computing basic and diluted net loss per common
share, adjusted for the conversion of all of our outstanding convertible
preferred stock to common stock as if the conversion occurred at the date of
its original issuance.
--------------------------
<TABLE>
<CAPTION>
As of December 31, 1999
-----------------------------
Pro Pro Forma
Actual Forma As Adjusted
-------- ------- -----------
Dollars in thousands
<S> <C> <C> <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents......................... $ 21,735 $36,635 $
Working capital................................... 21,641 36,541
Total assets...................................... 31,764 54,182
Redeemable preferred stock........................ 53,371 --
Total stockholders' equity (deficit) ............. (25,116) 50,673
</TABLE>
4
<PAGE>
Risk Factors
You should carefully consider the risks described below before deciding to
purchase shares of our common stock. The risks described below are not the only
ones that we face. Any of the following risks may materially and adversely
affect our business, financial condition or results of operations. The trading
price of our common stock could decline as a result of these risks, and you
could lose all or part of your investment.
This prospectus contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of a number of
factors, including the risks described below and elsewhere in this prospectus.
See "Forward-looking Statements."
Risks Relating to our Business
We have an extremely limited operating history and are subject to the risks of
start-up companies.
We began operations in June 1996 and did not generate revenue until the second
quarter of 1997. Consequently, we have an extremely limited operating history
and our prospects are subject to the risks and uncertainties frequently
encountered by start-up companies, particularly in the new and rapidly evolving
markets for Internet services. These risks include:
. our ability to increase penetration of our existing client base;
. our ability to make our services a standard for managing business
communication in the industries that we target;
. competition from companies with greater financial and other resources or
products or services similar or superior to ours;
. whether businesses will widely adopt the Internet as a means for
managing their business communication;
. our ability to maintain our market position through enhancement of our
services; and
. our ability to identify, attract, retain and motivate qualified
personnel.
We may not be successful in addressing these risks, and our failure to do so
could harm our ability to provide our services or become profitable.
We have a history of losses, expect to incur future losses and may not be able
to achieve profitability.
We have a history of losses and anticipate that we will continue to incur net
losses. As of December 31, 1999, we had an accumulated deficit of approximately
$23.2 million. We currently expect to increase our operating expenses
significantly in connection with expansion of our sales and marketing
operations and continued development of our services. In order for our business
to become profitable, we will need to significantly increase the revenues we
generate from providing our services. We may never generate enough revenue to
achieve profitability.
Our operating results are likely to fluctuate, which may have an impact on our
stock price.
Our operating results have varied significantly from quarter to quarter and are
likely to vary significantly from quarter to quarter in the future. As a
result, our operating results may fall below market analysts' expectations in
some future quarters, which could lead to downturns in the market price of our
stock. Quarterly fluctuations may result from factors such as:
. changes in demand for our services;
. rate of penetration of our existing client base;
. obtaining new clients or loss of current clients;
5
<PAGE>
. changes in service fees paid by users;
. changes in our operating expenses;
. software "bugs" or other product quality problems;
. increased competition;
. the seasonality of the corporate finance market; and
. general economic conditions.
Based upon all of these factors, we believe that our quarterly operating
results are likely to vary significantly in the future, that period-to-period
comparisons of results of operations are not necessarily meaningful and that,
as a result, such comparisons should not be relied upon as indications of
future performance.
We currently receive a substantial portion of our revenue from a single
product, IntraLoan, and our failure to successfully market additional products
could prevent us from becoming profitable.
We currently derive a substantial majority of our revenue from IntraLoan, a
service used by banks to facilitate corporate loan syndications. We expect that
IntraLoan-related revenue will continue to account for a substantial majority
of our revenue for the foreseeable future. A decline in demand for IntraLoan as
a result of competition, technological change, a reduction in the number of
syndicated corporate loans or other factors would harm our future results of
operations and financial condition and could keep us from becoming profitable.
We currently depend on the corporate loan market for a substantial majority of
our revenue, making our operating results sensitive to fluctuations in that
market.
We currently depend on the corporate loan market for a substantial majority of
our revenue. We generally charge our clients a fee for each syndicated loan
transaction in which our IntraLoan service is used. Our fee is based on the
number of unique individuals who are given access to the secure environment
established for managing the loan syndication process. As a result, our
revenues are sensitive to the number of new syndicated loan transactions, the
number of banks participating in new syndicates and the number of loan
transactions using our services. The level of syndication activity in the
corporate loan market is sensitive to interest rates, regulatory policies,
general economic conditions and other factors beyond our control. A decrease in
syndicated loan activity could decrease the use of our services.
We rely on a small number of clients for substantially all of our revenue, and
our operating results may suffer if these clients' business were reduced or
discontinued.
A small number of our clients account for a substantial amount of our revenue.
In 1999, our five largest clients accounted for 52% of our revenue, and Chase
Manhattan Bank accounted for 29% of our revenue. We cannot be certain that our
top five clients, or other clients, will continue to use our products and
services for their transactions. Our revenue would decrease if any of our
significant clients were to reduce or discontinue their use of our services.
If our new pricing model is not acceptable to the marketplace, we will not be
able to generate enough revenues to be profitable.
Historically, we have marketed our services on a per-transaction basis with no
long-term commitments. In February 2000, we began marketing our services under
one-year enterprise service agreements containing minimum fee requirements
whether or not our services are used. We cannot assure you that this type of
long-term commitment will be accepted commercially.
We need to expand into and increase our penetration in additional markets, or
we may be unable to generate enough revenues to become profitable.
We believe our success depends on expanding the number of industries that use
our services. We have developed DealSpace to extend our services beyond the
loan syndication market to capital markets and business transactions in the
corporate finance, professional services and legal and pharmaceutical
industries. We
6
<PAGE>
cannot assure you, however, that we will be successful in expanding the use of
our collaboration services in these industries. Although we are developing a
specialized service for use in the pharmaceuticals industry, we cannot assure
you that we will be able to introduce this service on a timely basis or that it
will be accepted by the drug trials industry. In addition, in January 2000 we
launched IntraLinks ASAP, a secure messaging service for business-to-business
communication. However, we cannot assure you that IntraLinks ASAP will be
accepted commercially. We cannot be certain that we will be successful in
developing other new services that achieve market acceptance.
If we are unable to establish our brand name, we may not be able to generate
sufficient business to become profitable.
We believe that establishing and maintaining our brand identity will be
important for expanding our client base in our existing markets and will make
it easier for us to expand our services into new markets. We do not have a
recognizable brand identity outside of the commercial loan industry. We are
currently developing and implementing an advertising program that will increase
our marketing expenditures significantly and which may not be effective in
further developing our brand identity in new or existing markets. If we are
unable to provide high quality services, or if we provide new services that are
not favorably received, we will diminish the value of our brand names.
We need to build and convert our present technology platform to a new
technology platform in order to accomodate any significant growth.
We believe that our ability to accomodate significant growth depends on our
ability to convert our services from our existing Lotus Domino platform to our
new Unix/Oracle database platform. We expect to complete this conversion during
the second half of 2000. We have incurred and will continue to incur
substantial expenses to develop the new architecture and delivery platform,
while sustaining expenses to keep the existing Lotus platform operational. If
we are unable to build our new scalable platform and convert our services
successfully or on a timely basis, we may not be able to handle increased
customer demand for our services, which may result in transaction delays for
our clients.
Businesses may not broadly accept Internet-based services to manage business-
to-business communication, which may prevent us from growing or expanding our
service offerings.
Our business model is new and unproven, and our success depends on the
willingness of businesses to manage collaboration and document-intensive
business processes using the Internet instead of traditional management and
physical distribution methods. Businesses may be reluctant to adopt Internet
solutions due to concerns about security, reliability or other factors. In
addition, we cannot be certain that businesses will accept our model of
providing our software as part of a service integrating hosting, security,
backup and customer service which is billable to our clients on a per-
transaction or a subscription basis as opposed to a direct license of the
software to the end-user. As a result, widespread conversion from traditional
physical methods of communication to electronic methods may not occur as
rapidly as we expect or at all.
We need to expand our sales force and distribution channels in order to
increase market awareness of our services and generate increased revenue.
We must expand our direct and indirect sales operations to increase market
awareness of our services, expand in those markets we have begun to penetrate,
reach new markets and generate increased revenue. We have recently expanded our
direct sales force and plan to hire additional sales personnel. Our services
require a sophisticated sales effort targeted at the senior management of our
prospective clients. We cannot be certain that our recent hires will become as
productive as necessary or that we will be able to hire enough qualified
individuals in the future. New hires will require training and take time to
achieve full productivity. We have begun to develop relationships with third-
party resellers to strengthen our selling efforts. We cannot be certain that
our third-party resellers will be able to market our services successfully or
devote the necessary resources to do so.
7
<PAGE>
We rely on unproven strategic alliances for growth, and the failure of these
alliances may prevent our growth or harm our future operating results.
Our prospects will depend significantly upon, among others, our strategic
relationships with:
. The Chase Manhattan Corporation. In connection with their equity
investment in January 2000, Chase Manhattan, our largest customer,
entered into an enterprise service agreement with us under which Chase
Manhattan agreed to use its best efforts to help us reach specified
revenue targets for our services and granted to us first option rights
to provide our services to its Global Investment Bank segment if it
should decide to utilize those types of services. This agreement does
not require Chase Manhattan to purchase any minimum amount of our
services or to expand the use our services to its Global Investment Bank
segment.
. Ernst & Young LLP. In April 1999, we entered into a marketing agreement
with Ernst & Young, under which Ernst & Young undertook to market our
services to its clients. The agreement does not establish minimum
performance requirements for Ernst & Young. We must rely on Ernst &
Young's voluntary efforts to pursue our joint goals. We cannot be
certain that Ernst & Young's marketing activities on our behalf, if any,
will benefit us.
. The R.W. Johnson Pharmaceutical Research Institute. In June 1999, we
entered into a collaboration and service agreement with RWJ-PRI, under
which we agreed to develop and host for RWJ-PRI a secure Internet-based
workspace for pharmaceutical research and development activities called
PharmaSpace. Under the agreement, RWJ-PRI has paid us $500,000. This
agreement does not establish minimum performance requirements for RWJ-
PRI or require them to use PharmaSpace. The collaboration and service
agreement expires three years after RWJ-PRI accepts the fully developed
site from us and may be terminated by them at any time. We cannot be
certain that RWJ-PRI's activities, if any, to develop or promote
PharmaSpace will generate enough revenue for us to make the alliance
beneficial or that its use of the site will generate meaningful revenue
for us.
. IBM Global Services. In January 2000, we entered into a non-exclusive
agreement with IBM to market our IntraLinks ASAP application to users of
Lotus Notes. This agreement does not establish minimum performance
requirements for IBM. We cannot assure you that IBM's activities under
the agreement will benefit us.
See "Business--Strategic Alliances and Collaborations" for a more complete
discussion of our current strategic relationships. The relationships described
above are new and as yet unproven. We plan to continue actively seeking
strategic partners, and we will rely on such partnerships to generate a
significant portion of our growth. Our strategic partners, however, may not
view their relationships with us as significant for their own businesses, and
they may reassess their commitment to us in the future. We cannot assure you
that our current or any future strategic relationships will help us to generate
significant levels of revenue or will not be terminated or expire. We also
cannot assure you that after termination a former strategic partner would not
begin to compete with us. In any of these events, our ability to become
profitable could be jeopardized.
Our prospects depend on our ability to succeed against intense competition in
the electronic business-to-business communication management market.
The business-to-business online communication management market is increasingly
competitive. We currently or potentially compete with a variety of other
companies, including, among others, fax service companies, courier services,
financial printers and law firms and other service companies, many of which
offer, in conjunction with their principal services, online communication
management services to clients who may also use our services. We cannot be
certain that we will maintain our competitive position against current and
potential competitors, especially the significant number of competitors with
greater name recognition and client bases and greater financial, marketing,
service, support, technical and other resources than ours. We have not yet had
to face significant direct competition from other companies offering business-
to-business communication management services over the Internet. However, the
business-to-business online communication management market has generally low
technological and financial barriers to entry, and we expect that such
competition will develop and it may harm our business or keep us from becoming
profitable.
8
<PAGE>
In addition, we compete indirectly with the in-house online communication
management capabilities of our clients. Many of our existing and potential
clients continually evaluate purchasing our services against developing similar
services in-house, on the basis of such considerations as cost, security, ease
of use and administration, flexibility and responsiveness of service.
Many of our competitors may be able to respond more quickly to new or emerging
technologies and changes in client requirements, and to devote greater
resources to the development, promotion and sale of their products and services
than we can. It is possible that our current or potential competitors will
develop Internet-based services superior to those we have developed or adapt
more quickly than we have to new technologies, evolving industry trends or
changes in client requirements. Our market is still evolving and we cannot be
certain that we will be able to compete successfully with current or future
competitors, or that competitive pressures faced by us will not harm our
business or keep us from becoming profitable.
Our future success currently depends on the services of a small number of key
personnel, and the loss of some or all of these persons may harm our future
operating results.
Our future operating results depend in significant part upon the continued
services of our senior management and key technical personnel, particularly the
following key employees:
. Mark S. Adams, Chairman and Chief Executive Officer;
. James P. Dougherty, President and Chief Operating Officer;
. John M. Muldoon, Chief Financial Officer, Chief Administrative Officer
and Treasurer;
. Leonard G. Goldstein, Chief Information Officer;
. Patrick J. Wack, Executive Vice President-Business Development;
. Myles Trachtenberg, Chief Technology Officer; and
. Gene W. Fuller, Executive Vice President-Worldwide Sales.
IntraLinks has an employment agreement with Mr. Adams which expires on
December 31, 2002. We also have employment agreements with each of
Messrs. Dougherty, Muldoon, Goldstein, Wack, Trachtenberg, and Fuller. These
agreements all expire in early 2002. While members of senior management are
parties to non-competition and non-disclosure agreements, we cannot assure you
that these key personnel and others will not leave IntraLinks or compete with
us, which could impact our ability to grow or operate our business or become
profitable. In addition, we have purchased key person life insurance only on
Mr. Adams and Mr. Wack.
Our success also depends upon our ability to attract, assimilate, and retain
other highly qualified technical, sales and managerial and service personnel in
the future. We cannot assure you that we will be able to attract and retain
such personnel or that we will retain our key employees. The loss of any of our
key technical, sales and senior management personnel or the inability to
attract and retain additional qualified personnel could harm our operating
results or require us to divert other resources to replacing these personnel.
We depend on a limited number of key personnel who have recently joined us and
whom we may not be able to retain.
Our performance is substantially dependent on our senior management and other
key employees, many of whom have only been with us, and with each other, for a
short time. In addition, although we believe that we have hired effective
managers, we cannot assure you that they will perform to our expectations. We
may not be able to execute our business plan if the members of our management
team cannot establish effective working relationships or if they do not perform
as expected.
We rely on third parties to host our services and to develop our software, and
failures by these parties to perform could damage our ability to do business.
We rely on third parties to host our systems and to develop our software. If
our arrangements with these third parties are terminated, we may not be able to
find an alternative source on a timely basis or on commercially reasonable
terms and our business could be disrupted. These arrangements include:
. IBM Global Services and USinternetworking. We currently rely on IBM
Global Services to host our services on the existing NT/Lotus platform
and to provide the security features on which our services
9
<PAGE>
currently depend. When we migrate our platform to Unix/Oracle, we will
use USinternetworking to host our services. We believe that our use of
IBM hosting facilities establishes, and the use of USinternetworking
will establish, credibility with our clients and address concerns our
clients may have concerning reliability, security and availability. If
we were to lose our access to our hosting services without securing a
supplier with a comparable reputation, we may find it more difficult to
maintain our client base and obtain new clients.
. Outside Consulting Firms. Historically, we have chosen to use outside
consulting firms to assist our internal programming staff in developing
and maintaining the software supporting our services. We currently rely
on Cintra and other consulting firms to assist us in our development
efforts. Any deterioration in the services provided to us by these
consulting firms could impair our ability to maintain these services or
delay the development of new services.
We may have difficulty in migrating our hosting service from IBM to
USinternetworking, which could cause delays or interruptions in our service.
When we migrate our hosting service from IBM to USinternetworking, we may
experience technical and logistic difficulties, which could include system
failure, technology failure and other similar events. These events could cause
service stoppages or transaction delays for our clients.
We may have difficulty in managing growth, which could reduce our efficiency
and divert our resources.
Our business has grown rapidly in the last two years and must continue to do
so in order for us to become profitable. The number of our full-time employees
has grown from nine at December 31, 1997 to 131 at December 31, 1999, and the
scope of our operating and financial systems has expanded significantly. This
recent rapid growth has placed and, if sustained, will continue to place, a
significant strain on our management and operations. Accordingly, our future
operating results will depend on the ability of our officers and other key
employees to continue to implement and improve our operational, client support
and financial control systems, and effectively expand, train and manage our
employee base. We cannot be certain that we will be able to manage any future
expansion successfully, and any inability to do so may harm our operating
results or divert our resources to addressing these issues.
We may not be able to keep up with rapid changes in Internet technology, which
could prevent us from competing effectively.
The market for our services is marked by rapid technological change, frequent
new product introductions and Internet-related technology enhancements,
uncertain product life cycles, changes in client demands and evolving industry
standards. We cannot be certain that we will successfully develop and market
new services or service enhancements compliant with present or emerging
Internet technology standards. New products and services based on new
technologies or new industry standards can render existing products and
services obsolete and unmarketable.
To succeed, we will need to enhance our services and develop new services on a
timely basis to keep pace with developments related to Internet technology and
to satisfy the increasingly sophisticated requirements of our clients.
Internet commerce technology is complex, and new services and service
enhancements can require long development and testing periods. Any delays in
developing and releasing enhanced or new services could prevent us from
competing effectively in the markets we serve.
Our business, operating results and financial condition could suffer from the
residual impact of the Year 2000 transition.
We have executed a plan designed to make our computer systems, applications,
equipment and facilities Year 2000 ready. To date, none of our systems,
applications, equipment or facilities have experienced material difficulties
from the transition to Year 2000, but complete testing of those systems by our
normal business operations have been limited so far. During the Year 2000, it
is possible that material difficulties could still be discovered or could
arise. Computer experts have warned that there may still be residual
consequences of the change in century date. Any such difficulties could result
in a decrease in the use of our services or web site, interruptions of data or
other critical information, an increase in allocation of resources to address
Year 2000 problems or an increase in litigation costs relating to losses due
to such Year 2000 problems. Any of these events could materially harm our
business or financial results.
10
<PAGE>
Risks Typical of Internet Companies
The possible slow adoption of Internet solutions by businesses may harm our
prospects.
In order for us to be successful, the Internet must continue to be adopted as
an important means of disseminating business communication. Because intranet
and Internet usage is continuing to evolve, it is difficult to estimate with
any assurance the size of this market and its growth rate, if any. To date,
many businesses have been deterred from utilizing intranets and the Internet
for a number of reasons, including:
. lack of availability of cost-effective, high-speed service;
. actual or perceived lack of security of information;
. lack of access and ease of use;
. the need to operate with multiple and frequently incompatible products;
. inconsistent quality of service; and
. potentially inadequate development of network infrastructure.
Possible Internet security breaches could harm our business.
We rely on encryption and authentication technology licensed from third parties
for secure transmission of confidential information of our clients. Advances in
computer capabilities, new discoveries in the field of cryptography, or other
events or developments may compromise or breach the encryption schemes used by
us to protect client transaction data. The ability to provide a highly secure
environment for our clients to manage their business communication is a
cornerstone feature of our products and services that is demanded by our
clients and is critical to our success. If any compromise of our security were
to occur, it could have a material adverse effect on our reputation and results
of operations and financial condition, and expose us to risks of loss or
litigation and possible liability. It is possible that our security measures
will not prevent security breaches.
Our software applications are subject to risk of product defects, which could
subject us to liability for those defects.
The types of sophisticated software applications that we use to provide our
services sometimes contain undetected software errors or failures, especially
when we use newly developed applications or when new versions are implemented.
These errors or failures can cause delays in the introduction of services or
require design modifications before or after we introduce the service. We have
experienced these delays and the need for design modification in the past. Our
services are intended for use in applications that are critical to our
customers' businesses. As a result, our customers and potential customers may
have a greater sensitivity to product defects than do customers of software
products generally.
Capacity constraints or system failures could harm our business.
The performance of our products and services is critical to our reputation and
achieving market acceptance of our online products and services. Any system
failure, including network, software or hardware failure, that causes
interruption or loss of data could result in decreased usage of our products
and services. An increase in the volume of transactions and the number of
simultaneous users could strain the capacity of the hardware employed by us,
which could lead to slower response time or system failures. IBM currently
maintains the computer systems we use to provide our services in its Lotus
hosting facilities. We plan to migrate our applications to USinternetworking's
hosting facilities during the second half of 2000. Most of our systems are
protected by redundant systems, but we cannot assure you that our back-up
systems will prevent all types of system failure. Our operations also depend in
part upon the ability to protect our systems against physical damage from
natural disasters, power loss, telecommunications failures, physical and
electronic break-ins, computer viruses and similar events. The occurrence of
any of these events, either involving our internal systems or IBM's or
USinternetworking's hosting facilities, could result in interruptions, delays
or cessations in service to users of our services, which could harm our future
financial results. As we increase our business, we must expand and upgrade our
technology, systems and network hardware and software. We may not be able to
expand and upgrade our systems and network hardware and software capabilities
to accommodate increased use of our services. If we do not appropriately
upgrade our systems and internal hardware and software, we may be unable to
conduct our business or may lose customers.
11
<PAGE>
Our success is tied to the adequacy of the Internet infrastructure in the face
of rapid growth in the use of the Internet.
Any problems in the functioning of the Internet could harm our business. To the
extent that the Internet continues to experience significant growth in the
number of users, it is possible that the infrastructure of the Internet will
not be able to support the demands placed upon it. In addition, the Internet
could lose its viability due to delays in the development or adoption of new
standards and protocols required to handle increased levels of Internet
activity, or due to increased governmental regulation. Changes in or
insufficient availability of telecommunications services to support the
Internet also could result in slower response times and adversely affect usage
of the Internet generally and our services in particular. If the infrastructure
for the Internet does not effectively support growth that may occur, our future
financial results will be materially and adversely affected. Even if the
required Internet infrastructure, standards and protocols are developed, we may
be required to incur substantial expenditures in order to adapt our services to
changing or emerging technologies, which could divert our funds or other
resources from growing our business.
Possible infringement of intellectual property rights could harm our business.
Much of our business is derived from software programs, methodologies and other
information in which we have a proprietary interest. We seek to protect our
intellectual property through patents, trademarks, copyrights, assignments of
inventions, work made for hire and confidentiality agreements. Currently, we
have registered the copyright for our IntraLoan service, but none of our patent
or trademark applications have yet issued or registered, and we cannot assure
you that any of these applications will be issued or registered. Although broad
foreign patent protection for our IntraLoan service appears no longer to be
available, we are continuing to innovate our technologies and plan to pursue
diligently U.S. and foreign patent protection. Even if these applications are
approved, we cannot assure you that these measures will be adequate to prevent
the unauthorized use of our intellectual property or that others may not
independently develop competing products or services. Any of these events could
subject us to liabilities that might harm our future financial results.
Litigation may be necessary to enforce our intellectual property or to protect
our trade secrets, and we cannot assure you that such litigation would be
successful. Any such litigation, even if successful, could result in
substantial costs and diversions of our resources.
In addition, we cannot be certain that our business activities will not
infringe upon the proprietary rights of others or that other parties will not
assert infringement claims against us. We cannot, therefore, give any assurance
that these third party rights will not be asserted against us or that if these
assertions are made that they will not subject us to substantial liabilities.
Further, any third party asserting a claim could obtain a temporary,
preliminary or permanent injunction barring the offering of our products or
services. Any injunction, even if subsequently lifted, could impede our ability
to do business and harm our future results of operations and financial
condition.
We are aware of other companies using or owning the trademark "IntraLinq" and
variations of that name but do not believe any confusion between our services
and other companies' activities will result. We are also aware of other
companies that have United States registered and pending trademarks for
"IntraLink" and similar terms and for "ASAP," for computer-related goods and
services. Although we do not believe that any confusion currently exists or is
likely to occur in the future regarding our use of "IntraLinks" as a company
name or our use of "IntraLinks ASAP" as a service name, the users of these
similar terms may have senior trademark rights if they were ever to assert a
claim against us for trademark infringement. If an infringement suit were to be
instituted against us, even if groundless, it could result in substantial
litigation expenses in defending the suit. If the suit were to be successful,
we could be forced to cease using the "IntraLinks ASAP" or IntraLinks marks and
to pay damages. We have not received notices from any companies alleging
infringement or any confusion. We cannot assure you, however, that our business
would not be materially and adversely affected if confusion did occur. There is
also uncertainty as to how existing laws will be applied to the Internet in
areas such as the offer and sale of securities, property ownership, copyright
and trademark.
12
<PAGE>
Risks Relating to this Offering and Our Shares
Our stock price may decline after the offering and may be volatile in the
future.
Prior to this offering, there has been no public market for our common stock.
The initial public offering price will be determined through negotiations
between the underwriters and us and may not be indicative of our future market
prices. As a result, you may not be able to resell any shares you buy at or
above the initial public offering price due to a number of factors, including:
. actual or anticipated fluctuations in our operating results;
. changes in expectations as to our future financial performance or
changes in financial estimates by securities analysts;
. announcements of new products or product enhancements by us or our
competitors;
. investors' perceptions;
. general conditions in the economy in general or in Internet-related
industries;
. technological innovations by us or our competitors; and
. the operating and stock price performance of other comparable companies.
In addition, the stock market in general has experienced extreme volatility
that often has been unrelated to the operating performance of particular
companies. These broad market and industry fluctuations may lower the trading
price of our common stock, regardless of our actual operating performance. In
particular, the stock prices for many companies in the Internet sector have
experienced wide fluctuations that have often been unrelated to the operating
performance of such companies. These fluctuations may adversely affect the
market price of the common stock.
There will be immediate and substantial dilution to new investors in this
offering.
The initial public offering price is substantially higher than the net tangible
book value per share of our outstanding common stock will be immediately after
the offering. Any common stock you purchase in the offering will have a post-
offering net tangible book value per share of $ less than the price you paid
for the share, assuming an initial public offering price of $ per share, the
mid-point of the range set forth on the cover page of this prospectus.
Sales of outstanding common stock may depress the stock price after the
offering.
A substantial number of shares of our common stock could be sold into the
public market after this offering. The occurrence of such sales, or the
perception that such sales could occur, could materially lower our stock price
or could impair our ability to obtain capital through an offering of equity
securities. After this offering, we will have outstanding shares of common
stock, or shares if the underwriters exercise their option to purchase
additional shares of common stock in the offering. In addition, 3,500,000
shares of common stock may be issued under our stock incentive plan. Options to
purchase 3,258,157 of these shares have been issued, 660,293 of which are
exercisable. In addition, 2,161,262 shares of common stock underlie outstanding
warrants, of which 2,036,988 will be exercisable upon the closing of this
offering.
The shares of common stock being sold in this offering will be freely
transferable under the securities laws immediately after issuance, except for
any shares sold to "affiliates" of IntraLinks. In addition, substantially all
of our existing stockholders will agree under written "lock-up" agreements
that, for a period of 180 days from the date of this prospectus, they will not
sell their shares. As a result, upon the expiration of the lock-up agreements
180 days after the date of this prospectus, shares of common stock will be
eligible for sale, subject, in most cases, to certain volume and other
restrictions under the Federal securities laws. The remaining shares of
common stock that are not subject to these agreements will become eligible for
resale under the Federal securities laws on the first anniversary of their
respective dates of issuance, subject to these same restrictions.
We and shareholders who will hold in the aggregate shares of common
stock upon the consummation of this offering have entered into registration
rights agreements that require us to include shares of common stock held by
shareholders in registered offerings of common stock made by us in the future.
13
<PAGE>
After the offering, we will continue to be controlled by existing stockholders
whose interests may differ from those of other stockholders.
Upon completion of this offering, the principal stockholders listed under
"Principal Stockholders" will beneficially own approximately % of our
outstanding common stock, or % if the underwriters' over-allotment option
is exercised in full. Consequently, such persons, as a group, will be able to
control the outcome of all matters submitted for stockholder action, including
the election of members to our board of directors and the approval of change-
in-control transactions.
Our business could be harmed if management uses our proceeds from this offering
ineffectively.
Our management will have significant flexibility in applying the net proceeds
of this offering that we receive. We intend to use the proceeds of this
offering that we receive for general corporate purposes, including capital
expenditures and potential future acquisitions. These purposes could include
strategic acquisitions or investments, international expansion, technical
upgrades of internal systems and working capital requirements. As of the date
of this prospectus, we cannot specify with certainty the particular uses for
the net proceeds to be received upon completion of this offering. The failure
of our management to apply these proceeds effectively could lead to losses or
diversion of our resources.
Our charter and by-law provisions and Delaware corporate law may make a
takeover of IntraLinks more difficult, including takeovers that might
economically benefit our stockholders.
Our governing corporate documents contain provisions that could discourage
potential takeover attempts and make attempts by our stockholders to change
management more difficult. Following this offering, our certificate of
incorporation will allow our board of directors to issue up to shares
of preferred stock and fix the rights attached to those shares without approval
by the stockholders. The rights of holders of common stock may be harmed by the
rights of the holders of any of this preferred stock. We do not, at present,
intend to issue any preferred stock, but if we do, an outside party may find it
more difficult to acquire a majority of our outstanding voting stock. Also, we
are subject to the anti-takeover provisions of Section 203 of the Delaware
General Corporation Law, which prohibits us from engaging in a business
combination with any interested stockholder for a period of three years from
the date the person became an interested stockholder, unless certain conditions
are met. Applying these provisions could delay or prevent a change in control
of us, including takeovers that might economically benefit our stockholders,
which could lower the market price of our common stock.
14
<PAGE>
Use of Proceeds
Assuming an initial public offering price of $ per share, which is the mid-
point of the range set forth on the cover of this prospectus, we will receive
approximately $ million from the sale of common stock in this offering,
or $ million if the underwriters' over-allotment option is exercised in
full, after deducting estimated underwriting discounts and commissions and
estimated offering expenses.
We intend to use the net proceeds of this offering for general corporate
purposes, including working capital, the expansion of our sales and marketing
capabilities and capital expenditures. We may also apply a portion of the net
proceeds of the offering to acquire businesses, products and technologies that
are complementary to ours. We have not entered into any current agreements,
understandings or arrangements with respect to any specific businesses,
products or technologies that we may acquire, although we will continue to
evaluate such opportunities from time to time. Pending such uses, the net
proceeds will be invested in government securities and other short-term,
investment-grade, interest-bearing instruments.
Dividend Policy
IntraLinks has never declared or paid any cash dividends on its common stock
and does not intend to pay any cash dividends on its common stock for the
foreseeable future. Our current policy is to retain earnings, if any, to
finance the expansion of our business. Future dividends, if any, will be
determined solely by our board of directors.
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. These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions, including
those set forth under "Risk Factors."
Words such as "expect", "anticipate", "intend", "plan", "believe", "estimate"
and variations of such words and similar expressions are intended to identify
such forward-looking statements. 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.
15
<PAGE>
Capitalization
The following table sets forth the capitalization of IntraLinks as of December
31, 1999:
.on an actual basis;
.on a pro forma basis to give effect to:
. the recognition of approximately $5,054,000 of expense at the
closing of the offering in connection with the immediate vesting of
previously contingent warrants to purchase 468,000 common shares.
Such amount will be recorded as a non-cash dividend to the Company's
Series D preferred stockholder. For purposes of the pro forma data,
the amount of the dividend using a Black-Scholes pricing model is
based on a value of $17.00 per share, which is the price paid in the
Company's recent private placement of Series F redeemable
convertible preferred stock. The actual amount of the dividend will
be determined using the initial public offering price upon the
consummation of the offering. Each $1 change in the initial public
offering price will affect this dividend by approximately $426,000;
. the issuance of 882,354 shares of Series F redeemable convertible
preferred stock at $17.00 per share during the first quarter of 2000
for net proceeds of $14.9 million;
. the issuance of 1,050,000 fully vested Series F warrants granted to
The Chase Manhattan Corporation in connection with the Series F
financing in January 2000 and the execution of an enterprise service
agreement. The $7.5 million value ascribed to the warrants,
calculated using a Black-Scholes pricing model, will be recorded as
a partner advance;
. the automatic conversion on a one-for-one basis of all outstanding
shares of convertible preferred stock into 7,093,974 shares of
common stock upon the closing of this offering; and
. on a pro forma as adjusted basis to give effect to the sale of, and the
application of the net proceeds from, shares of common stock in
this offering, assuming an initial public offering price of $ per
share.
This information should be read in conjunction with IntraLinks's consolidated
financial statements and related notes appearing elsewhere in this prospectus,
as well as the information appearing under "Certain Relationships and Related
Transactions" and "Management--Stock Incentive Plan."
<TABLE>
----------------------
<CAPTION>
As of December 31, 1999
-------------------------------
Pro Pro Forma
Actual Forma As Adjusted
-------- -------- -----------
Dollars in thousands
<S> <C> <C> <C>
Cash and cash equivalents..................... $ 21,735 $ 36,635 $
======== ======== ===
Obligations under capital leases, excluding
current installments ........................ $ 92 $ 92 $
Redeemable convertible preferred stock:
Series B -- $.01 par value; 887,992 shares
authorized; 780,230 shares issued and
outstanding actual; no shares issued and
outstanding pro forma and pro forma as
adjusted..................................... 5,849 -- --
Series C -- $.01 par value; 3,901,000 shares
authorized; 2,500,000 shares issued and
outstanding actual; no shares issued and
outstanding pro forma and pro forma as
adjusted..................................... 17,408 -- --
Series D -- $.01 par value; 1,480,000 shares
authorized, issued and outstanding actual; no
shares issued and outstanding pro forma and
pro forma as adjusted........................ 15,593 -- --
Series E -- $.01 par value; 1,068,890 shares
authorized, issued and outstanding actual; no
shares issued and outstanding pro forma and
pro forma as adjusted........................ 14,521 -- --
Series F -- $.01 par value; 1,932,354 shares
authorized; no shares issued and outstanding
actual, pro forma and pro forma as adjusted.. -- -- --
Stockholders' equity (deficit):
Series A convertible preferred stock, $.01 par
value; 382,500 shares authorized, issued and
outstanding actual; no shares issued and
outstanding pro forma and pro forma as
adjusted..................................... 4 -- --
Common stock, $.01 par value; 11,000,000
shares authorized; 1,262,168 shares issued
and outstanding actual; 8,356,142 shares
issued and outstanding pro forma and
shares issued and outstanding pro forma as
adjusted..................................... 13 84
Additional paid-in capital.................... 3,127 78,849
Accumulated deficit........................... (23,180) (28,234)
Deferred compensation......................... (5,064) (10)
Other comprehensive loss...................... (16) (16)
-------- -------- ---
Total stockholders' equity (deficit) ......... (25,116) 50,673
-------- -------- ---
Total capitalization.......................... $ 28,347 $ 50,765
$
======== ======== ===
</TABLE>
16
<PAGE>
The table above excludes:
. 2,379,488 shares of common stock issuable as of December 31, 1999 upon
the exercise of options outstanding at a weighted average exercise price
of $7.98 per share;
. 1,120,512 additional shares of common stock reserved for future option
grants under our stock incentive plan;
. 2,161,262 shares of common stock issuable upon the exercise of warrants
that will remain outstanding after this offering at a weighted average
exercise price of $12.95 per share; and
. shares of common stock issuable upon exercise of the underwriters'
over-allotment option in connection with this offering.
17
<PAGE>
Dilution
Our pro forma net tangible book value as of December 31, 1999 was $48.8
million, or $5.84 per share of common stock. Pro forma net tangible book value
per share is determined by dividing the amount of our pro forma total tangible
assets less total liabilities by the pro forma number of shares of common stock
outstanding at that date. Dilution in net tangible book value per share
represents the difference between the amount per share paid by purchasers of
shares of common stock in this offering and the pro forma net tangible book
value per share of common stock immediately after the completion of this
offering. After giving effect to the issuance and sale of the shares
of common stock in this offering (at an assumed initial public offering price
of $ per share, the mid-point of the range set forth on the cover of this
prospectus, and after deducting estimated underwriting discounts and
commissions and estimated offering expenses), which would result in estimated
net proceeds of $ , our pro forma net tangible book value as of
December 31, 1999, would have been $ or $ per share. This
represents an immediate increase in the pro forma net tangible book value of
$ per share to existing stockholders and an immediate dilution of $
per share to new investors. The following table illustrates the per share
dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share................. $
Pro forma net tangible book value per share at
December 31, 1999............................................ $
Increase in pro forma net tangible book value per share
attributable
to new investors.............................................
Pro forma net tangible book value per share after this offering.
----
Dilution per share to new investors............................. $
====
</TABLE>
As of the date of this prospectus, options and warrants to purchase
shares of common stock were outstanding at a weighted average exercise price of
$ per share, and shares were available for the issuance of
additional stock options under our stock incentive plan. To the extent that any
of these options or warrants are exercised, there will be further dilution to
new investors.
The following table summarizes on a pro forma basis, as of December 31, 1999,
the difference between the number of shares of common stock purchased from us,
the total consideration paid to us and the average price per share paid by the
existing stockholders and by the new investors, assuming an initial public
offering price of $ per share, the mid-point of the range set forth on the
cover of this prospectus, before deduction of estimated underwriting discounts
and commissions and offering expenses:
------------------------------------
<TABLE>
<CAPTION>
Shares
Purchased Total Consideration
-------------- ---------------------- Average Price
Number Percent Amount Percent Per Share
------ ------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders(1)....
New investors...............
--- ---- --------- ---------- ---
Total................... 100% 100%
=== ==== ========= ========== ===
</TABLE>
(1) Does not include:
. 2,379,488 shares of common stock issuable as of December 31, 1999 upon
the exercise of options outstanding at a weighted average exercise price
of $7.98 per share;
. 1,120,512 additional shares of common stock reserved for future option
grants under our stock incentive plan;
. 2,161,262 shares of common stock issuable upon the exercise of warrants
that will remain outstanding after this offering at a weighted average
exercise price of $12.95 per share; and
. shares of common stock issuable upon exercise of the underwriters'
over-allotment option in connection with this offering.
18
<PAGE>
Selected Consolidated Financial Information
The selected balance sheet data as of December 31, 1998 and 1999 and the
selected statement of operations data for each of the years in the three-year
period ended December 31, 1999 have been derived from our audited financial
statements included elsewhere in this prospectus. The balance sheet data as of
December 31, 1996 and 1997 and the statement of operations data for the period
from June 13, 1996 (inception) to December 31, 1996 have been derived from our
audited financial statements not included in this prospectus. Historical
results are not indicative of the results to be expected in the future and
results of interim periods are not necessarily indicative of results for the
entire year. You should read this selected consolidated financial information
in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations," our financial statements and the related
notes included elsewhere in this prospectus.
The following balance sheet data is presented:
. on an actual basis;
. on a pro forma basis to give effect to:
. the recognition of approximately $5,054,000 of expense at the
closing of the offering in connection with the immediate vesting of
previously contingent warrants to purchase 468,000 common shares.
Such amount will be recorded as a non-cash dividend to the Company's
Series D preferred stockholder. For purposes of the pro forma data,
the amount of the dividend using a Black-Scholes pricing model is
based on a value of $17.00 per share, which is the price paid in the
Company's recent private placement of Series F redeemable
convertible preferred stock. The actual amount of the dividend will
be determined using the initial public offering price upon the
consummation of the offering. Each $1 change in the initial public
offering price will affect this dividend by approximately $426,000;
. the issuance of 882,354 shares of Series F redeemable convertible
preferred stock at $17.00 per share during the first quarter of 2000
for net proceeds of $14.9 million;
. the issuance of 1,050,000 fully vested Series F warrants granted to
the Chase Manhattan Corporation in connection with the Series F
financing and the execution of an enterprise service agreement. The
$7.5 million value ascribed to the warrants will be recorded as a
partner advance;
. the automatic conversion on a one-for-one basis of all outstanding
shares of convertible preferred stock into 7,093,974 shares of
common stock upon the closing of this offering and
. on a pro forma as adjusted basis to give effect to the sale of, and the
application of the net proceeds from, shares of common stock in
this offering, assuming an initial public offering price of $ per
share.
19
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------
Years Ended
December 31,
----------------------------------
Period from
June 13, 1996
(inception)
to December
31, 1996 1997 1998 1999
------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Dollars in thousands, except
share and per share data
Consolidated Statements of
Operations Data
Revenues.................... $ -- $ 112 $ 980 $ 4,450
Cost of revenues............ -- 374 1,776 4,659
-------- ---------- ---------- ----------
Gross loss................ -- (262) (796) (209)
-------- ---------- ---------- ----------
Operating expenses:
General and
administrative........... 202 1,143 2,179 5,542
Sales and marketing....... -- 208 2,155 5,338
Product development....... 300 439 1,956 3,036
Amortization of intangible
assets................... -- -- -- 336
-------- ---------- ---------- ----------
Total operating
expenses............... 502 1,790 6,290 14,252
-------- ---------- ---------- ----------
Loss from operations.. (502) (2,052) (7,086) (14,461)
-------- ---------- ---------- ----------
Interest income (expense):
Interest income........... -- 8 187 952
Interest expense.......... -- (41) (176) (9)
-------- ---------- ---------- ----------
Total interest income
(expense), net......... -- (33) 11 943
-------- ---------- ---------- ----------
Net loss.................... (502) (2,085) (7,075) (13,518)
-------- ---------- ---------- ----------
Cumulative dividends on
mandatorily redeemable
convertible preferred
stock...................... -- (14) (702) (3,279)
Dividends in connection with
modification of dividend
rights of Series C
preferred stockholders..... -- -- -- (1,370)
Dividends in connection with
the beneficial conversion
feature associated with
Series D preferred stock... -- -- -- (1,855)
-------- ---------- ---------- ----------
Net loss attributable to
common stockholders........ $ (502) $ (2,099) $ (7,777) $ (20,022)
======== ========== ========== ==========
Basic and diluted net loss
per common share........... $ (0.97) $ (1.90) $ (6.62) $ (16.54)
======== ========== ========== ==========
Weighted average shares
outstanding used in basic
and diluted net loss per
common share calculation... 515,000 1,102,500 1,175,000 1,210,584
======== ========== ========== ==========
Pro forma:
Pro forma net loss
attributable to common
stockholders............... $ (20,022)
Cumulative dividends in
connection with the vesting
of contingent Series D
preferred stock warrants .. (5,054)
----------
Pro forma net loss
attributable to common
stockholders............... $ (25,076)
==========
Pro forma basic and diluted
net loss per
common share............... $ (3.94)
==========
Shares used in pro forma
basic and diluted net loss
per common share
calculation................ 6,363,963
==========
</TABLE>
Shares used in computing pro forma basic and diluted net loss per common share
include the shares used in computing basic and diluted net loss per common
share, adjusted for the conversion of all of our outstanding convertible
preferred stock to common stock as if the conversion occurred at the date of
their original issuance.
20
<PAGE>
<TABLE>
----------------------------------------------
<CAPTION>
As of December 31,
---------------------------------
Pro Forma
1996 1997 1998 1999 Pro Forma As Adjusted
----- ------- ------- -------- --------- -----------
Dollars in thousands
<S> <C> <C> <C> <C> <C> <C>
Consolidated Balance
Sheet Data:
Cash and cash
equivalents............ $ 37 $ 2,618 $11,188 $ 21,735 $36,635 $
Working capital
(deficit).............. (322) 3,647 10,263 21,641 36,541
Total assets............ 96 4,327 13,626 31,764 54,182
Deferred development
fees................... -- -- 150 -- --
Deferred rent........... -- 4 98 484 484
Deferred revenue........ -- 232 25 244 244
Obligations under
capital leases,
excluding current
installments........... -- 9 4 92 92
Redeemable convertible
preferred stock........ -- 5,014 21,701 53,371 --
Total stockholders'
equity (deficit)....... (263) (1,203) (9,713) (25,116) 50,673
</TABLE>
<TABLE>
<CAPTION>
Years Ended
December 31,
-----------------
1997 1998 1999
---- ----- ------
<S> <C> <C> <C>
Supplemental Information
Number of transactions....................................... 19 204 889
Number of seats(1)........................................... 373 3,202 24,100
</TABLE>
- --------
(1) A seat is an individual registered user of our services for one or more
transactions.
21
<PAGE>
Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion and analysis should be read in conjunction with our
consolidated financial statements and related notes included elsewhere in this
prospectus. The following discussion contains forward-looking statements that
involve risks and uncertainties. Our actual results may differ materially from
those anticipated in those forward-looking statements as a result of certain
factors, including, but not limited to, those set forth under "Risk Factors"
and other portions of this prospectus.
IntraLinks develops and markets online services to manage business-to-business
communication. Our services allow businesses to exchange information securely
over the Internet through an environment that facilitates effective
collaboration among working group members and efficient execution of projects
and business processes.
Since our founding in June 1996, we have devoted our efforts to developing the
proprietary Internet-based applications that support our services, building our
organization and developing and marketing our online services. In May 1997, we
launched our IntraLoan service. Since its launch, use of IntraLoan has grown
from two transactions for the first three months of its introduction to 624
transactions during 1999. We have focused our efforts on increasing IntraLoan's
use in the global syndicated loan market while simultaneously tailoring our
services to new markets. In collaboration with Ernst & Young, we introduced
DealSpace in October 1998 as our branded service for a broad range of capital
markets financing transactions. We had marketed predecessor services of
DealSpace under different brand names beginning in June 1997.
Our revenues are generated from fees we charge clients for using our services.
We have historically billed for each loan syndication or other transaction,
project or business process in which our services are used to manage business-
critical communication. Our per-project fees are based on the number of users
who are granted access to the secure online environment that we establish for
the project. We recognize these revenues ratably over the average life of the
project, provided that we have no significant remaining obligations and
collection of the receivable is probable. In February 2000, we also began
marketing our service under one-year enterprise service agreements containing
minimum fee requirements whether or not our services are used. We will
recognize revenue for any enterprise service agreements ratably over the
service period.
Cost of revenues primarily consists of computer hosting fees paid to IBM Global
Services and personnel costs for client service specialists, who establish and
administer our online services. Prior to January 1, 1999, our hosting service
provider charged a fixed monthly fee for each user with the right to log onto
the secure web site through which our services are provided. Effective January
1, 1999, this pricing structure was replaced by a fixed monthly fee for hosting
services plus a lower monthly fee per user. We anticipate that during the
second half of 2000, we will migrate our applications to a new hosting
facility, USinternetworking. USinternetworking will charge a monthly charge for
an all-inclusive service. This service does not have a charge based upon the
number of subscribers, but rather a charge based on the number of servers
needed and network connectivity. This cost structure will lower our per user
costs as our business grows.
We recorded allowances for doubtful accounts of $75,000 as of December 31, 1998
and $110,000 as of December 31, 1999. Such allowance approximated 12.2% of our
gross accounts receivable as of December 31, 1998 and 4.8% of our gross
accounts receivable as of December 31, 1999. We base our allowance for doubtful
accounts on our past collection history and our best estimate of possible
future uncollectible accounts. Included in our allowance for doubtful accounts
as of December 31, 1998 is $43,000 from Bank of America, which has been
subsequently collected. We adjust our allowance for doubtful accounts when
accounts previously reserved have been collected.
In August 1999, we acquired substantially all of the assets and assumed
substantially all of the liabilities of Cambridge Technology Visions, Inc. CTV
is the developer of Acquisition Trustee, a service to facilitate secure
communication and collaboration in connection with mergers, acquisitions and
post-merger integration. The acquisition was accounted for as a purchase
business combination. The consideration payable by us to acquire CTV consisted
of the following: $180,000 in cash and 87,168 shares of IntraLinks common stock
valued at $907,000. We also incurred acquisition costs of $31,000. The excess
of the purchase price over the net book value of the acquired assets and
liabilities of CTV has been allocated to goodwill and other intangible assets.
Goodwill and other intangible assets will be amortized over a period of three
years, the expected period of benefit.
In January 2000, we acquired selected assets from and assumed selected
liabilities of Savant Technologies, Inc., a software development company, for
$1,274,000, including acquisition costs. The acquisition was
22
<PAGE>
accounted for as a purchase business combination. The consideration consisted
of 72,000 shares of our common stock valued at $1,224,000, or $17.00 per share,
and acquisition costs of $50,000. We will amortize the resulting goodwill over
three years, the expected period of benefit. An additional 18,000 shares of our
common stock were issued into escrow and will be released from escrow if the
shareholders/employees of Savant are employees of IntraLinks on January 28,
2002. We consider these 18,000 shares issued into escrow to be compensation for
post-combination services rather than additional purchase price and,
accordingly, will ratably amortize such shares to expense through January 28,
2002.
Since inception, we have incurred substantial costs to develop our services and
to build our sales and marketing capabilities. As a result, we have incurred
net losses in each fiscal quarter since inception and, as of December 31, 1999,
we had an accumulated deficit of $23.2 million. We anticipate that our
operating expenses will continue to increase in future quarters as we continue
to make significant investments in our sales and marketing operations, increase
our organizational and technical infrastructure and develop services for new
markets. Accordingly, we expect to incur additional losses in the future. Our
limited operating history makes it difficult for us to predict future operating
results, and we cannot assure you that we will achieve or sustain revenue
growth or profitability.
Results of Operations
Revenues. Revenues consist primarily of fees derived from our services. A
significant majority of our historical revenues, in the amount of $4.4 million,
have been generated from IntraLoan. We did not generate revenues until 1997.
Revenues were $112,000 for the year ended December 31, 1997, $980,000 for the
year ended December 31, 1998 and $4.5 million for the year ended December 31,
1999. This growth in revenues is principally attributable to an increase in the
number of secure environments we established for our clients. The number of
secure environments we established for our clients increased from 19 for the
year ended December 31, 1997 to 204 for the year ended December 31, 1998 and to
889 for the year ended December 31, 1999.
Cost of revenues. Cost of revenues primarily consists of computer hosting fees
paid to IBM Global Services and costs for client service personnel, who
establish and administer our online services. We did not have any cost of
revenues until 1997. Cost of revenues was $374,000 for the year ended December
31, 1997, $1.8 million for the year ended December 31, 1998 and $4.7 million
for the year ended December 31, 1999. These increases in cost of revenues are
attributable to increases in hosting fees, as well as increases in the number
of our client service personnel. Hosting fees increased during the period from
our initial launch in 1997 through December 31, 1999 as a direct result of the
increase in the number of users of our services.
General and administrative expense. General and administrative expense
primarily includes salaries for executive, administrative and accounting
personnel, and non-personnel costs such as facilities, professional fees and
depreciation and amortization. General and administrative expense was, $1.1
million for the year ended December 31, 1997, $2.2 million for the year ended
December 31, 1998, and $5.5 million for the year ended December 31, 1999. This
increase in general and administrative expense was primarily due to increased
salaries and related expenses associated with hiring additional accounting and
administrative personnel, increased facilities expense relating to the leasing
of additional office space to support our rapid growth. We expect these
expenses to continue to grow as we hire additional personnel and incur
additional expenses relating to growing our business and operating as a public
company.
Sales and marketing. Sales and marketing expense consists primarily of
salaries, travel related costs of sales, marketing, business development,
personnel, public relations and conference costs, and other marketing expenses.
We did not incur any sales and marketing expense until mid-1997, when we began
marketing our IntraLoan service. Sales and marketing expense was $208,000 for
the year ended December 31, 1997, $2.2 million for the year ended December 31,
1998 and $5.3 million for the year ended December 31, 1999. This increase in
sales and marketing expense was primarily due to an increase in sales personnel
from three as of December 31, 1997 to 16 as of December 31, 1998 and 25 as of
December 31, 1999 and related travel and entertainment costs, and marketing
expenses such as trade conference costs, public relations expenditures and
promotional items.
Product development. Product development expense includes consulting costs
associated with the design, development and testing of our systems and
personnel costs. Prior to January 1, 1999, we expensed product development
costs as incurred. Since January 1, 1999, we have capitalized our development
expense for IntraLoan and DealSpace in accordance with accounting Statement of
Position 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use." We capitalized software costs of $1.3 million for
the year ended December 31, 1999. We continue to expense other product
development costs as incurred. Product development expense was $439,000 for the
year ended December 31, 1997, $2.0 million for the year
23
<PAGE>
ended December 31, 1998 and $3.0 million for the year ended December 31, 1999.
Product development expense increased substantially each year and each period
as we continued to use independent consultants to develop and enhance our
products. In 1996, we engaged a consulting firm to develop IntraLoan. We began
to establish our in-house development capability after the launch of IntraLoan.
We continue to work with outside consultants to assist us in developing and
enhancing our products while increasing our in-house development staff. We
believe that timely deployment of new and enhanced features and technology are
critical to attaining our strategic objectives. Accordingly, we intend to
continue to hire additional experienced product development personnel, to use
outside consultants and to make additional investments in product development.
Amortization of Intangible Assets. Amortization of intangible assets includes
amortization of the partner advance that was derived from the issuance of
warrants to Johnson & Johnson Development Corporation as well as the
amortization of goodwill associated with the CTV acquisition.
Interest income (expense), net. We had no interest income or expense until
1997. Interest income for all periods resulted from interest earned on cash and
cash equivalents in money market accounts. Interest income increased from
$8,000 for the year ended December 31, 1997 to $187,000 for the year ended
December 31, 1998 and to $952,000 for the year ended December 31, 1999. This
increase in interest income is directly attributable to higher balances in our
money market accounts from the proceeds of our equity offerings. Interest
expense for the years ended December 31, 1997 and 1998 is comprised of interest
on our bridge loans, capital lease obligations and amortization of the discount
on our debt. Interest expense for the year ended December 31, 1999 is comprised
of interest on our capital lease obligations. Interest expense was $41,000 for
the year ended December 31, 1997, $176,000 for the year ended December 31, 1998
and $9,000 for the year ended December 31, 1999.
Dividends. Dividends on redeemable convertible preferred stock amounted to
$14,000 for the year ended December 31, 1997, $702,000 for the year ended
December 31, 1998, and $3.3 million for the year ended December 31, 1999. Upon
the closing of this offering, all of the outstanding shares of convertible
preferred stock will convert into shares of common stock, and all accrued but
undeclared dividends on these shares will be cancelled. There are currently no
unpaid declared dividends, and we do not anticipate declaring any dividends on
our preferred stock prior to the closing of this offering. We also recorded a
dividend of $1.4 million in 1999 in connection with the modification of
dividend rights of Series C preferred stockholders along with recording a $1.9
million dividend in 1999 in connection with the beneficial conversion feature
associated with the Company's Series D preferred stock.
Quarterly Results of Operations
The following table presents certain unaudited quarterly financial information
for each of the four quarters in the year ended December 31, 1999. In the
opinion of management this data has been prepared on the same basis as the
audited consolidated financial statements appearing elsewhere in this
prospectus, and includes all necessary adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of such data. The
quarterly data should be read together with the consolidated financial
statements and the notes to those statements appearing elsewhere in this
prospectus. The results of operations for any quarter are not necessarily
indicative of the results of operations for any future period.
<TABLE>
<CAPTION>
----------------------------------------------------
Three Months Ended
----------------------------------------------------
March 31, June 30, September 30, December 31,
1999 1999 1999 1999
----------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Consolidated Statements
of Operations:
Revenues................. $ 406,000 $ 1,054,000 $ 1,183,000 $ 1,807,000
Cost of revenues......... 783,000 825,000 1,347,000 1,704,000
----------- ----------- ----------- -----------
Gross profit (loss)... (377,000) 229,000 (164,000) 103,000
Operating expenses:
General and
administrative......... 852,000 1,168,000 1,389,000 2,133,000
Sales and marketing..... 833,000 1,093,000 1,510,000 1,902,000
Product development..... 554,000 411,000 784,000 1,287,000
Amortization of
intangible assets...... -- -- 153,000 183,000
----------- ----------- ----------- -----------
Total operating
expenses............ 2,239,000 2,672,000 3,836,000 5,505,000
----------- ----------- ----------- -----------
Loss from operations..... (2,616,000) (2,443,000) (4,000,000) (5,402,000)
Total interest income,
net..................... 110,000 138,000 361,000 334,000
----------- ----------- ----------- -----------
Net loss............. $(2,506,000) $(2,305,000) $(3,639,000) $(5,068,000)
=========== =========== =========== ===========
</TABLE>
24
<PAGE>
We have experienced variations in our quarterly revenues, gross margins and
operating costs and we expect our quarterly operating results to continue to
fluctuate due to a variety of factors, many of which are outside our control.
Factors that may affect our quarterly operating results, in addition to those
listed under "Risk Factors --Our operating results are likely to fluctuate,
which may have an impact on our stock price," include:
. syndicated loan origination activity;
. the success of our efforts to expand into new markets; and
. the timing of our introduction of new products.
As a result of our limited operating history and the emerging nature of the
market for Internet-based services, our revenues are difficult to forecast. In
addition, our service revenues are derived generally from orders placed during
the quarter, so we do not have a backlog which also contributes to our
difficulty in projecting our revenues. At the same time, our expense levels are
relatively fixed since our spending programs are based on estimates of future
revenues and our plans to invest in our business. As a result, we may be unable
to adjust our spending in a timely manner to match revenue shortfalls. An
unexpected shortfall in revenue could have a disproportionate impact on our
operating results.
Liquidity and Capital Resources
Since our inception, we have obtained financing primarily through private
placements of equity securities, bridge loans and the exercise of warrants.
Through the date of this prospectus, we have raised $66.9 million through sales
of equity securities, bridge loans and the exercise of warrants. As of December
31, 1999, we had $21.7 million in cash and cash equivalents, which was
augmented in January 2000 by our sales of Series F preferred stock, which
raised $14.9 million in net proceeds, and in February 2000 by the exercise of
options to purchase 29,480 shares of our common stock, which provided $500,000.
We have had significant negative cash flows from operating activities for each
fiscal and quarterly period to date. Net cash used in operating activities was
$1.7 million for year ended December 31, 1997, $6.4 million for the year ended
December 31, 1998, and $13.4 million for the year ended December 31, 1999. Net
cash used in operating activities consisted mostly of net operating losses,
decreased by non-cash compensation, depreciation and amortization, provision
for doubtful accounts, amortization of the discount on our debt and changes in
operating assets and liabilities.
Net cash used in investing activities was $108,000 for the year ended December
31, 1997, $1.7 million for the year ended December 31, 1998, and $3.3 million
for the year ended December 31, 1999. Net cash used in investing activities
consisted primarily of leasehold improvements and purchases of furniture,
fixtures and computer equipment. We expect that net cash used in investing
activities will increase in the future.
Our net cash provided by financing activities was $4.4 million for the year
ended December 31, 1997, $16.6 million for the year ended December 31, 1998,
and $27.2 million for the year ended December 31, 1999. The main sources of
cash in 1997 were the proceeds from the issuance of Series A and Series B
preferred stock, and the proceeds from bridge loans. In 1998, the main sources
of cash were the proceeds from the issuance of Series B and Series C preferred
stock and the proceeds of bridge loans. In 1999, the main sources of cash were
the proceeds from the issuance of Series D and Series E preferred stock and the
exercise of a portion of our outstanding warrants to purchase Series D
preferred stock. In addition, subsequent to December 31, 1999 we received net
proceeds of $14.9 million from the issuance of Series F preferred stock and
$500,000 from the exercise of a portion of the outstanding options to purchase
our common stock.
In the fourth quarter of 1998, we launched our DealSpace service in connection
with a letter of understanding with Ernst & Young LLP. Under this arrangement,
Ernst & Young paid us a monthly fee for developing and exploring the potential
of the DealSpace service. We recorded net deferred development fees from Ernst
& Young of $150,000 for the year ended December 31, 1998, and $210,000 through
March 31, 1999.
In April 1999, we replaced our then-existing agreement with Ernst & Young with
a new agreement. Under this new agreement, we issued to Ernst & Young U.S. LLP
660,000 shares of our Series D preferred stock, warrants to purchase 660,000
shares of Series D preferred stock at $10.00 per share and warrants to purchase
192,308 shares of Series C preferred stock at $6.50 per share in exchange for
$6.6 million in cash. In connection with this private placement of Series D
preferred stock and the issuance of these warrants, the $360,000 of net
deferred development fees previously recorded as an advance was contributed to
capital.
25
<PAGE>
In connection with our new agreement with Ernst & Young, we also issued to
Ernst & Young U.S. LLP warrants to purchase 468,000 shares of Series D
preferred stock at $10.00 per share. These warrants are exercisable upon the
earlier of the closing of this offering or our achieving certain defined
revenue targets, and expire on April 13, 2004. If and when it becomes probable
that these warrants will become exercisable, we will record an expense
calculated using a Black-Scholes pricing model based on the then-fair value of
our common stock.
In June 1999, we issued 1,068,890 shares of Series E preferred stock to
investors at $13.00 per share, which raised $13.7 million in net proceeds. In
connection with this private placement, Ernst & Young and the holders of our
Series C preferred stock exercised warrants issued to them in April 1999 to
purchase an aggregate of 820,000 shares of Series D preferred stock, totalling
$8.2 million in proceeds to us.
Also in connection with our private placement of Series E preferred stock and
the execution of a collaboration and service agreement with R.W. Johnson
Pharmaceutical Research Institute, we issued to RWJ-PRI warrants to purchase an
aggregate of 230,770 shares of common stock at $13.00 per share. Of these
warrants, warrants to purchase 38,462 shares of common stock are immediately
exercisable and expire in June 2002. Warrants to purchase an additional 76,923
shares of common stock are exercisable upon the earliest of: (1) the closing of
this offering, (2) Johnson & Johnson Development Corporation, a subsidiary of
Johnson & Johnson, an affiliate of RWJ-PRI and a Series E preferred stock
investor, being forced to sell its shares of IntraLinks in accordance with the
terms of our Second Amended and Restated Shareholders' Agreement or (3) June
30, 2001. We have the right to require RWJ-PRI to exercise these warrants,
which expire in December 2002, upon the closing of this offering. Warrants to
purchase the remaining 115,385 shares of common stock become exercisable over
time upon our achieving certain defined revenue targets.
In January 2000, we issued 882,354 shares of our Series F preferred stock to
investors at $17.00 per share, which raised $14.9 million in net proceeds. In
connection with the Series F offering, we entered into an enterprise service
agreement with The Chase Manhattan Corporation, under which we have the first
option to make a proposal to Chase Manhattan to provide Internet-based
collaboration and secure messaging services to Chase Manhattan's Global
Investment Bank. In connection with the enterprise service agreement, we issued
Chase Manhattan warrants to purchase 1,050,000 shares of Series F preferred
stock at $17.00 per share. We calculated the $7.5 million value of the four-
year warrants using a Black-Scholes pricing model with a volatility factor of
45%, fair value of $17.00 and exercise price of $17.00. These warrants are
fully vested and immediately exercisable. We have recorded the value of these
warrants as a partner advance which is being ratably amortized over the two
year term of the enterprise service agreement.
We believe that net proceeds from this offering and the recent private
placements together with our existing cash and cash equivalents will be
sufficient to fund our operations for at least the next 24 months. However, we
may need additional equity or debt financing in the future to fund our
operations or to finance potential acquisitions of other business, products or
technologies, which we evaluate on an ongoing basis. Sales of additional equity
securities could result in additional dilution to our stockholders.
Quantitative and Qualitative Disclosures About Market Risk
We do not use derivative financial instruments in our operations or investment
portfolio. We do not have significant exposure to market risks associated with
changes in interest rates related to our corporate debt instruments held as of
December 31, 1999.
Recent Accounting Pronouncements Applicable to this Offering
In April 1998, the AICPA issued SOP No. 98-5, "Reporting on the Costs of Start-
Up Activities," which provides guidance on the financial reporting of start-up
costs. SOP 98-5 requires costs of start-up activities and organization costs to
be expensed as incurred. SOP 98-5 was adopted by us on January 1, 1999. As we
have not capitalized such costs, the adoption of SOP 98-5 did not have an
impact on our consolidated financial statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including derivative
instruments embedded in other contracts, and for hedging activities.
Subsequently, the FASB issued SFAS No. 137 which deferred the effective date of
SFAS No. 133. SFAS No. 137 is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000. We have not yet analyzed the impact of this
pronouncement on our financial statements.
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<PAGE>
Business
IntraLinks provides services that enable business-to-business collaboration and
secure messaging over the Internet. We provide Internet-based, secure
environments in which members of a community of interest--for example, bankers,
lawyers and accountants working together on a public financing--can exchange
information and communicate within a framework that enhances collaboration and
more rapid completion of high-value projects.
The following diagram illustrates this concept of a community of interest that
includes our clients and their advisors, partners and investors:
[Insert graphic. This graphic depicts boxes representing the various
collaborating parties involved in a transaction managed through IntraLinks's
services. At the left edge of the picture are boxes labelled "Law Firm" and
"Accounting Firm." These boxes are connected to each other by arrows and to a
box to the right labelled "Corporate Client." This box connects to three
overlapping boxes labelled "JP Morgan," "Bank of America" and "Salomon Smith
Barney." Below and connected by an arow to these three boxes is a box labelled
"Law Firm." The three bank boxes are connected by arrows to five small boxes to
the right that are all labelled "Inv." The entire graphic is labelled
"Financial" at the bottom, indicating that these are parties that might
participate in a financing transaction. Below "Financial" are additional tags
labelled "Legal," "Technology" and "Professional Services," representing other
types of transactions that can be managed through IntraLinks's services.]
Our services integrate our software applications designed for managing
business-to-business communication with secure hosting and global 24-hour
customer support to provide a comprehensive and easily outsourced service. We
believe that by using our services, our clients realize productivity gains,
reduced project cycle times and cost savings.
To accelerate adoption of our services, we work with industry leaders to design
and promote our services. We seek to establish our services as industry
standards within the markets we target. We have established our services as a
standard in the corporate loan syndication market, where our services were used
to help manage approximately 35% of all domestically originated corporate loan
syndications in the fourth quarter of 1999. Our goal is to become the leading
provider of Internet-based services for collaboration and secure messaging
across a broad range of markets. During 1999, 22 of the 25 top syndicated
lenders, as ranked by Loan Pricing Corporation, used our services.
From a common platform consisting of application development, comprehensive
customer care, high level security protocols and comprehensive customer
service, we develop our services for our targeted markets.
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<PAGE>
Each secure environment we establish has the capability to address business
processes of varying degrees of complexity.
The following diagram illustrates how we provide our services across various
markets:
[Insert graphic. This graphic depicts a large black box at the base of the
graphic labelled "IntraLinks Core." Beneath these words are the sub-labels
"Customer Care," "Application Development & Infrastructure" and "Security,"
representing primary elements of IntraLink's core technologies. Intersecting
with this base along its top edge are six grey boxes labelled "Financial
Services," "Legal," "Pharma," "Accounting," "New Market" and "New Market," each
of which, other than "New Market," represents a market to which IntraLinks
provides its services. The outline of the two boxes labelled "New Market" are
dotted lines, indicating that they are potential markets for IntraLinks.
Outside the left edge of the graphic are the words "point-to-point messaging",
connected by an arrow pointing to the words "global, multi-party collaboration"
near the top; this represents the range of complexity of the services
IntraLinks can provide to the markets listed in the boxes described above.]
Our services range from DealSpace, which facilitates the complex multi-party
business processes underlying global corporate financing, public financing and
business development, to IntraLinks ASAP, which enables secure transmission of
basic point-to-point, business-to-business messaging. Our initial target market
for ASAP is the 56 million worldwide users of Lotus Notes.
By fostering stronger community links and enhanced collaboration, our solutions
help enable substantial increases in employee productivity and decreases in
project cycle time. In addition, our clients report that the use of our
services results in significant cost savings by reducing the inefficiencies and
administrative burdens associated with paper-based and other traditional means
of communication.
Our solutions enable businesses to:
. rapidly exchange and efficiently manage large volumes of business-to-
business information;
. enhance collaboration among dispersed project group members and
communities of interest;
. provide high levels of security in conjunction with standard Internet
access;
. control and monitor users' access to information; and
. manage project assignments and monitor progress and completion.
The markets that can benefit most from our services are those with business
processes characterized by:
. multiple collaborating parties;
. large volumes of information;
. repeated cycles of revision and review of documents; and
. a need for high levels of security.
We currently serve the financial services, legal, technology and professional
services markets. We have entered the pharmaceutical market and have targeted
the insurance sector as another market that could benefit from our services. We
distribute our services through our direct sales force and remarketing
partners. In January 2000, we launched our IntraLinks ASAP secure messaging
service and entered into an agreement under which IBM agreed to remarket this
service. As of February 29, 2000 we had 98 customers, including our strategic
partners The Chase Manhattan Corporation, Ernst & Young LLP and The R.W.
Johnson Pharmaceutical Research Institute, or RWJ-PRI.
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<PAGE>
Industry Background
Today's complex business processes often involve collaborating parties from
different companies operating in various locations, large volumes of sensitive
information and repeated cycles of review and revision of documents. For
example, a loan syndication can involve dozens or even hundreds of banks and
individual working group members, including lenders, the borrower, law firms,
accounting firms and other parties, each reviewing or revising a large number
of documents. Inefficiencies associated with paper-based execution of these
processes consume significant amounts of time and resources. To respond to
increasing competition, companies are seeking ways to streamline these
business-to-business processes through the use of technology.
By virtue of its power as a communication medium and universal accessibility,
the Internet presents significant opportunities to facilitate these processes.
Recognizing the Internet's potential for transforming relationships with
suppliers, customers, partners and advisors, businesses are increasingly
adopting online solutions. Forrester Research estimates that the total volume
of on-line business-to-business transactions will increase to $2.7 trillion by
2004.
While there has been growing acceptance of the Internet as an important
business-to-business medium, its use for managing business-to-business
communication between enterprises has been limited. For business-to-business
communication, companies continue to rely largely upon traditional paper-based
methods of communication, such as first class mail, overnight express mail,
courier services and facsimile. To leverage the power of the Internet to
facilitate and streamline communication processes, companies require cost-
effective solutions that ensure the security of the information transferred,
encourage collaboration among working group members and reduce the
inefficiencies of the paper-based and other traditional means of communication.
We believe this migration to the Internet is a natural evolution. According to
the Aberdeen Group, more than 90% of paper-based business documents originate
electronically, through word processing, computer programs or otherwise. In
addition, the Aberdeen Group estimates that 35% of the overnight delivery
market, representing more than 1,000,000 documents per day, will transition to
the Internet by 2001.
As a partial solution, companies are increasingly using e-mail. However, e-mail
has several disadvantages that limit its usefulness for managing critical
business-to-business communication. Most importantly, e-mail is primarily a
delivery mechanism and does not provide an environment that fosters enhanced
collaboration in the execution of business processes. Also, because e-mail
lacks security, many organizations have imposed limitations on its use.
Furthermore, e-mail is not always easily accessible from remote locations and
can be subject to significant delivery delays, especially during large-scale
distributions that may result in server congestion. For these reasons,
companies are seeking alternative Internet-based solutions that address the
limitations of e-mail.
Some companies have attempted to create in-house Internet solutions. These
solutions, however, tend to be costly and of limited use outside the sponsoring
company. The development and maintenance of in-house technology may consume
significant corporate resources. In addition, in-house solutions for managing
business-to-business communication may face significant adoption hurdles that
would limit their potential user-base. For example, due to confidentiality
concerns, industry participants might refuse to use competitors' systems for
the management of their sensitive business information. Absent a neutral third-
party solution, these security concerns could give rise to multiple in-house
solutions within the same industry, all addressing the same fundamental need.
Users have been increasingly turning to application service providers to obtain
the benefits of outsourced software applications through the Internet without
the need to invest in costly and time-consuming installations, maintenance or
user support.
For all of the above reasons, we believe companies are seeking standardized
Internet-based solutions for the management of business-to-business
communication that can easily be outsourced to neutral third parties.
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<PAGE>
The IntraLinks Solution
IntraLinks provides a comprehensive solution for managing business-to-business
communication over the Internet. Our services enable our clients to communicate
with customers, clients, advisors and partners to manage complex business
processes in a single, secure and reliable environment which we brand with our
client's name and logo. Our interface utilizes standard Internet navigation,
rendering it easy to use.
The key benefits of our services include:
Increased Productivity and Reduced Cycle Time
IntraLinks can help increase employee productivity by organizing related
business communications and information in a single environment and by
providing easy-to-use task management functions. By organizing all project- or
process-related information and messages in a single easily sorted framework,
our services enable working group members to more rapidly locate their
information. In addition, our task management functions help to ensure more
timely completion of projects and processes by increasing the accountability of
working group members. Using our services, project managers can assign tasks,
monitor their status through to completion, and notify working group members of
imminent and missed deadlines. In addition, IntraLinks helps speed the delivery
of business-to-business communications. Unlike e-mail, which is subject to
delivery delays and may be inaccessible from remote locations or with
incompatible systems, information distributed through our services becomes
immediately accessible to authorized users who have web access and an Internet
browser.
Enhanced Collaboration Among Working Group Members
Our services encourage collaboration among working group members by providing a
globally accessible client-branded environment in which they can securely
access, share and modify communications and information in real time, assign
tasks and monitor duties and the completion of tasks. By immediately notifying
users about new distributions via both traditional e-mail and our secure
messaging function, we help ensure that project team members are working with
up-to-date information. Because our services can be accessed virtually anywhere
using an Internet browser, users can more effectively collaborate with one
another regardless of their location.
Highly Scalable Turnkey Service
We provide a complete and easily outsourced solution that can scale to
accommodate high numbers of simultaneous users and projects. We provide 24-hour
client support through our toll free help-line and over the Internet. Our
services are easy to use and require minimal training. Our services allow our
clients to access and use these applications over the Internet, eliminating the
need for installation or investment in additional hardware or software beyond
web access and an Internet browser. In addition, upon a client's request, we
promptly set up an online environment that working group members can use for
their business communications and place the logo of our client on each page.
Trusted Third-Party Provider
Our services provide a trusted third-party environment for the management of
business-to-business communication. As a result, we are able to attract
multiple industry users to our services who might not otherwise use a
proprietary system developed by an industry competitor. We do not have a
financial interest in the outcome of projects managed on our system, nor do we
have any ownership interest in information derived from the use of our
services. In addition, we do not use customer information for marketing
purposes, nor do we sell user identifications or information. We believe that
our neutral third-party status will help us to create an industry standard for
managing sensitive business communication online.
Managed Access
Our services allow clients to manage and control the rights of users to access
and modify information posted to our site. These services allow clients to
instantly and easily add or remove users during the course of a project. Once
added, new users can be given immediate access to any or all current or
previously posted information. In addition, our services provide reports that
track site, document and message access by user, date and time. This feature
provides an audit trail that helps our clients monitor their business
processes, increases accountability of working group members and protects
against unauthorized access to information.
Highest Levels of Security and Document Integrity
Because many business communications are highly sensitive, we have incorporated
several levels of security to protect the confidentiality of those
communications. To prevent unauthorized use of sensitive information,
IntraLinks uses the highest level of encryption permitted by law. We
authenticate working group members
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<PAGE>
through their unique user identifications and passwords and by using defined
validation procedures. Our clients determine working group members' rights to
access information or edit documents. In addition, our hosting facilities are
designed to ensure high levels of network security and physical protection of
the servers.
Client-Branded Environments
We place the logo of our client on each page of its secure environment. As a
result, electronic interactions between our client and its customers, partners
and advisors reinforce our client's brand. We believe that this branding adds
value for our clients.
Reduced Administrative Costs
By reducing the need for faxes, couriers and overnight mail delivery, our
clients can significantly reduce the expenses of a particular project, business
process or transaction. We charge our clients on a per-project or subscription
basis, irrespective of the volume of communication that occurs. Therefore, the
more our services are used on each project, the more cost-effective they become
in comparison to traditional document delivery methods.
Strategy
We have established the Internet-based standard for managing communication and
documentation for loan syndications. Our goal is to be the leading provider of
Internet-based services to manage secure communication and collaboration across
a broad range of markets.
Central to our strategy are the following key objectives:
Rapidly Penetrate New Markets and Increase Penetration of Existing Markets
We seek to expand into markets where we can leverage our secure communications
and collaboration platform. We also seek to expand into markets where we can
best replicate the strategies we have successfully used to establish IntraLinks
as a trusted provider of secure Internet-based communication and collaboration
services for the capital markets. To this end, we focus on markets where
processes are characterized by multiple collaborating parties, large volumes of
information, repeated cycles of revision and review of documents and a need for
high levels of security and auditability. We have identified the financial
services, accounting, legal and pharmaceutical industries, among others, as
markets that could benefit from our services. We have hired sales professionals
with extensive experience in and detailed knowledge of each of those
industries' business processes. To adapt our services to each specific market
we target or serve, we intend to continue collaborating with industry leaders.
For example, we have an agreement with RWJ-PRI to develop and deliver our
PharmaSpace service for pharmaceutical research and development.
As part of our expansion strategy, we also intend to market additional services
to our existing customers. For example, we are currently leveraging our leading
position in the syndicated loan market to promote the use of DealSpace, our
collaborative service solution for managing a broad array of corporate finance
and capital markets transactions, to our clients in that market. Through
DealSpace, our objective is to establish IntraLinks as the leading provider of
online collaborative services for managing information for a broad range of
capital market financings.
Increase Focus on Enterprise Agreements for Our Services
IntraLinks provides a range of services for secure communications and
collaboration in our current and future target markets. We plan to target large
potential customers who are likely to make enterprise-wide purchases to meet
their secure communications needs. Our goal is to provide our clients with a
variety of secure collaboration and messaging services.
Expand Direct Sales Teams Around Target Markets
Because we sell to senior business professionals as well as to technologists,
the marketing of our services requires a sophisticated understanding of our
clients' businesses. For this reason, we recruit for our sales force
individuals with significant relevant experience in each of our existing and
target markets. We believe that by further developing and expanding industry-
focused sales teams in both the United States and Europe, we will increase our
penetration of existing markets and develop new markets.
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<PAGE>
Improve our Platform
We continually seek to improve our technology and service delivery. During the
second half of 2000, we expect to begin converting our services to a three-tier
architecture that includes Oracle databases, Sun Microsystems application
servers and Netscape web servers. This new platform will improve scalability,
ease of maintenance, and our ability to rapidly deploy applications for new
markets. Customizing our applications for the markets we serve has been
essential to our success in loan syndications, mergers and acquisitions and
other markets.
Incorporate Additional Functional Applications and Content to Enhance our
Services
We intend to continue to enhance our services by providing IntraLinks
communities of interest with access to functional applications and additional
process-relevant content. We have recently added calendaring and task
management capabilities to our collaborative services, and are working with
Yahoo! Financial Media Services to provide streaming video and audio management
presentations to facilitate capital markets transactions such as private
placements and loan syndications. In addition, Loan Pricing Corporation, a
subsidiary of Reuters, delivers financial content alongside our IntraLoan
service through LoanInvestor, a jointly marketed vertical portal for syndicated
loans. As a result, our users have convenient access to real-time market data
and news, analytical tools, research reports, SEC filings, Internet-based
company presentations and other useful information. By leveraging the
IntraLinks platform with additional value-added services and applications for
specific markets, we provide users with increased functionality and the
convenience of one common interface. We believe this will result in increased
use and adoption of our services while allowing IntraLinks to increase revenue
from existing users by charging for value-added applications.
Increase Indirect Sales Through Strategic Alliances
We intend to build and diversify our sales channels further by forging
strategic alliances and increasing co-marketing arrangements with content
providers, technology companies, application developers and other strategic
partners. For example, we have established an important sales channel through
our relationship with Ernst & Young, which has created a dedicated team to
coordinate co-marketing of our services. We plan to add new sales channels and
revenue streams by licensing our technology to well-established application
software providers and other technology marketers that have national and
international sales capabilities. For example, we have entered an agreement
with IBM under which IBM will remarket IntraLinks ASAP, an enterprise
application for secure point-to-point delivery of documents and messages. We
have also entered into co-marketing arrangements with suppliers of proprietary
financial content and services. For example, Reuters co-markets our loan
syndication services with their loan market information through its subsidiary
Loan Pricing Corporation. We plan to enter into partnerships and co-marketing
agreements with suppliers of additional services to the financial and legal
communities. We have recently entered into an arrangement with Capital Printing
Systems, Inc. under which Capital is marketing a co-branded version of our
services to financial institutions and law firms that utilize Capital's
financial printing services.
Broaden Brand Name Recognition
We believe that broadening the brand name recognition of IntraLinks and its
services will facilitate market acceptance of our services. We have achieved
brand name recognition in the loan syndication community, and we are working to
build brand name recognition in the legal and pharmaceutical markets and the
broader financial community. We plan to continue to build brand awareness for
our services through marketing and promotional initiatives, including
advertising, public relations campaigns, event sponsorship, trade show
participation, direct mail and advertising.
Pursue Strategic Acquisitions
We plan to use strategic acquisitions as a means to continue to improve our
service offerings and enter into new markets. In August 1999, we acquired
Cambridge Technology Visions, a developer of hosted applications to facilitate
the secure communications and collaboration required to rapidly complete
mergers and acquisition transactions and post-merger integration. Using CTV's
technology, we expanded our target customer base to include corporate acquirers
and their financial, legal and accounting advisors. In January 2000, we
acquired Savant Technologies, Inc., which specializes in the rapid deployment
of complex Internet applications. Our Savant team will focus on the
introduction of new IntraLinks applications for current and future target
markets.
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<PAGE>
Expand our International Operations
We seek to grow our business in both the United States and abroad. In March
1998, we opened an office in London to serve Europe, Asia and Australia. In
1999, sales out of our London office accounted for 6% of our total sales,
largely through the sale of our IntraLoan service. We plan to continue to
expand our marketing efforts abroad in order to increase sales of all of our
services.
Services
IntraLinks provides services that allow our clients to initiate, collaborate
and complete business-to-business communication. We supply a managed, secure
digital workplace that is client-branded and Internet-accessible. Our broad
range of services span one-to-one messaging and complex multi-party
collaboration.
Our services fall into two categories: secure messaging, which facilitates one-
to-one or one-to-many communication, and collaboration services, which enable
group collaboration and distribution of information. Upon a client's request,
we establish an online environment that internal and external working group
members can use for their business communication. Our services enable working
group members to collaborate online and post, access and organize information
and communication associated with a particular transaction, project or business
process.
IntraLinks Services
<TABLE>
<CAPTION>
Service Type Service Name Target Markets
- ---------------------- ------------------------------- --------------------------------------
<S> <C> <C>
Secure Messaging
Services IntraLinks ASAP Large enterprises
Collaboration Services IntraLinks Syndicated loans
for the Loan Syndication Market
IntraLinks DealSpace for Corporate finance and capital markets
Corporate Finance
IntraLinks DealSpace Mergers and acquisitions
Acquisition Trustee
IntraLinks for the Legal Law firms and in-house legal
Community departments
IntraLinks DataRoom Due diligence and project
management for transactions and
projects
Intralinks for the General Professional services firms, boards of
Business Community directors and project teams
IntraLinks PharmaSpace Pharmaceutical industry
</TABLE>
Secure Messaging Services
IntraLinks ASAP
IntraLinks ASAP, launched in January 2000, is a secure messaging service
intended for customers whose core business processes involve the frequent
distribution of important documents or digital files to customers, clients, and
business partners. ASAP is targeted at large enterprises. We intend to support
and supplement direct sales into markets in which we have expertise and
established customer relationships. Our targeted customers for ASAP include:
.financial services firms;
.legal and other professional services firms, including consulting firms,
accounting firms and others;
.pharmaceutical companies; and
.insurance companies.
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<PAGE>
Initial sales of ASAP are targeted at the 56 million worldwide Lotus Notes
users in industries in which the exchange of intellectual capital is of
particular importance. Because Lotus Notes is predominantly used by large
enterprises, we believe that this strategy allows us to target sales more
precisely to the largest potential customers.
We intend to market IntraLinks ASAP through third parties. IBM has agreed to
market this service on a non-exclusive basis.
The following illustrates a representative screen that an ASAP user would view,
which shows ASAP messages sent by the user:
[Insert graphic. The graphic depicts a representative screen that a user of
IntraLinks ASAP might view on his or her computer monitor while using the
service, in this case the screen depicting messages previously sent by the
user. In the top left corner is the client logo "broadway" within a crescent
moon image; a line runs from this logo to a legend, placed on the left of the
logo, that read "Online environment is branded for each client." In the top
center of the screen are "links" to various IntraLinks ASAP screens. These
links read "Inbox," "Sent," "Address Book," "Administration," "Help" and
"Logout;" the link reading "Sent" is in black, indicating that the "Sent" page
is the one being viewed. In the top right corner is the "IntraLinks ASAP" logo.
Across the center of the screen are subheadings showing the information that is
presented for each of six sample messages listed below. These subheadings read
"Title," "Date Sent," "Expiration Date" and "Seen by All Recipients." To the
left of these subheadings appears "Create ASAP Pak," a feature of this service.
Beneath these subheadings, each on a separate line are data for six sample
messages entitled "Final Contract," "Contract for Review," "Proposed
Implementation P..,'' ""Enterprise Pricing,'' ""Revised Proposal'' and ""Initial
Proposal."" For each message the date sent and expiration date (including the
times of day) is shown; for five of the six messages, a checkmark is shown
beneath the ''Seen by All Recipients"" subheading. A legend to the right of
these checkmarks is connected to them by an arrow and reads ''Tracking feature
shows when all recipients have viewed a message.
"In the bottom left corner are the words "Powered by IntraLink. Copyright 2000
IntraLinks, Inc. All Rights Reserved." In the bottom right corner is an arrow
pointing upwards labelled "Previous" and an arrow pointing downwards labelled
"Next," each indicating links for the user to view the previous or the next
IntraLinks ASAP screen. Below the entire graphic, connected to it by an arrow,
is the legend "Web interface (pictured above) offers complete functionality.
Lotus Notes users of ASAP also have the option of working directly from Notes
mail."]
Collaboration Services
We offer several services that enable business-to-business collaboration on
high-value projects. We work with industry leaders to develop our applications
and services. These arrangements are designed to validate the utility and
design of our services, increase the likelihood of attracting additional
customers and provide highly credible references for future sales. We worked
with J.P. Morgan to design IntraLoan, our global loan syndication service, and
with Bank of America to create our private placement service, which is now
incorporated in DealSpace. We also worked with Ernst & Young to develop
DealSpace. We are working with RWJ-PRI to develop IntraLinks PharmaSpace, a
secure collaborative workspace for the pharmaceutical industry. We plan to
continue to collaborate with industry leaders to develop new applications and
services targeted at specific markets.
Our clients determine the rights of working group members to access or modify
information. Once clients post information to the site for the working group,
our system simultaneously delivers a secure message within the IntraLinks
environment and a traditional e-mail to all approved users notifying them to
access the newly posted information. Users can immediately download and print
any document to which they have access instead of waiting for delivery through
more time-consuming means such as courier or overnight delivery.
To enhance our service offerings to the corporate finance market, we have
incorporated into our hosted applications relevant third party content and
tools. For example, users of DealSpace can access EDGAR Online directly through
our service as well as Yahoo! Financial Media Services' streaming audio and
video presentations. As a result of these enhancements, we expect that users
will more frequently access our services. We also expect that these
enhancements will accelerate the adoption of our services.
IntraLinks for the Loan Syndication Market
Since 1997, our premier capital markets service has been IntraLoan. IntraLoan
has become the global standard for managing loan syndication transactions
online. We also offer IntraAgency, which enables agent institutions to manage
loan syndications over their lifecycles.
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<PAGE>
IntraLinks DealSpace for Corporate Finance
Building on IntraLoan's success in the loan syndication market, we introduced
our IntraLinks DealSpace service to the corporate finance market in October
1998. We had marketed predecessor services of DealSpace under different brand
names since June 1997. DealSpace, developed in conjunction with our strategic
partner Ernst & Young, is an Internet-based service for the management of
capital markets and other business transactions, including:
. mergers, acquisitions and divestitures;
. municipal finance;
. private placements;
. equity issuance;
. project finance;
. asset-backed finance;
. debt finance; and
. collateralized bond and loan obligations.
The following shows a representative screen that a DealSpace user would view to
select authorized readers and editors of a document posted by the user:
[Insert graphic. This graphic shows a representative screen that a user of
IntraLinks DealSpace might view on his or her monitor while using the service,
in this case the screen for the "IntraLinks IPO" transaction, in which the user
selects a document to post to the DealSpace site and chooses which working group
members may view or edit the document; it also provides a space for the document
author to type a cover note to readers of the document. In the top left corner
is the IntraLinks DealSpace logo. To the right are links to other screens for
the transaction, labelled "Overview," "Documents," "Messages," "Help" and "Sign
Out." In the top right corner is a link labelled "Feedback." Beneath the
DealSpace logo along the left margin are the logos of JP Morgan and Bank of
America; to the left of these logos, connected to them by an arrow, is the
legend "Online environment is branded for each client."
Beneath the clients' logos are links to create a "New Document," to create a
"New Certified Doc," to "Set Doc Access" and to "View All Documents." To the
right of the client logos is the heading "IntraLinks IPO Document." Beneath are
two sub-windows, each listing all of the working group members for the
transaction and their organizations. The top window is labelled "Assign Editors:
The selected participants will have all rights to this document (editing,
deleting and choosing document readers and administrators). To select or
deselect multiple participants, hold down the CTRL key and click on each name."
The bottom window is labelled "Assign Readers: The selected participants will be
able to read this document but not alter it on this site in any way. To select
or deselect multiple users, hold down the CTRL key and click on each name."
There are two boxes above the bottom window that may be selected to allow all
current and future participants to read it, or merely all users listed in the
bottom window. To the right of these two sub-windows, connected to them by
arrows, is a legend that reads "The Author of a document assigns rights to edit
or simply read the document on a group or individual basis."
Beneath the two sub-windows are boxes for the user to select the "Type" of
document (original, draft, etc.), a "Sort Number" to determine this document's
position within its category, and a "URL" if the document is to be linked to a
specific Internet site. Beneath these boxes is a box in which the user would
type the "Body" of the user's cover note to readers of the document. To the
right of this box, connected by an arrow, is a legend that reads "A secure
message to readers can be posted to accompany each document."
Beneath the "Body" box are boxes for the user to type or select, using a
windows menu, the file path of the document to be posted. To the right of these
boxes, connected to them by an arrow, is a legend that reads "Attachments can be
varying size or type of file." Beneath the entire graphic, connected to it by an
arrow, is a legend that reads "Easy-to-use interface guides the user through
each action, such as creating a new document."]
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<PAGE>
IntraLinks DealSpace Acquisition Trustee
Through our 1999 purchase of Cambridge Technology Visions, we acquired
Acquisition Trustee, a collaborative web-based application designed to improve
the management, purchase and post-merger integration of acquisition targets.
Our customers are currently using Acquisition Trustee in connection with their
merger and acquisition programs.
IntraLinks for the Legal Community
IntraLinks for the Legal Community enables attorneys to communicate and
collaborate securely with their clients, colleagues and opposing attorneys.
IntraLinks DataRoom
IntraLinks DataRoom enables businesses to bring volumes of paper-based and
electronic information into a single, secure, searchable database. This service
includes scanning hardware and software to turn paper documents into electronic
files, plus a web-based environment that allows authorized individuals to
catalogue, sort and then search transaction or project documents. As an adjunct
to our collaborative solutions, DataRoom streamlines due diligence and project
management.
IntraLinks for the General Business Community
Professional service firms and boards of directors use our services for complex
business projects. Our services can also be used for product management and
team collaboration in a variety of organizations, including for-profit and not-
for-profit corporations and government agencies.
IntraLinks PharmaSpace for the Pharmaceutical Industry
In collaboration with RWJ-PRI, we are developing PharmaSpace, a secure
collaborative workspace for pharmaceutical research and development activities.
PharmaSpace seeks to transform the traditional, paper-based clinical
pharmaceutical research process into a fully integrated web-based solution that
eliminates the need for duplicate data entry, thus speeding time to market for
new products. This service is currently in the development stage. Additionally,
we are developing a solution to improve data collection, reporting and
communication in the clinical drug trials process.
Strategic Alliances and Collaborations
The Chase Manhattan Corporation
In connection with their equity investment in us in January 2000, Chase
Manhattan entered into an enterprise service agreement with us under which
Chase Manhattan has agreed to use its best efforts to help us reach specified
revenue targets for our services and granted to us first option rights to
provide our services to its Global Investment Bank segment, if it should decide
to utilize those types of services.
Ernst & Young LLP
We have an agreement under which we and Ernst & Young jointly market our
services to Ernst & Young's worldwide customer base of approximately 2,400
publicly traded companies. Ernst & Young has dedicated a team to oversee the
integration of our services into their service offerings and to support our
direct sales effort. In April 1999, we sold a significant minority equity
interest in IntraLinks to Ernst & Young.
The R.W. Johnson Pharmaceutical Research Institute
In June 1999, we entered into a three-year collaboration and service agreement
with RWJ-PRI. Under this agreement, RWJ-PRI is assisting us in the development
and design of our services for the pharmaceuticals industry, including
PharmaSpace. In connection with these arrangements, in June 1999, we sold a
minority equity interest in IntraLinks to Johnson & Johnson Development
Corporation, an affiliate of RWJ-PRI.
36
<PAGE>
IBM
We entered into a marketing agreement with IBM in January 2000 for IntraLinks
ASAP. Our initial target market for IntraLinks ASAP is the 56 million Lotus
Notes users worldwide.
Reuters
We have entered into an arrangement with Loan Pricing Corporation, a subsidiary
of Reuters, under which Loan Pricing Corporation delivers its financial content
and services alongside our IntraLoan service through a jointly marketed service
called LoanInvestor. In June 1999, we sold a minority equity interest in
IntraLinks to Reuters in connection with the issuance of our Series E
convertible preferred stock.
Capital Printing Systems, Inc.
In October 1999, we entered into a one-year co-marketing agreement with Capital
Printing Systems, Inc., an international financial printer. Under this
agreement, Capital Printing is re-marketing our applications to their financial
printing customers in the financial services and legal markets.
USinternetworking
As part of our hosting agreement, USinternetworking will provide approximately
1,500 hours of application development consulting. USinternetworking will focus
on continued development of IntraLinks ASAP.
Other Content Providers
Our relationships with content providers allow us to provide users with useful
industry information, services and features directly through our site, which we
believe will increase the use and rate of adoption of our services. In addition
to Loan Pricing Corporation, our content providers presently include Portfolio
Management Data Research and EDGAR Online.
Sales and Marketing
Our direct sales force, which has generated substantially all of our sales to
date, is comprised of experienced sales professionals with expertise in the
specific industry to which they market. As of December 31, 1999, we employed 25
people in sales. During 2000 we plan to expand our sales force by approximately
60% with experienced sales professionals who will focus on key accounts. In
March 2000, we implemented a new commission-based compensation structure
providing more incentives for our sales force. In February 2000, we also
instituted a new pricing option to encourage enterprise-wide adoption of our
services, where clients buy a package of services for a pre-determined
subscription price.
We use a consultative sales approach, selling primarily to senior business
professionals and to technologists within client organizations. We target
enterprises that can benefit from one or more of our solutions and design an
implementation plan in collaboration with the client. A team of client service
specialists supports our sales force in their efforts. Customer support is an
integral part of the services we provide. We believe that integrating client
service specialists with direct sales teams fosters both stronger customer
relationships and greater use of our services across our clients'
organizations.
To strengthen and complement our direct sales efforts, we are continuing to
leverage our relationships with Ernst & Young, IBM and Lotus to provide us with
introductions to potential clients. We have also established relationships with
several content and service providers in several markets that have resulted in
co-marketing opportunities. In addition, we plan to enter into additional co-
marketing arrangements with leading technology providers such as IBM. Also, our
business development staff is seeking to establish additional alliances and
sales channels.
We currently market and promote our services and brand names through a variety
of methods, including electronic and printed promotional materials, product
demonstrations, public relations initiatives, participation in trade and
industry conferences, customer focus groups and membership in industry
associations. In addition, we have launched a new advertising campaign.
37
<PAGE>
Customers
Our clients include many global financial institutions such as:
. Chase Manhattan Bank;
. Bank of America;
. Citigroup;
. GE Capital;
. J.P. Morgan;
and over 90 other clients, including:
. banks and investment banks;
. law firms;
. accounting firms; and
. other major corporations and professional service firms.
As of December 31, 1999, over 1,700 organizations and over 24,000 individual
registered users had used our services. For the year ended December 31, 1999,
Chase Manhattan Bank accounted for 29% of our revenue. No other client
accounted for 10% or more of our 1999 revenue.
We intend to leverage the extensive relationships of our existing customers to
identify new customers. As our customers deploy our services to working groups
that include multiple firms, additional organizations will be exposed to our
services and the benefits they provide.
Technology
Our services are currently based on a common software platform built using
Lotus Domino and Lotus Notes. Lotus Domino provides access to Lotus Notes over
the Internet, while Lotus Notes provides the document repository function. We
have written proprietary code allowing for enhanced workflow features,
increased manageability of the documents and communications and improved
auditing capabilities.
To protect documents from unauthorized use, we employ 128-bit encryption, the
highest level of security allowed by law for document transmission via the
Internet. Each user of the system has a unique identification name,
authenticated by Lotus Domino software, that allows the user to view only those
documents to which he or she is entitled based on his or her access rights.
Our services currently operate on redundant, high availability Windows NT
servers hosted by IBM Global Services. IBM houses the servers, maintains the
Windows NT operating systems, and deploys Lotus Domino technology. IBM's
hosting sites are located near major nodes of the Internet, providing high
bandwidth to and from the Internet, and have backup electrical service provided
by their own on-site diesel generators. IBM performs daily backups and houses
the backup data in multiple locations. IBM provides high levels of security,
including hardened servers and firewalls, to protect against intrusion. Also,
because IntraLinks is an IBM business partner, the IBM Ethical Hacking Team
performs various levels of intrusion tests on our applications to ensure their
integrity.
We are in the process of migrating our services to a three-tier architecture
platform utilizing the redundant and highly available Oracle 8i database and
Powertier Persistence application servers with Netscape Communications web
servers hosted by USinternetworking. This three-tier architecture has a high
degree of scalability, will allow us to develop services for new markets in
shorter periods of time without major software modifications and will have a
high degree of monitoring capability to insure customer satisfaction.
USinternetworking will house the servers, maintain the Oracle operating system
and procure, integrate and operate the hardware.
38
<PAGE>
Competition
The market for managing business information is intensively competitive,
rapidly evolving and subject to swift technological change. Our services
currently compete with a variety of other services, including courier services,
overnight delivery services such as Federal Express, United Parcel Service and
the United States Postal Service, fax and e-mail. We also compete against other
existing and emerging companies providing secure on-line communications,
including Tumbleweed, and The docSpace Company (recently acquired by Critical
Path) and Niku, which acquired LegalAnywhere, a direct competitor of ours in
the legal market. In addition, companies with which we do not presently compete
directly may become competitors in the future, either through the expansion of
our products and services or through their product development in the area of
secure online communication services. To date, we have not had significant
direct competition from other companies offering a full range of secure
communications and collaboration services in our target markets. However, some
financial printers and law firms have announced or introduced Internet
strategies for use by their own clients, which could potentially be offered to
other customers.
As of now, we have not had significant direct competition from other companies
offering a service for distributing documents to financial institutions over
the Internet or an intranet with features comparable to those of our services.
However, we expect that such competition will develop in the financial services
market as well as other markets we intend to enter, and this may have an
adverse impact on our business. Many of our competitors may be able to respond
more quickly to new or emerging technologies and changes in client
requirements, and to devote greater resources to the development, promotion and
sale of their products and services than we can. Many of our competitors may
also have substantially greater financial resources than ours. See "Risk
Factors--Our prospects depend on our ability to succeed against intense
competition in the electronic business-to-business communication management
market."
We believe that we compete effectively based on a number of factors, including:
. industry knowledge and expertise;
. customer service and support;
. breadth, quality and cost effectiveness of our services; and
. product performance and technical features.
Intellectual Property
We regard substantial elements of our web site and underlying technology as
proprietary and attempt to protect them by relying on intellectual property
laws. We generally enter into confidentiality agreements with our employees,
consultants and third parties who gain access to our trade secrets. In
addition, we seek to control physical and electronic access to and distribution
of our technology, documentation and other proprietary information. Despite
these precautions, it may be possible for an unauthorized third party to copy
or otherwise obtain and use our proprietary information or to develop
independently similar technology.
We currently have six U.S. patent applications pending relating to our
proprietary technology. However, we cannot assure you that the Patent Office
will issue any patents to us. Furthermore, we cannot guarantee that any patents
issued to us will be of sufficient scope and strength to provide meaningful
protection of our technology or any commercial advantage to us. In addition, we
cannot assure you that our patents will not be challenged, invalidated or
circumvented.
We have also registered the copyright in our IntraLoan service website and have
applied to register the trademarks "DealSpace," "IntraLoan," "IntraTrials,"
"IntraLinks ASAP," "DealSpace AT," "Acquisition Trustee," "DataRoom,"
"IntraAgency," "PharmaSource," "PharmaSpace" and "Is it work if you love it?"
We cannot assure you that these trademark applications will succeed or that our
trademarks will not be infringed.
Effective patent, trademark, copyright and trade secret protection may not be
available in every country in which our services are currently distributed or
made available in the future over the Internet. In addition, although we
believe that none of our intellectual property infringes on the rights of
others, we cannot assure you that we do not and will not infringe these rights
or that third parties will not assert infringement claims against us in the
future. See "Risk Factors Possible Infringement of Intellectual Property Rights
Could Harm Our Business" and "Business--Legal Proceedings."
39
<PAGE>
Employees
As of December 31, 1999, IntraLinks had 131 full time and 7 part time
employees. IntraLinks also periodically employs a limited number of independent
contractors and temporary employees. None of our employees is represented by a
labor union, and we consider our labor relations to be good.
Facilities
We are headquartered in New York, New York, where we lease approximately 31,000
square feet under a lease that expires on March 31, 2008 and provides for
annual rent of approximately $980,000, subject to customary escalation clauses.
We use these facilities for executive office space, sales and marketing,
finance, administration and client support. In addition, we maintain offices in
Wilmington, Delaware; Burlington, Massachussetts; and London, England.
Legal Proceedings
There are presently no material claims filed against us.
40
<PAGE>
Management
Executive Officers and Directors
The following sets forth certain information with respect to our directors and
executive officers as of the date of this prospectus.
<TABLE>
<CAPTION>
Name Age Positions
- ---- --- ---------
<S> <C> <C>
Mark S. Adams........... 49 Chairman of the Board of Directors and
Chief Executive Officer
James P. Dougherty...... 43 President, and Chief Operating Officer
John M. Muldoon......... 44 Chief Financial Officer, Chief Administrative Officer, and Treasurer
Leonard G. Goldstein, 50 Chief Information Officer
Ph.D...................
Patrick J. Wack, Jr..... 32 Executive Vice President and Assistant Secretary
Myles Trachtenberg...... 36 Chief Technology Officer
Gene W. Fuller.......... 52 Executive Vice President - Worldwide Sales
William B. Ford*........ 36 Director
Thomas P. Hirschfeld+... 37 Director
Julie Kunstler*......... 44 Director
Carolyn Buck Luce+...... 47 Director
Steven D. Oesterle*..... 46 Director
Milton J. Pappas*+...... 71 Director
J. Douglas Phillips..... 58 Director
Arthur B. Sculley....... 54 Director
Devin N. Wenig.......... 32 Director
Stephen M. Davis........ 45 Secretary
</TABLE>
- --------
* Member of Compensation Committee
+ Member of Audit Committee
Mark S. Adams, a founder of IntraLinks, has served as our Chairman of the Board
and Chief Executive Officer since February 2000 and President and as a director
since June 1996. From March 1995 until October 1996, Mr. Adams was the co-
founder and was President and Chief Executive Officer of Prospectus Plus, Inc.,
a company which saved and distributed capital markets prospectuses on CD-ROM.
Prior to founding Prospectus Plus, from December 1993 until December 1994, Mr.
Adams served as a vice president of the asset-backed securities group at Kidder
Peabody & Co. Incorporated.
James P. Dougherty has served as our Chief Operating Officer and President
since January 2000. Mr. Dougherty was at Prodigy from November 1997 to
September 1999, first as the CEO of the software subsidiary Taconix, and then
as Executive Vice President when Prodigy launched Prodigy Business Solutions.
Prior to joining Prodigy, Mr. Dougherty was a consultant for a number of
Internet start-ups and businesses such as Johnson & Higgins. He served as
Executive Vice President at a NYC-based Internet start-up, iFusion, in 1996.
From 1987 to 1996, Mr. Dougherty was with Lotus Development Corporation; his
last position was General Manager of the eApplications Division.
John M. Muldoon, a founder of IntraLinks, has served as our Chief Financial
Officer and Treasurer since June 1996 and has served as our Chief
Administrative Officer since February 2000. He served as a director until
November 1998. From February 1996 until September 1996, Mr. Muldoon served as
the Chief Financial Officer for Prospectus Plus, Inc., a company which saved
and distributed capital markets prospectuses on CD-ROM. From February 1995
until August 1995 he served as Chief Financial Officer for The American
Business Journal, a television production company. From March 1994 until
January 1995, Mr. Muldoon was Chief Financial Officer for Perry Corporation, a
trading advisor and hedge fund manager.
Leonard G. Goldstein, Ph.D. has served as our Chief Information Officer since
January 1998. From April 1987 until January 1998, Mr. Goldstein served as Vice
President of the Investment Research Department at Goldman, Sachs & Company,
where he was responsible for the development, implementation and operation of a
large-scale research delivery system.
41
<PAGE>
Patrick J. Wack, Jr. has served as our Executive Vice President since September
1999. Mr. Wack had served as our Chief Operating Officer from April 1997 until
September 1999 and served as Director from June 1997 until November 1998. From
May 1991 until August 1996, Mr. Wack was co-founder, Chief Operating Officer,
and Director of Professional Sports Care Management, Inc., the greater New York
metro area's largest provider of outpatient physical therapy, and from August
1996 until May 1997 he served as a consultant to HealthSouth Corp., which
acquired PSCM in August 1996. Mr. Wack is the son-in-law of John Sculley, a
consultant to IntraLinks who is the brother of Arthur B. Sculley, a member of
our Board of Directors.
Myles Trachtenberg joined IntraLinks as Chief Technology Officer in February
2000. From October 1999 until February 2000, Mr. Trachtenberg served as Vice
President, Marketing eBusiness: Individual Financial Services at Prudential
Insurance Company of America. From September 1996 to August 1999, he was Vice
President and Chief Information Officer of Prudential HealthCare. He served as
Vice President, Distributed Delivery Services, a department within Information
Technology and Operations of The Chase Manhattan Bank from March 1992 to June
1996.
Gene W. Fuller has served as Executive Vice President--Worldwide Sales since
February 2000. From February 1993 to January 2000 he was Vice President of
Business Development for Phillips Publishing, one of the largest newsletter
publishers.
William B. Ford has served as a director of IntraLinks since October 1998. Mr.
Ford has served as a Managing Director of Perseus L.L.C., a merchant banking
firm, since November 1997. Prior to that, Mr. Ford was Director of Acquisitions
for Fisher Scientific International from April 1997 until September 1997. From
July 1992 until September 1996, Mr. Ford was a Vice President of Butler Capital
Corporation, a private equity investment firm. Mr. Ford also serves as a
director of Fisk Corporation.
Thomas P. Hirschfeld has served as a director of IntraLinks since October 1998.
Since March 1999, Mr. Hirschfeld has been a managing director of Patricof & Co.
Ventures, a venture capital firm where he was a principal from January 1995 to
March 1999. Mr. Hirschfeld also serves as a director of Audible, Inc., Talk
City, Inc., PNV, Inc. and various privately held companies.
Julie Kunstler has served as a director of IntraLinks since October 1998. Since
June 1999, Ms. Kunstler has served as a Managing Director of HK Catalyst
Strategy & Finance Ltd. a firm that provides management services to investment
companies, including Catalyst Investments (Belgium) N.V. and Portview
Communications Partners. Ms. Kunstler served in a variety of capacities at HK
Catalyst Strategy & Finance Ltd. since June 1991.
Carolyn Buck Luce has been a director since April 1999. Since October 1998 she
has served as Partner and National Director of Electronic Commerce at Ernst &
Young LLP. From October 1996 until September 1998, Ms. Buck Luce Served as Co-
National Director of Ernst & Young's Center for Strategic Transactions. Ms.
Buck Luce has served in a variety of capacities at Ernst & Young since 1991.
Steven D. Oesterle has served as a director of IntraLinks since April 1999.
Since October 1998, Mr. Oesterle has served as a Partner and as National
Director--National Specialty Practices at Ernst & Young LLP. From October 1996
until September 1998, he served as Co-National Director of Ernst & Young's
Center for Strategic Transactions. From October 1986 until October 1996, he
served as a partner in Ernst & Young's Financial Advisory Services practice.
Milton J. Pappas has served as a director of IntraLinks since January 1998.
Since 1983, Mr. Pappas has been Chairman of Euclid Partners Corporation, a
management company providing services to Euclid Partners, a venture capital
investment fund. From 1983 to the present, he has been a General Partner of
Euclid Partners Associates II, L.P., Euclid Partners Associates III, L.P. and
Euclid Partners Associates IV, L.P., private venture capital investment funds.
Mr. Pappas also serves on the Boards of Directors of JuniorNet Corporation and
Vision Rx.com, Inc.
42
<PAGE>
J. Douglas Phillips has served as a director of IntraLinks since April 1999.
Since October 1994, Mr. Phillips has served as Vice Chair - Assurance &
Advisory Business Services at Ernst & Young LLP. Mr. Phillips has served in a
variety of capacities at Ernst & Young since 1963.
Arthur B. Sculley, a founder of IntraLinks, has served as Chairman of
IntraLinks's Board from our inception until February 2000 and as a director
since such time. From June 13, 1996 until March 15, 1998, Mr. Sculley's role as
chairman included various executive responsibilities. Mr. Sculley is a founder
of, and since March 1995 has been a partner in, Sculley Brothers LLC, a New
York based private investment and strategic advisory firm, which serves the
financial services, communication and media/entertainment industries. From
November 1970 until March 1995, Mr. Sculley served at J.P. Morgan & Co. in
various capacities, including as a Managing Director in the Private Banking
area. Mr. Sculley also serves as Chairman of the Bermuda Stock Exchange. Mr.
Sculley is the brother of John Sculley, a consultant to IntraLinks.
Devin N. Wenig has served as a director of IntraLinks since July 1999. Since
February 2000, he has served as Managing Director of Reuters Information. From
October 1998 until February 2000, Mr. Wenig served as Executive Vice President,
Marketing for Reuters Holding Switzerland SA. From June 1997 to October 1998,
he served as Director--Third Party Data for Reuters. From April 1994 to June
1997, he served as Corporate Counsel for Reuters.
Stephen M. Davis has served as our Secretary since June 1996. Mr. Davis has
been a partner of Heller Ehrman White & McAuliffe LLP since April 1999 and was
a partner of a predecessor firm, Werbel & Carnelutti, from January 1987 until
March 1999. Mr. Davis also serves as a director of National R.V. Holdings, Inc.
Advisory Board
<TABLE>
<S> <C>
Thomas J. Barr............ Vice President, Concept Realities Software, Inc.
Jude Gartland............. Investment Banker, Benedetto-Gartland Co.
Craig Goldman............. President and CEO, Cyber Consulting Services Group
George Levitt............. Executive Vice President, Credit Lyonnais
Michael Lobdell........... Managing Director, J.P. Morgan & Company
Irene Miller.............. CEO, Akim, Inc.
John Patrick.............. Vice President, IBM
Sam Ridley................ Independent Advisor
David Rogers, Esq. ....... Partner, Latham and Watkins
Marty Rosenblatt.......... Partner, Deloitte & Touche, LLP
John Sculley.............. President and CEO, Sculley Brothers, LLC
William W. Wilson III..... President and CEO, WWW/3/, LLC
</TABLE>
Board of Directors and Officers
Directors are elected by the stockholders at each annual meeting of
stockholders to serve until the next annual meeting of stockholders or until
their successors are duly elected and qualified. Our current directors were
nominated and elected in accordance with the Amended and Restated Shareholders'
Agreement, dated as of January 24, 2000, which will terminate upon the closing
of this offering.
Our executive officers are appointed by our board of directors and serve until
their successors have been duly elected and qualified.
We maintain directors' and officers' liability insurance, and our certificate
of incorporation provides for mandatory indemnification of directors and
officers to the fullest extent permitted by Delaware law. In addition, our
certificate of incorporation limits the liability of our directors or
stockholders for breaches of the directors' fiduciary duties to the fullest
extent permitted by Delaware law. See "Description of Capital Stock Certain
Delaware Law Provisions."
Committees of the Board of Directors
Our board of directors has established a compensation committee and an audit
committee.
Compensation Committee. The members of the compensation committee are William
B. Ford, Julie Kunstler, Steven D. Oesterle and Milton J. Pappas. The
compensation committee is responsible for reviewing and
43
<PAGE>
approving all compensation arrangements and benefit plans for our officers and
for administering our stock incentive plan.
Audit Committee. The members of the audit committee are Thomas P. Hirschfeld
and Milton J. Pappas. The audit committee performs the following functions:
. reviews and approves our financial statements, as audited, prior to
issuance each year;
. recommends appointment of our independent auditors and meets with our
auditors to discuss the scope of their annual examination;
. reviews the annual report of our auditors, including the financial
statements and any management letters or recommendations on internal
control;
. meets with our treasurer to discuss and review our system of internal
controls and procedures, the quality of his staff and our financial
statements;
. directs and supervises special investigations of our accounting affairs;
and
. makes a report of the committee's activities at each annual meeting.
Compensation of Directors
Directors do not receive salaries or cash fees for serving as directors or for
serving on committees. All members of the board of directors who are not
employees or consultants are reimbursed for their expenses for each meeting
attended and are eligible to receive stock options pursuant to our stock
incentive plan. We have not granted any options to any of our directors,
although we intend to adopt a customary compensation plan for directors after
this offering closes.
Compensation Committee Interlocks and Insider Participation
None of the members of the compensation and audit committees of the board of
directors is an officer or employee of IntraLinks. None of our executive
officers serves as a member of the board of directors or compensation committee
of any entity that has one or more executive officers serving on our
compensation committee.
Executive Compensation
Summary Compensation Table
The following table sets forth certain information concerning the compensation
earned during the year ended December 31, 1999 for our Chief Executive Officer
and our other executive officers whose total salary and bonus exceeded $100,000
for services rendered to us and our subsidiaries during 1999. For disclosure
regarding terms of the stock options, see "Management--Stock Incentive Plan."
------------------------------------------------
<TABLE>
<CAPTION>
Annual Long-term
Compensation Compensation
---------------- ------------
Number of
Securities
Underlying
Other Annual Options All Other
Name and Position(s) Year Salary Bonus Compensation Granted (1) Compensation
- -------------------- ---- -------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Mark S. Adams........... 1999 $257,575 $75,000 $-- 136,894 --
Chief Executive
Officer, President and
Director
John M. Muldoon ........ 1999 175,000 -- -- 15,576 --
Chief Financial Officer
and Treasurer
Patrick J. Wack, Jr..... 1999 175,000 -- -- 15,576 --
Executive Vice
President and Assistant
Secretary
Leonard G. Goldstein ... 1999 150,000 -- -- 15,576 --
Chief Information
Officer
Robert T. Garrigan ..... 1999 150,000 -- -- 41,831 --
Executive Vice
President of Sales and
Marketing
</TABLE>
- --------
(1) These options were granted pursuant to our 1997 Stock Incentive Plan and
are options to purchase our common stock.
44
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth certain information concerning stock options
granted to each of the officers named in the Summary Compensation Table that
received such options during 1999.
Individual Grants
-------------------------------------------
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of
Number of % of Total Stock Price
Securities Options Appreciation for
Underlying Granted to Price Option Term(2)
Options Employees Per Expiration ---------------------
Name Granted(1) in 1999 Share Dates 5% 10%
- ---- ---------- ---------- ------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Mark S. Adams........... 36,894 2.26% $ 7.50 4/13/09
100,000 6.13% 10.40 11/19/09
John M. Muldoon......... 15,576 0.95% 7.50 4/13/09
Patrick J. Wack, Jr..... 15,576 0.95% 7.50 4/13/09
Leonard G. Goldstein.... 15,576 0.95% 7.50 4/13/09
Robert T. Garrigan...... 35,000 2.14% 7.50 3/25/09
6,831 0.42% 7.50 4/13/09
</TABLE>
- --------
(1) These options were granted pursuant to our 1997 Stock Incentive Plan and
are options to purchase our common stock. Shares underlying options
generally vest over a three-year period, unless accelerated in accordance
with the stock option agreements governing such stock options. For
information regarding terms of the stock options, see "Management--Stock
Incentive Plan."
(2) Assumes increases in the fair market value of the common stock of 5% and
10% per year from $ , the mid-point of the range set forth on the cover
of this prospectus, over the ten-year option period as mandated by the
rules and regulations of the Securities and Exchange Commission, and does
not represent our estimate or projection of the future value of the common
stock. These values do not take into account any amounts required to be
paid as income taxes under the Internal Revenue Code and any applicable
state laws or option provisions providing for termination of an option
following termination of employment, non-transferability or vesting. The
actual value realized may be greater or less than the potential realizable
values set forth in the table.
Aggregate Option Exercises in Last Fiscal Year and Fiscal year-end Option
Values
The following table sets forth certain information concerning option holdings
at December 31, 1999 with respect to each of the officers named in the Summary
Compensation Table.
----------------------------------------------------
<TABLE>
<CAPTION>
Shares Number of Securities
Acquired Underlying Unexercised Value of Unexercised
on Value Options at In-the-Money Options at
Exercise(#)(1) Realized($) December 31, 1999(2) December 31, 1999(3)
-------------- ----------- ------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mark S. Adams........... -- -- 93,500 318,394 --
John M. Muldoon......... -- -- 23,000 107,576 --
Patrick J. Wack, Jr..... -- -- 23,000 107,576 --
Leonard G. Goldstein.... -- -- 49,175 88,901 --
Robert T. Garrigan...... -- -- 5,100 51,731 --
</TABLE>
- --------
(1) There were no option exercises during 1999.
(2) "Exercisable" refers to those options which were both exercisable and
vested, while "Unexercisable" refers to those options which were unvested.
(3) Value is determined by subtracting the exercise price per share from $ ,
the mid-point of the range set forth on the cover page of this prospectus,
and multiplying the result by the number of shares underlying the options.
Employment and Non-Competition Agreements
We have entered into employment agreements with Mark Adams, James Dougherty,
John Muldoon, Patrick Wack, Leonard Goldstein, Myles Trachtenberg and Gene
Fuller. The material terms of such employment agreements generally are as
follows:
. the initial employment term for Mr. Adams expires on December 31, 2002
and for each of Messrs. Dougherty, Muldoon, Wack, Goldstein,
Trachtenberg, and Fuller expire by February 2002. Each agreement is
automatically renewable for successive one-year terms unless either
party gives at least 90 days prior notice of its intention not to renew,
or 120 days in the cases of Mr. Adams and Mr. Dougherty;
45
<PAGE>
. Mr. Adams and Mr. Dougherty each receive an annual base salary of
$275,000. Messrs. Muldoon, Wack, Goldstein, Trachtenberg, and Fuller
each receive annual base salaries of $200,000;
. each executive is entitled to receive annual grants of incentive stock
options at the discretion of the board of directors;
. we may terminate the agreement at any time with or without cause, as
defined in the agreement; if an executive is terminated without cause,
he will receive, among, other things, severance pay in an amount
generally equal to in the case of Messrs. Adams and Dougherty, up to 24
months base salary and bonus, and in the case of others, up to 12
months' base salary and bonus, plus continued health plan and other
benefits. If termination is without cause (including, but not limited
to, by reason of a change of control (as defined in the agreement))
Mr. Adams will be entitled to accelerated vesting of all granted options
and each of Messrs. Dougherty, Muldoon, Wack, Goldstein, Trachtenberg
and Fuller shall be entitled to accelerated vesting of those granted
options which would vest by their terms within 12 months of the
termination date but for such termination.
. if termination is the result of the executive's death or disability, we
will pay to the executive or his estate an amount equal to six months of
his annual base salary except that, in the case of Mr. Adams we will pay
to him or his estate an amount equal to his annual base salary; and
. we will indemnify the executive to the fullest extent permitted by law.
Messrs. Adams, Dougherty, Muldoon, Wack, Goldstein, Trachtenberg and Fuller are
each parties to confidentiality and non-competition agreements with us under
which they have agreed not to compete with our business or solicit our
customers or employees for a period with respect to Messrs. Adams and Dougherty
of two years after termination of employment, and with respect to Messrs.
Muldoon, Wack, Goldstein, Trachtenberg and Fuller, one year after termination
of employment, regardless of the reason for termination. In addition, all
proprietary information must be kept confidential during or after the term of
each executive's employment.
Stock Incentive Plan
Our 1997 Stock Incentive Plan was adopted by the Board of Directors and our
stockholders in May 1997. All of our employees, consultants and non-employee
directors that satisfy certain requirements are eligible to receive awards
under the stock 1997 Stock Incentive Plan. 3,500,000 shares of common stock are
reserved for issuance under the 1997 Stock Incentive Plan. The types of awards
that may be made under the 1997 Stock Incentive Plan are incentive or non-
qualified options to purchase shares of common stock and restricted stock.
The 1997 Stock Incentive Plan is administered by the compensation committee of
our board of directors. The compensation committee has full authority, subject
to the terms of the plan, to make all decisions relating to the interpretation
and operation of the 1997 Stock Incentive Plan, including the discretion to
determine which eligible individuals are to receive any award, determine the
type, number, vesting requirements and other features and conditions of each
award. Terms and conditions of awards are set forth in written award
agreements. The exercise price of options granted under this plan may not be
less than 100% of the fair market value of our common stock at the time of the
original grant or 110%, in the case of incentive stock options granted to a
holder of more than 10% of the total voting power of our outstanding stock. All
options granted under the plan expire no more than ten years from the date of
the grant. The Stock Incentive Plan terminates on December 31, 2000, unless
terminated sooner by our board of directors with our stockholders' approval.
In the event of a merger or other reorganization, the compensation committee
will make adjustments to the exercise price of the options and the type of
securities which may be issued pursuant to the option in order to preserve the
value of the option for the option holder.
The stock incentive plan may be amended by our board of directors, except where
stockholder approval is required by law. Present stockholder approval
requirements for amending the plan are contained in our shareholders'
agreement, which will terminate upon the closing of this offering.
As of December 31, 1999, no shares had been issued upon exercise of options
granted under the 1997 Stock Incentive Plan, options for 2,379,488 shares were
outstanding and options to purchase 1,120,512 shares were available for future
grant under this plan. No restricted stock has been granted under the plan.
46
<PAGE>
Certain Relationships and Related Transactions
It is our policy to enter into transactions with related parties on terms that,
on the whole, are no less favorable than those that would be available from
unaffiliated parties. Based on our experience in the business segments in which
we operate and the terms of our transactions with unaffiliated third parties,
we believe that all of the transactions described below met our policy
standards at the time they occurred.
Private Placements
Series A Preferred Stock
We issued 75,000 shares of our Series A preferred stock in October 1996, an
additional 45,000 shares in January 1997 and an additional 262,500 shares in
June 1997, all at a price of $3.33 per share. The purchasers of Series A
preferred stock in these transactions included:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total Shares
Purchaser Purchased Relationship to IntraLinks
--------- ------------ --------------------------
<C> <C> <S>
Duncan W. Brown.................. 60,000 Father-in-law of Mark Adams*,
our chief executive officer
Arthur B. Sculley*............... 45,000 Director
David W. Sculley................. 45,000 Brother of Arthur Sculley*, a
director
John Sculley..................... 45,000 Brother of Arthur Sculley*, a
director
Eugene A. Tomei.................. 30,000 Father-in-law of John
Muldoon*, our chief financial
officer
</TABLE>
- --------
* Denotes a 5% or greater owner of our common stock.
Series B Preferred Stock
On September 9, 1997, we sold promissory notes for an aggregate principal
amount of $600,000, together with warrants to purchase 26,750 shares of common
stock at an exercise price of $3.33 per share for an aggregate price of
$600,000. On December 18, 1997, the entire principal amount of these notes were
converted into a total of 92,307 shares of Series B preferred stock, reflecting
a conversion price of $6.50 per share. Simultaneously on December 18, 1997, we
sold 676,923 shares of Series B preferred stock at a price of $6.50 per share,
together with warrants to purchase 192,305 shares of common stock (which were
distributed ratably to purchasers of the shares, including those listed below).
On October 9, 1998, the warrants issued on December 18, 1997 were exchanged by
their holders for a total of 11,000 shares of Series B preferred stock. The
purchasers of Series B preferred stock in these transactions, including those
who received their shares upon conversion of these promissory notes or exchange
of their warrants, included:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total Shares
Purchaser Purchased Relationship to IntraLinks
--------- ------------ --------------------------
<C> <C> <S>
Catalyst Investment (Belgium) 78,023 Right to appoint member(s) to
N.V.*........................... our board of directors
Euclid Partners IV, L.P.......... 312,092 Right to appoint member(s) to
our board of directors
Perseus Capital, LLC............. 234,070 Right to appoint member(s) to
our board of directors
Sculley Brothers LLC............. 23,407 Limited liability company
controlled by Arthur Sculley*,
a director
John Sculley, including a related
limited partnership and trusts
for the benefit of members of 109,232 Brother of Arthur Sculley*, a
his family...................... director
</TABLE>
- --------
* Denotes a 5% or greater owner of our common stock.
47
<PAGE>
Series C Preferred Stock
On August 20, 1998, we sold promissory notes in an aggregate principal amount
of $2,000,000, together with warrants to purchase 108,000 shares of Series B
preferred stock at an exercise price of $6.50, for an aggregate purchase price
of $2,000,000. On October 9, 1998, these promissory notes were converted into
307,692 shares of Series C preferred stock. Simultaneously, we sold an
additional 2,153,846 shares of Series C preferred stock in connection with a
private placement to investors. An additional 38,462 shares of Series C
preferred stock were issued to C.E. Unterberg, Towbin LLC as partial payment
for their placement agency fee in connection with this private placement. The
purchasers of Series C preferred stock in these transactions, including those
who received their shares upon conversion of these promissory notes, included:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total Shares
Purchaser Purchased Relationship to IntraLinks
--------- ------------ --------------------------
<C> <C> <S>
Duncan W. Brown.................. 15,385 Father-in-law of Mark Adams*,
our chief executive officer
Catalyst Investment (Belgium) 461,537 Right to appoint member(s) to
N.V.*........................... our board of directors
Euclid Partners IV, L.P.......... 153,846 Right to appoint member(s) to
our board of directors
Funds managed by Patricof & Co.
Ventures, Inc.*................. 1,384,616 Right to appoint member(s) to
our board of directors
Perseus Capital, LLC............. 76,923 Right to appoint member(s) to
our board of directors
Sculley Brothers LLC............. 46,154 Limited liability company
controlled by Arthur Sculley*,
a director
</TABLE>
- --------
* Denotes a 5% or greater owner of our common stock.
Series D Preferred Stock and related transactions with Ernst & Young
In April 1999, we sold to Ernst & Young U.S. LLP 660,000 shares of Series D
preferred stock, together with warrants to purchase an additional 660,000
shares of Series D preferred stock at a purchase price of $10.00 per share.
These warrants were exercised by Ernst & Young in June 1999 upon completion of
our private placement of Series E preferred stock. We also issued to Ernst &
Young warrants to purchase 192,308 shares of Series C preferred stock at an
exercise price of $6.50 per share.
In addition, in connection with a joint marketing agreement with Ernst & Young,
we issued to them warrants to purchase an additional 468,000 shares of Series D
preferred stock at an exercise price of $10.00 per share. These warrants become
exercisable upon the earlier of the closing of this offering or our achieving
certain defined revenue targets.
In April 1999, the holders of the Series C preferred stock received, pro rata
to their ownership of the Series C preferred stock, cash payments totalling
$800,000 and warrants to purchase a total of 160,000 shares of Series D
preferred stock at an exercise price of $10.00 per share. These warrants were
issued in exchange for the Series C preferred stock holders cancellation of
quarterly payment of dividends. These warrants were exercised by the holders in
June 1999 upon completion of our private placement of Series E preferred stock.
Series E Preferred Stock
In June 1999, we sold 1,068,890 shares of Series E preferred stock at a
purchase price of $13.00 per share. Of these shares, 399,660 were purchased by
existing stockholders pursuant to pre-emptive rights granted to all of our
stockholders under a shareholders' agreement. Purchasers pursuant to these pre-
emptive rights included:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total Shares
Purchaser Purchased Relationship to IntraLinks
--------- ------------ --------------------------
<C> <C> <S>
Catalyst Investment (Belgium) 38,462 Right to appoint member(s) to
N.V.*........................... our board of directors
Funds managed by Patricof & Co.
Ventures, Inc.*................. 239,527 Right to appoint member(s) to
our board of directors
Reuters Holding Switzerland SA... 384,615 Right to appoint member(s) to
our board of directors
</TABLE>
- --------
* Denotes a 5% or greater owner of our common stock.
48
<PAGE>
Series F Preferred Stock and related transaction with The Chase Manhattan
Corporation.
In January 2000, we sold in a private placement 882,354 shares of Series F
preferred stock at a purchase price of $17.00 per share. The shares were
purchased by The Chase Manhattan Corporation and Euclid E corporate Partners,
L.P. In connection with the transaction and an agreement we entered into with
Chase, we issued to Chase warrants to purchase 1,050,000 shares of Series F
preferred stock at an exercise price of $17.00 per share.
Rights to appoint directors
In connection with their purchases of our securities, John M. Muldoon, Patrick
J. Wack, Jr., their related parties and parties related to Mark S. Adams
received the right to collectively appoint one member of our board of
directors. Mark S. Adams is the current director appointed by these holders. In
addition, Arthur B. Sculley, John Sculley, David Sculley and their related
parties also received the right to collectively appoint one member of our board
of directors. Arthur B. Sculley is the current director appointed by these
holders.
In connection with their purchases of Series B preferred stock, the holders of
the Series B preferred stock received the right to appoint two members of our
board of directors. Milton J. Pappas, chairman of the parent of Euclid Partners
IV, L.P., and William B. Ford, a managing director of Perseus Capital, LLC, are
the current directors appointed by the Series B preferred stock holders.
In connection with their purchases of Series C preferred stock, each of
Catalyst Investments (Belgium) N.V. and APA Excelsior V, L.P. (together with
related funds managed by Patricof & Co. Ventures, Inc.), holders of Series C
preferred stock, received the right to appoint two members of our board of
directors. Thomas P. Hirschfeld, a managing director of Patricof & Co.
Ventures, Inc., and Julie Kunstler, a managing director of the company that
manages Catalyst Investments, are the current directors appointed by the Series
C preferred stock holders.
In connection with its purchases of Series D preferred stock, Ernst & Young
received the right to appoint three members of our board of directors. Carolyn
Buck Luce, Steven D. Oesterle and J. Douglas Phillips are the current directors
appointed by Ernst & Young.
In connection with its purchase of Series E preferred stock, Reuters Holding
Switzerland SA received the right to appoint one member of our board of
directors. Devin N. Wenig is the current director appointed by Reuters.
All of these rights to appoint directors are pursuant to an Amended and
Restated Shareholders' Agreement dated January 24, 2000, which will expire upon
the closing of this offering. For a further description of the beneficial
ownership and relationships to IntraLinks of persons described in this section,
see "Management" and "Principal Stockholders."
Other Relationships and Transactions
On September 1, 1997, we entered into a three-year consulting agreement with
John Sculley. Mr. Sculley provides consulting services to IntraLinks in the
areas of marketing, financing, public relations and business strategy. Mr.
Sculley is a member of our advisory board and is the brother of Arthur B.
Sculley, one of our directors. As compensation for his services under this
agreement, we granted to Mr. Sculley five-year warrants to purchase 40,000
shares of common stock at an exercise price of $3.33 per share. These warrants
are currently exercisable and expire on September 1, 2002. Mr. Sculley would
forfeit a portion of these warrants if his consulting agreement is terminated
for any reason prior to the end of its three-year term.
In addition, in February 2000, we granted to Mr. Sculley and each member of our
advisory board options to purchase 15,000 shares of common stock at an exercise
price of $17.00 per share. One half of these options vest upon the closing of
this offering, and one half vest on the first anniversary of the date of grant.
All current shareholders of IntraLinks are party to an Amended and Restated
Shareholders' Agreement dated January 24, 2000. This agreement will terminate
upon the closing of this offering. Under this agreement, in addition to the
rights to appoint directors described above, shareholders and classes of shares
have rights with
49
<PAGE>
respect to election of members of the compensation and audit committees of our
board of directors, limited observation rights, pre-emptive rights, rights of
first refusal, tag-along and bring-along rights. The shareholders' agreement
restricts the transfer of any class of shares by the shareholders. The
shareholders' agreement requires stockholder approval for certain events and
requires approval by seven out of our ten directors for certain corporate
actions, including debt or equity financings, certain related-party
transactions and the payment of dividends.
In addition, all of our directors, executive officers and 5% shareholders are
parties to registration rights agreements with us which are described under
"Description of Capital Stock--Registration Rights."
50
<PAGE>
Principal Stockholders
The following table sets forth certain information regarding beneficial
ownership of the common stock as of February 29, 2000 by:
. each person who is known by us to own beneficially more than five
percent of the outstanding common stock;
. each of our directors and the executive officers named under
"Management--Executive Compensation"; and
. all of our current executive officers and directors as a group.
The table has been prepared on a pro forma basis assuming the:
. conversion of all outstanding shares of preferred stock into common
stock and of all warrants to purchase preferred stock into warrants to
purchase common stock;
. exercise of all options that, by their terms, are exercisable within 60
days of February 29, 2000; shares subject to such options are deemed
outstanding for the purpose of computing the ownership percentage of the
person holding such options, but are not deemed outstanding for purposes
of computing the ownership percentage of any other person; and
. where indicated, the sale of shares in this offering,
assuming no exercise of the underwriters' over-allotment option.
As used in this table, "beneficial ownership" means the sole or shared power to
vote or direct the voting or to dispose or direct the disposition of any common
stock. Unless otherwise indicated, the address of each person or party is c/o
IntraLinks, Inc., 1372 Broadway, Floor 12A, New York, New York, 10018, our
principal place of business.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Beneficially Percentage of Common Stock
Owned Beneficially Owned
------------------- ------------------------------
Beneficial Owner Number Before Offering After Offering
- ---------------- ------------------- --------------- --------------
<S> <C> <C> <C>
Arthur B. Sculley(1)........ 388,462 4.4%
Mark S. Adams(2)............ 590,044 6.6%
John M. Muldoon(3).......... 427,296 4.9%
Patrick J. Wack, Jr.(4)..... 293,246 3.4%
James P. Dougherty.......... 135,490 1.6%
Leonard G. Goldstein........ 106,296 1.3%
Robert T. Garrigan.......... 47,373 *
Myles Trachtenberg.......... 25,000 *
Gene W. Fuller.............. 25,000 *
William Ford(5)............. 342,916 3.9%
Thomas P. Hirschfeld(6)..... 1,712,758 17.0%
Julie Kunstler(7)........... 634,560 7.1%
Steven D. Oesterle(8)....... 1,980,308 19.2%
Carolyn Buck Luce(8)........ 1,980,308 19.2%
Milton J. Pappas(9)......... 796,902 8.7%
J. Douglas Phillips(8)...... 1,980,308 19.2%
Devin N. Wenig(10).......... 384,615 4.4%
Ernst & Young U.S. LLP(11).. 1,980,308 19.2%
Patricof & Co. Ventures,
Inc.(12)................... 1,712,758 17.0%
Euclid Partners IV L.P.(13). 796,902 8.7%
Catalyst Investment
(Belgium) N.V.(14)......... 634,560 7.1%
The Chase Manhattan
Corporation(15)............ 838,236 9.1%
All executive officers and
directors
as a group (19
persons)(16)............... 8,761,166 93.1%
</TABLE>
51
<PAGE>
- --------
*Less than 1%.
(1) Includes 122,515 shares and warrants to purchase 16,200 shares held by
Sculley Brothers LLC, a limited liability company which Mr. Sculley
controls, and 14,650 shares held by a trust for the benefit of members of
Mr. Sculley's family. Excludes 45,000 shares held by David Sculley,
Mr. Sculley's brother, 204,311 shares held by John Sculley, Mr. Sculley's
brother, and 12,171 shares held by entities for the benefit of John Sculley
and his immediate family. Mr. Sculley disclaims beneficial ownership of all
of these shares.
(2) Includes options to purchase 287,544 shares held by Mr. Adams, 287,850
shares held by Sarah S. Brown-Adams, Mr. Adams' wife, and 14,650 shares
held by a trust for the benefit of Mr. Adams' daughter. Excludes 123,322
shares held by Duncan W. Brown, Mr. Adams' father-in-law. Mr. Adams
disclaims beneficial ownership of all of these persons' shares.
(3) Includes options to purchase 120,296 shares held by Mr. Muldoon and 15,000
shares held by three trusts for the benefit of Mr. Muldoon's children.
Excludes 1,000 shares held by David Muldoon, Mr. Muldoon's brother, 32,714
shares held jointly by Frederick Benjamin and Ruth Lohr-Benjamin,
Mr. Muldoon's uncle and aunt, and 56,477 shares held by Eugene A. Tomei,
Mr. Muldoon's father-in-law. Mr. Muldoon disclaims beneficial ownership of
all of these persons' shares.
(4) Includes options to purchase 120,296 shares held by Mr. Wack and 20,250
shares and warrants to purchase 2,700 shares held by a trust for the
benefit of members of Mr. Wack's immediate family. Mr. Wack disclaims
beneficial ownership of all of these persons' shares.
(5) Includes 315,916 shares and warrants to purchase 27,000 shares held by
Perseus Capital, LLC, of which Mr. Ford is a Managing Director. Mr. Ford
disclaims beneficial ownership of all of these shares. Mr. Ford's address
is c/o Perseus Capital LLC, 1627 I Street, N.W., Suite 610, Washington,
D.C. 20006.
(6) Includes 1,391,368 shares held by APA Excelsior V L.P., 304,491 shares held
by P/A Fund III, L.P., and 16,899 shares held by Patricof Private
Investment Club II, L.P. Mr. Hirschfeld is a managing director of Patricof
& Co. Ventures, Inc., which manages each of these entities. Mr. Hirschfeld
disclaims beneficial ownership of all of these shares, except to the extent
of his pecuniary interest in these shares. Mr. Hirschfeld's address is c/o
Patricof & Co. Ventures, Inc., 445 Park Avenue, New York, New York 10022.
(7) Includes 607,560 shares and warrants to purchase 27,000 shares held by
Catalyst Investment (Belgium) N.V. Ms. Kunstler is a Managing Director of
HK Catalyst Strategy & Finance Ltd., a firm that manages investments for
Catalyst Investment (Belgium) N.V. Ms. Kunstler disclaims beneficial
ownership of all of these shares. Ms. Kunstler's address is c/o HK Strategy
& Finance Ltd., 10 Hayetsira Street, P.O. Box 2197, Ra'anana 43650, Israel.
(8) Information for each of these individuals includes 1,320,000 shares and
warrants to purchase 660,308 shares held by Ernst & Young U.S. LLP. Each of
Ms. Buck Luce, Mr. Oesterle and Mr. Phillips is a partner in Ernst & Young.
Each of Ms. Buck Luce, Mr. Oesterle and Mr. Phillips disclaims beneficial
ownership of all of these shares. Each of Ms. Buck Luce, Mr. Oesterle and
Mr. Phillips' addresses is c/o Ernst & Young, 787 Seventh Avenue, New York,
New York 10019.
(9) Includes 475,784 shares and warrants to purchase 27,000 shares held by
Euclid Partners IV L.P. and 294,118 shares held by Euclid E corporate
Partners L.P. Mr. Pappas is chairman of Euclid Partners Corporation, which
manages Euclid Partners IV L.P. and Euclid E corporate Partners L.P. Mr.
Pappas disclaims beneficial ownership of all of these shares. Mr. Pappas'
address is c/o Euclid Partners Corporation, 50 Rockefeller Plaza, Suite
1022, New York, New York 10020.
(10) Includes 384,615 shares held by Reuters Holding Switzerland SA, of which
Mr. Wenig is Executive Vice President, Marketing. Mr. Wenig disclaims
beneficial ownership of all of these shares. Mr. Wenig's address is c/o
Reuters, 40 East 52nd Street, 14th Floor, New York, New York 10022.
(11) Includes warrants to purchase 660,308 shares. Ernst & Young U.S. LLP's
address is 787 Seventh Avenue, New York, New York 10019.
(12) Includes 1,391,368 shares held by APA Excelsior V L.P., 304,491 shares
held by P/A Fund III, L.P., and 16,899 shares held by Patricof Private
Investment Club II, L.P. Patricof & Co. Ventures, Inc. manages each of
these entities. Patricof & Co. Ventures, Inc.'s address is 445 Park
Avenue, New York, New York 10022.
(13) Includes warrants to purchase 27,000 shares held by Euclid Partners IV
L.P. and 294,118 shares held by Euclid E corporate Partners L.P. The
address of these entities is c/o Euclid Partners Corporation,
50 Rockefeller Plaza, Suite 1022, New York, New York 10020.
(14) Includes warrants to purchase 27,000 shares. Catalyst Investment (Belgium)
N.V.'s address is Desguinlei 50, bus 6, 2018 Antwerp, Belgium.
(15) Includes warrants to purchase 250,000 shares.
(16) Includes shares, warrants and options held by these individuals' family
members or related entities as described in the preceding footnotes.
52
<PAGE>
Description of Capital Stock
Upon the closing of this offering, the authorized capital stock of IntraLinks
will consist of shares of common stock, $.01 par value per share,
and shares of preferred stock, $.01 par value per share, whose
rights and designations have not yet been established. Prior to this offering,
there was no established public trading market for our common stock. There will
be no preferred stock outstanding immediately after the closing of this
offering. The description in the sections below of our certificate of
incorporation and by-laws refers to our Amended and Restated Certificate of
Incorporation that will be in effect at the closing of this offering.
Common Stock
As of December 31, 1999, there were 8,356,142 shares of common stock
outstanding (as adjusted to reflect the conversion of all outstanding shares of
our preferred stock into common stock immediately prior to the closing of this
offering) held by 50 stockholders.
The holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and are not entitled to vote
cumulatively when electing directors. Accordingly, holders of a majority of the
shares of common stock entitled to vote in any election of directors may elect
all of the directors standing for election. Subject to preferences that may be
applicable to any outstanding preferred stock, holders of common stock are
entitled to receive dividends in proportion to the number of shares they hold,
if they are declared by our board of directors out of funds that are legally
available for that purpose. Upon the liquidation, dissolution or winding up of
IntraLinks, the holders of common stock are entitled to share ratably in all
assets remaining after payment of all debts and other liabilities, subject to
prior distribution rights of preferred stock, if any, then outstanding. Holders
of the common stock have no preferential right to participate in any future
debt or equity offerings, right to have their shares redeemed or right to
convert their shares into any other type of security. The outstanding shares of
common stock are, and the shares offered by us in this offering will be, when
issued and paid for, fully paid and non-assessable. In the event that we issue
shares of preferred stock in the future, the rights of the holders of common
stock may be adversely affected by that issuance. This is because it is
probable that any preferred stock issued will have certain rights and
preferences that entitle the holders of such shares to have priority over the
holders of the common stock with respect to certain matters. These matters
include the right to receive dividends and the right to receive the assets of
IntraLinks in the event of a bankruptcy or similar type event. There will be no
shares of preferred stock outstanding immediately after the closing of this
offering.
Preferred Stock
Under our certificate of incorporation, our board of directors is authorized,
subject to certain limitations prescribed by law, without further stockholder
approval, from time to time to issue up to an aggregate of shares of
preferred stock. The preferred stock may be issued in one or more series. Each
series may have different rights, preferences and designations and
qualifications, limitations and restrictions that may be established by our
board of directors without approval from the shareholders. These rights,
designations and preferences include:
.number of shares to be issued;
.dividend rights;
.dividend rates;
.right to convert the preferred shares into a different type of security;
.voting rights attributable to the preferred shares;
.right to set aside a certain amount of assets for payments relating to the
preferred shares; and
.prices to be paid upon redemption of the preferred shares or a voluntary
or involuntary liquidation.
If our board of directors decides to issue any preferred stock, it could have
the effect of delaying or preventing another party from taking control of
IntraLinks. This is because the terms of the preferred stock would be designed
to make it prohibitively expensive for any unwanted third party to make a bid
for our shares. We have no present plans to issue any shares of preferred
stock.
53
<PAGE>
Delaware Law Business Combination Provisions
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law, which regulates corporate acquisitions. Subject to certain
exceptions, Section 203 prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for three
years after the date that the person became an interested stockholder, unless
the interested stockholder attained that status with the approval of the board
of directors or unless the business combination is approved in a prescribed
manner. A "business combination" includes, among other things, certain mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. Subject to certain exceptions, an "interested
stockholder" is a person who, together with his or her affiliates and
associates, owns, or owned within three years prior, 15% or more of the
corporation's voting stock.
Registration Rights
Under registration rights agreements with us, all of our current stockholders
and warrant holders and some of our option holders are entitled, following this
offering, to request that we register their IntraLinks shares under the
Securities Act.
The holders of at least 30% of all of our currently issued and outstanding
common stock, Series A preferred stock and Series B preferred stock, and the
holders of the options and warrants listed in the registration rights agreement
dated December 18, 1997, as amended on October 9, 1998, may request that we use
our best efforts to register their shares of common stock that are not freely
tradable under the Securities Act. They may make this request after the later
of 18 months following this offering and six months after the effectiveness of
the first registration statement pursuant to the Amended and Restated
Registration Rights Agreement dated June 30, 1999, which is discussed below. We
will only be obligated to register the shares if the minimum aggregate offering
price of the shares is at least $2 million. Other IntraLinks shareholders, as
well as IntraLinks itself, will have the right to include their shares in these
registrations, subject to certain limitations.
In addition, under the Amended and Restated Registration Rights Agreement dated
as of January 24, 2000, the holders of at least 30% of the outstanding common
stock converted from our Series C, Series D, Series E and Series F preferred
stock may request that we use our best efforts to register their shares of
common stock that are not freely tradable under the Securities Act, provided
that the minimum aggregate offering price of the securities to be registered is
at least $2 million. They may make this request any time at least one year
following this offering, and we will only be required to effect two
registrations of this type. Other IntraLinks shareholders, as well as
IntraLinks itself, will have the right to include their shares in these
registration, subject to certain limitations.
At any time when we are eligible to register securities on Form S-3, our
current stockholders will have the right to request that we register those
shares of common stock which are covered by these registration rights
agreements and not freely tradable under the Securities Act, provided that the
minimum aggregate offering price of the securities to be registered is at least
$2 million (if the request is made by the former holders of the Series C,
Series D, Series E or Series F preferred stock), or $1.5 million (if the
request is made by any of our other current stockholders).
Our current stockholders will also have the right to include their shares in
any registration statements filed by us for purposes of a public offering,
subject to certain limitations. An underwriter participating in an offering may
limit the number of shares offered for marketing reasons, in which case the
number of shares to be registered would be reduced pro rata among the holders
requesting registration of their shares.
We will not be required to file a registration statement within six months
after the effective date of any other registration statement filed by us
pursuant to these registration rights agreements. We will pay all expenses in
connection with any registration, other than underwriting discounts, selling
commissions and expenses of the counsel for any selling stockholders. The
foregoing registration rights are transferable under specified circumstances
and may be amended or waived only with the written consent of IntraLinks and a
specified number of the affected holders. Our current stockholders have agreed
to lock-up periods of up to 180 days after the effective date of any
registration statement in which they could have included, but did not include,
their shares pursuant to these rights.
54
<PAGE>
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is ChaseMellon
Shareholder Services, L.L.C.
Listing
We have filed an application to qualify the common stock for quotation on the
Nasdaq National Market under the trading symbol of "ILNX".
55
<PAGE>
Underwriting
Under the terms and subject to the conditions contained in an underwriting
agreement dated the date of this prospectus, the underwriters named below, for
whom J.P. Morgan Securities Inc., Banc of America Securities LLC and William
Blair & Company, L.L.C. are acting as representatives, have severally agreed to
purchase, and we have agreed to sell to them, the respective number of shares
of common stock set forth opposite their names below.
<TABLE>
<CAPTION>
----------------
Underwriters Number of Shares
------------ ----------------
<S> <C>
J.P. Morgan Securities Inc. .............................
Banc of America Securities LLC...........................
William Blair & Company, L.L.C...........................
------------
Total..................................................
============
</TABLE>
The underwriting agreement provides that the obligations of the several
underwriters to purchase shares of common stock are subject to the approval of
certain legal matters by counsel and to certain other conditions. Under the
terms and conditions of the underwriting agreement, all of the underwriters are
obligated to take and pay for all such shares of common stock, if any are
taken.
The underwriters propose initially to offer the shares of common stock directly
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. The underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per share to certain other
dealers. After the initial public offering of the common stock, the offering
price and other selling terms may be changed from time to time by the
Underwriters.
According to the terms of the underwriting agreement, we have granted to the
underwriters an option, exercisable for 30 days from the date hereof, to
purchase up to additional shares of common stock, on the same terms
and conditions as set forth on the cover page hereof. If this option is
exercised in full, the total price to the public will be $ ,
underwriting discounts and commissions will be , and proceeds to
IntraLinks will be $ . The underwriters may exercise this option solely to
cover over-allotments, if any, made in connection with the sale of shares of
common stock offered hereby. To the extent that this option is exercised, each
of the underwriters will have a commitment, subject to certain conditions, to
purchase approximately the same percentage of those additional shares as the
number of shares of common stock to be purchased by it as shown in the table
above bears to the total number of shares of common stock initially offered
hereby.
At our request, the underwriters have reserved up to shares of common
stock to be sold in the offering and offered hereby for sale, at the public
offering price, to our directors, officers, employees, business associates and
other related parties. The number of shares of common stock available for sale
to the general public will be reduced to the extent these individuals purchase
these reserved shares. Any reserved shares which are not so purchased will be
offered by the underwriters to the general public on the same basis as the
other shares offered hereby.
IntraLinks and certain of its stockholders, option holders, warrant holders,
officers and directors have agreed that during the period beginning on the date
of this prospectus and continuing to and including the date 180 days after the
date of this prospectus they will not:
. offer, pledge, announce the intention to sell, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of common
stock or any securities of IntraLinks which are substantially similar to
the common stock, including but not limited to any securities that are
convertible into or exercisable or exchangeable for, or that represent
the right to receive common stock or any such substantially similar
securities; or
. enter into any swap, option, future, forward or other agreement that
transfers, in whole or in part, any of the economic consequences of
ownership of common stock or any securities substantially similar to the
common stock without the prior written consent of J.P. Morgan Securities
Inc.
56
<PAGE>
These restrictions do not apply to:
. our employee stock incentive plans existing on, or upon the conversion
or exchange of convertible or exchangeable securities outstanding as of,
the date of this prospectus; or
. the issuance of common stock in connection with the transactions
described in this prospectus.
We and the underwriters have agreed to indemnify each other against specified
liabilities, losses and expenses, including liabilities under the Securities
Act, or to contribute to payments that may be required to be made in connection
with such liabilities.
Certain of the underwriters and their affiliates, including an affiliate of
J.P. Morgan Securities Inc., engage in transactions with, or have services
performed by, us in the ordinary course of business and have engaged, and may
in the future engage, in commercial banking and investment banking transactions
with us, for which they or we may receive customary compensation.
In connection with this offering, the underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the common stock.
Specifically, the underwriters may over-allot in connection with this offering,
creating a syndicate short position. In addition, the underwriters may bid for,
and purchase, shares of common stock in the open market to cover syndicate
short positions or to stabilize the price of the common stock. Finally, the
underwriting syndicate may reclaim selling concessions allowed for distributing
the common stock in this offering, if the syndicate repurchases previously
distributed common stock in syndicate covering transactions, in stabilization
transactions or otherwise. Any of these activities may stabilize or maintain
the market price of the common stock above independent market levels. The
underwriters are not required to engage in these activities, and may end any of
these activities at any time.
Prior to this offering, there has been no public market for the common stock.
The initial public offering price for the shares of common stock offered hereby
has been determined by agreement between IntraLinks and the underwriters. Among
the factors considered in making such determination were the history of and the
prospects for the industry in which we compete, an assessment of our
management, our present operations, our historical results and the trend of its
revenue and earnings, our prospects for future earnings, the general condition
of the securities markets at the time of this offering and the prices of
similar securities of generally comparable companies. There can be no assurance
that an active trading market will develop for the common stock or that the
common stock will trade in the public market at or above the initial public
offering price.
It is expected that delivery of the shares sold in this offering will be made
to investors on or about , 2000.
57
<PAGE>
Shares Eligible For Future Sale
Upon completion of this offering, we will have outstanding shares of
common stock, assuming no exercise of the underwriters' over-allotment option
and no further exercise of outstanding stock purchase warrants or options under
our stock incentive plan or other agreements. Of these shares, the shares
sold in this offering will be freely transferable without restriction or
further registration under the Securities Act, except for any shares held by an
existing "affiliate" of IntraLinks, as this term is defined by Rule 144 under
the Securities Act. The remaining shares, and any shares purchased by
affiliates in this offering, will be "restricted shares" as defined in Rule
144.
In addition, substantially all of our option holders, warrant holders and
stockholders, and all of our officers and directors, have agreed under written
"lock-up" agreements not to sell any shares of common stock for [180] days
after the date of this prospectus without the prior written consent of J.P.
Morgan Securities Inc. See "Underwriting."
In general, under Rule 144 as currently in effect, beginning 90 days after this
offering, a person (or persons whose shares are aggregated) who owns shares
that were purchased from IntraLinks or any affiliate at least one year
previously 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 the common stock, which will equal
approximately shares immediately after the completion of this
offering; or
. the average weekly trading volume of the common stock on the Nasdaq
National Market during the four calendar weeks preceding the date on
which notice of the sale is filed with the Securities and Exchange
Commission.
Sales under Rule 144 must be made with the required notice and the availability
of current public information about IntraLinks.
Any person, or persons whose shares are aggregated, who is not deemed to have
been an affiliate of IntraLinks at any time during the 90 days preceding a
sale, and who owns shares within the definition of "restricted securities"
under Rule 144 under the Securities Act that were purchased from IntraLinks or
any affiliate at least two years previously, would be entitled to sell such
shares under Rule 144(k) without regard to the volume limitations, manner of
sale provisions, public information requirements, or notice requirements.
Rule 701 may be relied upon with respect to the resale of securities originally
purchased from IntraLinks by its employees, directors, officers, consultants or
advisers prior to this offering. In addition, the Commission has indicated that
Rule 701 will apply to the typical stock options granted by an issuer before it
becomes a public company, along with the shares acquired upon exercise of such
options (including exercises after the date of this prospectus). Securities
issued in reliance on Rule 701 are restricted securities and, subject to the
contractual restrictions described above, beginning 90 days after the date of
this prospectus, may be sold by:
. persons other than affiliates, in ordinary brokerage transactions; and
. by affiliates under Rule 144 without compliance with its one-year
holding period requirement.
As a result of the foregoing regulations, beginning 90 days after the closing
of this offering, we expect that shares of common stock will be
eligible for resale without restriction under Rule 144(k) or Rule 701, all of
which shares are subject to lock-up agreements. In addition, upon the
expiration of the lock-up agreements 180 days after the date of this
prospectus, an additional shares of common stock, including
shares of common stock held by affiliates of IntraLinks, will become eligible
for sale under Rule 144, subject to the volume and other limitations of such
rule. The remaining shares of common stock will be eligible for sale
under Rule 144 on the first anniversary of their respective dates of issuance,
beginning on .
IntraLinks has agreed not to offer, sell or otherwise dispose of any shares of
common stock or any securities convertible into or exercisable or exchangeable
for common stock or any rights to acquire common stock for a period of 180 days
after the date of this prospectus, without the prior written consent of the
representatives of the Underwriters, subject to certain limited exceptions. See
"Underwriting."
58
<PAGE>
After the completion of this offering, the holders of shares of
common stock or their transferees would be entitled to have their shares
registered under the Securities Act. See "Description of Capital Stock--
Registration Rights." Registration of these shares under the Securities Act
would cause these shares to be freely tradable without restriction under the
Securities Act, except for shares purchased by affiliates, immediately upon the
effectiveness of such registration, which could result in some of such shares
becoming eligible for sale in advance of the dates set forth above.
In addition, we intend to file one or more registration statements under the
Securities Act covering approximately 3,500,000 shares of common stock reserved
for issuance under our 1997 Stock Incentive Plan. See "Management--Stock
Incentive Plan." These registration statements are expected to be filed within
90 days after the date of this prospectus and will automatically become
effective upon filing. Following the filing, shares registered under these
registration statements will, subject to the 180-day lock-up agreements
described above and Rule 144 volume limitations applicable to affiliates, be
available for sale in the open market upon the exercise of vested options 90
days after the effective date of this prospectus. As of the date of this
prospectus, options to purchase an aggregate of shares were issued
and outstanding under our stock incentive plan.
59
<PAGE>
Legal Matters
The validity of the common stock offered in this prospectus will be passed upon
for IntraLinks by Heller Ehrman White & McAuliffe LLP, New York, New York.
Certain legal matters in connection with the offering will be passed upon for
the underwriters by Davis Polk & Wardwell, New York, New York.
Experts
The consolidated financial statements of IntraLinks, Inc. as of December 31,
1998 and 1999 and for each of the years in the three-year period ended December
31, 1999, included in this prospectus and elsewhere in the registration
statement of which this prospectus is a part have been included herein in
reliance on the report of KPMG LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing.
Available Information
We have filed with the Commission a registration statement on Form S-1 with
respect to the common stock being offered by this prospectus. This prospectus
does not contain all of the information set forth in the registration
statement. For further information about us and the common stock, see the
registration statement, and its exhibits. Descriptions in this prospectus of
any contract or other document are not necessarily complete and, where the
contract or document is an exhibit to the registration statement, any such
description is qualified in all respects by the exhibit. Copies of the
registration statement, including exhibits, may be examined without charge in
the Public Reference Section of the Securities and Exchange Commission, 450
Fifth Street, N.W. Room 1024, Washington, DC 20549, and the Securities and
Exchange Commission's Regional Offices located at 500 West Madison Street,
Suite 1400, Chicago, IL 60601, and 7 World Trade Center, 13th Floor, New York,
NY 10048 or on the Internet at http://www.sec.gov. You can get information
about the operation of the Public Reference Room by calling the Securities and
Exchange Commission at 1-800-SEC-0300. Copies of all or a portion of the
registration statement can be obtained from the Public Reference Section of the
Securities and Exchange Commission upon payment of prescribed fees.
We intend to furnish to our stockholders annual reports containing audited
financial statements and quarterly reports containing unaudited interim
financial information for the first three quarters of each fiscal year.
As a result of this offering, IntraLinks will become subject to the information
and reporting requirements of the Securities Exchange Act of 1934 and will be
required to file periodic reports, proxy statements and other information with
the Securities and Exchange Commission.
60
<PAGE>
INTRALINKS, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report.............................................. F-2
Consolidated Balance Sheets as of December 31, 1998 and 1999.............. F-3
Consolidated Statements of Operations for the years ended December 31,
1997, 1998 and 1999...................................................... F-4
Consolidated Statements of Stockholders' Deficit and Comprehensive Loss
for the years ended December 31, 1997, 1998 and 1999..................... F-5
Consolidated Statements of Cash Flows for the years ended December 31,
1997, 1998 and 1999...................................................... F-6
Notes to Consolidated Financial Statements................................ F-7
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
IntraLinks, Inc.:
We have audited the accompanying consolidated balance sheets of IntraLinks,
Inc. and subsidiaries as of December 31, 1998 and 1999, and the related
consolidated statements of operations, stockholders' deficit and comprehensive
loss and cash flows for each of the years in the three years ended December 31,
1999. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of IntraLinks, Inc.
and subsidiaries as of December 31, 1998 and 1999, and the results of their
operations and their cash flows for each of the years in the three years ended
December 31, 1999 in conformity with generally accepted accounting principles.
/s/ KPMG LLP
New York, New York
March 1, 2000
F-2
<PAGE>
INTRALINKS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, Pro Forma
------------------------ (See Note 1(b))
1998 1999 December 31, 1999
----------- ----------- -----------------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......... $11,188,000 $21,735,000 $36,635,000
Accounts receivable, less
allowance for doubtful accounts
of $75,000 and $110,000 at
December 31, 1998 and 1999....... 542,000 2,178,000 2,178,000
Prepaid expenses and other
current assets................... 69,000 661,000 661,000
----------- ----------- -----------
Total current assets............ 11,799,000 24,574,000 39,474,000
Property and equipment, net........ 1,696,000 4,423,000 4,423,000
Partner advance, net............... -- 906,000 8,424,000
Goodwill and other intangible
assets, net....................... 20,000 978,000 978,000
Other assets....................... 111,000 883,000 883,000
----------- ----------- -----------
Total assets.................... $13,626,000 $31,764,000 $54,182,000
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Accounts payable.................. $ 969,000 $ 1,505,000 $ 1,505,000
Accrued expenses.................. 387,000 1,127,000 1,127,000
Deferred revenue.................. 25,000 244,000 244,000
Deferred development fees......... 150,000 -- --
Current installments of
obligations under capital
leases........................... 5,000 57,000 57,000
----------- ----------- -----------
Total current liabilities....... 1,536,000 2,933,000 2,933,000
Obligations under capital leases,
excluding current installments.... 4,000 92,000 92,000
Deferred rent...................... 98,000 484,000 484,000
Redeemable convertible preferred
stock:
Series B-$0.01 par value; 887,992
shares authorized; 780,230
shares issued and outstanding,
at December 31, 1998 and
1999, with an aggregate
liquidation preference of
$5,451,000, $5,849,000, in 1998
and 1999, no shares issued and
outstanding pro forma............ 5,451,000 5,849,000 --
Series C-$0.01 par value;
3,901,000 shares authorized;
2,500,000 shares issued and
outstanding at December 31, 1998
and 1999, with an aggregate
liquidation preference of
$16,250,000 and $17,408,000, in
1998 and 1999, no shares issued
and outstanding proforma......... 16,250,000 17,408,000 --
Series D-$0.01 par value;
1,480,000 shares authorized,
issued and outstanding at
December 31, 1999 with an
aggregate liquidation preference
of $15,593,000 at December 31,
1999, no shares issued and
outstanding proforma............. -- 15,593,000 --
Series E-$0.01 par value;
1,068,890 shares authorized,
issued and outstanding at
December 31, 1999 with an
aggregate liquidation preference
of $14,521,000 at December 31,
1999, no shares issued and
outstanding proforma............. -- 14,521,000 --
Stockholders' equity (deficit):
Series A-Convertible preferred
stock, $0.01 par value; 382,500
shares authorized, issued and
outstanding at December 31, 1998
and 1999, with an aggregate
liquidation preference of
$1,277,000, no shares issued and
outstanding pro forma............ 4,000 4,000 --
Common stock, $0.01 par value;
11,000,000 shares authorized;
1,175,000 and 1,262,168 shares
issued and outstanding at
December 31, 1998 and 1999
respectively, and 8,356,142
shares issued and outstanding on
a pro forma basis................ 12,000 13,000 84,000
Additional paid-in capital........ (21,000) 3,127,000 78,849,000
Accumulated deficit............... (9,662,000) (23,180,000) (28,234,000)
Deferred compensation............. (40,000) (5,064,000) (10,000)
Other comprehensive loss.......... (6,000) (16,000) (16,000)
----------- ----------- -----------
Total stockholders' equity
(deficit)...................... (9,713,000) (25,116,000) 50,673,000
----------- ----------- -----------
Commitments and contingencies
Total liabilities and
stockholders' equity (deficit). $13,626,000 $31,764,000 $54,182,000
=========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
INTRALINKS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years ended December 31,
--------------------------------------
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
Revenues............................... $ 112,000 $ 980,000 $ 4,450,000
Cost of revenues....................... 374,000 1,776,000 4,659,000
----------- ----------- ------------
Gross loss......................... (262,000) (796,000) (209,000)
Operating expenses:
General and administrative........... 1,143,000 2,179,000 5,542,000
Sales and marketing.................. 208,000 2,155,000 5,338,000
Product development.................. 439,000 1,956,000 3,036,000
Amortization of intangible assets.... -- -- 336,000
----------- ----------- ------------
Total operating expenses........... 1,790,000 6,290,000 14,252,000
----------- ----------- ------------
Loss from operations............... (2,052,000) (7,086,000) (14,461,000)
----------- ----------- ------------
Interest income (expense):
Interest income...................... 8,000 187,000 952,000
Interest expense..................... (41,000) (176,000) (9,000)
----------- ----------- ------------
Total interest income (expense),
net............................... (33,000) 11,000 943,000
----------- ----------- ------------
Net loss............................... (2,085,000) (7,075,000) (13,518,000)
Cumulative dividends on redeemable
convertible preferred stock........... (14,000) (702,000) (3,279,000)
Dividends in connection with
modification of dividend rights of
Series C preferred stockholders....... -- -- (1,370,000)
Dividends in connection with the
beneficial conversion feature
associated with Series D preferred
stock................................. -- -- (1,855,000)
----------- ----------- ------------
Net loss attributable to common
stockholders.......................... $(2,099,000) $(7,777,000) $(20,022,000)
=========== =========== ============
Basic and diluted net loss per common
share................................. $ (1.90) $ (6.62) $ (16.54)
=========== =========== ============
Weighted average shares outstanding
used in basic and diluted net loss per
common share calculation.............. 1,102,500 1,175,000 1,210,584
=========== =========== ============
Pro forma:
Net loss attributable to common
stockholders........................ $(20,022,000)
Cumulative dividends in connection
with the settlement of contingent
Series D preferred stock warrants... (5,054,000)
------------
Pro forma net loss attributable to
common stockholders................. $(25,076,000)
============
Pro forma basic and diluted net loss
per common share.................... $ (3.94)
============
Shares used in pro forma basic and
diluted net loss per common share
calculation......................... 6,363,963
============
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
INTRALINKS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT AND COMPREHENSIVE LOSS
<TABLE>
<CAPTION>
Series A convertible
preferred stock Common stock Additional Other
---------------------------------------- paid-in Subscription Accumulated Deferred compre-
Shares Amount Shares Amount capital receivable deficit compensation hensive loss
----------- ------------------- ------- ---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1996............. 75,000 $1,000 1,030,000 $10,000 $ 238,000 $(10,000) $ (502,000) $ -- $ --
Issuance of
common stock..... -- 30,000 1,000 99,000 10,000 -- -- --
Issuance of
common stock to
officers......... -- -- 115,000 1,000 52,000 -- -- (53,000) --
Issuance of stock
options and
warrants in lieu
of compensation.. -- -- -- 72,000 -- -- (72,000) --
Amortization of
deferred
compensation..... -- -- -- -- -- -- -- 70,000 --
Issuance of
warrants in
connection with
bridge loans..... -- -- -- -- 14,000 -- -- -- --
Issuance of
Series A
convertible
preferred stock
upon conversion
of notes payable. 45,000 -- -- 150,000 -- -- -- --
Issuance of
Series A
convertible
preferred stock.. 262,500 3,000 -- -- 872,000 -- -- -- --
Offering costs in
connection with
Series B
redeemable
convertible
preferred stock.. -- -- -- -- (60,000) -- -- -- --
Accrual of
cumulative
dividend on
Series B
redeemable
convertible
preferred stock.. -- -- -- -- (14,000) -- -- --
Net loss......... -- -- -- -- -- -- (2,085,000) -- --
----------- --------- --------- ------- ---------- -------- ------------ ----------- --------
Balance at
December 31,
1997............. 382,500 4,000 1,175,000 12,000 1,423,000 -- (2,587,000) (55,000) --
Amortization of
deferred
compensation..... -- -- -- -- -- -- -- 31,000 --
Issuance of
warrants in
connection with
bridge loans..... -- -- -- -- 151,000 -- -- -- --
Issuance of stock
options to
consultant in
lieu of
compensation..... -- -- -- -- 16,000 -- -- (16,000) --
Conversion of
warrants into
shares of Series
B redeemable
convertible
preferred stock.. -- -- -- -- (72,000) -- -- -- --
Offering costs in
connection with
Series C
redeemable
convertible
preferred stock.. -- -- -- -- (837,000) -- -- -- --
Cumulative
dividends on
Series B and C
redeemable
convertible
preferred stock.. -- -- -- -- (702,000) -- -- -- --
Foreign currency
translation
adjustment....... -- -- -- -- -- -- -- -- (6,000)
Net loss......... -- -- -- -- -- -- (7,075,000) -- --
Total
comprehensive
loss............ -- -- -- -- -- -- -- -- --
----------- --------- --------- ------- ---------- -------- ------------ ----------- --------
Balance at
December 31,
1998............. 382,500 4,000 1,175,000 12,000 (21,000) -- (9,662,000) (40,000) (6,000)
Amortization of
deferred
compensation..... -- -- -- -- -- -- -- 30,000 --
Issuance of
options in lieu
of compensation.. -- -- -- -- 4,000 -- -- -- --
Cumulative
dividends on
Series B through
E redeemable
convertible
preferred stock.. -- -- -- -- (3,279,000) -- -- -- --
Dividend payment
to holders of
redeemable Series
C convertible
preferred stock
in connection
with modification
of Series D...... -- -- -- -- (800,000) -- -- -- --
Issuance of
Series D
contingent
warrants......... -- -- -- -- 5,054,000 -- -- (5,054,000) --
Offering costs in
connection with
redeemable Series
D and E
convertible
preferred stock.. -- -- -- -- (184,000) -- -- -- --
Issuance of
Series E warrants
in connection
with the RWJ-PRI
development
agreement........ -- -- -- -- 1,087,000 -- -- -- --
Contribution to
Capital--E&Y
deferred
development fees. -- -- -- -- 360,000 -- -- -- --
Issuance of
Common Stock to
Cambridge........ -- -- 87,168 1,000 906,000 -- -- -- --
Foreign currency
translation
adjustment....... -- -- -- -- -- -- -- -- (10,000)
Net loss......... -- -- -- -- -- -- (13,518,000) -- --
Total
comprehensive
loss............ -- -- -- -- -- -- -- -- --
----------- --------- --------- ------- ---------- -------- ------------ ----------- --------
Balance at
December 31,
1999............. 382,500 $4,000 1,262,168 $13,000 $3,127,000 $ -- $(23,180,000) $(5,064,000) $(16,000)
=========== ========= ========= ======= ========== ======== ============ =========== ========
<CAPTION>
Total
stockholders'
deficit
--------------
<S> <C>
Balance at
December 31,
1996............. $ (263,000)
Issuance of
common stock..... 110,000
Issuance of
common stock to
officers......... --
Issuance of stock
options and
warrants in lieu
of compensation.. --
Amortization of
deferred
compensation..... 70,000
Issuance of
warrants in
connection with
bridge loans..... 14,000
Issuance of
Series A
convertible
preferred stock
upon conversion
of notes payable. 150,000
Issuance of
Series A
convertible
preferred stock.. 875,000
Offering costs in
connection with
Series B
redeemable
convertible
preferred stock.. (60,000)
Accrual of
cumulative
dividend on
Series B
redeemable
convertible
preferred stock.. (14,000)
Net loss......... (2,085,000)
--------------
Balance at
December 31,
1997............. (1,203,000)
Amortization of
deferred
compensation..... 31,000
Issuance of
warrants in
connection with
bridge loans..... 151,000
Issuance of stock
options to
consultant in
lieu of
compensation..... --
Conversion of
warrants into
shares of Series
B redeemable
convertible
preferred stock.. (72,000)
Offering costs in
connection with
Series C
redeemable
convertible
preferred stock.. (837,000)
Cumulative
dividends on
Series B and C
redeemable
convertible
preferred stock.. (702,000)
Foreign currency
translation
adjustment....... (6,000)
Net loss......... (7,075,000)
--------------
Total
comprehensive
loss............ (7,081,000)
--------------
Balance at
December 31,
1998............. (9,713,000)
Amortization of
deferred
compensation..... 30,000
Issuance of
options in lieu
of compensation.. 4,000
Cumulative
dividends on
Series B through
E redeemable
convertible
preferred stock.. (3,279,000)
Dividend payment
to holders of
redeemable Series
C convertible
preferred stock
in connection
with modification
of Series D...... (800,000)
Issuance of
Series D
contingent
warrants......... --
Offering costs in
connection with
redeemable Series
D and E
convertible
preferred stock.. (184,000)
Issuance of
Series E warrants
in connection
with the RWJ-PRI
development
agreement........ 1,087,000
Contribution to
Capital--E&Y
deferred
development fees. 360,000
Issuance of
Common Stock to
Cambridge........ 907,000
Foreign currency
translation
adjustment....... (10,000)
Net loss......... (13,518,000)
--------------
Total
comprehensive
loss............ (13,528,000)
--------------
Balance at
December 31,
1999............. $(25,116,000)
==============
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
INTRALINKS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended December 31,
--------------------------------------
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss............................. $(2,085,000) $(7,075,000) $(13,518,000)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Noncash compensation expense....... 70,000 31,000 34,000
Goodwill amortization.............. -- -- 155,000
Amortization of warrants........... -- -- 181,000
Depreciation and amortization...... 26,000 118,000 637,000
Amortization of debt discount...... 14,000 151,000 --
Provision for doubtful accounts.... -- 75,000 125,000
Changes in operating assets and
liabilities:
Accounts receivable.............. (24,000) (593,000) (1,761,000)
Prepaid expenses and other
assets.......................... (8,000) (61,000) (592,000)
Other assets..................... (12,000) (85,000) (772,000)
Accounts payable and accrued
expenses........................ 77,000 1,024,000 1,337,000
Due to officers.................. (19,000) -- --
Deferred revenue................. 232,000 (207,000) 219,000
Deferred development fees........ -- 150,000 210,000
Deferred rent.................... 4,000 94,000 386,000
----------- ----------- ------------
Net cash used in operating
activities..................... (1,725,000) (6,378,000) (13,359,000)
----------- ----------- ------------
Cash flows from investing activities:
Intangible assets.................... -- (25,000) --
Capital expenditures................. (108,000) (1,658,000) (3,090,000)
Cash paid for acquisition............ -- -- (211,000)
----------- ----------- ------------
Net cash used in investing
activities..................... (108,000) (1,683,000) (3,301,000)
----------- ----------- ------------
Cash flows from financing activities:
Principal payments under capital
lease obligations................... (11,000) (4,000) (129,000)
Proceeds from issuance of Series A
convertible preferred stock......... 875,000 -- --
Proceeds from issuance of Series B
through E redeemable
convertible preferred stock ........ 2,900,000 15,500,000 20,496,000
Exercise of Series D warrants in
connection with Series E financing . -- -- 8,200,000
Offering costs....................... (60,000) (587,000) (184,000)
Proceeds from issuance of bridge
loans............................... 600,000 2,000,000 --
Proceeds from issuance of common
stock............................... 110,000 -- --
Dividends paid to Series C redeemable
convertible preferred stockholders.. -- (272,000) (1,166,000)
----------- ----------- ------------
Net cash provided by financing
activities.......................... 4,414,000 16,637,000 27,217,000
----------- ----------- ------------
Effect of foreign exchange rate
changes on cash and cash
equivalents......................... -- (6,000) (10,000)
----------- ----------- ------------
Net change in cash and cash
equivalents......................... 2,581,000 8,570,000 10,547,000
Cash and cash equivalents at beginning
of period............................ 37,000 2,618,000 11,188,000
----------- ----------- ------------
Cash and cash equivalents at end of
period............................... $ 2,618,000 $11,188,000 $ 21,735,000
=========== =========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
(1) Summary of Operations and Significant Accounting Policies
(a) Summary of Operations
IntraLinks, Inc. (the "Company" or "IntraLinks"), a Delaware corporation, was
formed on June 13, 1996. On September 17, 1996, the Company formed IntraLoan,
Inc., a Delaware corporation subsidiary, which has not had any activity. During
1998, the Company formed IntraLinks, Ltd., a wholly owned subsidiary of the
Company. This subsidiary, located in London, England, was formed for the
purpose of marketing and selling the IntraLinks services in the United Kingdom
and Europe. During 1999, the Company formed IntraLinks Pharma, Inc., another
wholly owned subsidiary of the Company. This subsidiary, located in Wilmington,
Delaware, was formed for the purpose of providing the IntraLinks services to
the pharmaceutical industry.
IntraLinks provides services that enable business-to-business collaboration and
secure messaging over the Internet. The Company's services provide an Internet-
based environment in which communication can be posted, accessed and organized
for use by collaborating parties worldwide.
(b) Initial Public Offering and Pro Forma Balance Sheet--Unaudited
In February 2000, the Board of Directors authorized the filing of a
registration statement with the Securities and Exchange Commission ("SEC") that
would permit the Company to sell shares of its common stock in connection with
a proposed initial public offering ("IPO").
The accompanying pro forma data as of December 31, 1999 gives effect to:
. the recognition of approximately $5,054,000 of expense at the closing of
the offering in connection with the immediate vesting of previously
contingent warrants (see note 4) to purchase 468,000 common shares. Such
amount will be recorded as a non-cash dividend to the Company's Series D
preferred stockholder. For purposes of the pro forma data, the amount of
the dividend using a Black-Scholes pricing model is based on a value of
$17.00 per share, which is the price paid in the Company's recent
private placement of Series F redeemable convertible preferred stock.
The actual amount of the dividend will be determined using the initial
public offering price upon the consummation of the offering. Each $1
change in the IPO price will effect this dividend by approximately
$426,000;
. the issuance of 882,354 shares of Series F redeemable convertible
preferred stock at $17.00 per share during the first quarter of 2000 for
net proceeds of $14.9 million (see note 4);
. the issuance of 1,050,000 fully vested Series F warrants in connection
with the Series F financing and execution of an enterprise service
agreement. The $7.5 million value ascribed to the warrants will be
recorded as a partner advance; and
. the automatic conversion on a one-for-one basis of all outstanding
shares of convertible preferred stock into 7,093,974 shares of common
stock upon the closing of the IPO (see note 4);
(c) Principles of Consolidation
The consolidated financial statements include the financial statements of
IntraLinks, Inc. and its wholly-owned subsidiaries. All intercompany balances
and transactions have been eliminated in consolidation.
(d) Use of Estimates
The preparation of consolidated financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and revenue and expenses during the reporting
period. Actual results could differ from those estimates.
(e) Cash Equivalents
The Company considers all highly liquid securities with original maturities of
three months or less to be cash equivalents, which principally consist of money
market accounts.
F-7
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
(f) Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the related assets,
which generally range between five and seven years. Property and equipment
under capital leases are stated at the present value of minimum lease payments,
and are amortized using the straight-line method over the shorter of the lease
term or the estimated useful lives of the assets.
Leasehold improvements are amortized using the straight-line method over the
shorter of the lease term or the estimated useful life of the asset.
(g) Goodwill and Intangible Assets
Goodwill is stated net of accumulated amortization of $155,000 at December 31,
1999. Goodwill is amortized over the expected period of benefit of three years.
Intangible assets represent the purchase of a domain name, which is being
amortized on a straight-line basis over five years.
(h) Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of the assets to future net undiscounted cash
flows expected to be generated by the assets. If the assets are considered to
be impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceeds the fair value of the assets. The
fair value of the assets is determined by quoted market prices if available, or
the best information available in the circumstances. To date, no impairment has
occurred.
(i) Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to the differences between the financial statement carrying
amounts of the existing assets and liabilities and the respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be realized or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in results of
operations in the period that the tax rate change occurs. Valuation allowances
are established when necessary to reduce deferred tax assets to the amount
expected to be realized.
(j) Revenue Recognition
The Company establishes a secure Internet site (the "deal space") for each
transaction or project ("deal") on the IntraLinks services and posts various
business communications to the deal space based on client specific
requirements. The Company provides a user name and password for each user who
has access to the deal space. The Company's fees are based on the number of
unique users who have access to the deal space and, if the project extends
longer than anticipated, other additional fees. Once a deal is functional on
the deal space, it is considered to be in its "launch phase" at which point
customers can access the information. The average length of a launch phase
ranges from two to three months. There is no stated time period of a deal. The
Company recognizes revenue ratably over the average length of the launch phase
provided that no significant Company obligations remain and collection of the
resulting receivable is probable. The Company adjusts its estimates if a deal
does not last as long as expected.
In February 2000, the Company began marketing its services under one-year
enterprise service agreements containing minimum fee requirements whether or
not services are used. Revenues for these contracts will be recognized ratably
over the related service period.
The Company has entered into two development agreements. The first development
agreement was with Ernst & Young whereby the Company received a non-refundable
fee in consideration for developing, marketing and building a business to
provide secure access to multiple parties and permitted parties and permitted
participants in connection with confidential financial transactions. Amounts
received under this arrangement were offset against costs incurred with the
remainder deferred until development was complete. This development agreement
was amended on April 13, 1999 (see Note (8)).
F-8
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
The Company also entered into a three year development agreement with RWJ-PRI
to develop, market and build a business to provide secure access to multiple
parties and permitted participants in connection with the establishment of an
internet based workspace for pharmaceutical research and development
activities. In consideration of the Company's three-month exclusive agreement
with RWJ-PRI to create an application for a secure Internet-based workspace for
pharmaceutical research, the Company received a non-refundable $350,000 fee
(see Note (8)). This fee is ratably recognized as revenue over the exclusive
period. The Company also received a non-refundable $150,000 fee, which is an
advance of usage fees and will be recognized as services are performed.
Deferred revenue consists of billings in excess of recognized revenues.
Included in accounts receivable are unbilled receivables of $101,000 and
$983,000 as of December 31, 1998 and 1999, respectively.
(k) Product Development
Product development costs include consultant costs associated with the design,
development and testing of the company's systems and amortization of
capitalized software costs. Product development costs and enhancements to
existing products are charged to operations as incurred. Software development
costs are required to be capitalized when a product's technological feasibility
has been established by completion of a working model of the product and ending
when a product is available for general release to customers. To date,
completion of a working model of the Company's products and general release
have substantially coincided. As a result, the Company has not capitalized any
software development costs since such costs have not been significant. Product
development costs are expensed as incurred, except for costs capitalized in
accordance with SOP 98-1 beginning in 1999 (see note 1(l)). The Company
capitalizes internal-use software that is acquired, internally developed, or
modified solely to meet its internal needs provided no substantive plan exists
or is being developed to market the software externally. The amounts
capitalized are for external direct costs of services used in developing
internal-use software. Product development costs amounted to $439,000,
$1,956,000, and $3,036,000 for the years ended December 31, 1997, 1998 and
1999, respectively.
(l) Capitalized Software
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." SOP 98-1 provides guidance for
determining whether computer software is internal-use software and on
accounting for the proceeds of computer software originally developed or
obtained for internal use and then subsequently sold to the public. It also
provides guidance on capitalization of the costs incurred for computer software
developed or obtained for internal use. The Company adopted SOP 98-1 in 1999,
and capitalized approximately $1.3 million as of December 31, 1999.
(m) Advertising Expenses
The Company expenses the cost for producing and communicating advertising and
promoting its services when incurred. Costs of communicating advertising are
not incurred until the item or service has been received. Such costs are
included in sales and marketing and totaled $58,000, $236,000, and $607,000 for
the years ended December 31, 1997, 1998 and 1999, respectively.
(n) Financial Instruments and Concentration of Credit Risk
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist of cash and cash equivalents and accounts
receivable. At December 31, 1997 and 1998, the fair value of these instruments
approximated their financial statement carrying amount because of the short-
term maturity of these instruments. Substantially all of the Company's cash
equivalents were invested in money market accounts.
The Company currently derives a substantial majority of its revenues from
IntraLoan, a service used by banks to facilitate corporate loan syndications.
As a result, the Company's revenues are sensitive to the level of activity in
the corporate loan market. The Company expects that IntraLoan-related revenues
will continue to account for a subtantial majority of its revenues for the
foreseeable future.
The Company's revenues are primarily derived from companies located in the
United States and United Kingdom. The Company performs periodic credit
evaluations of its customers' financial condition and does not
F-9
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
require collateral. Accounts receivable are due principally from large U.S.
companies under stated contract terms and the Company provides for estimated
credit losses at the time of sale. Such losses have not been significant to
date.
<TABLE>
<CAPTION>
Percentage of
Total Revenues
for the Years
ended
December 31,
----------------
1997 1998 1999
Revenues derived from significant customers: ---- ---- ----
<S> <C> <C> <C>
Five largest customers combined............................... 100% 84% 52%
Largest single customer....................................... 50% 31% 29%
Second largest customer....................................... 22% 21% 8%
Third largest customer........................................ 16% 18% 6%
</TABLE>
<TABLE>
<CAPTION>
Percentage of
Accounts Receivable
at December 31,
-------------------
1998 1999
Accounts Receivable due from significant customers: --------- ---------
<S> <C> <C>
Largest single customer............................... 24% 18%
Second largest customer............................... 15% 11%
Third largest customer................................ 11% 9%
</TABLE>
(o) Stock-Based Compensation
The Company accounts for its employee stock option plans in accordance with the
provisions of Accounting Principles Board ("APB") Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations. Compensation
expense related to employee stock options is recorded only if, on the date of
grant, the fair value of the underlying stock exceeds the exercise price of the
stock option. The Company adopted the disclosure-only requirements of Statement
of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation," which allows entities to continue to apply the provisions of APB
Opinion No. 25 for transactions with employees and non-employee board of
director members and provide pro forma net income and pro forma earnings per
share disclosures for employee stock as if the fair-value-based method of
accounting in SFAS No. 123 had been applied to these transactions.
The Company accounts for non-employee stock-based awards in which goods or
services are the consideration received for the equity instruments issued based
on the fair value of the consideration received or the fair value of the equity
instrument issued, whichever is more reliably measured.
(p) Basic and Diluted Net Loss Per Share
Loss per share is presented in accordance with the provisions of SFAS No. 128.
"Computation of Earnings Per Share," and SEC Staff Accounting Bulletin No. 98.
Under SFAS No. 128, basic earnings per share excludes dilution for common stock
equivalents and is computed by dividing income or loss available to common
shareholders by the weighted average number of common shares outstanding for
the period. Diluted earnings per share reflects the potential dilution that
could occur if securities or other contracts to issue common stock were
exercised or converted into common stock and resulted in the issuance of common
stock. Diluted net loss per share is equal to basic loss per share since all
common stock equivalents are anti-dilutive for each of the periods presented.
Diluted net loss per common share for the years ended December 31, 1997, 1998
and 1999, does not include the effects of options to purchase 30,000, 776,000
and 2,379,488 shares of common stock, respectively, 304,489, 220,184, and
1,111,262 common and preferred stock warrants, respectively and 1,151,730,
3,662,730, and 6,211,620 shares of convertible preferred stock on an "as if"
converted basis, respectively.
The pro forma net loss per share for the year ended December 31, 1999, is
computed by dividing the net loss by the sum of the weighted average number of
shares of common stock outstanding and the shares resulting from the automatic
conversion of all of our outstanding convertible preferred stock, totalling
6,211,620, as if
F-10
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
such conversion occurred at the date of original issuance during 1999. The
shares used in calculating the pro forma basic and diluted net loss per common
share are as follows:
<TABLE>
<S> <C>
Actual Weighted Average common shares outstanding:................. 1,210,584
Series A Convertible Preferred Stock............................. 382,500
Series B Redeemable Convertible Preferred Stock.................. 780,230
Series C Redeemable Convertible Preferred Stock.................. 2,500,000
Series D Redeemable Convertible Preferred Stock.................. 911,667
Series E Redeemable Convertible Preferred Stock.................. 578,982
---------
6,363,963
=========
</TABLE>
(q) Foreign Currency Translation Adjustments
Cumulative translation adjustments include the effects of using current rates
in translating the financial statements of the Company's foreign subsidiary
located in the United Kingdom. The net foreign currency translation loss
affecting comprehensive loss was $0, $6,000 and $10,000 for the years ended
December 31, 1997 and 1998 and 1999, respectively, and is included as a
component of stockholders' deficit and comprehensive loss.
(r) Stock Split
In June 1997, the Board of Directors approved a 1.428571-for-one split of the
Company's Series A convertible preferred stock ("Series A"). Accordingly, all
Series A share and per share information in the accompanying consolidated
financial statements has been retroactively restated to reflect the effect of
the Series A stock split.
(s) Comprehensive Loss
The Company adopted the provisions of Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" in 1998. SFAS No. 130
requires the Company to report in its financial statements, in addition to its
net income (loss), comprehensive income (loss), which includes all changes in
equity during a period from non-owner sources including, as applicable, foreign
currency items, minimum pension liability adjustments and unrealized gains and
losses on certain investments in debt and equity securities.
(t) Segments
During 1998, the Company adopted the provisions of SFAS No. 131, "Disclosures
About Segments of an Enterprise and Related Information." SFAS No. 131
establishes annual and interim reporting standards for operating segments of a
company. SFAS No. 131 requires disclosures of selected segment-related
financial information about products, major customers, and geographic areas.
The chief operating decision maker evaluates performance, makes operating
decisions, and allocates resources based on financial data consistent with the
presentation in the accompanying financial statements. The Company has
determined that it does not have any separately reportable segments.
The Company's revenues have been earned primarily from customers in the United
States. In addition, all significant operations and assets are based in the
United States.
(u) Recent Accounting Pronouncements
In April 1998, the AICPA issued SOP No. 98-5, "Reporting on the Costs of Start-
Up Activities," which provides guidance on the financial reporting of start-up
costs. SOP 98-5 requires costs of start-up activities and organization costs to
be expensed as incurred. SOP 98-5 was adopted by the Company on January 1,
1999. As the Company had not capitalized such costs, the adoption of SOP 98-5
did not have an impact on the consolidated financial statements of the Company.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including derivative
instruments embedded in other contracts, and for hedging activities.
Subsequently, the FASB issued SFAS No. 137 which deferred the effective date of
SFAS No. 133. SFAS No. 137 is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000. The Company has not yet analyzed the impact of
this pronouncement on its financial statements.
F-11
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
(2) Balance Sheet Components
Property and equipment, including equipment under capital leases, are stated at
cost and are summarized as follows:
<TABLE>
<CAPTION>
December 31,
----------------------
1998 1999
---------- ----------
<S> <C> <C>
Computer and office equipment and software, including
amounts related to capital leases of $24,000 and
$293,000 ............................................. $ 467,000 $1,937,000
Furniture and fixtures ................................ 446,000 636,000
Leasehold improvements ................................ 923,000 1,334,000
Capitalized software .................................. -- 1,288,000
---------- ----------
1,836,000 5,195,000
---------- ----------
Less accumulated depreciation and amortization,
including amounts related to capital leases of $24,000
and $71,000 .......................................... (140,000) (772,000)
---------- ----------
Total................................................ $1,696,000 $4,423,000
========== ==========
Accrued expenses consist of the following:
<CAPTION>
December 31,
----------------------
1998 1999
---------- ----------
<S> <C> <C>
Product development.................................... $ 164,000 $ 532,000
Professional fees...................................... 56,000 423,000
Dividends.............................................. 61,000 --
Other.................................................. 106,000 172,000
---------- ----------
Total................................................ $ 387,000 $1,127,000
========== ==========
</TABLE>
(3) Bridge Loans
During September 1997, the Company received bridge loans from three related
party investors amounting to $600,000 at an interest rate of 12% per annum due
on December 31, 1998. In connection with the bridge loans, the Company granted
the investors warrants to purchase 26,750 shares of common stock at $3.33 per
share, exercisable over a five-year period. The Company recorded a $14,000 debt
discount on the date of issuance using a Black-Scholes pricing model with a 10%
volatility factor, $3.33 exercise price and $3.33 fair value. On December 18,
1997, these bridge loans converted into 92,307 shares of Series B redeemable
convertible preferred stock (note 4).
During August 1998, the Company received bridge loans from seven related party
investors amounting to $2,000,000 at an interest rate of 8% per annum due on
October 19, 1998. In connection with the bridge loan offering, the Company
granted the investors warrants to purchase 108,000 shares of Series B
redeemable convertible preferred stock at $6.50 per share, exercisable over a
five-year period. The Company recorded a $151,000 debt discount on the date of
issuance using a Black-Scholes pricing model with a 40% volatility factor $3.33
exercise price and $3.33 fair value. On October 9, 1998, these bridge loans
converted into 307,692 shares of Series C redeemable convertible preferred
stock.
Interest expense, including amortization of debt discount, on the bridge loans
amounted to $41,000 and $176,000 for the years ended December 31, 1997, and
1998, respectively.
(4) Capitalization
Common Stock
During 1996, the Company issued 1,000,000 shares of common stock to its
founders, who were also officers and directors of the Company, at $0.0342 per
share.
F-12
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
During August 1996, the Board of Directors authorized the issuance of 50,000
shares to an officer of the Company at no cost to the officer. Of the amount
authorized, 30,000 and 10,000 shares were issued in 1996 and 1997,
respectively. The Company recorded compensation expense of $1,000 in both 1996
and 1997. Upon termination of the officer's employment with the Company in July
1997, the remaining 10,000 authorized shares were forfeited.
During April 1997, the Board of Directors approved the issuance of 105,000
shares to an executive of the Company. Of the total shares issued, 60,000
shares vested immediately. In April 1998, 15,000 additional shares vested. In
April 1999 and 2000, the remaining 30,000 shares shall vest in 15,000 share
increments. The Company recorded the issuance of the shares at $0.4995 per
share, the fair market value of the stock on the grant date as deferred
compensation. The Company recorded $36,000, $9,000, and $8,000, in compensation
expense for the years ended December 31, 1997, 1998, and 1999, respectively.
During May 1997, a founding shareholder of the Company entered into a stock
option agreement with an executive of the Company, granting the executive
options to purchase up to 45,000 shares of the Company's common stock in
consideration for the executive's services to be rendered to the Company. The
agreement provided for the vesting of options to purchase 15,000 shares of
common stock on each of April 15, 1998, 1999 and 2000, exercisable at $0.4995
per-share. The executive may exercise the options in full or in part at any
time prior to their expiration ten years from the grant date. In connection
with the options, the Company recorded deferred compensation of $22,000, using
the Black-Scholes pricing model with a 10% volatility factor, fair value of $1
and an exercise price of $0.4995. The Company recognized $4,000, $7,000, and
$7,000, as compensation expense for the years ended December 31, 1997, 1998,
and 1999, respectively. The Company will recognize an additional $4,000 of
compensation expense over the remaining vesting period.
During June 1997, Landwell Financial Services Inc. ("Landwell"), a consultant
to the Company, purchased 30,000 shares of common stock at $3.33 per share.
Warrants
The following summarizes the Company's issued and outstanding warrants:
<TABLE>
<CAPTION>
Exercise price Preferred Common
per share Stock Stock
-------------- --------- --------
<S> <C> <C> <C>
Balance at December 31, 1996..........
June 1997 warrants.................. $ 3.33 -- 30,384
September 1997 warrants............. $ 3.33 -- 40,000
September 1997 warrants............. $ 3.33 -- 26,750
October 1997 warrants............... $ 3.33 -- 15,050
December 1997 warrants.............. $ 6.50 -- 192,305
------- --------
Balance at December 31, 1997..........
-- 304,489
Exchange of December 1997 warrants
for 11,000 shares of Series B
redeemable convertible preferred
stock.............................. -- -- (192,305)
August 1998 warrants................ $ 6.50 108,000 --
------- --------
Balance at December 31, 1998.......... 108,000 112,184
======= ========
April 1999 E&Y warrants............. $10.00 468,000 --
April 1999 E&Y warrants............. $ 6.50 192,308 --
June 1999 J&J warrants.............. $13.00 230,770 --
------- --------
Balance at December 31, 1999.......... 999,078 112,184
======= ========
</TABLE>
F-13
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
During June 1997, the Company issued two sets of warrants to Landwell to
purchase up to 30,384 shares of common stock at $3.33 per share. The first set
of warrants representing the right to purchase 15,000 shares of common stock is
exercisable in whole, but not in part, during the five-year period starting
July 1, 1997. The latter set of warrants representing the right to purchase
15,384 shares of common stock was exercisable upon the successful private
equity placement of the Company's shares which occurred during December 1997.
The Company recorded $16,000 in expense using the Black-Scholes pricing model
with a 10% volatility factor, $3.33 fair value and $3.33 exercise price during
the year ended December 31, 1997 related to the issuance of the warrants.
During September 1997, the Company issued warrants to a related party investor
to purchase 40,000 shares of common stock at $3.33 per share, expiring on
September 1, 2002. In exchange, the related party investor agreed to provide
marketing and advisory services for a three-year period. In connection with the
warrants, the Company recorded deferred compensation of $22,000 using the
Black-Scholes pricing model with a 10% volatility factor, $3.33 fair value and
$3.33 exercise price, over the three-year service period applicable to the
grant. The Company has recorded compensation expense of approximately $2,000,
$7,000, and $7,000 for the years ended December 31, 1997, 1998 and for 1999,
respectively. The Company will recognize an additional $6,000 of compensation
expense over the remaining service period.
During September 1997, the Company received three bridge loans from related
party investors. In connection with the bridge loans, the Company granted the
investors warrants to purchase 26,750 shares of common stock at $3.33 per
share, exercisable over a five-year period.
During October 1997, the Company issued its software development vendor, the
Lante Corporation, warrants to purchase 15,050 shares of common stock at $3.33
per share expiring October 2, 2002. In exchange, the vendor provided
development services for the Company during 1997, resulting in product
development expense of approximately $9,000 using the Black-Scholes pricing
model with a 10% volatility factor, $3.33 fair value and $3.33 exercise price.
During December 1997, in connection with the issuance of Series B redeemable
convertible preferred stock, the Company issued warrants to purchase 192,305
shares of common stock of an exercise price of $6.50 per share. On October 9,
1998, as authorized by the Board of Directors, these warrants were converted
into 11,000 shares of Series B redeemable convertible preferred stock.
During August 1998, in connection with the bridge loan financing, the Company
issued warrants to purchase 108,000 shares of Series B redeemable convertible
preferred stock at $6.50 per share exercisable over a five-year period.
Immediately prior to the closing of the IPO, all remaining warrants to purchase
shares of preferred stock will be converted into warrants to purchase common
stock.
Series A Convertible Preferred Stock
During October 1996, the Company issued 75,000 shares of Series A convertible
preferred stock ("Series A") for $250,000 or $3.33 per share.
During January 1997, 45,000 shares of Series A stock were issued upon
conversion of $150,000 of convertible notes payable.
During June 1997, the Company issued 262,500 shares of Series A stock for
$875,000 or $3.33 per share to various existing and new investors.
The Series A shares are convertible into common stock on a one for one basis,
subject to certain anti-dilution provisions, as defined, at any time at the
option of the holder. The Company may require the conversion of such shares
into common stock upon the earlier of five years from the date of issuance or
an initial public offering of the Company's common stock.
F-14
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
Series B Redeemable Convertible Preferred Stock
During 1997, the Company issued 769,230 shares of Series B redeemable
convertible preferred stock (the "Series B") at $6.50 per share of which bridge
loans in the amount of $600,000 converted into 92,307 Series B shares (see note
3). Total proceeds, net of offering costs of $60,000, amounted to $2,840,000.
In connection therewith, an investor signed a stock subscription agreement
dated December 17, 1997 to purchase 230,769 shares at $6.50 per share valued at
$1,500,000. Such shares were paid for in January 1998, prior to the issuance of
the 1997 financial statements.
During 1998, the Company increased the total authorized shares to 887,922 and
exchanged warrants to purchase 192,305 shares of common stock for 11,000 shares
of Series B stock at $6.50 per share. The value of the shares was approximately
$72,000, which is less than the original value ascribed to the warrants,
accordingly, no expense was recorded in 1998.
Through October 5, 1998, Series B stockholders were entitled to receive cash
dividends at a rate of $0.52 per share per annum when, and if, declared by the
Company's Board of Directors. During October, 1998, as approved by the Series B
stockholders, the dividend rate was decreased to $0.325 per share, per annum
when and if declared by the Company's Board of Directors. The dividends are
cumulative and accrue from the issuance date. During April 1999, as approved by
the Board of Directors, the dividend rate was increased to $0.585 per share,
per annum. At December 31, 1997, 1998 and 1999, accrued and unpaid dividends
were $14,000, $379,000, and $777,000, respectively.
The shares are subject to mandatory redemption, in total, by the Company on
December 18, 2003, at an amount equal to $6.50 per share plus any accrued and
unpaid dividends. The Series B stockholders have the right, at their option, to
convert the shares into common stock at $6.50 per share. At the Company's
option, the redemption can be made in cash or by the issuance of notes payable.
In the event that the Company consummates an IPO at a price per share of not
less than $13 per share as adjusted, and net proceeds of at least $10,000,000,
all of the then outstanding Series B shares shall automatically convert into
common stock at a conversion price of $6.50 per share and the Company will be
relieved of its obligation to pay any undeclared accrued dividends.
Series C Redeemable Convertible Preferred Stock
During October 1998, the Company issued 2,500,000 shares of Series C redeemable
convertible preferred stock ("Series C") at $6.50 per share. In total, 307,692
shares were issued to bridge loan holders (see note 3) in settlement of the
Company's bridge loan, 38,462 shares were issued in partial settlement of
issuance costs, and 2,153,846 Series C shares were issued for cash proceeds.
Total proceeds from Series C, net of offering costs of $837,000, amounted to
$13,413,000.
During the period from October 1998 through March 1999, Series C holders
received quarterly cash dividends at a rate of $0.585 per share per annum. In
March 1999, as approved by the Board of Directors, the dividend terms were
modified to accrete unpaid dividends. Such dividends are cumulative, and accrue
from the date of issue. The Company made dividend payments of $272,000 and
$366,000 to Series C holders on December 15, 1998 and March 15, 1999,
respectively. The 1999 dividend payment included $61,000 which was accrued in
1998. At December 31, 1998 and 1999, accrued and unpaid dividends to Series C
shareholders amounted to $61,000 and $1,158,000, respectively.
The Series C shares are subject to mandatory redemption, in total, by the
Company on October 9, 2003, at an amount equal to $6.50 per share plus any
accrued and unpaid dividends. The Series C holders have the right, at their
option, to convert the shares into common stock at $6.50 per share. In the
event that the Company consummates an IPO at a price per share of not less than
$19.50 per share as adjusted, with net proceeds of at least $25,000,000, all of
the then outstanding Series C shares shall automatically convert into common
stock at a conversion price of $6.50 per share and the Company will be relieved
of its obligations to pay any accrued but undeclared dividends.
F-15
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
Series D Redeemable Convertible Preferred Stock
During April 1999, the Company issued 660,000 shares of Series D redeemable
convertible preferred stock ("Series D") to E&Y for $6.6 million, together with
warrants to purchase an additional 660,000 shares of Series D at $10.00 per
share expiring April 13, 2001. These warrants were exercised in connection with
the Series E redeemable convertible preferred stock offering.
The Company also issued E&Y warrants to purchase an additional 468,000 shares
of Series D stock with an exercise price of $10.00 per share, expiring April
13, 2004 and exercisable upon the Company achieving certain revenue targets or
upon consummation of an IPO. The Company will record an expense if and when the
revenue targets are achieved or an IPO is consummated and the warrants become
vested using a Black-Scholes pricing model based on the then fair value of the
Company's stock. Upon the consummation of an IPO, these warrants will be
exercisable immediately. For purposes of the pro forma data, the amount is
calculated based on a value of $17 per share, which is the price paid in the
Company's recent private placement. The actual amount of the dividend will be
determined using the initial public offering price upon consummation of the
offering.
The Company also issued E&Y warrants to purchase 192,308 shares of the Series C
stock with an exercise price of $6.50, expiring October 22, 2001.
The Company ascribed a value of approximately $1.9 million to the beneficial
conversion feature associated with the Series D preferred stock. The value was
determined using the relative fair value approach (average of the value
ascribed to the 2 year warrants using a Black-Scholes pricing model (45%
volatility factor, $10 fair value and $6.50 exercise price) and the present
value of the preferred stock.) The preferred stock converts at the option of
the holder. The beneficial conversion feature is treated as a preferred
dividend in the statement of operations.
As a condition of the Series D offering, the dividend rights of the holders of
Series C were modified to accrue but not pay dividends. In consideration
thereof, the Company made a one-time cash payment of $800,000 to the Series C
holders and issued warrants to the Series C holders for 160,000 shares of
Series D stock on the same terms as the aforementioned warrants to purchase
660,000 shares of Series D stock. The Company ascribed a value of $570,000 to
the 3 year warrants using a Black-Scholes pricing model with a 45% volatility
factor, $10 fair value and $10 exercise price. The total ascribed value,
$1,370,000, is treated as a preferred dividend in the statement of operations.
Series D holders are entitled to receive annual cash dividends at a rate of
$0.90 per share. The dividends are cumulative and accrue from the date of
issuance. Accrued dividends are payable when, and if declared by the Board of
Directors or upon redemption of the Series D shares or liquidation of the
Company. At December 31, 1999 accrued and unpaid dividends to Series D
shareholders amounted to $793,000.
The Series D shares are subject to mandatory redemption, in total, by the
Company on October 9, 2003. The Company will redeem all of the outstanding
Series D shares by paying an amount equal to $10.00 per share, plus an amount
equal to any accrued and unpaid dividends, up to the redemption date, whether
or not declared by the Board of Directors. The Series D shares may also be
converted at any time, into shares of Common Stock of the Company at the option
of the holder. In the event that the Company consummates an IPO at a price not
less than $19.50 per share, with net proceeds of at least $25,000,000 then all
outstanding Series D shares shall automatically convert into common stock at a
conversion price of $10.00 per share and the Company will be relieved of its
obligations to pay any accrued but unpaid dividends.
Series E Redeemable Convertible Preferred Stock and Pharmaceutical Research
Institute Warrants
During June 1999, the Company issued 1,068,890 shares of Series E redeemable
convertible preferred stock ("Series E") at $13.00 per share. Total proceeds
from Series E, net of offering costs of $184,000, amounted to approximately
$13.7 million.
F-16
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
As specified in the warrant certificates, holders of warrants to purchase
820,000 shares of Series D stock exercised such warrants in connection with the
Series E offering, with the Company receiving proceeds of $8.2 million.
Series E holders are entitled to receive annual cash dividends at a rate of
$1.17 per share. The dividends are cumulative and accrue from the date of
issuance. Accrued dividends are payable when, and if, declared by the Board of
Directors or upon redemption of the Series E shares or liquidation of the
Company. At December 31, 1999 accrued and unpaid dividends to Series E
shareholders amounted to $625,000.
The Series E shares are subject to mandatory redemption by the Company on
October 9, 2003. The Company will redeem all of the outstanding Series E shares
by paying an amount equal to $13.00 per share, plus any accrued and unpaid
dividends, whether or not declared by the Board of Directors. The Series E
shares may be converted at any time, into shares of Common Stock of the Company
at the option of the holder. In the event
that the Company consummates an IPO at a price not less than $19.50 per share,
with net proceeds of at least $25,000,000, all outstanding Series E shares
shall automatically convert into common stock at a conversion price of $13.00
per share and the Company will be relieved of its obligations to pay any
accrued and undeclared dividends.
In connection with the Series E offering and development agreement (see note
7), the Company issued to R.W. Johnson Pharmaceutical Research Institute, a
division of Ortho-McNeil Pharmaceutical, Inc., a wholly-owned subsidiary of
Johnson & Johnson ("RWJ-PRI") three series of warrants to purchase an aggregate
of 230,770 shares of common stock at $13.00. The Company calculated the value
of the 3 years warrants (approximately $1.1 million) using a Black-Scholes
pricing model with a volatility factor of 45%, fair value of $13 and exercise
price of $13. This amount was recorded as an advance and will be ratably
amortized to expense over the three year development agreement. The Company
amortized $181,000 as of December 31, 1999.
The first set of warrants are fully vested and exercisable for 38,462 shares
expiring June 30, 2002, and are immediately exercisable at any time.
The second set of warrants are fully vested for 76,923 shares expiring December
31, 2002 or earlier under certain circumstances. The warrants shall not be
exercisable until June 30, 2001 unless the Company consummates an IPO or RWJ-
PRI is required to sell its shares prior to an IPO as defined in the Company's
shareholders agreement. The Company has the right to require RWJ-PRI to
exercise the warrants upon consummation of an IPO.
The third set of warrants are fully vested for 115,385 shares, and are
exercisable upon the Company achieving certain revenue targets, as defined. In
the event that those targets are attained within a three-year period, the
warrants will become fully exercisable and a pro rata number of warrants shall
be exercisable for revenues less than the target amount. The cumulative revenue
and related warrant amount will be calculated every six months. At any time,
RWJ-PRI may exercise all or a portion of the then-exercisable warrants.
Series F Redeemable Convertible Preferred Stock
During the first quarter of 2000, the Company issued an aggregate of 882,354
shares of Series F Redeemable Convertible Preferred Stock ("Series F") at
$17.00 per share. Total proceeds from Series F, net of offering costs of
approximately $100,000, amounted to approximately $14.9 million.
Series F holders are entitled to receive annual cash dividends at a rate of
$1.53 per share. The dividends are cumulative and accrue from the date of
issuance. Accrued dividends are payable when, and if, declared by the Board of
Directors or upon redemption of the Series F shares or liquidation of the
Company.
The Series F shares are subject to mandatory redemption by the Company on
October 9, 2003. The Company will redeem all of the outstanding Series F shares
by paying an amount equal to $17 per share, plus any accrued and unpaid
dividends, whether or not declared by the Board of Directors.
F-17
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
In connection with the Series F offering, the Company entered into an
Enterprise Service Agreement with The Chase Manhattan Corporation whereby the
Company has the first option to make a proposal to Chase Manhattan to provide
Internet-based document management and communications services to Chase
Manhattan's Global Investment Bank. In connection with the Enterprise Service
Agreement, the Company issued Chase Manhattan warrants to purchase 1,050,000
shares of common stock at $17 per share. The Company calculated the value of
the 4 year warrants (approximately $7.5 million) using a Black-Scholes pricing
model with a volatility factor of 45%, fair value of $17 and exercise price of
$17. The warrants are fully vested and immediately exercisable.
The Company will record the value of these warrants as a partner advance which
will be ratably amortized over the two-year term of the Enterprise Service
Agreement. We gave pro forma effect to the issuance of the Series F financing
and the issuance of the warrants in the pro forma balance sheet.
Voting Rights and Liquidation Preferences
Series A, B, C, D & E stockholders have one vote for each full share of common
stock into which their respective shares are convertible on the record date for
the vote.
In the event of any liquidation, dissolution or winding up of the Company, the
Series A and B stockholders liquidation preferences are pari passu and the
Series C, D and E stockholders liquidation preferences are pari passu but
senior to the Series A and B.
(5) The Stock Option Plan
On June 10, 1997, the Board of Directors of the Company approved the stock
incentive plan (the "Plan") which provides for the granting of incentive stock
options, as defined under the Internal Revenue Code, nonqualified stock options
or restricted shares. Under the Plan, stock options are granted at prices not
less than 100% of the fair market value of the common stock on the date of
option grant and are exercisable at such times as determined by the Company,
but no later than ten years after the date of grant. A maximum of 3,500,000
shares of common stock may be issued pursuant to the Plan.
Restricted shares to be granted under the Plan shall not exceed 10% of the
total shares eligible for grant and are subject to restrictions on
transferability, as defined in the Company's shareholders' agreement, until the
restrictions lapse as determined by the Compensation Committee (the
"Committee") of the Board of Directors. Upon termination of employment during
the restriction period, the restricted shares and any accrued but unpaid
dividends on such shares are forfeited to the Company, unless the restriction
or forfeiture conditions are waived by the Committee.
The Plan terminates on December 31, 2000, unless terminated sooner by the
Company's Board of Directors with the stockholders' approval.
The Company's stock option activity is as follows:
<TABLE>
<CAPTION>
Weighted
average
fair value
Weighted Options of options
average exercisable granted
exercise at period during the
Options price end period
--------- -------- ----------- ----------
<S> <C> <C> <C> <C>
Outstanding at December 31,
1996......................... -- --
Granted....................... 30,000 $ 3.78
--------- ------
Outstanding at December 31,
1997......................... 30,000 $ 3.78 -- $ 1.44
--------- ------ ======= ======
Granted....................... 746,500 $ 4.46
Forfeited..................... (500) $ 4.00
--------- ------
Outstanding at December 31,
1998......................... 776,000 $ 4.43 16,200 $ 1.22
--------- ------ ======= ======
Granted....................... 1,634,625 $ 9.63
Forfeited..................... (31,137) $ 6.49
--------- ------
Outstanding at December 31,
1999......................... 2,379,488 $ 7.98 402,544 $ 1.89
========= ====== ======= ======
</TABLE>
F-18
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
The following table summarizes information about stock options outstanding and
exercisable at December 31, 1999:
<TABLE>
<CAPTION>
Weighted
average Weighted Weighted
remaining average average
Range of Number contractual exercise Number exercise
exercise prices outstanding life price exercisable price
--------------- ----------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$3.33............... 10,000 7.63 $ 3.33 6,700 $ 3.33
$4.00............... 139,750 8.12 $ 4.00 77,240 $ 4.00
$4.55............... 622,030 8.53 $ 4.55 166,590 $ 4.55
$7.50............... 395,736 9.35 $ 7.50 1,333 $ 7.50
$10.40.............. 1,211,972 9.86 $10.40 150,681 $10.40
--------- ---- ------ ------- ------
2,379,488 9.29 $ 7.98 402,544 $ 6.62
========= ==== ====== ======= ======
</TABLE>
Options generally vest ratably over three years, except for certain options
issued to members of management which have varying vesting schedules.
During 1997, the Company granted 5,000 options to purchase common stock to a
consultant for services rendered with a 3 year life. The Company recorded a
noncash charge of $3,000, based upon the fair market value of the stock option
using a Black-Scholes option pricing model with a 10% volatility factor, $4
fair value and $4 exercise price.
During 1998, the Company granted 12,000 options to purchase common stock to a
consultant for services rendered within a 3 year life. The Company recorded a
noncash charge of $16,000, based upon the fair market value of the stock option
using a Black-Scholes option pricing model with a 40% volatility factor, $4
fair value and $4 exercise price. The Company recognized $8,000 and $8,000 as
compensation expense for the years ended December 31, 1998 and 1999,
respectively.
During 1999, the Company granted 1,500 options to purchase common stock to a
consultant for services rendered with a 3 year life. The Company recorded a
noncash charge of $4,000, based upon the fair market value of the stock option
using a Black-Scholes option pricing model with a 45% volatility factor, $7.50
fair value and $7.50 exercise price.
The fair value of each stock option granted to employees during 1998 and 1999
is estimated using the Black-Scholes method with the following assumptions:
dividend yield 0%; risk-free interest rates ranging from 4.18% to 6.00%;
expected volatility of 0.01%; and an expected life of five years.
The Company applies APB Opinion No. 25 in accounting for its employee stock
options and, accordingly, no compensation cost has been recognized for these
options in the accompanying consolidated financial statements. The pro forma
effect on the Company's net loss, had such options been accounted for at fair
market value at the date of grant, is as follows:
<TABLE>
<CAPTION>
1997 1998 1999
----------- ----------- ------------
<S> <C> <C> <C>
Net loss attributable to common
shareholders:
As reported................... $(2,099,000) $(7,777,000) $(20,022,000)
=========== =========== ============
Pro forma..................... $(2,102,000) $(7,913,000) $(20,792,000)
=========== =========== ============
Net loss per common share:
As reported................... $ (1.90) $ (6.62) $ (16.54)
=========== =========== ============
Pro forma..................... $ (1.91) $ (6.73) $ (17.18)
=========== =========== ============
</TABLE>
F-19
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
(6) Acquisitions
Cambridge Technology Visions
During August 1999, IntraLinks acquired substantially all of the assets and
assumed substantially all of the liabilities of Cambridge Technology Visions,
Inc. for approximately $1.1 million, including acquisition costs pursuant to an
asset purchase agreement among IntraLinks and the shareholders of CTV. The
acquisition was accounted for as a purchase business combination. The
consideration payable by IntraLinks in connection with the acquisition of CTV
consisted of the following: approximately $180,000 in cash and 87,168 shares of
IntraLinks common stock valued at approximately $907,000. The Company also
incurred acquisition costs of approximately $31,000.
The excess of the purchase price over the net book value of the acquired assets
and assumed liabilities of CTV has been allocated to goodwill and other
intangible assets. Goodwill and other intangible assets will be amortized over
a period of three years, the expected period of benefit.
The following unaudited pro forma consolidated amounts give effect to the
acquisition as if it occurred on January 1, 1998 by consolidating the results
of operations of CTV with the results of the Company for 1998 and 1999.
<TABLE>
<CAPTION>
1998 1999
----------- ------------
<S> <C> <C>
Revenues....................................... $ 1,246,900 $ 4,595,000
Net loss attributable to common stockholders... (7,661,095) (19,991,000)
Basic and diluted net loss per common share.... (6.07) (15.84)
Weighted average shares used in net loss per
common share calculation (1).................. 1,262,168 1,262,168
</TABLE>
- --------
(1) The Company computes net loss per share in accordance with provisions of
FAS No. 128, "Earnings Per Share". Basic net loss per share is computed by
dividing the net loss for the period by the weighted average number of
common shares outstanding during the period. The Weighted Average Common
Shares used to compute pro forma basic net loss per share includes the
actual weighted average common shares outstanding for the year ended 1998,
plus the common shares issued in connection with the acquisition of
Cambridge from January 1, 1998. The common stock issued in connection with
the acquisition of Cambridge was 87,168 shares, which was adjusted for the
weighted average period such shares were considered to be outstanding
during 1999. In addition, diluted net loss per share is equal to basic net
loss per share as common stock issuable upon exercise of the Company's
employee stock options and upon exercise of outstanding warrants are not
included because they are antidilutive. In future periods, the weighted
average shares used to compute diluted earnings per share will include the
incremental shares of common stock relating to outstanding options and
warrants to the extent such incremental shares are dilutive.
The unaudited pro forma consolidated statements of operations are not
necessarily indicative of the operating results that would have been achieved
had the transactions been in effect as of the beginning of the periods
presented and should not be construed as being representative of future
operating results.
Savant
On January 28, 2000, the Company acquired certain assets from and assumed
certain liabilities of Savant Technologies for approximately $1,274,000,
including acquisition costs pursuant to an Asset Purchase agreement among
IntraLinks and the shareholders of Savant. The acquisition was accounted for as
a purchase business combination. The consideration consisted of 72,000 shares
of IntraLinks common stock valued at approximately $1,224,000 and acquisition
costs of approximately $50,000. The Company will amortize the resulting
goodwill over three years, the expected period of benefit. An additional 18,000
shares of common
F-20
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
stock were issued into escrow and will be released from escrow if and when the
shareholders/employees of Savant are employees of the Company on January 28,
2002. The Company considers the 18,000 shares issued into escrow to be
compensation for post combination services rather than additional purchase
price and, accordingly, will ratably amortize the $306,000 value of such shares
to expense through January 28, 2002.
(7) Retirement Plan
The Company has a defined contribution plan (the "401(k) Plan") under Internal
Revenue Code Section 401(k). All employees of the Company are covered by the
401(k) Plan.
The Plan also provides employees with employer matching contributions. All
full-time employees who have twelve months of employment are eligible to
participate in the 401(k) Plan. The 401(k) Plan allows participants to make a
pretax deferred contribution of between 2% and 15% of their compensation. The
401(k) Plan provides that the employer will contribute $500 per employee
payable at the end of the year. Matching contributions made by the Company
amounted to $2,000 and $10,000 for year ended December 31, 1998 and 1999,
respectively. No matching contributions were made for the year ended December
31, 1997.
(8) Development Agreements
During October 1998, the Company and Ernst & Young entered into an agreement to
develop, market and build a business to provide secure access to multiple
parties and permitted participants in connection with confidential financial
transactions. The Company also agreed to develop a separate workspace on its
internet site for use by E&Y. In consideration thereof, E&Y paid the Company a
monthly fee, which aggregated $150,000 and $300,000 in the year ended December
31, 1998 and for the period from January 1, 1999 through April 13, 1999,
respectively. Such amounts are recorded net of development costs incurred,
which aggregated approximately $90,000 for the period from January 1, 1999
through April 13, 1999 with the remainder recorded as deferred development
fees.
The Company entered into a new marketing and equity agreement with Ernst &
Young (see note 4), and, since April 1999, the Company has no longer received
monthly development fees from Ernst & Young. In connection with this agreement,
the Company recorded the remaining deferred development fees as a contribution
to capital as such amount is considered to be part of the total price paid for
the Series D stock and warrants. Pursuant to the marketing agreement, E&Y will
market the Company's services to its client base but has no minimum performance
targets.
During June 1999, the Company and RWJ-PRI entered into a three year development
agreement to develop, market and build a business to provide secure access to
multiple parties and permitted participants in connection with the
establishment of an internet based workspace for pharmaceutical research and
development activities. In consideration of the Company's three-month exclusive
agreement with RWJ-PRI to create an application for a secure Internet-based
workspace for pharmaceutical research, the Company received a non-refundable
$350,000 fee. The Company also received a non-refundable $150,000 fee, which is
an advance of usage fees.
(9) Significant Vendors
We currently rely on IBM Global Services to host our services on the existing
NT/Lotus platform and to provide the security features on which our services
currently depend. IBM accounted for approximately 14%, 52% and 43% of the
Company's costs of revenues in 1997, 1998 and 1999, respectively. IBM also
accounted for 3%, 15% and 14% of total operating costs in 1997, 1998 and 1999,
respectively.
The Company relies on outside consulting firms to develop and maintain the
software supporting its services. Lante Corporation ("Lante") developed and
assists in maintaining the applications platform supporting the IntraLoan and
DealSpace services and the ASAP secure messaging product. The Company has
engaged Transaction Information Systems, Inc. to develop the software for its
IntraTrials services.
F-21
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
Lante accounted for approximately 87%, 91% and 32% of the Company's product
development cost in 1997, 1998 and 1999, respectively. Lante also accounted for
21%, 28% and 7% of total operating costs in 1997, 1998 and 1999, respectively.
(10) Income Taxes
There is no provision for federal, foreign, state or local income taxes for all
periods presented, since the Company has incurred losses since inception. At
December 31, 1999, the Company had approximately $22 million of federal net
operating loss carryforwards available to offset future taxable income, such
carryforwards expire in various years through 2019. The Company has recorded a
full valuation allowance against its deferred tax assets since management
believes that, after considering all the available objective evidence, it is
not more likely than not that these assets will be realized. The tax effect of
temporary differences that give rise to significant portions of federal
deferred tax assets principally consists of the Company's net operating loss
carryforward.
The Company realized an income tax benefit for the years ended December 31,
1998 and 1999. Income tax benefit as reported herein differs from the
"expected" income tax benefit for the years ended December 31, 1997, 1998 and
1999, computed by applying the Federal corporate tax rate of 34% to the loss
before income taxes, as follows:
<TABLE>
<CAPTION>
1997 1998 1999
--------- ----------- -----------
<S> <C> <C> <C>
Computed "expected" tax benefit....... $(707,000) $(2,380,000) $(4,596,000)
State tax benefit, net of Federal
income tax benefit................... (202,000) (681,000) (1,300,000)
Nondeductible expenses................ 4,000 9,000 112,000
Increase in valuation allowance....... 905,000 3,052,000 5,784,000
--------- ----------- -----------
$ -- $ -- $ --
========= =========== ===========
</TABLE>
Due to the change in ownership provisions of the Internal Revenue Code, the
availability of the Company's net operating loss and credit carryforwards may
be subject to annual limitations against taxable income in future periods,
which could substantially limit the eventual utilization of such carryforwards.
The Company has not analyzed the historical or potential impact of this
offering on beneficial ownership and therefore, no determination has been made
whether the net operating loss carry forward is subject to any IRC section 382
limitation.
The tax effect of temporary differences that give rise to deferred tax assets
at December 31, 1998 and 1999 is as follows:
<TABLE>
<CAPTION>
1998 1999
----------- ----------
<S> <C> <C>
Net operating loss carryforward.................. $ 4,013,000 $9,608,000
Fixed assets, principally due to differences in
depreciation.................................... 16,000 (194,000)
Expenses not currently deductible for tax
purposes........................................ 148,000 547,000
----------- ----------
Gross deferred tax assets...................... 4,177,000 9,961,000
Less valuation allowance......................... (4,177,000) (9,961,000)
----------- ----------
Net deferred income taxes...................... $ -- $ --
=========== ==========
</TABLE>
(11) Commitments and Contingencies
Leases
The Company has entered into operating lease agreements for office space and
equipment. Rent abatements have been granted to the Company for varying periods
on certain of its facilities. Deferred rent relating to these abatements is
being amortized on a straight-line basis over the applicable lease term, which
is ten years.
F-22
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
Future minimum lease payments under noncancelable operating leases with initial
or remaining lease terms in excess of one year at December 31, 1999 are as
follows:
<TABLE>
<CAPTION>
Year ending December 31, Amount
------------------------ ----------
<S> <C>
2000......................................................... $ 980,000
2001......................................................... 981,000
2002......................................................... 1,053,000
2003......................................................... 1,054,000
2004......................................................... 1,067,000
Thereafter................................................... 3,597,000
----------
Total minimum lease payments............................... $8,732,000
==========
</TABLE>
Total rent expense for the years ended December 31, 1997, 1998 and 1999 was
approximately $96,000 $383,000 and $1 million, respectively.
Future minimum capital lease payments under the capital lease are as follows:
<TABLE>
<CAPTION>
Year Amount
---- --------
<S> <C>
2000......................................................... $ 71,000
2001......................................................... 67,000
2002......................................................... 33,000
--------
Net minimum lease payments................................... (171,000)
Less amounts representing interest at 13%.................... (22,000)
--------
Present value of minimum capital lease payments............ 149,000
Less current installments of obligations under capital lease. 57,000
--------
Obligations under capital lease, excluding current
installments.............................................. $ 92,000
========
</TABLE>
Employment Agreements
The Company has employment agreements with seven senior employees that provide
for severance benefits among other items. In the event these agreements are
terminated, the Company may be liable for severance payments of up to an
aggregate of $1.6 million of salary payable during the year following
termination.
(12) Related Party Transactions
Various related parties have participated in our preferred stock private
placements. These related parties consist of family members of management and
board members and stockholders who have the rights to appoint board members.
Included in Series A, B, C and E, are 225,000, 756,824, 2,138,461 and 662,604
shares, respectively, owned by different related parties.
F-23
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
(13) Supplemental Cash Flow Information
Supplemental cash flow information is as follows:
<TABLE>
<CAPTION>
1997 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
Noncash financing activities:
Stock subscription receivable............ $ 1,500,000 $ -- $ --
=========== =========== ===========
Common stock issued to officers.......... $ 53,000 $ -- $ --
=========== =========== ===========
Conversion of notes payable into Series A
stock................................... $ 150,000 $ -- $ --
=========== =========== ===========
Equipment acquired under capital lease... $ 24,000 $ -- $ 269,000
=========== =========== ===========
Conversion of bridge loans into Series B
stock................................... $ 600,000 $ 2,000,000 $ --
=========== =========== ===========
Warrants issued in connection with bridge
loan.................................... $ 14,000 $ 151,000 $ --
=========== =========== ===========
Warrants issued in connection with a
development agreement................... $ -- $ -- $ 1,087,000
=========== =========== ===========
Warrants issued in lieu of compensation.. $ 47,000 $ -- $ --
=========== =========== ===========
Stock options issued in lieu of
compensation............................ $ 20,000 $ 16,000 $ 4,000
=========== =========== ===========
Series C stock issued in settlement of
offering costs.......................... $ -- $ 250,000 $ --
=========== =========== ===========
Accrued dividends........................ $ -- $ 430,000 $ 2,974,000
=========== =========== ===========
Conversion of warrants into Series B
stock................................... $ -- $ 72,000 $ --
=========== =========== ===========
Cash paid for interest................... $ 7,000 $ 25,000 $ 9,000
=========== =========== ===========
</TABLE>
(14) Valuation and Qualifying Accounts
<TABLE>
<CAPTION>
Additions Balance
Balance at charged to at end
beginning costs and Deductions/ of
of period expenses write-offs period
---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
For the year ended December 31,
1997:
Allowance for doubtful accounts.. $ -- $ -- $ -- $ --
======= ======== ======== ========
For the year ended December 31,
1998:
Allowance for doubtful accounts.. $ -- $ 75,000 $ -- $ 75,000
======= ======== ======== ========
For the year ended December 31,
1999:
Allowance for doubtful accounts.. $75,000 $125,000 $(90,000) $110,000
======= ======== ======== ========
</TABLE>
(15) Subsequent Events
For the period January 1, 2000 through March 10, 2000, the Company granted
stock options to purchase 711,919 shares of common stock to employees at a
weighted average exercise price of $14.81. For the period from January 1, 2000
through March 10, 2000, options to purchase 13,250 shares of common stock at a
weighted average exercise price of $8.05 per share were cancelled.
In February 2000, the Company granted options to purchase 180,000 shares of
common stock to members of its advisory board in exchange for services to be
performed over the next year. The Company ascribed a $1.4 million value to
these options using a Black-Scholes pricing model with a volatility factor of
45%, fair value of $17.00 and exercise price of $17.00.
F-24
<PAGE>
INTRALINKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998 and 1999
(All information subsequent to December 31, 1999 is unaudited)
Also in February 2000, the Company granted options to purchase 44,186 shares of
common stock to consultants. The Company ascribed a value of approximately
$354,000 to these options using a Black-Scholes pricing model with a volatility
factor of 45%, fair value of $17.00 and exercise price of $17.00. These options
were fully vested on the date of grant. In February 2000, 29,840 of these
options were exercised.
F-25
<PAGE>
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
Expenses of the Registrant in connection with the issuance and distribution of
the securities being registered, other than the underwriting discount, are
estimated as follows:
<TABLE>
<S> <C>
SEC Registration Fee........................................... $ 13,200
NASD Fees...................................................... 5,500
Nasdaq Listing Fees............................................ 80,000
Printing and Engraving Expenses................................ 200,000
Legal Fees and Expenses........................................ 300,000
Accountants' Fees and Expenses................................. 350,000
Expenses of Qualification Under State Securities Laws,
Including Attorneys' Fees..................................... 7,500
Transfer Agent and Registrar's Fees............................ 3,000
Miscellaneous Costs............................................ 41,800
----------
Total........................................................ $1,000,000
==========
</TABLE>
The Company will bear all of the foregoing expenses.
The foregoing, except for the Securities and Exchange Commission registration
fee and the National Association of Securities Dealers, Inc. filing fee, are
estimates.
Item 14. Indemnification of Directors, Officers and Employees
Section 145 of the Delaware General Corporation law empowers a Delaware
corporation to indemnify its officers and directors and certain other persons
to the extent and under the circumstances set forth therein.
The form of the Amended and Restated Certificate of Incorporation of the
Registrant and the Amended and Restated By-laws of the Registrant, copies of
the forms of which are filed as Exhibits 3.1 and 3.2, provide for
indemnification of officers and directors of the Registrant and certain other
persons against liabilities and expenses incurred by any of them in certain
stated proceedings and under certain stated conditions.
The above discussion of the Third Amended and Restated Certificate of
Incorporation, Amended and Restated By-Laws and Section 145 of the Delaware
General Corporation Law is not intended to be exhaustive and is qualified in
its entirety by the forms of such Amended and Restated Certificate of
Incorporation, Amended and Restated By-Laws, and statute. The Registrant will
agree to indemnify the Underwriters and their controlling persons, and the
Underwriters will agree to indemnify the Registrant and its controlling
persons, including directors and executive officers of the Registrant, against
certain liabilities, including liabilities under the Securities Act. Reference
is made to the form of the Underwriting Agreement that will be filed as part of
the Exhibits hereto.
For information regarding the Registrant's undertaking to submit to
adjudication the issue of indemnification for violation of the securities laws,
see Item 17 hereof.
Item 15. Recent Sales of Unregistered Securities
Since its inception, the Registrant has sold the following securities that were
not registered under the Securities Act:
Between October 1996 and September 1997, the Registrant issued an aggregate of
1,175,000 shares of its common stock to its founders and persons related to the
founders at prices ranging from $.0342 to $.04995 per share. A majority of
these shares are presently owned by the Registrant's current directors and
officers and members of their immediate families (including trusts for their
benefit). See "Principal Stockholders" in the accompanying prospectus for a
more complete breakdown of these persons' ownership.
In October 1996 the Registrant issued 52,500 shares of its Series A Convertible
Preferred Stock ("Series A Preferred Stock") to several accredited shareholders
of the Registrant at a price of $4.76 per share. On June 10, 1997 the
Registrant's Board of Directors approved a 1.428571-for-one stock split of the
Series A Preferred
II-1
<PAGE>
stock outstanding as of April 1, 1997. Following the declaration of the stock
split, there were 75,000 shares outstanding at $3.33 per share.
On June 13, 1997, the Registrant issued 262,500 shares of Series A Preferred
stock at $3.33 per share. A majority of these shares and notes were purchased
by our directors and officers and members of their immediate families
(including trusts for their benefit). See "Principal Stockholders" in the
accompanying prospectus for a more complete breakdown of these persons'
ownership.
On September 9, 1997, the Registrant issued promissory notes to for a total
principal amount of $600,000, together with warrants to purchase 26,750 shares
of common stock at an exercise price of $3.33 per share. A majority of these
notes were purchased by the Registrant's directors and officers and members of
their immediate families (including trusts for their benefit). See "Principal
Stockholders" in the accompanying prospectus for a more complete breakdown of
these persons' ownership. On December 18, 1997 the principal amount of such
notes was converted by all of the holders thereof into a total of 92,307 shares
of the Registrant's Series B Convertible Preferred Stock ("Series B Preferred
Stock").
Also on December 18, 1997, the Registrant entered into an agreement for the
private placement of 676,923 shares of Series B Preferred Stock at a price of
$6.50 per share, together with warrants to purchase 192,305 shares of common
stock. These shares were purchased by several accredited investors, which
included Euclid Partner IV, L.P., Perseus Capital LLC, Catalyst Investments
(Belgium) N.V. and certain of the Registrant's directors and officers and
members of their immediate families (including trusts for their benefit). In
connection with these purchases, the holders of the Series B Preferred Stock
received the right, which will expire upon the closing of this offering, to
appoint two members of the Registrant's board of directors. Milton J. Pappas
and William B. Ford are the current directors appointed by the Series B
Preferred stockholders. See "Management" and "Principal Stockholders" in the
accompanying prospectus.
On August 20, 1998, the Registrant issued promissory notes for a total
principal amount of $2,000,000 together with warrants to purchase 108,000
shares of Series B Preferred Stock at an exercise price of $6.50. Lenders for
these notes were existing stockholders of the Registrant. On October 9, 1998,
these notes were converted into 307,692 shares of Series C Preferred Stock.
Simultaneously, on October 9, 1998, an additional 2,153,846 shares of Series C
Convertible Preferred Stock ("Series C Preferred Stock") were sold in a private
placement to accredited investors at a price of $6.50 per share. The purchasers
of these notes were accredited investors, including APA Excelsior Fund V and
other affiliates of Patricof & Co. Ventures, Inc., Catalyst Investments
(Belgium) N.V., Euclid Partners IV, L.P., New York Small Business Venture Fund,
LLC, C.E. Unterberg Towbin, LLC and certain of the Registrant's directors and
officers and members of their immediate families (including trusts for their
benefit). In connection with such placement, the Registrant paid $350,000 in
cash and issued 38,462 shares of Series C Preferred Stock to C.E. Unterberg
Towbin as a fee for placement agency services. In addition, on such date, the
warrants to purchase 192,305 shares of common stock issued on December 18, 1997
were exchanged by their holders for a total of 11,000 shares of Series B
Preferred Stock. In connection with these purchases, each of Catalyst
Investments (Belgium) N.V. and APA Excelsior V, L.P. (together with related
funds managed by Patricof & Co. Ventures, Inc.), which were both investors in
the Series C Preferred Stock private placement, received the right, which will
expire upon the closing of this offering, to appoint two members of the
Registrant's board of directors. Thomas P. Hirschfeld and Julie Kunstler are
the current directors appointed by the Series C Preferred Stock holders. See
"Management" and "Principal Stockholders."
On April 13, 1999, the Registrant sold in a private placement to Ernst & Young
U.S. LLP 660,000 shares of the Registrant's Series D Convertible Preferred
Stock ("Series D Preferred Stock") at a purchase price of $10.00 per share,
together with warrants to purchase an additional 660,000 shares of Series D
Preferred Stock at such price. Also on April 13, 1999, the holders of the
Series C Preferred Stock received, pro rata to their ownership of the Series C
Preferred Stock, warrants to purchase a total of 160,000 shares of Series D
Preferred Stock at an exercise price of $10.00 per share. These warrants were
issued, together with a one-time cash payment of $800,000, in exchange for the
cancellation of the rights of the holders of Series C Preferred Stock to
receive quarterly dividend payments. In connection with its purchase of the
Series D Preferred Stock and entering into a joint marketing venture with the
Registrant, Ernst & Young also received warrants to purchase an additional
468,000 shares of Series D Preferred Stock at an exercise price of $10.00 per
share and 192,308 shares of Series C Preferred Stock $6.50 per share. These
warrants will become exercisable upon the earlier of the closing of this
offering or our achieving certain defined revenue targets. In connection with
all of the
II-2
<PAGE>
foregoing, Ernst & Young received the right, which will expire upon the closing
of this offering, to appoint three members of the Registrant's board of
directors. Carolyn Buck Luce, Steven D. Oesterle and J. Douglas Phillips are
the current directors appointed by Ernst & Young. See "Management" and
"Principal Stockholders" in the accompanying prospectus.
On June 30, 1999, IntraLinks sold in a private placement 1,068,890 shares of
Series E Preferred Stock at a purchase price of $13.00 per share. Of these
shares, 399,660 were purchased by existing stockholders pursuant to pre-emptive
rights granted to all of IntraLinks's stockholders under a shareholders'
agreement. The remainder of these shares were purchased by Reuters Holdings
Switzerland SA, Johnson & Johnson Development Corporation, Younes Nazarian and
three trusts for the benefit of Mr. Nazarian's family. Simultaneously with this
private placement, Ernst & Young exercised the 660,000 warrants to purchase
Series D Preferred Stock issued on April 13, 1999 and the Series C Preferred
Stock holders exercised the 160,000 warrants to purchase Series D Preferred
Stock issued on April 13, 1999.
In August 1999, the Registrant issued 87,168 shares of its common stock to
Cambridge Technology Visions, Inc. as partial consideration for acquiring
certain assets and liabilities of CTV. These shares were valued for purposes of
the acquisition at approximately $907,000, or $10.41 per share.
As of December 31, 1999, the Registrant had issued options to purchase an
aggregate 2,379,488 shares of common stock under the Registrant's 1997 Stock
Incentive Plan. These grants of options were made in reliance on the exemptions
from registration under the Securities Act provided by Rule 701 thereunder or
by Section 4(2) thereof.
On January 24, 2000, by agreement dated January 14, 2000, IntraLinks sold in a
private placement 882,354 shares of Series F Preferred Stock at a purchase
price of $17.00 per share. The shares were purchased by The Chase Manhattan
Corporation and Euclid E corporate Partners, L.P. In connection with the
transaction and an agreement entered into by IntraLinks and Chase, IntraLinks
issued to Chase warrants to purchase 1,050,000 shares of Series F Preferred
Stock at $17.00 per share.
On January 28, 2000, the Registrant issued 72,000 shares of its common stock to
Savant Technologies, Inc. as partial consideration for acquiring certain assets
and liabilities of Savant. These shares were valued for purposes of the
acquisition at approximately $1,224,000, or $17.00 per share. In addition the
Registrant issued an additional 18,000 shares of common stock into escrow, with
such shares to be released from escrow if the current shareholders of Savant
are employees of the Registrant as of January 28, 2002. These shares were
issued into escrow as compensation for post-closing services to be rendered
rather than additional purchase price.
The sale and issuance of the remaining securities in the transactions described
above were deemed to be exempt from registration under the Securities Act by
virtue of Section 4(2) and/or Regulation D as transactions not involving any
public offering, or Regulation S as offers and sales that occurred outside the
United States. The purchasers in each case represented their intention to
acquire the securities for investment only and not with a view to the
distribution thereof. Appropriate legends are affixed to the stock certificates
issued in such transactions. All recipients either received adequate
information about the Registrant or had access, through employment or other
relationships, to such information.
II-3
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) The following is a list of exhibits filed as a part of this registration
statement:
Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------- ----------- ---
<C> <S> <C>
1.1 Form of Underwriting Agreement*
3.1 Form of Articles of Incorporation of the Registrant, as Amended
3.2 Form of Amended and Restated By-Laws of Registrant
4.1 Specimen Certificate for shares of the Registrant's Common
Stock*
5.1 Opinion of Heller Ehrman White and McAuliffe LLP, counsel to the
Registrant, regarding the legality of the shares of Common
Stock*
10.1 Registrant's 1997 Stock Incentive Plan
10.2 Registration Rights Agreement by and among certain shareholders
and Registrant dated December 18, 1997
10.3 Second Amendment to Registration Rights Agreement by and among
Registrant and certain shareholders dated as of October 9, 1998
10.4 Third Amended and Restated Registration Rights Agreement by and
among Registrant and certain shareholders dated as of January
24, 2000
10.5 Amended and Restated Shareholders' Agreement by and among
Registrant and its shareholders dated as of January 24, 2000
10.6 Employment Agreement dated as of January 1, 2000 by and between
Mark S. Adams and Registrant*
10.7 Employment Agreement dated as of January 10, 2000 by and between
James Dougherty and Registrant*
10.8 Employment Agreement dated as of January 10, 2000 by and between
John M. Muldoon and Registrant*
10.9 Employment Agreement dated as of January 10, 2000 by and between
Patrick J. Wack, Jr. and Registrant*
10.10 Employment Agreement dated as of January 10, 2000 by and between
Leonard G. Goldstein and Registrant*
10.11 Employment Agreement dated as of February 14, 2000 by and
between Myles Trachtenberg and Registrant*
10.12 Employment Agreement dated as of February 14, 2000 by and
between Gene W. Fuller and Registrant*
10.13 Consulting Agreement dated September 1, 1997 by and between
Registrant and John Sculley
10.14 Office Lease, dated as of March 23, 1998 by and between
Registrant and SL Green Operating Partnership LP
10.15 Assignment of Lease, dated as of December 17, 1996 by and
between Registrant and Prospectus Plus, Inc.
10.16 Warrant to purchase 15,384 shares of common stock dated December
18, 1997 issued to Landwell Financial Services, Inc.
10.17 Warrant to purchase 27,000 shares of Series B Preferred Stock
dated August 20, 1998 issued to Perseus Capital, LLC
10.18 Warrant to purchase 27,000 shares of Series B Preferred Stock
dated August 20, 1998 issued to Catalyst Investments (Belgium)
NV
10.19 Warrant to purchase 27,000 shares of Series B Preferred Stock
dated August 20, 1998 issued to Euclid Partners IV, L.P.
10.20 Warrant to purchase 2,700 shares of Series B Preferred Stock
dated August 20, 1998 issued to Patrick J. Wack, Jr. Family
Trust
10.21 Warrant to purchase 2,700 shares of Series B Preferred Stock
dated August 20, 1998 issued to Eugene A. Tomei
10.22 Warrant to purchase 5,400 shares of Series B Preferred Stock
dated August 20, 1998 issued to Duncan W. Brown
10.23 Warrant to purchase 16,200 shares of Series B Preferred Stock
dated August 20, 1998 issued to Sculley Brothers LLC
10.24 Warrant to purchase 192,308 shares of Series C Preferred Stock
dated April 13, 1999 issued to Ernst & Young U.S. LLP
10.25 Warrant to purchase 468,000 shares of Series D Preferred Stock
dated April 13, 1999 issued to Ernst & Young U.S. LLP
10.26 Warrant to purchase 38,462 shares of common stock dated June 30,
1999 issued to
R.W. Johnson Pharmaceutical Research Institute
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
------- ----------- ---
<C> <S> <C>
10.27 Warrant to purchase 76,923 shares of common stock dated June 30,
1999 issued to The R.W. Johnson Pharmaceutical Research
Institute
10.28 Warrant to purchase 115,385 shares of common stock dated June
30, 1999 issued to The R.W. Johnson Pharmaceutical Research
Institute
10.29 Warrant to purchase 15,050 shares of common stock dated October
2, 1997 issued to Lante Corporation
10.30 Warrant to purchase 15,000 shares of common stock dated June 10,
1997 issued to Landwell Financial Services, Inc.
10.31 Warrant to purchase 40,000 shares of common stock dated
September 1, 1997 issued to John Sculley
10.32 Warrant to purchase 2,250 shares of common stock dated September
9, 1997 issued to Duncan W. Brown
10.33 Warrant to purchase 22,250 shares of common stock dated
September 16, 1998 issued to John Sculley
10.34 Warrant to purchase 2,250 shares of common stock dated September
9, 1997 issued to Robert Lerner
10.35 Warrant to purchase 1,050,000 shares of common stock dated
January 24, 2000 issued to The Chase Manhattan Corporation
21.1 Subsidiaries of Registrant
23.1 Consent of KPMG LLP
23.2 Consent of Heller Ehrman White and McAuliffe LLP, counsel to the
Registrant (included in Exhibit 5.1)*
24.1 Powers of Attorney (Included in the signature page to the
Registration Statement)
27.1 Financial Data Schedule
</TABLE>
- --------
* To be filed by amendment.
Schedules
All schedules have been omitted because either they are not required, are not
applicable or the information is otherwise set forth in the consolidated
financial statements and notes thereto.
Item 17. Undertakings
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 hereof, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification 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, officer 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 Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes:
(1) To provide the Underwriters at the closing specified in the
Underwriting Agreement certificates in such denominations and registered in
such names as required by the Underwriter to permit prompt delivery to each
purchaser.
(2) That for purposes of 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.
(3) That 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-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
IntraLinks Inc., has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on this fifteenth day of March, 2000.
INTRALINKS, INC.
By: /s/ Mark S. Adams
----------------------------------
Mark S. Adams
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below
hereby authorizes, constitutes and appoints each of Mark S. Adams and John M.
Muldoon his true and lawful attorney-in-fact, with full powers of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to sign any registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, that relates to the offering of securities covered by this
Registration Statement, and to file the same with exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorney-in-fact or his
substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated on March 15, 2000.
Signatures Capacity Date
/s/ Mark S. Adams Chairman of the March 15, 2000
- ------------------------------------ Board of Directors
Mark S. Adams and Chief
Executive Officer
(Principal
Executive Officer)
/s/ John M. Muldoon Chief Financial March 15, 2000
- ------------------------------------ Officer (Principal
John M. Muldoon Financial and
Accounting
Officer)
/s/ William B. Ford Director March 15, 2000
- ------------------------------------
William B. Ford
/s/ Thomas P. Hirschfeld Director March 15, 2000
- ------------------------------------
Thomas P. Hirschfeld
/s/ Julie Kunstler Director March 15, 2000
- ------------------------------------
Julie Kunstler
II-6
<PAGE>
Signatures Capacity Date
/s/ Carolyn Buck Luce Director March 15, 2000
- -------------------------------------
Carolyn Buck Luce
/s/ Steven D. Oesterle Director March 15, 2000
- -------------------------------------
Steven D. Oesterle
/s/ Milton J. Pappas Director March 15, 2000
- -------------------------------------
Milton J. Pappas
/s/ J. Douglas Phillips Director March 15, 2000
- -------------------------------------
J. Douglas Phillips
/s/ Arthur B. Sculley Director March 15, 2000
- -------------------------------------
Arthur B. Sculley
/s/ Devin N. Wenig Director March 15, 2000
- -------------------------------------
Devin N. Wenig
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
1.1 Form of Underwriting Agreement*
3.1 Form of Articles of Incorporation of the Registrant, as
Amended
3.2 Form of Amended and Restated By-Laws of Registrant
4.1 Specimen Certificate for shares of the Registrant's
Common Stock*
5.1 Opinion of Heller Ehrman White and McAuliffe LLP,
counsel to the Registrant, regarding the legality of
the shares of Common Stock*
10.1 Registrant's 1997 Stock Incentive Plan
10.2 Registration Rights Agreement by and among certain
shareholders and Registrant dated December 18, 1997
10.3 Second Amendment to Registration Rights Agreement by
and among Registrant and certain shareholders dated as
of October 9, 1998
10.4 Third Amended and Restated Registration Rights
Agreement by and among Registrant and certain
shareholders dated as of January 24, 2000
10.5 Amended and Restated Shareholders' Agreement by and
among Registrant and its shareholders dated as of
January 24, 2000
10.6 Employment Agreement dated as of January 1, 2000 by and
between Mark S. Adams and Registrant*
10.7 Employment Agreement dated as of January 10, 2000 by
and between James Dougherty and Registrant*
10.8 Employment Agreement dated as of January 10, 2000 by
and between John M. Muldoon and Registrant*
10.9 Employment Agreement dated as of January 10, 2000 by
and between Patrick J. Wack, Jr. and Registrant*
10.10 Employment Agreement dated as of January 10, 2000 by
and between Leonard G. Goldstein and Registrant*
10.11 Employment Agreement dated as of February 14, 2000 by
and between Myles Trachtenberg and Registrant*
10.12 Employment Agreement dated as of February 14, 2000 by
and between Gene W. Fuller and Registrant*
10.13 Consulting Agreement dated September 1, 1997 by and
between Registrant and John Sculley
10.14 Office Lease, dated as of March 23, 1998 by and between
Registrant and SL Green Operating Partnership LP
10.15 Assignment of Lease, dated as of December 17, 1996 by
and between Registrant and Prospectus Plus, Inc.
10.16 Warrant to purchase 15,384 shares of common stock dated
December 18, 1997 issued to Landwell Financial
Services, Inc.
10.17 Warrant to purchase 27,000 shares of Series B Preferred
Stock dated August 20, 1998 issued to Perseus Capital,
LLC
10.18 Warrant to purchase 27,000 shares of Series B Preferred
Stock dated August 20, 1998 issued to Catalyst
Investments (Belgium) NV
10.19 Warrant to purchase 27,000 shares of Series B Preferred
Stock dated August 20, 1998 issued to Euclid Partners
IV, L.P.
10.20 Warrant to purchase 2,700 shares of Series B Preferred
Stock dated August 20, 1998 issued to Patrick J. Wack,
Jr. Family Trust
10.21 Warrant to purchase 2,700 shares of Series B Preferred
Stock dated August 20, 1998 issued to Eugene A. Tomei
10.22 Warrant to purchase 5,400 shares of Series B Preferred
Stock dated August 20, 1998 issued to Duncan W. Brown
10.23 Warrant to purchase 16,200 shares of Series B Preferred
Stock dated August 20, 1998 issued to Sculley Brothers
LLC
10.24 Warrant to purchase 192,308 shares of Series C
Preferred Stock dated April 13, 1999 issued to Ernst &
Young U.S. LLP
10.25 Warrant to purchase 468,000 shares of Series D
Preferred Stock dated April 13, 1999 issued to Ernst &
Young U.S. LLP
10.26 Warrant to purchase 38,462 shares of common stock dated
June 30, 1999 issued to R.W. Johnson Pharmaceutical
Research Institute
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
10.27 Warrant to purchase 76,923 shares of common stock dated
June 30, 1999 issued to The R.W. Johnson
Pharmaceutical Research Institute
10.28 Warrant to purchase 115,385 shares of common stock
dated June 30, 1999 issued to The R.W. Johnson
Pharmaceutical Research Institute
10.29 Warrant to purchase 15,050 shares of common stock dated
October 2, 1997 issued to Lante Corporation
10.30 Warrant to purchase 15,000 shares of common stock dated
June 10, 1997 issued to Landwell Financial Services,
Inc.
10.31 Warrant to purchase 40,000 shares of common stock dated
September 1, 1997 issued to John Sculley
10.32 Warrant to purchase 2,250 shares of common stock dated
September 9, 1997 issued to Duncan W. Brown
10.33 Warrant to purchase 22,250 shares of common stock dated
September 16, 1998 issued to John Sculley
10.34 Warrant to purchase 2,250 shares of common stock dated
September 9, 1997 issued to Robert Lerner
10.35 Warrant to purchase 1,050,000 shares of common stock
dated January 24, 2000 issued to The Chase Manhattan
Corporation
21.1 Subsidiaries of Registrant
23.1 Consent of KPMG LLP
23.2 Consent of Heller Ehrman White and McAuliffe LLP,
counsel to the Registrant (included in Exhibit 5.1)*
24.1 Powers of Attorney (Included in the signature page to
the Registration Statement)
27.1 Financial Data Schedule
</TABLE>
- --------
* To be filed by amendment.
Schedules
All schedules have been omitted because either they are not required, are not
applicable or the information is otherwise set forth in the consolidated
financial statements and notes thereto.
<PAGE>
EXHIBIT 3.1
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 06/13/1996
960172674 -- 2633827
CERTIFICATE OF INCORPORATION
OF
INTRALINKS INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is IntraLinks Inc.
SECOND: The address, including street, number, city and county of the
registered office of the Corporation in the State of Delaware is 1013 Centre
Road, City of Wilmington, County of New Castle, 19805-1297; and the name of the
registered agent of the Corporation in the State of Delaware at such address is
The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the purpose to be conducted and
promoted by the Corporation shall be to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The aggregate number of shares of stock which the Corporation
shall have the authority to issue is Ten Million One Hundred Thousand
(10,100,000) shares, which are divided into Ten Million (10,000,000) shares of
Common Stock, par value $0.01 per share (the "Common Stock"), and One Hundred
Thousand (100,000) shares of Preferred Stock, par value $0.01 per share (the
"Preferred Stock").
Preferred Stock. The Corporation may divide and issue Preferred
Stock in series. Preferred Stock of each series when issued shall be designated
to distinguish them from shares of other series of Preferred Stock. The Board of
Directors of the Corporation is hereby expressly vested with the authority to
divide the class of Preferred Stock into series and fix and determine the
relative rights and preferences of the shares of any such series so established
to the full extent permitted by the laws of the State of Delaware in respect of
the following:
1. The number of shares to constitute such series, and the distinctive
designations thereof;
<PAGE>
2. The rate and preference of dividends, if any, the time of payment of
dividends, whether dividends are cumulative and the date from which any
dividends shall accrue;
3. Whether shares may be redeemed and, if so, the redemption price and the
terms and conditions of redemption;
4. The amount payable upon shares in the event of voluntary and
involuntary liquidation;
5. Sinking fund or other provisions, if any, for the redemption or
purchase of shares;
6. The terms and conditions on which shares may be converted;
7. Voting rights, if any; and
8. Variations in the relative rights and preferences as between the
series, including, without limitation, any restriction on an increase in
the number of shares of any series theretofore authorized, any rights of
Preferred Stock shareholders to receive dividends in the form of Common
Stock or Preferred Stock, and any limitation or restriction of rights or
powers to which shares of any future series shall be subject.
FIFTH: The name and the mailing address of the incorporator is as
follows:
Shari A. Seibert
Werbel McMillin & Carnelutti
711 Fifth Avenue
New York, New York 10022
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in
- 2 -
<PAGE>
value of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of this Corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this Corporation as a
consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, it sanctioned by the court to
which said application has been made, be binding on all the creditors or class
of creditors, and/or on all of the stockholders or class of stockholders, of
this Corporation, as the case may be, and also on this Corporation.
EIGHTH: No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit. If the General Corporation Law of the State of Delaware is amended
after June 13, 1996 to authorize corporate action further eliminating or
limiting the personal liability of directors, the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the General Corporation Law of the State of Delaware.
NINTH: The Corporation shall, to the fullest extent permitted by Section
145 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have power
to indemnify under said section from and against any and all of the expenses,
liabilities, judgments, fines, amounts paid in settlement, liabilities, or other
matters referred to in or covered by said section, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to which
those seeking indemnification of expenses may be entitled under any by-laws,
agreements, vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
TENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
- 3 -
<PAGE>
ELEVENTH: In furtherance and not in limitation of the powers conferred
by statute, the by-laws of the Corporation may be made, altered, amended or
repealed by the stockholders of the Corporation or by a majority of the
entire Board of Directors of the Corporation.
Signed: June 13, 1996
/s/ Shari A. Seibert
----------------------------------
Shari A. Seibert
Sole Incorporator
711 Fifth Avenue
New York, New York 10022
- 4 -
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 09/20/1996
960273089 -- 2633827
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
INTRALINKS, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is IntraLinks, Inc.
2. The Certificate of Incorporation of the Corporation is hereby
amended by striking out Article FOURTH thereof and by substituting in lieu of
said Article the following new Article FOURTH:
"FOURTH: The aggregate number of shares of all classes of stock which
the Corporation shall have the authority to issue is Ten
Million Two Hundred Thousand (10,200,000) shares, of which Ten
Million (10,000,000) shares, of the par value $0.01 each shall
be common stock (the "Common Stock") and Two Hundred Thousand
(200,000) shares of the par value $0.01 each, shall be
preferred stock (the "Preferred Stock").
3. The Amendment of the Certificate of Incorporation of the
Corporation herein certified has been duly adopted, pursuant to the provisions
of Sections 228 and 242 of the General Corporation Law of the State of Delaware.
Signed and attested to on September 11, 1996.
/s/ John M. Muldoon
------------------------------
Name: John M. Muldoon
Title: Chief Financial Officer
Attest:
/s/ Mark S. Adams
- -----------------------------
Name: Mark S. Adams
Title: President
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
INTRALINKS INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is IntraLinks Inc.
2. The Certificate of Incorporation of the Corporation is hereby
amended by striking out Article FOURTH thereof and by substituting in lieu of
said Article the following new Article FOURTH:
"FOURTH: The aggregate number of shares of all classes of stock which
the Corporation shall have the authority to issue is Ten
Million Seven Hundred Thousand (10,700,000) shares, of which
Ten Million (10,000,000) shares, of the par value $0.01 each
shall be common stock (the "Common Stock") and Seven Hundred
Thousand (700,000) shares of the par value $0.01 each, shall
be preferred stock (the "Preferred Stock").
3. The Amendment of the Certificate of Incorporation of the
Corporation herein certified has been duly adopted, pursuant to the provisions
of Sections 228 and 242 of the General Corporation Law of the State of Delaware.
Signed and attested to on January 15th, 1997.
/s/ John M. Muldoon
------------------------------
Name: John M. Muldoon
Title: Chief Financial Officer
Attest:
/s/ Mark S. Adams
- -----------------------------
Name: Mark S. Adams
Title: President
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 03:00 PM 01/28/1997
971029633 -- 2633827
<PAGE>
AMENDED CERTIFICATE OF DESIGNATION
SERIES A PREFERRED STOCK
OF
INTRALINKS INC.
PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW
THE UNDERSIGNED, Mark S. Adams, President of INTRALINKS, INC., a
corporation organized and existing under the laws of the State of Delaware (the
"Company"), HEREBY CERTIFIES:
That pursuant to authority conferred upon the Board of Directors of
this Company by the Certificate of Incorporation, and pursuant to the provisions
of Section 151 of the General Corporation Law of the State of Delaware, the
Board of Directors of this Company, by unanimous written consent dated January
14, 1997 duly adopted the following resolution:
"RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Company by the provisions of its
Certificate of Incorporation, the Board of Directors of the Company hereby
creates a series of Preferred Stock of the Company consisting of 700,000 shares
of Series A Preferred Stock, $0.01 par value per share (the "Series A Preferred
Stock"), which this Company now has authority to issue and the Board of
Directors of the Company hereby fixes the designation, powers, preferences and
relative, participating, optional and other special rights, and the
qualifications, limitations or restrictions thereof, of the shares of Series A
Preferred Stock as follows:
(i) Dividend Provisions. The holders of shares of Series A
Preferred Stock shall be entitled to receive dividends, out of any assets
legally available therefor, prior and in preference to any declaration or
payment of any dividend (payable other than solely in the Company's common
stock, par value $0.01 per share ("Common Stock")), when, as and if
declared by the Board of Directors.
(ii) Liquidation Preference.
(a) Amount. In the event of any liquidation, dissolution
or winding up of the Company, either voluntary or involuntary, the holders
of Series A Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the Company to
holders of the Company's Common Stock, an amount per share equal to the
sum of (i) the purchase price paid by the initial holder of such
outstanding share of Series A Preferred Stock purchased directly from the
Company (as determined by the Company and noted in its books and records)
(the "Purchase Price") and (ii) an
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:00 PM 03/21/1997
971092856 - 2633827
<PAGE>
amount equal to accrued but unpaid dividends on such Series A Preferred
Stock, it any. If upon the occurrence of such event, the assets and funds
thus distributed among the holders of the Series A Preferred Stock shall
be insufficient to permit the payment to such holders of the full
aforesaid preferential amounts, then, the entire assets and funds of the
Company legally available for distribution shall be distributed ratably
among the holders of the Series A Preferred Stock in proportion to the
amount of such stock owned by each such holder, unless the Company has
issued a more senior class of preferred stock which by its terms has
liquidation preferences senior to Series A Preferred Stock.
(b) Remaining Assets. Upon the completion of the
distribution required by subparagraph (a) of this Section 2, if assets
remain in the Company, the holders of the Common Stock of the Company,
shall receive all of the remaining assets of the Company.
(c) Senior Stock. At its sole discretion, the Company
may issue a class of stock which is senior to the Series A Preferred
Stock.
(iii) Voting Rights.
(a) Number of Votes. Each holder of shares of Series A
Preferred Stock shall be entitled to the number of votes equal to the
number of whole shares of Common Stock into which such shares of Series A
Preferred Stock could be converted pursuant to the provisions of Section 4
at the record date for the determination of the stockholders entitled to
vote on such matters or, if no such record date is established, the date
such vote is taken or an written consent of stockholders is solicited.
(b) General. Subject to the foregoing provisions and the
provisions of Section 5, each holder of Series A Preferred Stock shall not
have voting rights except as provided for under the laws of the State of
Delaware.
(iv) Conversion Rights. The outstanding shares of Series A
Preferred Stock shall be convertible into Common Stock as follows:
(a) Optional Conversion.
i) At the option of the holder thereof, each share
of Series A Preferred Stock shall be convertible, at any time or from time
to time prior to the close of business on the business day before any date
fixed for redemption of such share, into fully paid and
2
<PAGE>
nonassessable shares of Common Stock for no additional consideration as
provided herein.
ii) Each bolder of Series A Preferred Stock who
elects to convert the same into shares of Common Stock shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Company or any transfer agent for the Series A Preferred Stock or Common
Stock, and shall give written notice to the Company at such office that
such holder elects to convert the same and shall state therein the number
of shares of Series A Preferred Stock being converted. Thereupon the
Company shall promptly issue and deliver at such office to such holder a
certificate or certificates for the number of shares of Common Stock to
which such holder is entitled upon such conversion. Such conversion shall
be deemed to have been made immediately prior to the close of business on
the date of such surrender of the certificate or certificates representing
the shares of Series A Preferred Stock to be converted, and the person
entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such
shares of Common Stock on such date.
(b) Conversion Price. Each share of Series A Preferred
Stock shall be convertible in accordance with Section 4(a) into the number
of shares of Common Stock which results from dividing the Purchase Price
by the conversion price for the Series A Preferred Stock that is in effect
at the time of conversion (the "Conversion Price"). The initial Conversion
Price for share of Series A Preferred Stock shall be such share's Purchase
Price. The Conversion Price shall be subject to adjustment from time to
time as provided below.
(c) Adjustment Upon Common Stock Event. Upon the
happening of a Common Stock Event (as hereinafter defined), the Conversion
Price of the Series A Preferred Stock shall, simultaneously with the
happening of such Common Stock Event, be adjusted by multiplying the
Conversion Price of the Series A Preferred Stock in effect immediately
prior to such Common Stock Event by a fraction, (i) the numerator of which
shall be the number of shares of Common Stock issued and outstanding
immediately prior to such Common Stock Event, and (ii) the denominator of
which shall be the number of shares of Common Stock issued and outstanding
immediately after such Common Stock Event, and the product so obtained
shall thereafter be the Conversion Price for the Series A Preferred
Stock. The Conversion Price for the Series A Preferred Stock shall be
readjusted in the same manner upon the happening of each subsequent Common
Stock Event. As used herein, the term "Common Stock Event" shall mean (i)
the issue by the Company of additional shares of Common Stock as a
dividend or other distribution on outstanding Common Stock, (ii) a
subdivision
3
<PAGE>
of the outstanding shares of Common Stock into a greater number of shares
of Common Stock, or (iii) a combination of the outstanding shares of
Common Stock into a smaller number of shares of Common Stock.
(d) Adjustment for Reclassification, Exchange and
Substitution. If at any time or from time to time the Common Stock
issuable upon the conversion of the Series A Preferred Stock is changed
into the same or a different number of shares of any class or classes of
stock, whether by recapitalization, reclassification or otherwise (other
than by a Common Stock Event or a stock dividend, reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 4),
then in any such event each holder of Series A Preferred Stock shall have
the right thereafter to convert such stock into the kind and amount of
stock and other securities and property receivable upon such
recapitalization, reclassification or other change by holders of the
number of shares of Common Stock into which such shares of Series A
Preferred Stock could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further
adjustment as provided herein or with respect to such other securities or
property by the terms thereof.
(e) Certificate of Adjustment. In each case of an
adjustment or readjustment of the Conversion Price for the Series A
Preferred Stock, the Company, at its expense, shall cause its chief
financial or accounting officer to compute such adjustment or readjustment
in accordance with the provisions hereof and prepare a certificate showing
such adjustment or readjustment, and shall mail such certificate, by first
class mail, postage prepaid, to each registered holder of the Series A
Preferred Stock at the holder's address as shown in the Company's books.
(f) Fractional Shares. No fractional shares of Common
Stock shall be issued upon any conversion of Series A Preferred Stock. In
lieu of any fractional share to which the holder would otherwise be
entitled, the Company shall pay the holders cash equal to the product of
such fraction multiplied by the Common Stock's fair market value as
determined in good faith by the Board as of the date of conversion.
(g) Reservation of Stock Issuable Upon Conversion. The
Company shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series A Preferred Stock,
such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the
Series A Preferred Stock; and if at any time the number
4
<PAGE>
of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Series A
Preferred Stock, the Company will take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be
sufficient for such purpose.
(h) Notices. Any notice required by the provisions of
this Section 4 to be given to the holders of shares of the Series A
Preferred Stock shall be deemed given upon the earlier of actual receipt
(including by facsimile) or three (3) days after deposit in the United
States mail, by certified or registered mail, return receipt requested,
postage prepaid, addressed to each holder of record at the address of such
holder appearing on the books of the Company.
(i) No Impairment. The Company shall not avoid or seek
to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but shall at all times in good
faith assist in carrying out all such action as may be reasonably
necessary or appropriate in order to protect the conversion rights of the
holders of the Series A Preferred Stock against impairment.
(j) Mandatory Conversion. Upon the earlier to occur of
(i) five (5) years or (ii) the initial public offering of the Company's
Common Stock, by written notice to the holders of Series A Preferred
Stock, the Company may require the holders to convert their Series A
Preferred Stock into Common Stock of the Company.
(k) Protective Provisions. So long as shares of Series A
Preferred Stock are outstanding, the Company shall not without first
obtaining the approval (by vote or written consent, as provided by law) of
the holders of at least a majority of the then outstanding shares of
Series A Preferred Stock, voting as a separate class, alter or change the
rights, preferences or privileges of the shares of Series A Preferred
Stock so as to affect adversely the shares.
Executed at 1372 Broadway, on the 6th day of March, 1997.
/s/ Mark S. Adams
-------------------------------------
Mark S. Adams, President
Attest:
/s/ John M. Muldoon
- ---------------------------
John M. Muldoon
5
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
INTRALINKS INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is IntraLinks Inc.
2. The Certificate of Incorporation of the Corporation is hereby
amended by striking out Article FOURTH thereof and by substituting in lieu of
said article the following new Article FOURTH:
"FOURTH: The aggregate number of shares of all classes of stock which
the Corporation shall have the authority to issue is Eleven
Million (11,000,000) shares, which are divided into Ten
Million (10,000,000) shares of common stock, $0.01 par value
per share (the "Common Stock") and One Million (1,000,000)
shares of preferred stock, $0.01 par value per share (the
"Preferred Stock").
3. The Amendment of the Certificate of Incorporation of the
Corporation herein certified has been duly adopted, pursuant to the provisions
of Sections 228 and 242 of the General Corporation Law of the State of Delaware.
Signed and attested to on June 11, 1997.
/s/ John M. Muldoon
------------------------------
Name: John M. Muldoon
Title: Chief Financial Officer
Attest:
/s/ Mark S. Adams
- -----------------------------
Name: Mark S. Adams
Title: President
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 11:30 AM 06/12/1997
971192683 -- 2633827
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:01 AM 11/25/1997
971403124 -- 2633827
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
INTRALINKS INC.
It is hereby certified that:
1. The name of the corporation is INTRALINKS INC., a corporation
organized and existing under the laws of the State of Delaware (hereinafter
referred to as the "Corporation").
2. The Certificate at Amendment of the Certificate of Incorporation
of the Corporation (the "Certificate of Amendment"), which was filed by the
Secretary of State of Delaware on January 28, 1997, is hereby corrected.
3. The inaccuracy to be corrected in said instrument is in the
second paragraph of the Certificate of Amendment, which paragraph prior to
corrections hereunder reads as follows:
2. The Certificate of Incorporation of the Corporation is hereby amended
by striking out Article FOURTH thereof and by substituting in lieu of said
Article the following new Article FOURTH:
FOURTH: The aggregate number of shares of all classes of stock which
the Corporation shall have the authority to issue is Ten
Million Seven Hundred Thousand (10,700,000) shares, of which
Ten Million (10,000,000) shares, of the par value $ 0.01 each
shall be common stock (the "Common Stock") and Seven Hundred
Thousand (700,000) shares of the par value $ 0.01 each, shall
be preferred stock (the "Preferred Stock").
4. The second paragraph of the Certificate of Amendment in corrected
form shall read in its entirety as follows:
3. The Certificate of Incorporation of the Corporation is hereby amended
by striking our Article FOURTH thereof and by substituting in lieu of said
Article the following new Article FOURTH:
FOURTH: The aggregate number of shares of all classes of stock which
the Corporation shall have the authority to issue is Ten
Million Seven Hundred Thousand (10,700,000) shares, which are
divided into Ten
<PAGE>
Million (10,000,000) shares of Common Stock, par value $0.01
per share (the "Common Stock"), and Seven Hundred Thousand
(700,000) shares of Preferred Stock, par value $0.01 per
share (the "Preferred Stock").
Preferred Stock. The Corporation may divide and issue Preferred
Stock in series. Preferred Stock of each series when issued shall be designated
to distinguish them from shares of other series of Preferred Stock. The Board of
Directors of the Corporation is hereby expressly vested with the authority to
divide the class of Preferred Stock into series and fix and determine the
relative rights and preferences of the shares of any such series so established
to the full extent permitted by the laws of the State of Delaware in respect of
the following:
1. The number of shares to constitute such series, and the distinctive
designations thereof;
2. The rate and preference of dividends, if any, the time of payment of
dividends, whether dividends are cumulative and the date from which any
dividends shall accrue;
3. Whether shares may be redeemed and, if so, the redemption price and the
terms and conditions of redemption;
4. The amount payable upon shares in the event of voluntary and
involuntary liquidation;
5. Sinking fund or other provisions, if any, for the redemption or
purchase of shares;
6. The terms and conditions on which shares may be converted;
7. Voting rights, if any; and
8. Variations in the relative rights and preferences as between the
series, including, without limitation, any restriction on an increase in
the number of shares of any series theretofore authorized, any rights of
Preferred Stock shareholders to receive dividends in the form of Common
Stock or Preferred Stock, and any limitation or restriction of rights or
powers to which shares of any future series shall be subject.
IN WITNESS WHEREOF, the undersigned has hereunto set forth his
signature as of the 24th day of November, 1997.
s/Stephen M. Davis
------------------------------------
Name: Stephen M. Davis
Title: Secretary
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 11/25/1997
971403123 - 2633827
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
INTRALINKS INC.
It is hereby certified that:
1. The name of the corporation is INTRALINKS INC., a corporation
organized and existing under the laws of the State of Delaware (hereinafter
referred to as the "Corporation").
2. The Certificate of Amendment of the Certificate of Incorporation
of the Corporation (the "Certificate of Amendment"), which was filed by the
Secretary of State of Delaware on September 20, 1996, is hereby corrected.
3. The inaccuracy to be corrected in said instrument is in the
second paragraph of the Certificate of Amendment, which paragraph prior to
corrections hereunder reads as follows:
2. The Certificate of Incorporation of the Corporation is hereby amended
by striking out Article FOURTH thereof and by substituting in lieu of said
Article the following new Article FOURTH:
FOURTH: The aggregate number of shares of all classes of stock which
the Corporation shall have the authority to issue is Ten
Million Two Hundred Thousand (10,200,000) shares, of which Ten
Million (10,000,000) shares, of the par value $.01 each shall
be common stock (the "Common Stock") and Two Hundred Thousand
(200,000) shares of the par value $.01 each, shall be
preferred stock (the "Preferred Stock").
4. The second paragraph of the Certificate of Amendment in corrected
form shall read in its entirety as follows:
2. The Certificate of Incorporation of the Corporation is hereby amended
by striking out Article FOURTH thereof and by substituting in lieu of said
Article the following new Article FOURTH:
FOURTH: The aggregate number of shares of all classes of stock which
the Corporation shall have the authority to issue is Ten
Million Two Hundred Thousand (10,200,000) shares, which are
divided into Ten Million (10,000,000) shares of Common Stock,
par value $0.01 per share (the "Common Stock"), and Two
<PAGE>
Hundred Thousand (200,000) shares of Preferred Stock, par
value $0.01 per share (the "Preferred Stock").
Preferred Stock. The Corporation may divide and issue Preferred
Stock in series. Preferred Stock of each series when issued shall be designated
to distinguish them from shares of other series of Preferred Stock. The Board of
Directors of the Corporation is hereby expressly vested with the authority to
divide the class of Preferred Stock into series and fix and determine the
relative rights and preferences of the shares of any such series so established
to the full extent permitted by the laws of the State of Delaware in respect of
the following:
1. The number of shares to constitute such series, and the distinctive
designations thereof;
2. The rate and preference of dividends, if any, the time of payment of
dividends, whether dividends are cumulative and the date from which any
dividends shall accrue;
3. Whether shares may be redeemed and, if so, the redemption price and the
terms and conditions of redemption;
4. The amount payable upon shares in the event of voluntary and
involuntary liquidation;
5. Sinking fund or other provisions, if any, for the redemption or
purchase of shares;
6. The terms and conditions on which shares may be converted;
7. Voting rights, if any; and
8. Variations in the relative rights and preferences as between the
series, including, without limitation, any restriction on an increase in
the number of shares of any series theretofore authorized, any rights of
Preferred Stock shareholders to receive dividends in the form of Common
Stock or Preferred Stock, and any limitation or restriction of rights or
powers to which shares of any future series shall be subject.
IN WITNESS WHEREOF, the undersigned has hereunto set forth his
signature as of the 24th day of November, 1997.
s/Stephen M. Davis
------------------------------------
Name: Stephen M. Davis
Title: Secretary
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:02 AM 11/25/1997
971403126 -2633827
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
INTRALINKS INC.
It is hereby certified that:
1. The name of the corporation is INTRALINKS INC., a corporation
organized and existing under the laws of the State of Delaware (hereinafter
referred to as the "Corporation").
2. The Certificate of Amendment of the Certificate of Incorporation
of the Corporation (the "Certificate of Amendment"), which was filed by the
Secretary of State of Delaware on June 12, 1997, is hereby corrected.
3. The inaccuracy to be corrected in said instrument is in the
second paragraph of the Certificate of Amendment, which paragraph prior to
corrections hereunder reads as follows:
2. The Certificate of Incorporation of the Corporation is hereby amended
by striking out Article FOURTH thereof and by substituting in lieu of said
Article the following new Article FOURTH:
FOURTH: The aggregate number of shares of all classes of stock which
the Corporation shall have the authority to issue is Eleven
Million (11,000,000) shares, which are divided into Ten
Million (10,000,000) shares of common stock, $0.01 par value
per share (the "Common Stock") and One Million (1,000,000)
shares of preferred stock, $0.01 par value per share (the
"Preferred Stock").
4. The Second Paragraph of the Certificate of Amendment in corrected
form shall read in its entirety as follows:
2. The Certificate of Incorporation of the Corporation is hereby amended
by striking out Article FOURTH thereof and by substituting in lieu of said
Article the following new Article FOURTH:
FOURTH: The aggregate number of shares of all classes of stock which
the Corporation shall have the authority to issue is Eleven
Million (11,000,000) shares, which are divided into Ten
Million (10,000,000) shares of Common Stock, par value $0.01
per share (the "Common Stock"), and One Million (1,000,000)
<PAGE>
shares of Preferred Stock, par value $0.01 per share (the
"Preferred Stock").
Preferred Stock. The Corporation may divide and issue Preferred
Stock in series. Preferred stock of each series when issued shall be designated
to distinguish them from shares of other series of Preferred Stock. The Board of
Directors of the Corporation is hereby expressly vested with the authority to
divide the class of Preferred Stock into series and fix and determine the
relative rights and preferences at the shares of any such series so established
to the full extent permitted by the laws of the State of Delaware in respect of
the following:
1. The number of shares to constitute such series, and the distinctive
designations thereof;
2. The rate and preference of dividends, if any, the time of payment of
dividends, whether dividends are cumulative and the date from which any
dividends shall accrue;
3. Whether shares may be redeemed and, if so, the redemption price and the
terms and conditions of redemption;
4. The amount payable upon shares in the event of voluntary and
involuntary liquidation;
5. Sinking fund or other provisions, if any, for the redemption or
purchase of shares;
6. The terms and conditions on which shares may be converted;
7. Voting rights, if any; and
8. Variations in the relative rights and preferences as between the
series, including, without limitation, any restriction on an increase in
the number of shares of any series theretofore authorized, any rights of
Preferred Stock shareholders to receive dividends in the form of Common
Stock or Preferred Stock, and any limitation or restriction of rights or
powers to which shares of any future series shall be subject.
IN WITNESS WHEREOF, the undersigned has hereunto set forth his
signature as of the 24th day of November, 1997.
/s/ Stephen M. Davis
------------------------------------
Name: Stephen M. Davis
Title: Secretary
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 12/17/1997
971435134 -- 2633827
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
INTRALINKS INC.
INTRALINKS INC., a corporation organized and existing under the laws
of the State of Delaware (the "Corporation"), hereby certifies as follows:
FIRST: That the following resolutions were duly adopted by the Board
of Directors of the Corporation, setting forth a proposed amendment to the
Certificate of Incorporation of the Corporation, declaring such amendment to be
advisable and directing that such amendment be submitted to the stockholders of
the Corporation for their approval. The resolutions are as follows:
"RESOLVED, that there is hereby adopted an amendment to the
Corporation's Certificate of Incorporation pursuant to which the
authorized capital stock of the Corporation shall be changed from
11,000,000 shares, consisting of 10,000,000 shares at common stock, $.01
par value, and 1,000,000 shares of preferred stock, $.01 par value, to
11,151,730 shares, consisting of 10,000,000 shares of common stock, $.01
par value, and 1,151,730 shares of preferred stock, $.01 par value; and,
in connection with such change, the first sentence of Article FOURTH of
the Certificate of Incorporation of the Corporation shall be amended to
read in its entirety as follows:
FOURTH: The total number of shares of all classes of stock
which the Corporation shall have authority to issue is 11,151,730
shares, consisting of (a) 10,000,000 shares of Common Stock, $.01
par value ("Common Stock") and (b) 1,151,730 shares of Preferred
Stock, $.01 par value ("Preferred Stock").
Preferred Stock. The Corporation may divide and issue
Preferred Stock in series. Preferred Stock of each series when
issued shall be designated to distinguish them from shares of other
series of Preferred Stock. Authority is hereby vested in the Board
of Directors from time to time to authorize the issuance of one or
more series of Preferred Stock, and in connection with the creation
of such series to fix by resolution or
<PAGE>
resolutions providing for the issue of shares thereof the
designations, powers, preferences and relative, participating,
optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such series in respect of
the matters set forth as follows:
1. The maximum number of shares to constitute such series and
the distinctive designation thereof and the stated value thereof if
different than the par value thereof;
2. The dividend rate, if any, on the shares of such series,
the conditions and dates upon which such dividends shall be payable,
the preference or relation which such dividends shall bear to the
dividends payable on any other class or classes or on any other
series of capital stock, and whether such dividends shall be
cumulative or non-cumulative;
3. Whether the shares of such series shall be subject to
redemption by the Corporation, and, if made subject to redemption,
the times, prices and other terms and conditions of such redemption;
4. Whether or not the shares of such series shall be subject
to the operation of a retirement or sinking fund, and, if so, the
extent to and manner in which any such retirement or sinking fund
shall be applied to the purchase or redemption of the shares of such
series for retirement or to other corporate purposes and the terms
and provisions relative to the operation thereof;
5. The rights of the holders of shares of such series upon the
liquidation, dissolution or winding up of the Corporation;
6. Whether or not the shares of such series shall be
convertible into, or exchangeable for, shares of stock of any other
class or classes, or of any other series of the same class, and if
so convertible or exchangeable, the price or prices or the rate or
rates of conversion or exchange and the method, if any, of adjusting
the same and any other terms or conditions of conversion or
exchange;
7. The limitations and restrictions, if any, to be effective
while any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the
purchase, redemption or other acquisition by the Corporation of, the
Common Stock or any other class or classes of stock of the
Corporation
2
<PAGE>
ranking junior to the shares of such series either as to dividends
or upon liquidation, dissolution or winding up;
8. The conditions or restrictions, if any, upon the creation
of indebtedness of the Corporation or upon the issue of any
additional stock (including additional shares of such series or of
any other series or of any other class) ranking on a parity with or
prior to the shares of such series either as to dividends or upon
liquidation, dissolution or winding up;
9. Whether the shares of such series shall have voting rights,
in addition to any voting rights provided by law, and, if so, the
terms of such voting rights; and
10. Any other powers, preferences and relative, participating,
optional or other special rights and any qualifications, limitations
or restrictions thereof as shall not be inconsistent with this
Article FOURTH.
RESOLVED, that the Board of Directors declares the foregoing
amendment to the Corporation's Certificate of Incorporation to be
advisable and directs that the amendment be submitted to the stockholders
of the Corporation for their approval pursuant to Section 242(b) of the
General Corporation Law of the State of Delaware."
SECOND: That the amendment to the Certificate of Incorporation of
the Corporation effected by this Certificate was duly authorized by the written
consent of the holders of not less than a majority of the outstanding shares of
capital stock of the Corporation entitled to vote thereon, after having been
declared advisable by the Board of Directors of the Corporation, all in
accordance with the provisions of Sections 228 and 242 of the General
Corporation Law of the State of Delaware.
3
<PAGE>
IN WITNESS WHEREOF, INTRALINKS INC. has caused this Certificate to
be signed by Mark S. Adams, its President, who hereby acknowledges under
penalties of perjury that the facts herein stated are true and that this
Certificate is the act and deed of the Corporation, this 17th day of December
1997.
INTRALINKS INC.
By /s/ Mark S. Adams
-------------------------------------
Mark S. Adams
President
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:01 AM 12/17/1997
971435136 - 2633827
AMENDED CERTIFICATE OF DESIGNATION
SERIES A PREFERRED STOCK
OF
INTRALINKS INC.
PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW
THE UNDERSIGNED, Mark S. Adams, President of INTRALINKS, INC., a
corporation organized and existing under the laws of the State of Delaware (the
"Company"), HEREBY CERTIFIES:
That pursuant to authority conferred upon the Board of Directors of
this Company by the Certificate of Incorporation, and pursuant to the provisions
of Section 151 of the General Corporation Law of the State of Delaware, the
Board of Directors of this Company, by unanimous written consent dated December
12, 1997 duly adopted the following resolution:
"RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Company by the provisions of its
Certificate of Incorporation, the Board of Directors of the Company hereby
creates a series of Preferred Stock of the Company consisting of 382,500 shares
of Series A Preferred Stock, $0.01 par value per share (the "Series A Preferred
Stock"), which this Company now has authority to issue and the Board of
Directors of the Company hereby fixes the designation, powers, preferences and
relative, participating, optional and other special rights, and the
qualifications, limitations or restrictions thereof, of the shares of Series A
Preferred Stock as follows:
(i) Dividend Provisions. The holders of shares of Series A
Preferred Stock shall be entitled to receive dividends, out of any assets
legally available therefor, prior and in preference to any declaration or
payment of any dividend (payable other than solely in the Company's common
stock, par value $0.01 per share ("Common Stock")), when, as and if
declared by the Board of Directors.
(ii) Liquidation Preference.
(a) Amount. In the event of any liquidation, dissolution
or winding up of the Company, either voluntary or involuntary, the holders
of Series A Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the Company to
holders of the Company's Common Stock, an amount per share equal to the
sum of (i) the purchase price paid by the initial holder of such
outstanding share of Series A Preferred Stock purchased directly from the
Company (as determined by the Company and noted in its books and records)
(the "Purchase Price") and (ii) an amount equal to accrued but unpaid
dividends on such Series A Preferred Stock, if any. If upon the occurrence
of such event, the assets and funds available for distribution to its
stockholders shall be insufficient to pay the holders of shares of Series
A Preferred Stock the
<PAGE>
full amount of the Purchase Price and the holders of any other shares, if any,
which are on a parity with the Series A Preferred Stock upon liquidation,
dissolution or winding up of the company (the "Other Shares") the full amount of
their liquidation preference, then the entire assets of the Company to be so
distributed shall be distributed ratably to the holders of the Series A
Preferred Stock and the Other Shares in proportion to the full preferential
amounts (as described above) they would otherwise have been entitled to receive.
None of the payments or distributions provided for in this Section 2(a) shall be
made by the Company to the holders of any Series A Preferred Stock and Other
Shares in preference to the holders of any class of preferred stock issued by
the Company that is senior to such Series A Preferred Stock and Other Shares.
(b) Remaining Assets. Upon the completion of the
distribution required by subparagraph (a) of this Section 2, if assets
remain in the Company, the holders of the Common Stock of the Company,
shall receive all of the remaining assets of the Company.
(c) Senior Stock. At its sole discretion, the Company
may issue a class of stock which is senior to the Series A Preferred
Stock.
(iii) Voting Rights.
(a) Number of Votes. Each holder of shares of Series A
Preferred Stock shall be entitled to the number of votes equal to the
number of whole shares of Common Stock into which such shares of Series A
Preferred Stock could be converted pursuant to the provisions of Section 4
at the record date for the determination of the stockholders entitled to
vote on such matters or, if no such record date is established, the date
such vote is taken or any written consent of stockholders is solicited.
(b) General. Subject to the foregoing provisions and the
provisions of Section 5, each holder of Series A Preferred Stock shall not
have voting rights except as provided for under the laws of the State of
Delaware.
(iv) Conversion Rights. The outstanding shares of Series A
Preferred Stock shall be convertible into Common Stock as follows:
2
<PAGE>
(a) Optional Conversion.
i) At the option of the holder thereof, each share
of Series A Preferred Stock shall be convertible, at any time or from time
to time prior to the close of business on the business day before any date
fixed for redemption of such share, into fully paid and nonassessable
shares of Common Stock for no additional consideration as provided herein.
ii) Each holder of Series A Preferred Stock who
elects to convert the same into shares of Common Stock shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Company or any transfer agent for the Series A Preferred Stock or Common
Stock, and shall give written notice to the Company at such office that
such holder elects to convert the same and shall state therein the number
of shares of Series A Preferred Stock being converted. Thereupon the
Company shall promptly issue and deliver at such office to such holder a
certificate or certificates for the number of shares of Common Stock to
which such holder is entitled upon such conversion. Such conversion shall
be deemed to have been made immediately prior to the close of business on
the date of such surrender of the certificate or certificates representing
the shares of Series A Preferred Stock to be converted, and the person
entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such
shares of Common Stock on such date.
(b) Conversion Price. Each share of Series A Preferred
Stock shall be convertible in accordance with Section 4(a) into the number
of shares of Common Stock which results from dividing the Purchase Price
by the conversion price for the Series A Preferred Stock that is in effect
at the time of conversion (the "Conversion Price"). The initial Conversion
Price for share of Series A Preferred Stock shall be such share's Purchase
Price. The Conversion Price shall be subject to adjustment from time to
time as provided below.
(c) Adjustment Upon Common Stock Event. Upon the
happening of a Common Stock Event (as hereinafter defined), the Conversion
Price of the Series A Preferred Stock shall, simultaneously with the
happening of such Common Stock Event, be adjusted by multiplying the
Conversion Price of the Series A Preferred Stock in effect immediately
prior to such Common Stock Event by a fraction, (i) the numerator of which
shall be the number of shares of Common Stock issued and outstanding
immediately prior to such Common Stock Event, and (ii) the denominator of
which shall be the number of shares of Common Stock issued and outstanding
immediately after such Common Stock Event, and the product so obtained
shall
3
<PAGE>
thereafter be the Conversion Price for the Series A Preferred Stock The
Conversion Price for the Series A Preferred Stock shall be readjusted in
the same manner upon the happening of each subsequent Common Stock Event.
As used herein, the term "Common Stock Event" shall mean (i) the issue by
the Company of additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, (ii) a subdivision of the
outstanding shares of Common Stock into a greater number of shares of
Common Stock, or (iii) a combination of the outstanding shares of Common
Stock into a smaller number of shares of Common Stock.
(d) Adjustment for Reclassification, Exchange and
Substitution. If at any time or from time to time the Common Stock
issuable upon the conversion of the Series A Preferred Stock is changed
into the same or a different number of shares of any class or classes of
stock, whether by recapitalization, reclassification or otherwise (other
than by a Common Stock Event or a stock dividend, reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 4),
then in any such event each holder of Series A Preferred Stock shall have
the right thereafter to convert such stock into the kind and amount of
stock and other securities and property receivable upon such
recapitalization, reclassification or other change by holders of the
number of shares of Common Stock into which such shares of Series A
Preferred Stock could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further
adjustment as provided herein or with respect to such other securities or
property by the terms thereof.
(e) Certificate of Adjustment. In each case of an
adjustment or readjustment of the Conversion Price for the Series A
Preferred Stock, the Company, at its expense, shall cause its chief
financial or accounting officer to compute such adjustment or readjustment
in accordance with the provisions hereof and prepare a certificate showing
such adjustment or readjustment, and shall mail such certificate, by first
class mail, postage prepaid, to each registered holder of the Series A
Preferred Stock at the holder's address as shown in the Company's books.
(f) Fractional Shares. No fractional shares of Common
Stock shall be issued upon any conversion of Series A Preferred Stock. In
lieu of any fractional share to which the holder would otherwise be
entitled, the Company shall pay the holders cash equal to the product of
such fraction multiplied by the Common Stock's fair market value as
determined in good faith by the Board as of the date of conversion -
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<PAGE>
(g) Reservation of Stock Issuable Upon Conversion. The
Company shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series A Preferred Stock,
such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the
Series A Preferred Stock; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of the Series A Preferred Stock,
the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such
purpose.
(h) Notices. Any notice required by the provisions of
this Section 4 to be given to the holders of shares of the Series A
Preferred Stock shall be deemed given upon the earlier of actual receipt
(including by facsimile) or three (3) days after deposit in the United
States mail, by certified or registered mail, return receipt requested,
postage prepaid, addressed to each holder of record at the address of such
holder appearing on the books of the Company.
(i) No Impairment. The Company shall not avoid or seek
to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but shall at all times in good
faith assist in carrying out all such action as may be reasonably
necessary or appropriate in order to protect the conversion rights of the
holders of the Series A Preferred Stock against impairment.
(j) Mandatory Conversion. Upon the earlier to occur of
(i) five (5) years or (ii) the initial public offering of the Company's
Common Stock, by written notice to the holders of Series A Preferred
Stock, the Company may require the holders to convert their Series A
Preferred Stock into Common Stock of the Company.
(v) Protective Provisions. So long as shares of Series A
Preferred Stock are outstanding, the Company shall not without first
obtaining the approval (by vote or written consent, as provided by law) of
the holders of at least a majority of the then outstanding shares of
Series A Preferred Stock, voting as a separate class, alter or change the
rights, preferences or privileges of the shares of Series A Preferred
Stock so as to affect adversely the shares.
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Executed at 1372 Broadway New York, New York, on the 17th day of
December, 1997.
/s/ Mark S. Adams
----------------------------------------
Mark S. Adams, President
Attest:
/s/ John Muldoon
- ----------------------------
6
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:02 AM 12/17/1997
971435240 -- 2633827
CERTIFICATE OF DESIGNATION
OF
SERIES B PREFERRED STOCK
OF
INTRALINKS INC.
------------------------------------
Pursuant to Section 151 of
the Delaware General Corporation Law
------------------------------------
INTRALINKS INC., a corporation organized and existing under the laws
of the State of Delaware (the "Corporation"), hereby certifies as follows:
That, pursuant to the authority vested in the Board of Directors of
the Corporation by Article FOURTH of the Certificate of Incorporation, as
amended, of the Corporation, and pursuant to the provisions of Section 151 of
the Delaware General Corporation Law, the Board of Directors of the Corporation,
by unanimous written consent dated December 17, 1997 duly adopted the following
resolution:
RESOLVED that, pursuant to the authority vested in the Board of
Directors of the Corporation by Article FOURTH of the Corporation's Restated
Certificate of Incorporation, as amended, of the total authorized number of
1,151,730 shares of Preferred Stock, par value $.01 per share, of the
Corporation ("Preferred Stock"), there shall be designated a series of 769,230
shares which shall be issued in and constitute a single series to be known as
"Series B Preferred Stock" (hereinafter called the "Series B Preferred Stock").
The shares of Series B Preferred Stock shall have the voting powers,
designations, preferences and other special rights, and qualifications,
limitations and restrictions thereof set forth below:
1. Dividends. (a) The holders of shares of Series B Preferred
Stock shall be entitled to receive, out of funds legally available for
such purpose, cash dividends at the rate of $0.52 per share per annum,
payable as provided herein or when and as declared by the Board of
Directors of the Corporation. Such dividends shall be cumulative and shall
accrue from and after the date of issue whether or not declared and
whether or not there are any funds of the Corporation legally available
for the payment
<PAGE>
of dividends. Accrued but unpaid dividends shall not bear interest. The
Board of Directors of the Corporation may fix a record date for the
determination of holders of Series B Preferred Stock entitled to receive
payment of a dividend declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof.
(b) As long as any shares of Series B Preferred Stock shall
remain outstanding, in no event shall any dividend be declared or paid
upon, nor shall any distribution be made upon, any shares of Common Stock,
nor (without the consent of the holders of a majority in interest of the
outstanding Series B Preferred Stock) shall any shares of Common Stock be
purchased or redeemed by the Corporation, nor shall any moneys be paid to
or made available for a sinking fund for the purchase or redemption of
shares of any Common Stock, unless, in each such case, (i) full cumulative
dividends on the outstanding shares of Series B Preferred Stock shall have
been declared and paid and (ii) any arrears or defaults in any redemption
of shares of Series B Preferred Stock shall have been cured. In the event
that the Corporation shall at any time pay a dividend on the Series A
Preferred Stock, $.01 par value ("Series A Preferred Stock") of the
Corporation in accordance with this paragraph 1(b), it shall, at the same
time, pay to each holder of Series B Preferred Stock (in addition to any
payment such holder is entitled to receive pursuant to paragraph 1 (a)
above), a dividend equal to the dividend payable to such holder of shares
of Series A Preferred Stock.
2. Redemption. The shares of Series B Preferred Stock shall be
redeemable as follows:
2A Mandatory Redemption. The Corporation shall redeem all of
the outstanding shares of Series B Preferred Stock on December 18, 2003
(the "Redemption Date"), in the manner and with the effect provided in
subparagraphs 2B through 2C below, by paying for each share an amount
equal to the sum of $6.50, plus an amount equal to any accrued and unpaid
dividends thereon up to such Redemption Date whether or not such dividends
shall have been declared by the Board of Directors of the Corporation,
such aggregate amount being herein sometimes referred to as the
"Redemption Price".
2B Redemption Price. The Redemption Price shall, at the sole
discretion of the Corporation, be paid either (i) in cash or (ii) by
executing Promissory Notes in aggregate principal amounts equal to the
Redemption Price, which Promissory Notes shall be in the form of Exhibit G
to the Securities Purchase Agreement, dated as of December 18, 1997, among
the Corporation, Euclid Partners IV, L.P. and
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<PAGE>
the other Purchasers named therein; provided, however, that no Promissory
Notes may be issued in lieu of a cash payment if to do so would contravene
any agreement or other instrument to which the Corporation is a party, and
unless simultaneously therewith the Corporation shall deliver to each
holder thereof an opinion of its counsel addressed to such holder,
satisfactory in form and substance to the holders of a majority in
interest of the outstanding Series B Preferred Stock, as to the validity
and binding effect of the Promissory Notes and the non-contravention of
existing agreements. Not less than 20 days before a Redemption Date,
written notice shall be given by mail, postage prepaid, to the holders of
record of the Series B Preferred Stock to be redeemed, such notice to be
addressed to each such stockholder at its post office address as shown by
the records of the Corporation, specifying the number of shares to be
redeemed, the Redemption Price, whether such Redemption Price shall be
paid in cash or by executing Promissory Notes, and the place and date of
such redemption, which date shall not be a day on which banks in The City
of New York are required or authorized to close. If such notice of
redemption shall have been duly given, then, notwithstanding that any
certificate for shares of Series B Preferred Stock to be redeemed shall
not have been surrendered for cancellation, after the close of business on
such Redemption Date, the shares so called for redemption shall no longer
be deemed outstanding and all rights with respect to such shares (except
for the conversion rights which, as provided in subparagraph 4A, shall
terminate as of the close of business on the last full business day prior
to each Redemption Date) shall forthwith after the close of business on
such Redemption Date cease, except only the right of the holders thereof
to receive, upon presentation of the certificate representing shares so
called for redemption, the Redemption Price therefor, without interest
thereon.
2C Redeemed or Otherwise Acquired Shares to be Retired. Any
shares of the Preferred Stock redeemed pursuant to this paragraph 2 or
otherwise acquired by the Corporation in any manner whatsoever shall be
permanently retired and shall not under any circumstances be reissued; and
the Corporation may from time to time take such appropriate corporate
action as may be necessary to reduce the authorized Preferred Stock
accordingly.
3. Liquidation, Dissolution or Winding Up. (a) Upon any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the shares of Series B Preferred
Stock shall be entitled, before any distribution or payment is made upon
any Common Stock, to be paid an amount equal to $6.50 per share plus any
accrued but unpaid dividends whether or not such
3
<PAGE>
dividends shall have been declared by the Board of Directors of the
Corporation (such amounts being sometimes referred to as the "Series B
Liquidation Payments"). If upon such liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the assets of the
Corporation available for distribution to its stockholders shall be
insufficient to pay the holders of shares of Series B Preferred Stock the
full amount of the Series B Liquidation Payments, the holders of the
Series A Preferred Stock the full amount of its liquidation preference
under paragraph (ii) (a) of the Amended Certificate of Designation for
Series A Preferred Stock as in effect on December 17, 1997, and the
holders of any other shares, if any, which are on a parity with the Series
B Preferred Stock and the Series A Preferred Stock upon liquidation,
dissolution or winding up of the Corporation (the "Other Shares") the full
amount of their liquidation preference, then the entire assets of the
Corporation to be so distributed shall be distributed ratably to the
holders of the Series B Preferred Stock, the Series A Preferred Stock and
the Other Shares in proportion to the full preferential amounts (as
described above) they would otherwise have been entitled to receive.
(b) Upon any such liquidation, dissolution or winding up of
the Corporation, after the holders of Series B Preferred Stock shall have
been paid the full amount of the Series B Liquidation Payments and the
Series A Preferred Stock and the Other Shares shall have been paid in full
the preferential amounts to which they shall be entitled as described
above, the holders of Common Stock shall be entitled to share ratably
according to the number of shares of Common Stock held by them in all
remaining assets of the Corporation available for distribution to its
stockholders. Written notice of such liquidation, dissolution or winding
up, stating a payment date, the amount of the Series B Liquidation
Payments to be made pursuant hereto and the place where said Series B
Liquidation Payments shall be payable shall be given by mail, postage
prepaid, not less than 30 days prior to the payment date stated therein to
the holders of record of the Series B Preferred Stock, such notice to be
addressed to each such holder at his post office address as shown by the
records of the Corporation.
(c) None of the payments or distributions provided for in this
paragraph 3 shall be made by the Corporation to the holders of any Series
B Preferred Stock, Series A Preferred Stock and Other Shares in preference
to the holders of any class of Preferred Stock issued by the Corporation
that is senior to such Series B Preferred Stock, Series A Preferred Stock
and Other Shares.
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<PAGE>
(d) As used in this paragraph 3, a liquidation. dissolution or
winding up of the Corporation shall be deemed to include (i) a
consolidation or merger of the Corporation with or into any other
corporation (other than a merger in which the Corporation is the surviving
corporation and which will not result in more than 50% of the voting
capital stock of the Corporation outstanding immediately after the
effective date of such merger being owned of record or beneficially by
persons other than the holders of such voting capital stock immediately
prior to such merger in the same proportions in which such shares were
held immediately prior to such merger), (ii) a sale of all or
substantially all of the properties and assets of the Corporation as an
entirety to any other person, or (iii) the acquisition of "beneficial
ownership" by any "person" or "group" of voting stock of the Corporation
representing more than 50% of the voting power of all outstanding shares
of such voting stock, whether by way of merger or consolidation or
otherwise.
As used in this Certificate of Designation, the terms "person"
and "group" shall have the meaning set forth in Section 13(d)(3) of the
Exchange Act, whether or not applicable, (ii) the term "beneficial owner"
shall have the meaning set forth in Rules 13d-3 and 13d-5 under the
Exchange Act, whether or not applicable, except that a person shall be
deemed to have "beneficial ownership" of all shares that any such person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time or upon the occurrence of certain events,
and (iii) any "person" or "group" will be deemed to beneficially own any
voting stock of the Corporation so long as such person or group
beneficially owns, directly or indirectly, in the aggregate a majority of
the voting stock of a registered holder of the voting stock of the
Corporation.
4. Conversion. The shares of Series B Preferred Stock shall be
convertible as follows:
4A Right to Convert Series B Preferred Stock. (1) Subject to
the terms and conditions of this paragraph 4, the holder of any share or
shares of Series B Preferred Stock shall have the right, at its option, to
convert any such shares of Series B Preferred Stock (except that upon any
liquidation, dissolution or winding up of the Corporation, or upon
redemption of the Series B Preferred Stock as provided in subparagraph 2B,
the right of conversion shall terminate at the close of business on the
last full business day next preceding the date fixed for payment of the
amount distributable on the Series B Preferred Stock), into such number of
fully paid and nonassessable whole shares of Common Stock as is obtained
by
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<PAGE>
multiplying the number of shares of Series B Preferred Stock so to be
converted by $6.50 and dividing the result by the conversion price of
$6.50 per share, or by the conversion price as last adjusted and in effect
at the date any share or shares of such series of Series B Preferred Stock
are surrendered for conversion (such price, or such price as last
adjusted, being referred to herein as the "Series B Conversion Price")
(2) The rights of conversion contained in this subparagraph 4A shall
be exercised by the holder of shares of Series B Preferred Stock by giving
written notice that such holder elects to convert a stated number of
shares of Series B Preferred Stock into Common Stock and by surrender of a
certificate or certificates for the shares so to be converted to the
Corporation at its principal office (or such other office or agency of the
Corporation as the Corporation may designate by notice in writing to the
holder or holders of the Series B Preferred Stock) at any time during its
usual business hours on the date set forth in such notice, together with a
statement of the name or names (with address) in which the certificate or
certificates for shares of Common Stock shall be issued.
4B Automatic Conversion. In the event that, at any time while
any of the Series B Preferred Stock shall be outstanding, the Corporation
shall complete a firm commitment public offering involving the sale by the
Corporation of shares of Common Stock (i) at a per share price to the
public of not less than $13.00 (appropriately adjusted for any stock
splits, combinations or stock dividends) and (ii) in which the net
proceeds paid by the public to the Corporation are at least $10,000,000,
then all outstanding shares of Preferred Stock shall, automatically and
without further action on the part of the holders of the Series B
Preferred Stock, be converted into shares of Common Stock in accordance
with the terms of this paragraph 4 with the same effect as if the
certificates evidencing such shares had been surrendered for conversion,
such conversion to be effective simultaneously with the closing of such
public offering, provided, however, that certificates evidencing the
shares of Common Stock issuable upon such conversion shall not be issued
except on surrender of the certificates for the shares of the Series B
Preferred Stock so converted.
4C Issuance of Certificates; Time Conversion Effected.
Promptly after the receipt of the written notice referred to in
subparagraph 4A(2) and surrender of the certificate or certificates for
the share or shares of Series B Preferred Stock to be converted, the
Corporation shall issue and deliver, or cause to be issued and
6
<PAGE>
delivered, to the holder, registered in such name or names as such holder
may direct, a certificate or certificates for the number of whole shares
of Common Stock issuable upon the conversion of such share or shares of
Series B Preferred Stock. To the extent permitted by law, such conversion
shall be deemed to have been effected, and the Series B Conversion Price
shall be determined, as of the close of business on the date on which such
written notice shall have been received by the Corporation and the
certificate or certificates for such share or shares shall have been
surrendered as aforesaid, and at such time the rights of the holder of
such share or shares of Series B Preferred Stock shall cease, and the
person or persons in whose name or names any certificate or certificates
for shares of Common Stock shall be issuable upon such conversion shall be
deemed to have become the holder or holders of record of the shares of
Common Stock represented thereby.
4D Fractional Shares; Dividends; Partial Conversion. No
fractional shares may be issued upon conversion of the Series B Preferred
Stock into Common Stock. At the time of each conversion, the Corporation
shall pay in cash an amount equal to all dividends, if any, declared and
unpaid on the shares surrendered for conversion to the date upon which
such conversion is deemed to take place as provided in subparagraph 4C. In
case the number of shares of Series B Preferred Stock represented by the
certificate or certificates surrendered pursuant to subparagraph 4C
exceeds the number of shares converted, the Corporation shall, upon such
conversion, execute and deliver to the holder thereof, at the expense of
the Corporation, a new certificate or certificates for the number of
shares of Series B Preferred Stock represented by the certificate or
certificates surrendered which are not to be converted. If any fractional
interest in a share of Common Stock would, except for the provisions of
the first sentence of this subparagraph 4D, be deliverable upon any such
conversion, the Corporation, in lieu of delivering the fractional share
thereof, shall pay to the holder surrendering the Series B Preferred Stock
for conversion an amount in cash equal to the current market price of such
fractional interest as determined in good faith by the Board of Directors
of the Corporation.
4E Adjustment of Price Upon Issuance of Common Stock. Except
as provided in subparagraph 4G hereof, if and whenever the Corporation
shall issue or sell, or is in accordance with subparagraphs 4E(1) through
4E(7) deemed to have issued or sold, any shares of its Common Stock for a
consideration per share less than the Series B Conversion Price in effect
immediately prior to the time of such issue or sale the following clauses
(i) and (ii) shall apply:
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<PAGE>
(i) if such consideration per share is greater than $5.25
(which number shall be proportionately adjusted for any subdivision or
combination of the Common Stock), then, forthwith, upon such issue or
sale, the Series B Conversion Price shall be reduced to the price
(calculated to the nearest cent) determined by dividing (x) an amount
equal to the consideration, if any, received by the Corporation upon such
issue or sale, by (y) the total number of shares of Common Stock so issued
or sold; and
(ii) if such consideration per share is less than $5.25 (which
number shall be proportionately adjusted for any subdivision or
combination of the Common Stock), then, forthwith, the Series B Conversion
Price shall be reduced to the price (calculated to the nearest cent)
determined by dividing (x) an amount equal to the sum of (1) the number of
shares of Common Stock outstanding immediately prior to such issue or sale
(including as outstanding all shares of Common Stock issuable upon
conversion of outstanding Series A Preferred Stock and Series B Preferred
Stock) multiplied by the then existing Series B Conversion Price, and (2)
the consideration, if any, received by the Corporation upon such issue or
sale, by (y) the total number of shares of Common Stock outstanding
immediately after such issue or sale (including as outstanding all shares
of Common Stock issuable upon conversion of outstanding Series A Preferred
Stock and Series B Preferred Stock without giving effect to any adjustment
in the number of shares so issuable by reason of such issue or sale).
For purposes of this subparagraph 4E, the following
subparagraphs 4E(1) to 4E(7) shall also be applicable:
4E(1) Issuance of Rights or Options. In case at any time the
Corporation shall in any manner grant any rights to subscribe for or to
purchase, or any options for the purchase of, Common Stock or any stock or
securities convertible into or exchangeable for Common Stock (such rights
or options being herein called "Options" and such convertible or
exchangeable stock or securities being herein called "Convertible
Securities") whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable, and
the price per share for which Common Stock is issuable upon the exercise
of such Options or upon conversion or exchange of such Convertible
Securities (determined by dividing (i) the total amount, if any, received
or receivable by the Corporation as consideration for the granting of such
Options, plus the minimum aggregate amount of additional consideration
payable to the Corporation upon the exercise of all such Options, plus, in
the case of such Options which relate to Convert-
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<PAGE>
ible Securities, the minimum aggregate amount of additional consideration,
if any, payable upon the issue or sale of such Convertible Securities and
upon the conversion or exchange thereof, by (ii) the total maximum number
of shares of Common Stock issuable upon the exercise of such Options or
upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Series
B Conversion Price in effect immediately prior to the time of the granting
of such Options, then the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange
of the total maximum amount of such Convertible Securities issuable upon
the exercise of such Options shall be deemed to have been issued for such
price per share as of the date of granting of such Options and thereafter
shall be deemed to be outstanding. Except as otherwise provided in
subparagraph 4E(3), no adjustment of the Series B Conversion Price shall
be made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such Options or upon the actual issue of such
Common Stock upon conversion or exchange of such Convertible Securities.
4E(2) Issuance of Convertible Securities. In case the
Corporation shall in any manner issue (whether directly or by assumption
in a merger or otherwise) or sell any Convertible Securities, whether or
not the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which Common Stock is issuable
upon such conversion or exchange (determined by dividing (i) the total
amount received or receivable by the Corporation as consideration for the
issue or sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Corporation
upon the conversion or exchange thereof, by (ii) the total maximum number
of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than the Series B Conversion
Price in effect immediately prior to the time of such issue or sale, then
the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall be deemed
to have been issued for such price per share as of the date of the issue
or sale of such Convertible Securities and thereafter shall be deemed to
be outstanding, provided that (a) except as otherwise provided in
subparagraph 4E(3) below, no adjustment of the Series B Conversion Price
shall be made upon the actual issue of such Common Stock upon conversion
or exchange of such Convertible Securities, and (b) if any such issue or
sale of such Convertible Securities is made upon exercise of any Option to
purchase any such Convertible Securities for which adjustments of the
Series B Conversion Price have been or
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<PAGE>
are to be made pursuant to other provisions of this subparagraph 4D, no
further adjustment of the Series B Conversion Price shall be made by
reason of such issue or sale.
4E(3) Change in Option Price or Conversion Rate. If (i) the
purchase price provided for in any Option referred to in subparagraph
4E(1), (ii) the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
subparagraph 4E(1) or 4E(2) or (iii) the rate at which any Convertible
Securities referred to in subparagraph 4E(1) or 4E(2) are convertible into
or exchangeable for Common Stock shall change at any time (in each case
other than under or by reason of provisions designed to protect against
dilution), then the Series B Conversion Price in effect at the time of
such event shall, as required, forthwith be readjusted to such series B
Conversion Price which would have been in effect at such time had such
Options or Convertible Securities still outstanding provided for such
changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold; and on the
expiration of any such Option or the termination of any such right to
convert or exchange such Convertible Securities, the Series B Conversion
Price then in effect hereunder shall, as required, forthwith be increased
to the Series B Conversion Price which would have been in effect at the
time of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such expiration
or termination, never been issued, and the Common Stock issuable
thereunder shall no longer be deemed to be outstanding. If the purchase
price provided for in any such Option referred to in subparagraph 4E(1) or
the rate at which any Convertible Securities referred to in subparagraph
4E(1) or 4E(2) are convertible into or exchangeable for Common Stock shall
be reduced at any time under or by reason of provisions with respect
thereto designed to protect against dilution, then, in case of the
delivery of Common Stock upon the exercise of any such Option or upon
conversion or exchange of any such Convertible Securities, the Series B
Conversion Price then in effect hereunder shall, as required, forthwith be
adjusted to such respective amount as would have been obtained had such
Option or Convertible Securities never been issued as to such Common Stock
and had adjustments been made upon the issuance of the shares of Common
Stock delivered as aforesaid, but only if as a result of such adjustment
the Series B Conversion Price then in effect hereunder is thereby reduced.
4E(4) Stock Dividends. In case the Corporation shall declare a
dividend or make any other distribution upon
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<PAGE>
any stock of the Corporation payable in Common Stock, Options or
Convertible Securities, any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without
consideration, and the Series B Conversion Price shall be reduced as if
the Corporation had subdivided its outstanding shares of Common Stock into
a greater number of shares, as provided in subparagraph 4F hereof.
4E(5) Consideration for Stock. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for cash,
the consideration received therefor shall be deemed to be the amount
received by the Corporation therefor, without deduction therefrom of any
expenses incurred or any underwriting commissions or concessions paid or
allowed by the Corporation in connection therewith. In case any shares of
Common Stock, Options or Convertible Securities shall be issued or sold
for a consideration other than cash, the amount of the consideration other
than cash received by the Corporation shall be deemed to be the fair value
of such consideration as determined in good faith by the Board of
Directors of the Corporation, without deduction therefrom of any expenses
incurred or any underwriting commissions or concessions paid or allowed by
the Corporation in connection therewith. In case any Options shall be
issued in connection with the issue and sale of other securities of the
Corporation, together comprising one integral transaction in which no
specific consideration is allocated to such Options by the Corporation,
such Options shall be deemed to have been issued without consideration,
and the Series B Conversion Price shall be reduced as if the Corporation
had subdivided its outstanding shares of Common Stock into a greater
number of shares, as provided in subparagraph 4F hereof.
4E(6) Record Date. In case the Corporation shall rake a record
of the holders of its Common Stock for the purpose of entitling them (i)
to receive a dividend or other distribution payable in Common Stock,
Options or Convertible Securities, or (ii) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of
Common Stock deemed to have been issued or sold upon the declaration of
such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be,
provided that such shares of Common Stock shall in fact have been issued
or sold.
4E(7) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include
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<PAGE>
shares owned or held by or for the account of the Corporation, and the
disposition of any such shares shall be considered an issue or sale of
Common Stock for the purposes of this subparagraph 4E.
4F Subdivision or Combination of Stock. In case the
Corporation shall at any time subdivide its outstanding shares of Common
Stock into a greater number of shares, the Series B Conversion Price in
effect immediately prior to such subdivision shall be proportionately
reduced, and conversely, in case the outstanding shares of Common Stock of
the Corporation shall be combined into a smaller number of shares, the
Series B Conversion Price in effect immediately prior to such combination
shall be proportionately increased.
4G Certain Issues of Common Stock Excepted. Anything herein to
the contrary notwithstanding, the Corporation shall not be required to
make any adjustment of the Series B Conversion Price upon the occurrence
of any of the following events: (i) the issuance of Common Stock upon
conversion of outstanding shares of Series A Preferred Stock or Series B
Preferred Stock and other options, warrants and other securities
exercisable for or convertible into shares of Common Stock and which are
issued and outstanding as of December 18, 1997, (ii) the issuance and sale
of, or grant of options to purchase, shares of Common Stock pursuant to
the Corporation's 1997 Stock Incentive Plan, and (iii) the issuance and
sale of, or grant of options, warrants and other securities exercisable
for or convertible into up to an aggregate of 441,250 shares of Common
Stock.
4H Reorganization, Reclassification, Consolidation, Merger or
Sale. If any capital reorganization or reclassification of the capital
stock of the Corporation or any consolidation or merger of the Corporation
with another corporation, or the sale of all or substantially all of its
assets to another corporation shall be effected in such a way (including,
without limitation, by way of consolidation or merger) that holders of
Common Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful
and adequate provisions shall be made whereby each holder of a share or
shares of Series B Preferred Stock shall thereafter have the right to
receive, upon the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock of the Corporation immediately
theretofore receivable upon the conversion of such shares or shares of the
Series B Preferred Stock, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of
12
<PAGE>
outstanding shares of such Common Stock equal to the number of shares of
such stock immediately theretofore so receivable had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in
any such case appropriate provision shall be made with respect to the
rights and interests of such holder to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Series B
Conversion Price) shall thereafter be applicable, as nearly practicable,
in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of such conversion rights (including, if
necessary to effect the adjustments contemplated herein, an immediate
adjustment in the manner set forth herein, by reason of such
reorganization, reclassification, consolidation, merger or sale, of the
Series B Conversion Price to the value for the Common Stock reflected by
the terms of such reorganization, reclassification, consolidation, merger
or sale if the value so reflected is less than the Series B Conversion
Price in effect immediately prior to such reorganization,
reclassification, consolidation, merger or sale). In the event of a merger
or consolidation of the Corporation as a result of which a greater or
lesser number of shares of common stock of the surviving corporation is
issuable to holders of Common Stock of the Corporation outstanding
immediately prior to such merger or consolidation, the Series B Conversion
Price in effect immediately prior to such merger or consolidation shall be
adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock of the Corporation.
The Corporation will not effect any such consolidation or merger, or any
sale of all or substantially all of its assets and properties, unless
prior to the consummation thereof the successor corporation (if other than
the Corporation) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument,
executed and mailed or delivered to each holder of shares of Series B
Preferred Stock at the last address of such holder appearing on the books
of the Corporation, the obligation to deliver to such holder such shares
of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to receive.
4I Notice of Adjustment. Upon any adjustment of the Series B
Conversion Price, then and in each such case the Corporation shall give
written notice thereof, by first class mail, postage prepaid, addressed to
each holder of shares of Series B Preferred Stock at the address of such
holder as shown on the books of the Corporation, which notice shall state
the Series B Conversion Price resulting from such adjustment, setting
forth in reasonable detail the
13
<PAGE>
method of calculation and the facts upon which such calculation is based.
4J Other Notices. In case at any time:
(1) the corporation shall declare any dividend upon its Common
Stock payable in cash or stock or make any other distribution to the
holders of its Common Stock;
(2) the Corporation shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of
any class or other rights;
(3) there shall be any capital reorganization or
reclassification of the capital stock of the Corporation, or a
consolidation or merger of the Corporation with, or a sale of all or
substantially all its assets to, another corporation, or any
acquisition of "beneficial ownership" by any "person" or "group" of
voting stock of the Corporation representing more than 50% of the
voting power of all outstanding shares of such voting stock, whether
by way of merger or consolidation or otherwise;
(4) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; or
(5) the Corporation shall take any action or there shall be
any event which would result in an automatic conversion of the
Series B Preferred Stock pursuant to subparagraph 4H,
then, in any one or more of said cases, the Corporation shall give, by
first class mail, postage prepaid, addressed to each holder of any shares
of Series B Preferred Stock at the address of such holder as shown on the
books of the Corporation, (a) at least 10 days' prior written notice of
the date on which the books of the Corporation shall close or a record
shall be taken for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least 10 days' prior written notice of the date when the same shall take
place, and (c) in the case of any event which would result in an automatic
conversion of the Series B Preferred Stock pursuant to subparagraph 4H, at
least 10 days' prior written notice of the date on which the same is
expected to be completed.
14
<PAGE>
Such notice in accordance with the foregoing clause (a) shall also
specify, in the case of any such dividend, distribution or subscription
rights, the date on which the holders of Common Stock shall be entitled
thereto, and such notice in accordance with the foregoing clause (b) shall
also specify the date on which the holders of Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be.
4K Stock to be Reserved. The Corporation will at all times
reserve and keep available out of its authorized Common Stock of its
treasury shares, solely for the purpose of issue upon the conversion of
the Series B Preferred Stock as herein provided, such number of shares of
Common Stock as shall then be issuable upon the conversion of all
outstanding shares of Series B Preferred Stock. The Corporation covenants
that all shares of Common Stock which shall be so issued shall be duly and
validly issued and fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof and, without limiting
the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that
the par value per share of the Common Stock is at all times equal to or
less than the effective Series B Conversion Price. The Corporation will
take all such action as may be necessary to assure that all such shares of
Common Stock may be so issued without violation of any applicable law or
regulation, or of any requirements of any national securities exchange
upon which the Common Stock of the Corporation may be listed. The
Corporation will not take any action which results in any adjustment of
the Series B Conversion Price if the total number of shares of Common
Stock issued and issuable after such action upon conversion of the Series
B Preferred Stock would exceed the total number of shares of Common Stock
then authorized by the Corporation's Certificate of Incorporation.
4L No Reissuance of Preferred Stock. Shares of Series B
Preferred Stock which are converted into shares of Common Stock as
provided herein shall not be reissued.
4M Issue Tax. The issuance of certificates for shares of
Common Stock upon conversion of the Series B Preferred Stock shall be made
without charge to the holders thereof for any issuance tax in respect
thereof, provided that the Corporation shall not be required to pay any
tax which may he payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other
15
<PAGE>
than that of the holder of the Series B Preferred Stock which is being
converted.
4N Closing of Books. The Corporation will at no time close its
transfer books against the transfer of any Series B Preferred Stock or of
any shares of Common Stock issued or issuable upon the conversion of any
shares of Series B Preferred Stock in any manner which interferes with the
timely conversion of such Series B Preferred Stock.
4O Definition of Common Stock. As used in this Section 4, the
term "Common Stock" shall mean and include the Corporation's authorized
Common Stock, par value $.01 per share, as constituted on December 17,
1997 and shall also include any capital stock of any class of the
Corporation thereafter authorized that shall not be limited to a fixed sum
or percentage of par value in respect of the rights of the holders thereof
to participate in dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation; provided, however, that such term, when used to describe the
securities receivable upon conversion of shares of the Series B Preferred
Stock of the Corporation, shall include only shares designated as Common
Stock of the Corporation on December 17, 1997, any shares resulting from
any combination or subdivision thereof referred to in Section 4F, or in
case of any reorganization or reclassification of the outstanding shares
thereof, the stock, securities or assets provided for in Section 4H.
5. Voting. Except as otherwise required by law, the
Corporation's Certificate of Incorporation or this Certificate of
Designation, the holders of the Series B Preferred Stock and the holders
of Common Stock shall be entitled to notice of any stockholders meeting
in accordance with the By-laws of the Corporation and to vote upon any
matter submitted to the stockholders for a vote as follows: (i) the
holders of Series B Preferred Stock shall have one vote for each full
share of Common Stock into which their respective shares of Series B
Preferred Stock are convertible on the record date for the vote and (ii)
the holders of Common Stock shall have one vote per share of Common Stock.
6. Restrictions. At any time when shares of Series B Preferred
Stock are outstanding, except where the vote or written consent of the
holders of a greater number of shares of the Corporation is required by
law or by the Certificate of Incorporation, and in addition to any other
vote required by law:
Without the prior consent of the holders of a majority of the
outstanding Series B Preferred Stock, given
16
<PAGE>
in person or by proxy, either in writing or at a special meeting called
for that purpose:
(1) The Corporation will not (i) create or authorize the
creation of any additional class or series of shares which ranks senior to
the Series B Preferred Stock as to the distribution of assets upon the
liquidation, dissolution or winding up of the Corporation or (ii) increase
the authorized amount of the Series A Preferred Stock or the Series B
Preferred Stock.
(2) The Corporation will not amend, alter or repeal this
Certificate of Designation or the Amended Certificate of Designation for
Series A Preferred Stock in effect as of December 17, 1997.
(3) The Corporation will not issue debt in excess of the
Corporation's net worth.
(4) The Corporation will not engage in any transaction or
activity that would constitute a deemed dividend under the Internal
Revenue Code of 1986, as amended.
17
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designation has been
executed by the Corporation by its President, Mark S. Adams, this 17th day of
December, 1997.
INTRALINKS INC.
By: /s/ Mark S. Adams
------------------------------------
Mark S. Adams
President
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 08/20/1998
981327175 - 2633827
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
INTRALINKS INC.
----------------------------
INTRALINKS INC., a corporation organized and existing under the laws
of the State of Delaware (the "Corporation"), hereby certifies as follows:
FIRST: That the following resolutions were duly adopted by the Board
of Directors of the Corporation, setting forth a proposed amendment to the
Certificate of Incorporation of the Corporation, declaring such amendment to be
advisable and directing that such amendment be submitted to the stockholders of
the Corporation for their approval. The resolutions are as follows:
"RESOLVED, that there is hereby adopted an amendment to the
Corporation's Certificate of Incorporation pursuant to which the
authorized capital stock of the Corporation shall be changed from
11,151,730 shares, consisting of 10,000,000 shares of common stock, $.01
par value, and 1,151,730 shares of preferred stock, $.01 par value, to
11,259,730 shares, consisting of 10,000,000 shares of common stock, $.01
par value, and 1,259,730 shares of preferred stock, $.01 par value: and,
in connection with such change, the first sentence of Article FOURTH of
the Certificate of Incorporation of the Corporation shall be amended to
read in its entirety as follows:
FOURTH: The total number of shares of all classes of stock
which the Corporation shall have authority to issue is 11,259,730
shares, consisting of (a) 10,000,000 shares of Common Stock, $.01
par value ("Common Stock"), and (b) 1,259,730 shares of Preferred
Stock, $.01 par value ("Preferred Stock").
RESOLVED, that the Board of Directors declares the foregoing
amendment to the Corporation's Certificate of Incorporation to be
advisable and directs that the amendment be submitted to the stockholders
of the corporation for their
<PAGE>
approval pursuant to Section 242(b) of the General Corporation Law of
the State of Delaware."
SECOND: That the amendment to the Certificate of Incorporation of
the Corporation effected by this Certificate was duly authorized by the written
consent of the holders of not less than a majority of the outstanding shares of
capital stock of the Corporation entitled to vote thereon, after having been
declared advisable by the Board of Directors of the Corporation, all in
accordance with the provisions of Sections 228 and 242 of the General
Corporation Law of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, INTRALINKS INC. has caused this Certificate to
be signed by Mark S. Adams, its President, who hereby acknowledges under
penalties of perjury that the facts herein stated are true and that this
Certificate is the act and deed of the Corporation, this 20 day of August, 1998.
INTRALINKS INC.
By: /s/ Mark S. Adams
------------------------------------
Mark S. Adams
President
3
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:01 AM 08/20/1998
981327177 - 2633827
AMENDED CERTIFICATE OF DESIGNATION
OF
SERIES B PREFERRED STOCK
OF
INTRALINKS INC.
------------------------------------
Pursuant to Section 151 of
the Delaware General Corporation Law
------------------------------------
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is IntraLinks Inc.
2. The paragraph of the Certificate of Designation of the Series B
Preferred Stock (the "Certificate of Designation") beginning with the word
"RESOLVED" shall be amended by inserting "877,230" in lieu of "769,230".
3. All other terms and provisions of the Certificate of Designation
shall remain in full force and effect.
4. The Amendment to the Certificate of Designation of the
Corporation herein certified has been duly adopted, pursuant to the provisions
of Section 242 and 228 of the General Corporation Law or the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designation has been
executed by the Corporation by its President, Mark S. Adams, this 20 day of
August, 1998.
INTRALINKS INC.
By: /s/ Mark S. Adams
------------------------------------
Mark S. Adams
President
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
INTRALINKS INC.
------------------------------------
It is hereby certified that;
1. The name of the corporation (hereinafter called the
"Corporation") is INTRALINKS INC.
2. The Certificate of Incorporation of the Corporation, as amended,
is hereby further amended by striking out Article FIRST thereof and by
substituting in lieu of said Article the following new Article FIRST:
"FIRST: The name of the Corporation (the "Corporation") is INTRALINKS,
INC."
3. The Certificate of Incorporation of the Corporation, as amended,
is hereby further amended by striking out the first paragraph of Article FOURTH
thereof and by substituting in lieu of said paragraph of such Article the
following new paragraph:
"FOURTH; The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 15,171,696
shares, consisting of (a) 10,000,000 shares of Common Stock,
$.01 par value ("Common Stock"), and (b) 5,171,696 shares of
Preferred Stock, $.01 par value ("Preferred Stock").
4. The Amendment of the Certificate of Incorporation of the
Corporation herein certified has been duly adopted, pursuant to the provisions
of Sections 228 and 242 of the General Corporation Law of the State of Delaware.
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 10/09/1998
981392277 -- 2633827
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to
be signed by Mark Adams, its President, who hereby acknowledges under penalties
of perjury that the facts herein stated are true and that this Certificate is
the act and deed of the Corporation, this 5th day of October, 1998.
INTRALINKS INC.
By: /s/ Mark S. Adams
------------------------------------
Mark S. Adams
President
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:01 AM 10/09/1998
981392278 -- 2633827
AMENDMENT TO CERTIFICATE OF DESIGNATION
OF
SERIES B PREFERRED STOCK
OF
INTRALINKS INC.
------------------------------------
Pursuant to Section 151 of
the Delaware General Corporation Law
------------------------------------
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is IntraLinks Inc.
2. The paragraph of the Certificate of Designation of the Series B
Preferred Stock (the "Certificate of Designation") beginning with the word
"RESOLVED" shall be amended by inserting "887,922" in lieu of "769,230".
3. Section 1(a) of the Certificate of Designation shall be amended
by inserting "$0.325" in lieu of "$0.52."
4. The following Section 4P shall be added to the Certificate of
Designation:
4P. Cash or Extraordinary Dividend. If the Corporation shall, by
dividend or otherwise, distribute to holders of its Common Stock or
Convertible Securities (other than its Series C Convertible Preferred
Stock, par value $.01 ("Series C Preferred Stock")) evidences of its
indebtedness, cash or other assets (but excluding any dividends or
distributions which change the total number of shares of Common Stock
outstanding) (the "Distribution") then in each such case, the Series B
Conversion Price shall be reduced to the price determined by dividing (x)
an amount equal to the difference between (1) the total number of shares
of Common Stock outstanding (including as outstanding all shares of Common
Stock issuable upon conversion of outstanding Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock) multiplied by the
then existing Series B Conversion Price, and (2) fair market value of the
Distribution, by (y) the total number of shares of Common Stock
outstanding (including as outstanding all shares at Common Stock issuable
upon conversion of outstanding Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock); provided, however, no
adjustment in Series B Conversion
<PAGE>
Price shall be made if the Distribution is made to the holders of Series B
Preferred Stock.
5. All other terms and provisions of the Certificate of Designation
shall remain in full force and effect.
6. The Amendment to Certificate of Designation of the Corporation
herein certified has been duly adopted, pursuant to the provisions of Section
242 and 228 of the General Corporation Law of the State of Delaware.
2
<PAGE>
IN WITNESS WHEREOF, this Amendment to Certificate of Designation has
been executed by the Corporation by its President, Mark S. Adams, this 5th day
of October, 1998.
INTRALINKS INC.
By: /s/ Mark S. Adams
------------------------------------
Mark S. Adams
President
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 04/13/1999
991144422 -- 2633827
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
INTRALINKS, INC.
------------------------------------
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is INTRALINKS, INC.
2. The Certificate of Incorporation of the Corporation, as amended,
is hereby further amended by striking out the first paragraph of Article FOURTH
thereof and by substituting in lieu of said paragraph of such Article the
following new paragraph:
"FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 17,119,696
shares, consisting of (a) 10,000,000 shares of Common Stock,
$.01 par value ("Common Stock"), and (b) 7,119,696 shares of
Preferred Stock, $.01 par value ("Preferred Stock").
3. The Amendment of the Certificate of Incorporation of the Corporation herein
certified has been duly adopted, pursuant to the provisions of Sections 228 and
242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to
be signed by Mark Adams, its President, who hereby acknowledges under penalties
of perjury that the facts herein stated are true and that this Certificate is
the act and deed of the Corporation, this 13th day of April, 1999.
INTRALINKS INC.
By: /s/ Mark S. Adams
------------------------------------
Name: Mark S. Adams
Title: President
<PAGE>
AMENDMENT TO CERTIFICATE OF DESIGNATIONS
OF
SERIES B PREFERRED STOCK
OF
INTRALINKS, INC.
Pursuant to Section 151 of
the Delaware General Corporation Law
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is IntraLinks, Inc.
2. Section 1(a) of the Certificate of Designations shall be amended
by inserting "$.585" in lieu of "$0.325."
3. The following Section 4P shall be added to the Certificate of
Designations:
4P. Cash or Extraordinary Dividend. If the Corporation shall, by
dividend or otherwise, distribute to holders of its Common Stock or
Convertible Securities (other than its Series C Convertible Preferred
Stock, par value $.01 ("Series C Preferred Stock") or its Series D
Convertible Preferred Stock, par value $.01 ("Series D Preferred Stock"))
evidences of its indebtedness, cash or other assets (but excluding any
dividends or distributions which change the total number of shares of
Common Stock outstanding) (the "Distribution") then in each such case, the
Series B Conversion Price shall be reduced to the price determined by
dividing (x) an amount equal to the difference between (1) the total
number of shares of Common Stock outstanding (including as outstanding all
shares of Common Stock issuable upon conversion of outstanding Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock) multiplied by the then existing Series B
Conversion Price, and (2) fair market value of the Distribution, by (y)
the total number of shares of Common Stock outstanding (including as
outstanding all shares of Common Stock issuable upon conversion of
outstanding Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock); provided, however, no
adjustment in Series B Conversion Price shall be made if the Distribution
is made to the holders of Series B Preferred Stock.
4. All other terms and provisions of the Certificate of Designations
shall remain in full force and effect.
5. The Amendment to Certificate of Designations of the Corporation
herein certified has been duly adopted, pursuant to the provisions of Section
242 and 228 of the General Corporation Law of the State of Delaware.
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:01 AM 04/13/1999
991144427 -- 2633827
<PAGE>
IN WITNESS WHEREOF, this Amendment to Certificate of Designations
has been executed by the Corporation by its President, Mark S. Adams, this 13th
day of April, 1999.
INTRALINKS INC.
By: /s/ Mark S. Adams
------------------------------------
Name: Mark S. Adams
Title: President
2
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:02 AM 04/13/1999
991144436 -- 2633827
AMENDMENT TO CERTIFICATE OF DESIGNATIONS
OF
SERIES C PREFERRED STOCK
OF
INTRALINKS INC.
Pursuant to Section 151 of
the Delaware General Corporation Law
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is IntraLinks, Inc.
2. The paragraph of the Certificate of Designations of the Series C
Convertible Preferred Stock (the "Certificate of Designation") beginning with
the word "RESOLVED" shall be amended by inserting" 7,119,696 in lieu of"
"5,171,696".
3. Section 1 of the Certificate of Designations is hereby amended
and restated in its entirety as follows:
"1. Rank. The Series C Preferred Stock will, with respect to
dividend rights and rights on liquidation, winding-up, dissolution,
redemption and rank (i) on a parity with the Corporation's Series D
Convertible Preferred Stock, $.01 par value ("Series D Preferred Stock")
and (ii) senior to all classes of Common Stock and to the Corporation's
Series A Convertible Preferred Stock, $.01 par value ("Series A Preferred
Stock"), and Series B Convertible Preferred Stock, $.01 par value ("Series
B Preferred Stock"), and to each other class or series of the
Corporation's capital stock, including any series of preferred stock,
established hereafter by the Board of Directors, the terms of which do not
expressly provide that it ranks senior to, or on a parity with, the Series
C Preferred Stock as to dividend rights and rights on liquidation,
winding-up and dissolution of the Corporation (collectively referred to,
together with all classes of Common Stock, Series A Preferred Stock, and
Series B Preferred Stock, as "Junior Securities").
4. Section 2 of the Certificate of Designations is hereby amended
and restated in its entirety as follows:
"(a) The holders of shares of Series C Preferred Stock shall be
entitled to receive, out of funds legally available for such purpose, cash
dividends at the rate of $0.585 per share per annum, payable as provided
herein or when, as and if declared by the Board of Directors of the
<PAGE>
and after the date of issue whether or not declared and whether or not
there are any funds of the Corporation legally available for the payment
of dividends. Accrued but unpaid dividends shall not bear interest. The
Board of Directors of the Corporation may fix a record date for the
determination of holders of Series C Preferred Stock entitled to receive
payment of a dividend declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof.
(b) As long as any shares of Series C Preferred Stock shall remain
outstanding, in no event shall any dividends be declared or paid upon, nor
shall any distribution be made upon, any shares of Junior Securities, nor
(without the consent of the holders of a majority in interest of the
outstanding Series C Preferred Stock and Series D Preferred Stock, voting
as a single class) shall any shares of Junior Securities be purchased or
redeemed by the Corporation, nor shall any monies be paid to or made
available for a sinking fund for the purchase or redemption of shares of
any Junior Securities, unless, in each such case, (i) full cumulative
dividends on the outstanding shares of Series C Preferred Stock shall have
been declared and paid and (ii) any arrears or defaults in any redemption
of shares of Series C Preferred Stock shall have been cured. In the event
that the Corporation shall at any time pay a dividend on any securities
issued by the Corporation which are on a parity with Series C Preferred
Stock ("Parity Securities"), it shall, at the same time, pay to each
holder of Series C Preferred Stock (in addition to any payment such holder
is entitled to receive pursuant to paragraph 2(a) above), a dividend equal
to the dividend payable to such holder of shares of Parity Securities."
5. The following language is hereby added as Section 3D of the
Certificate of Designations:
3D If the assets to be distributed are insufficient to permit
the payment to holders of the Series C Preferred Stock and holders
of the Series D Preferred Stock of their full Redemption Prices, the
entire assets and property legally available for distribution shall
be distributed ratably among the holders of Series C Preferred Stock
and Series D Preferred Stock in proportion to the full Redemption
Price each such holder is otherwise entitled to receive.
6. The following language is hereby added as Section 4(d) of the
Certificate of Designation:
(d) If the assets to be distributed are insufficient to permit
the payment to holders of the Series C Preferred Stock and holders of the Series
D Preferred Stock of their full preferential amounts, the entire assets and
property legally available for distribution shall be distributed ratably among
the
2
<PAGE>
property legally available for distribution shall be distributed ratably among
the holders of Series C Preferred Stock and Series D Preferred Stock in
proportion to the full preferential amount each such holder is otherwise
entitled to receive.
7. The first paragraph of Section 5E of the Certificate of
Designation is hereby amended and restated in its entirety as follows:
5E Adjustment of Price Upon Issuance of Common Stock. Except
as provided in subparagraph 5H hereof, if and whenever the
Corporation shall issue or sell, or is in accordance with
subparagraphs 5E(1) through 5E(7) deemed to have issued or sold, any
shares of its Common Stock for a consideration per share less than
the Series C Conversion Price in effect immediately prior to the
time of such issue or sale, then, forthwith, the Series C Conversion
Price shall be reduced to the price (calculated to the nearest cent)
determined by dividing (x) an amount equal to the sum of (1) the
number of shares of Common Stock outstanding immediately prior to
such issue or sale (including as outstanding all shares of Common
Stock issuable upon conversion of outstanding Convertible Securities
(as defined below)) multiplied by the then existing Series C
Conversion Price, and (2) the consideration, if any, received by the
Corporation upon such issue or sale, by (y) the total number of
shares of Common Stock outstanding immediately after such issue or
sale (including as outstanding all shares of Common Stock issuable
upon conversion of outstanding Convertible Securities without giving
effect to any adjustment in the number of shares so issuable by
reason of such issue or sale).
8. Section 5H of the Certificate of Designation is hereby amended
and restated in its entirety as follows:
"5H Certain Issues of Securities Excepted. Anything herein to the
contrary notwithstanding, the Corporation shall not be required to
make any adjustment of the Series C Conversion Price upon the
occurrence of any of the following events: (i) the issuance of
capital stock upon conversion of outstanding shares of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock
or the Series D Preferred Stock or other options, warrants and other
securities exercisable for or convertible into shares of Common
Stock, Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or Series D Preferred Stock and which are issued and
outstanding as of the date of filing of the Certificate of
Designations for the Series D Preferred Stock, (ii) the issuance and
sale of, or grant of options to purchase, shares of Common Stock
pursuant to the Corporation's 1997 Stock Incentive Plan; (iii) the
issuance of warrants to Ernst & Young U.S. LLP ("E&Y") for the
purchase of up to 192,308 shares of Series C Preferred Stock (the
"E&Y Warrants") and 1,128,000
3
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shares of Series D Preferred Stock, or the issuance of any shares of
Preferred Stock or Common Stock underlying such warrants; and the
issuance to the holders of the Series C Preferred Stock of warrants
the purchase of up to 160,000 shares of Series D Preferred Stock, or
the issuance of any shares of Preferred Stock or Common Stock
underlying such warrants, in each case as adjusted for stock splits,
combinations, stock dividends, anti-dilution adjustments and other
similar events."
9. The second paragraph and subsection (1) of Section 7 of the
Certificate of Designation are hereby amended and restated in its entirety as
follows:
"Without the prior consent of the holders of a majority in interest
of the outstanding Series C Preferred Stock and Series D Preferred
Stock, voting as a single class, given in person or by proxy, either
in writing or at a meeting called for that purpose:
(1) The Corporation will not (i) create or authorize the
creation of any additional class or series of shares which ranks
senior to the Series C Preferred Stock as to the distribution of
assets upon the liquidation, dissolution or winding up of the
Corporation, or (ii) increase the authorized amount of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock or the Series D Preferred Stock."
10. Following subsection (7) of Section 7 of the Certificate of
Designation, the following new paragraph and new subsection (8) are added (and
existing subsection 8 is renumbered as 9):
"In addition, without the prior consent of the holders of a majority
in interest of the outstanding Series C Preferred Stock, given in
person or by proxy, either in writing or at a meeting called for
that purpose:
(8) The Corporation will not alter in any way adverse to
the holders thereof the enfranchisement, privileges or preferences
of the Series C Preferred Stock."
11. All other terms and provisions of the Certificate of Designation
shall remain in full force and effect.
12. The Amendment to Certificate of Designation of the Corporation
herein certified has been duly adopted, pursuant to the provisions of Section
242 and 228 of the General Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF. this Amendment to Certificate of Designation has
been executed by the Corporation by its President, Mark S. Adams, this 13th day
of April, 1999.
INTRALINKS INC.
By: /s/ Mark S. Adams
------------------------------------
Mark S. Adams
President
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STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:03 AM 04/13/1999
991144445 -- 2633827
CERTIFICATE OF DESIGNATIONS
OF
SERIES D CONVERTIBLE PREFERRED STOCK
OF
INTRALINKS, INC.
Pursuant to Section 151 of
the Delaware General Corporation Law
INTRALINKS, INC., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:
That, pursuant to the authority vested in the Board of Directors of
the Corporation by Article FOURTH of the Certificate of Incorporation, as
amended, of the Corporation, and pursuant to the provisions of Section 151 of
the Delaware General Corporation Law, the Board of Directors of the Corporation,
at a meeting duly convened on April 12, 1999 duly adopted the following
resolution:
RESOLVED that, pursuant to the authority vested in the Board of
Directors of the Corporation by Article FOURTH of the Corporation's Restated
Certificate of Incorporation, as amended, of the Preferred Stock, par value $.01
per share, of the Corporation ("Preferred Stock"), there shall be designated a
series of 1,948,000 shares which shall be issued in and constitute a single
series to be known as "Series D Convertible Preferred Stock" (hereinafter called
the "Series D Preferred Stock"). The shares of Series D Preferred Stock shall
have the voting powers, designations, preferences and other special rights, and
qualifications, limitations and restrictions thereof set forth below:
1. Rank. The Series D Preferred Stock will, with respect to
dividend rights and rights on liquidation, winding-up, dissolution,
redemption and rank (i) on a parity with the Corporation's Series C
Convertible Preferred Stock, $.01 par value ("Series C Preferred Stock")
and (ii) senior to all classes of Common Stock and to the Corporation's
Series A Convertible Preferred Stock, $.01 par value ("Series A Preferred
Stock"), and Series B Convertible Preferred Stock, $.01 par value ("Series
B Preferred Stock"), and to each other class or series of the
Corporation's capital stock, including any series of preferred stock,
established hereafter by the Board of Directors, the terms of which do not
expressly provide that it ranks senior to, or on a parity with, the Series
D Preferred Stock as to dividend rights and rights on liquidation,
winding-up and dissolution of the Corporation (collectively referred to,
together with all classes of
<PAGE>
Common Stock, Series A Preferred Stock, and Series B Preferred Stock, as
"Junior Securities").
2. Dividends. (a) The holders of shares of Series D Preferred
Stock shall be entitled to receive, out of funds legally available for
such purpose, cash dividends at the rate of $0.90 per share per annum,
payable as provided herein or when, as and if declared by the Board of
Directors of the Corporation. Such dividends shall be cumulative and shall
accrue from and after the date of issue whether or not declared and
whether or not there are any funds of the Corporation legally available
for the payment of dividends. Accrued but unpaid dividends shall not bear
interest. The Board of Directors of the Corporation may fix a record date
for the determination of holders of Series D Preferred Stock entitled to
receive payment of a dividend declared thereon, which record date shall be
no more than 60 days prior to the date fixed for the payment thereof.
(b) As long as any shares of Series D Preferred Stock shall
remain outstanding, in no event shall any dividends be declared or paid
upon, nor shall any distribution be made upon, any shares of Junior
Securities, nor (without the consent of the holders a majority in interest
of the outstanding Series C Preferred Stock and Series D Preferred Stock,
voting as a single class) shall any shares of Junior Securities be
purchased or redeemed by the Corporation, nor shall any monies be paid to
or made available for a sinking fund for the purchase or redemption of
shares of any Junior Securities, unless, in each such case, (i) full
cumulative dividends on the outstanding shares of Series D Preferred Stock
shall have been declared and paid and (ii) any arrears or defaults in any
redemption of shares of Series D Preferred Stock shall have been cured. In
the event that the Corporation shall at any time pay a dividend on any
securities issued by the Corporation which are on a parity with Series D
Preferred Stock with respect to dividend rights ("Parity Securities"), it
shall, at the same time, pay to each holder of Series D Preferred Stock
(in addition to any payment such holder is entitled to receive pursuant to
paragraph 2(a) above), a dividend equal to the dividend payable to such
holder of shares of Parity Securities.
3 Redemption. The shares of Series D Preferred Stock shall be
redeemable as follows:
3A Mandatory Redemption. The Corporation shall redeem all
outstanding shares of Series D Preferred Stock on October 9, 2003 (the
"Redemption Date"), in the manner and with the effect provided in
subparagraphs 3B through 3C below, by paying for each share an amount
equal to the sum of $10.00, plus an amount equal to any accrued and unpaid
dividends thereon up to (but excluding) such Redemption Date whether or
not such dividends shall have been declared by the Board of Directors of
the Corporation, such aggregate amount being herein sometimes referred to
as the "Redemption Price". With respect to the right to receive payment
upon such redemption, the Series D Preferred Stock will rank senior to the
Junior Securities (to the extent not redeemed prior to such redemption).
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3B Redemption. The Redemption Price shall be paid in cash. Not
less than 20 days before a Redemption Date, written notice shall be given
by mail, postage prepaid, to the holders of record of the Series D
Preferred Stock to be redeemed, such notice to be addressed to each such
stockholder at its post office address as shown by the records of the
Corporation, specifying the number of shares to be redeemed, the
Redemption Price and the place and date of such redemption, which date
shall not be a day on which banks in The City of New York are required or
authorized to close. If such notice of redemption shall have been duly
given, then, notwithstanding that any certificate for shares of Series D
Preferred Stock to be redeemed shall not have been surrendered for
cancellation, after the close of business on such Redemption Date, the
shares so called for redemption shall no longer be deemed outstanding and
all rights with respect to such shares (except for the conversion rights
which, as provided in subparagraph 5A, shall terminate as of the close of
business on the last full business day prior to each Redemption Date)
shall forthwith after the close of business on such Redemption Date cease,
except only the right of the holders thereof to receive, upon presentation
of the certificate representing shares so called for redemption, the
Redemption Price therefor, without interest thereon.
3C Redeemed or Otherwise Acquired Shares to be Retired. Any
shares of the Series D Preferred Stock redeemed pursuant to this paragraph
3 or otherwise acquired by the Corporation in any manner whatsoever shall
be permanently retired and shall not under any circumstances be reissued;
and the Corporation may from time to time take such appropriate corporate
action as may be necessary to reduce the authorized Series D Preferred
Stock accordingly.
3D Pro Rata Distribution. If the assets to be distributed are
insufficient to permit the payment to holders of the Series C Preferred
Stock and holders of the Series D Preferred Stock of their full Redemption
Prices, the entire assets and property legally available for distribution
shall be distributed ratably among the holders of Series C Preferred Stock
and Series D Preferred Stock in proportion to the full Redemption Price
each such holder is otherwise entitled to receive.
4. Liquidation, Dissolution or Winding Up. (a) Upon any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the shares of Series D Preferred
Stock shall be entitled to be paid, before any distribution or payment is
made upon any Junior Securities, an amount equal to $10.00 per share plus
any accrued but unpaid dividends whether or not such dividends shall have
been declared by the Board of Directors of the Corporation (such amounts
being sometimes referred to as the "Series D Liquidation Payments").
(b) Written notice of such liquidation, dissolution or winding
up, stating a payment date, the amount of the Series D Liquidation
Payments to be made pursuant hereto and the place where said Series D
Liquidation Payments shall be payable shall be given by mail, postage
prepaid, not less than 30 days prior to the payment date stated therein to
the holders of record of the Series D Preferred Stock, such notice to be
3
<PAGE>
addressed to each such holder at his post office address as shown by the
records of the Corporation.
(c) As used in this paragraph 4, a liquidation, dissolution or
winding up of the Corporation shall be deemed to include (i) a
consolidation or merger of the Corporation with or into any other
corporation (other than a merger in which the Corporation is the surviving
corporation and which will not result in more than 50% of the voting
capital stock of the Corporation outstanding immediately after the
effective date of such merger being owned of record or beneficially by
persons other than the holders of such voting capital stock immediately
prior to such merger in the same proportions in which such shares were
held immediately prior to such merger), (ii) a sale of all or
substantially all of the properties and assets of the Corporation as an
entirety to any other person, or (iii) the acquisition of "beneficial
ownership" by any "person" or "group" of voting stock of the Corporation
representing more than 50% of the voting power of all outstanding shares
of such voting stock, whether by way of merger or consolidation or
otherwise.
As used in this Certificate of Designation, (i) the terms
"person" and "group" shall have the meaning set forth in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not applicable, (ii) the term "beneficial owner" shall have the
meaning set forth in Rules 13d-3 and 13d-5 under the Exchange Act, or any
successor rules thereunder, whether or not applicable, except that a
person shall be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time or upon the
occurrence of certain events, and (iii) any "person" or "group" will be
deemed to beneficially own any voting stock of the Corporation so long as
such person or group beneficially owns, directly or indirectly, in the
aggregate a majority of the voting stock of a registered holder of the
voting stock of the Corporation.
(d) If the assets to be distributed are insufficient to permit
the payment to holders of the Series C Preferred Stock and holders of the
Series D Preferred Stock of their full preferential amounts, the entire
assets and property legally available for distribution shall be
distributed ratably among the holders of Series C Preferred Stock and
Series D Preferred Stock in proportion to the full preferential amount
each such holder is otherwise entitled to receive.
5. Conversion. The shares of Series D Preferred Stock shall be
convertible as follows:
5A Right to Convert Series D Preferred Stock. (1) Subject to
the terms and conditions of this paragraph 5, at any time or from time to
time, the holder of any share or shares of Series D Preferred Stock shall
have the right, at the holders option, to convert any such shares of
Series D Preferred Stock (except that upon any liquidation, dissolution or
winding up of the Corporation, or upon redemption of the Series D
Preferred Stock as provided in paragraph 3, the right of conversion shall
terminate at the close of business on the last full business day next
preceding the date fixed for payment
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<PAGE>
of the amount distributable on the Series D Preferred Stock), into such
number of fully paid and nonassessable whole shares of Common Stock as is
obtained by multiplying the number of shares of Series D Preferred Stock
to be converted by $10.00 and dividing the result by the conversion price
of $10.00 per share, or by the conversion price as last adjusted in
accordance with paragraphs 5E, 5F and 5G hereunder and in effect at the
date any share or shares of such Series D Preferred Stock are surrendered
for conversion (such price, or such price as last adjusted, being referred
to herein as the "Series D Conversion Price").
(2) The rights of conversion contained in this subparagraph 5A
shall be exercised by the holder of shares of Series D Preferred Stock by
giving written notice that such holder elects to convert a stated number
of shares of Series D Preferred Stock into Common Stock and by surrender
of a certificate or certificates for the shares so to be converted to the
Corporation at its principal office (or such other office or agency of the
Corporation as the Corporation may designate by notice in writing to the
holder or holders of the Series D Preferred Stock) at any time during its
usual business hours on the date set forth in such notice, together with a
statement of the name or names (with address) in which the certificate or
certificates for shares of Common Stock shall be issued.
5B Automatic Conversion. In the event that, at any time while
any shares of the Series D Preferred Stock shall be outstanding, the
Corporation shall complete a firm commitment public offering involving the
sale by the Corporation of shares of Common Stock (i) at a per share price
to the public of not less than $19.50 (appropriately adjusted for any
stock splits, combinations or stock dividends or other events set forth in
paragraphs 5E, 5F and 5G), and (ii) in which the net proceeds paid by the
public to the Corporation are at least $25,000,000 (the "Qualified Public
Offering"), then all outstanding shares of the Series D Preferred Stock
shall, automatically and without further action on the part of the holders
of the Series D Preferred Stock, be converted into shares of Common Stock
in accordance with the terms of this paragraph 5 with the same effect as
if the certificates evidencing such shares had been surrendered for
conversion, such conversion to be effective simultaneously with the
closing of such public offering, provided, however, that certificates
evidencing the shares of Common Stock issuable upon such conversion shall
not be issued except on surrender of the certificates for the shares of
the Series D Preferred Stock so converted.
5C Issuance of Certificates; Time Conversion Effected.
Promptly after the receipt of the written notice referred to in
subparagraph 5A(2) and surrender of the certificate or certificates for
the share or shares of Series D Preferred Stock to be converted, the
Corporation shall issue and deliver, or cause to be issued and delivered,
to the holder, registered in such name or names as such holder may direct,
a certificate or certificates for the number of whole shares of Common
Stock issuable upon the conversion of such share or shares of Series D
Preferred Stock. To the extent permitted by law, such conversion shall be
deemed to have been effected, and the Series D Conversion Price shall be
determined, as of the close of business on the date on which such written
notice shall have been received by the Corporation and the certificate or
5
<PAGE>
certificates for such share or shares shall have been surrendered as
aforesaid, and at such time the rights of the holder of such share or
shares of Series D Preferred Stock shall cease, and the person or persons
in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares of Common Stock
represented thereby.
5D Fractional Shares; Dividends; Partial Conversion. No
fractional shares may be issued upon conversion of the Series D Preferred
Stock into Common Stock. At the time of each conversion, the Corporation
shall pay in cash an amount equal to all dividends, if any, declared and
unpaid on the shares surrendered for conversion to the date upon which
such conversion is deemed to take place as provided in subparagraph 5C.
Unless dividends have been declared by the Board of Directors of the
Corporation and remain unpaid by the Corporation, the holders of Series D
Preferred Stock will not be entitled to accrued and unpaid dividends upon
conversion thereof. In case the number of shares of Series D Preferred
Stock represented by the certificate or certificates surrendered pursuant
to subparagraph 5C exceeds the number of shares converted, the Corporation
shall, upon such conversion, execute and deliver to the holder thereof, at
the expense of the Corporation, a new certificate or certificates for the
number of shares of Series D Preferred Stock represented by the
certificate or certificates surrendered which are not to be converted. If
any fractional interest in a share of Common Stock would, except for the
provisions of the first sentence of this subparagraph 5D, be deliverable
upon any such conversion, the Corporation, in lieu of delivering the
fractional share thereof, shall pay to the holder surrendering the Series
D Preferred Stock for conversion an amount in cash equal to the current
market price of such fractional interest as determined in good faith by
the Board of Directors of the Corporation.
5E Adjustment of Price Upon Issuance of Common Stock. Except
as provided in subparagraph 5H hereof, if and whenever the Corporation
shall issue or sell, or is in accordance with subparagraphs 5E(1) through
5E(7) deemed to have issued or sold, any shares of its Common Stock for a
consideration per share less than the Series D Conversion Price in effect
immediately prior to the time of such issue or sale, then, forthwith, the
Series D Conversion Price shall be reduced to the price (calculated to the
nearest cent) determined by dividing (x) an amount equal to the sum of (1)
the number of shares of Common Stock outstanding immediately prior to such
issue or sale (including as outstanding all shares of Common Stock
issuable upon conversion of outstanding Convertible Securities (as defined
below)) multiplied by the then existing Series D Conversion Price, and (2)
the consideration, if any, received by the Corporation upon such issue or
sale, by (y) the total number of shares of Common Stock outstanding
immediately after such issue or sale (including as outstanding all shares
of Common Stock issuable upon conversion of outstanding Convertible
Securities without giving effect to any adjustment in the number of shares
so issuable by reason of such issue or sale).
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For purposes of this subparagraph 5E, the following
subparagraphs 5E(1) to 5E(7) shall also be applicable:
5E(1) Issuance of Rights or Options. (a) In case at any time
after the date hereof the Corporation shall in any manner grant any rights
to subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock or securities convertible into or exchangeable
for Common Stock (such rights or options being herein called "Options" and
such convertible or exchangeable stock or securities, including Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock, being herein called "Convertible Securities")
whether or not such Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the price per
share for which Common Stock is issuable upon the exercise of such Options
or upon conversion or exchange of such Convertible Securities (determined
by dividing (i) the total amount, if any, received or receivable by the
Corporation as consideration for the granting of such Options, plus the
minimum aggregate amount of additional consideration payable to the
Corporation upon the exercise of all such Options, plus, in the case of
such Options which relate to Convertible Securities, the minimum aggregate
amount of additional consideration, if any, payable upon the issue or sale
of such Convertible Securities and upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon the conversion or
exchange of all such Convertible Securities issuable upon the exercise of
such Options) shall be less than the Series D Conversion Price in effect
immediately prior to the time of the granting of such Options, then for
purposes of calculating the adjusted Series D Conversion Price the total
maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon conversion or exchange of the total maximum amount of
such Convertible Securities issuable upon the exercise of such Options
shall be deemed to have been issued for such price per share as of the
date of granting of such Options and thereafter shall be deemed to be
outstanding. Except as otherwise provided in subparagraph 5E(3), no
adjustment of the Series D Conversion Price shall be made upon the actual
issue of such Common Stock or of such Convertible Securities upon exercise
of such Options or upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities.
5E(2) Issuance of Convertible Securities. In case the
Corporation shall in any manner issue (whether directly or by assumption
in a merger or otherwise) or sell any Convertible Securities, whether or
not the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which Common Stock is issuable
upon such conversion or exchange (determined by dividing (i) the total
amount received or receivable by the Corporation as consideration for the
issue or sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Corporation
upon the conversion or exchange thereof, by (ii) the total maximum number
of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than the Series D Conversion
Price in effect immediately prior to the time of such issue or sale, then
for purposes of adjusting
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<PAGE>
the Series D Conversion Price, the total maximum number of shares of
Common Stock issuable upon conversion or exchange of all such Convertible
Securities shall be deemed to have been issued for such price per share as
of the date of the issue or sale of such Convertible Securities and
thereafter shall be deemed to be outstanding, provided that (a) except as
otherwise provided in subparagraph 5E(3) below, no adjustment of the
Series D Conversion Price shall be made upon the actual issue of such
Common Stock upon conversion or exchange of such Convertible Securities,
and (b) if any such issue or sale of such Convertible Securities is made
upon exercise of any Option to purchase any such Convertible Securities
for which adjustments of the Series D Conversion Price have been or are to
be made pursuant to other provisions of this subparagraph 5D, no further
adjustment of the Series D Conversion Price shall be made by reason of
such issue or sale.
5E(3) Change in Option Price or Conversion Rate. If (i) the
purchase price provided for in any Option referred to in subparagraph
5E(1), (ii) the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
subparagraph 5E(1) or 5E(2) or (iii) the rate at which any Convertible
Securities referred to in subparagraph 5E(1) or 5E(2) are convertible into
or exchangeable for Common Stock shall change at any time (in each case
other than under or by reason of provisions designed to protect against
dilution), then the Series D Conversion Price in effect at the time of
such event shall, as required, forthwith be readjusted to such Series D
Conversion Price which would have been in effect at such time had such
Options or Convertible Securities still outstanding provided for such
changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold; and on the
expiration of any such Option or the termination of any such right to
convert or exchange such Convertible Securities, the Series D Conversion
Price then in effect hereunder shall, as required, forthwith be increased
to the Series D Conversion Price which would have been in effect at the
time of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such expiration
or termination, never been issued, and the Common Stock issuable
thereunder shall no longer be deemed to be outstanding. If the purchase
price provided for in any such Option referred to in subparagraph 5E(1) or
the rate at which any Convertible Securities referred to in subparagraph
5E(1) or 5E(2) are convertible into or exchangeable for Common Stock shall
be reduced at any time under or by reason of provisions with respect
thereto designed to protect against dilution, then, in case of the
delivery of Common Stock upon the exercise of any such Option or upon
conversion or exchange of any such Convertible Securities, the Series D
Conversion Price then in effect hereunder shall, as required, forthwith be
adjusted to such respective amount as would have been obtained had such
Option or Convertible Securities never been issued as to such Common Stock
and had adjustments been made upon the issuance of the shares of Common
Stock delivered as aforesaid, but only if as a result of such adjustment
the Series D Conversion Price then in effect hereunder is thereby reduced.
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5E(4) Stock Dividends. In case the Corporation shall declare a
dividend or make any other distribution upon any securities of the
Corporation payable in Common Stock, Options or Convertible Securities,
any Common Stock, Options or Convertible Securities, as the case may be,
issuable in payment of such dividend or distribution shall be deemed to
have been issued or sold without consideration, and the Series D
Conversion Price shall be reduced as if the Corporation had subdivided its
outstanding shares of Common Stock into a greater number of shares, as
provided in subparagraph 5F hereof.
5E(5) Consideration for Stock. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for cash,
the consideration received therefor shall be deemed to be the amount
received by the Corporation therefor, without deduction therefrom of any
expenses incurred or any underwriting commissions or concessions paid or
allowed by the Corporation in connection therewith. In case any shares of
Common Stock, Options or Convertible Securities shall be issued or sold
for a consideration other than cash, the amount of the consideration other
than cash received by the Corporation shall be deemed to be the fair value
of such consideration as determined in good faith by the Board of
Directors of the Corporation, without deduction therefrom of any expenses
incurred or any underwriting commissions or concessions paid or allowed by
the Corporation in connection therewith. In case any Options shall be
issued in connection with the issue and sale of other securities of the
Corporation, together comprising one integral transaction in which no
specific consideration is allocated to such Options by the Corporation,
such Options shall be deemed to have been issued without consideration,
and the Series D Conversion Price shall be reduced as if the Corporation
had subdivided its outstanding shares of Common Stock into a greater
number of shares, as provided in subparagraph 5F hereof.
5E(6) Record Date. In case the Corporation shall take a record
of the holders of its Common Stock for the purpose of entitling them (i)
to receive a dividend or other distribution payable in Common Stock,
Options or Convertible Securities, or (ii) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of
Common Stock deemed to have been issued or sold upon the declaration of
such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be,
provided that such shares of Common Stock shall in fact have been issued
or sold.
5E(7) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or
for the account of the Corporation, and the disposition of any such shares
shall be considered an issue or sale of Common Stock for the purposes of
this subparagraph 5E.
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5F Subdivision or Combination of Stock. In case the
Corporation shall at any time subdivide its outstanding shares of Common
Stock into a greater number of shares, the Series D Conversion Price in
effect immediately prior to such subdivision shall be proportionately
reduced, and conversely, in case the outstanding shares of Common Stock of
the Corporation shall be combined into a smaller number of shares, the
Series D Conversion Price in effect immediately prior to such combination
shall be proportionately increased.
5G Cash or Extraordinary Dividend. If the Corporation shall,
by dividend or otherwise, distribute to holders of its Junior Securities,
Parity Securities or Convertible Securities evidences of its indebtedness,
cash or other assets (but excluding any dividends or distributions which
change the total number of shares of Common Stock outstanding) (the
"Distribution") then in each such case, the Series D Conversion Price
shall be reduced to the price determined by dividing (x) an amount equal
to the difference between (1) the total number of shares of Common Stock
outstanding (including as outstanding all shares of Common Stock issuable
upon conversion of outstanding Series A Preferred Stock, Series B
Preferred Stock and Series D Preferred Stock) multiplied by the then
existing Series D Conversion Price, and (2) fair market value of the
Distribution, by (y) the total number of shares of Common Stock
outstanding (including as outstanding all shares of Common Stock issuable
upon conversion of outstanding Series A Preferred Stock, Series B
Preferred Stock and Series D Preferred Stock); provided, however, no
adjustment in Series D Conversion Price shall be made if the Distribution
is made to the holders of Series D Preferred Stock.
5H Certain Issues of Securities Excepted. Anything herein to
the contrary notwithstanding, the Corporation shall not be required to
make any adjustment of the Series D Conversion Price upon the occurrence
of any of the following events: (i) the issuance of capital stock upon
conversion of outstanding shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock or
other options, warrants and other securities exercisable for or
convertible into shares of Common Stock, Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock
and which are issued and outstanding as of the date of issuance of the
Series D Preferred Stock, (ii) the issuance and sale of, or grant of
options to purchase, shares of Common Stock pursuant to the Corporation's
1997 Stock Incentive Plan; (iii) the issuance of one or more warrants to
Ernst & Young U.S. LLP (the "E&Y Warrants") for the purchase of up to
192,308 shares of Series C Preferred Stock and 1,128,000 shares of Series
D Preferred Stock, or the issuance of any shares of Preferred Stock or
Common Stock underlying such warrants; and (iv) the issuance of one or
more warrants to the holders of the Series C Preferred Stock for the
purchase of up to 160,000 shares of Series D Preferred Stock, or the
issuance of any shares of Preferred Stock or Common Stock underlying such
warrants, in each case as adjusted for stock splits, combinations, stock
dividends, anti-dilution adjustments and other similar events.
10
<PAGE>
5I Reorganization, Reclassification, Consolidation, Merger or
Sale. If any capital reorganization or reclassification of the capital
stock of the Corporation or any consolidation or merger of the Corporation
with another corporation, or the sale of all or substantially all of its
assets to another corporation shall be effected in such a way (including,
without limitation, by way of consolidation or merger) that holders of
Common Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful
and adequate provisions shall be made whereby each holder of a share or
shares of Series D Preferred Stock shall thereafter have the right to
receive, upon the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock of the Corporation immediately
theretofore receivable upon the conversion of such shares or shares of the
Series D Preferred Stock, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of
such stock immediately theretofore so receivable had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in
any such case appropriate provision shall be made with respect to the
rights and interests of such holder to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Series D
Conversion Price) shall thereafter be applicable, as nearly practicable,
in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of such conversion rights (including, if
necessary to effect the adjustments contemplated herein, an immediate
adjustment in the manner set forth herein, by reason of such
reorganization, reclassification, consolidation, merger or sale, of the
Series D Conversion Price to the value for the Common Stock reflected by
the terms of such reorganization, reclassification, consolidation, merger
or sale if the value so reflected is less than the Series D Conversion
Price in effect immediately prior to such reorganization,
reclassification, consolidation, merger or sale). In the event of a merger
or consolidation of the Corporation as a result of which a greater or
lesser number of shares of common stock of the surviving corporation is
issuable to holders of Common Stock of the Corporation outstanding
immediately prior to such merger or consolidation, the Series D Conversion
Price in effect immediately prior to such merger or consolidation shall be
adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock of the Corporation.
The Corporation will not effect any such consolidation or merger, or any
sale of all or substantially all of its assets and properties, unless
prior to the consummation thereof the successor corporation (if other than
the Corporation) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument,
executed and mailed or delivered to each holder of shares of Series D
Preferred Stock at the last address of such holder appearing on the books
of the Corporation, the obligation to deliver to such holder such shares
of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to receive.
5J Notice of Adjustment. Upon any adjustment of the Series D
Conversion Price, then and in each such case the Corporation shall give
written notice thereof, by first class mail, postage prepaid, addressed to
each holder of shares of Series
11
<PAGE>
D Preferred Stock at the address of such holder as shown on the books of
the Corporation, which notice shall state the Series D Conversion Price
resulting from such adjustment, setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based.
5K Other Notices. In case at any time:
(1) the Corporation shall declare any dividend upon its Common
Stock payable in cash or stock or make any other distribution to the
holders of its Common Stock;
(2) the Corporation shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of
any class or other rights;
(3) there shall be any capital reorganization or
reclassification of the capital stock of the Corporation, or a
consolidation or merger of the Corporation with, or a sale of all or
substantially all its assets to, another corporation, or any
acquisition of "beneficial ownership" by any "person" or "group" of
voting stock of the Corporation representing more than 50% of the
voting power of all outstanding shares of such voting stock, whether
by way of merger or consolidation or otherwise;
(4) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; or
(5) the Corporation shall take any action or there shall be
any event which would result in an automatic conversion of the
Series D Preferred Stock pursuant to subparagraph 5B,
then, in any one or more of said cases, the Corporation shall give, by
first class mail, postage prepaid, addressed to each holder of any shares
of Series D Preferred Stock at the address of such holder as shown on the
books of the Corporation, (a) at least 10 days' prior written notice of
the date on which the books of the Corporation shall close or a record
shall be taken for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least 10 days' prior written notice of the date when the same shall take
place, and (c) in the case of any event which would result in an automatic
conversion of the Series D Preferred Stock pursuant to subparagraph 5B, at
least 10 days' prior written notice of the date on which the same is
expected to be completed. Such notice in accordance with the foregoing
clause (a) shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of
Common Stock shall be entitled thereto, and such notice in accordance with
the foregoing clause (b) shall also specify the date on which the holders
of Common Stock shall be entitled to
12
<PAGE>
exchange their Common Stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be.
5L Stock to be Reserved. The Corporation will at all times
reserve and keep available out of its authorized Common Stock or its
treasury shares, solely for the purpose of issue upon the conversion of
the Series D Preferred Stock as herein provided, such number of shares of
Common Stock as shall then be issuable upon the conversion of all
outstanding shares of Series D Preferred Stock. The Corporation covenants
that all shares of Common Stock which shall be so issued shall be duly and
validly issued and fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof and, without limiting
the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that
the par value per share of the Common Stock is at all times equal to or
less than the effective Series D Conversion Price. The Corporation will
take all such action as may be necessary to assure that all such shares of
Common Stock may be so issued without violation of any applicable law or
regulation, or of any requirements of any national securities exchange
upon which the Common Stock of the Corporation may be listed. The
Corporation will not take any action which results in any adjustment of
the Series D Conversion Price if the total number of shares of Common
Stock issued and issuable after such action upon conversion of the Series
D Preferred Stock would exceed the total number of shares of Common Stock
then authorized by the Corporation's Certificate of Incorporation.
5M No Reissuance of Preferred Stock. Shares of Series D
Preferred Stock which are converted into shares of Common Stock as
provided herein shall not be reissued.
5N Issue Tax. The issuance of certificates for shares of
Common Stock upon conversion of the Series D Preferred Stock shall be made
without charge to the holders thereof for any issuance tax in respect
thereof, provided that the Corporation shall not be required to pay any
tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
holder of the Series D Preferred Stock which is being converted.
5O Closing of Books. The Corporation will at no time close its
transfer books against the transfer of any Series D Preferred Stock or of
any shares of Common Stock issued or issuable upon the conversion of any
shares of Series D Preferred Stock in any manner which interferes with the
timely conversion of such Series D Preferred Stock.
5P Definition of Common Stock. As used in this Section 5, the
term "Common Stock" shall mean and include the Corporation's authorized
Common Stock, par value $.01 per share, and shall also include any capital
stock of any class of the Corporation thereafter authorized that shall not
be limited to a fixed sum or percentage of
13
<PAGE>
par value in respect of the rights of the holders thereof to participate
in dividends or in the distribution of assets upon the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation;
provided, however, that such term, when used to describe the securities
receivable upon conversion of shares of the Series D Preferred Stock of
the Corporation, shall include only shares designated as Common Stock of
the Corporation on the date of filing of this Certificate, any shares
resulting from any combination or subdivision thereof referred to in
Section 5F, or in case of any reorganization or reclassification of the
outstanding shares thereof, the stock, securities or assets provided for
in Section 5H.
6. Voting. Except as otherwise required by law, the
Corporation's Certificate of Incorporation or this Certificate of
Designation, the holders of the Series D Preferred Stock, together with
the holders of Common Stock, shall be entitled to notice of any
stockholders meeting in accordance with the By-laws of the Corporation and
to vote upon any matter submitted to the stockholders for a vote as
follows: (i) the holders of Series D Preferred Stock shall have one vote
for each full share of Common Stock into which their respective shares of
Series D Preferred Stock are convertible on the record date for the vote
and (ii) the holders of Common Stock shall have one vote per share of
Common Stock.
7. Restrictions. At any time when shares of Series D Preferred
Stock are outstanding, except where the vote or written consent of the
holders of a greater number of shares of the Corporation is required by
law or by the Certificate of Incorporation of the Corporation, and in
addition to any other vote required by law:
Without the prior consent of the holders of a majority in
interest of the outstanding Series C Preferred Stock and Series D
Preferred Stock, voting as a single class, given in person or by proxy,
either in writing or at a meeting called for that purpose:
(1) The Corporation will not (i) create or authorize the
creation of any additional class or series of shares which ranks senior to
the Series D Preferred Stock as to the distribution of assets upon the
liquidation, dissolution or winding up of the Corporation, or (ii)
increase the authorized amount of the Series A Preferred Stock, the Series
B Preferred Stock, the Series C Preferred Stock or the Series D Preferred
Stock.
(2) The Corporation will not issue debt in excess of the
Corporation's net worth.
(3) The Corporation will not engage in any business other than
that described in a business plan submitted to and approved by the Board
of Directors of the Corporation or approved subsequently thereto by the
Board of Directors.
(4) The Corporation will not engage in any transaction with
any affiliate, except on an arms-length basis as approved by a majority of
the non-interested directors voting on such matter.
14
<PAGE>
(5) The Corporation will not dispose of or transfer assets
other than in the ordinary course of business; or merge or consolidate
with any other entity; or liquidate or dissolve.
(6) The Corporation will not amend, alter or repeal this
Certificate of Designation, the Amended Certificate of Designation for the
Series A Preferred Stock in effect as of December 17, 1997 and the Amended
Certificates of Designation for the Series B Preferred Stock and the
Series C Preferred Stock in effect as of the date hereof.
(7) The Corporation will not alter, amend or repeal its
Certificate of Incorporation.
In addition, without the prior consent of the holders of a
majority in interest of the outstanding Series D Preferred Stock, given in
person or by proxy, either in writing or at a meeting called for that
purpose:
(8) The Corporation will not alter in any way adverse to the
holders thereof the enfranchisement, privileges or preferences of the
Series D Preferred Stock.
(9) The Corporation will not issue any shares of Series D
Preferred Stock, other than pursuant to the E&Y Warrants or pursuant to
160,000 warrants issued to the holders of the Company's Series C Preferred
Stock.
(10) So long as Ernst & Young U.S. LLP or an affiliate thereof
or successor thereto owns at least 660,000 shares of the Company's Common
Stock (as adjusted for stock splits, combinations, stock dividends,
anti-dilution adjustments and other similar events), the Corporation will
not engage in any material transaction out of the ordinary course of
business, including a merger, consolidation, joint venture, partnership or
co-marketing arrangement with Arthur Andersen LLP, KPMG Peat Marwick LLP,
PriceWaterhouse Coopers LLP, or Deloitte & Touche LLP or an affiliate
thereof or successor thereto. As used in this paragraph, "ordinary course
of business" includes providing services to parties directly in
substantially the same manner as the services are provided generally.
(11) The Corporation shall not sell any securities to, or
enter into any other transaction with, any audit or attest client of E&Y
or any officer, director, shareholder, partner, affiliate of or other
person or entity that has a relationship with, any such E&Y audit or
attest client where such sale would result in E&Y's not being deemed
"independent" for audit purposes with respect to such client.
15
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designation has been
executed by the Corporation by its President, Mark S. Adams, this 13 day of
April, 1999.
INTRALINKS, INC.
By: /s/ Mark S. Adams
------------------------------------
Mark S. Adams
President
16
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 06/30/1999
991268070 - 2633827
AMENDMENT TO CERTIFICATE OF DESIGNATIONS
OF
SERIES C PREFERRED STOCK
OF
INTRALINKS INC.
Pursuant to Section 151 of
the Delaware General Corporation Law
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is IntraLinks, Inc.
2. Section 1 of the Certificate of Designations is hereby amended
and restated in its entirety as follows:
"1. Rank. The Series C Preferred Stock will, with respect to
dividend rights and rights on liquidation, winding-up, dissolution,
redemption and rank (i) on a parity with the Corporation's Series D
Convertible Preferred Stock, $.01 par value ("Series D Preferred Stock")
and the Corporation's Series E Convertible Preferred Stock, $.01 par value
("Series E Preferred Stock") and (ii) senior to all classes of Common
Stock and to the Corporation's Series A Convertible Preferred Stock, $.01
par value ("Series A Preferred Stock"), and Series B Convertible Preferred
Stock, $.01 par value ("Series B Preferred Stock"), and to each other
class or series of the Corporation's capital stock, including any series
of preferred stock, established hereafter by the Board of Directors, the
terms of which do not expressly provide that it ranks senior to, or on a
parity with, the Series C Preferred Stock as to dividend rights and rights
on liquidation, winding-up and dissolution of the Corporation
(collectively referred to, together with all classes of Common Stock,
Series A Preferred Stock, and Series B Preferred Stock, as "Junior
Securities").
3. Section 2(b) of the Certificate of Designations is hereby amended
and restated in its entirety as follows:
"(b) As long as any shares of Series C Preferred Stock shall remain
outstanding, in no event shall any dividends be declared or paid
<PAGE>
upon, nor shall any distribution be made upon, any shares of Junior
Securities, nor (without the consent of the holders of a majority in
interest of the outstanding Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock, voting as a single class) shall any
shares of Junior Securities be purchased or redeemed by the Corporation,
nor shall any monies be paid to or made available for a sinking fund for
the purchase or redemption of shares of any Junior Securities, unless, in
each such case, (i) full cumulative dividends on the outstanding shares of
Series C Preferred Stock shall have been declared and paid and (ii) any
arrears or defaults in any redemption of shares of Series C Preferred
Stock shall have been cured. In the event that the Corporation shall at
any time pay a dividend on any securities issued by the Corporation which
are on a parity with Series C Preferred Stock ("Parity Securities"), it
shall, at the same time, pay to each holder of Series C Preferred Stock
(in addition to any payment such holder is entitled to receive pursuant to
paragraph 2(a) above), a dividend equal to the dividend payable to such
holder of shares of Parity Securities."
4. The following language is hereby added as Section 3D of the
Certificate of Designations:
3D If the assets to be distributed are insufficient to
permit the payment to holders of the Series C Preferred Stock,
holders of the Series D Preferred Stock and holders of the Series E
Preferred Stock of their full Redemption Prices, the entire assets
and property legally available for distribution shall be distributed
ratably among the holders of Series C Preferred Stock, Series D
Preferred Stock and Series E Preferred Stock in proportion to the
full Redemption Price each such holder is otherwise entitled to
receive.
5. The following language is hereby added as Section 4(d) of the
Certificate of Designations:
(d) If the assets to be distributed are insufficient to
permit the payment to holders of the Series C
Preferred Stock, holders of the Series D Preferred
Stock and holders of the Series E Preferred Stock of
their full preferential amounts, the entire assets and
property legally available for distribution shall be
distributed ratably among the holders of Series C
Preferred Stock, the Series D Preferred Stock and
Series E Preferred Stock in proportion to the full
preferential amount each such holder is otherwise
entitled to receive.
2
<PAGE>
6. Section 5E(1) of the Certificate of Designation is hereby amended
and restated in its entirety as follows:
5E(1) Issuance of Rights or Options. (a) In case at any time
after the date hereof the Corporation shall in any manner grant any
rights to subscribe for or to purchase, or any options for the purchase
of, Common Stock or any stock or securities convertible into or
exchangeable for Common Stock (such rights or options being herein called
"Options" and such convertible or exchangeable stock or securities,
including Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock and Series E Preferred Stock.
being herein called "Convertible Securities") whether or not such Options
or the right to convert or exchange any such Convertible Securities are
immediately exercisable, and the price per share for which Common Stock is
issuable upon the exercise of such Options or upon conversion or exchange
of such Convertible Securities (determined by dividing (i) the total
amount, if any, received or receivable by the Corporation as consideration
for the granting of such Options, plus the minimum aggregate amount of
additional consideration payable to the Corporation upon the exercise of
all such Options, plus, in the case of such Options which relate to
Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such Convertible
Securities and upon the conversion or exchange thereof, by (ii) the total
maximum number of shares of Common Stock issuable upon the exercise of
such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options) shall be less than
the Series C Conversion Price in effect immediately prior to the time of
the granting of such Options, then for purposes of calculating the
adjusted Series C Conversion Price the total maximum number of shares of
Common Stock issuable upon the exercise of such Options or upon conversion
or exchange of the total maximum amount of such Convertible Securities
issuable upon the exercise of such Options shall be deemed to have been
issued for such price per share as of the date of granting of such Options
and thereafter shall be deemed to be outstanding. Except as otherwise
provided in subparagraph 5E(3), no adjustment of the Series C Conversion
Price shall be made upon the actual issue of such Common Stock or of such
Convertible Securities upon exercise of such Options or upon the actual
issue of such Common Stock upon conversion or exchange of such Convertible
Securities.
7. Section 5G of the Certificate of Designation is hereby amended
and restated in its entirety as follows:
5G Cash or Extraordinary Dividend. If the Corporation shall,
by dividend or otherwise, distribute to holders of its Junior Securities,
Parity Securities or Convertible Securities evidences of its indebtedness,
cash or other assets (but excluding any dividends or distributions which
change the total number of shares of Common Stock outstanding) (the
"Distribution") then in each such case, the Series C Conversion Price
shall be reduced to the price determined by dividing (x) an amount equal
to the difference between (1) the total number of shares of Common Stock
outstanding (including as outstanding all shares of Common Stock issuable
upon conversion of outstanding Series
3
<PAGE>
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and Series E Preferred Stock) multiplied by the
then existing Series C Conversion Price, and (2) fair market value of the
Distribution, by (y) the total number of shares of Common Stock
outstanding (including as outstanding all shares of Common Stock issuable
upon conversion of outstanding Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock and
Series E Preferred Stock); provided, however, no adjustment in Series C
Conversion Price shall be made if the Distribution is made to the holders
of Series C Preferred Stock.
8. Section 5H of the Certificate of Designations is hereby amended
and restated in its entirety as follows:
"5H Certain Issues of Securities Excepted. Anything herein to the
contrary notwithstanding, the Corporation shall not be required to
make any adjustment of the Series C Conversion Price upon the
occurrence of any of the following events: (i) the issuance of
capital stock upon conversion of outstanding shares of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock or Series E Preferred Stock or other
options, warrants and other securities exercisable for or
convertible into shares of Common Stock, Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock or Series E Preferred Stock and which are issued and
outstanding as of the date of filing of the Certificate of
Designations for the Series E Preferred Stock, (ii) the issuance and
sale of, or grant of options to purchase, shares of Common Stock
pursuant to the Corporation's 1997 Stock Incentive Plan; (iii) the
issuance of warrants to Ernst & Young U.S. LLP ("E&Y") for the
purchase of up to 192,308 shares of Series C Preferred Stock (the
"E&Y Warrants") and 1,128,000 shares of Series D Preferred Stock, or
the issuance of any shares of Preferred Stock or Common Stock
underlying such warrants; and the issuance to the holders of the
Series C Preferred Stock of warrants the purchase of up to 160,000
shares of Series D Preferred Stock, or the issuance of any shares of
Preferred Stock or Common Stock underlying such warrants, in each
case as adjusted for stock splits, combinations, stock dividends,
anti-dilution adjustments and other similar events."
9. The second paragraph and subsection (1) of Section 7 of the
Certificate of Designations are hereby amended and restated in its entirety as
follows:
"Without the prior consent of the holders of a majority in interest
of the outstanding Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock, voting as a single class, given
in person or by proxy, either in writing or at a meeting called for
that purpose:
4
<PAGE>
(1) The Corporation will not (i) create or authorize the
creation of any additional class or series of shares which ranks
senior to the Series C Preferred Stock as to the distribution of
assets upon the liquidation, dissolution or winding up of the
Corporation, or (ii) increase the authorized amount of the Series A
Preferred Stock, the Series B Preferred Stock, the Series C
Preferred Stock, the Series D Preferred Stock or the Series E
Preferred Stock."
10. All other terms and provisions of the Certificate of
Designations shall remain in full force and effect.
11. The Amendment to Certificate of Designations of the Corporation
herein certified has been duly adopted, pursuant to the provisions of Section
242 and 228 of the General Corporation Law of the State of Delaware.
5
<PAGE>
IN WITNESS WHEREOF, this Amendment to Certificate of Designation has
been executed by the Corporation by its President, Mark S. Adams, this 30th day
of June, 1999.
INTRALINKS, INC.
By: /s/ Mark S. Adams
------------------------------------
Mark S. Adams
President
6
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:01 AM 06/30/1999
991268071 - 2633827
AMENDMENT TO CERTIFICATE OF DESIGNATIONS
OF
SERIES D PREFERRED STOCK
OF
INTRALINKS INC.
Pursuant to Section 151 of
the Delaware General Corporation Law
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is IntraLinks, Inc.
2. Section 1 of the Certificate of Designations is hereby amended
and restated in its entirety as follows:
"1. Rank. The Series D Preferred Stock will, with respect to
dividend rights and rights on liquidation, winding-up, dissolution,
redemption and rank (i) on a parity with the Corporation's Series C
Convertible Preferred Stock, $.01 par value ("Series C Preferred Stock")
and the Corporation's Series E Convertible Preferred Stock, $.01 par value
("Series E Preferred Stock') and (ii) senior to all classes of Common
Stock and to the Corporation's Series A Convertible Preferred Stock, $.01
par value ("Series A Preferred Stock"), and Series B Convertible Preferred
Stock, $.01 par value ("Series B Preferred Stock"), and to each other
class or series of the Corporation's capital stock, including any series
of preferred stock, established hereafter by the Board of Directors, the
terms of which do not expressly provide that it ranks senior to, or on a
parity with, the Series D Preferred Stock as to dividend rights and rights
on liquidation, winding-up and dissolution of the Corporation
(collectively referred to, together with all classes of Common Stock,
Series A Preferred Stock, and Series B Preferred Stock, as "Junior
Securities").
3. Section 2(b) of the Certificate of Designations is hereby amended
and restated in its entirety as follows:
"(b) As long as any shares of Series D Preferred Stock shall remain
outstanding, in no event shall any dividends be declared or paid upon, nor
shall any distribution be made upon, any shares of Junior
<PAGE>
Securities, nor (without the consent of the holders of a majority in
interest of the outstanding Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock, voting as a single class) shall any
shares of Junior Securities be purchased or redeemed by the Corporation,
nor shall any monies be paid to or made available for a sinking fund for
the purchase or redemption of shares of any Junior Securities, unless, in
each such case, (i) full cumulative dividends on the outstanding shares of
Series D Preferred Stock shall have been declared and paid and (ii) any
arrears or defaults in any redemption of shares of Series D Preferred
Stock shall have been cured. In the event that the Corporation shall at
any time pay a dividend on any securities issued by the Corporation which
are on a parity with Series D Preferred Stock ("Parity Securities"), it
shall, at the same time, pay to each holder of Series D Preferred Stock
(in addition to any payment such holder is entitled to receive pursuant to
paragraph 2(a) above), a dividend equal to the dividend payable to such
holder of shares of Parity Securities."
4. The following language is hereby added as Section 3D of the
Certificate of Designations:
3D If the assets to be distributed are insufficient to
permit the payment to holders of the Series C Preferred Stock,
holders of the Series D Preferred Stock and holders of the Series E
Preferred Stock of their full Redemption Prices, the entire assets
and property legally available for distribution shall be distributed
ratably among the holders of Series C Preferred Stock, Series D
Preferred Stock and Series E Preferred Stock in proportion to the
full Redemption Price each such holder is otherwise entitled to
receive.
5. The following language is hereby added as Section 4(d) of the
Certificate of Designation:
(d) If the assets to be distributed are insufficient to
permit the payment to holders of the Series C
Preferred Stock, holders of the Series D Preferred
Stock and holders of the Series E Preferred Stock of
their full preferential amounts, the entire assets and
property legally available for distribution shall be
distributed ratably among the holders of Series C
Preferred Stock, the Series D Preferred Stock and
Series E Preferred Stock in proportion to the full
preferential amount each such holder is otherwise
entitled to receive.
6. Section 5E(1) of the Certificate of Designation is hereby amended
and restated in its entirety as follows:
2
<PAGE>
5E(1) Issuance of Rights or Options. (a) In case at any time
after the date hereof the Corporation shall in any manner grant any rights
to subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock or securities convertible into or exchangeable
for Common Stock (such rights or options being herein called "Options" and
such convertible or exchangeable stock or securities, including Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and Series E Preferred Stock, being herein called
"Convertible Securities") whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable
upon the exercise of such Options or upon conversion or exchange of such
Convertible Securities (determined by dividing (i) the total amount, if
any, received or receivable by the Corporation as consideration for the
granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Corporation upon the exercise of all such
Options, plus, in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and
upon the conversion or exchange thereof, by (ii) the total maximum number
of shares of Common Stock issuable upon the exercise of such Options or
upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Series
D Conversion Price in effect immediately prior to the time of the granting
of such Options, then for purposes of calculating the adjusted Series D
Conversion Price the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange
of the total maximum amount of such Convertible Securities issuable upon
the exercise of such Options shall be deemed to have been issued for such
price per share as of the date of granting of such Options and thereafter
shall be deemed to be outstanding. Except as otherwise provided in
subparagraph 5E(3), no adjustment of the Series D Conversion Price shall
be made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such Options or upon the actual issue of such
Common Stock upon conversion or exchange of such Convertible Securities.
7. Section 5G of the Certificate of Designation is hereby amended
and restated in its entirety as follows:
5G Cash or Extraordinary Dividend. If the Corporation shall,
by dividend or otherwise, distribute to holders of its Junior Securities,
Parity Securities or Convertible Securities evidences of its indebtedness,
cash or other assets (but excluding any dividends or distributions which
change the total number of shares of Common Stock outstanding) (the
"Distribution") then in each such case, the Series D Conversion Price
shall be reduced to the price determined by dividing (x) an amount equal
to the difference between (1) the total number of shares of Common Stock
outstanding (including as outstanding all shares of Common Stock issuable
upon conversion of outstanding Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and
Series E Preferred Stock) multiplied by the then existing Series D
Conversion Price, and (2) fair market value of the Distribution, by (y)
the total number of shares of
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Common Stock outstanding (including as outstanding all shares of Common
Stock issuable upon conversion of outstanding Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock); provided, however, no adjustment in
Series D Conversion Price shall be made if the Distribution is made to the
holders of Series D Preferred Stock.
8. Section 5H of the Certificate of Designations is hereby amended
and restated in its entirety as follows:
"5H Certain Issues of Securities Excepted. Anything herein to the
contrary notwithstanding, the Corporation shall not be required to
make any adjustment of the Series D Conversion Price upon the
occurrence of any of the following events: (i) the issuance of
capital stock upon conversion of outstanding shares of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock or Series E Preferred Stock or other
options, warrants and other securities exercisable for or
convertible into shares of Common Stock, Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock or Series E Preferred Stock and which are issued and
outstanding as of the date of filing of the Certificate of
Designations for the Series E Preferred Stock, (ii) the issuance and
sale of, or grant of options to purchase, shares of Common Stock
pursuant to the Corporation's 1997 Stock Incentive Plan; (iii) the
issuance of warrants to Ernst & Young U.S. LLP ("E&Y") for the
purchase of up to 192,308 shares of Series C Preferred Stock (the
"E&Y Warrants") and 1,128,000 shares of Series D Preferred Stock, or
the issuance of any shares of Preferred Stock or Common Stock
underlying such warrants; and the issuance to the holders of the
Series C Preferred Stock of warrants the purchase of up to 160,000
shares of Series D Preferred Stock, or the issuance of any shares of
Preferred Stock or Common Stock underlying such warrants, in each
case as adjusted for stock splits, combinations, stock dividends,
anti-dilution adjustments and other similar events."
9. The second paragraph and subsection (1) of Section 7 of the
Certificate of Designations are hereby amended and restated in its entirety as
follows:
"Without the prior consent of the holders of a majority in interest
of the outstanding Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock, voting as a single class, given
in person or by proxy, either in writing or at a meeting called for
that purpose:
(1) The Corporation will not (i) create or authorize the
creation of any additional class or series of shares which ranks
senior to the Series D Preferred Stock as to the distribution of
assets upon the liquidation, dissolution or winding up of the
Corporation, or (ii) increase the authorized amount of the Series A
Preferred Stock, the Series B
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Preferred Stock, the Series C Preferred Stock, the Series D
Preferred Stock or the Series E Preferred Stock."
10. All other terms and provisions of the Certificate of
Designations shall remain in full force and effect.
11. The Amendment to Certificate of Designations of the Corporation
herein certified has been duly adopted, pursuant to the provisions of Section
242 and 228 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, this Amendment to Certificate of Designation has
been executed by the Corporation by its President, Mark S. Adams, this 30th of
June, 1999.
INTRALINKS, INC.
By: /s/ Mark S. Adams
------------------------------------
Mark S. Adams
President
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STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:02 AM 06/30/1999
992268073 - 2633827
CERTIFICATE OF DESIGNATIONS
OF
SERIES E CONVERTIBLE PREFERRED STOCK
OF
INTRALINKS. INC.
Pursuant to Section 151 of
the Delaware General Corporation Law
INTRALINKS, INC., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:
That, pursuant to the authority vested in the Board of Directors of
the Corporation by Article FOURTH of the Certificate of Incorporation, as
amended, of the Corporation, and pursuant to the provisions of Section 151 of
the Delaware General Corporation Law, the Board of Directors of the Corporation,
at a meeting duly convened on June 25, 1999 duly adopted the following
resolution:
RESOLVED that, pursuant to the authority vested in the Board of
Directors of the Corporation by Article FOURTH of the Corporation's Restated
Certificate of incorporation, as amended, of the Preferred Stock, par value $.01
per share, of the Corporation ("Preferred Stock"), there shall be designated a
series of 1,068,890 shares which shall be issued in and constitute a single
series to be known as "Series E Convertible Preferred Stock" (hereinafter called
the "Series E Preferred Stock"). The shares of Series E Preferred Stock shall
have the voting powers, designations, preferences and other special rights, and
qualifications, limitations and restrictions thereof set forth below:
1. Rank. The Series E Preferred Stock will, with respect to
dividend rights and rights on liquidation, winding-up, dissolution,
redemption and rank (i) on a parity with the Corporation's Series C
Convertible Preferred Stock, $.01 par value ("Series C Preferred Stock"),
and the Corporation's Series D Convertible Preferred Stock, $.01 par value
("Series D Preferred Stock"), and (ii) senior to all classes of Common
Stock and to the Corporation's Series A Convertible Preferred Stock, $.01
par value ("Series A Preferred Stock"), and Series B Convertible Preferred
Stock, $.01 par value ("Series B Preferred Stock"), and to each other
class or series of the Corporation's capital stock, including any series
of preferred stock, established hereafter by the Board of Directors, the
terms of which do not expressly provide that it ranks senior to, or on a
parity with, the Series E Preferred Stock as to dividend rights and rights
on liquidation, winding-up and dissolution of the Corporation
(collectively referred to, together with all
<PAGE>
classes of Common Stock, Series A Preferred Stock, and Series B Preferred
Stock, as "Junior Securities").
2. Dividends. (a) The holders of shares of Series E Preferred
Stock shall be entitled to receive, out of funds legally available for
such purpose, cash dividends at the rate of $1.17 per share per annum,
payable as provided herein or when, as and if declared by the Board of
Directors of the Corporation. Such dividends shall be cumulative and shall
accrue from and after the date of issue whether or not declared and
whether or not there are any funds of the Corporation legally available
for the payment of dividends. Accrued but unpaid dividends shall not bear
interest. The Board of Directors of the Corporation may fix a record date
for the determination of holders of Series E Preferred Stock entitled to
receive payment of a dividend declared thereon, which record date shall
be no more than 60 days prior to the date fixed for the payment thereof.
(b) As long as any shares of Series E Preferred Stock shall
remain outstanding, in no event shall any dividends be declared or paid
upon, nor shall any distribution be made upon, any shares of Junior
Securities, nor (without the consent of the holders of a majority in
interest of the outstanding Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock, voting as a single class) shall any
shares of Junior Securities be purchased or redeemed by the Corporation,
nor shall any monies be paid to or made available for a sinking fund for
the purchase or redemption of shares of any Junior Securities, unless, in
each such case, (i) full cumulative dividends on the outstanding shares of
Series E Preferred Stock shall have been declared and paid and (ii) any
arrears or defaults in any redemption of shares of Series E Preferred
Stock shall have been cured. In the event that the Corporation shall at
any time pay a dividend on any securities issued by the Corporation which
are on a parity with Series E Preferred Stock with respect to dividend
rights ("Parity Securities"), it shall, at the same time, pay to each
holder of Series E Preferred Stock (in addition to any payment such holder
is entitled to receive pursuant to paragraph 2(a) above), a dividend equal
to the dividend payable to such holder of shares of Parity Securities.
3 Redemption. The shares of Series E Preferred Stock shall be
redeemable as follows:
3A Mandatory Redemption. The Corporation shall redeem all
outstanding shares of Series E Preferred Stock on October 9, 2003 (the
"Redemption Date"), in the manner and with the effect provided in
subparagraphs 3B through 3C below, by paying for each share an amount
equal to the sum of $13.00, plus an amount equal to any accrued and unpaid
dividends thereon up to (but excluding) such Redemption Date whether or
not such dividends shall have been declared by the Board of Directors of
the Corporation, such aggregate amount being herein sometimes referred to
as the "Redemption Price". With respect to the right to receive payment
upon such redemption, the Series E Preferred Stock will rank senior to the
Junior Securities (to the extent not redeemed prior to such redemption).
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3B Redemption Price. The Redemption Price shall be paid in
cash. Not less than 20 days before a Redemption Date, written notice shall
be given by mail, postage prepaid, to the holders of record of the Series
E Preferred Stock to be redeemed, such notice to be addressed to each such
stockholder at its post office address as shown by the records of the
Corporation, specifying the number of shares to be redeemed, the
Redemption Price and the place and date of such redemption, which date
shall not be a day on which banks in The City of New York are required or
authorized to close. If such notice of redemption shall have been duly
given, then, notwithstanding that any certificate for shares of Series E
Preferred Stock to be redeemed shall not have been surrendered for
cancellation, after the close of business on such Redemption Date, the
shares so called for redemption shall no longer be deemed outstanding and
all rights with respect to such shares (except for the conversion rights
which, as provided in subparagraph 5A, shall terminate as of the close of
business on the last full business day prior to each Redemption Date)
shall forthwith after the close of business on such Redemption Date cease,
except only the right of the holders thereof to receive, upon presentation
of the certificate representing shares so called for redemption, the
Redemption Price therefor, without interest thereon.
3C Redeemed or Otherwise Acquired Shares to be Retired. Any
shares of the Series E Preferred Stock redeemed pursuant to this paragraph
3 or otherwise acquired by the Corporation in any manner whatsoever shall
be permanently retired and shall not under any circumstances be reissued;
and the Corporation may from time to time take such appropriate corporate
action as may be necessary to reduce the authorized Series E Preferred
Stock accordingly.
3D Pro Rata Distribution. If the assets to be distributed are
insufficient to permit the payment to holders of the Series C Preferred
Stock, the Series D Preferred Stock and the Series E Preferred Stock of
their full Redemption Prices, the entire assets and property legally
available for distribution shall he distributed ratably among the holders
of Series C Preferred Stock, Series D Preferred Stock and Series E
Preferred Stock in proportion to the full Redemption Price each such
holder is otherwise entitled to receive.
4. Liquidation, Dissolution or Winding Up. (a) Upon any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the shares of Series E Preferred
Stock shall be entitled to be paid, before any distribution or payment is
made upon any Junior Securities, an amount equal to $13.00 per share plus
any accrued but unpaid dividends whether or not such dividends shall have
been declared by the Board of Directors of the Corporation (such amounts
being sometimes referred to as the "Series E Liquidation Payments").
(b) Written notice of such liquidation, dissolution or winding
up, stating a payment date, the amount of the Series E liquidation
Payments to be made pursuant hereto and the place where said Series E
Liquidation Payments shall be payable shall be given by mail, postage
prepaid, not less than 30 days prior to the payment date stated therein to
the holders of record of the Series E Preferred Stock, such notice to be
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<PAGE>
addressed to each such holder at his post office address as shown by the
records of the Corporation.
(c) As used in this paragraph 4, a liquidation, dissolution or
winding up of the Corporation shall be deemed to include (i) a
consolidation or merger of the Corporation with or into any other
corporation (other than a merger in which the Corporation is the surviving
corporation and which will not result in more than 50% of the voting
capital stock of the Corporation outstanding immediately after the
effective date of such merger being owned of record or beneficially by
persons other than the holders of such voting capital stock immediately
prior to such merger in the same proportions in which such shares were
held immediately prior to such merger), (ii) a sale of all or
substantially all of the properties and assets of the Corporation as an
entirety to any other person, or (iii) the acquisition of "beneficial
ownership" by any "person" or "group" of voting stock of the Corporation
representing more than 50% of the voting power of all outstanding shares
of such voting stock, whether by way of merger or consolidation or
otherwise.
As used in this Certificate of Designation, (i) the terms
"person" and "group" shall have the meaning set forth in Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not applicable, (ii) the term "beneficial owner" shall have the
meaning set forth in Rules 13d-3 and 13d-5 under the Exchange Act, or any
successor rules thereunder, whether or not applicable, except that a
person shall be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time or upon the
occurrence of certain events, and (iii) any "person" or "group" will be
deemed to beneficially own any voting stock of the Corporation so long as
such person or group beneficially owns, directly or indirectly, in the
aggregate a majority of the voting stock of a registered holder of the
voting stock of the Corporation.
(d) If the assets to be distributed are insufficient to permit
the payment to holders of the Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock of their full preferential amounts, the
entire assets and property legally available for distribution shall be
distributed ratably among the holders of Series C Preferred Stock, Series
D Preferred Stock and Series E Preferred Stock in proportion to the full
preferential amount each such holder is otherwise entitled to receive.
5. Conversion. The shares of Series E Preferred Stock shall be
convertible as follows:
5A Right to Convert Series E Preferred Stock. (1) Subject to
the terms and conditions of this paragraph 5, at any time or from time to
time, the holder of any share or shares of Series E Preferred Stock shall
have the right, at the holder's option, to convert any such shares of
Series E Preferred Stock (except that upon any liquidation, dissolution or
winding up of the Corporation, or upon redemption of the Series E
Preferred Stock as provided in paragraph 3, the right of conversion shall
terminate at the close of business on the last full business day next
preceding the date fixed for payment of the amount distributable on the
Series E Preferred Stock), into such number of fully
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<PAGE>
paid and nonassessable whole shares of Common Stock as is obtained by
multiplying the number of shares of Series E Preferred Stock to be
converted by $13.00 and dividing the result by the conversion price of
$13.00 per share, or by the conversion price as last adjusted in
accordance with paragraphs 5E, 5F and 5G hereunder and in effect at the
date any share or shares of such Series E Preferred Stock are surrendered
for conversion (such price, or such price as last adjusted, being referred
to herein as the "Series E Conversion Price").
(2) The rights of conversion contained in this subparagraph 5A
shall be exercised by the holder of shares of Series E Preferred Stock by
giving written notice that such holder elects to convert a stated number
of shares of Series E Preferred Stock into Common Stock and by surrender
of a certificate or certificates for the shares so to be converted to the
Corporation at its principal office (or such other office or agency of the
Corporation as the Corporation may designate by notice in writing to the
holder or holders of the Series E Preferred Stock) at any time during its
usual business hours on the date set forth in such notice, together with a
statement of the name or names (with address) in which the certificate or
certificates for shares of Common Stock shall be issued.
5B Automatic Conversion. In the event that, at any time while
any shares of the Series E Preferred Stock shall be outstanding, the
Corporation shall complete a firm commitment public offering involving the
sale by the Corporation of shares of Common Stock (i) at a per share price
to the public of not less than $19.50 (appropriately adjusted for any
stock splits, combinations or stock dividends or other events set forth in
paragraphs 5E, 5F and 5G), and (ii) in which the net proceeds paid by the
public to the Corporation are at least $25,000,000 (the "Qualified Public
Offering"), then all outstanding shares of the Series E Preferred Stock
shall, automatically and without further action on the part of the
holders of the Series E Preferred Stock, be converted into shares of
Common Stock in accordance with the terms of this paragraph 5 with the
same effect as if the certificates evidencing such shares had been
surrendered for conversion, such conversion to be effective simultaneously
with the closing of such public offering, provided, however, that
certificates evidencing the shares of Common Stock issuable upon such
conversion shall not be issued except on surrender of the certificates for
the shares of the Series E Preferred Stock so converted.
5C Issuance of Certificates; Time Conversion Effected.
Promptly after the receipt of the written notice referred to in
subparagraph 5A(2) and surrender of the certificate or certificates for
the share or shares of Series E Preferred Stock to be converted, the
Corporation shall issue and deliver, or cause to be issued and delivered,
to the holder, registered in such name or names as such holder may direct,
a certificate or certificates for the number of whole shares of Common
Stock issuable upon the conversion of such share or shares of Series E
Preferred Stock. To the extent permitted by law, such conversion shall be
deemed to have been effected, and the Series E Conversion Price shall be
determined, as of the close of business on the date on which such written
notice shall have been received by the Corporation and the certificate or
certificates for such share or shares shall have been surrendered as
aforesaid, and at such time the rights of the holder of such share or
shares of Series E Preferred Stock shall
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<PAGE>
cease, and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record
of the shares of Common Stock represented thereby.
5D Fractional Shares; Dividends; Partial Conversion. No
fractional shares may be issued upon conversion of the Series E Preferred
Stock into Common Stock. At the time of each conversion, the Corporation
shall pay in cash an amount equal to all dividends, if any, declared and
unpaid on the shares surrendered for conversion to the date upon which
such conversion is deemed to take place as provided in subparagraph 5C.
Unless dividends have been declared by the Board of Directors of the
Corporation and remain unpaid by the Corporation, the holders of Series E
Preferred Stock will not be entitled to accrued and unpaid dividends upon
conversion thereof. In case the number of shares of Series E Preferred
Stock represented by the certificate or certificates surrendered pursuant
to subparagraph 5C exceeds the number of shares converted, the Corporation
shall, upon such conversion, execute and deliver to the holder thereof, at
the expense of the Corporation, a new certificate or certificates for the
number of shares of Series E Preferred Stock represented by the
certificate or certificates surrendered which are not to be converted. If
any fractional interest in a share of Common Stock would, except for the
provisions of the first sentence of this subparagraph 5D, be deliverable
upon any such conversion, the Corporation, in lieu of delivering the
fractional share thereof, shall pay to the holder surrendering the Series
E Preferred Stock for conversion an amount in cash equal to the current
market price of such fractional interest as determined in good faith by
the Board of Directors of the Corporation.
5E Adjustment of Price Upon Issuance of Common Stock. Except
as provided in subparagraph 5H hereof, if and whenever the Corporation
shall issue or sell, or is in accordance with subparagraphs 5E(1) through
5E(7) deemed to have issued or sold, any shares of its Common Stock for a
consideration per share less than the Series E Conversion Price in effect
immediately prior to the time of such issue or sale, then, forthwith, the
Series E Conversion Price shall be reduced to the price (calculated to the
nearest cent) determined by dividing (x) an amount equal to the sum of (1)
the number of shares of Common Stock outstanding immediately prior to such
issue or sale (including as outstanding all shares of Common Stock
issuable upon conversion of outstanding Convertible Securities (as defined
below)) multiplied by the then existing Series E Conversion Price, and (2)
the consideration, if any, received by the Corporation upon such issue or
sale, by (y) the total number of shares of Common Stock outstanding
immediately after such issue or sale (including as outstanding all shares
of Common Stock issuable upon conversion of outstanding Convertible
Securities without giving effect to any adjustment in the number of shares
so issuable by reason of such issue or sale).
For purposes of this subparagraph 5E, the following
subparagraphs 5E(1) to 5E(7) shall also be applicable:
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<PAGE>
5E(1) Issuance of Rights or Options. (a) In case at any time
after the date hereof the Corporation shall in any manner grant any rights
to subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock or securities convertible into or exchangeable
for Common Stock (such rights or options being herein called "Options" and
such convertible or exchangeable stock or securities, including Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and Series E Preferred Stock, being herein called
"Convertible Securities") whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable
upon the exercise of such Options or upon conversion or exchange of such
Convertible Securities (determined by dividing (i) the total amount, if
any, received or receivable by the Corporation as consideration for the
granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Corporation upon the exercise of all such
Options, plus, in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and
upon the conversion or exchange thereof, by (ii) the total maximum number
of shares of Common Stock issuable upon the exercise of such Options or
upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Series
E Conversion Price in effect immediately prior to the time of the granting
of such Options, then for purposes of calculating the adjusted Series E
Conversion Price the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange
of the total maximum amount of such Convertible Securities issuable upon
the exercise of such Options shall be deemed to have been issued for such
price per share as of the date of granting of such Options and thereafter
shall be deemed to be outstanding. Except as otherwise provided in
subparagraph 5E(3), no adjustment of the Series E Conversion Price shall
be made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such Options or upon the actual issue of such
Common Stock upon conversion or exchange of such Convertible Securities.
5E(2) Issuance of Convertible Securities. In case the
Corporation shall in any manner issue (whether directly or by assumption
in a merger or otherwise) or sell any Convertible Securities, whether or
not the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which Common Stock is issuable
upon such conversion or exchange (determined by dividing (i) the total
amount received or receivable by the Corporation as consideration for the
issue or sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Corporation
upon the conversion or exchange thereof, by (ii) the total maximum number
of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities) shall be less than the Series E Conversion
Price in effect immediately prior to the time of such issue or sale, then
for purposes of adjusting the Series E Conversion Price, the total maximum
number of shares of Common Stock issuable upon conversion or exchange of
all such Convertible Securities shall be deemed to have been issued for
such price per share as of the date of the issue or sale of such
Convertible Securities and thereafter shall be deemed to be outstanding,
provided that
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(a) except as otherwise provided in subparagraph 5E(3) below, no
adjustment of the Series E Conversion Price shall be made upon the actual
issue of such Common Stock upon conversion or exchange of such Convertible
Securities, and (b) if any such issue or sale of such Convertible
Securities is made upon exercise of any Option to purchase any such
Convertible Securities for which adjustments of the Series E Conversion
Price have been or are to be made pursuant to other provisions of this
subparagraph 5D, no further adjustment of the Series E Conversion Price
shall be made by reason of such issue or sale.
5E(3) Change in Option Price or Conversion Rate. If (i) the
purchase price provided for in any Option referred to in subparagraph
5E(1), (ii) the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
subparagraph 5E(1) or 5E(2) or (iii) the rate at which any Convertible
Securities referred to in subparagraph 5E(l) or 5E(2) are convertible into
or exchangeable for Common Stock shall change at any time (in each case
other than under or by reason of provisions designed to protect against
dilution), then the Series E Conversion Price in effect at the time of
such event shall, as required, forthwith be readjusted to such Series E
Conversion Price which would have been in effect at such time had such
Options or Convertible Securities still outstanding provided for such
changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold; and on the
expiration of any such Option or the termination of any such right to
convert or exchange such Convertible Securities, the Series E Conversion
Price then in effect hereunder shall, as required, forthwith be increased
to the Series E Conversion Price which would have been in effect at the
time of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such expiration
or termination, never been issued, and the Common Stock issuable
thereunder shall no longer be deemed to be outstanding. If the purchase
price provided for in any such Option referred to in subparagraph 5E(1) or
the rate at which any Convertible Securities referred to in subparagraph
5E(1) or 5E(2) are convertible into or exchangeable for Common Stock shall
be reduced at any time under or by reason of provisions with respect
thereto designed to protect against dilution, then, in case of the
delivery of Common Stock upon the exercise of any such Option or upon
conversion or exchange of any such Convertible Securities, the Series E
Conversion Price then in effect hereunder shall, as required, forthwith be
adjusted to such respective amount as would have been obtained had such
Option or Convertible Securities never been issued as to such Common Stock
and had adjustments been made upon the issuance of the shares of Common
Stock delivered as aforesaid, but only if as a result of such adjustment
the Series E Conversion Price then in effect hereunder is thereby reduced.
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5E(4) Stock Dividends. In case the Corporation shall declare a
dividend or make any other distribution upon any securities of the
Corporation payable in Common Stock, Options or Convertible Securities,
any Common Stock, Options or Convertible Securities, as the case may be,
issuable in payment of such dividend or distribution shall be deemed to
have been issued or sold without consideration, and the Series E
Conversion Price shall be reduced as if the Corporation had subdivided its
outstanding shares of Common Stock into a greater number of shares, as
provided in subparagraph 5F hereof.
5E(5) Consideration for Stock. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for cash,
the consideration received therefor shall be deemed to be the amount
received by the Corporation therefor, without deduction therefrom of any
expenses incurred or any underwriting commissions or concessions paid or
allowed by the Corporation in connection therewith. In case any shares of
Common Stock, Options or Convertible Securities shall be issued or sold
for a consideration other than cash, the amount of the consideration other
than cash received by the Corporation shall be deemed to be the fair value
of such consideration as determined in good faith by the Board of
Directors of the Corporation, without deduction therefrom of any expenses
incurred or any underwriting commissions or concessions paid or allowed by
the Corporation in connection therewith. In case any Options shall be
issued in connection with the issue and sale of other securities of the
Corporation, together comprising one integral transaction in which no
specific consideration is allocated to such Options by the Corporation,
such Options shall be deemed to have been issued without consideration and
the Series E Conversion Price shall be reduced as if the Corporation had
subdivided its outstanding shares of Common Stock into a greater number of
shares, as provided in subparagraph 5F hereof.
5E(6) Record Date. In case the Corporation shall take a record
of the holders of its Common Stock for the purpose of entitling them (i)
to receive a dividend or other distribution payable in Common Stock,
Options or Convertible Securities, or (ii) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of
Common Stock deemed to have been issued or sold upon the declaration of
such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be,
provided that such shares of Common Stock shall in fact have been issued
or sold.
5E(7) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or
for the account of the Corporation, and the disposition of any such shares
shall be considered an issue or sale of Common Stock for the purposes of
this subparagraph 5E.
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5F Subdivision of Combination of Stock. In case the
Corporation shall at any time subdivide its outstanding shares of Common
Stock into a greater number of shares, the Series E Conversion Price in
effect immediately prior to such subdivision shall be proportionately
reduced, and conversely, in case the outstanding shares of Common Stock of
the Corporation shall be combined into a smaller number of shares, the
Series E Conversion Price in effect immediately prior to such combination
shall be proportionately increased.
5G Cash or Extraordinary Dividend. If the Corporation shall,
by dividend or otherwise, distribute to holders of its Junior Securities,
Parity Securities or Convertible Securities evidences of its indebtedness,
cash or other assets (but excluding any dividends or distributions which
change the total number of shares of Common Stock outstanding) (the
"Distribution") then in each such case, the Series E Conversion Price
shall be reduced to the price determined by dividing (x) an amount equal
to the difference between (1) the total number of shares of Common Stock
outstanding (including as outstanding all shares of Common Stock issuable
upon conversion of outstanding Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and
Series E Preferred Stock) multiplied by the then existing Series E
Conversion Price, and (2) fair market value of the Distribution, by (y)
the total number of shares of Common Stock outstanding (including as
outstanding all shares of Common Stock issuable upon conversion of
outstanding Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock and Series E Preferred Stock);
provided, however, no adjustment in Series E Conversion Price shall be
made if the Distribution is made to the holders of Series E Preferred
Stock.
5H Certain Issues of Securities Excepted. Anything herein to
the contrary notwithstanding, the Corporation shall not be required to
make any adjustment of the Series E Conversion Price upon the occurrence
of any of the following events: (i) the issuance of capital stock upon
conversion of outstanding shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock or
Series E Preferred Stock or other options, warrants and other securities
exercisable for or convertible into shares of Common Stock, Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock or Series E Preferred Stock and which are issued
and outstanding as of the date of issuance of the Series E Preferred
Stock, and (ii) the issuance and sale of, or grant of options to purchase,
shares of Common Stock pursuant to the Corporation's 1997 Stock Incentive
Plan.
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5I Reorganization, Reclassification, Consolidation, Merger or
Sale. If any capital reorganization or reclassification of the capital
stock of the Corporation or any consolidation or merger of the Corporation
with another corporation, or the sale of all or substantially all of its
assets to another corporation shall be effected in such a way (including,
without limitation, by way of consolidation or merger) that holders of
Common Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful
and adequate provisions shall be made whereby each holder of a share or
shares of Series E Preferred Stock shall thereafter have the right to
receive, upon the basis and upon the terms and conditions specified herein
and in lieu of the shares of Common Stock of the Corporation immediately
theretofore receivable upon the conversion of such shares or shares of the
Series E Preferred Stock, such shares of stock, securities or assets as
may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of
such stock immediately theretofore so receivable had such reorganization,
reclassification, consolidation, merger or sale not taken place, and in
any such case appropriate provision shall be made with respect to the
rights and interests of such holder to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Series E
Conversion Price) shall thereafter be applicable, as nearly practicable,
in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of such conversion rights (including, if
necessary to effect the adjustments contemplated herein, an immediate
adjustment in the manner set forth herein, by reason of such
reorganization, reclassification, consolidation, merger or sale, of the
Series E Conversion Price to the value for the Common Stock reflected by
the terms of such reorganization, reclassification, consolidation, merger
or sale if the value so reflected is less than the Series E Conversion
Price in effect immediately prior to such reorganization,
reclassification, consolidation, merger or sale). In the event of a merger
or consolidation of the Corporation as a result of which a greater or
lesser number of shares of common stock of the surviving corporation is
issuable to holders of Common Stock of the Corporation outstanding
immediately prior to such merger or consolidation, the Series E Conversion
Price in effect immediately prior to such merger or consolidation shall be
adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock of the Corporation.
The Corporation will not effect any such consolidation or merger, or any
sale of all or substantially all of its assets and properties, unless
prior to the consummation thereof the successor corporation (if other than
the Corporation) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument,
executed and mailed or delivered to each holder of shares of Series E
Preferred Stock at the last address of such holder appearing on the books
of the Corporation, the obligation to deliver to such holder such shares
of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to receive.
5J Notice of Adjustment. Upon any adjustment of the Series E
Conversion Price, then and in each such case the Corporation shall give
written notice thereof, by first class mail, postage prepaid, addressed to
each holder of shares of Series E Preferred Stock at the address of such
holder as shown on the books of the Corporation.
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which notice shall state the Series E Conversion Price resulting from such
adjustment, setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
5K Other Notices. In case at any time:
(1) the Corporation shall declare any dividend upon its Common
Stock payable in cash or stock or make any other distribution to the
holders of its Common Stock;
(2) the Corporation shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of
any class or other rights;
(3) there shall be any capital reorganization or
reclassification of the capital stock of the Corporation, or a
consolidation or merger of the Corporation with, or a sale of all or
substantially all its assets to, another corporation, or any
acquisition of "beneficial ownership" by any "person" or "group" of
voting stock of the Corporation representing more than 50% of the
voting power of all outstanding shares of such voting stock, whether
by way of merger or consolidation or otherwise;
(4) there shall he a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; or
(5) the Corporation shall take any action or there shall be
any event which would result in an automatic conversion of the
Series E Preferred Stock pursuant to subparagraph 5B,
then, in any one or more of said cases, the Corporation shall give, by
first class mail, postage prepaid, addressed to each holder of any shares
of Series E Preferred Stock at the address of such holder as shown on the
books of the Corporation, (a) at least 10 days' prior written notice of
the date on which the books or the Corporation shall close or a record
shall be taken for such dividend, distribution or subscription rights or
for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least 10 days' prior written notice of the date when the same shall take
place, and (c) in the case of any event which would result in an automatic
conversion of the Series E Preferred Stock pursuant to subparagraph 5B, at
least 10 days' prior written notice of the date on which the same is
expected to be completed. Such notice in accordance with the foregoing
clause (a) shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of
Common Stock shall be entitled thereto, and such notice in accordance with
the foregoing clause (b) shall also specify the date on which the holders
of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such
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reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be.
5L Stock to be Reserved. The Corporation will at all times
reserve and keep available out of its authorized Common Stock or its
treasury shares, solely for the purpose of issue upon the conversion of
the Series E Preferred Stock as herein provided, such number of shares of
Common Stock as shall then be issuable upon the conversion of all
outstanding shares of Series E Preferred Stock. The Corporation covenants
that all shares of Common Stock which shall be so issued shall be duly and
validly issued and fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof and, without limiting
the generality of the foregoing, the Corporation covenants that it will
from time to time take all such action as may be requisite to assure that
the par value per share of the Common Stock is at all times equal to or
less than the effective Series E Conversion Price. The Corporation will
take all such action as may be necessary to assure that all such shares of
Common Stock may be so issued without violation of any applicable law or
regulation, or of any requirements of any national securities exchange
upon which the Common Stock of the Corporation may be listed. The
Corporation will not take any action which results in any adjustment of
the Series E Conversion Price if the total number of shares of Common
Stock issued and issuable after such action upon conversion of the Series
E Preferred Stock would exceed the total number of shares of Common Stock
then authorized by the Corporation's Certificate of Incorporation.
5M No Reissuance of Preferred Stock. Shares of Series E
Preferred Stock which are converted into shares of Common Stock as
provided herein shall not be reissued.
5N Issue Tax. The issuance of certificates for shares of
Common Stock upon conversion of the Series E Preferred Stock shall be made
without charge to the holders thereof for any issuance tax in respect
thereof, provided that the Corporation shall not be required to pay any
tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
holder of the Series E Preferred Stock which is being converted.
5O Closing of Books. The Corporation will at no time close its
transfer books against the transfer of any Series E Preferred Stock or of
any shares of Common Stock issued or issuable upon the conversion of any
shares of Series E Preferred Stock in any manner which interferes with the
timely conversion of such Series E Preferred Stock.
5P Definition of Common Stock. As used in this Section 5, the
term "Common Stock" shall mean and include the Corporation's authorized
Common Stock, par value $.01 per share, and shall also include any capital
stock of any class of the Corporation thereafter authorized that shall not
be limited to a fixed sum or percentage of par value in respect of the
rights of the holders thereof to participate in dividends or in the
distribution of assets upon the voluntary or involuntary liquidation,
dissolution or
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<PAGE>
winding up of the Corporation; provided, however, that such term, when
used to describe the securities receivable upon conversion of shares of
the Series E Preferred Stock of the Corporation, shall include only shares
designated as Common Stock of the Corporation on the date of filing of
this Certificate, any shares resulting from any combination or subdivision
thereof referred to in Section 5F, or in case of any reorganization or
reclassification of the outstanding shares thereof, the stock, securities
or assets provided for in Section 5I.
6. Voting. Except as otherwise required by law, the
Corporation's Certificate of Incorporation or this Certificate of
Designation, the holders of the Series E Preferred Stock, together with
the holders of Common Stock, shall be entitled to notice of any
stockholders meeting in accordance with the By-laws of the Corporation and
to vote upon any matter submitted to the stockholders for a vote as
follows: (i) the holders of Series E Preferred Stock shall have one vote
for each full share of Common Stock into which their respective shares of
Series E Preferred Stock are convertible on the record date for the vote
and (ii) the holders of Common Stock shall have one vote per share of
Common Stock.
7. Restrictions. At any time when shares of Series E Preferred
Stock are outstanding, except where the vote or written consent of the
holders of a greater number of shares of the Corporation is required by
law or by the Certificate of Incorporation of the Corporation, and in
addition to any other vote required by law:
Without the prior consent of the holders of a majority in
interest of the outstanding Series E Preferred Stock, Series D Preferred
Stock and Series C Preferred Stock, voting as a single class, given in
person or by proxy, either in writing or at a meeting called for that
purpose:
(1) The Corporation will not (i) create or authorize the
creation of any additional class or series of shares which ranks senior to
the Series E Preferred Stock as to the distribution of assets upon the
liquidation, dissolution or winding up of the Corporation, or (ii)
increase the authorized amount of the Series A Preferred Stock, the Series
B Preferred Stock, the Series C Preferred Stock, the Series D Preferred
Stock, or the Series E Preferred Stock.
(2) The Corporation will not issue debt in excess of the
Corporation's net worth.
(3) The Corporation will not engage in any business other than
that described in a business plan submitted to and approved by the Board
of Directors of the Corporation or approved subsequently thereto by the
Board of Directors.
(4) The Corporation will not engage in any transaction with
any affiliate, except on an arms-length basis as approved by a majority of
the non-interested directors voting on such matter.
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(5) The Corporation will not dispose of or transfer assets
other than in the ordinary course of business; or merge or consolidate
with any other entity; or liquidate or dissolve.
(6) The Corporation will not amend, alter or repeal this
Certificate of Designations, the Amended Certificate of Designations for
the Series A Preferred Stock in effect as of December 17, 1997 and the
Amended Certificates of Designations for the Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock in effect as of
the date hereof.
(7) The Corporation will not alter, amend or repeal its
Certificate of Incorporation.
In addition, without the prior consent of the holders of a
majority in interest of the outstanding Series E Preferred Stock, given in
person or by proxy, either in writing or at a meeting called for that
purpose:
(8) The Corporation will not alter in any way adverse to the
holders thereof the enfranchisement, privileges or preferences of the
Series E Preferred Stock.
(9) The Corporation will not issue any shares of Series E
Preferred Stock.
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<PAGE>
IN WITNESS WHEREOF, this Certificate of Designation has been
executed by the Corporation by its President, Mark S. Adams, this 30th day of
June, 1999.
INTRALINKS, INC.
By: /s/ Mark S. Adams
------------------------------------
Mark S. Adams
President
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<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:03 AM 06/30/1999
991268086 -- 2633827
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
INTRALINKS, INC.
------------------------------
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is INTRALINKS, INC.
2. The Certificate of Incorporation of IntraLinks, Inc., as amended,
is hereby further amended by striking out the first paragraph of Article FOURTH
thereof and by substituting in lieu of said paragraph of such Article the
following new paragraph:
"FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 19,188,586
shares, consisting of (a) 11,000,000 shares of Common Stock,
$.01 par value ("Common Stock"), and (b) 8,188,586 shares of
Preferred Stock, $.01 par value ("Preferred Stock").
3. The Amendment of the Certificate of Incorporation of the
Corporation herein certified has been duly adopted, pursuant to the provisions
of Sections 228 and 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to
be signed by Mark Adams, its President, who hereby acknowledges under penalties
of perjury that the facts herein stated are true and that this Certificate is
the act and deed of the Corporation, this 30th day of June, 1999.
INTRALINKS, INC.
By: /s/ Mark S. Adams
------------------------------------
Name: Mark S. Adams
Title: President
<PAGE>
EXHIBIT 3.2
AMENDED BY-LAWS
OF
INTRALINKS INC.
(a Delaware corporation)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be
established and maintained at The Prentice-Hall Corporation System, Inc., 1013
Centre Road, Wilmington, Delaware. The Prentice-Hall Corporation System, Inc.
shall be the registered agent of this corporation in charge thereof.
Section 2. Other Offices. The corporation may have other offices,
either within or without the State of Delaware, at such place or places as the
Board of Directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETING OF STOCKHOLDERS
Section 1. Annual Meetings. Annual meetings of stockholders for the
election of directors and for such other business as may be stated in the notice
of the meeting shall be held at such place, either within or without the State
of Delaware, and at such time and date as the Board of Directors, by resolution,
shall determine and as set forth in the notice of the meeting.
Section 2. Other Meetings. Meetings of stockholders for any purpose
other than the election of directors may be held at such time and place, within
or without the State of Delaware, as shall be stated in the notice of the
meeting.
Section 3. Voting. Each stockholder entitled to vote in accordance
with the terms of the Certificate of Incorporation, in accordance with such
shareholders' agreements by and between the corporation and its stockholders as
the corporation may enter into from time to time (the "Shareholders' Agreement")
and in accordance with the provisions of these By-Laws shall be entitled to one
vote, in person or by proxy, for each share of stock entitled to vote held by
such stockholder, but no proxy shall be voted after three years from its date
unless such proxy provides for a longer period. Upon the demand of any
stockholder, the vote for directors and the vote upon any question before the
meeting, shall be by ballot. All elections for directors shall be decided by
majority vote; all other questions shall be decided
<PAGE>
by majority vote except as otherwise provided by the Certificate of
Incorporation, the Shareholders' Agreement or the laws of the State of Delaware.
A complete list of the stockholders entitled to vote at the ensuing
election, arranged in alphabetical order, with the address of each, and the
number of shares held by each, shall be opened to the examination of any
stockholder for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 4. Quorum. Except as otherwise required by law, by the
Certificate of Incorporation or by these By-Laws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
entitled to vote shall constitute a quorum at all meetings of the stockholders.
In case a quorum shall not be present at any meeting, a majority in interest of
the stockholders entitled to vote thereat, present in person or by proxy, shall
have the power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until the requisite amount of stock entitled
to vote shall be present. At such adjourned meeting at which the requisite
amount of stock entitled to vote shall be represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed; but only those stockholders entitled to vote at the meeting as
originally notice shall be entitled to vote at any adjournment or adjournments
thereof.
Section 5. Special Meetings. Special meetings of the stockholders
for any purpose or purposes may be called by the President or Secretary, or by
resolution of the directors. Special meetings of the stockholders may also be
called by the consent of a majority of the holders of the then outstanding
Series C Convertible Preferred Stock.
Section 6. Notice of Meetings. Written notice, stating the place,
date and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the corporation, not less than ten nor
more than sixty days before the date of the meeting. No business other than that
stated in the notice shall be transacted at any meeting without the unanimous
consent of all the stockholders entitled to vote thereat.
Section 7. Action Without Meeting. Unless otherwise provided by the
Certificate of Incorporation, any action required to be taken at any annual or
special meeting of stockholders, or any action which may be taken at any annual
or special meeting, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous
<PAGE>
written consent shall be given to those stockholders who have not consented in
writing.
ARTICLE III
DIRECTORS
Section 1. Number and Term. The number of directors of the
Corporation initially shall be eight, but in no event shall the number of
directors be less than four nor more than fifteen. The directors shall be
elected at the annual meeting of the stockholders and each director shall be
elected to serve until his successor shall be elected and qualified. Directors
need not be stockholders.
Section 2. Removal. Any director or directors may be removed either
for or without cause at any time by the affirmative vote of the holders of a
majority of all the shares of stock outstanding and entitled to vote, at a
special meeting of the stockholders called for the purpose. The removal of a
director pursuant to this Section 2 shall require the Company to hold a special
meeting of shareholders to elect all directors of the Company. At such meeting,
all directors shall be elected or re-elected by the majority vote of the
shareholders present in person or by proxy at such meeting. The directors so
elected shall serve until their successors shall be elected and qualified.
Section 3. Increase or Decrease of Number; Vacancy. The number of
directors may be increased or decreased from time to time by action of the
directors or the stockholders. Any vacancy in the Board of Directors may be
filled by a vote of the majority of the remaining directors then in office,
although less than a quorum. Any additional director elected to fill a vacancy,
whether resulting from an increase in the number of directors, shall hold office
for a term that shall coincide with the remaining term of directors.
Section 4. Powers. The Board of Directors shall exercise all of the
powers of the corporation except such as are by law, by the Certificate of
Incorporation of the corporation, by these By-Laws or by the Shareholders'
Agreement conferred upon or reserved to the stockholders.
Section 5. Committees. The Board of Directors may, by resolution or
resolutions passed by a majority of the whole Board, designate one or more
committees, each committee to consist of two or more of the directors of the
corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of such committee or committees. The member or members thereof present
at any meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member.
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Any such committee, to the extent provided in the resolution of the
Board of Directors, in these By-Laws or in the Shareholders' Agreement, shall
have and may exercise all the powers and authority of the Board of Directors in
the management of the business and affairs of the corporation, and may authorize
the seal of the corporation to be affixed to all papers which may require it;
but no such committee shall have the power or authority to amend the Certificate
of Incorporation, to amend the Shareholders' Agreement to adopt an agreement of
merger or consolidation, to recommend to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets,
to recommend to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or to amend the By-Laws of the corporation; and,
unless the resolution, these By-Laws, or the Certificate of Incorporation
expressly so provides, no such committee shall have the power or authority to
declare a dividend or to authorize the issuance of stock.
Section 6. Meetings. The newly elected directors shall hold their
first meeting for the purpose of organization and the transaction of business,
if a quorum be present, immediately after the annual meeting of the
stockholders; or the time and place of such meeting may be fixed by consent in
writing of all the directors.
Regular meetings of the directors may be held without notice at such
places and times as shall be determined from time to time by resolution of the
directors.
Special meetings of the Board may be called by the President or the
Secretary on the written request of any two directors on at least two days'
notice to each director and shall be held at such place or places as may be
determined by the directors, or as shall be stated in the call of the meeting.
Special meetings of the Board of Directors may also be called by the
consent of a majority of the holders of the then outstanding Series C
Convertible Preferred Stock
Section 7. Quorum. A majority of the total number of directors shall
constitute a quorum for the transaction of business. If at any meeting of the
Board of Directors there shall be less than a quorum present, a majority of
those present may adjourn the meeting from time to time until a quorum is
obtained, and no further notice thereof need be given other than by announcement
at the meeting which shall be so adjourned.
Section 8. Compensation. Directors shall not receive any stated
salary for their services as members of committees, but by resolution of the
Board of Directors a fixed fee and expenses of attendance may be allowed for
attendance at each meeting. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
Section 9. Action Without Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee
thereof, may be taken without a meeting, if a written consent thereto is signed
by all members of the Board of
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<PAGE>
Directors, or of such committee as the case may be, and such written consent is
filed with the minutes of proceedings of the Board of Directors or committee.
Section 10. Participation by Conference Telephone. Members of the
Board of Directors of the corporation, or any committee designated by such Board
may participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
shall constitute presence in person at such meeting.
ARTICLE IV
OFFICERS
Section 1. Officers. The officers of the corporation shall be a
President, a Treasurer and a Secretary, all of whom shall be elected by the
Board of Directors and who shall hold office until their successors are elected
and qualified. In addition, the Board of Directors may elect a Chairman, one or
more Vice Presidents and such Assistant Secretaries and Assistant Treasurers as
they may deem proper. None of the officers of the corporation need be directors
or employees of the corporation. The officers shall be elected at the first
meeting of the Board of Directors after each annual meeting. More than two
offices may be held by the same person.
Section 2. Other Officers and Agents. The Board of Directors may
appoint such other officers and agents as it may deem advisable, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.
Section 3. Chairman. The Chairman of the Board of Directors, if one
be elected, shall preside at all meetings of the Board of Directors and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
Section 4. President. The President shall be the chief executive
officer of the corporation and shall have the general powers and duties of
supervision and management usually vested in the office of president of a
corporation. He shall preside at all meetings of the stockholders if present
thereat, and, in the absence or non-election of the Chairman of the Board of
Directors, at all meetings of the Board of Directors, and shall have general
supervision, direction and control of the business of the corporation. Except as
the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages and other contracts on behalf of the
corporation, and shall cause the seal to be affixed to any instrument requiring
it and when so affixed the seal shall be attested by the signature of the
Secretary or the Treasurer or an Assistant Secretary or an Assistant Treasurer.
5
<PAGE>
Section 5. Vice-President. Each Vice-President shall have such
powers and shall perform such duties as shall be assigned to him by the
directors.
Section 6. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the corporation. He shall
deposit all monies and other valuables in the name and to the credit of the
corporation in such depositaries as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as may be
ordered by the Board of Directors, or the President, taking proper vouchers for
such disbursements. He shall render to the President and Board of Directors at
the regular meetings of the Board of Directors, or whenever they may request it,
an account of all his transactions as Treasurer and of the financial condition
of the corporation. If required by the Board of Directors, he shall give the
corporation a bond for the faithful discharge of his duties in such amount and
with such surety as the Board of Directors shall prescribe.
Section 7. Secretary. The Secretary shall give, or cause to be
given, notice of all meetings of stockholders and directors, and all other
notices required by law or by these By-Laws, and in case of his absence or
refusal or neglect so to do, any such notice may be given by any person
thereunto directed by the President, or by the directors, or stockholders, upon
whose requisition the meeting is called as provided in these By-Laws. He shall
record all the proceedings of the meetings of the corporation and of the
directors in a book to be kept for that purpose, and shall perform such other
duties as may be assigned to him by the directors or the President. He shall
have the custody of the seal of the corporation and shall affix the same to all
instruments requiring it, when authorized by the directors or the President, and
attest the same.
Section 8. Assistant Treasurers and Assistant Secretaries. Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the directors.
ARTICLE V
MISCELLANEOUS
Section 1. Resignations. Any director, member of a committee or
corporate officer may, provided the same would not result in a breach of any
contract to which said person is a party, resign at any time. Such resignation
shall be made in writing, and shall take effect at the time specified therein,
and if no time be specified, at the time of its receipt by the President or
Secretary. The acceptance of a resignation shall not be necessary to make it
effective.
Section 2. Vacancies. If the office of any director, member of a
committee or corporate officer becomes vacant, by reason of death, disability or
otherwise (except
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vacancies caused by removal), the remaining directors in office, though less
than a quorum, by a majority vote may appoint any qualified person to fill such
vacancy, who shall hold office for the unexpired term and until his successor
shall be duly chosen.
Section 3. Certificates of Stock. Certificates of stock, signed by
the Chairman of the Board of Directors, or the President or any Vice President,
and the Treasurer or an Assistant Treasurer, or Secretary or an Assistant
Secretary, shall be issued to each stockholder certifying the number of shares
owned by him in the corporation. When such certificates are countersigned (1) by
a transfer agent other than the corporation or its employee, or (2) by a
registrar other than the corporation or its employee, the signatures of such
officers may be facsimiles.
Section 4. Lost Certificates. A new certificate of stock may be
issued in the place of any certificate theretofore issued by the corporation,
alleged to have been lost or destroyed, and the directors may, in their
discretion, require the owner of the lost or destroyed certificate, or his legal
representatives, to give the corporation a bond, in such sum as they may direct,
not exceeding double the value of the stock represented by such certificate, to
indemnify the corporation against any claim that may be made against it on
account of the alleged loss of any such certificate, or the issuance of any such
new certificate.
Section 5. Transfer of Shares. The shares of stock of the
corporation shall be transferable only upon its books by the holders thereof in
person or by their duly authorized attorneys or legal representatives, and upon
such transfer the old certificates shall be surrendered to the corporation by
the delivery thereof to the person in charge of the stock transfer books and
ledgers, or to such other person as the directors may designate, by whom they
shall be canceled, and new certificates shall thereupon be issued. A record
shall be made of each transfer and whenever a transfer shall be made for
collateral security, and not absolutely, it shall be so expressed in the entry
of the transfer.
Section 6. Stockholders Record Date. In order that the corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 7. Dividends. Subject to the provisions of the Certificate
of Incorporation, the Board of Directors may, out of funds legally available
therefor at any
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regular or special meeting, declare dividends upon the capital stock of the
corporation as and when they deem expedient. Before declaring any dividend
there may be set apart out of any funds of the corporation available for
dividends, such sum or sums as the directors from time to time in their
discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
directors shall deem conducive to the interests of the corporation.
Section 8. Seal. The corporate seal shall be circular in form and
shall contain the name of the corporation, the year of its creation and the
words "CORPORATE SEAL DELAWARE." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or otherwise reproduced.
Section 9. Fiscal Year. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors. In the absence of such
determination, the fiscal year shall be the calendar year.
Section 10. Checks. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation shall be signed by such officer or officers, agent or agents of
the corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
Section 11. Notice and Waiver of Notice. Whenever any notice is
required by these By-Laws to be given, personal notice is not meant unless
expressly so stated, and any notice so required shall be deemed to be sufficient
if given by depositing the same in the United States mail, postage prepaid,
addressed to the person entitled thereto at his address as it appears on the
records of the corporation, and such notice shall be deemed to have been given
on the day of such mailing. Stockholders not entitled to vote shall not be
entitled to provided receive notice of any meetings except as otherwise by
statute.
Whenever any notice whatever is required to be given under the
provisions of any law, or under the provisions of the Certificate of
Incorporation of the corporation or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
ARTICLE VI
INDEMNIFICATION
To the full extent permitted by law, the corporation may indemnify
any person or his heirs, distributees, next of kin, successors, appointees,
executors, administrators, legal representatives and assigns who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceedings, whether civil, criminal, administrative
or investigative by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation.
partnership, joint venture,
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trust or other enterprise, domestic or foreign, against expenses, attorneys'
fees, court costs, judgments, fines, amounts paid in settlement and other losses
actually and reasonably incurred by him in connection with such action, suit or
proceeding.
ARTICLE VII
AMENDMENTS
These Amended By-Laws, the Certificate of Incorporation and the
Shareholders' Agreement of the Company may only be amended, altered or repealed
in accordance with the provisions of the Certificate of Incorporation and the
Shareholders' Agreement.
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I HEREBY CERTIFY that the foregoing is a full, true and correct copy
of the By-Laws of IntraLinks Inc., a Delaware corporation, as in effect on the
date hereof.
Dated: October 5, 1998
/s/ Mark S. Adams
----------------------------------------
Mark S. Adams, President
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EXHIBIT 10.1
IntraLinks, Inc.
1997 STOCK INCENTIVE PLAN
1. Purpose
IntraLink's, Inc., (the "Company") plans to attract and retain the best
available talent and to encourage high levels of employee performance which
benefit the Company and its shareholders. The Company believes that the 1997
Stock Incentive Plan (the "1997 Plan") will contribute to the attainment of
these objectives. The 1997 Plan affords key personnel the opportunity to acquire
a proprietary equity interest in the Company and provides them with financial
incentives to put forth their maximum efforts for the success of the Company's
business.
2. Scope and Duration
Awards under the 1997 Plan may be granted:
. in the form of incentive stock options ("Incentive Options") as
provided in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or
. in the form of nonqualified stock options ("Nonqualified Options"),
or
. in the form of restricted shares ("Restricted Shares").
References in the 1997 Plan to "Awards" include Restricted Shares,
Incentive Options and Nonqualified Options. "Options" include Incentive Options
and Nonqualified Options.
"Outstanding Shares" means the total number of (a) IntraLinks' common
shares issued and outstanding, plus (b) common share equivalents on an
"as-converted" basis arising from IntraLinks' convertible preferred stock, plus
(c) common shares which may be acquired under vested and unvested Options,
warrants and other rights to acquire the Company's common shares, which are
outstanding as of January 1st of the given Plan year. Shares as to which Awards
may be granted may be, in whole or in part, authorized but unissued shares or
Treasury shares.
The maximum aggregate number shares as to which Awards may be granted from
time to time to all recipients under the 1997 Plan will be as follows:
Year Maximum Shares
---- --------------
1997 30,000 Shares
1998 4% of the Outstanding Shares
1999 4% of the Outstanding Shares
2000 4% of the Outstanding Shares
Restricted shares shall be no more than 10% of the total shares eligible
for Awards.
The 1997 Plan shall terminate on December 31, 2000, unless terminated
sooner pursuant to paragraph 9 of this 1997 Plan. No Awards shall be granted
after that date.
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3. Administration
The 1997 Plan shall be administered by the Compensation Committee of the
Company's Board of Directors (the "Committee"). If required, each member of the
Committee shall be a "disinterested person" as defined in Rule 16b-3 pursuant to
the Securities Exchange Act of 1934 or an "outside director", as that term is
used in Section 162(m) of the Code and the Treasury Regulations promulgated
thereunder.
Subject to and consistent with the specific provisions of the 1997 Plan,
the Committee in its discretion shall have plenary authority to:
. determine the purchase price of the shares covered by each Option,
the term of each Award, the persons to whom, and the time or times
at which, Awards shall be granted, and the number of shares to be
covered by each Award;
. designate shares as Incentive Options or Nonqualified Options or
Restricted Stock;
. interpret the 1997 Plan;
. prescribe, amend, and rescind rules and regulations relating the
1997 Plan;
. determine the terms and provisions of the Award agreements (which
need not be identical) entered into in connection with Awards under
the 1997 Plan;
. accelerate the exercise dates or vesting of all or any portion of an
Award or to extend the period during which an Award may be
exercised; and
. make all other determinations deemed necessary or advisable for the
administration of the 1997 Plan.
The Committee may delegate to one or more of its members, or to one or
more agents, such administrative duties as it may deem advisable. The Committee
(or any person to whom it has delegated duties) may employ one or more persons
to render advice about any responsibility the Committee or such person may have
under the 1997 Plan.
4. Eligibility; Factors to be Considered in Granting Awards
Incentive Options shall be limited to employees of the Company, including
officers and directors who are employees. Nonqualified Options and Restricted
Shares may be granted to employees of the Company, to non-employees of the
Company (including non-employee directors) and to independent agents and
consultants to the Company, in each case to persons whom the Committee believes
have contributed, or will contribute, to the success of the Company.
In determining which employees shall be granted Awards, the Committee
shall take into account the nature and relative importance of employees' duties,
their present and potential contributions to the success of the Company,
achievement of business performance goals tied to annual operating plans, and
such other factors as it shall deem relevant in connection with accomplishing
the objectives of the 1997 Plan.
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5. Specific Terms of Awards
(A) Options. The Committee may grant Options on the following terms and
conditions:
1. Price of Options. The purchase price per share of shares covered by
each Option ("Strike Price") shall be determined by the Committee. Subject to
subparagraph 5(B) below, in no event shall the Strike Price be less than 100% of
the Fair Market Value (as defined in paragraph 10 below) of a share on the date
on which the Option is granted. The Strike Price of any Option shall be subject
to adjustment from time to time as provided in paragraph 7 below. The Committee
shall determine the date on which Option shares are granted.
2. Term of Options. Subject to subparagraph 5(B) below, the term of each
Option shall be not more than ten (10) years from the date of grant as the
Committee shall determine. Options may be subject to earlier termination in the
event of the Option Holder's termination of service, as provided by the
Committee.
(B) Exercise of Options.
1. The period during which any Option granted may be exercised shall be
determined in each case by the Committee.
2. Options available for exercise may be exercised on any business day at
any time, or from time to time, as to any or all full shares to which the Option
applies.
3. The purchase price of shares covered by each Option shall be paid in
full at the time of exercise. Payment may be made:
. in cash; or
. by delivery of a promissory note (which shall be due and payable in
one year and bear interest no less than at the lowest applicable IRS
rate and provided that such note is secured by the purchased
shares); or
. by payment in shares of the Company which already are owned by the
Option Holder, valued at the Fair Market Value (as defined in
paragraph 10 below) on the date of exercise, subject to compliance
with applicable laws, regulations and such other conditions as the
Committee may impose in its sole discretion.
4. Any amounts necessary to satisfy federal, state or local tax
withholding obligations of the Company or of the Option Holder shall be paid by
the Option Holder at time of the Option exercise.
5. The Committee, either at the time of grant or thereafter, will
determine the period during which an Option may be exercised after an Option
Holder's termination of employment.
6. Upon the exercise of all or a portion of an Option, the Option Holder
shall have the rights of a shareholder with respect to the shares for which the
Option was exercised.
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5. Specific Terms of Awards (Continued)
(C) Substitution of Options.
During the term of the 1997 Plan, the Committee in its discretion may
offer one or more Option Holders the opportunity to surrender any or all
unexpired options for cancellation or replacement. If any options are
surrendered, the Committee then may grant new Nonqualified or Incentive Options
to such Option Holder for the same or different numbers of options at a higher
or lower Strike Price than the surrendered options. Such new options may have a
different term than the surrendered options but shall otherwise be subject to
the provisions of the 1997 Plan.
(D) Incentive Options.
1. At the time Incentive Options are granted, the aggregate purchase price
of all Incentive Options (calculated by multiplying the number of shares covered
by such Incentive Options by the Strike Price) exercisable by an employee during
any calendar year shall not exceed $100,000 (as described and defined in Section
424 of the Code) unless the Code subsequently is amended to provide for a higher
annual limit.
2. No Incentive Options may be awarded to any employee who, immediately
prior to the grant date of such Incentive Option, owns more than 10% of the
combined voting power of all classes of Outstanding Shares of the Company --
unless the Strike Price is at least 110% of the Fair Market Value and the Option
expires within five (5) years from the date of the grant.
3. In the event of amendments to the Code or applicable regulations
relating to Incentive Options subsequent to the date of this 1997 Plan, the
Company may amend the provisions of the 1997 Plan. The Company and the employees
holding Options may agree to amend outstanding Options agreements to conform to
such amendments.
(E) Restricted Shares. The Committee is authorized to grant Restricted
Shares to employees or other persons as provided in paragraph 4, on the
following terms and conditions:
1. Issuance and Restrictions. Restricted Shares shall be subject to
restrictions on transferability as described in the Company's Shareholders'
Agreement, and may be subject to such other restrictions, if any, as the
Committee may impose at the date of grant or thereafter. Such restrictions may
lapse separately or in combination at such times, under such circumstances
(including, without limitation, upon achievement of performance criteria if
deemed appropriate by the Committee) and in such installments or otherwise as
the Committee may determine. Except to the extent restricted under the Award
agreement relating to the Restricted Shares, an employee granted Restricted
Shares shall have all of the rights of a shareholder including, without
limitation, the right to vote Restricted Shares and the right to receive
dividends.
2. Forfeiture. Except as otherwise determined by the Committee at the date
of grant or thereafter, upon termination of employment during the applicable
restriction period, Restricted Shares and any accrued but unpaid dividends (that
are subject to restrictions) shall be forfeited. The Committee may provide, by
rule or regulation or in any Award agreement, or may determine in any individual
case, that restrictions or forfeiture conditions relating to such Restricted
Shares will be waived or modified in whole or in part in event of a termination
resulting from specified causes. The Committee may waive in whole or in part the
forfeiture of Restricted Shares.
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5. Specific Terms of Awards. (Paragraph 5(E), Continued)
3. Certificates for Shares. Restricted Shares granted under the 1997 Plan
may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Shares are registered in the name of the
employee, such certificates shall bear an appropriate legend referring to the
terms, conditions, and any restrictions applicable to such Restricted Shares.
The Company shall retain physical possession of the certificates.
4. Distributions. Distributions, including dividends, paid on Restricted
Shares either shall be paid at the distribution payment date, or deferred for
payment to such date as determined by the Committee, paid in cash or paid in
unrestricted Shares having a Fair Market Value equal to the amount of such
distributions.
6. Non-Transferability of Awards.
Awards granted under the 1997 Plan shall not be transferable otherwise
than by will or the laws of descent and distribution. Options granted under the
1997 Plan may be exercised during the lifetime of the Option Holder only by the
Option Holder.
7. Adjustments Upon Changes In Capitalization
(A) Notwithstanding any other provisions of the 1997 Plan, the Committee
may at any time make or provide for such adjustments to the 1997 Plan, to the
number and class of shares issuable or to any outstanding awards as it shall
deem appropriate to prevent dilution or enlargement of rights. Adjustments may
be made in the event of changes in the Outstanding Shares by reason of share
distributions, split-ups, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, separations, reorganizations, liquidations
and similar corporate transactions or events.
(B) Any such adjustment to an Incentive Options shall be made in
accordance with Section 424(h) of the Code, unless the Committee determines
otherwise. In the event of any offer to holders of Outstanding Shares generally
relating to the acquisition of their shares, the Committee may make such
adjustment as it deems equitable in respect of outstanding Awards including, in
its discretion, revision of outstanding Awards so that they may be exercisable
for the consideration payable in the acquisition transaction. Any such
adjustment determination by the Committee shall be conclusive. Any fractional
shares resulting from such adjustments shall be eliminated.
(C) Notwithstanding the above, Option Holders shall not have any
pre-emptive rights to maintain their proportionate equity ownership interest
(directly or on an "as-converted" basis) in the event that the Company issues
new primary shares to public or private investors.
8. Effective Date.
The 1997 Plan shall be effective as of June 30, 1997, subject to the
approval of the 1997 Plan by the Company's Shareholders within one year after
the effective date. Any grants of Awards prior to such approval shall be
effective when made (unless otherwise specified by the Committee at the time of
grant) but shall be conditioned upon, and subject to, approval of the 1997 Plan
by the Company's Shareholders (and no shares may be exercised prior to such
approval).
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9. Termination and Amendment
The Company's Board may suspend, terminate or amend the 1997 Plan, subject
to the approval of the Company's Shareholders (if such approval is required by
law or by the Company's Shareholders' Agreement). Except as described in
paragraph 7, no suspension, termination or amendment of the 1997 Plan, without
the consent of the employee to whom an Award previously has been granted, may
adversely affect the rights of such employee under such previous Award.
10. Miscellaneous.
The term "Fair Market Value" (as used in the 1997 Plan) of the shares on
any day means:
(A) if the principal market for the shares are a national securities
exchange or the NASDAQ National Market System, the closing sales price of the
shares on such day as reported by such exchange or market system, or
(B) if the principal market for the shares is not a national securities
exchange or the NASDAQ National Market System, and the shares are quoted on the
National Association of Securities Dealers Automated Quotations System, the mean
between the closing bid and the closing asked prices for the shares on such day
as quoted on such System, or
(C) if the principal market for the shares is not a national securities
exchange or the NASDAQ National Market System, and the shares are not quoted on
the National Association of Securities Dealers Automated Quotations System, the
mean between the highest bid and the lowest asked prices for the shares on such
day as reported by the National Quotation Bureau, Inc.
If clauses (A), (B) and (C) of this paragraph all are inapplicable, or if
no trades have been made or no quotes are available for such day, or if the
Company shares are not publicly traded in any market, then the Fair Market Value
of the shares shall be determined by the Committee by any method which it deems
to be appropriate. If there has been a material arms-length private investment
in primary shares of common or convertible preferred stock of the Company within
six months prior to the date of the Award, then the Fair Market Value shall be
the price per share (adjusted for any splits, recapitalizations and the like)
paid in conjunction with such investment, unless the Committee shall determine
otherwise. The determination of the Committee shall be conclusive as to the Fair
Market Value of the shares.
The Committee may require, as a condition to the issuance or delivery of
any shares granted under the 1997 Plan, to the extent required at the time of
exercise (i) that the shares reserved for purposes of the 1997 Plan shall be
duly listed, upon official notice of issuance, upon such share exchange(s) on
which the shares is listed, (ii) that a registration statement under the
Securities Act of 1933, with respect to such shares shall be effective, and/or
(iii) that the person receiving such shares deliver to the Company such
documents, agreements, investment representations and other representations as
the Committee shall determine to be in the best interests of the Company.
11. No Right To Continued Employment.
Nothing in the 1997 Plan or in any Awards granted pursuant to the 1997
Plan shall confer upon any employee any right to continue in the employ of the
Company.
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IntraLinks, Inc.
STOCK OPTION AGREEMENT
This Agreement is entered into as of ________ 199_, (the "Date of
Agreement") by and between IntraLinks, Inc. (the "Company") and
________________________ (the "Optionee").
The Company has chosen the Optionee to participate in the 1997 Stock
Incentive Plan (the "1997 Plan"). In consideration of the premises and mutual
covenants contained herein, and for other good and valuable consideration, the
Company and the Optionee agree as follows:
(a) Grant. Pursuant to the provisions of the 1997 Plan, the terms of which
are incorporated herein by reference, the Company hereby grants to the Optionee
the right and option (the "Option") to purchase from the Company, from time to
time, all or any part of an aggregate of ________ Shares of common stock, par
value .01 per share, of the Company (the "Shares") at the purchase price of
$____.__ per share (the "Strike Price") payable in full upon exercise of the
Option. The Option is granted as of ________ 199__, (the "Date of Grant"). This
grant is subject to the terms and conditions of this Agreement and to the terms
and conditions of the 1997 Plan. This Option shall be treated as [an incentive]
[a nonqualified] stock option under Section 422 of the Internal Revenue Code of
1986, as amended.
(b) Term of Option. The Option may be exercised only during the period
commencing on the Date of Grant and expiring ______ years from the Date of Grant
(the "Option Period"). The Optionee's rights to exercise during the Option
Period shall be subject to limitations as provided in this Agreement and shall
be subject to sooner termination of employment, as provided below. The Option
shall terminate at the end of the Option Period or, if earlier, at the end of
the period of exercisability, as provided in paragraph (d), below,
(c) Exercisability. Except as otherwise provided in paragraph (d) below,
the Option shall vest and become exercisable, and the Optionee shall be entitled
to exercise the Option, in accordance with the following schedule:
This Option Shall Be Exercisable
With Respect to the Following
Cumulative Percentage of the
Aggregate Number of Shares
On or After This Date: Set Forth In Paragraph (a), Above:
---------------------- ----------------------------------
1 Year from Date of Grant 34%
2 Years from Date of Grant 67%
3 Years from Date of Grant 100%
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(d) Termination
(i) Termination by Death. If the Optionee's employment by the
Company terminates by reason of death, the Option thereafter may be exercised,
to the extent it was exercisable as of the date of death, by the legal
representative or legatee of the Optionee, for a period of 12 months from the
date of death, or until the expiration of the Option Period, if earlier.
(ii) Termination by Reason of Disability. If the Optionee's
employment by the Company terminates by reason of the Optionee's disability, the
Option thereafter may be exercised, to the extent it was exercisable on the date
of such termination, for a period of 12 months from the date of such termination
of employment, or until the expiration of the Option Period, if earlier. In the
event of the Optionee's death during this 12-month period, the period shall be
extended for 12 months from the Optionee's date of death, subject to termination
upon the expiration of the Option Period, if earlier. For purposes of this
Agreement, the Optionee shall be deemed "Disabled" if he or she is unable to
perform services by reason of illness incapacity for a period of more than two
months, established by medical evidence satisfactory to the Company in its sole
discretion.
(iii) Termination For Cause. If the Optionee's employment by the
Company is terminated for Cause, his or her Option shall immediately terminate
and be of no further force and effect. All unexercised Option shares, whether
vested or not, then shall be null and void. For purposes of this Agreement,
"Cause" shall be deemed to mean one of more of the following: (i) Optionee's
embezzlement or misappropriation of funds, (ii) Optionee's conviction of a
felony involving moral turpitude, (iii) Optionee's commission of material acts
of dishonesty, fraud, or deceit, (iv) Optionee's breach of any material
provisions of any employment agreement with the Company to which he or she is
party, (v) Optionee's habitual or willful neglect of his or her duties, (vi)
Optionee's breach of fiduciary duty to the Company involving personal profit, or
(vii) Optionee's material violation of any other duty to the Company or its
stockholders imposed by law or by the Board of Directors.
(iv) Other Termination. If the Optionee's employment by the Company
is terminated for any reason other than death, Disability, or for Cause, his or
her Option, to the extent exercisable on the date of such termination of
employment, may be exercised during a specified period ("grace period") from the
date of such termination of employment or until the expiration of the Option
Period, if earlier. The "grace period" will be determined by length of
employment with the Company according to the following schedule:
Length of Employment Grace period
-------------------- ------------
Less than 1 year none
1-2 years 3 months
Over 2 years 3 months, plus 1 month per year over 2 years
(v) Unvested Options. Whether by reason of death, Disability, for
Cause or without Cause, all unvested options which were not exercisable on the
date of termination shall be null and void after the date of the Optionee's
termination of employment with the Company..
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(e) Exercise of Option. In order to exercise the Option, the Optionee
shall submit to the Company an instrument in writing specifying the number of
Shares in respect of which the Option is being exercised, accompanied by payment
in a manner acceptable to the Company and consistent with the provisions of the
Plan, of the Option Price of the Shares in respect of which the Option is being
exercised. Shares shall then be issued by the Company and a share certificate
delivered to the Optionee; provided, however, that the Company shall not be
obligated to issue any Shares hereunder until all applicable securities laws and
other legal and stock exchange requirements have been satisfied, and the Company
shall not be obligated to issue any Share certificates hereinunder if another
method for recording share ownership is in effect under the Company's
Shareholders' Agreement.
(f) No rights of Stockholder. The Optionee shall not, by virtue of the
Option, be entitled to any rights of a stockholder of the Company, either at law
or equity, and the grant of the Option shall not confer on the Optionee any
right with respect to continuance of his or her service with the Company nor
shall such grant interfere in any way with the right of the Company to terminate
the Optionee's service at any time.
(g) Recapitalizations, Dividends and Adjustment. In the event of any
recapitalization, reclassification, split-up or consolidation of Shares,
separation (including a spin-off), dividend on Shares payable in capital stock
or other similar change in capitalization of the Company, merger or
consolidation of the Company, sale by the Company of all or a portion of its
assets or other similar event, the Compensation Committee of the Board (the
"Committee") shall make such appropriate adjustments in the exercise price of
the Option and in the number and kind of securities, cash or other property
which may be issued pursuant to the Option as the Committee deems equitable with
a view toward maintaining the proportionate interest of the Optionee and
preserving the value of the Option, all in accordance with paragraph 7. of the
1997 Plan.
(h) Nontransferability. The Option shall not be transferable by the
Optionee except by will or the laws of decent and distribution, and it shall be
exercisable, during the Optionee's lifetime, only by the Optionee.
(i) Withholding. The Optionee agrees to make appropriate arrangements with
the Company, consistent with the provisions of Section 9 of the 1997 Plan, for
satisfaction of any applicable tax withholding requirements, or similar
requirements, arising out of this Agreement.
(j) References. References herein to rights and obligations of the
Optionee shall apply, where appropriate, to the Optionee's legal representative
or estate without regard to whether specific reference to such legal
representative or estate is contained in particular provision of this Agreement.
Capitalized terms referred to herein but not defined shall have the meanings
given to them in the 1997 Plan.
- --------------------------------------------------------------------------------
Page 3
<PAGE>
- --------------------------------------------------------------------------------
(k) Notice. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or by courier, or sent by certified or registered mail,
postage prepaid, return receipt requested, duly addressed to the party concerned
at the address indicated below or to such changed address as such party may
subsequently by similar process give notice of:
If to the Company:
IntraLink's, Inc.
1372 Broadway, Floor 12A
New York, NY 10018
Attention: Chief Executive Officer
If to the Optionee:
(l) Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute one and the same instrument.
(m) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to the
principles of conflict of laws.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date referred to in the first paragraph, above.
By:
---------------------------------
IntraLinks, Inc.
By:
---------------------------------
Optionee
- --------------------------------------------------------------------------------
Page 4
<PAGE>
- --------------------------------------------------------------------------------
IntraLinks, Inc.
RESTRICTED STOCK AGREEMENT
This Agreement is entered into as of _________, 199_, (the "Date of
Agreement") by and between IntraLinks, Inc. (the "Company") and ___________ (the
"Recipient").
The Company has chosen the Recipient to participate in the 1997 Stock
Incentive Plan (the "1997 Plan") and to receive Restricted Stock of the Company.
In consideration of the premises and mutual covenants contained herein, and for
other good and valuable consideration, the Company and the Recipient agree as
follows:
(a) Grant. Pursuant to the provisions of the 1997 Plan, the terms of which
are incorporated herein by reference, the Company hereby grants to the Recipient
an Award of ___________ Restricted Shares (the "Award") as of ________, 199_(the
"Date of Grant"). The Award will be held by the Company in a Restricted Stock
Account on behalf of the Recipient and will be credited annually with dividend
equivalents from the Date of Grant. This Grant is subject to the terms and
conditions of this Agreement, to the terms and conditions of the 1997 Plan, and
to the terms and conditions of the Company's Shareholders' Agreement.
(b) Vesting. Except as otherwise provided in paragraph (f) below, the
Award shall fully vest and be 100% nonforfeitable, in accordance with the
following vesting schedule:
This Award Shall Vest and Be Payable
With Respect to the Following
Cumulative Percentage of the
Aggregate Number of Shares
On or After This Date Set Forth In Paragraph (a), Above:
--------------------- ----------------------------------
1 Year from Date of Grant 34%
2 Years from Date of Grant 67%
3 Years from Date of Grant 100%
(c) Payment. Subject to the provisions of paragraph (e) below, as soon as
practicable after an Award has become vested in accordance with paragraph (b),
such vested Award, together with accumulated credits for dividend equivalents,
if any, shall be paid to the Recipient in unrestricted Common Shares of the
Company equal in number to the vested Award shares, subject to the continuing
restrictions, if any, on transferability set forth in paragraph (d) below. The
Compensation Committee of the Board (the "Committee") may, in its sole
discretion, provide that payment of vested Awards be deferred (a "Deferred
Award") until such time as the Recipient may elect. Any election of a Recipient
pursuant to the preceding sentence shall be filed in writing with the Committee
in accordance with such rules and regulations, including any deadline for the
making of such an election, as the Committee may provide from time to time.
- --------------------------------------------------------------------------------
Page 1
<PAGE>
- --------------------------------------------------------------------------------
(d) Issuance and Restrictions. Vested Awards shall be subject to
restrictions on transferability as described in the Company's Shareholders'
Agreement. Unvested Awards may be subject to other restrictions the Committee
may impose from time to time. Such restrictions may lapse separately or in
combination at such times, under such circumstances (including, without
limitation, upon achievement of performance criteria if deemed appropriate by
the Committee) in such installments or otherwise as the Committee may determine.
With respect to vested Awards, the Recipient shall have all of the rights of a
shareholder including, without limitation, the right to vote vested Restricted
Shares and the right to receive dividends.
(e) Forfeiture. Except as otherwise determined by the Committee in its
sole discretion, upon termination of Recipient's employment during the
applicable vesting period for any reason whatsoever, including death,
disability, retirement, or termination of employment with or without cause,
unvested Awards and any accrued but unpaid dividends (that are subject to
vesting) shall be forfeited. The Committee may provide, by rule or regulation or
in any Award agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to such unvested Awards will be
waived or modified in whole or in part in event of a termination resulting from
specified causes. The Committee may waive in whole or in part the forfeiture of
Awards.
(f) Termination.
(i) Termination by Death. If the Recipient's employment by the
Company terminates by reason of death or disability, any vested but unpaid
Deferred Award thereafter may be paid, to the extent it was payable as of the
date of death or disability, to the legal representative or legatee of the
Recipient in the case of death, or to the Recipient in the case of disability,
for a period of 12 months from the date of death or disability. For purposes of
this Agreement, the Recipient shall be deemed "Disabled" if he or she is unable
to perform services by reason of illness incapacity for a period of more than
two months, established by medical evidence satisfactory to the Committee in its
sole discretion.
(ii) Termination For Cause. If the Recipient's employment by the
Company is terminated for Cause, his or her Deferred Award shall immediately
terminate and be of no further force and effect. All vested but unpaid Deferred
Award shares and all unvested Awards, then shall be forfeited and become null
and void. For purposes of this Agreement, "Cause" shall be deemed to mean one of
more of the following: (i) Recipient's embezzlement or misappropriation of
funds, (ii) Recipient's conviction of a felony involving moral turpitude, (iii)
Recipient's commission of material acts of dishonesty, fraud, or deceit, (iv)
Recipient's breach of any material provisions of any employment agreement with
the Company to which he or she is party, (v) Recipient's habitual or willful
neglect of his or her duties, (vi) Recipient's breach of fiduciary duty to the
Company involving personal profit, or (vii) Recipient's material violation of
any other duty to the Company or its stockholders imposed by law or by the Board
of Directors.
(iii) Other Termination. If the Recipient's employment by the
Company is terminated for any reason other than death, Disability, or for Cause,
his or her Deferred Award, to the extent payable on the date of such termination
of employment, may be payable within 90 days from the date of termination of
employment, subject to paragraph (d) above.
- --------------------------------------------------------------------------------
Page 2
<PAGE>
- --------------------------------------------------------------------------------
(g) Certificates for Shares. Awards granted under this Agreement may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Shares are registered in the name of the employee, such
certificates shall bear an appropriate legend referring to the terms,
conditions, and any restrictions applicable to such Restricted Shares. The
Company shall retain physical possession of the certificates.
(h) Non-Transferability of Awards. Awards granted under this Agreement
shall not be transferable otherwise than by will or the laws of descent and
distribution.
(i) Adjustments Upon Changes In Capitalization
(1) Notwithstanding any other provisions of this Agreement, the
Committee may at any time make or provide for such adjustments to the number and
class of shares issuable or to any outstanding Awards as it shall deem
appropriate to prevent dilution or enlargement of rights. Adjustments may be
made in the event of changes in the Outstanding Shares by reason of share
distributions, split-ups, recapitalizations, mergers, consolidations,
combinations or exchanges of shares, separations, reorganizations, liquidations
and other similar corporate transactions or events, all in accordance with
paragraph 7 of the 1997 Plan.
(2) In the event of any offer to holders of Outstanding Shares
generally relating to the acquisition of their shares, the Committee may make
such adjustment as it deems equitable in respect of outstanding Awards
including, in its discretion, revision of outstanding Awards so that they may be
eligible for the consideration payable in the acquisition transaction. Any such
adjustment determination by the Committee shall be conclusive. Any fractional
shares resulting from such adjustments shall be eliminated.
(3) Notwithstanding the above, the Recipient shall not have any
pre-emptive rights to maintain his or her proportionate equity ownership
interest in the Company (directly or on an "as-converted" basis) in the event
that the Company issues new primary shares to public or private investors.
(j) No Rights of Stockholder. The Recipient shall not, by virtue of an
unvested Award, be entitled to any rights of a stockholder of the Company,
either at law or equity, and the Grant of the Award shall not confer on the
Recipient any right with respect to continuance of his or her service with the
Company nor shall such grant interfere in any way with the right of the Company
to terminate the Recipient's service at any time.
(k) Withholding. The Recipient agrees to make appropriate arrangements
with the Company for satisfaction of any applicable tax withholding requirement,
or similar requirements, arising out of this Agreement.
(l) References. References herein to rights and obligations of the
Recipient shall apply, where appropriate, to the Recipient's legal
representative or estate without regard to whether specific reference to such
legal representative or estate is contained in particular provision of this
Agreement. Capitalized terms not defined herein shall have the meanings given to
them in the 1997 Plan.
- --------------------------------------------------------------------------------
Page 3
<PAGE>
- --------------------------------------------------------------------------------
(m) Notice. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or by courier, or sent by certified or registered mail,
postage prepaid, return receipt requested, duly addressed to the party concerned
at the address indicated below or to such changed address as such party may
subsequently by similar process give notice of:
If to the Company:
IntraLink's, Inc.
1372 Broadway, Floor 12A
New York, NY 10018
Attention: Chief Executive Officer
If to the Recipient:
(n) Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute one and the same instrument.
(o) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to the
principles of conflict of laws.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date referred to in the first paragraph, above.
By:
---------------------------------
IntraLinks, Inc.
By:
---------------------------------
Recipient
- --------------------------------------------------------------------------------
Page 4
<PAGE>
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
December 18, 1997
To the several persons named
at the foot hereof
Ladies and Gentlemen:
As set forth below, this letter (i) provides for the registration
rights of Euclid Partners IV, L.P., Perseus Capital, LLC, Catalyst Investments
(Belgium) N.V., John Sculley, Sculley Brothers LLC, Eugene A. Tomei and
Frederick W. Benjamin and Ruth Lohr-Benjamin (herein sometimes referred to
collectively as the "Investors") and (ii) provides to certain other persons
named at the foot hereof substantially all of the registration rights they
previously had been granted in Section 6 of a Shareholders' Agreement dated as
of June 13, 1997, as amended, by and between IntraLinks Inc., a Delaware
corporation (the "Company"), and such persons (referred to herein as the
"Original Stockholders"), which agreement is to be amended and restated to
remove such rights so that, for clarity of reference, they may be provided for
herein.
The ownership interests of the capital stock of the Company for each
of the several persons named at the foot hereof is as set forth in the attached
Exhibit A. In consideration of the agreement of such persons to accept the
provisions set forth herein, and in order (i) to induce the Investors to enter
into an agreement dated as of the date hereof with the Company with respect to
the acquisition concurrently herewith of Series B Preferred Stock, $.01 par
value, of the Company ("Series B Preferred Stock"), and (ii) to induce the
Original Stockholders to enter into the amended and restated shareholders'
agreement referred to above (the "Amended and Restated Shareholders'
Agreement"), the Company hereby covenants and agrees with each of you and with
each subsequent holder of Restricted Stock (as such term is defined herein) as
follows:
<PAGE>
1. Certain Definitions. As used herein, the following terms shall
-------------------
have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
----------
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock of the Company, $.01 par
------------
value, as constituted as of the date of this Agreement, subject to
adjustment pursuant to the provisions of Section 9 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934 or any
------------
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Registration Expenses" shall mean the expenses so described in
---------------------
Section 8 hereof.
"Restricted Stock" shall mean any shares of capital stock (including
----------------
any options) of the Company, the certificates for which are required to
bear the legend set forth in the Amended and Restated Shareholders'
Agreement.
"Securities Act" shall mean the Securities Act of 1933 or any similar
--------------
federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 8
----------------
hereof.
2. Required Registration.
---------------------
(a) At any time on or after the first anniversary of an initial public
offering of the Company, the Investors may request the Company to register under
the Securities Act all or any pro rata portion of the Restricted Stock held by
the Investors for sale in the manner specified in such notice; provided,
--------
however, that the only securities which the Company shall be required to
- -------
register pursuant hereto shall be shares of Common Stock.
<PAGE>
(b) Promptly following receipt of any notice under this Section 2(a),
the Company shall immediately notify all holders of Restricted Stock and shall
use its best efforts to register under the Securities Act, for public sale in
accordance with the method of disposition specified in the notice from the
Investors, the number of shares of Restricted Stock specified in such notice
(and in any notices received from other holders of Restricted Stock within 20
days after their receipt of such notice from the Company); provided, however,
-------- -------
that if the proposed method of disposition specified by the Investors shall be
an underwritten public offering, the number of shares of Restricted Stock to be
included in such an offering will be reduced, pro rata (i) first among the
--------
Original Stockholders and (ii) then, and only if Restricted Stock of Original
Stockholders is no longer to be included in such offering, among the Investors,
based on the number of shares of Restricted Stock so requested to be registered,
if and to the extent that the managing underwriter shall be of the opinion that
such inclusion would adversely affect the marketing of the Restricted Stock to
be sold. If such method of disposition shall be an underwritten public
offering, the Company may designate the managing underwriter of such offering,
subject to the approval of the Investors, which approval shall not be
unreasonably withheld. The Company shall be obligated to register Restricted
Stock pursuant to this Section 2 on one occasion only.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 2, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Investor Restricted Stock to be sold. Except as provided in
this paragraph (c), the Company will not effect any other registration of its
Common Stock, whether for its own account or that of other holders, from the
date of receipt of a notice from requesting holders pursuant to this Section 2
until the completion of the period of distribution of the registration
contemplated thereby.
3. Form S-3 Registration.
---------------------
(a) At the time that the Company is qualified to use a Form S-3 for
registration for shares of its own stock or for
<PAGE>
shares of its stockholders and if the Company shall receive from any holder or
holders of Restricted Stock a written request or requests that the Company
effect a registration on Form S-3 and any related qualification or compliance
with respect to Restricted Stock owned by such holder or holders, the Company
will:
(i) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other holders of Restricted
Stock; and
(ii) as soon as practicable, effect such registration (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualifications under applicable blue sky or other
state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other government
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
holder's or holders' Restricted Stock as are specified in such request,
together with all or such portion of the Restricted Stock of any holder or
holders joining in such request as are specified in a written request given
within thirty (30) days after receipt of such written notice from the
Company, provided that the Company shall not be obligated to effect any
such registration, qualification or compliance pursuant to this Agreement
(A) more than once in any 270-day period, or (B) if the Company is not
entitled to use Form S-3 for registration for shares of its own stock or
for shares of its stockholders. Subject to the foregoing, the Company
shall file a registration statement covering the Restricted Stock so
requested to be registered as soon as practicable after receipt of the
request or requests of the holders of the Restricted Stock.
(b) Registrations effected pursuant to this Section 3 shall not be
counted as requests for registration effected pursuant to Section 2.
(c) Anything to the contrary in this Section 3 notwithstanding, a
registration shall not be effected pursuant to this Section 3 (i) for Restricted
Stock with an aggregate market value of less than $1,500,000, or (ii) once the
Restricted Stock otherwise may be sold to the public without restriction.
<PAGE>
4. Incidental Registration. If the Company at any time (other than
-----------------------
pursuant to Sections 2 and 3 hereof) proposes to register any of its Common
Stock under the Securities Act for sale to the public, whether for its own
account or for the account of other securityholders or both (except with respect
to registration statements on Form S-4 or S-8 or another form not available for
registering the Restricted Stock for sale to the public), it will give written
notice at such time to all holders of outstanding Restricted Stock of its
intention to do so. Upon the written request of any such holder, given within
30 days after receipt of any such notice by the Company, to register any of its
Restricted Stock (which request shall state the intended method of disposition
thereof), the Company will use its best efforts to cause the Restricted Stock as
to which registration shall have been so requested to be included in the
securities to be covered by the registration statement proposed to be filed by
the Company, all to the extent requisite to permit the sale or other disposition
by the holder (in accordance with its written request) of such Restricted Stock
so registered; provided that nothing herein shall prevent the Company from
--------
abandoning or delaying such registration at any time. In the event that any
registration pursuant to this Section 4 shall be, in whole or in part, an
underwritten public offering of Common Stock, any request by a holder pursuant
to this Section 4 to register Restricted Stock shall specify that either (i)
such Restricted Stock is to be included in the underwriting on the same terms
and conditions as the shares of Common Stock otherwise being sold through
underwriters under such registration or (ii) such Restricted Stock is to be sold
in the open market without any underwriting, on terms and conditions comparable
to those normally applicable to offerings of common stock in reasonably similar
circumstances. The number of shares of Restricted Stock to be included in such
an underwriting may be reduced (pro rata among the requesting holders of
--- ----
Restricted Stock based upon the number of shares of Restricted Stock so
requested to be registered) if and to the extent that the managing underwriter
shall be of the opinion that such inclusion would adversely affect the marketing
of the securities to be sold by the Company therein.
Notwithstanding anything to the contrary contained in this Section 4,
in the event that there is a firm commitment underwritten public offering of
securities of the Company pursuant to a registration covering Restricted Stock
and a holder of Restricted Stock does not elect to sell his Restricted Stock to
the underwriters of the Company's securities in connection with
<PAGE>
such offering, such holder shall refrain from selling such Restricted Stock so
registered pursuant to this Section 4 during the period of distribution of the
Company's securities by such underwriters and the period of time in which the
underwriting syndicate participates in the after market; provided, however, that
-------- -------
such holder shall, in any event, be entitled to sell its Restricted Stock
commencing on the 180th day after the effective date of such registration
statement.
5. Registration Procedures and Expenses. If and whenever the Company
------------------------------------
is required by the provisions of Sections 2, 3 and 4 hereof to use its best
efforts to effect the registration of any of the Restricted Stock under the
Securities Act, the Company will, as expeditiously as possible:
(a) prepare (and afford counsel for the selling holders reasonable
opportunity to review and comment thereon) and file with the Commission a
registration statement (which, in the case of an underwritten public
offering pursuant to Section 2 hereof, shall be on a form of general
applicability satisfactory to the managing underwriter selected as therein
provided) with respect to such securities and use its best efforts to cause
such registration statement to become and remain effective for the period
of the distribution contemplated thereby (determined as hereinafter
provided);
(b) prepare (and afford counsel for the selling holders reasonable
opportunity to review and comment thereon) and file with the Commission
such 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 the period specified in paragraph (a)
above and as comply with the provisions of the Securities Act with respect
to the disposition of all Restricted Stock covered by such registration
statement in accordance with the sellers' intended method of disposition
set forth in such registration statement for such period;
(c) furnish to each seller and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as such persons may reasonably
request in order to facilitate the public sale or other disposition of the
Restricted Stock covered by such registration statement;
<PAGE>
(d) use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or blue sky
laws of such jurisdictions as the sellers of Restricted Stock or, in the
case of an underwritten public offering, the managing underwriter, shall
reasonably request (provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (d), (ii) subject
itself to taxation in any such jurisdiction or (iii) consent to general
service of process in any jurisdiction);
(e) immediately notify each seller under such registration statement
and each underwriter, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus contained 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 the light of the
circumstances then existing;
(f) use its best efforts (if the offering is under-written) to
furnish, at the request of any underwriter, on the date that Restricted
Stock is delivered to the underwriters for sale pursuant to such
registration: (i) an opinion dated such date of counsel representing the
Company for the purposes of such registration, addressed to the
underwriters, stating that such registration statement has become effective
under the Securities Act and that (A) to the best knowledge of such
counsel, no stop order suspending the effectiveness thereof has been issued
and no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act, (B) the registration statement, the
related prospectus, and each amendment or supplement thereof, comply as to
form in all material respects with the requirements of the Securities Act
and the applicable rules and regulations of the Commission thereunder
(except that such counsel need express no opinion as to financial
statements, the notes thereto, and the financial schedules and other
financial and statistical data contained therein) and (C) to such other
effects as may reasonably be requested by counsel for the underwriters or
<PAGE>
by such seller or its counsel, and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters, stating that they are independent public accountants within
the meaning of the Securities Act and that, in the opinion of such
accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as
to the period ending no more than five business days prior to the date of
such letter) with respect to the registration in respect of which such
letter is being given as such underwriters or seller may reasonably
request; and
(g) during normal business hours and with reasonable notice, make
available for inspection by each seller, any underwriter participating in
any distribution pursuant to such registration statement, and any attorney,
accountant or other agent retained by such seller or underwriter, all
financial and other records, pertinent corporate documents and properties
of the Company, and cause the Company's officers, directors and employees
to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such
registration statement and permit such seller, attorney, accountant or
agent to participate in the preparation of such registration statement.
For purposes of paragraphs (a) and (b) above and of Section 2(c) hereof, the
period of distribution of Restricted Stock in a firm commitment underwritten
public offering shall be deemed to extend until each underwriter has completed
the distribution of all securities purchased by it, and the period of
distribution of Restricted Stock in any other registration shall be deemed to
extend until the earlier of the sale of all Restricted Stock covered thereby or
six months after the effective date thereof.
In connection with each registration hereunder, the selling holders of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as shall be
reasonably necessary in order to assure compliance with federal and applicable
state securities laws.
<PAGE>
In connection with each registration pursuant to Sections 2, 3 and 4
hereof covering an underwritten public offering, the Company agrees to enter
into a written agreement with the managing underwriter selected in the manner
herein provided in such form and containing such provisions as are customary in
the securities business for such an arrangement between major underwriters and
companies of the Company's size and investment stature, provided, however, that
-------- -------
such agreement shall not contain any such provision applicable to the Company
which is inconsistent with the provisions hereof and provided, further, however,
-------- ------- -------
that the time and place of the closing under said agreement shall be as mutually
agreed upon among the Company and such managing underwriter.
6. Expenses. All expenses incurred by the Company in complying with
--------
Sections 2, 3 and 4 hereof, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National Association
of Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars and fees, but excluding any Selling Expenses and expenses of counsel
for the sellers of Restricted Stock, are herein called "Registration Expenses".
All underwriting discounts and selling commissions applicable to the sale of
Restricted Stock are herein called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement filed pursuant to Sections 2, 3 and 4 hereof.
7. Indemnification. In the event of a registration of any of the
---------------
Restricted Stock under the Securities Act pursuant to Sections 2, 3 or 4 hereof,
the Company will indemnify and hold harmless each seller of such Restricted
Stock thereunder and each underwriter of Restricted Stock thereunder and each
other person, if any, who controls such seller or underwriter within the meaning
of the Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which such seller or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Restricted Stock was
registered under
<PAGE>
the Securities Act pursuant to Sections 2, 3 or 4, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereof, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each such seller, each
such underwriter and each such controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
-------- -------
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by such seller, such underwriter
or such controlling person in writing specifically for use in such registration
statement or prospectus.
In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Sections 2, 3 or 4 hereof, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer or director or underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
was registered under the Securities Act pursuant to Sections 2, 3 or 4, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that such seller will be liable
- -------- -------
<PAGE>
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus; provided, further, however, that the
-------- ------- -------
liability of each seller hereunder shall be limited to the proportion of any
such loss, claim, damage, liability or expense which is equal to the proportion
that the public offering price of shares sold by such seller under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not to exceed the proceeds (net of underwriting
discounts and commissions) received by such seller from the sale of Restricted
Stock covered by such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party other than under this Section 8. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 8 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, if the defendants in
-------- -------
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional to
those available to the indemnifying party, or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and
<PAGE>
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the indemnifying party shall not, in connection with any
action or related actions in the same jurisdiction, be liable for the fees and
disbursements of more than one separate firm qualified in such jurisdiction to
act as counsel for the indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in the first two paragraphs of
this Section 7 is unavailable or insufficient to hold harmless an indemnified
party under such paragraphs in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then each
indemnifying party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the underwriters and the sellers of such Restricted Stock, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or actions as well as any other relevant equitable
considerations, including the failure to give any notice under the third
paragraph of this Section 7. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact relates to information supplied by the Company, on the one
hand, or the underwriters and the sellers of such Restricted Stock, on the
other, and to the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
<PAGE>
each of you agree that it would not be just and equitable if contributions
pursuant to this paragraph were determined by pro rata allocation (even if all
--- ----
of the sellers of such Restricted Stock were treated as one entity for such
purpose) or by any other method of allocation which did not take account of the
equitable considerations referred to above in this paragraph. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities or action in respect thereof, referred to above in this paragraph,
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph, the sellers
of such Restricted Stock shall not be required to contribute any amount in
excess of the amount, if any, by which the total price at which the Common Stock
sold by each of them was offered to the public exceeds the amount of any damages
which they would have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act),
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
The indemnification of underwriters provided for in this Section 7
shall be on such other terms and conditions as are at the time customary and
reasonably required by such underwriters. In that event the indemnification of
the sellers of Restricted Stock in such underwriting shall at the sellers'
request be modified to conform to such terms and conditions.
8. Changes in Common Stock. If, and as often as, there are any
-----------------------
changes in the Common Stock by way of stock split, stock dividend, combination
or reclassification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof, as may be required, so that the rights and privileges
granted hereby shall continue with respect to the Common Stock as so changed.
9. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and
will not violate any provis-
<PAGE>
ion of law, any order of any court or other agency of government, the
Certificate of Incorporation or By-laws of the Company, or any provision of
any indenture, agreement or other instrument to which it or any of its
properties or assets is bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
such indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon
any of the properties or assets of the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, subject to
considerations of public policy in the case of the indemnification
provisions hereof.
10. Rule 144 Reporting. The Company agrees with you as follows:
------------------
(a) The Company shall make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities
Act, at all times from and after the date it is first required to do so.
(b) The Company shall file with the Commission in a timely manner all
reports and other documents as the Commission may prescribe under Section
13(a) or 15(d) of the Exchange Act at any time after the Company has become
subject to such reporting requirements of the Exchange Act.
(c) The Company shall furnish to such holder of Restricted Stock
forthwith upon request (i) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time from
and after the date it first becomes subject to such reporting require-
ments, and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other
reports and documents so filed as a holder may reasonably request to avail
itself of any rule or regulation of the Commission allowing a holder of
Restricted Stock to sell any such securities without registration.
<PAGE>
11. Miscellaneous.
-------------
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so
expressed or not. Without limiting the generality of the foregoing, the
registration rights conferred herein on the holders of Restricted Stock
shall inure to the benefit of any and all subsequent holders from time to
time of the Restricted Stock.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be mailed by first class registered
mail, postage prepaid, addressed as follows:
if to the Company, to it at 1372 Broadway, 12A, New York, New York
10018, Attn: Mark S. Adams, President;
if to any of the persons named at the foot hereof, to him or it at his
or its address listed in the Company's records;
if to any subsequent holder of Restricted Stock, to it at such address
as may have been furnished to the Company in writing by such holder;
or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of Restricted
Stock) or to the holders of Restricted Stock (in the case of the Company).
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to the
principles of conflict of laws thereof.
(d) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and may not be modified or
amended except in writing signed by the Company and (i) the holders of not
less than a majority in interest of the holders of Restricted Stock then
outstanding and (ii) a majority in interest of the holders of Series B
Preferred Stock; provided that any such amendment
<PAGE>
does not adversely effect the rights of any of the holders of Series B
Preferred Stock.
(e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
<PAGE>
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this letter (herein
sometimes called "this Agreement") shall be a binding agreement between the
Company and you.
Very truly yours,
INTRALINKS INC.
By____________________________
Name:
Title:
AGREED TO AND ACCEPTED
as of the date first
above written.
EUCLID PARTNERS IV, L.P.
By Euclid Associates IV, L.P.,
General Partner
By____________________________
General Partner
PERSEUS CAPITAL, LLC
By____________________________
Name:
Title:
CATALYST INVESTMENTS (BELGIUM) N.V.
By____________________________
Name:
Title:
<PAGE>
______________________________
Sarah Brown-Adams
WALKER BROWN-ADAMS TRUST
By____________________________
Name:
Title:
______________________________
Duncan W. Brown
______________________________
John M. Muldoon
KELLY JEAN MULDOON TRUST
By____________________________
Name:
Title:
RYAN JOHN MULDOON TRUST
By____________________________
Name:
Title:
ERIC JAMES MULDOON TRUST
<PAGE>
By____________________________
Name:
Title:
______________________________
Frederick Benjamin
______________________________
Ruth Benjamin
______________________________
Eugene A. Tomei
______________________________
Arthur B. Sculley
______________________________
David W. Sculley
______________________________
John Sculley
SCULLEY FAMILY TRUST
By____________________________
Name:
Title:
SCULLEY BROTHERS LLC
<PAGE>
By____________________________
Name:
Title:
______________________________
Patrick J. Wack, Jr.
PATRICK J. WACK, JR. FAMILY TRUST
By____________________________
Name:
Title:
______________________________
Cheryl Snyder
______________________________
Robert Lerner
INCLUSIVE VENTURES LLC
By____________________________
Name:
Title:
GREENWICH VENTURES LP
<PAGE>
By____________________________
Name:
Title:
VANTAGE VENTURES CV
By____________________________
Name:
Title:
LANDWELL FINANCIAL SERVICES, INC.
By____________________________
Name:
Title:
______________________________
Isabel M. Espina
<PAGE>
Exhibit A
Capitalization of IntraLinks Inc.
--------------------------------
I. Original Stockholders
---------------------
<TABLE>
<CAPTION>
No. of Shares No. of
No. of Shares of Series A Options/
Name/Type of Common Stock Preferred Stock Warrants
- --------- --------------- --------------- --------
<S> <C> <C> <C>
Management Shareholders
- -----------------------
Sarah Brown-Adams 293,350 0 0
Walker Brown-Adams
Trust 14,650 0 0
John M. Muldoon 293,000 0 0
Kelly Jean Muldoon
Trust 5,000 0 0
Ryan John Muldoon Trust 5,000 0 0
Eric James Muldoon
Trust 5,000 0 0
Arthur B. Sculley 190,097 45,000 0
Patrick J. Wack, Jr. 150,000 0 0
Patrick J. Wack, Jr.
Family Trust 5,250 15,000 0
Non-Management Shareholders
- ---------------------------
Cheryl Snyder 84,500 0 0
Robert Lerner 0 15,000 2,250
Inclusive Ventures, LLC 0 22,500 0
Greenwich Ventures L.P. 0 55,916 0
Vantage Ventures CV 0 19,084 0
Landwell Financial
Services, Inc. 30,000 0 15,000
Duncan W. Brown 31,500 60,000 2,250
Frederick and Ruth
Benjamin 0 30,000 0
Eugene A. Tomei 0 30,000 0
David W. Sculley 0 45,000 0
John Sculley 0 45,000 62,500
Sculley Family Trust 14,650 0 0
Sculley Brothers LLC 50,000 0 0
Isabel M. Espina 3,003 0 0
--------- ------- ------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
TOTAL: 1,175,000 382,500 82,000
</TABLE>
In addition, as a result of the conversion of certain promissory notes issued by
the Company, each of Duncan W. Brown, Robert Lerner and John Sculley own 7,692,
7,692 and 76,923 shares, respectively, of Series B Preferred Stock (total =
92,307 shares), and 1,923, 1,923 and 19,231 warrants, respectively (total =
23,076 warrants).
<PAGE>
II. Investors
---------
<TABLE>
<CAPTION>
No. of Shares of
No. of Series B
Investor Warrants Preferred Stock
- -------- -------- ---------------
- ---------------------------------------------------------------------------
<S> <C> <C>
Euclid Partners IV, L.P. 76,923 307,692
Perseus Capital, LLC 57,692 230,770
Catalyst Investment (Belgium) 19,231 76,923
N.V.
John Sculley 7,692 30,769
Sculley Brothers LLC 5,769 23,077
Eugene A. Tomei 1,538 6,154
Frederick A. Benjamin and
Ruth Lohr-Benjamin 384 1,538
------- -------
Total 169,229 676,923
======= =======
</TABLE>
<PAGE>
EXHIBIT 10.3
SECOND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT
As of this 9th day of October, 1998, that certain Registration Rights
Agreement (the "Agreement") dated December 18, 1997, as amended August 20,1998,
by and among IntraLinks, Inc. (the "Company") and the shareholder signatories
thereto (the "Investors") is hereby amended (the "Amendment") as follows and all
other provisions of the Agreement remain in full force and effect. All
capitalized terms used herein shall have the meanings assigned to such terms in
the Agreement unless otherwise defined herein.
"Restricted Stock" shall mean the shares of Common Stock, Series A
Preferred Stock, Series B Preferred Stock, options and warrants listed on
Exhibit A to the Agreement.
- ---------
Section 2 shall be deleted in its entirety and replaced with the
following:
2. Required Registration.
---------------------
(a) At any time on or after the Earliest Demand Date (as defined
below), Investors holding in the aggregate at least 30% of the Restricted Stock
(as adjusted for stock splits, stock dividends, recapitalizations and the like)
may request, in writing, that the Company effect the registration of Restricted
Stock having an anticipated aggregate offering price of at least $2.0 million
(based on the then current market price or fair value and including any shares
to be registered pursuant to any incidental registration rights described in
paragraph 2(b) hereof) in accordance with the intended methods of distribution
as specified by the Investors in such notice; provided, however, that the only
-------- -------
securities which the Company shall be required to register pursuant hereto shall
be shares of Common Stock. A "Qualified IPO" shall mean the completion of a firm
commitment initial public offering of the Company's Common Stock. "Earliest
Demand Date" shall mean the later of (i) the date eighteen (18) months after a
Qualified IPO (as defined herein) of the Company or (ii) the date six months
after the effectiveness of the first registration statement pursuant to Section
2 of the Series C Registration Rights Agreement (as defined below), so long as
such first registration statement is filed within such 18-month period.
(b) Promptly following receipt of any notice under Section 2(a), the
Company shall immediately notify (the "Company Notice") all holders of
Restricted Stock and other securityholders who have incidental registration
rights pursuant hereto or to the Registration Rights Agreement (the "Series C
Registration Rights Agreement") dated October 9, 1998 (the shares requested to
be registered pursuant to the Registration Rights Agreement dated October 9,
1998 are referred to herein as the "Additional Shares") and shall use its best
efforts to register under the Securities Act, for public sale in accordance with
the method of disposition specified in the notice from the Investors, the number
of shares of Restricted Stock specified in such notice (and in any notices
received from other holders of Restricted Stock within 20 days after their
receipt of such notice from the Company) and any Additional Shares which the
Company
<PAGE>
is notified of within 20 days of the Company Notice. The Company shall be
entitled to include in any registration statement referred to in this Section 2
shares of Common Stock to be sold by the Company for its own account.
Notwithstanding the foregoing, if the proposed method of disposition specified
by the Investors shall be an underwritten public offering, the number of shares
of Restricted Stock and Additional Shares to be included in such an offering
will be reduced, first by the Company with respect to shares it wishes to
register in such registration (if such registration is the first demand
registration requested by the holders of the Restricted Stock or Additional
Shares) and then pro rata among the requesting holders of Restricted Stock and
--------
Additional Shares, based on the total number of shares of Restricted Stock and
Additional Shares so requested to be registered, if and to the extent that the
managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the Restricted Stock and Additional Shares to be sold.
If such method of disposition shall be an underwritten public offering, a
majority of the holders of the Restricted Shares may designate the managing
underwriter of such offering. Notwithstanding the foregoing, the Company shall
be cut back pro rata with the holders of the Restricted Stock and Additional
Shares where the registration is not the first demand registration requested by
either the holders of the Restricted Stock or the holders of the Additional
Shares.
(c) The Company shall not be required to effect more than one
registration pursuant to Section 2(a) above. In addition, the Company shall not
be obligated to effect any such registration, qualification or compliance
pursuant to this Agreement and the Series C Registration Rights Agreement more
than once in any six (6) month period. Subject to the foregoing, the Company
shall file a registration statement covering the Restricted Stock so requested
to be registered as soon as practicable after receipt of the request or requests
of the holders of the Restricted Stock. Anything to the contrary in this Section
2 notwithstanding, a registration shall not be effected pursuant to this Section
2 with respect to any Restricted Stock once such Restricted Stock otherwise may
be sold to the public without restriction.
(d) Notwithstanding anything to the contrary contained in this Section
2, in the event that there is a firm commitment underwritten public offering of
securities of the Company pursuant to a registration statement covering
Restricted Stock and a holder of Restricted Stock does not elect to sell his
Restricted Stock to the underwriters of the Company's securities in connection
with such offering, such holder shall agree to refrain from selling or otherwise
transferring its Restricted Stock for a period, to be determined by the managing
underwriter of the offering, of up to 180 days provided that the Company's
shares and any cut-back shares are subject to the same lock-up period.
Section 4 shall be deleted in its entirety and replaced with the
following:
4. Incidental Registration. If the Company at any time (other than
-----------------------
pursuant to Section 2 hereof) proposes to register any of its Common Stock under
the Securities Act for sale to the public, whether for its own account or for
the account of other securityholders or both (except with respect to (i)
registration statements on Form S-4 or S-8 or another form not available for
registering the Restricted Stock for sale to the public and (ii) the
registration
-2-
<PAGE>
statement filed pursuant to the first demand exercised pursuant to the Series C
Registration Rights Agreement), it will give written notice at such time to all
holders of outstanding Restricted Stock of its intention to do so. Upon the
written request of any such holder, given within 30 days after receipt of any
such notice by the Company, to register any of its Restricted Stock (which
request shall state the intended method of disposition thereof), the Company
will use its best efforts to cause the Restricted Stock as to which registration
shall have been so requested to be included in the securities to be covered by
the registration statement proposed to be filed by the Company, all to the
extent requisite to permit the sale or other disposition by the holder (in
accordance with its written request) of such Restricted Stock so registered;
provided that nothing herein shall prevent the Company from abandoning or
- --------
delaying such registration at any time. In the event that any registration
pursuant to this Section 4 shall be, in whole or in part, an underwritten public
offering of Common Stock, any request by a holder pursuant to this Section 4 to
register Restricted Stock shall specify that either (i) such Restricted Stock is
to be included in the underwriting on the same terms and conditions as the
shares of Common Stock otherwise being sold through underwriters under such
registration or (ii) such Restricted Stock is to be sold in the open market
without any underwriting, on terms and conditions comparable to those normally
applicable to offerings of common stock in reasonably similar circumstances.
The number of shares of Restricted Stock to be included in such an underwriting
may be reduced (pro rata among the requesting holders of Restricted Stock and
--- ----
other requesting securityholders who request pursuant to their demand or
incidental registration rights or other similar rights, based upon the total
number of shares so requested to be registered) if and to the extent that the
managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by the Company therein.
Notwithstanding anything to the contrary contained in this Section 4,
in the event that there is a firm commitment underwritten public offering of
securities of the Company pursuant to a registration covering Restricted Stock
and a holder of Restricted Stock does not elect to sell his Restricted Stock to
the underwriters of the Company's securities in connection with such offering,
such holder shall agree to refrain from selling or otherwise transferring its
Restricted Stock for a period, to be determined by the managing underwriter, of
up to 180 days.
This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
-3-
<PAGE>
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this Amendment, whereupon this Amendment
shall be a binding agreement between the Company and you.
Very truly yours,
INTRALINKS, INC.
By: /s/
-------------------------------
Name:
Title:
AGREED TO AND ACCEPTED as of
the date first above written:
/s/ Sarah Brown-Adams
----------------------------
EUCLID PARTNERS IV, L.P. Sarah Brown-Adams
By: Euclid Associates IV, L.P.
By: /s/ WALKER BROWN-ADAMS TRUST
----------------------------
Its: General Partner
Name:
Title: By: /s/ Barnett Brown
--------------------------
Name: Barnett Brown
Title: Trustee
PERSEUS CAPITAL, LLC
/s/ D. W. Brown
----------------------------
By: /s/ William B. Ford Duncan W. Brown
----------------------------
Name: William B. Ford
Title: Senior Vice President
/s/ John M. Muldoon
----------------------------
CATALYST INVESTMENTS (BELGIUM) N.V. John M. Muldoon
By: /s/ KELLY JEAN MULDOON TRUST
-----------------------------
Name: Mees Pierson Trust (Belgie) N.V.
Title: Managing Director
J. Hereijgers B.V.B.A By: /s/ David T. Muldoon
De heer J. Hereijgers ----------------------------
Name: David T. Muldoon
Title: Trustee
-4-
<PAGE>
RYAN JOHN MULDOON TRUST SCULLEY FAMILY TRUST
By: /s/ David T. Muldoon By: _____________________________
-----------------------------
Name: David T. Muldoon Name:
Title: Trustee Title:
ERIC JAMES MULDOON TRUST SCULLEY BROTHERS LLC
By: /s/ David T. Muldoon By: /s/ Arthur B. Sculley
----------------------------- -----------------------------
Name: David T. Muldoon Name: Arthur B. Sculley
Title: Trustee Title: President
/s/ Patrick J. Wack Jr.
__________________________________ ----------------------------------
Frederick Benjamin Patrick J. Wack, Jr.
PATRICK J. WACK, JR. FAMILY TRUST
__________________________________
Ruth Benjamin
By: /s/ Lynda Mulligan
__________________________________ ------------------------------
Eugene A. Tomei Name: Lynda Mulligan, Pres.
Title: Rhodes & O'Neill, LLC,
Trustee
/s/ Arthur B. Sculley /s/ Cheryl Snyder
- ---------------------------------- ----------------------------------
Arthur B. Sculley Cheryl Snyder
/s/ Robert L. Lerner
__________________________________ ----------------------------------
David W. Sculley Robert Lerner
INCLUSIVE VENTURES LLC
/s/ John Sculley
- ----------------------------------
John Sculley
By: /s/
------------------------------
Name:
Title:
<PAGE>
GREENWICH VENTURES LP SCULLEY INVESTMENT LTD.
PARTNERSHIP
By: /s/ Jon Victor By: /s/ John Sculley
------------------------------- ----------------------------
Name: Jon Victor Name:
Title: Manager, Greenwich Ventures, LLC Title:
General Partner
Greenwich Ventures, LP
VANTAGE VENTURES CV
By: /s/ Jon Victor
-------------------------------
Name: Jon Victor
Title: Manager, Greenwich Ventures, LLC
Investment Partner
Vantage Ventures CV
LANDWELL FINANCIAL SERVICES, INC.
By: _______________________________
Name:
Title:
/s/ Isabel M. Espina
- -----------------------------------
Isabel M. Espina
JOHN SCULLEY IRREVOCABLE TRUST
FOR THE BENEFIT OF MADELINE ALLNATT
By: /s/ John Sculley
-------------------------------
Name:
Title:
JOHN SCULLEY IRREVOCABLE TRUST
FOR THE BENEFIT OF OLIVER ALLNATT
By: /s/ John Sculley
-------------------------------
Name:
Title:
<PAGE>
EXHIBIT 10.4
THIRD AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
INTRALINKS, INC.
This Third Amended and Restated Registration Rights Agreement (the
"Agreement") is made and entered into as of January 24, 2000 by and among
IntraLinks, Inc., a Delaware corporation (the "Company"), the persons named at
the foot hereof under the caption "Series F Investors" (collectively, the
"Series F Investors"), the persons named at the foot hereof under the caption
"Series E Investors" (collectively, the "Series E Investors"), Ernst & Young
U.S. LLP (the "Series D Investor") and the persons named at the foot hereof
under the caption "Series C Investors" (collectively, the "Series C Investors"
and, together with the Series F Investors, Series E Investors and the Series D
Investor, the "Investors"). This Agreement provides for the registration rights
of the investors in the Company's Series C Convertible Preferred Stock, par
value $.01 (the "Series C Preferred Stock"), Series D Convertible Preferred
Stock, par value $.01 (the "Series D Preferred Stock"), Series E Convertible
Preferred Stock, par value $.01 (the "Series E Preferred Stock") and Series F
Convertible Preferred Stock, par value $.01 (the "Series F Preferred Stock"),
who are signatories hereto.
In connection with the Investors executing an agreement dated as of
the date hereof with the Company with respect to the acquisition concurrently
herewith of Series F Preferred Stock and the amendment and restatement of that
certain Second Amended and Restated Registration Rights Agreement dated as of
June 30, 1999 by and among the Company, the Series C Investors, the Series D
Investor and the Series E Investors, the Company hereby covenants and agrees
with the Investors and with each subsequent holder of Restricted Stock (as such
term is defined herein) as follows:
1. Certain Definitions. As used herein, the following terms shall
-------------------
have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
----------
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock of the Company, $.01 par
------------
value, as constituted as of the date of this Agreement, subject to
adjustment pursuant to the provisions of Section 8 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934 or any
------------
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Registration Expenses" shall mean the expenses so described in
---------------------
Section 6 hereof.
"Restricted Stock" shall mean any shares of Series C Preferred Stock,
----------------
Series D Preferred Stock, Series E Preferred Stock or Series F Preferred
Stock or any shares of Common Stock issued upon conversion of such shares,
in each case which are not freely tradable under the Securities Act.
<PAGE>
"Securities Act" shall mean the Securities Act of 1933 or any similar
--------------
federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 6
----------------
hereof.
2. Required Registration.
---------------------
(a) At any time on or after the first anniversary of a Qualified IPO
(as defined herein) of the Company, Investors holding in the aggregate at least
30% of the Restricted Stock (as adjusted for stock splits, stock dividends,
recapitalizations and the like) may request, in writing, that the Company effect
the registration of Restricted Stock having an anticipated aggregate offering
price of at least $2.0 million (based on the then current market price or fair
value and including any shares to be registered pursuant to any incidental
registration rights described in paragraph 2(b) hereof) in accordance with the
intended methods of distribution as specified by the Investors in such notice;
provided, however, that the only securities which the Company shall be required
- -------- -------
to register pursuant hereto shall be shares of Common Stock. A "Qualified IPO"
shall mean the completion of a firm commitment initial public offering of the
Company's Common Stock.
(b) Promptly following receipt of any notice under Section 2(a), the
Company shall immediately notify (the "Company Notice") all holders of
Restricted Stock and all other securityholders that pursuant to the Registration
Rights Agreement (the "1997 Registration Rights Agreement") dated December 18,
1997 (as amended) have incidental registration rights in such registration (the
shares requested to be registered pursuant to such agreement, the "Additional
Shares") and shall use its best efforts to register under the Securities Act,
for public sale in accordance with the method of disposition specified in the
notice from the Investors, the number of shares of Restricted Stock specified in
such notice (and in any notices received from other holders of Restricted Stock
within 20 days after their receipt of such notice from the Company) and any
Additional Shares which the Company is notified of within 20 days of the Company
Notice. The Company shall be entitled to include in any registration statement
referred to in this Section 2 shares of Common Stock to be sold by the Company
for its own account. Notwithstanding the foregoing, if the proposed method of
disposition specified by the Investors shall be an underwritten public offering,
the number of shares of Restricted Stock and Additional Shares (if any) to be
included in such an offering will be reduced, first by the Company with respect
to shares it wishes to register in such registration (if such registration is
the first demand registration requested by the holders of the Restricted Stock
or Additional Shares, if any) and then pro rata among the requesting holders of
--------
Restricted Stock and Additional Shares (if any), based on the total number of
shares of Restricted Stock and Additional Shares (if any) so requested to be
registered, if and to the extent that the managing underwriter shall be of the
opinion that such inclusion would adversely affect the marketing of the
Restricted Stock and Additional Shares (if any) to be sold. Notwithstanding the
foregoing, the first registration of shares pursuant to Section 2(a) above shall
not include any Additional Shares without the approval of the holders of a
majority of the then-outstanding Series C Preferred Stock, Series D
2
<PAGE>
Preferred Stock, Series E Preferred Stock and Series F Preferred Stock on an as
converted basis. If such method of disposition shall be an underwritten public
offering, a majority of the holders of the Restricted Shares may designate the
managing underwriter of such offering. Notwithstanding the foregoing, the
Company shall be cut back pro rata with the holders of the Restricted Stock and
Additional Shares (if any), if the Company has successfully effected one demand
registration for holders of the Restricted Stock.
(c) The Company shall not be required to effect more than two
registrations pursuant to Section 2(a) above. In addition, the Company shall
not be obligated to effect any such registration, qualification or compliance
pursuant to this Agreement or the 1997 Registration Rights Agreement more than
once in any six (6) month period. Subject to the foregoing, the Company shall
file a registration statement covering the Restricted Stock so requested to be
registered as soon as practicable after receipt of the request or requests of
the holders of the Restricted Stock. Anything to the contrary in this Section 2
notwithstanding, a registration shall not be effected pursuant to this Section 2
with respect to any Restricted Stock once such Restricted Stock other wise may
be sold to the public without restriction.
(d) Notwithstanding anything to the contrary contained in this Section
2, in the event that there is a firm commitment underwritten public offering of
securities of the Company pursuant to a registration statement covering
Restricted Stock and a holder of Restricted Stock does not elect to sell his
Restricted Stock to the underwriters of the Company's securities in connection
with such offering or elects to sell only a portion of its Restricted Stock to
the underwriters in connection with such offering, such holder shall agree to
refrain from selling or otherwise transferring its Restricted Stock or portion
thereof as the case may be for a period, to be determined by the managing
underwriter of the offering, of up to 180 days provided that the Company's
shares and any cut-back shares are subject to the same lock-up period.
3. Form S-3 Registration.
---------------------
(a) At the time that the Company is qualified to use a Form S-3 (or
successor short form registration form, if applicable) for registration for
shares of its own stock or for shares of its stockholders and if the Company
shall receive from any holder or holders of Restricted Stock a written request
or requests that the Company effect a registration on Form S-3 and any related
qualification or compliance with respect to Restricted Stock owned by such
holder or holders, the Company will:
(i) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other holders of Restricted
Stock; and
(ii) as soon as practicable, effect such registration (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualifications under applicable blue sky or other
state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other government
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such
holder's or holders'
3
<PAGE>
Restricted Stock as are specified in such request, together with all or
such portion of the Restricted Stock of any holder or holders joining in
such request as are specified in a written request given within thirty (30)
days after receipt of such written notice from the Company, provided that
(i) the Company may defer such registration for one period of up to 90 days
during any 12-month period and (ii) the Company shall not be obligated to
effect any such registration, qualification or compliance pursuant to this
Agreement (A) more than once in any twelve month period, or (B) if the
Company is not entitled to use Form S-3 for registration for shares of its
own stock or for shares of its stockholders. Subject to the foregoing, the
Company shall file a registration statement covering the Restricted Stock
so requested to be registered as soon as practicable after receipt of the
request or requests of the holders of the Restricted Stock.
(b) Registrations effected pursuant to this Section 3 shall not be
counted as requests for registration effected pursuant to Section 2.
(c) Anything to the contrary in this Section 3 notwithstanding, a
registration shall not be effected pursuant to this Section 3 (i) for Restricted
Stock with an aggregate market value of less than $2,000,000, or (ii) once the
Restricted Stock otherwise may be sold to the public without restriction.
(d) Notwithstanding anything to the contrary contained in this
Section 3, in the event that there is a firm commitment underwritten public
offering of securities of the Company pursuant to a registration covering
Restricted Stock and a holder of Restricted Stock does not elect to sell his
Restricted Stock to the underwriters of the Company's securities in connection
with such offering, such holder shall agree to refrain from selling or otherwise
transferring its Restricted Stock for a period, to be determined by the managing
underwriter that such sale would adversely effect the marketing of the
securities of the Company, of up to 180 days.
4. Incidental Registration. If the Company at any time (other than
-----------------------
pursuant to Section 2 hereof) proposes to register any of its Common Stock under
the Securities Act for sale to the public, whether for its own account or for
the account of other securityholders or both (except with respect to
registration statements on Form S-4 or S-8 or another form not available for
registering the Restricted Stock for sale to the public), it will give written
notice at such time to all holders of outstanding Restricted Stock of its
intention to do so. Upon the written request of any such holder, given within
30 days after receipt of any such notice by the Company, to register any of its
Restricted Stock (which request shall state the intended method of disposition
thereof), the Company will use its best efforts to cause the Restricted Stock as
to which registration shall have been so requested to be included in the
securities to be covered by the registration statement proposed to be filed by
the Company, all to the extent requisite to permit the sale or other disposition
by the holder (in accordance with its written request) of such Restricted Stock
so registered; provided that nothing herein shall prevent the Company from
--------
abandoning or delaying such registration at any time. In the event that any
registration pursuant to this Section 4 shall be, in whole or in part, an
underwritten public offering of Common Stock, any request by a holder pursuant
to this Section 4 to register Restricted Stock shall specify that either (i)
such Restricted Stock is to be included in the underwriting on the same terms
and
4
<PAGE>
conditions as the shares of Common Stock otherwise being sold through
underwriters under such registration or (ii) such Restricted Stock is to be sold
in the open market without any underwriting. The number of shares of Restricted
Stock to be included in such an underwriting may be reduced (pro rata among the
--- ----
re questing holders of Restricted Stock and other requesting securityholders who
request pursuant to their demand or incidental registration rights or other
similar rights, based upon the total number of shares so requested to be
registered) if and to the extent that the managing underwriter shall be of the
opinion that such inclusion would adversely affect the marketing of the
securities to be sold by the Company therein.
Notwithstanding anything to the contrary contained in this Section 4,
in the event that there is a firm commitment underwritten public offering of
securities of the Company pursuant to a registration covering Restricted Stock
and a holder of Restricted Stock does not elect to sell his Restricted Stock to
the underwriters of the Company's securities in connection with such offering,
such holder shall agree to refrain from selling or otherwise transferring its
Restricted Stock for a period, to be determined by the managing underwriter, of
up to 180 days.
5. Registration Procedures and Expenses. If and whenever the Company
------------------------------------
is required by the provisions of Sections 2, 3 and 4 to use its best efforts to
effect the registration of any of the Restricted Stock under the Securities Act,
the Company will, as expeditiously as possible:
(a) prepare (and afford counsel for the selling holders reasonable
opportunity to review and comment thereon) and file with the Commission a
registration statement (which, in the case of an underwritten public
offering pursuant to Section 2 hereof, shall be on a form of general
applicability satisfactory to the managing underwriter selected as therein
provided) with respect to such securities and use its best efforts to cause
such registration statement to become and remain effective for the period
of the distribution contemplated thereby (deter mined as herein after
provided);
(b) prepare (and afford counsel for the selling holders reasonable
opportunity to review and comment thereon) and file with the Commission
such 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 the period specified in paragraph (a)
above and as comply with the provisions of the Securities Act with respect
to the disposition of all Restricted Stock covered by such registration
statement in accordance with the sellers' intended method of disposition
set forth in such registration statement for such period;
(c) furnish to each seller and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as such persons may reasonably
request in order to facilitate the public sale or other disposition of the
Restricted Stock covered by such registration statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or blue sky
laws of such jurisdictions as
5
<PAGE>
the sellers of Restricted Stock or, in the case of an underwritten public
offering, the managing underwriter, shall reasonably request (provided that
the Company will not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but
for this paragraph (d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any
jurisdiction);
(e) immediately notify each seller under such registration statement
and each underwriter, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus contained 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 the light of the
circumstances then existing;
(f) use its best efforts (if the offering is underwritten) to furnish,
at the request of any underwriter, on the date that Restricted Stock is
delivered to the underwriters for sale pursuant to such registration: (i)
an opinion dated such date of counsel representing the Company for the
purposes of such registration, addressed to the underwriters, stating that
such registration statement has become effective under the Securities Act
and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated under the
Securities Act, (B) the registration statement, the related prospectus, and
each amendment or supplement thereof, comply as to form in all material
respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder (except that such
counsel need express no opinion as to financial statements, the notes
thereto, and the financial schedules and other financial and statistical
data contained therein) and (C) to such other effects as may reasonably be
requested by counsel for the underwriters or by such seller or its counsel,
and (ii) a letter dated such date from the independent public accountants
retained by the Company, addressed to the underwriters, stating that they
are independent public accountants within the meaning of the Securities Act
and that, in the opinion of such accountants, the financial statements of
the Company included in the registration statement or the prospectus, or
any amendment or supplement thereof, comply as to form in all material
respects with the applicable accounting requirements of the Securities Act,
and such letter shall additionally cover such other financial matters
(including information as to the period ending no more than five business
days prior to the date of such letter) with respect to the registration in
respect of which such letter is being given as such underwriters or seller
may reasonably request; and
(g) during normal business hours and with reasonable notice, make
available for inspection by each seller, any underwriter participating in
any distribution pursuant to such registration statement, and any attorney,
accountant or other agent retained by such seller or underwriter, all
financial and other records, pertinent corporate documents and properties
of the Company, and cause the Company's officers, directors and employees
to supply all information reasonably requested by any such seller,
underwriter, attorney,
6
<PAGE>
accountant or agent in connection with such registration statement and
permit such seller, attorney, accountant or agent to participate in the
preparation of such registration statement.
For purposes of paragraphs (a) and (b) above, the period of distribution of
Restricted Stock in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Restricted Stock
in any other registration shall be deemed to extend until the earlier of the
sale of all Restricted Stock covered thereby or six months after the effective
date thereof.
In connection with each registration hereunder, the selling holders of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as shall be
reasonably necessary in order to assure compliance with federal and applicable
state securities laws.
In connection with each registration pursuant to Sections 2, 3 and 4
hereof covering an underwritten public offering, the Company agrees to enter
into a written agreement with the managing underwriter selected in the manner
herein provided in such form and containing such provisions as are customary in
the securities business for such an arrangement between major underwriters and
companies of the Company's size and investment stature, provided, however, that
-------- -------
such agreement shall not contain any such provision applicable to the Company
which is inconsistent with the provisions hereof and provided, further, however,
-------- ------- -------
that the time and place of the closing under said agreement shall be as mutually
agreed upon among the Company and such managing underwriter.
Notwithstanding anything to the contrary contained herein, the Company
shall not be required to include any class of securities in a registration
statement other than Common Stock.
6. Expenses. All expenses incurred by the Company in complying with
--------
Sections 2, 3 and 4 hereof, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National Association
of Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars and fees, but excluding any Selling Expenses, are herein called
"Registration Expenses". All underwriting discounts and selling commissions
applicable to the sale of Restricted Stock and fees and expenses of counsel for
the sellers of Restricted Stock are herein called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement filed pursuant to Sections 2, 3 and 4 hereof.
7. Indemnification. In the event of a registration of any of the
---------------
Restricted Stock under the Securities Act pursuant to Sections 2, 3 and 4
hereof, the Company will indemnify and hold harmless each seller of such
Restricted Stock thereunder and each underwriter of Restricted Stock thereunder
and each other person, if any, who controls such
7
<PAGE>
seller or underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such seller
or underwriter or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such Restricted Stock was registered under the Securities
Act pursuant to Sections 2, 3 and 4 hereof, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each such seller, each such
underwriter and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
-------- -------
Company will not be liable in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by such seller, such underwriter or such
controlling person in writing specifically for use in such registration
statement or prospectus.
In the event of a registration of any of the Restricted Stock under
the Securities Act pursuant to Sections 2, 3 or 4 hereof, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company and each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer or director or underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement under which such Restricted Stock
was registered under the Securities Act pursuant to Sections 2, 3 or 4, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that such seller will be liable hereunder in any such case if
- -------- -------
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with information
pertaining to such seller, as such, furnished in writing to the Company by such
seller specifically for use in such registration statement or prospectus;
provided, further, however, that the liability of each seller hereunder shall be
- -------- ------- -------
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of shares sold
by such seller under such registration statement bears to the total public
offering price of all securities sold
8
<PAGE>
thereunder, but not to exceed the proceeds (net of underwriting discounts and
commissions) received by such seller from the sale of Restricted Stock covered
by such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party other than under this Section 7. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 7 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, if the defendants in
-------- -------
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional to
those available to the indemnifying party, or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party shall have failed to retain counsel for the
indemnified person as aforesaid or (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such counsel.
It is understood that the indemnifying party shall not, in connection with any
action or related actions in the same jurisdiction, be liable for the fees and
disbursements of more than one separate firm qualified in such jurisdiction to
act as counsel for the indemnified party. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in the first two paragraphs of
this Section 7 is unavailable or insufficient to hold harmless an indemnified
party under such paragraphs in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then each
indemnifying party shall in lieu of indemnifying such indemnified party con
tribute to the amount paid or payable by such indemnified party as a result of
such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the underwriters and the sellers of such Restricted Stock, on the
9
<PAGE>
other, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or actions as well as any other relevant
equitable considerations, including the failure to give any notice under the
third paragraph of this Section 7. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact relates to information supplied by the Company, on the one
hand, or the underwriters and the sellers of such Restricted Stock, on the
other, and to the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
each of you agree that it would not be just and equitable if contributions
pursuant to this paragraph were determined by pro rata allocation (even if all
--- ----
of the sellers of such Restricted Stock were treated as one entity for such
purpose) or by any other method of allocation which did not take account of the
equitable considerations referred to above in this paragraph. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages,
liabilities or action in respect thereof, referred to above in this paragraph,
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph, the sellers
of such Restricted Stock shall not be required to contribute any amount in
excess of the amount, if any, by which the total price at which the Common Stock
sold by each of them was offered to the public exceeds the amount of any damages
which they would have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act),
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
The indemnification of underwriters provided for in this Section 7
shall be on such other terms and conditions as are at the time customary and
reasonably required by such underwriters. In that event the indemnification of
the sellers of Restricted Stock in such underwriting shall at the sellers'
request be modified to conform to such terms and conditions.
8. Changes in Common Stock. If, and as often as, there are any
-----------------------
changes in the Common Stock by way of stock split, stock dividend, combination
or reclassification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof, as may be required, so that the rights and privileges
granted hereby shall continue with respect to the Common Stock as so changed.
9. Representations and Warranties of the Company. The Company
---------------------------------------------
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other
agency of government, the Certificate of Incorporation as amended or By-
laws as amended of the Company, or any provision of any indenture,
agreement or other instrument to which it or any of its properties or
assets is bound, or conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any such
indenture, agreement or other
10
<PAGE>
instrument, or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the properties or assets
of the Company.
(b) This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to considerations of
public policy in the case of the indemnification provisions hereof.
10. Rule 144 Reporting. The Company agrees with you as follows:
------------------
(a) The Company shall make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities
Act, at all times from and after the date it is first required to do so.
(b) The Company shall file with the Commission in a timely manner all
reports and other documents as the Commission may prescribe under Section
13(a) or 15(d) of the Exchange Act at any time after the Company has become
subject to such reporting requirements of the Exchange Act.
(c) The Company shall furnish to such holder of Restricted Stock
forthwith upon request (i) a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time from
and after the date it first becomes subject to such reporting requirements,
and of the Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements), (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other
reports and documents so filed as a holder may reasonably request to avail
itself of any rule or regulation of the Commission allowing a holder of
Restricted Stock to sell any such securities without registration.
11. Miscellaneous.
-------------
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so
expressed or not. Without limiting the generality of the foregoing, the
registration rights conferred herein on the holders of Restricted Stock
shall inure to the benefit of any and all subsequent holders from time to
time of the Restricted Stock.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by first class registered mail,
postage prepaid, addressed as follows:
if to the Company, to it at 1372 Broadway, 12A, New York, New York
10018, Attn: President;
11
<PAGE>
if to any of the Investors, to him or it at his or its address listed
in the Company's records;
if to any subsequent holder of Restricted Stock, to it at such address
as may have been furnished to the Company in writing by such holder;
or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of Restricted
Stock) or to the holders of Restricted Stock (in the case of the Company).
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the
principles of conflict of laws thereof.
(d) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and may not be modified or
amended except in writing signed by the Company and the holders of not less
than two-thirds in interest of the holders of Restricted Stock then out
standing; provided that any such amendment which would adversely affect the
rights of any holder(s) of Restricted Stock must also be approved in
writing by holder(s) who would be so adversely affected.
(e) This Agreement may be executed in two or more counter parts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
12
<PAGE>
[Signature Page to Registration Rights Agreement]
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this Agreement, whereupon this Agreement
shall be a binding agreement between the Company and you.
Very truly yours,
INTRALINKS, INC.
By: _______________________________
Name:
Title:
AGREED TO AND ACCEPTED as of the date first above written:
__________________________________ Number of Shares of Series F
SERIES F INVESTOR: Convertible Preferred Stock:
_______________________
By: ___________________________
Name:
Title:
SERIES E INVESTOR:
JOHNSON & JOHNSON DEVELOPMENT CORPORATION
By: ____________________
Name:
Title:
REUTERS HOLDINGS SWITZERLAND S.A.
By: ____________________
Name:
Title:
<PAGE>
[Signature Page to Registration Rights Agreement]
________________________
Younes Nazarian
DAVID & ANGELLA NAZARIAN FAMILY TRUST
By: ____________________
Name:
Title:
SAM NAZARIAN TRUST
By: ____________________
Name:
Title:
SHARON NAZARIAN BARADARAN TRUST
By: ____________________
Name:
Title:
<PAGE>
[Signature Page to Registration Rights Agreement]
SERIES D INVESTOR:
Ernst & Young U.S. LLP
By: ___________________________
Name:
Title:
SERIES C INVESTORS:
Euclid Partners IV, L.P.
By: ____________________
Name:
Title:
Perseus Capital, LLC
By: ____________________
Name:
Title:
Catalyst Investments (Belgium) NV)
By: ____________________
Name:
Title:
Sculley Brothers LLC
By: ____________________
Name:
Title:
<PAGE>
[Signature Page to Registration Rights Agreement]
____________________
Duncan W. Brown
EUGENE A. TOMEI LIVING TRUST
By: ____________________
Name:
Title:
P/A FUND III, L.P.
By: APA Pennsylvania Partners III, L.P.
its General Partner
By: Patricof & Co. Managers, Inc.
its General Partner
By: ____________________
Name:
Title:
PATRICOF PRIVATE INVESTMENT CLUB II, L.P.
By: APA Excelsior V Partners, L.P.,
P.A. Fund III, L.P., its General Partner
By: Patricof & Co. Managers, Inc.
its General Partner
By: ____________________
Name:
Title:
<PAGE>
[Signature Page to Registration Rights Agreement]
APA EXCELSIOR V, L.P.
By: APA Excelsior V Partners, L.P.
its General Partner
By: Patricof & Co. Managers, Inc.
its General Partner
By: ____________________
Name:
Title:
Smart Technology Ventures, LLC
By: ____________________
Name:
Title:
Rita Angel, IRA
By: ____________________
Name:
Title:
New York Small Business Venture Fund, LLC
By: ____________________
Name:
Title:
Solar Group
By: ____________________
Name:
Title:
<PAGE>
[Signature Page to Registration Rights Agreement]
Hull Overseas, Ltd.
By: ____________________
Name:
Title:
Joshua Angel, IRA
By: ____________________
Name:
Title:
C.E. Unterberg, Towbin LLC
By: ____________________
Name:
Title:
<PAGE>
EXHIBIT 10.5
AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
INTRALINKS, INC.
This Amended and Restated Shareholders' Agreement ("Agreement") is
made and entered into as of January 24, 2000, by and among IntraLinks, Inc., a
Delaware corporation (the "Company"), the shareholders of the Company listed
herein on Schedule I under the section "Management Shareholders" (the
----------
"Management Shareholders"), the shareholders of the Company listed herein on
Schedule I under the section "Non-Management Shareholders" (the "Non-Management
- ----------
Shareholders;" the Non-Management Shareholders and the Management Shareholders
being herein referred to collectively as the "Original Shareholders"), the
shareholders listed herein on Schedule II (the "Series B Shareholders"), the
-----------
shareholders listed on Schedule III (the "Series C Shareholders"), the
------------
shareholders listed on Schedule IV (the "Series D Shareholders"), the
-----------
shareholders listed on Schedule V (the "Series E Shareholders") and the
----------
Shareholders listed in Schedule VI (the "Series F Shareholders," together with
-----------
the Original Shareholders, the Series B Shareholders, the Series C Shareholders,
the Series D Shareholder and the Series F Shareholders being herein sometimes
referred to collectively as "Shareholders").
RECITALS:
This Agreement is made with reference to the following facts:
A. The Company, the Original Shareholders, the Series B Shareholders,
the Series C Shareholders, the Series D Shareholder and the Series E
Shareholders are parties to an Amended and Restated Shareholders' Agreement
dated as of June 30, 1999, as amended from time to time by the addition of
signatories as contemplated therein (the "Original Shareholders' Agreement").
B. The Company and the Series F Shareholders are entering into a
Stock Purchase Agreement (the "Stock Purchase Agreement"), pursuant to which the
Series F Shareholders will purchase from the Company 882,354 shares of the
Company's Series F Convertible Preferred Stock, $.01 par value ("Series F
Preferred Stock") of which 588,236 shares of Series F Preferred Stock are being
purchased by The Chase Manhattan Corporation or one of its subsidiaries
("Chase").
C. As an inducement to the Series F Shareholders to consummate the
transactions contemplated by the Stock Purchase Agreement and for clarity of
reference, the parties wish to provide for the terms with respect to certain
matters regarding the relationship between the Company and the Shareholders and
among such Shareholders. Accordingly, the parties deem it in their best
interest to amend and restate the Original Shareholders' Agreement.
<PAGE>
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the Original Shareholders' Agreement
is hereby amended and restated in its entirety to provide as follows:
SECTION 1.
GENERAL
-------
Section 1.1 Purchase of Stock. Each Shareholder is a holder of
-----------------
shares of the Company's Common Stock, $.01 par value ("Common Stock"), Series A
Preferred Stock, $.01 par value ("Series A Preferred Stock"), Series B Preferred
Stock, $.01 par value ("Series B Preferred Stock"); Series C Preferred Stock,
$.01 par value (the "Series C Preferred Stock"), Series D Preferred Stock, $.01
par value (the "Series D Preferred Stock"), Series E Preferred Stock, $.01 par
value (the "Series E Preferred Stock") or Series F Preferred Stock (the Series F
Preferred Stock, together with the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and
the Series E Preferred Stock, the "Preferred Stock") (the Common Stock and
Preferred Stock collectively, the "Shares"). To the extent that the
Shareholders acquire additional shares of the Company's Common Stock or
Preferred Stock or hold or acquire any warrants, options or other rights to
acquire such securities of the Company, the Shareholders agree that such
securities, and such securities, when exercised or converted, shall be deemed to
be "Shares" for the purposes of Sections 4 and 5 of this Agreement.
Section 1.1 Series D Warrants. Simultaneously with the Series D
-----------------
Shareholder's purchase of Series D Preferred Stock pursuant to that certain
Stock and Warrant Purchase Agreement, between the Company and the Series D
Shareholder, dated April 13, 1999, the Company issued to the Series D
Shareholder a certain warrant to purchase 660,000 additional shares of Series D
Preferred Stock (the "Series D Warrant"), in addition to certain other warrants
(the "E&Y Warrants"). The Series D Shareholder hereby agrees to be bound by the
obligations set forth in the Series D Warrant to exercise all of the warrants
represented by the Series D Warrant upon the occurrence of an Exercise Event (as
defined in the Series D Warrant).
SECTION 2.
DIRECTORS
---------
Section 2.1 Election; Number and Term; Board Committees; Observers;
-------------------------------------------------------
Change of Chief Executive Officer. (a) At any annual or special shareholders
- ---------------------------------
meeting called for such purpose, and whenever the shareholders of the Company
act by written consent with respect to election of directors, each Shareholder
agrees to vote or otherwise give such Shareholder's consent in respect of all
shares of capital stock of the Company (whether now owned or hereafter acquired)
owned by such Shareholder or as to which such Shareholder is entitled to vote,
and the Company shall take all necessary and desirable actions within its
control, in order to cause:
2
<PAGE>
(i) the election to the Company's Board of Directors (the "Board"), as
promptly as practicable, but in any event prior to the next meeting of the
Board, of:
(A) three (3) individuals designated by the Series D Shareholder
(the "Series D Directors"), as long as the Series D Shareholder owns
in the aggregate at least 660,000 shares of the Company's Series D
Preferred Stock (as adjusted for stock splits, stock dividends, or
similar events), which individuals initially shall be Carolyn Buck
Luce, J. Douglas Phillips and Stephen D. Oesterle; and
(B) two (2) individuals designated by the holders of the Series C
Preferred Stock (collectively, the "Series C Directors"), voting as a
class; provided, however, that in the event Catalyst Investments
-------- -------
(Belgium) N.V. ("Catalyst") (or any Permitted Transferee of Catalyst
to which Catalyst's Series C Shares are transferred pursuant to
Section 4(b)(i) or (ii) hereof) or APA Excelsior V, L.P. and any other
fund managed by Patricof & Co. Ventures, Inc., (the "Patricof Funds"),
own at least one-half (1/2) of the number of shares of Series C
Preferred Stock set forth opposite their respective names on Schedule
--------
III (as adjusted for stock splits, stock dividends or similar events),
---
each such entity shall be entitled to designate one (1) individual,
which individuals are initially Thomas Hirschfeld for the Patricof
Funds and Julie Kunstler for Catalyst, and
(C) two (2) individuals designated by the holders of the Series B
Preferred Stock (collectively, the "Series B Directors") voting as a
class; provided, however, that in the event Euclid Partners IV, L.P.
-------- -------
("Euclid") or Perseus Capital, LLC ("Perseus") owns at least one-half
(1/2) of the number of shares of Series B Preferred Stock set forth
opposite their respective names on Schedule II hereto (as adjusted for
-----------
stock splits, stock dividends or similar events), each such entity
shall be entitled to designate one (1) individual, which individuals
are initially Milton J. Pappas for Euclid and William Ford for
Perseus; and
(D) one (1) individual designated by the Management Shareholders
(the "Management Directors"), which individual is initially Mark S.
Adams; and
(E) one (1) individual designated by Arthur B. Sculley, David W.
Sculley, John Sculley, Sculley Investment Ltd. Partnership, The John
Sculley Irrevocable Trust for the Benefit of Oliver Allnatt, The John
Sculley Irrevocable Trust for the Benefit of Madeline Allnatt, The
Sculley Family Trust, Sculley Brothers LLC, Isabel Espina and any
Permitted Transferee to which their shares are transferred (the
"Sculley Brothers Group") as long as the Sculley Brothers Group owns
in the aggregate at least one-half (1/2) of the shares of capital
stock of the Company set forth opposite their names on the Schedules
hereto (as adjusted for stock splits, stock dividends or similar
events), such designee is
3
<PAGE>
initially Arthur Sculley and thereafter, if not Arthur Sculley, David
Sculley or John Sculley to the extent available; and
(F) one (1) individual designated by the holders of the Series E
Preferred Stock; provided, however, in the event Reuters Holdings
-------- -------
Switzerland SA ("Reuters") owns at least one-half (1/2) of the number
of shares of Series E Preferred Stock set forth opposite its name on
Schedule V hereto (as adjusted for stock splits, stock dividends or
----------
similar events), Reuters shall be entitled to designate such
individual, which individual is initially Devin Wenig; and
(G) following an election by Chase pursuant and subject to
Section 2.1(c)(ii) below, one (1) individual designated by Chase;
all of which designees shall hold office subject to their earlier removal
in accordance with clause (ii) below, the By-laws of the Company and
applicable corporate law, until their respective successor shall have been
elected and shall have been qualified;
(ii) the removal from the Board (with or without cause) of any
representative designated hereunder by the Shareholders entitled to make
such designation hereunder pursuant to clause (i) above, upon written
request of such Shareholders for removal of its designee, but only upon
such written request; and
(iii) upon any vacancy in the Board as a result of any individual
designated as provided in clause (ii) above ceasing to be a member of the
Board, whether by resignation or otherwise, the election to the Board of an
individual designated by the Shareholders which designated the individual
who shall have so ceased to be a member of the Board.
(b) Each of the Shareholders agrees to cause its designees to the
Board to vote or otherwise give such director's consent to the creation and
maintenance of:
(i) a Compensation Committee of the Board consisting of four (4)
members of the Board which shall be composed of (A) two designees of the
holders of the Series B Preferred, initially to be the directors designated
by Euclid and Perseus; (B) a designee of the holders of the Series C
Preferred, initially to be the director designated by Catalyst; and (C) a
designee of the holder of the Series D Preferred, initially to be a
director designated by the Series D Preferred Shareholder. The approval of
a majority of the members of the Compensation Committee shall be required
for:
(A) all grants of stock options and other stock-based
compensation to officers and employees of the Company;
(B) all increases in compensation;
4
<PAGE>
(C) any bonus plan to be formed by the Company and all annual or
other bonuses granted to officers of the Company thereunder; and
(D) any increase in other employee benefits (including, without
limitation, vacation policy, benefit plans, company automobiles and
insurance) granted to officers of the Company; and
(ii) an Audit Committee of the Board consisting of three (3) members
of the Board which shall be composed of (A) a designee of the holders of
the Series B Preferred, initially to be the director designated by Euclid
(B) a designee of the holders of the Series C Preferred, initially to be
the director designated by the Patricof Funds; and (C) a designee of the
holders of the Series D Preferred, initially to be a director designated by
the Series D Shareholder, which Audit Committee shall review and approve by
majority vote the financial statements of the Company, as audited by the
Company's independent certified public accountants, prior to issuance each
year. The Audit Committee shall meet at least twice each year and shall be
empowered to:
(A) meet with the independent auditors of the Company to discuss
the scope of the annual examination;
(B) review the annual report of the auditors, including the
financial statements and management letter or recommendations on
internal control;
(C) meet with the Treasurer of the Company to discuss and review
the system of internal controls and procedures, the quality of the
staff in the Treasurer's office, and the financial statements;
(D) direct and supervise special investigations of the accounting
affairs of the Company;
(E) recommend the appointment of independent auditors for the
ensuing fiscal year; and
(F) make a report of its activities at each annual meeting of the
Company.
(c) John M. Muldoon, Patrick J. Wack, a Johnson & Johnson Development
Corporation ("JJDC") representative appointed by JJDC and a representative
appointed by Chase shall each have the right to attend all meetings of the Board
as observers without a vote or other rights of a director (except the right to
receive sufficient notice of any such meeting to enable such attendance and the
right to receive all other communications, information and materials furnished,
from time to time, to directors of the Company and the right to receive
reimbursement for travel expenses to the same extent as directors of the
Company); provided that:
--------
5
<PAGE>
(i) such observer and reimbursement rights set forth in this clause
(c) shall terminate with respect to John M. Muldoon, Patrick J. Wack, Jr.
and JJDC at such time as such individuals, with respect to Messrs. Muldoon
and Wack (together with members of their respective immediate families and
any trusts, etc. for the benefit of such persons), or JJDC hold less than
50% of their current ownership of the Company's capital stock; and
(ii) upon the earlier to occur of (i) the three (3) month anniversary
of the Company's IPO (as defined herein) or (ii) the twelve (12) month
anniversary of the date of the Initial Closing Date, as defined in the
Stock Purchase Agreement (the "Designation Event"), Chase may elect to
convert its observer rights into the right to appoint one individual to the
Board pursuant to Section 2.1(a)(i)(G) above, in which case the observer
and reimbursement rights set forth in this clause (c) shall terminate with
respect to Chase. In the event of such election, the Company and the
Shareholders shall take all necessary and appropriate actions to facilitate
the appointment of a Chase designee, who shall be reasonably acceptable to
the Company and to the Company's Board of Directors. In the event that
Chase does not exercise its right to designate a director within two years
after the Designation Event, such right shall terminate.
(d) In the event that Mark S. Adams resigns from his current position
as Chief Executive Officer of the Company ("CEO") or, for any reason whatsoever,
no longer holds such position, majority approval of the entire Board shall be
required in order to select and appoint a new CEO, which majority must include
each of the Series B Directors and Series C Directors.
(e) The Board shall meet on a quarterly basis unless and until
otherwise agreed by the Board. The Company will reimburse all directors who are
not also officers or employees of the Company for out-of-pocket and travel
expenses reasonably incurred in connection with attending such meetings.
6
<PAGE>
SECTION 3.
OFFICERS
--------
Until changed by any regular or special meeting of the Board, as
provided in the By-Laws of the Company and pursuant to the requirements
contained herein, the following persons shall be duly constituted officers of
the Company:
<TABLE>
<CAPTION>
<S> <C>
Chairman of the Board -- Arthur B. Sculley
Chief Executive Officer -- Mark S. Adams
President and -- James Dougherty
Chief Operating Officer
Chief Financial Officer and Treasurer -- John M. Muldoon
Assistant Secretary - -- Patrick J. Wack, Jr.
Secretary -- Stephen M. Davis
</TABLE>
The Shareholders shall be permitted to cause the Board to review and elect (or
reelect, as the case may be), the Chairman of the Board on or before April 1 of
each year.
SECTION 4.
RESTRICTIONS ON TRANSFER OF SHARES; REPURCHASE OF SHARES
--------------------------------------------------------
The Shares are subject to restriction on transfer as described below.
Section 4.1 Restrictions on Transfer. (a) None of the Shares may be
------------------------
sold, transferred or otherwise disposed of nor shall they be pledged or
otherwise hypothecated by any Original Shareholder, provided, however,
-------- -------
notwithstanding anything to the contrary contained herein, that an Original
Shareholder may transfer the Shares to any of the following (each, an "Original
Shareholder Permitted Transferee") in accordance with applicable securities
laws: (i) any spouse or family member related to them by one generation
("Immediate Family Member") or to a trust created for the benefit of an
Immediate Family Member or Immediate Family Members with the prior approval of a
Super Majority (as hereinafter defined) of the Board which will not be
unreasonably withheld; or (ii) any Shareholder by an Original Shareholder with
the prior approval of a Super Majority of the Board; or (iii) any beneficiary by
intestate succession or testamentary disposition from an Original Shareholder.
Notwithstanding anything contained herein to the contrary, each Original
Shareholder may transfer up to an aggregate of 15,000 Shares in one or more
gifts or contributions to any individual or charitable organization.
7
<PAGE>
(b) Anything herein to the contrary notwithstanding, each Series B
Shareholder, Series C Shareholder, Series D Shareholder, Series E Shareholder
and Series F Shareholder shall have the right to transfer its Shares to (a) any
partner, member or shareholder of such shareholder or any person or entity that
directly or indirectly through one or more intermediaries controls or is
controlled by or is under common control with such shareholder, (b) any limited
partnership, partnership, trust or other legal entity in which such shareholder
is a principal and that is managed or controlled by a company or entity which
controls, or is controlled by or is under common control with such shareholder,
(c) any corporate, partnership or member affiliate, or affiliate of such an
affiliate, of such shareholder, (d) any spouse or family member related by one
generation to such shareholder or to a partner, member or shareholder of such
shareholder or to any trust (or to any trustee, settlor or beneficiary of any
such trust), estate, personal representative, heir or devisee of any such person
or entity, and (e) no more than three other individuals or entities per each
such shareholder so long as such transfer is made without cash, deferred cash or
marketable security consideration (each, an "Investor Permitted Transferee"),
provided that such transfer is made in accordance with applicable securities
laws.
(c) In the event that the Series D Shareholder determines at some time
in the future that any Series E Shareholder, Series F Shareholder or any future
shareholder of the Company causes an independence issue for the Series D
Shareholder (any such further shareholder shall be referred to hereafter as a
"Non-Independent Shareholder") under Section 602.02.g of the Securities and
Exchange Commission's interpretations relating to independence or any federal or
state governmental or regulatory rules, or applicable professional guidelines
applicable to independent public accountants (an "Independence Issue"), the
following steps will be taken to cause the Non-Independent Shareholder to divest
itself of its investment in the Company's securities (the "Non-Independent
Securities"):
(i) The Series D Shareholder will give notice of such Independence
Issue to the Company (the "Non-Independence Notice").
(ii) The Company will engage an investment bank, reasonably acceptable
to the Non-Independent Shareholder, to determine the Market Price (as defined
herein) of the Non-Independent Securities. For the purposes hereof, the Market
Price shall be the price that a buyer would pay for the Non-Independent
Securities given the unregistered nature of the securities and the performance
and prospects of the Company and relevant market conditions at such time.
If the Company has already engaged an investment bank as the underwriter in
its prospective initial public offering (the "IPO"), such investment bank will
provide the valuation if the Company so chooses. The Company will use its best
efforts to cause the investment bank to provide the valuation of Market Price
within thirty (30) days of its receipt of the Non-Independence Notice by
providing all reasonable information and access to the Company's personnel to
the investment bank performing the valuation. All reasonable expenses of the
valuation shall be borne by the Company.
8
<PAGE>
(iii) Once the Market Price has been determined, the Non-Independent
Securities will be offered to the Company at the Market Price. The Company
shall have ten (10) days to purchase all or a portion of the Non-Independent
Securities.
(iv) Any Non-Independent Securities that are not purchased by the
Company shall be offered to the Shareholders at the Market Price in the manner
described in Section 5.1(i)(b) hereof.
(v) Any Non-Independent Securities that have not been purchased by the
Company or the Shareholders shall be offered by the Non-Independent Shareholder
to any third parties ("Third Parties") for the Market Price; provided, however,
-------- -------
that the Non-Independent Shareholder must obtain the approval of the Company in
writing prior to any such transfer of the Non-Independent Securities. The Non-
Independent Shareholder shall use commercially reasonable efforts to sell the
Non-Independent Securities within ninety (90) days of the Company's receipt of
the Non-Independence Notice.
(vi) Notwithstanding anything contained herein to the contrary, the
Non-Independent Shareholder shall not be required to sell the Non-Independent
Securities under subsections 4.01(c)(iii), (iv) or (v) unless either the Market
Price is, or one or more purchasers (including the Company, the Shareholders,
and/or Third Parties) acting individually or jointly offer to pay, $13.00 or
more per share, as adjusted for stock splits or share combinations.
(vii) Any and all sales commissions and brokers' fees incurred in
connection with the sale of the Non-Independent Securities shall be borne by the
Non-Independent Shareholder.
(viii) In the event of the Company's IPO at any time after the sale
of the Non-Independent Securities, the Company shall use commercially reasonable
efforts to cause the number of shares equal to the Non-Independent Securities
sold by the Non-Independent Investor (but in no event more than five percent
(5%) of the capital stock of the Company) to be allotted to the Non-Independent
Shareholder for purchase in the IPO.
(d) In the event that the Series D Shareholder determines at some time
in the future that any Original Shareholder, Series B Shareholder or Series C
Shareholder, or any director or officer of the Company, causes the Series D
Shareholder's investment in the Company to be a prohibited investment for the
Series D Shareholder because any such Shareholder, officer or director, through
the ownership of its Shares, causes an Independence Issue for the Series D
Shareholder, or in the event a Non-Independent Shareholder is not required to
divest itself of its Non-Independent Securities under subsection 4.1(c) above
following the occurrence of an Independence Issue as described in such
subsection, the Company will use commercially reasonable efforts to cure such
Independence Issue by assisting such Shareholder, director or officer in taking
whatever actions are reasonably appropriate to resolve the Independence Issue.
If such Independence Issue cannot be cured through these means, the Company will
use its commercially reasonable efforts to assist the Series D Shareholder in
disposing of its investment in the Company's securities, including, if
9
<PAGE>
requested, by (i) providing information for due diligence purposes to
prospective transferees of the Series D Shareholder's investment in the Company
and (ii) providing an opinion of Company counsel to a transferee in connection
with such transfer of the Series D Shareholder's investment in the Company. The
Series D Shareholder must obtain the approval of the Company in writing prior to
any such transfer of the Series D Shareholder's investment in the Company, such
approval not to be unreasonably withheld.
(e) Notwithstanding anything contained herein to the contrary, Savant
Technologies, Inc. shall have the right to transfer its Shares to any of its
shareholders (each, a "Savant Permitted Transferee," together with the Investor
Permitted Transferees and the Original Shareholder Permitted Transferees
sometimes referred to herein as "Permitted Transferees"), provided that such
transfer is made in accordance with applicable securities laws.
Section 4.2 Release of Restrictions on Shares. The restrictions set
---------------------------------
forth in Section 4.1 on the sale, transfer or other disposition and on the
pledge or other hypothecation of the Shares, including the Independence Issue-
related provisions in Section 4.1(c), shall lapse concurrently with the
successful completion of an IPO of Common Stock by the Company or upon the sale
of all or substantially all of the assets of the Company.
Section 4.3 Repurchase Upon Death. Any Original Shareholder who (i)
---------------------
owns more than 1% of the outstanding Shares; and (ii) is an employee of the
Company (an "Original Employee Shareholder"), may elect to have the Company
purchase up to $1,000,000 of his Shares at the time of his death at Fair Market
Value (as hereinafter defined); provided that, (i) such Original Shareholder,
-------- ----
while still living, has provided the Company with notice as of the date hereof
or provides the Company with one hundred and twenty (120) days' notice of such
intent at such other time ("Special Notice"); and (ii) upon receiving such
Special Notice, the Company shall be able to, through use of its reasonable best
efforts, obtain Company-sponsored life insurance ("Insurance") policies for each
Original Employee Shareholder providing a Special Notice pursuant to section (i)
of this Section at a commercially reasonable price. In the event that the
Company has been able to obtain such Insurance, then the Company shall purchase
such Shares with the proceeds of the Insurance policy and the purchase price for
the Shares shall be paid by the Company to the Original Employee Shareholder's
estate, at such time as proceeds are received under the Insurance plan.
4.4 Repurchase of Shares Owned by Management Shareholders. Upon any
-----------------------------------------------------
termination of the employment of any Management Shareholder by the Company for
cause (where applicable and as such term is defined in the respective employment
agreements in existence on this date between the Company and each Management
Shareholder), the Company shall have the right to repurchase from such
Management Shareholder all Shares held by such Management Shareholder at Fair
Market Value.
4.5 Procedure. (a) The repurchase rights of the Company under
---------
Section 4.4 may be exercised by notice specifying the Shares to be repurchased
(a "Repurchase Notice"). The Repurchase Notice shall be delivered to the
respective Management Shareholder during
10
<PAGE>
the period (the "Repurchase Period") ending 30 days after the event triggering
such repurchase right. Upon the delivery of any Repurchase Notice, the
respective Management Shareholder shall be obligated to sell to the Company the
Shares specified in such Repurchase Notice.
(b) The closing of any repurchase of Shares under this Section shall
take place at the offices of the Company or at such other place designated by
the Company on a business day designated by the Company which shall be not more
than 30 days after the receipt of the Repurchase Notice. At such closing, (i)
the respective Management Shareholder shall deliver to the Company the
certificate or certificates evidencing the Shares specified in the Repurchase
Notice, duly endorsed for transfer and free and clear of all liens, claims and
other encumbrances (other than encumbrances arising under this Agreement), and
(ii) the Company shall deliver to such Management Shareholder the purchase price
therefor.
SECTION 5.
RIGHTS WITH RESPECT TO SALES OF SHARES
--------------------------------------
Section 5.1 Certain Shareholder Requirements. No Shareholder, and
--------------------------------
none of his or its heirs, personal representatives, successors, or assigns, as
the case may be, shall have the right at any time of such ownership to sell, or
otherwise transfer any portion of his or its Shares, other than to a Permitted
Transferee (any Shareholder who desires to sell or transfer his or its Shares is
hereinafter referred to as a "Selling Shareholder") unless in accordance with
the following provisions.
(i) Right of First Refusal to Company and/or Shareholders. (a) The
-----------------------------------------------------
Selling Shareholder shall deliver a written-notice to the Company, stating the
price, terms, and conditions of the proposed sale or transfer, the Shares to be
sold or transferred, and the identity of the proposed transferee (a "Sale
Notice"). Within twenty (20) days after receipt of a Sale Notice, the Company
shall have the right to purchase all or any portion of the Shares so offered at
the price and on the terms and conditions stated in the Sale Notice.
(b) If none or only a part of the Shares for sale is bid for purchase
by the Company, then the Selling Shareholder shall deliver the Sale Notice to
all of the other Shareholders (the "Buying Shareholders"). Within twenty (20)
days after receipt of a Sale Notice, the Buying Shareholders shall have the
right to purchase all or a part of his or its pro rata portion (on an as-
converted basis) of the Shares so offered at the price and on the terms and
conditions stated in the Sale Notice by giving notice to the Selling Shareholder
stating the quantity of Shares to be so purchased.
(c) In the event that (X) the Company and/or the Buying Shareholders
have not bid to purchase all of the Shares for sale and (Y) the remaining Shares
are to be sold to a Reuters Competitor, then the Selling Shareholder shall give
Reuters written notice prior to any such sale stating the remaining number of
Shares for sale and the identity of the Reuters Competitor (a "Reuters Sale
Notice"). For a period of twenty (20) days after receipt of a Reuters Sale
Notice, Reuters shall have a right to purchase all or any portion of the
remaining
11
<PAGE>
Shares so offered at the price and on the terms and conditions stated
in the original Sale Notice. For purposes of this Section (c), a "Reuters
Competitor" shall be deemed to be (A) Bloomberg L.P., Dow Jones, Inc., Bridge
Data, Inc., Thomson Corporation, Automatic Data Processing Inc., IPC Systems
Inc. and any of their affiliates, successors or assigns and (B) any other person
or entity or an affiliate of any such person or entity similar to those types of
companies listed in (A) above which, at the time of the sale, either alone or
combined with its affiliates derives greater than 30% of its revenues from the
provision of financial information to the professional market.
(ii) Transfer to Third Parties. If none or only a part of the Shares
-------------------------
for sale is purchased by the Company and/or the Buying Shareholders, then the
Selling Shareholder may dispose of some or all of the remaining Shares for sale
to any person or persons, subject to Section 5.1(i)(c) but only within a period
of ninety (90) days from the date of his or her last Sale Notice. However, the
Selling Shareholder shall not sell or transfer any of the Shares for sale at a
lower price or on terms more favorable to the purchaser or transferee than those
specified in the Sale Notices. After the ninety (90) day period, the procedures
set forth in this Section 5.1 shall again apply.
(iii) Tag-Along Rights of Shareholders. If any Selling Shareholder
--------------------------------
or group of Selling Shareholders proposes to sell in a single transaction or a
series of related transactions an aggregate number of shares of stock of any
class for cash or other property which represents more than 10% of the then
outstanding Shares (other than, as provided above, to a Permitted Transferee),
such Selling Shareholder or group of Selling Shareholders shall comply with the
following:
(A) The Selling Shareholder or group of Selling Shareholders
shall send to all Shareholders a written notice of the proposed sale, offering
each the right to participate in the sale on the terms set out in this Section
5.1(iii). Each such Shareholder (a "Co-Seller") may elect to participate in the
contemplated sale by delivering a written notice to the Selling Shareholder or
group of Selling Shareholders within two business days after the expiration of
the notice periods identical to those set forth in Section 5.1(i) specifying the
number of shares such Co-Seller elects to sell. Each such Co-Seller may elect to
sell in the contemplated transaction up to a number of Shares equal to the
number obtained by multiplying the number of Shares which the Co-Seller owns by
a fraction, the numerator of which shall be the number of Shares the Selling
Shareholder or group of Selling Shareholders proposes to sell, and the
denominator of which shall be the aggregate number of Shares held by the Selling
Shareholder or group of Selling Shareholders. If the Co-Sellers and the Selling
Shareholder or group of Selling Shareholders (singularly, a "Selling Party",
and, collectively, the "Selling Parties") in the aggregate elect to sell more
than the total number of Shares that the Selling Shareholder's or group of
Selling Shareholders' buyer or buyers wish to purchase, then each Selling Party
shall be entitled to sell to the buyer or buyers that number of Shares to be so
purchased by the buyer or buyers from the Selling Parties multiplied by a
fraction, the numerator of which is the number of Shares such Selling Party
elects to sell and the denominator of which is the aggregate number of Shares
all of such Selling Parties elect to sell.
12
<PAGE>
(B) Each Co-Seller shall effect its participation in a sale of the
type contemplated in this Section 5.1(iii) by arranging for transfer to the
buyer or buyers of one or more certificates, properly endorsed for transfer,
which represent the number of Shares which the Co-Seller is entitled to sell
pursuant to this Section 5.1(iii). All Shares proposed to be sold by each
Selling Party shall be sold free and clear of all liens, claims and encumbrances
of any kind.
(C) The exercise or non-exercise of the rights of the Co-Sellers
hereunder to participate in one or more sales of Shares made by a Selling
Shareholder or group of Selling Shareholders shall not adversely affect Co-
Sellers' rights to participate in subsequent sales by Selling Shareholders or
groups of Selling Shareholders which meet the conditions specified in this
Section 5.1(iii).
(D) Any sale or transfer made pursuant to this Section 5.1(iii) shall
be consummated within 120 days of the expiration of the Section 5.1(iii) notice
period.
Section 5.2. Bring-Along Rights.
------------------
(i) Requirements. If any Shareholder or group of Shareholders
------------
who collectively hold at least 50% of the then outstanding Shares on an as
converted basis (the "Majority Shareholders") shall propose a sale or exchange
in a business combination or otherwise of all their Shares in a bona fide arm's
length transaction, the Majority Shareholders, at their option may require that
(1) all Shareholders sell or exchange all of their shares in the same
transaction at the same price and on the same terms and conditions as applicable
to the Majority Shareholders and, (2) if Shareholder approval of the transaction
is required, that each such Shareholder vote such Shareholder's Shares in favor
thereof. For the purposes of this Section 5.2, a "sale" shall include a merger,
consolidation or similar combination, exchange, sale of assets followed by a
liquidation, or any disposition thereof for cash, marketable securities, or debt
obligations, or a combination thereof; provided, however, that a "sale" shall
-------- -------
not include a public offering of shares to be registered under the Securities
Act.
(ii) Expiration of Bring-Along Rights. The provisions of this
--------------------------------
Section 5.2 shall expire at such time as the Company completes the initial
public offering of its Common Stock.
SECTION 6.
PRE-EMPTIVE RIGHTS
------------------
Section 6.1. Shareholders.
------------
(i) "New Securities." "New Securities" shall mean any
---------------
additional equity of the Company, whether Common Stock or any other equity
security or right convertible, exchangeable or exercisable into Common Stock or
any other security, other than (A) securities issued to employees, directors or
officers of the Company pursuant to plans
13
<PAGE>
adopted or arrangements approved by the Compensation Committee and any
securities issuable upon the exercise of any such options granted or issued
under such plans; (B) securities issued for the acquisition of another company
by the Company by merger, purchase of substantially all the assets of such
company, or other reorganization of the Company approved by a vote of a Super
Majority of the Board; (C) securities issued to an equipment lessor or source of
debt financing pursuant to arrangements approved by a vote of a Super Majority
of the Board; (D) the issuance of securities upon the exercise or conversion of
options, warrants or the convertible securities which are outstanding as of the
date of this Agreement; and (E) securities issued to consultants, and members of
any advisory board established by the Board of Directors of the Company and any
securities issuable upon the exercise or conversion of such securities.
(ii) Pre-Emptive Rights of Shareholders. (A) Notwithstanding
----------------------------------
any prior agreement to the contrary, in the event the Company intends to issue
New Securities, it shall give each Shareholder written notice of such intention,
describing the type of New Securities to be issued, the price thereof, and the
general terms upon which the Company proposes to effect such issuance. Each
Shareholder shall have fifteen (15) days from the date of such notice to agree
to purchase all or a part of its pro rata portion (on an as-converted and fully-
diluted basis) of such New Securities for the price and upon the general terms
and conditions specified in the Company's notice by giving notice to the Company
stating the quantity of New Securities to be so purchased.
(B) Any pre-emptive rights heretofore granted by the Company to any
Original Shareholders, Series B Shareholders, Series C Shareholders or Series D
Shareholders in connection with the Shares are hereby eliminated and only the
pre-emptive rights referred to in this Section 6.1 are effective.
SECTION 7.
LEGENDS
-------
By execution of this Agreement, the Shareholders indicate their
agreement to the repurchase rights of the Company, the restrictions on resale
and the special rights described in Section 5 hereof. The Shareholders also
acknowledge that neither the issuance nor the resale of the Shares has been
registered or qualified under applicable federal or state securities laws.
The Shareholders agree that the following legends will be imprinted on
each certificate representing Shares restricted from resale under Section 5
hereof:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED,
SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE
WITH AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDERS
14
<PAGE>
EXECUTING SUCH AGREEMENT, A COPY OF WHICH CAN BE INSPECTED AT THE COMPANY'S
EXECUTIVE OFFICES."
The Shareholders agree that the following legends will be imprinted on
all certificates representing the Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, MORTGAGED, PLEDGED,
HYPOTHECATED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THE SECURITIES
REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND APPLICABLE STATE SECURITIES LAWS OR THE COMPANY HAS RECEIVED AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT TO THE EFFECT THAT AN EXEMPTION
FROM REGISTRATION IS AVAILABLE."
SECTION 8.
ACTIONS REQUIRING SPECIAL APPROVAL
----------------------------------
Unless approved by a vote of a Super Majority of the Board, the
Company shall not permit:
(i) Any public offering of Common Stock;
(ii) Any equity or debt financings or series of financings by the Company,
which individually or in the aggregate equal more than $500,000;
(iii) A loan by the Company to any shareholder, officer, director or
employee in excess of $10,000 or any loan by any shareholder,
interested director, officer or employee to the Company in excess of
$10,000;
(iv) Any material transaction between the Company and any shareholder,
officer, director or employee or any member of the immediate family
of any of the foregoing persons;
(v) The payment of any dividends on any of the Company's capital stock;
(vi) Any transaction between the Company and any non-wholly-owned
subsidiary;
15
<PAGE>
(vii) Any repurchase by the Company of its capital stock;
(viii) Any reincorporation of the Company;
(ix) Any letter of intent, memorandum of understanding or other form of
agreement in principle to enter into a material transaction referred
to in this Section 7, not in the ordinary course of business; and
(x) Any amendment of the Company's Articles of Incorporation or Amended
By-Laws.
In addition to a vote of a Super Majority of the Board, any sale of
all or substantially all of the assets or capital stock of the Company, whether
by merger, consolidation, exchange or otherwise, shall require the vote of a
majority of the holders of the issued and outstanding capital stock of the
Company, on an as-converted basis.
SECTION 9.
TRADE SECRETS AND UNFAIR COMPETITION
------------------------------------
It is understood that the Shareholders will have access to the
Company's confidential and proprietary information and trade secrets, including
patentable and nonpatentable technology, customer or client lists and other
items of information. The use of such items or the solicitation of the
Company's clients, employees, business partners, material vendors or consultants
by a Shareholder would materially and adversely affect the Company and all of
the Shareholders, economically and otherwise.
Accordingly, the Company must protect such information through an
agreement regarding confidentiality by and among the Company and the
Shareholders on the terms of this Section.
(a) As a result of a Shareholder's investment in the Company, such
Shareholder may be in possession of proprietary and confidential information and
trade secrets relating to the business practices of the Company and affiliated
companies, if any. The Shareholder covenants and agrees that he or it will not,
at any time during or after the investment period, directly or indirectly, use
or disclose to any person, firm, company or other entity, use to the detriment
of the Company or the Company's employees or misuse in any way proprietary or
confidential information acquired by the Shareholder during the term of his or
its investment in the Company regarding the clients, customers or business
practices of the Company or affiliated companies which has not otherwise become
part of the public domain, without the prior written consent of the Company or
as required by law. For purposes of this Agreement, confidential information
includes, but is not limited to, trade secrets; lists of past or present
clients, customers or consultants; product or service development plans;
marketing plans; pricing policies; business acquisition plans or targets; any
portion or phase of any technical information, technique, method, process,
procedure, technology or know-how
16
<PAGE>
(whether or not in written on tangible form) used by the Company or any portion
or phase of any technical information, ideas, discoveries, designs, computer
programs, that is valuable (whether or not in written or tangible form or
whether or not down-loaded into a computer or on computer discs) to the Company.
All such information, in whatever form, including all memoranda, notes, plans,
reports, records, documents and other evidence thereof and any other information
of whatever nature which gives the Company an opportunity to obtain an advantage
over its competitors shall be considered a "trade secret" for the purposes of
this Agreement. Notwithstanding the foregoing, a Shareholder's obligations under
this subsection (a) shall not apply to any information that (i) was in the
possession of such Shareholder without obligation of confidence prior to the
receipt thereof from the Company, (ii) was independently developed by the
Shareholder, (iii) is or has become available to the public without fault of
such Shareholder, (iv) is disclosed to such Shareholder, without restriction, by
a third party, or (v) the Shareholder is requested to disclose the information
and the information is required by law to be disclosed (in which event the
Shareholder will notify the Company as promptly as practicable following the
request to enable the Company to seek an appropriate protective order or to
waive the provision).
(b) Each Original Shareholder agrees that during the term of and for a
period of one year immediately following termination of his or its investment in
the Company, such Original Shareholder shall not directly interfere with the
business of the Company in any manner, including, without limitation, by
inducing an employee or associate to leave the Company, or by inducing a
consultant or other independent contractor to sever that person's relationship
with the Company, or disrupting the Company's relationships with customers,
agents, representatives or vendors or otherwise.
(c) In the event that any portion of this Section 9 is determined to
be unenforceable, such enforceable portion shall be severable and the balance
shall remain valid and fully enforceable. Money damages for the breach of the
foregoing covenants may not be capable of determination. Accordingly, the
foregoing covenants shall be subject to specific enforcement in any court of
competent jurisdiction.
SECTION 10.
INDEMNIFICATION
---------------
Section 10.1 Arising out of Employment or Efforts on Behalf of the
-----------------------------------------------------
Company. To the full extent permitted by law, the Company will indemnify any
- -------
person or his or its, as the case may be, heirs, distributees, next of kin,
successors, appointees, executors, administrators, legal representatives and
assigns who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceedings, whether civil,
criminal, administrative or investigative by reason of the fact that he is or
was a director, officer, employee or agent of the Company, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another company, partnership, joint venture, trust or other enterprise, domestic
or foreign, against expenses, attorneys' fees, court costs, judgments, fines,
amounts paid in settlement and other losses actually and reasonably incurred
17
<PAGE>
by him in connection with such action, suit or proceeding. Where permitted by
applicable law, in connection with any such action, suit or proceeding, the
Company shall advance those attorneys' fees as may be reasonably requested from
time to time by the party to be indemnified.
Section 10.2 Arising out of Investment in the Company. To the full
----------------------------------------
extent permitted by law, the Company will indemnify any shareholder, director,
officer, employee or agent of the Company or his heirs, distributees, next of
kin, successors, appointees, executors, administrators, legal representatives
and assigns who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceedings, whether civil,
criminal, administrative or investigative by reason of the fact that he was or
is an investor in the Company, against expenses, attorneys' fees, court costs,
judgments, fines, amounts paid in settlement and other losses actually and
reasonably incurred by him in connection with such action, suit or proceeding.
Where permitted by applicable law, in connection with any such action, suit or
proceeding, the Company shall advance those attorneys' fees as may be reasonably
requested from time to time by the party to be indemnified.
SECTION 11.
AMENDMENTS
----------
This Agreement, the Certificate of Incorporation and By-Laws of the
Company may only be amended, altered or repealed by a vote of a Super Majority
of the Board and a majority of the issued and outstanding capital stock of the
Company, on an as converted basis; provided, however, that any such amendment of
-------- -------
Sections 2.1(a)(i)(A), (B), (C) and (G), Sections 2.1(b)(i) and (ii), 2.1(c)
(with respect to the representatives appointed by JJDC and the Series F
Shareholders) and Section 2.1(d) hereto which would adversely affect the rights
of the holders of a series of Preferred Stock must also be approved by the
holders of a majority of the shares of such series of Preferred Stock.
SECTION 12.
INFORMATION RIGHTS
------------------
All Original Shareholders will be entitled to copies upon request, of
the following financial and other information:
(i) Annual consolidated and consolidating financial statements,
audited by an accounting firm of nationally-recognized standing, within ninety
(90) days of the end of each fiscal year; and
(ii) Copies of all reports, proxy statements, registration statements
and notifications, if any, filed with the Securities and Exchange Commission,
within fifteen (15) days of such filing.
18
<PAGE>
SECTION 13.
MISCELLANEOUS
-------------
Section 13.1 Termination. This Agreement shall remain in effect
-----------
until the earlier to occur of (i) the tenth anniversary of the date hereof; (ii)
with respect to any Shareholder, the date on which such Shareholder no longer
owns any shares of capital stock of the Company; (iii) upon completion of a
public offering for the Company resulting in the conversion of all Preferred
Stock into Common Stock, or (iv) a sale of all or substantially all of the
Company's capital stock or assets, a merger, a consolidation or similar
combination, an exchange, or a sale of assets followed by a liquidation;
provided, however, that Section 10 shall survive for the applicable statute of
- -------- -------
limitations period.
Section 13.2 Definitions.
-----------
"Fair Market Value" shall be the fair market value per Share
determined by a single valuation expert mutually agreed upon by the Company and
any selling Shareholder; provided that if the Company and such selling
--------
Shareholder cannot mutually agree on a single valuation expert, such Fair Market
Value shall be determined by the majority vote of (i) a valuation expert
selected by the Company (the "Company Expert"), (ii) a valuation expert selected
by the selling Shareholder (the "Seller Expert") and (iii) a valuation expert
mutually selected by the Company Expert and the Seller Expert; it being
understood and agreed that the aggregate costs related to the engagement of such
valuation expert or valuation experts, as the case may be, shall be borne
equally by the Company and the selling Shareholder.
"Super Majority" means seven votes by Board members in favor of the
action.
Section 13.3 Entire Agreement. This Agreement embodies the entire
----------------
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings, whether
written or oral, relating to such subject matter.
Section 13.4 Notices. All notices, advice and commitments to be
-------
given or otherwise made to any party to this Agreement shall be deemed to be
sufficient if contained in a written instrument given by personal delivery or
telecopier or duly sent by first class registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at the address
appearing on the records of the Company or such other addresses as may have been
given by such person to the Company for the purposes of notice in accordance
with this subsection. All such notices, advice and communications shall be
deemed to have been delivered and received (i) in the case of personal delivery
or telecopier, on the date of such delivery and (ii) in the case of mailing, on
the third business day following such mailing. Notices hereunder may also be
given by e-mail to an e-mail address provided to the Company by any party hereto
or to the Company at [email protected]. Either party may change its e-
mail address by notifying the other party. E-mail notice shall be deemed to
have been
19
<PAGE>
given twenty-four (24) hours after it has been sent. Notice will not be deemed
given if the sending party receives a notification that the e-mail address of
the intended recipient is invalid or any other notification that indicates that
the e-mail was not received. In addition, the sender of the e-mail notice shall
retain a confirmation of the receipt of the e-mail by the recipient.
Section 13.5 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, without regard
to its conflict of laws provisions. The parties hereto hereby agree that all
actions and proceedings arising in connection with this Agreement or any
agreement, document or instrument executed in connection herewith shall be tried
and litigated in the state and federal courts located in New York, New York
(other than appeals from those courts that may have to be heard outside of New
York, New York).
Section 13.6 Benefits of Agreement; Permitted Transferees. Nothing
--------------------------------------------
expressed by or mentioned in this Agreement is intended or shall be construed to
give any person other than the parties hereto and their Permitted Transferees
any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of the parties hereto and their respective Permitted Transferees.
Anything in this Agreement to the contrary notwithstanding, any Permitted
Transferee shall be subject to and bound by the terms and conditions of this
Agreement as fully as though such person was a signatory hereto, and shall be
required to execute a joinder to this Agreement.
Section 13.7 Further Assurances. Each of the Shareholders agrees
------------------
that during the term of this Agreement such Shareholder will take such
reasonable actions as may be necessary to effect the purposes of this Agreement.
Section 13.8 Severability. Any provision hereof prohibited by or
------------
unlawful or unenforceable under any applicable law of any jurisdiction shall as
to such jurisdiction be ineffective without affecting any other provision of
this Agreement. To the full extent, however, that the provisions of such
applicable law may be waived, they are hereby waived to the end that this
Agreement be deemed to be a valid and binding agreement enforceable in
accordance with its terms.
Section 13.9 Remedies. The parties hereto shall have all remedies
--------
for breach of this Agreement available to them provided by law or equity.
Without limiting the generality of the foregoing, the parties agree that in
addition to all other rights and remedies available at law or in equity, the
parties shall be entitled to obtain specific performance of the obligations of
each party to this Agreement and immediate injunctive relief and that in the
event any action or proceeding is brought in equity to enforce the same, no
Shareholder will urge, as a defense, that there is an adequate remedy at law.
20
<PAGE>
Section 13.10. Counterparts. This agreement may be executed in
------------
several counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
21
<PAGE>
[Shareholders' Agreement Signature Page]
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as a sealed instrument, all as of the day and year first above
written.
INTRALINKS, INC.
By: ___________________________
Name:
Title:
APA EXCELSIOR V PARTNERS, L.P.
By: APA Excelsior V Partners, L.P.,
its General Partner
By: Patricof & Co. Managers, Inc.,
its General Partner
By: _____________________
Name:
Title:
P/A FUND III, L.P.
By: APA Pennsylvania Partners III, L.P.
By: Patricof & Co. Managers, Inc.,
its General Partner
By: ______________________
Name:
Title:
PATRICOF PRIVATE INVESTMENT CLUB II, L.P.
By: APA Excelsior V Partners, L.P.
its General partner
By: Patricof & Co., Managers, Inc.,
its General Partner
By: ______________________
Name:
Title:
<PAGE>
[Shareholders' Agreement Signature Page]
ERNST & YOUNG U.S. LLP
By: _______________________
Name:
Title:
CATALYST INVESTMENT (BELGIUM) N.V.
By: _______________________
Name:
Title:
PERSEUS CAPITAL, LLC
By: _______________________
Name:
Title:
EUCLID PARTNERS IV, L.P.
By: ______________________
Name:
Title:
<PAGE>
[Shareholders' Agreement Signature Page]
_________________________
Sarah Brown-Adams
WALKER BROWN-ADAMS TRUST
By: ____________________
Name:
Title:
_________________________
Duncan W. Brown
_________________________
John M. Muldoon
RYAN JOHN MULDOON TRUST
By: ____________________
Name:
Title:
ERIC JAMES MULDOON TRUST
By: ____________________
Name:
Title:
<PAGE>
[Shareholders' Agreement Signature Page]
KELLY JEAN MULDOON TRUST
By: ____________________
Name:
Title:
_________________________
Arthur B. Sculley
_________________________
David W. Sculley
_________________________
John Sculley
SCULLEY FAMILY TRUST
By: ____________________
Name:
Title:
_________________________
Frederick Benjamin
_________________________
Ruth Benjamin
<PAGE>
[Shareholders' Agreement Signature Page]
EUGENE A. TOMEI LIVING TRUST
By: ____________________
Name:
Title:
_________________________
Cheryl Snyder
_________________________
Robert Lerner
INCLUSIVE VENTURES LLC
By: ____________________
Name:
Title:
_________________________
Patrick J. Wack, Jr.
PATRICK J. WACK, JR. FAMILY TRUST
By: ____________________
Name:
Title:
_________________________
Isabel M. Espina
<PAGE>
[Shareholders' Agreement Signature Page]
VANTAGE VENTURES CV
By: ____________________
Name:
Title:
LANDWELL FINANCIAL SERVICES, INC.
By: ____________________
Name:
Title:
GREENWICH VENTURES LP
By: ____________________
Name:
Title:
JOHN SCULLEY IRREVOCABLE TRUST FOR
THE BENEFIT OF OLIVER ALLNAT
By: ____________________
Name:
Title:
<PAGE>
[Shareholders' Agreement Signature Page]
JOHN SCULLEY IRREVOCABLE TRUST FOR
THE BENEFIT OF MADELINE ALLNAT
By: ____________________
Name:
Title:
HULL OVERSEAS, LTD
By: ____________________
Name:
Title:
RITA ANGEL, IRA
By: ____________________
Name:
Title:
ALL SOULS CHURCH
By: ____________________
Name:
Title:
JOSHUA ANGEL, IRA
By: ____________________
Name:
Title:
<PAGE>
[Shareholders' Agreement Signature Page]
C.E. UNTERBERG, TOWBIN, LLC
By: ____________________
Name:
Title:
SOLAR GROUP
By: ____________________
Name:
Title:
________________________
DEXTER D. FELIPE
________________________
PHYLLIS M. LYNCH
SMART TECHNOLOGY VENTURES, LLC
By: ____________________
Name:
Title:
NEW YORK SMALL BUSINESS
VENTURE FUND, LLC
By: ____________________
Name:
Title:
<PAGE>
[Shareholders' Agreement Signature Page]
SCULLEY INVESTMENT LTD.
PARTNERSHIP
By: ____________________
Name:
Title:
SCULLEY BROTHERS LLC
By: ____________________
Name:
Title:
________________________
David T. Muldoon
________________________
Brian Barker
________________________
Thomas Fredell
JOHNSON & JOHNSON DEVELOPMENT CORPORATION
By: ____________________
Name:
Title:
REUTERS HOLDINGS SWITZERLAND S.A.
By: ____________________
Name:
Title:
<PAGE>
[Shareholders' Agreement Signature Page]
________________________
Younes Nazarian
DAVID & ANGELA NAZARIAN FAMILY TRUST
By: ____________________
Name:
Title:
SAM NAZARIAN TRUST
By: ____________________
Name:
Title:
SHARON NAZARIAN BARADARAN TRUST
By: ____________________
Name:
Title:
BRENDA ELLISON
________________________
THE CHASE MANHATTAN BANK
By: ____________________
Name:
Title:
<PAGE>
EUCLID ECORPORATE PARTNERS, L.P.
By: _______________________
Name:
Title:
<PAGE>
Schedule I
----------
List of Original Shareholders
-----------------------------
<TABLE>
<CAPTION>
Name/Type Common Shares Held Series A Shares Held
- --------- ------------------ --------------------
Management Shareholders
- -----------------------
<S> <C> <C>
Sarah Brown-Adams 287,850 0
Walker Brown-Adams Trust 14,650 0
John M. Muldoon 292,000 0
Kelly Jean Muldoon Trust 5,000 0
Ryan John Muldoon Trust 5,000 0
Eric James Muldoon Trust 5,000 0
Patrick J. Wack, Jr. 150,000 0
Patrick J. Wack, Jr. Family Trust 5,250 15,000
Non-Management Shareholders
- ---------------------------
Arthur B. Sculley 190,097 45,000
Cheryl Snyder 84,500 0
Robert Lerner 0 15,000
Inclusive Ventures, LLC 0 22,500
Greenwich Ventures L.P. 0 55,916
Vantage Ventures CV 0 19,084
Landwell Financial Services, Inc 30,000 0
Duncan W. Brown 31,500 60,000
Frederick and Ruth Benjamin 0 30,000
Eugene A. Tomei Living Trust 0 30,000
David W. Sculley 0 45,000
John Sculley 0 45,000
Sculley Family Trust 14,650 0
Sculley Brothers LLC 50,000 0
Isabel M. Espina 3,003 0
Dexter D. Felipe 500 0
All Souls Church 2,000 0
David Muldoon 1,000 0
Phyllis M. Lynch 2,000 0
Belinda Ellison 1,000
Brian Barker 43,584 0
Thomas Fredell 43,584 0
- -------------- --------- -------
TOTAL 1,262,168 382,500
</TABLE>
<PAGE>
Schedule II
-----------
List of Series B Shareholders
-----------------------------
<TABLE>
<CAPTION>
No. of Shares of
Shareholder Series B Preferred
- ----------- Stock
-----
<S> <C>
Euclid Partners IV, L.P. 312,092
Perseus Capital, LLC 234,070
Catalyst Investment (Belgium) N.V. 78,023
John Sculley 97,061
Sculley Brothers LLC 23,407
Eugene A. Tomei Living Trust 6,242
Frederick A. Benjamin and Ruth Lohr-Benjamin 1,560
Duncan Brown 7,802
Robert Lerner 7,802
Sculley Investment Ltd. Partnership 10,143
John Sculley Irrevocable Trust for the Benefit of Madeline Allnatt 1,014
John Sculley Irrevocable Trust for the Benefit of Oliver Allnatt 1,014
- ---------------------------------------------------------------- -----
Total 780,230
</TABLE>
<PAGE>
Schedule III
------------
List of Series C Shareholders
-----------------------------
<TABLE>
<CAPTION>
Shareholder No. of Shares of Series C
- ----------- Preferred Stock
-------------------------
<S> <C>
Duncan W. Brown 15,385
Sculley Brothers LLC 46,154
Eugene A. Tomei Living Trust 15,385
Euclid Partners IV, L.P. 153,846
Perseus Capital LLC 76,923
Catalyst Investments (Belgium) N.V. 461,537
P/A Fund III, LP 246,154
Patricof Private Investment Club II, LP 13,662
APA Excelsior V, LP 1,124,800
Solar Group 46,154
Smart Technology Ventures LLC 38,462
Hull Overseas, Ltd. 11,538
Rita Angel, IRA 23,077
Joshua Angel, IRA 23,077
New York Small Business Venture Fund, LLC 153,846
C.E. Unterberg, Towbin, LLC 50,000
- --------------------------- ------
Total: 2,500,000
</TABLE>
<PAGE>
Schedule IV
-----------
List of Series D Shareholders
-----------------------------
<TABLE>
<CAPTION>
No. of Shares of
Shareholder Series D Preferred Stock
- ----------- ------------------------
<S> <C>
Ernst & Young U.S. LLP 1,320,000
Duncan W. Brown 985
Sculley Brothers LLC 2,954
Eugene A. Tomei Living Trust 985
Euclid Partners IV LP 9,846
Perseus Capital LLC 4,923
Catalyst Investments (Belgium) N.V. 29,538
P/A Fund III, LP 15,754
Patricof Private Investment Club II, LP 874
APA Excelsior V, LP 71,987
Solar Group 2,954
Smart Technology Ventures LLC 2,462
Hull Overseas, Ltd. 738
Rita Angel, IRA 1,477
Joshua Angel, IRA 1,477
New York Small Business Venture Fund, LLC 9,846
C.E. Unterberg, Towbin, LLC 3,200
- --------------------------- -----
Total: 1,480,000
</TABLE>
<PAGE>
Schedule V
----------
List of Series E Shareholders
-----------------------------
<TABLE>
<CAPTION>
No. of Shares of
Shareholder Series E Preferred Stock
- ----------- ------------------------
<S> <C>
APA Excelsior V, L.P. 194,581
Catalyst Investments (Belgium) N.V. 38,462
Eugene A. Tomei Living Trust 1,165
Frederick and Ruth Lohr-Benjamin 1,154
Johnson & Johnson Development Corporation 230,769
New York Small Business Venture Fund, LLC 107,811
P/A Fund III, LP 42,583
Patricof Private Investment Club II, LP 2,363
Reuters Holdings Switzerland SA 384,615
Younes Nazarian 23,077
David and Angella Nazarian Family Trust 15,385
Sam Nazarian Trust 7,692
Sharon Nazarian Baradaran Trust 7,692
Solar Group 11,541
- -----------
Total 1,068,890
</TABLE>
<PAGE>
Schedule VI
-----------
List of Series F Shareholders
-----------------------------
<TABLE>
<CAPTION>
Shareholder No. of Shares of Series F Preferred Stock
- ----------- ------------------------------------------
<S> <C>
The Chase Manhattan Corporation 588,236
Euclid Ecorporate Partners, L.P. 294,118
Total: 882,354
</TABLE>
<PAGE>
EXHIBIT 10.13
CONSULTING AGREEMENT
This Agreement dated the 1st day of September, 1997, by and between Intralinks,
Inc., a Delaware Corporation (hereinafter referred to as "the Company") and John
Sculley (the "Consultant").
Whereas, the Consultant is in the business of providing general business
and marketing consulting services; and
Whereas, the Company is a duly authorized corporation, validly existing,
and in good standing under the laws of the State of Delaware;
Now, therefore, the parties hereby covenant, promise, agree, represent,
and warrant as follows:
1. Relationship of parties. The parties agree that in performing the Duties
hereunder, the Consultant shall be acting as an independent contractor. Nothing
contained in this agreement shall constitute the Consultant and the Company as
partners, joint venturers, or either agents, servants or employees of one
another, any such intent being hereby expressly disclaimed. Consultant shall be
responsible for all federal, state, local, Social Security and other taxes.
2. Term.
This agreement shall commence on the date first written above and terminate 3
years from that date. The Duties under this Agreement will be reviewed formally
by the parties in September and March of each year in order to better ensure
that both IntraLinks and the Consultant are satisfied with the ongoing
relationship.
Either party may terminate this agreement, with or without cause, by giving 60
days notice.
3. Duties
In connection with this agreement from time to time, as the Company shall
reasonably request, the Consultant hereby provide consulting services which
shall include, but are not limited to, marketing, financing, public relations,
and business strategy.
4. Compensation. For the services rendered in connection with section 3., the
Consultant shall receive Warrants to purchase 40,000 shares of the Company's
stock as attached hereto. The exercise price of such warrants shall be $3.33 per
share. The Consultant agrees that if this Agreement is terminated for any reason
prior to the end of the term, he shall forfeit the warrants at a rate of 1,111
per month remaining in the Agreement. If the Company has a change in control
whereby an entity or related entities acquires more than 50% of the
fully-diluted voting interest of the Company, the Warrants shall not be subject
to forfeiture.
<PAGE>
5. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled in accordance with the rules
of the American Arbitration Association, and judgment upon the award may be
entered in any Court having jurisdiction thereof.
6. Notices. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if send by Certified Mail, return receipt
requested to Sculley and Associates, 90 Park Avenue, NY, NY in the case of the
Consultant, or to its principal office in the case of the Company.
7. Waiver of Breach. The waiver by the Company of a breach of any provision of
this Agreement by the Consultant shall not operate or be construed as a waiver
of any subsequent breach by the Consultant.
8. Assignment. Neither party shall have the right to assign the duties or
obligations contained in this Agreement.
9. Entire Agreement. This instrument contains the entire agreement of the
parties. It may not be changed orally but only by an agreement in writing signed
by the party against whom enforcement of any waiver, change, modification,
extension or discharge is sought.
In witness whereof, the parties have executed this Agreement on the date first
above written.
/s/ Mark Adams
----------------------------------------
Intralinks, Inc.
BY ITs President
/s/ John Sculley
----------------------------------------
John Sculley
<PAGE>
EXHIBIT 10.14
EXECUTION ORIGINAL
- --------------------------------------------------------------------------------
AGREEMENT OF LEASE
Between
SL GREEN OPERATING PARTNERSHIP, L.P.
Landlord,
AND
INTRALINKS, INC.
Tenant.
Premises:
Part of Floor 1 2A
1372 Broadway
New York, New York
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Caption Page
------- ----
1. BASIC LEASE TERMS ................................................... 1
A. Premises ................................................ 1
B. Commencement Notice ..................................... 2
C. Definitions ............................................. 2
D. Rent Credit ............................................. 4
2. USE AND OCCUPANCY ................................................... 4
A. Permitted Uses .......................................... 4
B. Use Prohibitions ........................................ 4
3. ALTERATIONS ......................................................... 5
A. Alterations Within Premises ............................. 5
B. Chlorofluorocarbons ..................................... 6
C. Submission of Plans ..................................... 6
D. Mechanics' Liens; Labor Conflicts ....................... 7
4. REPAIRS - FLOOR LOAD ................................................ 8
5. WINDOW CLEANING ..................................................... 9
6. REQUIREMENTS OF LAW ................................................. 9
7. SUBORDINATION ....................................................... 10
A. Subordination ........................................... 10
B. Attornment .............................................. 11
8. RULES AND REGULATIONS ............................................... 11
9. INSURANCE ........................................................... 12
A. Tenant's Insurance ...................................... 12
B. Tenant's Improvement Insurance .......................... 13
C. Waiver of Subrogation ................................... 13
10. DESTRUCTION OF THE PREMISES; PROPERTY LOSS OR DAMAGE ................ 14
A. Repair of Damage ........................................ 14
B. Landlord's Termination Option ........................... 15
C. Repair Delays ........................................... 15
D. Provision Controlling ................................... 15
E. Property Loss or Damage ................................. 15
i
<PAGE>
11. CONDEMNATION ........................................................ 17
A. Condemnation ............................................ 17
B. Award ................................................... 17
12. ASSIGNMENT AND SUBLETTING ........................................... 18
A. Prohibition Without Consent ............................. 18
B. Notice of Proposed Transfer ............................. 18
C. Landlord's Options ...................................... 19
D. Termination by Landlord ................................. 19
E. Takeback by Landlord .................................... 19
F. Effect of Takeback or Termination ....................... 20
G. Conditions for Landlord's Approval. ..................... 21
H. Future Requests ......................................... 24
I. Sublease Provisions ..................................... 24
J. Profits from Assignment or Subletting ................... 25
K. Other Transfers ......................................... 26
L. Related Corporation ..................................... 27
M. Assumption by Assignee .................................. 27
N. Liability of Tenant ..................................... 27
0. Listings ................................................ 27
P. Exclusive Broker ........................................ 28
Q. Re-entry by Landlord .................................... 28
13. CONDITION OF THE PREMISES ........................................... 29
A. Acceptance by Tenant .................................... 29
B. Tenant's Initial Alteration ............................. 29
14. ACCESS TO PREMISES .................................................. 29
15. CERTIFICATE OF OCCUPANCY ............................................ 31
16. LANDLORD'S LIABILITY ................................................ 31
17. DEFAULT ............................................................. 32
A. Events of Default; Conditions of Limitation ............. 32
B. Effect of Bankruptcy .................................... 33
C. Conditional Limitation .................................. 34
18. REMEDIES AND DAMAGES ................................................ 34
A. Landlord's Remedies ..................................... 34
B. Damages ................................................. 35
C. Legal Fees .............................................. 37
19. FEES AND EXPENSES ................................................... 37
A. Curing Tenant's Defaults ................................ 37
ii
<PAGE>
B. Late Charges ............................................ 38
20. NO REPRESENTATIONS BY LANDLORD ...................................... 38
21. END OF TERM ........................................................ 38
A. Surrender of Premises ................................... 38
B. Holdover by Tenant ...................................... 39
22. QUIET ENJOYMENT ..................................................... 39
23. FAILURE TO GIVE POSSESSION .......................................... 40
24. NO WAIVER ........................................................... 40
25. WAIVER OF TRIAL BY JURY ............................................. 41
26. INABILITY TO PERFORM ................................................ 42
27. BILLS AND NOTICES ................................................... 42
28. ESCALATION .......................................................... 43
A. Defined Terms ........................................... 43
B. Escalation .............................................. 43
C. Payment of Escalations .................................. 45
D. Adjustments ............................................. 47
E. Capital Improvements .................................... 48
29. SERVICES ........................................................... 48
A. Elevator ................................................ 48
B. Heating ................................................. 48
C. Cooling ................................................. 49
D. After Hours and Additional Services ..................... 49
E. Cleaning ................................................ 50
F. Sprinkler System ........................................ 51
G. Water ................................................... 51
H. Electricity Service ..................................... 52
I. Interruption of Services ................................ 54
30. PARTNERSHIP TENANT ................................................... 55
A. Partnership Tenants ..................................... 55
B. Limited Liability Entity ................................ 56
31. VAULT SPACE .......................................................... 57
32. SECURITY DEPOSIT ..................................................... 57
iii
<PAGE>
A. Deposit of Security ..................................... 57
B. Reduction in Security Deposit ........................... 58
C. Review of Security Deposit .............................. 58
33. CAPTIONS ............................................................ 58
34. ADDITIONAL DEFINITIONS .............................................. 59
35. PARTIES BOUND ....................................................... 59
36. BROKER .............................................................. 59
37. INDEMNITY ........................................................... 59
38. ADJACENT EXCAVATION SHORING ......................................... 60
39. ADDITIONAL SPACE .................................................... 60
A. The Subleased Premises .................................. 60
B. Condition of the Subleased Premises ..................... 61
C. Modifications to Lease .................................. 61
40. MISCELLANEOUS ....................................................... 62
A. No Offer ................................................ 62
B. Signatories ............................................. 62
C. Certificates ............................................ 63
D. Directory Listings ...................................... 63
E. Authority ............................................... 63
F. Signage ................................................. 64
G. Consents and Approvals .................................. 64
iv
<PAGE>
Exhibit 1 Floor Plan of Premises
Exhibit 2 Floor Plan of Subleased Premises
Schedule A Rules and Regulations
Schedule B Tenant's Initial Alteration
Schedule C Requirements for Certificates of Final Approval
Schedule D Tenant Alteration Work and New Construction Conditions and
Requirements
v
<PAGE>
INDEX OF DEFINED TERMS
TERM PAGE
Alterations .................................................................. 5
Assessed Valuation .......................................................... 43
Base Labor Rates ............................................................ 45
Base Labor Year .............................................................. 3
Base Tax Year ................................................................ 3
Base Taxes .................................................................. 43
Broker ....................................................................... 3
Building ..................................................................... 1
business days ............................................................... 59
CFC .......................................................................... 6
Class A Office Buildings .................................................... 44
Commencement Date ............................................................ 2
Comparison Year ............................................................. 44
Deficiency .................................................................. 35
Events of Default ........................................................... 32
Excluded Capital Improvements ............................................... 48
Expiration Date .............................................................. 2
Final Plans ................................................................ B-2
General Contractor ......................................................... B-2
Governmental Entity ......................................................... 26
Hazardous Substances ......................................................... 3
Interim Electrical Charge ................................................... 54
Labor Rate Factor ............................................................ 3
Labor Rate Multiple .......................................................... 3
Labor Rates ................................................................. 44
Landlord ..................................................................... 1
Landlord's Consultant ........................................................ 6
Landlord's Contribution .................................................... B-2
Landlord's Statement ........................................................ 45
Leaseback Space ............................................................. 19
Limited Liability Successor Entity .......................................... 56
Mortgages ................................................................... 10
office(s) ................................................................... 59
Others ...................................................................... 44
Overtime Periods ............................................................ 50
Parties ..................................................................... 31
vi
<PAGE>
Partnership Tenant .......................................................... 55
Permitted Uses ............................................................... 3
Premises ..................................................................... 1
R.A.B. ...................................................................... 44
Real Property ................................................................ 1
reenter/reentry ............................................................. 59
related corporation ......................................................... 27
Rent ......................................................................... 2
Rent Commencement Date ....................................................... 3
Rules and Regulations ....................................................... 11
Security Deposit ............................................................. 3
Sublet Space ................................................................ 24
Superior Leases ............................................................. 10
Tax Year .................................................................... 43
Taxes ....................................................................... 43
Tenant ...................................................................... 1
Tenant's Initial Alteration ............................................. 3, B-1
Tenant's Proportionate Share ................................................. 3
Term ......................................................................... 1
vii
<PAGE>
AGREEMENT OF LEASE, made as of this 23rd day of March, 1998 between SL GREEN
OPERATING PARTNERSHIP, L.P., a _______________ limited partnership, having an
office c/o SL Green Realty Corp., 70 West 36th Street, New York, New York 10018
("Landlord") and INTRALINKS, INC., a Delaware corporation, having an office at
1372 Broadway, New York, New York 10018 ("Tenant").
WITNESSETH:
The parties hereto, for themselves, their heirs, distributees, executors,
administrators, legal representatives, successors and assigns, hereby covenant
as follows:
1. BASIC LEASE TERMS.
A. Premises. Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord a portion of floor 12A, as more particularly shown hatched on Exhibit 1
annexed hereto and made a part hereof (the "Premises") in the building known as
1372 Broadway, in the Borough of Manhattan, New York County, City and State of
New York (the "Building" and together with the plot of land upon which such
building stands, the "Real Property") for a term (the "Term") to commence on the
"Commencement Date" (hereinafter defined), and to end on the "Expiration Date"
(hereinafter defined), both dates inclusive, unless the Term shall sooner end
pursuant to any of the terms, covenants or conditions of this Lease or pursuant
to law at the "Rent" (hereinafter defined, which Rent shall also include any
additional rent payable hereunder), which Tenant agrees to pay in lawful money
of the United States which shall be legal tender in payment of all debts and
dues, public and private, at the time of payment, in equal monthly installments,
in advance, commencing on the Commencement Date and on the first (1st) day of
each calendar month thereafter during the Term (except as hereinafter otherwise
provided), at the office of Landlord or such other place as Landlord may
designate, without any set-off, offset, abatement or deduction whatsoever,
except that Tenant shall pay the first monthly installment on the execution
hereof. If the Rent Commencement Date (as hereinafter defined) shall occur on a
date other than the first (1st) day of any calendar month, Tenant shall pay to
Landlord, on the first (1st) day of the month next succeeding the month during
which the Rent Commencement Date shall occur, an amount equal to such proportion
of an equal monthly installment of Rent as the number of days from and including
the Rent Commencement Date bears to the total number of days in said calendar
month. Such payment, together with the sum paid by Tenant upon the execution of
this Lease, shall constitute payment of the Rent for the period from the Rent
<PAGE>
Commencement Date to and including the last day of the next succeeding calendar
month.
B. Commencement Notice. After the determination of the Commencement Date,
and at Landlord's request, Tenant agrees, upon demand of Landlord, to execute,
acknowledge and deliver to Landlord an instrument, in form satisfactory to
Landlord, setting forth the Commencement Date.
C. Definitions. The following definitions contained in this subsection C
of this Article 1 shall have the meanings hereinafter set forth used throughout
this Lease, Exhibits, Schedules and Riders (if any).
(i) "Commencement Date" shall mean the date of mutual execution and
delivery of this Lease.
(ii) "Expiration Date" shall mean the last day of the month in which the
ten (10) year anniversary of the Commencement Date shall occur.
(iii) "Rent" shall mean:
(a) for the period commencing on the Commencement Date through and
including the day immediately preceding the date on which the
third (3rd) anniversary of the Commencement Date shall occur,
One Hundred Eighty-Five Thousand Four Hundred and 00/00
($185,400.00) Dollars per annum, payable in equal monthly
installments of Fifteen Thousand Four Hundred Fifty and 00/100
($15,450.00) Dollars each;
(b) for the period commencing on the date on which the third (3rd)
anniversary of the Commencement Date shall occur through and
including the day immediately preceding the date on which the
seventh (7th ) anniversary of the Commencement Date shall
occur, One Hundred Ninety-Six Thousand Five Hundred
Twenty-Four and 00/100 ($196,524.00) Dollars per annum,
payable in equal monthly installments of Sixteen Thousand
Three Hundred Seventy-Seven and 00/100 ($16,377.00) each; and
2
<PAGE>
(c) for the period commencing on the date on which the seventh
(7th) anniversary of the Commencement Date shall occur
through and including the Expiration Date, Two Hundred Seven
Thousand Six Hundred Forty-Eight and 00/100 ($207,648.00)
Dollars per annum, payable in equal monthly installments of
Seventeen Thousand Three Hundred Four and 00/100 ($17,304.00)
Dollars each.
(iv) "Tenant's Initial Alteration" shall mean the work and installations
at the Premises as set forth in Schedule B. All of the terms,
covenants and conditions of Schedule B are incorporated in this
Lease by reference and shall be deemed a part of this Lease as
though more fully set forth in the body of this Lease.
(v) "Rent Commencement Date" shall mean the three (3) month anniversary
of the Commencement Date, subject to the provisions of Section D
below.
(vi) "Permitted Uses" shall mean executive and general offices in
connection with Tenant's business.
(vii) "Base Tax Year" shall mean the Tax Year (as defined in Article 28
hereof) 1998/1999.
(viii) "Tenant's Proportionate Share" shall mean one and five-tenth
percent (1.5% ).
(ix) "Base Labor Year" shall mean the calendar year 1998.
(x) "Labor Rate Factor" shall mean 7,416.
(xi) "Labor Rate Multiple" shall mean one (1).
(xii) "Security Deposit" shall mean the sum of $92,700.00, subject to
adjustment as provided in Articles 32 and 39 hereof.
(xiii) "Broker" shall mean SL Green Realty Corp.
(xiv) "Hazardous Substances" shall mean, collectively, (a) asbestos and
polychlorinated biphenyls and (b) hazardous or toxic
3
<PAGE>
materials, wastes and substances which are defined, determined and
identified as such pursuant to any law.
Notwithstanding anything to the contrary contained in this subsection C of
this Article 1, Articles 1 through 40 shall control the rights and obligations
of the parties hereto except that the provisions of any Riders shall supersede
any inconsistent provisions in Articles 1 through 40, as the case may be.
D. Rent Credit. Notwithstanding anything to the contrary hereinabove set
forth, provided this Lease is in full force and effect and Tenant is not in
default under this Lease, Tenant shall be entitled to a credit against the Rent
for (i) the three (3) month period commencing on the Commencement Date and
ending on the day immediately preceding the Rent Commencement Date in the
aggregate amount of $46,350.00, which credit shall be applied against the Rent
in three (3) equal monthly installments of $15,450.00 each, and (ii) the three
(3) month period commencing on the first (1st) anniversary of the Commencement
Date and ending on the day immediately preceding the first (1st) anniversary of
the Rent Commencement Date in the aggregate amount of $46,350.00, which credit
shall be applied against the Rent in three (3) equal monthly installments of
$15,450.00 each. The foregoing rent credits shall be null and void "ab initio"
if Landlord at any time terminates this Lease or re-enters or repossesses the
Premises on account of any default of Tenant under this Lease, and Landlord
shall be entitled to recover from Tenant, in addition to all other amounts
Landlord is entitled to recover, the aggregate amount of the rent credit herein
provided for.
2. USE AND OCCUPANCY.
A. Permitted Uses. Tenant shall use and occupy the Premises for the
Permitted Uses, and for no other purpose.
B. Use Prohibitions. Tenant hereby represents, warrants and agrees that
Tenant's business is not and shall not be photographic, multilith or multigraph
reproductions or offset printing. Anything contained herein to the contrary
notwithstanding, Tenant shall not use the Premises or any part thereof, or
permit the Premises or any part thereof to be used, (i) for the business of
photographic, multilith or multigraph reproductions or offset printing, (ii) for
a banking, trust company, depository, guarantee or safe deposit business, (iii)
as a savings bank, a savings and loan association or a loan company, (iv) for
the sale of travelers checks, money orders, drafts, foreign exchange or letters
of credit or for the receipt of money for transmission, (v) as a "retail" stock
broker's or dealer's office which shall be open to the general public (except
pursuant to prior appointment), (vi) as a
4
<PAGE>
restaurant or bar or for the sale of confectionery, soda, beverages, sandwiches,
ice cream or baked goods or for the preparation, dispensing or consumption of
food or beverages in any manner whatsoever, (vii) as a news or cigar stand,
(viii) as an employment agency, labor union office, physician's or dentist's
office or for the rendition of any other diagnostic or therapeutic services,
dance or music studio, school (except for the training of employees of Tenant),
(ix) as a barber shop, beauty salon or manicure shop (x) for the direct sale, at
retail, of any goods or products, (xi) for a public stenographer or typist,
(xii) for a telephone or telegraph agency, telephone or secretarial service for
the public at large, (xiii) for a messenger service for the public at large,
(xiv) gambling or gaming activities, obscene or pornographic purposes or any
sort of commercial sex establishment, (xv) for the possession, storage,
manufacture or sale of alcohol, drugs or narcotics, (xvi) for the conduct of a
public auction, (xvii) for the offices or business of any federal, state or
municipal agency or any agency of any foreign government or (xviii) for any use
that would cause the Premises to be deemed a place of public accommodation under
the Americans with Disabilities Act of 1990. Nothing in this subsection B shall
preclude Tenant from using any part of the Premises for photographic, multilith
or multigraph reproductions in connection with, either directly or indirectly,
its own business and/or activities.
3. ALTERATIONS.
A. Alterations Within Premises. Tenant shall not make or perform or
permit the making or performance of, any alterations, installations,
improvements, additions or other physical changes in or about the Premises
("Alterations") without Landlord's prior consent. Landlord agrees not to
withhold unreasonably its consent to any Alterations proposed to be made by
Tenant to adapt the Premises for those business purposes permitted by subsection
A of Article 2 hereof, which are nonstructural and which do not affect the
Building's mechanical, electrical, plumbing, Class E or other Building systems
or the structural integrity of the Building, provided that such Alterations are
performed only by contractors or mechanics designated by Landlord, do not affect
any part of the Building other than the Premises, do not affect any service
required to be furnished by Landlord to Tenant or to any other tenant or
occupant of the Building, do not reduce the value or utility of the Building and
are performed in compliance with all applicable laws. Tenant shall not perform
work which would (i) require changes to the structural components of the
Building or the exterior design of the Building, (ii) require any material
modification to the Building's mechanical, electrical, plumbing installations or
other Building installations outside the Premises, (iii) not be in compliance
with all applicable laws, rules, regulations and requirements of any
governmental department having jurisdiction over the Building and/or the
construction of the
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Premises, including but not limited to, the Americans with Disabilities Act of
1990, or (iv) be incompatible with the Certificate of Occupancy for the
Building. Any changes required by any governmental department affecting the
construction of the Premises shall be performed at Tenant's sole cost. All
Alterations shall be done at Tenant's expense and at such times and in such
manner as Landlord may from time to time reasonably designate pursuant to the
conditions for Alterations prescribed by Landlord for the Premises. A copy of
the current construction conditions and requirements for tenant alteration work
and new construction is annexed hereto as Schedule D and made a part hereof. All
furniture, furnishings and movable fixtures and removable partitions installed
by Tenant must be removed from the Premises by Tenant, at Tenant's expense,
prior to the Expiration Date. All Alterations in and to the Premises which may
be made by Landlord or Tenant prior to and during the Term, or any renewal
thereof, shall become the property of Landlord upon the Expiration Date or
earlier end of the Term or any renewal thereof, and shall not be removed from
the Premises by Tenant unless Landlord, at Landlord's option by notice to Tenant
prior to the Expiration Date, elects to have them removed from the Premises by
Tenant, in which event the same shall be removed from the Premises by Tenant, at
Tenant's expense, prior to the Expiration Date. In the event Landlord elects to
have Tenant remove such Alterations, Tenant shall repair and restore in a good
and workmanlike manner to Building standard original condition (reasonable wear
and tear excepted) any damage to the Premises or the Building caused by such
removal. Any of such fixtures or installations not so removed by Tenant at or
prior to the Expiration Date or earlier termination of the Term shall become the
property of Landlord, but nothing herein shall, be deemed to relieve Tenant of
responsibility for the cost of removal of any such fixtures or installations
which Tenant is obligated to remove hereunder.
B. Chlorofluorocarbons. Anything contained herein to the contrary
notwithstanding, in the event Landlord shall elect to have Tenant repair or
remove any mechanical or other equipment within the Premises containing
chlorofluorocarbons ("CFC's"), the repair or removal of such equipment, as the
case may be, shall conform with all requirements of law and industry practices.
Additionally, any such repair or removal shall be done by contractors approved
by Landlord and subject to the procedures to which Landlord's consent shall have
previously been obtained. Tenant shall indemnify and hold Landlord harmless from
any liability or damages resulting from any contamination within the Building,
as a result of the repair or removal of any of the aforesaid equipment
containing CFC's by Tenant.
C. Submission of Plans. Prior to making any Alterations, Tenant (i) shall
submit to Landlord or to a consultant appointed by Landlord ("Landlord's
"Consultant") detailed plans and specifications (including layout,
architectural,
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mechanical, electrical, plumbing, Class E sprinkler and structural drawings
stamped by a professional engineer or architect licensed in the State of New
York) for each proposed Alteration and shall not commence any such Alteration
without first obtaining Landlord's approval of such plans and specifications,
(ii) shall pay to Landlord all costs and expenses incurred by Landlord
(including the cost of Landlord's Consultant) in connection with Landlord's
review of Tenant's plans and specifications, (iii) shall, at its expense, obtain
all permits, approvals and certificates required by any governmental or
quasi-governmental bodies, and (iv) shall furnish to Landlord duplicate original
policies of worker's compensation insurance (covering all persons to be employed
by Tenant, and Tenant's contractors and subcontractors in connection with such
Alteration) and comprehensive public liability (including property damage
coverage) insurance in such form, with such companies, for such periods and in
such amounts as Landlord may reasonably require, naming Landlord and its agents
as additional insureds. Upon notice to Tenant, Landlord or Landlord's Consultant
may assume responsibility, at Tenant's expense, to file all plans and obtain the
necessary building permits, which filing and the obtaining of building permits,
if undertaken, shall be accomplished within fifteen (15) working days following
the date of notice to Tenant that Landlord or Landlord's Consultant is assuming
responsibility therefor, subject to any delays caused by the City of New York.
Upon completion of such Alteration, Tenant, at Tenant's expense, shall obtain
certificates of final approval of such Alteration, including the "as-built"
drawings showing such Alterations, required by any governmental or
quasi-governmental bodies and shall furnish Landlord with copies thereof. All
Alterations shall be made and performed in accordance with the Rules and
Regulations (hereinafter defined) and in accordance with the Americans with
Disabilities Act of 1990, including but not limited to the accessibility
provisions thereof; all materials and equipment to be incorporated in the
Premises as a result of all Alterations shall be new and first quality; no such
materials or equipment shall be subject to any lien, encumbrance, chattel
mortgage or title retention or security agreement. In the event any Alterations
are performed by a general partner of Landlord or any entity which is under the
common control of Landlord or any general partner of Landlord, the failure by
Tenant to pay the cost of such Alterations upon rendition of a bill therefor
shall be deemed a material default under this Lease. Landlord's approval of
Tenant's plans, specifications and working drawings for Alterations shall create
no responsibility or liability on the part of Landlord with respect to their
completeness, design, sufficiency or compliance with all applicable laws, rules
or regulations of governmental agencies or authorities.
D. Mechanics' Liens: Labor Conflicts. Any mechanic's lien filed against
the Premises, or the Real Property, for work claimed to have been done for, or
materials claimed to have been furnished to, Tenant shall be discharged by
Tenant within ten (10) days thereafter, at Tenant's expense, by payment or
filing
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the bond required by law. Tenant shall not, at any time prior to or during the
Term, directly or indirectly employ, or permit the employment of, any
contractor, mechanic or laborer in the Premises, whether in connection with any
Alteration or otherwise, if, in Landlord's sole discretion, such employment will
interfere or cause any conflict with other contractors, mechanics, or laborers
engaged in the construction, maintenance or operation of the Building by
Landlord, Tenant or others. In the event of any such interference or conflict,
Tenant, upon demand of Landlord, shall cause all contractors, mechanics or
laborers causing such interference or conflict to leave the Building
immediately.
4. REPAIRS - FLOOR LOAD. Landlord shall maintain and repair the public portions
of the Building, both exterior and interior. Tenant shall, throughout the Term,
take good care of the Premises and the fixtures and appurtenances therein and at
Tenant's sole cost and expense, make all nonstructural repairs thereto as and
when needed to preserve them in good working order and condition, reasonable
wear and tear and damage for which Tenant is not responsible under the terms of
this Lease excepted. Tenant shall pay Landlord for all replacements to the
lamps, tubes, ballasts and starters in the lighting fixtures installed in the
Premises. Notwithstanding the foregoing, all damage or injury to the Premises or
to any other part of the Building, or to its fixtures, equipment and
appurtenances, whether requiring structural or nonstructural repairs, caused by
or resulting from carelessness, omission, neglect or improper conduct of or
Alterations made by Tenant or any of Tenant's servants, employees, invitees or
licensees, shall be repaired promptly by Tenant, at its sole cost and expense,
to the satisfaction of Landlord. Tenant also shall repair all damage to the
Building and the Premises caused by the moving of Tenant's fixtures, furniture
or equipment. All the aforesaid repairs shall be of quality and class equal to
the original work or construction and shall be made in accordance with the
provisions of Article 3 hereof. If Tenant fails after ten (10) days notice to
proceed with due diligence to make repairs required to be made by Tenant
hereunder, the same may be made by Landlord, at the expense of Tenant, and the
expenses thereof incurred by Landlord shall be collectible by Landlord as
additional rent promptly after rendition of a bill or statement therefor. Tenant
shall give Landlord prompt notice of any defective condition in any plumbing,
electrical, air-cooling or heating system located in, servicing or passing
through the Premises. Tenant shall not place a load upon any floor of the
Premises exceeding the floor load per square foot area which such floor was
designed to carry and which is allowed by law. Landlord reserves the right to
prescribe the weight and position of all safes, business machines and heavy
equipment and installations. Business machines and mechanical equipment shall be
placed and maintained by Tenant at Tenant's expense in settings sufficient in
Landlord's judgment to absorb and prevent vibration, noise and annoyance. Except
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as expressly provided in Article 10 hereof, there shall be no allowance to
Tenant for a diminution of rental value and no liability on the part of Landlord
by reason of inconvenience, annoyance or injury to business arising from
Landlord, Tenant or others making, or failing to make, any repairs, alterations,
additions or improvements in or to any portion of the Building, or the Premises,
or in or to fixtures, appurtenances, or equipment thereof. If the Premises be or
become infested with vermin, Tenant, at Tenant's expense, shall cause the same
to be exterminated from time to time to the satisfaction of Landlord and shall
employ such exterminators and such exterminating company or companies as shall
be approved by Landlord. The water and wash closets and other plumbing fixtures
shall not be used for any purposes other than those for which they were designed
or constructed, and no sweepings, rubbish, rags, acids or other substances shall
be deposited therein.
5. WINDOW CLEANING. Tenant shall not clean, nor require, permit, suffer or allow
any window in the Premises to be cleaned, from the outside in violation of
Section 202 of the Labor Law, or any other applicable law, or of the rules of
the Board of Standards and Appeals, or of any other board or body having or
asserting jurisdiction. Landlord shall clean the exterior windows of the
Building no less than twice a year.
6. REQUIREMENTS OF LAW. Tenant, at its sole expense, shall comply with all laws,
statutes, orders, directives and regulations of federal, state, county, city and
municipal authorities, departments, bureaus, boards, agencies, commissions and
other sub-divisions thereof, and of any official thereof and any other
governmental and quasi-public authority and all rules, orders, regulations or
requirements of the New York Board of Fire Underwriters, or any other similar
body which shall now or hereafter impose any violation, order or duty upon
Landlord or Tenant with respect to the Premises as a result of the use,
occupation or alteration thereof by Tenant. Tenant shall not do or permit to be
done any act or thing upon the Premises which will invalidate or be in conflict
with any insurance policies covering the Building and fixtures and property
therein; and shall not do, or permit anything to be done in or upon the
Premises, or bring or keep anything therein, except as now or hereafter
permitted by the New York City Fire Department, New York Board of Fire
Underwriters, New York Fire Insurance Rating Organization or other authority
having jurisdiction and then only in such quantity and manner of storage as not
to increase the rate for fire insurance applicable to the Building, or use the
Premises in a manner which shall increase the rate of fire insurance on the
Building or on property located therein, over that in similar type buildings or
in effect prior to this Lease. Any work or installations made or performed by or
on behalf of Tenant or
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any person claiming through or under Tenant pursuant to this Article shall be
made in conformity with, and subject to the provisions of, Article 3 hereof. If
by reason of Tenant's failure to comply with the provisions of this Article, the
fire insurance rate shall at the beginning of this Lease or at any time
thereafter be higher than it otherwise would be, then Tenant shall reimburse
Landlord, as additional rent hereunder, for that part of all fire insurance
premiums thereafter paid by Landlord which shall have been charged because of
such failure of use by Tenant, and shall make such reimbursement upon the first
day of the month following such outlay by Landlord. In any action or proceeding
wherein Landlord and Tenant are parties, a schedule or "make up" of rates for
the Building or the Premises issued by the New York Fire Insurance Rating
Organization, or other body fixing such fire insurance rates, shall be
conclusive evidence of the facts therein stated and of the several items and
charges in the fire insurance rates then applicable to the Premises.
7. SUBORDINATION.
A. Subordination. This Lease is subject and subordinate to each and every
ground or underlying lease of the Real Property or the Building heretofore or
hereafter made by Landlord (collectively the "Superior Leases") and to each and
every trust indenture and mortgage (collectively the "Mortgages") which may now
or hereafter affect the Real Property, the Building or any such Superior Lease
and the leasehold interest created thereby, and to all renewals, extensions,
supplements, amendments, modifications, consolidations, and replacements thereof
or thereto, substitutions therefor and advances made thereunder. This clause
shall be self-operative and no further instrument of subordination shall be
required to make the interest of any lessor under a Superior Lease, or trustee
or mortgagee of a Mortgage superior to the interest of Tenant hereunder. In
confirmation of such subordination, however, Tenant shall execute promptly any
certificate that Landlord may request and Tenant hereby irrevocably constitutes
and appoints Landlord as Tenant's attorney-in-fact to execute any such
certificate or certificates for and on behalf of Tenant. If the date of
expiration of any Superior Lease shall be the same day as the Expiration Date,
the Term shall end and expire twelve (12) hours prior to the expiration of the
Superior Lease. Tenant covenants and agrees that, except as expressly provided
herein, Tenant shall not do anything that would constitute a default under any
Superior Lease or Mortgage, or omit to do anything that Tenant is obligated to
do under the terms of this Lease so as to cause Landlord to be in default under
any of the foregoing. If, in connection with the financing of the Real Property,
the Building or the interest of the lessee under any Superior Lease, any lending
institution shall request reasonable modifications of this Lease that do not
materially increase the obligations or materially and adversely affect the
rights of Tenant under this Lease, Tenant covenants to make such modifications.
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B. Attornment. If at any time prior to the expiration of the Term, any
Mortgage shall be foreclosed or any Superior Lease shall terminate or be
terminated for any reason, Tenant agrees, at the election and upon demand of any
owner of the Real Property or the Building, or the lessor under any such
Superior Lease, or of any mortgagee in possession of the Real Property or the
Building, to attorn, from time to time, to any such owner, lessor or mortgagee,
upon the then executory terms and conditions of this Lease, for the remainder of
the term originally demised in this Lease, provided that such owner, lessor or
mortgagee, as the case may be, or receiver caused to be appointed by any of the
foregoing, shall not then be entitled to possession of the Premises. The
provisions of this subsection B shall inure to the benefit of any such owner,
lessor or mortgagee, shall apply notwithstanding that, as a matter of law, this
Lease may terminate upon the termination of any such Superior Lease, and shall
be self-operative upon any such demand, and no further instrument shall be
required to give effect to said provisions. Tenant, however, upon demand of any
such owner, lessor or mortgagee, agrees to execute, from time to time,
instruments in confirmation of the foregoing provisions of this subsection B,
satisfactory to any such owner, lessor or mortgagee, acknowledging such
attornment and setting forth the terms and conditions of its tenancy. Nothing
contained in this subsection B shall be construed to impair any right otherwise
exercisable by any such owner, lessor or mortgagee.
8. RULES AND REGULATIONS. Tenant and Tenant's servants, employees, agents,
visitors, and licensees shall observe faithfully, and comply strictly with, the
Rules and Regulations annexed hereto and made a part hereof as Schedule A and
such other and further reasonable Rules and Regulations as Landlord or
Landlord's agents may from time to time adopt (collectively, the "Rules and
Regulations") on such notice to be given as Landlord may elect. In case Tenant
disputes the reasonableness of any additional Rule or Regulation hereafter made
or adopted by Landlord or Landlord's agents, the parties hereto agree to submit
the question of the reasonableness of such Rule or Regulation for decision to
the Chairman of the Board of Directors of the Management Division of The Real
Estate Board of New York, Inc., or to such impartial person or persons as he may
designate, whose determination shall be final and conclusive upon the parties
hereto. The right to dispute the reasonableness of any additional Rule or
Regulation upon Tenant's part shall be deemed waived unless the same shall be
asserted by service of a notice in writing upon Landlord within ten (10) days
after receipt by Tenant of written notice of the adoption of any such additional
Rule or Regulation. Nothing in this Lease contained shall be construed to impose
upon Landlord any duty or obligation to enforce the Rules and Regulations or
terms, covenants or conditions in any other lease, against any other tenant and
Landlord shall not be liable to Tenant for
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violation of the same by any other tenant, its servants, employees, agents,
visitors or licensees.
9. INSURANCE
A. Tenant's Insurance. Tenant shall obtain at its own expense and keep in
full force and effect during the Term, a policy of commercial general liability
insurance (including, without limitation, insurance covering Tenant's
contractual liability under this Lease), under which Tenant is named as the
insured, and Landlord, Landlord's managing agent, the present and any future
mortgagee of the Real Property or the Building and/or such other designees
specified by Landlord from time to time, are named as additional insureds. Such
policy shall contain (i) a provision that no act or omission of Tenant shall
affect or limit the obligation of the insurance company to pay the amount of any
loss sustained, (ii) a waiver of subrogation against Landlord or a consent to a
waiver of right of recovery against Landlord and (iii) an agreement by the
insurer that it will not make any claim against or seek to recover from Landlord
for any loss, damage or claim whether or not covered under such policy. Such
policy shall also contain a provision which provides the insurance company will
not cancel or refuse to renew the policy, or change in any material way the
nature or extent of the coverage provided by such policy, without first giving
Landlord at least thirty (30) days written notice by certified mail, return
receipt requested, which notice shall contain the policy number and the names of
the insureds and policy holder. The minimum limits of liability shall be a
combined single limit with respect to each occurrence in an amount of not less
than $3,000,000 for injury (or death) and damage to property or such greater
amount as Landlord may, from time to time, reasonably require. Tenant shall also
maintain at its own expense during the Term a policy of workers' compensation
insurance providing statutory benefits for Tenant's employees and employer's
liability. Tenant shall provide to Landlord upon execution of this Lease and at
least thirty (30) days prior to the termination of any existing policy, a
certificate evidencing the effectiveness of the insurance policies required to
be maintained hereunder which shall include the named insured, additional
insured, carrier, policy number, limits of liability, effective date, the name
of the insurance agent and its telephone number. Tenant shall provide Landlord
with a complete copy of any such policy upon written request of Landlord. Tenant
shall have no right to obtain any of the insurance required hereunder pursuant
to a blanket policy covering other properties unless the blanket policy contains
an endorsement that names Landlord, Landlord's managing agent and/or designees
specified by Landlord from time to time, as additional insureds, references the
Premises, and guarantees a minimum limit available for the Premises equal to the
amount of insurance required to be maintained hereunder. Each policy required
hereunder shall contain a clause
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that the policy and the coverage evidenced thereby shall be primary with respect
to any policies carried by Landlord, and that any coverage carried by Landlord
shall be excess insurance. The limits of the insurance required under this
subsection shall not limit the liability of Tenant under this Lease. All
insurance required to be carried by Tenant pursuant to the terms of this Lease
shall be effected under valid and enforceable policies issued by reputable and
independent insurers permitted to do business in the State of New York, and
rated in Best's Insurance Guide, or any successor thereto (or if there be none,
an organization having a national reputation) as having a general policyholder
rating of "A" and a financial rating of at least "13". In the event that Tenant
fails to continuously maintain insurance as required by this subsection,
Landlord may, at its option and without relieving Tenant of any obligation
hereunder, order such insurance and pay for the same at the expense of Tenant.
In such event, Tenant shall repay the amount expended by Landlord, with interest
thereon, immediately upon Landlord's written demand therefor.
B. Tenant's Improvement Insurance. Tenant shall also maintain at its own
expense during the Term a policy against fire and other casualty on an "all
risk" form covering all Alterations, construction and other improvements
installed within the Premises, whether existing in the Premises on the date
hereof or hereinafter installed by or on behalf of Landlord or Tenant, and on
all furniture, fixtures, equipment, personal property and inventory of Tenant
located in the Premises and any property in the care, custody and control of
Tenant (fixed or otherwise) sufficient to provide 100% full replacement value of
such items, which policy shall otherwise comply with the provisions of
subsections A and C of this Article 9. On any such policy, Tenant shall name
Landlord as a loss payee, as its interest may appear.
C. Waiver of Subrogation. The parties hereto shall procure an appropriate
clause in, or endorsement on, any "all-risk" property insurance covering the
Premises and the Building, including its respective Alterations, construction
and other improvements as well as personal property, fixtures, furniture,
inventory and equipment located thereon or therein, pursuant to which the
insurance companies waive subrogation or consent to a waiver of right of
recovery, and each party hereby agrees that it will not make any claim against
or seek to recover from the other for any loss or damage to its property or the
property of others resulting from fire or other hazards covered by such
"all-risk" property insurance policies to the extent that such loss or damage is
actually recoverable under such policies exclusive of any deductibles. Such
waiver will not apply should any loss or damage result from one of the parties'
gross negligence or willful misconduct. If the payment of an additional premium
is required for the inclusion of such waiver of subrogation provision, each
party shall advise the other of the amount of any such additional premiums and
the other party shall pay the same. It is expressly
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understood and agreed that Landlord will not carry insurance on the Alterations,
construction and other improvements presently existing or hereafter installed
within the Premises or on Tenant's fixtures, furnishings, equipment, personal
property or inventory located in the Premises or insurance against interruption
of Tenant's business.
10. DESTRUCTION OF THE PREMISES; PROPERTY LOSS OR DAMAGE.
A. Repair of Damage. If the Premises shall be damaged by fire or other
casualty, then Landlord shall proceed to repair and restore (subject to receipt
of insurance proceeds) the Premises to its condition preceding the damage,
subject to the provisions of this Article 10. Landlord shall have no liability
to Tenant, and Tenant shall not be entitled to terminate this Lease, if such
repairs and restoration are not in fact completed within Landlord's estimated
time period, so long as Landlord shall have proceeded with reasonable due
diligence. The Rent until such repairs shall be made shall be reduced in the
proportion which the area of the part of the Premises which is not usable by
Tenant bears to the total area of the Premises; provided, however, should Tenant
reoccupy a portion of the Premises for the conduct of its business prior to the
date such repairs are made, the Rent shall be reinstated with respect to such
reoccupied portion of the Premises and shall be payable by Tenant from the date
of such occupancy. Further, should Landlord, at its sole option, make available
to Tenant, during the period of such repair, other space in the Building which
is reasonably suitable for the temporary carrying on of Tenant's business, the
Rent shall be reinstated with respect to such temporarily occupied space and
shall be payable by Tenant from the date such space is occupied by Tenant.
Whenever in this Article 10 reference is made to restoration of the Premises,
(i) Tenant's obligation shall be as to all property within the Premises
including Tenant's furniture, fixtures, equipment and other personal property,
any and all Alterations, construction or other improvements made to the Premises
by or on behalf of Tenant and any other leasehold improvements existing in the
Premises on the date hereof, all of which shall be restored and replaced at
Tenant's sole cost and expense and (ii) Landlord's obligation, if any, shall be
as to the shell, which constitutes the structure of the Building and the
mechanical, electrical, plumbing, air-conditioning and other building systems up
to the point of connection into the Premises. Landlord's obligation to repair or
rebuild, and Tenant's right to rent abatement, as described in this Article 10,
are only effective provided the damage or destruction is not due to the
intentional or negligent acts or omissions of Tenant, its agents, employees,
licensees or invitees. During any period of Tenant's repair and restoration
following substantial completion of a Landlord's repair and restoration work,
Rent and additional rent shall be payable as if said fire or other casualty had
not occurred.
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B. Landlord's Termination Option. Anything in subsection A of this Article
10 to the contrary notwithstanding, if the Premises are totally damaged or are
rendered wholly untenantable, and if Landlord shall decide not to restore the
Premises, or if the Building shall be so damaged by fire or other casualty that,
in Landlord's opinion, either substantial alteration, demolition or
reconstruction of the Building shall be required (whether or not the Premises
shall have been damaged or rendered untenantable) or the Building, after its
proposed repair, alteration or restoration shall not be economically viable as
an office building, then in any of such events, Landlord, at Landlord's option,
may, not later than ninety (90) days following the damage, give Tenant a notice
in writing terminating this Lease. In addition, (i) if any damage shall occur to
the Premises or the Building during the last two (2) years of the Term, Landlord
shall have the option to terminate this Lease by thirty (30) days prior written
notice to Tenant and (ii) Landlord shall not be obligated to repair or restore
the Premises or the Building if a holder of a mortgage or underlying leasehold
applies proceeds of insurance to the loan or lease payment balance, and the
remaining proceeds, if any, available to Landlord are insufficient to pay for
such repair or restoration. If Landlord elects to terminate this Lease, the Term
shall expire upon the tenth (10th) day after such notice is given, and Tenant
shall vacate the Premises and surrender the same to Landlord. If Tenant shall
not be in default under this Lease, then upon the termination of this Lease
under the conditions provided for in the next preceding sentence, Tenant's
liability for Rent thereafter accruing shall cease as of the day following such
damage.
C. Repair Delays. Landlord shall not be liable for reasonable delays which
may arise by reason of the claim adjustment with any insurance company on the
part of Landlord and/or Tenant, and for reasonable delays on account of "labor
troubles" or any other cause beyond Landlord's control.
D. Provision Controlling. The parties agree that this Article 10
constitutes an express agreement governing any case of damage or destruction of
the Premises or the Building by fire or other casualty, and that Section 227 of
the Real Property Law of the State of New York, which provides for such
contingency in the absence of an express agreement, and any other law of like
import now or hereafter in force shall have no application in any such case.
E. Property Loss or Damage. Any Building employee to whom any property
shall be entrusted by or on behalf of Tenant shall be deemed to be acting as
Tenant's agent with respect to such property and neither Landlord nor its agents
shall be liable for any damage to property of Tenant or of others entrusted to
employees of the Building, nor for the loss of or damage to any property of
Tenant by theft or otherwise. Neither Landlord nor its agents shall be liable
for any injury or damage to persons or property or interruption of Tenant's
business resulting
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from fire, explosion, falling plaster, steam, gas, electricity, water, rain or
snow or leaks from any part of the Building or from the pipes, appliances or
plumbing works or from the roof, street or subsurface or from any other place or
by dampness or by any other cause of whatsoever nature; nor shall Landlord or
its agents be liable for any such damage caused by other tenants or persons in
the Building or caused by construction of any private, public or quasi-public
work; nor shall Landlord be liable for any latent defect in the Premises or in
the Building. Anything in this Article 10 to the contrary notwithstanding,
nothing in this Lease shall be construed to relieve Landlord from responsibility
directly to Tenant for any loss or damage caused directly to Tenant wholly or in
part by the gross negligence or willful misconduct of Landlord. Nothing in the
foregoing sentence shall affect any right of Landlord to the indemnity from
Tenant to which Landlord may be entitled under Article 37 hereof in order to
recoup for payments made to compensate for losses of third parties. If at any
time any windows of the Premises are temporarily closed, darkened or bricked-up
for any reason whatsoever including, but not limited to, Landlord's own acts, or
any of such windows are permanently closed, darkened or bricked-up if required
by law or related to any construction upon property adjacent to the Real
Property by Landlord or others, Landlord shall not be liable for any damage
Tenant may sustain thereby and Tenant shall not be entitled to any compensation
therefor nor abatement of Rent nor shall the same release Tenant from its
obligations hereunder nor constitute an eviction. Tenant shall reimburse and
compensate Landlord as additional rent within five (5) days after rendition of a
statement for all expenditures made by, or damages or fines sustained or
incurred by, Landlord due to nonperformance or noncompliance with or breach or
failure to observe any term, covenant or condition of this Lease upon Tenant's
part to be kept, observed, performed or complied with. Tenant shall give
immediate notice to Landlord in case of fire or accident in the Premises or in
the Building. Tenant shall not move any safe, heavy machinery, heavy equipment,
freight, bulky matter or fixtures into or out of the Building without Landlord's
prior consent and payment to Landlord of Landlord's costs in connection
therewith. If such safe, machinery, equipment, freight, bulky matter or fixtures
requires special handling, Tenant agrees to employ only persons holding a Master
Rigger's License to do said work, and that all work in connection therewith
shall comply with the Administrative Code of the City of New York and all other
laws and regulations applicable thereto, and shall be done during such hours as
Landlord may designate and, notwithstanding said consent of Landlord, Tenant
shall indemnify Landlord for, and hold Landlord harmless and free from, damages
sustained by persons or property and for any damages or monies paid out by
Landlord in settlement of any claims or judgments, as well as for all expenses
and attorneys' fees incurred in connection therewith and all costs incurred in
repairing any damage to the Building or appurtenances.
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11. CONDEMNATION.
A. Condemnation. If the whole of the Real Property, the Building or the
Premises shall be acquired or condemned for any public or quasi-public use or
purpose, this Lease and the Term shall end as of the date of the vesting of
title with the same effect as if said date were the Expiration Date. If only a
part of the Real Property shall be so acquired or condemned then, (i) except as
hereinafter provided in this subsection A, this Lease and the Term shall
continue in force and effect but, if a part of the Premises is included in the
part of the Real Property so acquired or condemned, from and after the date of
the vesting of title, the Rent shall be reduced in the proportion which the area
of the part of the Premises so acquired or condemned bears to the total area of
the Premises immediately prior to such acquisition or condemnation; (ii) whether
or not the Premises shall be affected thereby, Landlord, at Landlord's option,
may give to Tenant, within sixty (60) days next following the date upon which
Landlord shall have received notice of vesting of title, a five (5) days notice
of termination of this Lease; and (iii) if the part of the Real Property so
acquired or condemned shall contain more than thirty percent (30%) of the total
area of the Premises immediately prior to such acquisition or condemnation, or
if, by reason of such acquisition or condemnation, Tenant no longer has
reasonable means of access to the Premises, Tenant, at Tenant's option, may give
to Landlord, within sixty (60) days next following the date upon which Tenant
shall have received notice of vesting of title, a five (5) days notice of
termination of this Lease. If any such five (5) days notice of termination is
given by Landlord or Tenant this Lease and the Term shall come to an end and
expire upon the expiration of said five (5) days with the same effect as if the
date of expiration of said five (5) days were the Expiration Date. If a part of
the Premises shall be so acquired or condemned and this Lease and the Term shall
not be terminated pursuant to the foregoing provisions of this subsection A,
Landlord, at Landlord's expense, shall restore that part of the Premises not so
acquired or condemned to a self-contained rental unit. In the event of any
termination of this Lease and the Term pursuant to the provisions of this
subsection A, the Rent shall be apportioned as of the date of sooner termination
and any prepaid portion of Rent for any period after such date shall be refunded
by Landlord to Tenant.
B. Award. In the event of any such acquisition or condemnation of all or
any part of the Real Property, Landlord shall be entitled to receive the entire
award for any such acquisition or condemnation, Tenant shall have no claim
against Landlord or the condemning authority for the value of any unexpired
portion of the Term and Tenant hereby expressly assigns to Landlord all of its
right in and to any such award. Nothing contained in this subsection B shall be
deemed to prevent Tenant from making a claim in any condemnation proceedings for
the then value of any furniture, furnishings and fixtures installed by and at
the sole expense of
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Tenant and included in such taking, provided that such award shall not reduce
the amount of the award otherwise payable to Landlord.
12. ASSIGNMENT AND SUBLETTING.
A. Prohibition Without Consent. Tenant, for itself, its heirs,
distributees, executors, administrators, legal representatives, successors and
assigns, expressly covenants that it shall not assign, mortgage, pledge,
encumber or otherwise transfer this Lease, nor underlet, nor suffer, nor permit
the Premises or any part thereof to be used or occupied by others (whether for
desk space, mailing privileges or otherwise), without the prior written consent
of Landlord in each instance. If this Lease be assigned, or if the Premises or
any part thereof be underlet or occupied by anybody other than Tenant, Landlord
may, after default by Tenant, collect rent from the assignee, undertenant or
occupant, and apply the net amount collected to the Rent herein reserved, but no
assignment, underletting, occupancy or collection shall be deemed a waiver of
the provisions hereof, the acceptance of the assignee, undertenant or occupant
as tenant, or a release of Tenant from the further performance by Tenant of
covenants on the part of Tenant herein contained. The consent by Landlord to an
assignment or underletting shall not in any way be construed to relieve Tenant
from obtaining the express consent in writing of Landlord to any further
assignment or underletting. In no event shall any permitted subtenant assign or
encumber its sublease or further sublet all or any portion of its sublet space,
or otherwise suffer or permit the sublet space or any part thereof to be used or
occupied by others, without Landlord's prior written consent in each instance.
Any assignment, sublease, mortgage, pledge, encumbrance or transfer in
contravention of the provisions of this Article 12 shall be void.
B. Notice of Proposed Transfer. If Tenant shall at any time or times
during the Term desire to assign this Lease or sublet all or part of the
Premises, Tenant shall give notice thereof to Landlord, which notice shall be
accompanied by (i) a conformed or photostatic copy of the proposed assignment or
sublease, the effective or commencement date of which shall be not less than
sixty (60) nor more than one hundred and eighty (180) days after the giving of
such notice, (ii) a statement setting forth in reasonable detail the identity of
the proposed assignee or subtenant, the nature of its business and its proposed
use of the Premises, (iii) current financial information with respect to the
proposed assignee or subtenant, including, without limitation, its most recent
financial report, (iv) an agreement by Tenant to indemnify Landlord against
liability resulting from any claims that may be made against Landlord by the
proposed assignee or subtenant or by any brokers or other persons claiming a
commission or similar compensation
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in connection with the proposed assignment or sublease and (v) in the case of a
sublease, such additional information related to the proposed subtenant as
Landlord shall reasonably request, if any.
C. Landlord's Options. The notice containing all of the information set
forth in Subsection B of this Article 12 above shall be deemed an offer from
Tenant to Landlord whereby Landlord (or Landlord's designee) may, at its option,
(a) sublease such space (hereinafter called the "Leaseback Space") from Tenant
upon the terms and conditions hereinafter set forth (if the proposed transaction
is a sublease of all or part of the Premises), or (b) terminate this Lease (if
the proposed transaction is an assignment or a sublease of all or substantially
all of the Premises). Said options may be exercised by Landlord by notice to
Tenant at any time within sixty (60) days after the aforesaid notice has been
given by Tenant to Landlord; and during such sixty (60) day period Tenant shall
not assign this Lease nor sublet such space to any person or entity.
D. Termination by Landlord. If Landlord exercises its option to terminate
this Lease in the case where Tenant desires either to assign this Lease or
sublet all or substantially all of the Premises, then this Lease shall end and
expire on the date that such assignment or sublet was to be effective or
commence, as the case may be, and the Rent and additional rent due hereunder
shall be paid and apportioned to such date. Furthermore, if Landlord exercises
its option to terminate this Lease pursuant to subsection C of this Article 12,
Landlord shall be free to and shall have no liability to Tenant if Landlord
should lease the Premises (or any part thereof) to Tenant's prospective assignee
or subtenant.
E. Takeback by Landlord. If Landlord exercises its option to sublet the
Leaseback Space, such sublease to Landlord or its designee (as subtenant) shall
be at the lower of (i) the rental rate per rentable square foot of Rent and
additional rent then payable pursuant to this Lease, or (ii) the rentals set
forth in the proposed sublease, and shall be for the same term as that of the
proposed subletting, and such sublease:
(i) shall be expressly subject to all of the covenants, agreements,
terms, provisions and conditions of this Lease except such as are irrelevant or
inapplicable, and except as otherwise expressly set forth to the contrary in
this Article 12;
(ii) shall be upon the same terms and conditions as those contained
in the proposed sublease, except such as are irrelevant or inapplicable and
except as otherwise expressly set forth to the contrary in this Article 12;
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(iii) shall give the subtenant the unqualified and unrestricted
right, without Tenant's permission, to assign such sublease or any interest
therein and/or to sublet the space covered by such sublease or any part or parts
of such space and to make any and all changes, alterations and improvements in
the space covered by such sublease, and if the proposed sublease will result in
all or substantially all of the Premises being sublet, grant Landlord or its
designee the option to extend the term of such sublease for the balance of the
term of this Lease less one (1) day;
(iv) shall provide that any assignee or further subtenant of
Landlord or its designee, may, at the election of Landlord, be permitted to make
alterations, decorations and installations in such space or any part thereof and
shall also provide in substance that any such alterations, decorations and
installations in such space therein made by any assignee or subtenant of
Landlord or its designee may be removed, in whole or in part, by such assignee
or subtenant, at its option, prior to or upon the expiration or other
termination of such sublease provided that such assignee or subtenant, at its
expense, shall repair any damage and injury to such space so sublet caused by
such removal; and
(v) shall also provide that (a) the parties to such sublease
expressly negate any intention that any estate created under such sublease be
merged with any other estate held by either of said parties, (b) any assignment
or subletting by Landlord or its designee (as the subtenant) may be for any
purpose or purposes that Landlord, in Landlord's uncontrolled discretion, shall
deem suitable or appropriate, (c) Tenant, at Tenant's expense, shall and will at
all times provide and permit reasonably appropriate means of ingress to and
egress from such space so sublet by Tenant to Landlord or its designee, (d)
Landlord, at Tenant's expense, may make such alterations as may be required or
deemed necessary by Landlord to physically separate the subleased space from the
balance of the Premises and to comply with any legal or insurance requirements
relating to such separation, and (e) that at the expiration of the term of such
sublease, Tenant will accept the space covered by such sublease in its then
existing condition, subject to the obligations of the subtenant to make such
repairs thereto as may be necessary to preserve the premises demised by such
sublease in good order and condition.
F. Effect of Takeback or Termination. If Landlord exercises its option to
sublet the Leaseback Space, (i) Landlord shall indemnify and save Tenant
harmless from all obligations under this Lease as to the Leaseback Space during
the period of time it is so sublet to Landlord; (ii) performance by Landlord, or
its designee, unless sublease of the Leaseback Space shall be deemed performance
by Tenant of any similar obligation under this Lease and any default under any
such sublease shall not give rise to a default under a similar obligation
contained in this
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Lease nor shall Tenant be liable for any default under this Lease or deemed to
be in default hereunder if such default is occasioned by or arises from any act
or omission of the tenant under such sublease or is occasioned by or arises from
any act or omission of any occupant holding under or pursuant to any such
sublease; and (iii) Tenant shall have no obligation, at the expiration or
earlier termination of the Term, to remove any alteration, installation or
improvement made in the Leaseback Space by Landlord (or its designee); In
addition, if required by applicable law in connection with any termination of
this Lease, or subletting of all or any portion of the Leaseback Space to
Landlord or its designee, Tenant shall complete, swear to and file any
questionnaires, tax returns, affidavits or other documentation which may be
required to be filed with the appropriate governmental agency in connection with
any other tax which may now or hereafter be in effect. Tenant further agrees to
pay any amounts which may be assessed in connection with any of such taxes and
to indemnify Landlord against and to hold Landlord harmless from any claims for
payment of such taxes as a result of such transactions.
G. Conditions for Landlord's Approval. In the event Landlord does not
exercise either of the recapture options provided to it pursuant to subsection C
of this Article 12 and providing that Tenant is not in default of any of
Tenant's obligations under this Lease (after notice and the expiration of any
applicable grace period) as of the time of Landlord's consent, and as of the
effective date of the proposed assignment or commencement date of the proposed
sublease, Landlord's consent (which must be in writing and form reasonably
satisfactory to Landlord) to the proposed assignment or sublease shall not be
unreasonably withheld or delayed, provided and upon condition that:
(i) Tenant shall have complied with the provisions of subsection B
of this Article 12 and Landlord shall not have exercised any of its options
under subsection C of this Article 12 within the time permitted therefor;
(ii) In Landlord's reasonable judgment the proposed assignee or
subtenant is engaged in a business or activity, and the Premises, or the
relevant part thereof, will be used in a manner, which (a) is in keeping with
the then standards of the Building, (b) is limited to the use of the Premises as
general and executive offices, and (c) will not violate any negative covenant as
to use contained in any other lease of office space in the Building;
(iii) The proposed assignee or subtenant is a reputable person of
good character and with sufficient financial worth considering the
responsibility involved, and Landlord has been furnished with reasonable proof
thereof;
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(iv) Neither (a) the proposed assignee or subtenant nor (b) any
person which, directly or indirectly, controls, is controlled by or is under
common control with, the proposed assignee or subtenant, is then an occupant of
any part of the Building;
(v) The proposed assignee or subtenant is not a person with whom
Landlord is or has been, within the preceding six (6) month period, negotiating
to lease space in the Building;
(vi) The form of the proposed sublease or instrument of assignment
(a) shall be in form reasonably satisfactory to Landlord, and, without
limitation, (1) shall not provide for a rental or other payment for the use,
occupancy or utilization of the space demised thereby based in whole or in part
on the income or profits derived by any person from the property so leased,
used, occupied or utilized other than an amount based on a fixed percentage or
percentages of gross receipts or sales and (2) shall provide that no person
having an interest in the possession, use, occupancy or utilization of the space
demised thereby shall enter into any lease, sublease, license, concession or
other agreement for use, occupancy or utilization of such space which provides
for a rental or other payment for such use, occupancy or utilization based in
whole or in part on the income or profits derived by any person from the
property so leased, used, occupied or utilized other than an amount based on a
fixed percentage or percentages of gross receipts or sales, and that any such
purported lease, sublease, concession or other agreement shall be absolutely
void and ineffective ab initio and (b) shall comply with the applicable
provisions of this Article 12;
(vii) There shall not be more than two (2) subtenants (including
Landlord or its designee) of the Premises;
(viii) The amount of the aggregate rent to be paid by the proposed
subtenant is not less than the then current market rent per rentable square foot
for the Premises as though the Premises were vacant, and the rental and other
terms and conditions of the sublease are the same as those contained in the
proposed sublease furnished to Landlord pursuant to subsection B of this Article
12;
(ix) Within five (5) days after receipt of a bill therefor, Tenant
shall reimburse Landlord for the reasonable costs that may be incurred by
Landlord in connection with said assignment or sublease, including without
limitation, the costs of making investigations as to the acceptability of the
proposed assignee or subtenant, and reasonable legal costs incurred by Landlord
in connection with the granting of any requested consent;
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(x) Tenant shall not have (a) advertised or publicized in any way
the availability of the Premises without prior notice to and approval by
Landlord, nor shall any advertisement state the name (as distinguished from the
address) of the Building or the proposed rental, (b) listed the Premises for
subletting or assignment, with a broker, agent or representative other than the
then managing agent of the Building or other agent designated by Landlord;
(xi) The proposed occupancy shall not, in Landlord's opinion,
increase the office cleaning requirements or the Building's operating or other
expenses or impose an extra burden upon services to be supplied by Landlord to
Tenant;
(xii) The proposed assignee or subtenant or its business shall not
be subject to compliance with additional requirements of law (including related
regulations) beyond those requirements which are applicable to the named Tenant
herein; and
(xiii) The proposed subtenant or assignee shall not be entitled,
directly or indirectly, to diplomatic or sovereign immunity and shall be subject
to the service of process in, and the jurisdiction of the courts of New York
State.
Except for any subletting by Tenant to Landlord or its designee pursuant
to the provisions of this Article 12, each subletting pursuant to this
subsection G of this Article 12 shall be subject to all of the covenants,
agreements, terms, provisions and conditions contained in this Lease.
Notwithstanding any such subletting to Landlord or any such subletting to any
other subtenant and/or acceptance of Rent or additional rent by Landlord from
any subtenant, Tenant shall and will remain fully liable for the payment of the
Rent and additional rent due and to become due hereunder and for the performance
of all the covenants, agreements, terms, provisions and conditions contained in
this Lease on the part of Tenant to be performed and all acts and omissions of
any licensee or subtenant or anyone claiming under or through any subtenant
which shall be in violation of any of the obligations of this Lease shall be
deemed to be a violation by Tenant. Tenant further agrees that notwithstanding
any such subletting, no other and further subletting of the Premises by Tenant
or any person claiming through or under Tenant shall or will be made except upon
compliance with and subject to the provisions of this Article 12. If Landlord
shall decline to give its consent to any proposed assignment or sublease, or if
Landlord shall exercise either of its options under subsection C of this Article
12, Tenant shall indemnify, defend and hold harmless Landlord against and from
any and all loss, liability, damages, costs, and expenses (including reasonable
counsel fees) resulting from any claims that may be made against Landlord by the
proposed assignee or subtenant or by any brokers or
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other persons claiming a commission or similar compensation in connection with
the proposed assignment or sublease.
H. Future Requests. In the event that (i) Landlord fails to exercise
either of its options under subsection C of this Article 12 and consents to a
proposed assignment or sublease, and (ii) Tenant fails to execute and deliver
the assignment or sublease to which Landlord consented within ninety (90) days
after the giving of such consent, then, Tenant shall again comply with all of
the provisions and conditions of subsection B of this Article 12 before
assigning this Lease or subletting all or part of the Premises.
I. Sublease Provisions. With respect to each and every sublease or
subletting authorized by Landlord under the provisions of this Lease, it is
further agreed that:
(i) No subletting shall be for a term ending later than one (1) day
prior to the Expiration Date of this Lease;
(ii) No sublease shall be delivered, and no subtenant shall take
possession of the Premises or any part thereof, until an executed counterpart of
such sublease has been delivered to Landlord;
(iii) Each sublease shall provide that it is subject and subordinate
to this Lease and to the matters to which this Lease is or shall be subordinate,
and that in the event of termination, re-entry or dispossession by Landlord
under this Lease Landlord may, at its option, take over all of the right, title
and interest of Tenant, as sublessor, under such sublease, and such subtenant
shall, at Landlord's option, attorn to Landlord pursuant to the then executory
provisions of such sublease, except that Landlord shall not (a) be liable for
any previous act or omission of Tenant under such sublease, (b) be subject to
any counterclaim, offset or defense, not expressly provided in such sublease,
which theretofore accrued to such subtenant against Tenant, or (c) be bound by
any previous modification of such sublease or by any previous prepayment of more
than one (1) month's Rent. The provisions of this Article 12 shall be
self-operative and no further instrument shall be required to give effect to
this provision.
(iv) If any laws, orders, rules or regulations of any applicable
governmental authority require that any Hazardous Substances, including, without
limitation, asbestos, contained in or about the Premises to be sublet (the
"Sublet Space") be dealt with in any particular manner in connection with any
alteration of the Sublet Space or otherwise, then it shall be the subtenant's
obligation, at the subtenant's expense, to deal with such Hazardous Substances
in accordance with
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all such laws, orders, rules and regulations. In the event the subtenant is
required to deal with Hazardous Substances in accordance with the foregoing
provisions of this paragraph (iv) of subsection I of Article 12, then,
notwithstanding anything herein to the contrary, Landlord, at Landlord's
election, shall have the option to deal with such Hazardous Substances itself
and, in such event, the subtenant shall reimburse Landlord for all of Landlord's
costs and expenses in connection therewith within ten (10) days next following
the rendition of a statement by Landlord to the subtenant requesting such
reimbursement. If the subtenant shall fail to so reimburse Landlord for the
aforesaid costs and expenses within the ten (10) day period referred to above,
then notwithstanding anything contained in the Lease to the contrary, such costs
and expenses shall, at Landlord's option, be paid by Tenant to Landlord, within
ten (10) days next following of Landlord's demand therefor.
J. Profits from Assignment or Subletting. If Landlord shall give its
consent to any assignment of this Lease or to any sublease or if Tenant shall
enter into any other assignment or sublease permitted hereunder, Tenant shall in
consideration therefor, pay to Landlord, as additional rent:
(i) in the case of an assignment, an amount equal to seventy-five
percent (75%) of all sums and other considerations paid to Tenant by the
assignee for or by reason of such assignment (including, but not limited to,
sums paid for the sale of Tenant's fixtures, leasehold improvements, equipment,
furniture, furnishings or other personal property, less, in the case of a sale
thereof, the then net unamortized or undepreciated cost thereof determined on
the basis of Tenant's federal income tax returns) less all expenses reasonably
and actually incurred by Tenant on account of brokerage commissions and
advertising costs in connection with such assignment, provided that Tenant shall
submit to Landlord a receipt evidencing the payment of such expenses (or other
proof of payment as Landlord shall require); and
(ii) in the case of a sublease, seventy-five percent (75%) of any
rents, additional charges or other consideration payable under the sublease on a
per square foot basis to Tenant by the subtenant which is in excess of the Rent
and additional rent accruing during the term of the sublease in respect of the
subleased space (at the rate per square foot payable by Tenant hereunder)
pursuant to the terms hereof (including, but not limited to, sums paid for the
sale or rental of Tenant's fixtures, leasehold improvements, equipment,
furniture or other personal property, less, in the case of the sale thereof, the
then net unamortized or undepreciated cost thereof determined on the basis of
Tenant's federal income tax returns), less all expenses reasonably and actually
incurred by Tenant on account of brokerage commissions, advertising costs and
the cost of demising the premises so
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sublet in connection with such sublease, provided that Tenant shall submit to
Landlord a receipt evidencing the payment of such expenses (or other proof of
payment as Landlord shall require). The sums payable under this subsection J(ii)
of this Article 12 shall be paid to Landlord as and when payable by the
subtenant to Tenant.
K. Other Transfers. (i) If Tenant is a corporation other than a
corporation whose stock is listed and traded on a nationally recognized stock
exchange (hereinafter referred to as a "public corporation"), the provisions of
subsection A of this Article 12 shall apply to a transfer (by one or more
transfers) of a majority of the stock of Tenant as if such transfer of a
majority of the stock of Tenant were an assignment of this Lease; but said
provisions shall not apply to transactions with a corporation into or with which
Tenant is merged or consolidated or to which substantially all of Tenant's
assets are transferred, provided that in any of such events (a) the successor to
Tenant has a net worth computed in accordance with generally accepted accounting
principles at least equal to the greater of (1) the net worth of Tenant
immediately prior to such merger, consolidation or transfer, or (2) the net
worth of Tenant herein named on the date of this Lease and (b) proof
satisfactory to Landlord of such net worth shall have been delivered to Landlord
at least ten (10) days prior to the effective date of any such transaction.
(ii) If Tenant is a partnership, the provisions of subsection A of
this Article 12 shall apply to a transfer (by one or more transfers) of a
majority interest in the partnership, as if such transfer were an assignment of
this Lease.
(iii) If Tenant is a subdivision, authority, body, agency,
instrumentality or other entity created and/or controlled pursuant to the laws
of the State of New York or any city, town or village of such state or of
federal government ("Governmental Entity"), the provisions of subsection A of
this Article 12 shall apply to a transfer (by one or more transfers) of any of
Tenant's rights to use and occupy the Premises, to any other Governmental
Entity, as if such transfer of the right of use and occupancy were an assignment
of this Lease; but said provisions shall not apply to a transfer of any of
Tenant's rights in and to the Premises to any Governmental Entity which shall
replace or succeed to substantially similar public functions, responsibilities
and areas of authority as Tenant, provided that in any of such events the
successor Governmental Entity (a) shall utilize the Premises in a manner
substantially similar to Tenant, and (b) shall not utilize the Premises in any
manner which, in Landlord's judgment, would impair the reputation of the
Building as a first-class office building.
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L. Related Corporation. Tenant may, with Landlord's consent which shall
not be unreasonably withheld, permit any corporations or other business entities
(but not including Governmental Entities) which control, are controlled by, or
are under common control with Tenant (herein referred to as "related
corporation") to sublet all or part of the Premises for any of the purposes
permitted to Tenant, subject however to compliance with Tenant's obligations
under this Lease. Such subletting shall not be deemed to vest in any such
related corporation any right or interest in this Lease or the Premises nor
shall it relieve, release, impair or discharge any of Tenant's obligations
hereunder. For the purposes hereof, "control" shall be deemed to mean ownership
of not less than fifty percent (50%) of all of the voting stock of such
corporation or not less than fifty percent (50%) of all of the legal and
equitable interest in any other business entities.
M. Assumption by Assignee. Any assignment or transfer, whether made with
Landlord's consent pursuant to subsection A of this Article 12 or without
Landlord's consent pursuant to subsection K of this Article 12, shall be made
only if, and shall not be effective until, the assignee shall execute,
acknowledge and deliver to Landlord an agreement in form and substance
satisfactory to Landlord whereby the assignee shall assume the obligations of
this Lease on the part of Tenant to be performed or observed and whereby the
assignee shall agree that the provisions in subsection A of this Article 12
shall, notwithstanding such assignment or transfer, continue to be binding upon
it in respect of all future assignments and transfers. The original named Tenant
covenants that, notwithstanding any assignment or transfer, whether or not in
violation of the provisions of this Lease, and notwithstanding the acceptance of
Rent and/or additional rent by Landlord from an assignee, transferee or any
other party, the original named Tenant shall remain fully liable for the payment
of the Rent and additional rent and for the other obligations of this Lease on
the part of Tenant to be performed or observed.
N. Liability of Tenant. The joint and several liability of Tenant and any
immediate or remote successor in interest of Tenant and the due performance of
the obligations of this Lease on Tenant's part to be performed or observed shall
not be discharged, released or impaired in any respect by any agreement or
stipulation made by Landlord extending the time, or modifying any of the
obligations, of this Lease, or by any waiver or failure of Landlord to enforce
any of the obligations of this Lease.
0. Listings. The listing of any name other than that of Tenant, whether on
the doors of the Premises or the Building directory, or otherwise, shall not
operate to vest any right or interest in this Lease or in the Premises, nor
shall it be deemed to be the consent of Landlord to any assignment or transfer
of this
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Lease or to any sublease of the Premises or to the use or occupancy thereof by
others. Any such listing shall constitute a privilege extended by Landlord,
revocable at Landlord's will by notice to Tenant.
P. Exclusive Broker. In the event Tenant desires to sublet the Premises or
assign this Lease, at Landlord's option, Tenant shall designate Landlord, the
then managing agent of the Building or other agent designated by Landlord, as
Tenant's exclusive agent to effect such sublease or assignment and shall pay
Landlord, the managing agent or such other agent, as the case may be, a
reasonable brokerage commission computed in accordance with the usual rates
charged by Landlord, the managing agent or such other agent.
Q. Re-entry by Landlord. If Landlord shall recover or come into possession
of the Premises before the date herein fixed for the termination of this Lease,
Landlord shall have the right, at its option, to take over any and all subleases
or sublettings of the Premises or any part thereof made by Tenant and to succeed
to all the rights of said subleases and sublettings or such of them as it may
elect to take over. Tenant hereby expressly assigns and transfers to Landlord
such of the subleases and sublettings as Landlord may elect to take over at the
time of such recovery of possession, such assignment and transfer not to be
effective until the termination of this Lease or re-entry by Landlord hereunder
or if Landlord shall otherwise succeed to Tenant's estate in the Premises, at
which time Tenant shall upon request of Landlord, execute, acknowledge and
deliver to Landlord such further instruments of assignment and transfer as may
be necessary to vest in Landlord the then existing subleases and sublettings.
Every subletting hereunder is subject to the condition and by its acceptance of
and entry into a sublease, each subtenant thereunder shall be deemed
conclusively to have thereby agreed from and after the termination of this Lease
or re-entry by Landlord hereunder of or if Landlord shall otherwise succeed to
Tenant's estate in the Premises, that such subtenant shall waive any right to
surrender possession or to terminate the sublease and, at Landlord's election,
such subtenant shall be bound to Landlord for the balance of the term of such
sublease and shall attorn to and recognize Landlord, as its landlord, under all
of the then executory terms of such sublease, except that Landlord shall not (i)
be liable for any previous act, omission or negligence of Tenant under such
sublease, (ii) be subject to any counterclaim, defense or offset not expressly
provided for in such sublease, which theretofore accrued to such subtenant
against Tenant, (iii) be bound by any previous modification or amendment of such
sublease or by any previous prepayment of more than one (1) month's rent, and
additional rent which shall be payable as provided in the sublease, (iv) be
obligated to repair the subleased space or the Building or any part thereof, in
the event of total or substantial total damage beyond such repair as can
reasonably be accomplished from the net proceeds of insurance actually made
available to
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Landlord, (v) be obligated to repair the subleased space or the Building or any
part thereof, in the event of partial condemnation beyond such repair as can
reasonably be accomplished from the net proceeds of any award actually made
available to Landlord as consequential damages allocable to the part of the
subleased space or the Building not taken or (vi) be obligated to perform any
work in the subleased space of the Building or to prepare them for occupancy
beyond Landlord's obligations under this Lease, and the subtenant shall execute
and deliver to Landlord any instruments Landlord may reasonably request to
evidence and confirm such attornment. Each subtenant or licensee of Tenant shall
be deemed automatically upon and as a condition of occupying or using the
Premises or any part thereof, to have given a waiver of the type described in
and to the extent and upon the conditions set forth in this Article 12.
13. CONDITION OF THE PREMISES.
A. Acceptance by Tenant. Tenant agrees to accept possession of the
Premises in the condition which shall exist on the Commencement Date "as is",
and further agrees that Landlord shall have no obligation to perform any work or
make any installations in order to prepare the Premises for Tenant's occupancy.
The taking of possession of the Premises by Tenant shall be conclusive evidence
as against Tenant that, at the time such possession was so taken, the Premises
and the Building were in good and satisfactory condition.
B. Tenant's Initial Alteration. Tenant agrees to perform, or to cause
contractors approved by Landlord to perform, Tenant's Initial Alteration
described in Schedule B annexed hereto in accordance with the terms, conditions
and provisions thereof, and in accordance with all other terms, conditions and
provisions contained in this Lease, including, without limitation, Schedules C
and D annexed hereto. All of the terms, covenants and conditions of Schedules C
and D are incorporated in this Lease as if fully set forth at length herein.
14. ACCESS TO PREMISES. Tenant shall permit Landlord, Landlord's agents and
public utilities servicing the Building to erect, use and maintain, concealed
ducts, pipes and conduits in and through the Premises. Landlord or Landlord's
agents shall have the right to enter the Premises at all reasonable times to (i)
examine the same, (ii) to show them to prospective purchasers, mortgagees or
lessees of the Building or space therein, (iii) to make such decorations,
repairs, alterations, improvements or additions as Landlord may deem necessary
or desirable to the Premises or to any other portion of the Building or which
Landlord may elect to perform following Tenant's failure to make repairs or
perform any work which
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Tenant is obligated to perform under this Lease, or (iv) for the purpose of
complying with laws, regulations or other requirements of government
authorities; Landlord shall be allowed to take all necessary material and
equipment into and upon the Premises and to store them within the Premises
without the same constituting an eviction or constructive eviction of Tenant in
whole or in part and the Rent shall in nowise abate while any decorations,
repairs, alterations, improvements or additions are being made, by reason of
loss or interruption of business of Tenant, or otherwise. During the one (1)
year prior to the Expiration Date or the expiration of any renewal or extended
term, Landlord may exhibit the Premises to prospective tenants thereof. If,
during the last twelve (12) months of the Term, Tenant shall have removed all or
substantially all of Tenant's property therefrom, Landlord may immediately enter
and alter, renovate and redecorate the Premises, without elimination or
abatement of Rent, or incurring liability to Tenant for any compensation, and
such acts shall not be deemed an actual or constructive eviction and shall have
no effect upon this Lease. If Tenant shall not be personally present to open and
permit an entry into the Premises, at any time, when for any reason an entry
therein shall be necessary or permissible, Landlord or Landlord's agents may
enter the same by a master key, or may forcibly enter the same, without
rendering Landlord or such agents liable therefor (if during such entry Landlord
or Landlord's agents shall accord reasonable care to Tenant's property), and
without in any manner affecting the obligations and covenants of this Lease.
Nothing herein contained, however, shall be deemed or construed to impose upon
Landlord any obligation, responsibility or liability whatsoever, for the care,
supervision or repair of the Building or any part thereof, other than as herein
provided. Landlord also shall have the right at any time, without the same
constituting an actual or constructive eviction and without incurring any
liability to Tenant therefor, to change the arrangement and/or location of
entrances or passageways, doors and doorways, and corridors, elevators, stairs,
toilets or other public parts of the Building and to change the name, number or
designation by which the Building is commonly known. In addition, Tenant
understands and agrees that Landlord may perform substantial renovation work in
and to the public parts of the Building and the mechanical and other systems
serving the Building (which work may include the replacement of the building
exterior facade and window glass, requiring access to the same from within the
Premises), and that Landlord shall incur no liability to Tenant, nor shall
Tenant be entitled to any abatement of Rent on account of any noise, vibration
or other disturbance to Tenant's business at the Premises (provided that Tenant
is not denied access to said Premises) which shall arise out of the performance
by Landlord of the aforesaid renovations of the Building. Tenant understands and
agrees that all parts (except surfaces facing the interior of the Premises) of
all walls, windows and doors bounding the Premises (including exterior Building
walls, core corridor walls, doors and entrances), all balconies, terraces and
roofs adjacent to the Premises, all space in or adjacent to the Premises used
for
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shafts, stacks, stairways, chutes, pipes, conduits, ducts, fan rooms, heating,
air cooling, plumbing and other mechanical facilities, service closets and other
Building facilities are not part of the Premises, and Landlord shall have the
use thereof, as well as access thereto through the Premises for the purposes of
operation, maintenance, alteration and repair.
15. CERTIFICATE OF OCCUPANCY. Tenant shall not at any time use or occupy the
Premises in violation of the certificate of occupancy issued for the Premises or
for the Building and in the event that any department of the City or State of
New York shall hereafter at any time contend and/or declare by notice,
violation, order or in any other manner whatsoever that the Premises are used
for a purpose which is a violation of such certificate of occupancy whether or
not such use shall be a Permitted Use, Tenant shall, upon five (5) days written
notice from Landlord, immediately discontinue such use of the Premises. Failure
by Tenant to discontinue such use after such notice shall be considered a
default in the fulfillment of a covenant of this Lease and Landlord shall have
the right to terminate this Lease immediately, and in addition thereto shall
have the right to exercise any and all rights and privileges and remedies given
to Landlord by and pursuant to the provisions of Articles 17 and 18 hereof.
16. LANDLORD'S LIABILITY. The obligations of Landlord under this Lease shall not
be binding upon Landlord named herein after the sale, conveyance, assignment or
transfer by such Landlord (or upon any subsequent landlord after the sale,
conveyance, assignment or transfer by such subsequent landlord) of its interest
in the Building or the Real Property, as the case may be, and in the event of
any such sale, conveyance, assignment or transfer, Landlord shall be and hereby
is entirely freed and relieved of all covenants and obligations of Landlord
hereunder, and it shall be deemed and construed without further agreement
between the parties or their successors in interest, or between the parties and
the purchaser, grantee, assignee or other transferee that such purchaser,
grantee, assignee or other transferee has assumed and agreed to carry out any
and all covenants and obligations of Landlord hereunder. Neither the
shareholders, directors or officers of Landlord, if Landlord is a corporation,
nor the partners comprising Landlord (nor any of the shareholders, directors or
officers of such partners), if Landlord is a partnership (collectively, the
"Parties"), shall be liable for the performance of Landlord's obligations under
this Lease. Tenant shall look solely to Landlord to enforce Landlord's
obligations hereunder and shall not seek any damages against any of the Parties.
The liability of Landlord for Landlord's obligations under this Lease shall not
exceed and shall be limited to Landlord's interest in the Building and the Real
Property and Tenant shall not look to or attach any other property or
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(vi) if Tenant shall file a voluntary petition in bankruptcy or
insolvency, or shall be adjudicated a bankrupt or insolvent, or shall file
any petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief
under the present or any future federal bankruptcy act or any other
present or future applicable federal, state or other statute or law, or
shall make an assignment for the benefit of creditors or shall seek or
consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of Tenant or of all or any part of Tenant's property; or
(vii) if, within thirty (30) days after the commencement of any
proceeding against Tenant, whether by the filing of a petition or
otherwise, seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the present
or any future federal bankruptcy act or any other present or future
applicable federal, state or other statute or law, such proceeding shall
not have been dismissed, or if, within thirty (30) days after the
appointment of any trustee, receiver or liquidator of Tenant, or of all or
any part of Tenant's property, without the consent or acquiescence of
Tenant, such appointment shall not have been vacated or otherwise
discharged, or if any execution or attachment shall be issued against
Tenant or any of Tenant's property pursuant to which the Premises shall be
taken or occupied or attempted to be taken or occupied;
then, in any of said cases, at any time prior to or during the Term, of any one
or more of such Events of Default, Landlord, at any time thereafter, at
Landlord's option, may give to Tenant a five (5) days notice of termination of
this Lease and, in the event such notice is given, this Lease and the Term shall
come to an end and expire (whether or not the Term shall have commenced) upon
the expiration of said five (5) days with the same effect as if the date of
expiration of said five (5) days were the Expiration Date, but Tenant shall
remain liable for damages as provided in Article 18 hereof.
B. Effect of Bankruptcy. If, at any time, (i) Tenant shall be comprised of
two (2) or more persons, or (ii) Tenant's obligations under this Lease shall
have been guaranteed by any person other than Tenant, or (iii) Tenant's interest
in this Lease shall have been assigned, the word "Tenant", as used in clauses
(vi) and (vii) of subsection A of this Article 17, shall be deemed to mean any
one or more of the persons primarily or secondarily liable for Tenant's
obligations under this Lease. Any monies received by Landlord from or on behalf
of Tenant during the pendency of any proceeding of the types referred to in said
clauses (vi) and (vii) shall be deemed paid as compensation for the use and
occupation of the Premises and the acceptance of any such compensation by
Landlord shall not be deemed an
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acceptance of rent or a waiver on the part of Landlord of any rights under said
subsection A.
C. Conditional Limitation. Nothing contained in this Article 17 shall be
deemed to require Landlord to give the notices herein provided for prior to the
commencement of a summary proceeding for non-payment of rent or a plenary action
for recovery of rent on account of any default in the payment of the same, it
being intended that such notices are for the sole purpose of creating a
conditional limitation hereunder pursuant to which this Lease shall terminate
and if Tenant thereafter remains in possession after such termination, Tenant
shall do so as a holdover tenant.
18. REMEDIES AND DAMAGES.
A. Landlord's Remedies. (i) If Tenant shall default in the payment when
due of any installment of Rent or in the payment when due of any additional
rent, or if any execution or attachment shall be issued against Tenant or any of
Tenant's property whereupon the Premises shall be taken or occupied or attempted
to be taken or occupied by someone other than Tenant, or if Tenant shall fail to
move into or take possession of the Premises within sixty (60) days after the
Commencement Date, or if this Lease and the Term shall expire and come to an end
as provided in Article 17:
(a) Landlord and its agents and servants may immediately, or
at any time after such default or after the date upon which this Lease and the
Term shall expire and come to an end, re-enter the Premises or any part thereof,
either by summary proceedings, or by any other applicable action or proceeding,
(without being liable to indictment, prosecution or damages therefor), and may
repossess the Premises and dispossess Tenant and any other persons from the
Premises and remove any and all of their property and effects from the Premises;
and
(b) Landlord, at Landlord's option, may relet the whole or any
part or parts of the Premises from time to time, either in the name of Landlord
or otherwise, to such tenant or tenants, for such term or terms ending before,
on or after the Expiration Date, at such rental or rentals and upon such other
conditions, which may include concessions and free rent periods, as Landlord, in
its sole discretion, may determine. Landlord shall have no obligation to relet
the Premises or any part thereof and shall in no event be liable for refusal or
failure to relet the Premises or any part thereof, or, in the event of any such
reletting, for refusal or failure to collect any rent due upon any such
reletting, and no such refusal or failure shall operate to relieve Tenant of any
liability under this Lease or otherwise to
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affect any such liability; Landlord, at Landlord's option, may make such
repairs, replacements, alterations, additions, improvements, decorations and
other physical changes in and to the Premises as Landlord, in its sole
discretion, considers advisable or necessary in connection with any such
reletting or proposed reletting, without relieving Tenant of any liability under
this Lease or otherwise affecting any such liability.
(ii) Tenant hereby waives the service of any notice of intention to
re-enter or to institute legal proceedings to that end which may otherwise be
required to be given under any present or future law. Tenant, on its own behalf
and on behalf of all persons claiming through or under Tenant, including all
creditors, does further hereby waive any and all rights which Tenant and all
such persons might otherwise have under any present or future law to redeem the
Premises, or to re-enter or repossess the Premises, or to restore the operation
of this Lease, after (a) Tenant shall have been dispossessed by a judgment or by
warrant of any court or judge, or (b) any re-entry by Landlord, or (c) any
expiration or termination of this Lease and the Term, whether such dispossess,
re-entry, expiration or termination shall be by operation of law or pursuant to
the provisions of this Lease. The words "re-enter", "re-entry" and
"re-entered" as used in this Lease shall not be deemed to be restricted to
their technical legal meanings. In the event of a breach or threatened breach by
Tenant, or any persons claiming through or under Tenant, of any term, covenant
or condition of this Lease on Tenant's part to be observed or performed,
Landlord shall have the right to enjoin such breach and the right to invoke any
other remedy allowed by law or in equity as if re-entry, summary proceedings and
other special remedies were not provided in this Lease for such breach. The
right to invoke the remedies hereinbefore set forth are cumulative and shall not
preclude Landlord from invoking any other remedy allowed at law or in equity.
B. Damages. (i) If this Lease and the Term shall expire and come to an end
as provided in Article 17, or by or under any summary proceeding or any other
action or proceeding, or if Landlord shall re-enter the Premises as provided in
subsection A of this Article 18, or by or under any summary proceeding or any
other action or proceeding, then, in any of said events:
(a) Tenant shall pay to Landlord all Rent, additional rent and
other charges payable under this Lease by Tenant to Landlord to the date upon
which this Lease and the Term shall have expired and come to an end or to the
date of re-entry upon the Premises by Landlord, as the case may be;
(b) Tenant also shall be liable for and shall pay to Landlord,
as damages, any deficiency (referred to as "Deficiency") between the Rent
reserved
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in this Lease for the period which otherwise would have constituted the
unexpired portion of the Term and the net amount, if any, of rents collected
under any reletting effected pursuant to the provisions of subsection A(i) of
this Article 18 for any part of such period (first deducting from the rents
collected under any such reletting all of Landlord's expenses in connection with
the termination of this Lease, or Landlord's reentry upon the Premises and with
such reletting including, but not limited to, all repossession costs, brokerage
commissions, legal expenses, attorneys' fees and disbursements, alteration costs
and other expenses of preparing the Premises for such reletting); any such
Deficiency shall be paid in monthly installments by Tenant on the days specified
in this Lease for payment of installments of Rent, Landlord shall be entitled to
recover from Tenant each monthly Deficiency as the same shall arise, and no suit
to collect the amount of the Deficiency for any month shall prejudice Landlord's
right to collect the Deficiency for any subsequent month by a similar
proceeding; and
(c) whether or not Landlord shall have collected any monthly
Deficiencies as aforesaid, Landlord shall be entitled to recover from Tenant,
and Tenant shall pay to Landlord, on demand, in lieu of any further Deficiencies
as and for liquidated and agreed final damages, a sum equal to the amount by
which the Rent reserved in this Lease for the period which otherwise would have
constituted the unexpired portion of the Term exceeds the then fair and
reasonable rental value of the Premises for the same period, less the aggregate
amount of Deficiencies theretofore collected by Landlord pursuant to the
provisions of subsection B(1)(b) of this Article 18 for the same period; if,
before presentation of proof of such liquidated damages to any court, commission
or tribunal, the Premises, or any part thereof, shall have been relet by
Landlord for the period which otherwise would have constituted the unexpired
portion of the Term, or any part thereof, the amount of rent reserved upon such
reletting shall be deemed, prima facie, to be the fair and reasonable rental
value for the part or the whole of the Premises so relet during the term of the
reletting.
(ii) If the Premises, or any part thereof, shall be relet together
with other space in the Building, the rents collected or reserved under any such
reletting and the expenses of any such reletting shall be equitably apportioned
for the purposes of this subsection B. Tenant shall in no event be entitled to
any rents collected or payable under any reletting, whether or not such rents
shall exceed the Rent reserved in this Lease. Solely for the purposes of this
Article, the term "Rent" as used in subsection B(i) of this Article 18 shall
mean the Rent in effect immediately prior to the date upon which this Lease and
the Term shall have expired and come to an end, or the date of re-entry upon the
Premises by Landlord, as the case may be, adjusted to reflect any increase or
decrease pursuant to the provisions of Article 28 hereof for the Comparison Year
(as defined in said
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Article 28) immediately preceding such event. Nothing contained in Article 17
or this Article 18 shall be deemed to limit or preclude the recovery by Landlord
from Tenant of the maximum amount allowed to be obtained as damages by any
statute or rule of law, or of any sums or damages to which Landlord may be
entitled in addition to the damages set forth in subsection B(i) of this Article
18.
C. Legal Fees. (i) Tenant hereby agrees to pay, as additional rent, all
attorneys' fees and disbursements (and all other court costs or expenses of
legal proceedings) which Landlord may incur or pay out by reason of, or in
connection with:
(a) any action or proceeding by Landlord to terminate this
Lease in which Landlord prevails;
(b) any other action or proceeding by Landlord against Tenant
(including, but not limited to, any arbitration proceeding) in which Landlord
prevails;
(c) any default by Tenant in the observance or performance of
any obligation under this Lease (including, but not limited to, matters
involving payment of rent and additional rent, computation of escalations,
alterations or other Tenant's work and subletting or assignment), whether or not
Landlord commences any action or proceeding against Tenant;
(d) any action or proceeding brought by Tenant against
Landlord (or any officer, partner or employee of Landlord) in which Tenant fails
to secure a final unappealable judgment against Landlord; and
(e) any other appearance by Landlord (or any officer, partner
or employee of Landlord) as a witness or otherwise in any action or proceeding
whatsoever involving or affecting Landlord, Tenant or this Lease in which
Landlord prevails.
(ii) Tenant's obligations under this subsection C of Article 18
shall survive the expiration of the Term hereof or any earlier termination of
this Lease. This provision is intended to supplement (and not to limit) other
provisions of this Lease pertaining to indemnities and/or attorneys' fees.
19. FEES AND EXPENSES.
A. Curing Tenant's Defaults. If Tenant shall default in the observance or
performance of any term or covenant on Tenant's part to be observed or performed
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under or by virtue of any of the terms or provisions in any Article of this
Lease, Landlord may immediately or at any time thereafter on five (5) days
notice perform the same for the account of Tenant, and if Landlord makes any
expenditures or incurs any obligations for the payment of money in connection
therewith including, but not limited to reasonable attorneys' fees and
disbursements in instituting, prosecuting or defending any action or proceeding,
such sums paid or obligations incurred with interest and costs shall be deemed
to be additional rent hereunder and shall be paid by Tenant to Landlord within
five (5) days of rendition of any bill or statement to Tenant therefor.
B. Late Charges. If Tenant shall fail to make payment of any installment
of Rent or any additional rent within ten (10) days after the date when such
payment is due, Tenant shall pay to Landlord, in addition to such installment of
Rent or such additional rent, as the case may be, as a late charge and as
additional rent, a sum based on a rate equal to the lesser of (i) five percent
(5%) per annum above the then current prime rate charged by Citibank, N.A. or
its successor and (ii) the maximum rate permitted by applicable law, of the
amount unpaid computed from the date such payment was due to and including the
date of payment, but in no event shall interest be computed and payable for less
than a full calendar month. Tenant acknowledges and agrees that, except as
otherwise expressly provided herein, if Tenant fails to dispute any item of
additional rent within ten (10) days of receipt of a bill or notice therefor,
Tenant shall be deemed to have waived its right to dispute the same.
20. NO REPRESENTATIONS BY LANDLORD. Landlord or Landlord's agents have made no
representations or promises with respect to the Building, the Real Property, the
Premises or Taxes (as defined in Article 28 hereof) except as herein expressly
set forth and no rights, easements or licenses are acquired by Tenant by
implication or otherwise except as expressly set forth herein. All references in
this Lease to the consent or approval of Landlord shall be deemed to mean the
written consent of Landlord or the written approval of Landlord and no consent
or approval of Landlord shall be effective for any purpose unless such consent
or approval is set forth in a written instrument executed by Landlord.
21. END OF TERM
A. Surrender of Premises. Upon the expiration or other termination of the
Term, Tenant shall quit and surrender to Landlord the Premises, broom clean, in
good order and condition, ordinary wear and tear and damage for which Tenant is
not responsible under the terms of this Lease excepted, and Tenant shall remove
all
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of its property pursuant to Article 3 hereof. Tenant's obligation to observe or
perform this covenant shall survive the expiration or sooner termination of the
Term. If the last day of the Term or any renewal thereof falls on Saturday or
Sunday this Lease shall expire on the business day immediately preceding. In
addition, the parties recognize and agree that the damage to Landlord resulting
from any failure by Tenant to timely surrender possession of the Premises as
aforesaid will be substantial, will exceed the amount of the monthly
installments of the Rent theretofore payable hereunder, and will be impossible
to accurately measure. Tenant therefore agrees that if possession of the
Premises is not surrendered to Landlord within twenty-four (24) hours after the
Expiration Date or sooner termination of the Term, in addition to any other
rights or remedy Landlord may have hereunder or at law, Tenant shall pay to
Landlord for each month and for each portion of any month during which Tenant
holds over in the Premises after the Expiration Date or sooner termination of
this Lease, a sum equal to three (3) times the aggregate of that portion of the
Rent and the additional rent which was payable under this Lease during the last
month of the Term. Nothing herein contained shall be deemed to permit Tenant to
retain possession of the Premises after the Expiration Date or sooner
termination of this Lease and no acceptance by Landlord of payments from Tenant
after the Expiration Date or sooner termination of the Term shall be deemed to
be other than on account of the amount to be paid by Tenant in accordance with
the provisions of this Article 21, which provisions shall survive the Expiration
Date or sooner termination of this Lease.
B. Holdover by Tenant. If Tenant shall hold-over or remain in possession
of any portion of the Premises beyond the Expiration Date of this Lease,
notwithstanding the acceptance of any Rent and additional rent paid by Tenant
pursuant to subsection A above, Tenant shall be subject not only to summary
proceeding and all damages related thereto, but also to any damages arising out
of lost opportunities (and/or new leases) by Landlord to re-let the Premises (or
any part thereof). All damages to Landlord by reason of such holding over by
Tenant may be the subject of a separate action and need not be asserted by
Landlord in any summary proceedings against Tenant.
22. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon Tenant
paying the Rent and additional rent and observing and performing all the terms,
covenants and conditions, on Tenant's part to be observed and performed, Tenant
may peaceably and quietly enjoy the Premises subject, nevertheless, to the terms
and conditions of this Lease including, but not limited to, Article 16 hereof
and to all Superior Leases and Mortgages.
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23. FAILURE TO GIVE POSSESSION. Tenant waives any right to rescind this Lease
under Section 223-a of the New York Real Property Law or any successor statute
of similar import then in force and further waives the right to recover any
damages which may result from Landlord's failure to deliver possession of the
Premises on the date set forth in Article 1 hereof for the commencement of the
Term. If Landlord shall be unable to give possession of the Premises on such
date, and provided Tenant is not responsible for such inability to give
possession, the Rent reserved and covenanted to be paid herein shall not
commence until the possession of the Premises is given or the Premises are
available for occupancy by Tenant, and no such failure to give possession on
such date shall in any way affect the validity of this Lease or the obligations
of Tenant hereunder or give rise to any claim for damages by Tenant or claim for
rescission of this Lease, nor shall same be construed in anyway to extend the
Term. If permission is given to Tenant to enter into the possession of the
Premises or to occupy premises other than the Premises prior to the Commencement
Date, Tenant covenants and agrees that such occupancy shall be deemed to be
under all the terms, covenants, conditions and provisions of this Lease,
including the covenant to pay Rent.
24. NO WAIVER. If there be any agreement between Landlord and Tenant providing
for the cancellation of this Lease upon certain provisions or contingencies
and/or an agreement for the renewal hereof at the expiration of the Term, the
right to such renewal or the execution of a renewal agreement between Landlord
and Tenant prior to the expiration of the Term shall not be considered an
extension thereof or a vested right in Tenant to such further term, so as to
prevent Landlord from canceling this Lease and any such extension thereof during
the remainder of the original Term; such privilege, if and when so exercised by
Landlord, shall cancel and terminate this Lease and any such renewal or
extension previously entered into between Landlord and Tenant or the right of
Tenant to any such renewal or extension; any right herein contained on the part
of Landlord to cancel this Lease shall continue during any extension or renewal
hereof; any option on the part of Tenant herein contained for an extension or
renewal hereof shall not be deemed to give Tenant any option for a further
extension beyond the first renewal or extended term. No act or thing done by
Landlord or Landlord's agents during the Term shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept such surrender shall be
valid unless in writing signed by Landlord. No employee of Landlord or of
Landlord's agents shall have any power to accept the keys of the Premises prior
to the termination of this Lease. The delivery of keys to any employee of
Landlord or of Landlord's agents shall not operate as a termination of this
Lease or a surrender of the Premises. In the event Tenant at any time desires to
have Landlord sublet the Premises for Tenant's account, Landlord or Landlord's
agents are authorized to receive said keys for such purpose without
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releasing Tenant from any of the obligations under this Lease, and Tenant hereby
relieves Landlord of any liability for loss of or damage to any of Tenant's
effects in connection with such subletting. The failure of Landlord to seek
redress for violation of, or to insist upon the strict performance of, any
covenant or condition of this Lease, or any of the Rules and Regulations set
forth or hereafter adopted by Landlord, shall not prevent a subsequent act,
which would have originally constituted a violation, from having all force and
effect of an original violation. The receipt by Landlord of Rent with knowledge
of the breach of any covenant of this Lease shall not be deemed a waiver of such
breach. The failure of Landlord to enforce any of the Rules and Regulations set
forth, or hereafter adopted, against Tenant and/or any other tenant in the
Building shall not be deemed a waiver of any such Rules and Regulations. No
provision of this Lease shall be deemed to have been waived by Landlord unless
such waiver be in writing signed by Landlord. No payment by Tenant or receipt by
Landlord of a lesser amount than the monthly Rent herein stipulated shall be
deemed to be other than on account of the earliest stipulated Rent, or as
Landlord may elect to apply same, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as Rent be deemed an
accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such Rent or pursue any
other remedy in this Lease provided. This Lease contains the entire agreement
between the parties and all prior negotiations and agreements are merged in this
Lease. Any executory agreement hereafter made shall be ineffective to change,
modify, discharge or effect an abandonment of it in whole or in part unless such
executory agreement is in writing and signed by the party against whom
enforcement of the change, modification, discharge or abandonment is sought.
25. WAIVER OF TRIAL BY JURY. It is mutually agreed by and between Landlord and
Tenant that the respective parties hereto shall and they hereby do waive trial
by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other on any matters whatsoever arising out of or in
any way connected with this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, and/or any claim of injury or damage,
or for the enforcement of any remedy under any statute, emergency or otherwise.
It is further mutually agreed that in the event Landlord commences any summary
proceeding (whether for nonpayment of rent or because Tenant continues in
possession of the Premises after the expiration or termination of the Term),
Tenant will not interpose any counterclaim (except for mandatory or compulsory
counterclaims) of whatever nature or description in any such proceeding.
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26. INABILITY TO PERFORM. This Lease and the obligation of Tenant to pay Rent
and additional rent hereunder and perform all of the other covenants and
agreements hereunder on the part of Tenant to be performed shall in nowise be
affected, impaired or excused because Landlord is unable to fulfill any of its
obligations under this Lease expressly or impliedly to be performed by Landlord
or because Landlord is unable to make, or is delayed in making any repairs,
additions, alterations, improvements or decorations or is unable to supply or is
delayed in supplying any equipment or fixtures if Landlord is prevented or
delayed from so doing by reason of strikes or labor troubles or by accident or
by any cause whatsoever reasonably beyond Landlord's control, including but not
limited to, laws, governmental preemption in connection with a National
Emergency or by reason of any rule, order or regulation of any federal, state,
county or municipal authority or any department or subdivision thereof or any
government agency or by reason of the conditions of supply and demand which have
been or are affected by war or other emergency.
27. BILLS AND NOTICES. Except as otherwise expressly provided in this Lease, any
bills, statements, notices, demands, requests or other communications given or
required to be given under this Lease shall be deemed sufficiently given or
rendered if in writing, sent by registered or certified mail (return receipt
requested) addressed (i) to Tenant (a) at Tenant's address set forth in this
Lease if mailed prior to Tenant's taking possession of the Premises, or (b) at
the Building if mailed subsequent to Tenant's taking possession of the Premises,
or (c) at any place where Tenant or any agent or employee of Tenant may be found
if mailed subsequent to Tenant's vacating, deserting, abandoning or surrendering
the Premises, or (ii) to Landlord at Landlord's address set forth in this Lease
with a courtesy copy to Landlord's attorneys, Younkins & Schecter LLP, 545 Fifth
Avenue, New York, New York 10017, or (iii) to such other address as either
Landlord or Tenant may designate as its new address for such purpose by notice
given to the others in accordance with the provisions of this Article 27. Tenant
hereby acknowledges and agrees that any such bill, statement, demand, notice,
request or other communication may be given by Landlord's agent on behalf of
Landlord. Any such bill, statement, demand, notice, request or other
communication shall be deemed to have been rendered or given on the date when it
shall have been mailed as provided in this Article 27. Notwithstanding anything
contained in this Article 27 to the contrary, bills and statements issued by
Landlord may be sent by the method(s) set forth hereinabove, without copies to
any other party. This notice provision has been specifically negotiated between
the parties hereto.
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28. ESCALATION.
A. Defined Terms. In a determination of any increase in the Rent under the
provisions of this Article 28, Landlord and Tenant agree as follows:
(i) "Taxes" shall mean the aggregate amount of real estate taxes and
any special or other assessments (exclusive of penalties and interest thereon)
imposed upon the Real Property and real estate taxes or assessments imposed in
connection with the receipt of income or rents from the Building to the extent
that same shall be in lieu of all or a portion of the aforesaid taxes or
assessments, or additions or increases thereof (including, without limitation,
(i) assessments made upon or with respect to any "air rights", (ii) assessments
made in connection with the Fashion District Business Improvement District, and
(iii) any assessments levied after the date of this Lease for public benefits to
the Real Property or the Building (excluding an amount equal to the assessments
payable in whole or in part during or for the Base Tax Year (as defined in
Article 1 of this Lease)) which assessments, if payable in installments, shall
be deemed payable in the maximum number of permissible installments and there
shall be included in real estate taxes for each Comparison Year in which such
installments may be paid, the installments of such assessment so becoming
payable during such Comparison Year (in the manner in which such taxes and
assessments are imposed as of the date hereof); provided, that if because of any
change in the taxation of real estate, any other tax or assessment (including,
without limitation, any occupancy, gross receipts, rental, income, franchise,
transit or other tax) is imposed upon Landlord or the owner of the Real Property
or the Building, or the occupancy, rents or income therefrom, in substitution
for or in addition to, any of the foregoing Taxes, such other tax or assessment
shall be deemed part of the Taxes. With respect to any Comparison Year
(hereinafter defined) all expenses, including attorneys' fees and disbursements,
experts' and other witnesses' fees, incurred in contesting the validity or
amount of any Taxes or in obtaining a refund of Taxes shall be considered as
part of the Taxes for such year.
(ii) "Assessed Valuation" shall mean the amount for which the Real
Property is assessed pursuant to applicable provisions of the New York City
Charter and of the Administrative Code of the City of New York for the purpose
of imposition of Taxes.
(iii) "Tax Year" shall mean the period July 1 through June 30 (or
such other period as hereinafter may be duly adopted by the City of New York as
its fiscal year for real estate tax purposes).
(iv) "Base Taxes" shall mean the Taxes payable for the Base Tax
Year.
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(v) "Comparison Year" shall mean (a) with respect to Taxes, any Tax
Year subsequent to the Base Tax Year and (b) with respect to Labor Rates
(hereinafter defined) any calendar year subsequent to the Base Labor Year
(hereinafter defined) for any part or all of which there is an increase in the
Rent pursuant to subsection B of this Article 28.
(vi) "R.A.B." shall mean the Realty Advisory Board On Labor
Relations, Incorporated, or its successor.
(vii) "Local 32B-32J" shall mean Local 32B-32J of the Building
Service Employees International Union, AFL-CIO, or its successor.
(viii) "Class A Office Buildings" shall mean office buildings in the
same class or category as the Building under any agreement between R.A.B. and
Local 32B-32J, regardless of the designation given to such office buildings in
any such agreement.
(ix) "Labor Rates" shall mean a sum equal to the regular hourly wage
rate required to be paid to Others (hereinafter defined) employed in Class A
Office Buildings pursuant to an agreement between R.A.B. and Local 32B-32J;
provided, however, that if, as of October 1st of any Comparison Year, any such
agreement shall require Others in Class A Office Buildings to be regularly
employed on days or during hours when overtime or other premium pay rates are in
effect pursuant to such agreement, then the term "regular hourly wage rate", as
used in this subsection A(ix) shall mean the average hourly wage rate for the
hours in a calendar week during which Others are required to be regularly
employed; and provided, further, that if no such agreement is in effect as of
October 1st of any Comparison Year with respect to Others, then the term
"regular hourly wage rate", as used in this subsection A(ix) shall mean the
regular hourly wage rate actually paid to Others employed in the Building by
Landlord or by an independent contractor engaged by Landlord; and provided,
further, the term "regular hourly wage rate" in all events shall include all
payments and benefits of any kind, including, but not limited to, those payable
directly to taxing authorities or others on account of the employment and all
welfare, pension benefits and payments of any kind paid or given pursuant to
such agreement, but shall specifically exclude any fringe employee benefits.
(x) "Others" shall mean that classification of employee engaged in
the general maintenance and operation of Class A Office Buildings most nearly
comparable to the classification now applicable to "others" in the current
agreement between R.A.B. and Local 32B-32J.
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(xii) "Base Labor Rates" shall mean the Labor Rates in effect for
the Base Labor Year.
(xiii) "Landlord's Statement" shall mean an instrument or
instruments containing a comparison of any increase or decrease in the Rent for
the preceding Comparison Year pursuant to the provisions of this Article 28.
B. Escalation. (i) If the Taxes payable for any Comparison Year (any part
or all of which falls within the Term) shall represent an increase above the
Base Taxes, then the Rent for such Comparison Year and continuing thereafter
until a new Landlord's Statement is rendered to Tenant, shall be increased by
Tenant's Proportionate Share of such increase. The Taxes shall be initially
computed on the basis of the Assessed Valuation in effect at the time Landlord's
Statement is rendered (as the Taxes may have been settled or finally adjudicated
prior to such time) regardless of any then pending application, proceeding or
appeal respecting the reduction of any such Assessed Valuation, but shall be
subject to subsequent adjustment as provided in subsection D(i)(a) of this
Article 28.
(ii) If the Labor Rates in effect for any Comparison Year (any part
or all of which falls within the Term) shall be greater than the Base Labor
Rates, then the Rent for such Comparison Year and continuing thereafter until a
new Landlord's Statement is rendered to Tenant, shall be increased by a sum
equal to the Labor Rate Factor multiplied by the Labor Rate Multiple multiplied
by the number of cents (inclusive of any fractions of a cent) of such increase.
C. Payment of Escalations. (i) At any time prior to, during or after any
Comparison Year Landlord shall render to Tenant, either in accordance with the
provisions of Article 27 hereof or by personal delivery at the Premises, a
Landlord's Statement or Statements showing separately or together (a) a
comparison of the Taxes payable for the Comparison Year with the Base Taxes, (b)
a comparison of the Labor Rates for the Comparison Year with the Base Labor
Rates, and (c) the amount of the increase in the Rent resulting from each of
such comparisons. Landlord's failure to render a Landlord's Statement and/or
receive payments with respect thereto during or with respect to any Comparison
Year shall not prejudice Landlord's right to render a Landlord's Statement
and/or receive payments with respect thereto during or with respect to any
subsequent Comparison Year, and shall not eliminate or reduce Tenant's
obligation to pay increases in the Rent pursuant to this Article 28 for such
Comparison Year. Landlord may also at any time and from time to time, furnish to
Tenant a revised Landlord's Statement or Statements showing separately or
together (a) a comparison of the Taxes payable for the Comparison Year with the
Base Taxes and (b) a comparison of the Labor Rates for the Comparison Year with
the Base Labor Rates.
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(ii) (a) Tenant's obligations with respect to increases in Labor
Rates shall be payable by Tenant on the first day of the month following the
furnishing to Tenant of a Landlord's Statement with respect to Labor Rates in an
amount equal to one-twelfth (1/12th) of such increase in the Rent multiplied by
the number of months (and any fraction thereof) of the Term then elapsed since
the commencement of the Comparison Year for which the increase is applicable,
together with a sum equal to one-twelfth (1/12th) of such increase with respect
to the month following the furnishing to Tenant of a Landlord's Statement; and
thereafter, commencing with the next succeeding monthly installment of Rent and
continuing monthly thereafter until rendition of the next succeeding Landlord's
Statement, the monthly installments of Rent shall be increased by an amount
equal to one-twelfth (1/12th) of such increase. Any increase in the Rent shall
be collectible by Landlord in the same manner as Rent.
(b) With respect to an increase in the Rent resulting from an
increase in the Taxes for any Comparison Year above the Base Taxes, Tenant shall
pay to Landlord a sum equal to one-half (1/2) of such increase on the first day
of June and a sum equal to one-half (1A) of such increase on the first day of
December of each calendar year. If Landlord's Statement shall be furnished to
Tenant after the commencement of the Comparison Year to which it relates, then
(1) until Landlord's Statement is rendered for such Comparison Year, Tenant
shall pay Tenant's Proportionate Share of Taxes for such Comparison Year in
semi-annual installments, as described above, based upon the last prior
Landlord's Statement rendered to Tenant with respect to Taxes, and (2) Tenant
shall, within ten (10) days after Landlord's Statement is furnished to Tenant,
pay to Landlord an amount equal to any underpayment of the installments of Taxes
theretofore paid by Tenant for such Comparison Year and, in the event of an
overpayment by Tenant, Landlord shall permit Tenant to credit against subsequent
payments under this subsection (C)(ii)(b) of this Article 28 the amount of such
overpayment. If during the Term of this Lease, Taxes are required to be paid
(either to the appropriate taxing authorities or as tax escrow payments to a
mortgagee or ground lessor) in full or in monthly, quarterly, or other
installments, on any other date or dates than as presently required, then, at
Landlord's option, Tenant's Proportionate Share with respect to Taxes shall be
correspondingly accelerated or revised so that Tenant's Proportionate Share is
due at least thirty (30) days prior to the date payments are due to the taxing
authorities or the superior mortgagee or ground lessor, as the case may be. The
benefit of any discount for any early payment or prepayment of Taxes shall
accrue solely to the benefit of Landlord, and such discount shall not be
subtracted from Tenant's Proportionate Share of such Taxes.
(c) Following each Landlord's Statement, a reconciliation
shall be made as follows: Tenant shall be debited with any increase in the Rent
shown
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on such Landlord's Statement and credited with the aggregate, if any, paid by
Tenant on account in accordance with the provisions of subsection C(ii)(a) or
C(ii)(b) for the Comparison Year in question; Tenant shall pay any net debit
balance to Landlord within fifteen (15) days next following rendition by
Landlord, either in accordance with the provisions of Article 27 hereof or by
personal delivery to the Premises, of an invoice for such net debit balance; any
net credit balance shall be applied against the next accruing monthly
installment of Rent.
D. Adjustments. (i) (a) In the event that, after a Landlord's Statement
has been sent to Tenant, an Assessed Valuation which had been utilized in
computing the Taxes for a Comparison Year is reduced (as a result of settlement,
final determination of legal proceedings or otherwise), and as a result thereof
a refund of Taxes is actually received by or on behalf of Landlord, then,
promptly after receipt of such refund, Landlord shall send Tenant a statement
adjusting the Taxes for such Comparison Year (taking into account the expenses
mentioned in the last sentence of subsection A(i) of this Article 28) and
setting forth Tenant's Proportionate Share of such refund and Tenant shall be
entitled to receive such Share by way of a credit against the Rent next becoming
due after the sending of such Statement; provided, however, that Tenant's Share
of such refund shall be limited to the amount, if any, which Tenant had
theretofore paid to Landlord as increased Rent for such Comparison Year on the
basis of the Assessed Valuation before it had been reduced.
(b) In the event that, after a Landlord's Statement has been
sent to Tenant, the Assessed Valuation which had been utilized in computing the
Base Taxes is reduced (as a result of settlement, final determination of legal
proceedings or otherwise) then, and in such event: (1) the Base Taxes shall be
retroactively adjusted to reflect such reduction, (2) the monthly installment of
Rent shall be increased accordingly and (3) all retroactive additional rent
resulting from such retroactive adjustment shall be forthwith payable when
billed by Landlord. Landlord promptly shall send to Tenant a statement setting
forth the basis for such retroactive adjustment and additional rent payments.
(ii) Any Landlord's Statement sent to Tenant shall be conclusively
binding upon Tenant unless, within thirty (30) days after such statement is
sent, Tenant shall (a) pay to Landlord the amount set forth in such statement,
without prejudice to Tenant's right to dispute the same, and (b) send a written
notice to Landlord objecting to such statement and specifying the particular
respects in which such statement is claimed to be incorrect. The parties
recognize the unavailability of Landlord's books and records because of the
confidential nature thereof.
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(iii) Anything in this Article 28 to the contrary notwithstanding,
under no circumstances shall the rent payable under this Lease be less than the
then annual base Rent set forth in Article 1 hereof.
(iv) The expiration or termination of this Lease during any
Comparison Year for any part or all of which there is an increase or decrease in
the Rent under this Article shall not affect the rights or obligations of the
parties hereto respecting such increase or decrease and any Landlord's Statement
relating to such increase or decrease may, on a pro rata basis, be sent to
Tenant subsequent to, and all such rights and obligations shall survive, any
such expiration or termination. Any payments due under such Landlord's Statement
shall be payable within twenty (20) days after such statement is sent to Tenant.
E. Capital Improvements. If any capital improvement (other than an
Excluded Capital Improvement) is made to the Real Property during any calendar
year during the Term which is required by any government or quasi-governmental
laws, ordinances, rules, regulations or orders (excluding the ADA and local laws
5,10 and 76 and excluding violations of any governmental or quasi-governmental
laws, ordinances, rules, regulations or orders, as presently enacted, existing
on the date hereof), then Tenant shall pay to Landlord, immediately upon demand
therefor, Tenant's Proportionate Share of the reasonable annual amortization,
with interest, of the cost of such improvement in each calendar year during the
Term during which such amortization occurs. As used herein, the term "Excluded
Capital Improvements" shall mean, collectively, capital improvements made in
connection with the capital improvement program currently in effect for the
Building consisting of cosmetically upgrading the lobby of the Building and
cosmetically and mechanically upgrading certain elevator cabs.
29. SERVICES.
A. Elevator. Landlord shall provide passenger elevator facilities on
business days from 8:00 A.M. to 6:00 P.M. and shall have one passenger elevator
in the bank of elevators servicing the Premises available at all other times.
Landlord shall provide freight elevator services on an "as available" basis for
incidental use by Tenant from 8:00 A.M. through 12:00 Noon and from 1:00 P.M.
through 5:00 P.M. on business days only. Any extended use may be arranged with
Landlord's prior consent and Tenant shall pay as additional rent all building
standard charges therefor.
B. Heating. Landlord shall furnish heat to the Premises when and as
required by law, on business days from 8:00 A.M. to 6:00 P.M. Landlord shall not
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be responsible for the adequacy, design or capacity of the heating distribution
system if the normal operation of the heat distribution system serving the
Building shall fail to provide heat at reasonable temperatures or any reasonable
volumes or velocities in any parts of the Premises by reason of any
rearrangement of partitioning or other Alterations made or performed by or on
behalf of Tenant or any person claiming through or under Tenant.
C. Cooling. Tenant shall have the privilege of using the air-cooling
system presently serving the Premises which Tenant agrees to maintain and repair
at its own cost and expense. Tenant accepts such air-cooling system in its
"as-is" condition. Tenant shall enter into service maintenance agreements for
the service and maintenance of the air-cooling systems with a contractor
approved by Landlord, which approval shall not be unreasonably withheld. Tenant
shall cause periodic service and maintenance to be performed on the air-cooling
system and shall provide Landlord with copies of service and maintenance
records. Tenant shall not alter, modify or replace such air-cooling system, or
any part thereof, without Landlord's consent, which shall not be unreasonably
withheld. Anything in this subsection C to the contrary notwithstanding,
Landlord shall not be responsible if the normal operation of the air-cooling
system shall fail to provide cooled air at reasonable temperatures, pressures or
degrees of humidity or any reasonable volumes or velocities in any parts of the
Premises by reason of (i) human occupancy factors and any machinery or equipment
installed by or on behalf of Tenant or any person claiming through or under
Tenant, having an electrical load in excess of the average electrical load for
the air-cooling system as designed or (ii) any rearrangement of partitioning or
other Alterations made or performed by or on behalf of Tenant or any person
claiming through or under Tenant. Tenant agrees to keep and cause to be kept
closed all of the windows in the Premises whenever the air-cooling system is in
operation and agrees to lower and close the blinds when necessary because of the
sun's position whenever the air-cooling system is in operation. Tenant at all
times agrees to cooperate fully with Landlord and to abide by the regulations
and requirements which Landlord may prescribe for the proper functioning and
protection of the air-cooling system. Landlord, throughout the Term, shall have
free access to any and all mechanical installations of Landlord, including but
not limited to air-cooling, fan, ventilating, machine rooms and electrical
closets. Tenant shall pay for the costs of electrical energy consumed by the
air-cooling system in accordance with the provisions of Article 29, subsection
H, hereof.
D. After Hours and Additional Services. Rent does not include any charge
to Tenant for the furnishing of any additional passenger elevator facilities,
any freight elevator facilities (other than as contemplated in Article 29
subsection A) or for the service of heat to the Premises during periods other
than the hours
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and days set forth in sections A and B of this Article 29 for the furnishing and
distributing of such facilities or services (referred to as "Overtime Periods").
Accordingly, if Landlord shall furnish any (i) passenger elevator facilities to
Tenant during Overtime Periods or freight elevator facilities, except as
provided in subsection A of this Article 29, or (ii) heat, to the Premises
during Overtime Periods, then Tenant shall pay Landlord additional rent for such
facilities or services at the standard rates then fixed by the Landlord for the
Building or, if no such rates are then fixed, at reasonable rates. Neither the
facilities nor the services referred to in this Article 29D shall be furnished
to Tenant or the Premises if Landlord has not received advance notice from
Tenant specifying the particular facilities or services requested by Tenant at
least twenty-four (24) hours prior to the date on which the facilities or
services are to be furnished; or if Tenant is in default under or in breach of
any of the terms, covenants or conditions of this Lease; or if Landlord shall
determine, in its sole and exclusive discretion, that such facilities or
services are requested in connection with, or the use thereof shall create or
aid in a default under or a breach of any term, covenant or condition of this
Lease. All of the facilities and services referred to in this Article 29D are
conveniences and are not and shall not be deemed to be appurtenances to the
Premises, and the failure of Landlord to furnish any or all of such facilities
or services shall not constitute or give rise to any claim of an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of Rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Landlord or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business or otherwise. Landlord may limit the furnishing during Overtime Periods
of any of the facilities or services referred to in this Article 29D to a total
of twenty (20) hours in any one week. In the event Tenant installs a
supplemental air cooling system in the Premises, and if condenser water for such
system shall be supplied by Landlord, (x) Tenant shall pay to Landlord, annually
upon demand, a sum equal to $750 per ton of air conditioning capacity, adjusted
annually, to compensate Landlord for the cost of supplying condenser water for
such supplemental system and (y) Tenant shall pay to Landlord upon demand,
Tenant's share of the cost of maintaining, repairing and/or replacing the
cooling tower providing such condenser water, such share to be based upon
Tenant's total demand of condenser water relative to the total demand of all
other tenants and occupants in the Building who are similarly supplied condenser
water by Landlord. In addition, any such supplemental air-cooling system shall
be installed with balancing valves and circuit setters manufactured by Bell &
Gossett for balancing by Landlord, at Tenant's sole cost and expense.
E. Cleaning. Tenant at Tenant's expense, shall cause the Premises to be
kept clean in a manner satisfactory to Landlord and no one other than persons
approved by Landlord shall be permitted to enter the Premises or the Building
for
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such purpose. Notwithstanding the foregoing, Landlord shall not unreasonably
withhold or delay its consent to a cleaning company proposed by Tenant provided:
(i) that, in Landlord's sole but reasonable judgment, such cleaning
company is reasonably sound financially and has a confirmed reputation for
providing high quality professional services;
(ii) such cleaning company maintains insurance naming Landlord,
Landlord's managing agent and other entities designated by Landlord from time to
time as additional insureds with coverage for liability, workers compensation,
fidelity at limits reasonably approved by Landlord and such other coverages as
reasonably required by Landlord in amounts reasonably required by Landlord; and
(iii) that, in Landlord's sole but reasonable judgment, such
cleaning company shall use only such employees and other workers as shall be
compatible with all other employees and workers employed in connection with the
Building and any work being performed in the Building; and no such employee or
worker employed or retained by or on behalf of such cleaning company shall be
the cause of any labor disturbance, strike, picketing, jurisdictional union
dispute or work slowdown. If any such disturbance, strike, picketing, dispute or
slowdown shall occur due to the persons employed by or on behalf of such
cleaning company, then such cleaning company shall immediately cease performance
of work in the Premises. Tenant shall indemnify, defend and hold harmless
Landlord from any and all damages, injuries, expenses (including reasonable
attorneys' fees) and all other liabilities (including consequential damages)
resulting from any such labor problem.
F. Sprinkler System. If there now is or shall be installed in the Building
a "sprinkler system", and such system or any of its appliances shall be damaged
or injured or not in proper working order by reason of any act or omission of
Tenant, Tenant's agents, servants, employees, licensees or visitors, Tenant
shall forthwith restore the same to good working condition at its own expense;
and if the New York Board of Fire Underwriters or the New York Fire Insurance
Rating Organization or any bureau, department or official of the state or city
government, shall require or recommend that any changes, modifications,
alterations or additional sprinkler heads or other equipment be made or supplied
by reason of Tenant's business, or the location of the partitions, trade
fixtures, or other contents of the Premises, Tenant shall, at Tenant's expense,
promptly make and supply such changes, modifications, alterations, additional
sprinkler heads or other equipment.
G. Water. If Tenant requires, uses or consumes water for any purpose in
addition to ordinary drinking, cleaning or lavatory purposes, Landlord may
install a water meter and thereby measure Tenant's water consumption for all
purposes. In
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such event (i) Tenant shall pay Landlord for the cost of the meter and the cost
of the installation thereof and through the duration of Tenant's occupancy
Tenant shall keep said meter and installation equipment in good working order
and repair at Tenant's own cost and expense in default of which Landlord may
cause such meter and equipment to be replaced or repaired and collect the cost
thereof from Tenant; (ii) Tenant agrees to pay for water consumed, as shown on
said meter as and when bills are rendered, and on default in making such payment
Landlord may pay such charges and collect the same from Tenant; and (iii) Tenant
covenants and agrees to pay the sewer rent, charge or any other tax, rent, levy
or charge which now or hereafter is assessed, imposed or shall become a lien
upon the Premises or the realty of which they are part pursuant to law, order or
regulation made or issued in connection with any such metered use, consumption,
maintenance or supply of water, water system, or sewage or sewage connection or
system. The bill rendered by Landlord for the above shall be based upon Tenant's
consumption and shall be payable by Tenant as additional rent within five (5)
days of rendition. Any such costs or expenses incurred or payments made by
Landlord for any of the reasons or purposes hereinabove stated shall be deemed
to be additional rent payable by Tenant and collectible by Landlord as such.
Independently of and in addition to any of the remedies reserved to Landlord
hereinabove or elsewhere in this Lease, Landlord may sue for and collect any
monies to be paid by Tenant or paid by Landlord for any of the reasons or
purposes hereinabove set forth.
H. Electricity Service. (i) Landlord shall redistribute ten (10) watts of
connected electrical load per rentable square foot of space deemed to be in the
Premises for the servicing of all of Tenant's electrical needs within the
Premises, including, without limitation, any air-cooling equipment located in,
or exclusively servicing the Premises. Landlord's designated agent shall install
a submeter to measure Tenant's consumption of electrical energy in the Premises
at Landlord's sole cost and expense. Tenant shall pay Landlord for any and all
costs incurred in connection with the installation of such submeter upon the
submission by Landlord of a bill for such costs. The cost of electricity
utilized by Tenant shall be paid for by Tenant to Landlord as additional rent
and shall be calculated at the then applicable rate prescribed by the public
utility company serving the Premises for submetered electrical energy, plus (a)
Landlord's charge for overhead and supervision in the amount of eight percent
(8%) of the total electric bill and (b) any taxes or other charges in connection
therewith. If any tax shall be imposed upon Landlord's receipts from the sale or
resale of electrical energy to Tenant, the pro rata share applicable to the
electrical energy service received by Tenant shall be passed onto, included in
the bill of, and paid by Tenant if and to the extent permitted by law. Landlord
shall bill Tenant, monthly, for the cost of its consumption of electricity in
the Premises and Tenant shall pay the amount thereof at the time of payment of
each installment of Rent. If either the quantity or
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character of electrical services is changed by the public utility or other
company supplying electrical service to the Building or is no longer available
or suitable for Tenant's requirements, no such change, unavailability or
unsuitability shall constitute an actual or constructive eviction, in whole or
in part, or entitle Tenant to any abatement or diminution of rent, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord, or its agents, by reason of inconvenience or annoyance to Tenant,
or injury to or interruption of Tenant's business, or otherwise.
(ii) If Tenant requires additional electrical energy beyond the
wattage specified above for any reason whatsoever, including without limitation,
the use of additional business machines, office equipment or other appliances in
the Premises which utilize electrical energy, Tenant shall request such
additional electrical energy from Landlord in each instance. If Landlord agrees
to provide the same, any additional feeders or risers which are required to
supply Tenant's additional electrical requirements, and all other equipment
proper and necessary in connection with such feeders or risers, shall be
installed by Landlord upon Tenant's request, at the sole cost and expense of
Tenant (including without limitation, a connection fee of Three Hundred Fifty
and 00/100 ($350.00) Dollars per kilovolt ampere), provided that, in Landlord's
reasonable judgment, such additional feeders or riders are necessary and are
permissible under applicable laws and insurance regulations and the installation
of such feeders or risers will not cause permanent damage or injury to the
Building or the Premises or cause or create a dangerous or hazardous condition
or entail excessive or unreasonable alterations or interfere with or disturb
other tenants or occupants of the Building. Tenant covenants that at no time
shall the use of electrical energy in the Premises exceed the capacity of the
existing feeders or wiring installations then serving the Premises or provide
Tenant with greater that ten (10) watts of connected electrical load per
rentable square foot deemed to be in the Premises. Tenant shall not make or
perform, or permit the making or performance of, any alterations to wiring
installations or other electrical facilities in or serving the Premises without
the prior consent of Landlord in each instance and without paying Landlord's
customary changes therefor. Any such Alterations, additions or consent by
Landlord shall be subject to the provisions of this Lease including, but not
limited to, the provisions of Article 3 hereof.
(iii) Landlord reserves the right to discontinue furnishing
electricity to Tenant in the Premises on not less than sixty (60) days notice to
Tenant. If Landlord exercises such right to discontinue, or is compelled to
discontinue furnishing electricity to Tenant, this Lease shall continue in full
force and effect and shall be unaffected thereby, except only that from and
after the effective date of such discontinuance, Landlord shall not be obligated
to furnish electricity to Tenant. If Landlord so discontinues furnishing
electricity to Tenant, Tenant shall arrange to
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obtain electricity directly from the public utility or other company servicing
the Building. Such electricity may be furnished to Tenant by means of the then
existing electrical facilities serving the Premises to the extent that the same
are available, suitable and safe for such purposes. All meters and all
additional panel boards, feeders, risers, wiring and other conductors and
equipment which may be required to obtain electricity, of substantially the same
quantity, quality and character, shall be installed by Landlord at Tenant's sole
cost and expense. Landlord shall not voluntarily discontinue furnishing
electricity to Tenant until Tenant is able to receive electricity directly from
the public utility or other company servicing the Building.
(iv) Landlord shall not be liable to Tenant in any way for any
interruption, curtailment or failure or defect in the supply or character of
electricity furnished to the Premises by reason of any requirement, act or
omission of Landlord or of any public utility or other company servicing the
Building with electricity or for any other reason except Landlord's negligence
or willful misconduct.
(v) In the event that the submeter to be installed in the Premises
in accordance with the provisions of Subsection H(i) of this Article 29 is not
installed, activated and fully operational on or before the Commencement Date
(and irrespective of whether or not Rent shall be payable for such period),
Tenant will pay, monthly, as additional rent the sum of $1,374.00 (the "Interim
Electrical Charge") on the Commencement Date and on the first day of each
calendar month thereafter until such time as the submeter is installed,
activated and fully operational. If the Commencement Date occurs on a date other
than the first day of a calendar month, the Interim Electrical Charge for such
month shall be an amount equal to such proportion of the Interim Electrical
Charge as the number of days from and including the Commencement Date to the
last day of the calendar month in which the Commencement Date occurs bears to
the total number of days in such calendar month. If the first day that the
electrical submeter becomes activated and fully operational occurs on a date
other than the first day of a calendar month, the Tenant shall pay for such
month an amount equal to such proportion of the Interim Electrical Charge as the
number of days from the beginning of such calendar month through and including
the date that such electrical submeter becomes operational bears to the total
number of days in such calendar month plus the cost of electricity as determined
by the submeter, for the remainder of such month.
I. Interruption of Services. Landlord reserves the right to stop service
of the heating system and all other Building systems during any period of a
violation or breach by Tenant of the provisions of this Lease and to stop the
service of the heating system or the elevator, electrical, plumbing or other
mechanical systems or
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facilities in the Building when necessary, by reason of accident or emergency,
or for repairs, additions, alterations, replacements, decorations or
improvements in the judgment of Landlord desirable or necessary to be made,
until said repairs, alterations, replacements or improvements shall have been
completed. Landlord shall have no responsibility or liability for interruption,
curtailment or failure to supply cooled or outside air, heat, elevator, plumbing
or electricity when prevented by exercising its right to stop service or by
strikes, labor troubles or accidents or by any cause whatsoever reasonably
beyond Landlord's control, or by failure of independent contractors to perform
or by laws, orders, rules or regulations of any federal, state, county or
municipal authority, or failure of suitable fuel supply, or inability by
exercise of reasonable diligence to obtain suitable fuel or by reason of
governmental preemption in connection with a National Emergency or by reason of
the conditions of supply and demand which have been or are affected by war or
other emergency. Tenant acknowledges that the air-cooling system serving the
Premises may contain freon or other chlorofluorocarbons (CFC's) and that future
federal, state or city regulations may require the removal of CFC's as well as
the alteration or replacement of equipment utilizing CFC's. In connection
therewith (i) Landlord reserves the right to stop service of the air-cooling
system or any other mechanical systems containing CFC's for such duration as may
be necessary to convert any such systems to eliminate the use of CFC's and (ii)
to enter upon the Premises, as necessary to install replacement equipment within
the Premises required by any such change. The exercise of such right or such
failure by Landlord shall not constitute an actual or constructive eviction, in
whole or in part, or entitle Tenant to any compensation or to any abatement or
diminution of Rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Landlord or its agents by reason of
inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's
business, or otherwise.
30. PARTNERSHIP TENANT.
A. Partnership Tenants. If Tenant is a partnership (or is comprised of two
(2) or more persons, individually and as co-partners of a partnership) or if
Tenant's interest in this Lease shall be assigned to a partnership (or to two
(2) or more persons, individually and as co-partners of a partnership) pursuant
to Article 12 (any such partnership and such persons are referred to in this
Article 30 as a "Partnership Tenant"), the following provisions of this Article
30 shall apply to such Partnership Tenant: (i) the liability of each of the
parties comprising a Partnership Tenant shall be joint and several, and (ii)
each of the parties comprising a Partnership Tenant hereby consents in advance
to, and agrees to be bound by, any written instrument which may hereafter be
executed, changing, modifying or discharging this Lease, in whole or in part, or
surrendering all or any part of the
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Premises to Landlord, and by any notices, demands, requests or other
communications which may hereafter be given by a Partnership Tenant or by any of
the parties comprising a Partnership Tenant, and (iii) any bills, statements,
notices, demands, requests or other communications given or rendered to a
Partnership Tenant and to all such parties shall be binding upon a Partnership
Tenant and all such parties, and (iv) if a Partnership Tenant shall admit new
partners, all of such new partners shall, by their admission to a Partnership
Tenant, be deemed to have assumed performance of all of the terms, covenants and
conditions of this Lease on Tenant's part to be observed and performed, and (v)
a Partnership Tenant shall give prompt notice to Landlord of the admission of
any such new partners, and upon demand of Landlord, shall cause each such new
partner to execute and deliver to Landlord an agreement in form satisfactory to
Landlord, wherein each such new partner shall assume performance of all the
terms, covenants and conditions of this Lease on Tenant's part to be observed
and performed (but neither Landlord's failure to request any such agreement nor
the failure of any such new partner to execute or deliver any such agreement to
Landlord shall vitiate the provisions of subdivision (iv) of subsection A of
this Article 30).
B. Limited Liability Entity. Notwithstanding anything to the contrary
contained herein, if Tenant is a limited or general partnership (or is comprised
of two (2) or more persons, individually or as co-partners), the change or
conversion of Tenant to (i) a limited liability company, (ii) a limited
liability partnership, or (iii) any other entity which possesses the
characteristics of limited liability (any such limited liability company,
limited liability partnership or entity is collectively referred to as a
"Limited Liability Successor Entity"), shall be prohibited unless the prior
written consent of Landlord is obtained, which consent may be withheld in
Landlord's sole discretion. Notwithstanding the foregoing, Landlord agrees not
to unreasonably withhold or delay such consent provided that:
(a) The Limited Liability Successor Entity succeeds to all or
substantially all of Tenant's business and assets;
(b) The Limited Liability Successor Entity shall have a net worth,
determined in accordance with generally accepted accounting principles,
consistently applied, of not less than the greater of the net worth of Tenant on
(1) the date of execution of this Lease, or (2) the day immediately preceding
the proposed effective date of such conversion;
(c) Tenant is not in default of any of the terms, covenants or
conditions of this Lease on the proposed effective date of such conversion;
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(d) Tenant shall cause each partner of Tenant to execute and deliver
to Landlord an agreement, in form and substance satisfactory to Landlord,
wherein each such partner agrees to remain personally liable for all of the
terms, covenants and conditions of this Lease that are to be observed and
performed by the Limited Liability Successor Entity; and
(e) Tenant shall reimburse Landlord within ten (10) business days
following demand by Landlord for any and all reasonable costs and expenses that
may be incurred by Landlord in connection with said conversion of Tenant to a
Limited Liability Successor Entity, including, without limitation, any
attorney's fees and disbursements.
31. VAULT SPACE. Any vaults, vault space or other space outside the boundaries
of the Real Property, notwithstanding anything contained in this Lease or
indicated on any sketch, blueprint or plan are not included in the Premises.
Landlord makes no representation as to the location of the boundaries of the
Real Property. All vaults and vault space and all other space outside the
boundaries of the Real Property which Tenant may be permitted to use or occupy
is to be used or occupied under a revocable license, and if any such license
shall be revoked, or if the amount of such space shall be diminished or required
by any Federal, State or Municipal authority or by any public utility company,
such revocation, diminution or requisition shall not constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of rent, or relieve Tenant from any of its obligations under this
Lease, or impose any liability upon Landlord. Any fee, tax or charge imposed by
any governmental authority for any such vaults, vault space or other space shall
be paid by Tenant.
32. SECURITY DEPOSIT.
A. Deposit of Security. Tenant shall deposit with Landlord on the signing
of this Lease the Security Deposit (as defined in Article 1 of this Lease) as
security for the faithful performance and observance by Tenant of the terms,
conditions and provisions of this Lease, including without limitation the
surrender of possession of the Premises to Landlord herein provided. It is
agreed that in the event Tenant defaults in respect of any of the terms,
provisions and conditions of this Lease, including, but not limited to, the
payment of Rent and additional rent, Landlord may apply or retain the whole or
any part of the Security Deposit so deposited to the extent required for the
payment of any Rent and additional rent or any other sum as to which Tenant is
in default or for any sum which Landlord may expend or may be required to expend
by reason of Tenant's default in respect of any of the terms,
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covenants and conditions of this Lease, including but not limited to, any
damages or deficiency in the reletting of the Premises, whether such damages or
deficiency accrue or accrues before or after summary proceedings or other
reentry by Landlord. If Landlord applies or retains any part of the Security
Deposit so deposited, Tenant, within three (3) days' after notice from Landlord,
shall deposit with Landlord the amount so applied or retained so that Landlord
shall have the full Security Deposit on hand at all times during the Term. The
failure by Tenant to deposit such additional amount within the foregoing time
period shall be deemed a material default pursuant to Article 17 of this Lease.
If Tenant shall fully and faithfully comply with all of the terms, provisions,
covenants and conditions of this Lease, the security shall be returned to Tenant
after the Expiration Date and after delivery of the entire possession of the
Premises to Landlord. In the event of a sale of the Real Property or the
Building or leasing of the Building, Landlord shall have the right to transfer
the Security Deposit to the vendee or lessee and Landlord shall thereupon be
released by Tenant from all liability for the return of the Security Deposit;
and Tenant agrees to look solely to the new Landlord for the return of the
Security Deposit; and it is agreed that the provisions hereof shall apply to
every transfer or assignment made of the Security Deposit to a new Landlord.
Tenant further covenants that it will not assign or encumber or attempt to
assign or encumber the Security Deposit and that neither Landlord nor its
successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.
B. Reduction in Security Deposit. Provided this Lease shall be in full
force and effect and Tenant shall not be in default hereunder and Tenant shall
have made payments of Rent and additional rent in a timely fashion for five (5)
years following the Rent Commencement Date, the Security Deposit (which shall
have been increased pursuant to Article 39 of this Lease) shall be subsequently
reduced to $116,000.00 on the first day of the month in which the fifth (5th)
anniversary of the Rent Commencement Date shall occur.
C. Review of Security Deposit. Notwithstanding anything to the contrary
contained herein, Tenant may submit current financial statements to Landlord
from time to time during the Term and if Landlord shall determine, following its
review of such financials, that the Security Deposit is greater than necessary,
then Landlord may reduce the amount of the Security Deposit.
33. CAPTIONS. The Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this Lease nor
the intent of any provision thereof.
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34. ADDITIONAL DEFINITIONS.
A. The term "office" or "offices", wherever used in this Lease, shall not
be construed to mean premises used as a store or stores, for the sale or
display, at any time, of goods, wares or merchandise, of any kind, or as a
restaurant, shop, booth, bootblack or other stand, barber shop, or for other
similar purposes or for manufacturing.
B. The words "reenter" and "reentry" as used in this Lease are not
restricted to their technical legal meaning.
C. The term "rent" as used in this Lease shall mean and be deemed to
include Rent, any increases in Rent, all additional rent and any other sums
payable hereunder.
D. The term "business days" as used in this Lease shall exclude Saturdays,
Sundays and all days observed by the State or Federal Government as legal
holidays and union holidays for those unions that materially affect the delivery
of services in the Building.
35. PARTIES BOUND. The covenants, conditions and agreements contained in this
Lease shall bind and inure to the benefit of Landlord and Tenant and their
respective heirs, distributees, executors, administrators, successors, and,
except as otherwise provided in this Lease, their assigns.
36. BROKER. Tenant represents and warrants that Tenant has dealt directly with
(and only with), the Broker (as defined in Article 1 herein) as broker in
connection with this Lease, and that insofar as Tenant knows no other broker
negotiated this Lease or is entitled to any commission in connection therewith,
and the execution and delivery of this Lease by Landlord shall be conclusive
evidence that Landlord has relied upon the foregoing representation and
warranty.
37. INDEMNITY. Tenant shall not do or permit any act or thing to be done upon
the Premises which may subject Landlord to any liability or responsibility for
injury, damages to persons or property or to any liability by reason of any
violation of law or of any legal requirement of public authority, but shall
exercise such control over the Premises as to fully protect Landlord against any
such liability. Tenant agrees to indemnify and save harmless Landlord from and
against (i) all claims of whatever nature against Landlord arising from any act,
omission or negligence of Tenant, its
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contractors, licensees, agents, servants, employees, invitees or visitors,
including any claims arising from any act, omission or negligence of Landlord or
Landlord and Tenant, (ii) all claims against Landlord arising from any accident,
injury or damage whatsoever caused to any person or to the property of any
person and occurring during the Term in or about the Premises, (iii) all claims
against Landlord arising from any accident, injury or damage to any person,
entity or property, occurring outside of the Premises but anywhere within or
about the Real Property, where such accident, injury or damage results or is
claimed to have resulted from an act or omission of Tenant or Tenant's agents,
employees, invitees or visitors, including any claims arising from any act,
omission or negligence of Landlord or Landlord and Tenant, and (iv) any breach,
violation or nonperformance of any covenant, condition or agreement in this
Lease set forth and contained on the part of Tenant to be fulfilled, kept,
observed and performed and (v) any claim, loss or liability arising or claimed
to arise from Tenant, or any of Tenant's contractors, licensees, agents,
servants, employees, invitees or visitors causing or permitting any Hazardous
Substance to be brought upon, kept or used in or about the Premises or the Real
Property or any seepage, escape or release of such Hazardous Substances. As used
herein and in all other provisions in this Lease containing indemnities made for
the benefit of Landlord, the term "Landlord" shall mean SL Green Operating
Partnership, L.P. and SL Green Management LLC and their respective parent
companies and/or corporations, their respective controlled, associated,
affiliated and subsidiary companies and/or corporations and their respective
members, officers, partners, agents, consultants, servants, employees,
successors and assigns. This indemnity and hold harmless agreement shall include
indemnity from and against any and all liability, fines, suits, demands, costs
and expenses of any kind or nature incurred in or in connection with any such
claim or proceeding brought thereon, and the defense thereof.
38. ADJACENT EXCAVATION SHORING. If an excavation shall be made upon land
adjacent to the Premises, or shall be authorized to be made, Tenant shall afford
to the person causing or authorized to cause such excavation, license to enter
upon the Premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the Building from injury or damage and to
support the same by proper foundations without any claim for damages or
indemnity against Landlord, or diminution or abatement of Rent.
39. ADDITIONAL SPACE.
A. The Subleased Premises. Pursuant to that certain sublease dated as of
August 21, 1996 between KBC of America, Inc., as sublessor, and Prospectus Plus,
Inc., as sublessee, which sublease was assigned to Tenant pursuant to that
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certain assignment dated as of December 17, 1996 between Prospectus Plus, Inc.,
as assignor, and Tenant, as assignee (collectively, the "Sublease"), Tenant is
currently occupying certain additional space on floor 12A of the Building which
is adjacent to the Premises (the "Subleased Premises"). For a term commencing on
July 30, 2000 or upon such earlier date that the Sublease shall terminate (such
earlier date is hereinafter referred to as the "Adjustment Date"), the following
additional space in the Building shall be added to and included in the Premises,
to wit:
a portion of floor 12A of the Building substantially as shown
hatched on the floor plan annexed hereto as Exhibit 2 and made a
part hereof (the "Subleased Premises"),
so that the term "Premises" as defined in this Lease shall mean collectively the
Premises and the Subleased Premises. Effective as of the Adjustment Date,
Landlord shall lease to Tenant, and Tenant shall hire from Landlord, the
Subleased Premises, subject and subordinate to all superior leases and superior
mortgages as provided in this Lease and upon and subject to all the covenants,
agreements, terms and conditions of this Lease.
B. Condition of the Subleased Premises. Tenant is currently in possession
of the Subleased Premises and agrees to accept possession of the Subleased
Premises in the condition which shall exist on the Adjustment Date "as is", and
further agrees that Landlord shall have no obligation to perform any work or
make any installations in order to prepare the Subleased Premises for Tenant's
occupancy except as expressly set forth in Exhibit B annexed hereto. The taking
of possession of the Subleased Premises by Tenant shall be conclusive evidence
as against Tenant that, at the time such possession was so taken, the Subleased
Premises and the Building were in good and satisfactory condition.
C. Modifications to Lease. Effective as of the Adjustment Date, this Lease
shall be modified as follows:
(a) Subsection C(iii) of Article 1 of the Lease shall be deleted in
its entirety and the following shall be inserted in lieu thereof:
"Rent" shall mean:
(i) for the period commencing on the Adjustment Date through and
including the day immediately preceding the date on which the third
(3rd) anniversary of the
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Commencement Date shall occur, Three Hundred Forty-Eight Thousand
and 00/100 ($348,000.00) Dollars per annum, payable in equal monthly
installments of Twenty-Nine Thousand and 00/100 ($29,000.00)
Dollars each;
(ii) for the period commencing on the third (3rd) anniversary of the
Commencement Date through and including the day immediately
preceding the date on which the seventh (7th) anniversary of the
Commencement Date shall occur, Three Hundred Sixty-Eight Thousand
Eight Hundred Eighty and 00/100 ($368,880.00) Dollars per annum,
payable in equal monthly installments of Thirty Thousand Seven
Hundred Forty and 00/100 ($30,740.00) Dollars each; and
(iii) for the period commencing on the seventh (7th) anniversary of
the Commencement Date through and including the Expiration Date,
Three Hundred Eighty-Nine Thousand Seven Hundred Sixty and 00/100
($389,760.00) Dollars per annum, payable in equal monthly
installments of Thirty-Two Thousand Four Hundred Eighty and 00/100
($32,480.00) Dollars each.
(b) Tenant's Proportionate Share set forth in subsection B(viii) of
Article 1 of this Lease shall be increased to two and seventy-seven hundredths
percent (2.77%).
(c) The Labor Rate Factor set forth in subsection B(x) of Article 1
of this Lease shall be increased to 13,920.
(d) The Security Deposit shall be increased to $174,000.00.
40. MISCELLANEOUS.
A. No Offer. This Lease is offered for signature by Tenant and it is
understood that this Lease shall not be binding upon Landlord unless and until
Landlord shall have executed and delivered a fully executed copy of this Lease
to Tenant.
B. Signatories. If more than one person executes this Lease as Tenant,
each of them understands and hereby agrees that the obligations of each of them
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under this Lease are and shall be joint and several, that the term "Tenant" as
used in this Lease shall mean and include each of them jointly and severally and
that the act of or notice from, or notice or refund to, or the signature of, any
one or more of them, with respect to the tenancy and/or this Lease, including,
but not limited to, any renewal, extension, expiration, termination or
modification of this Lease, shall be binding upon each and all of the persons
executing this Lease as Tenant with the same force and effect as if each and all
of them had so acted or so given or received such notice or refund or so signed.
C. Certificates. From time to time, within seven (7) days next following
request by Landlord or the mortgagee of a Mortgage, Tenant shall deliver to
Landlord or such mortgagee, as the case may be, a written statement executed and
acknowledged by Tenant, in form satisfactory to Landlord or such mortgagee, (i)
stating that this Lease is then in full force and effect and has not been
modified (or if modified, setting forth all modifications), (ii) setting forth
the date to which the Rent, additional rent and other charges hereunder have
been paid, together with the amount of fixed base monthly Rent then payable,
(iii) stating whether or not, to the best knowledge of Tenant, Landlord is in
default under this Lease, and, if Landlord is in default, setting forth the
specific nature of all such defaults, (iv) stating the amount of the security
deposit under this Lease, (v) stating whether there are any subleases affecting
the Premises, (vi) stating the address of Tenant to which all notices and
communications under the Lease shall be sent, the Commencement Date and the
Expiration Date, and (vii) as to any other matters requested by Landlord or such
mortgagee. Tenant acknowledges that any statement delivered pursuant to this
subsection C may be relied upon by any purchaser or owner of the Real Property
or the Building, or Landlord's interest in the Real Property or the Building or
any Superior Lease, or by any mortgagee of a Mortgage, or by any assignee of any
mortgagee of a Mortgage, or by any lessor under any Superior Lease.
D. Directory Listings. Landlord agrees to provide Tenant, at Landlord's
sole cost and expense, with a single listing of Tenant's name on the directory
in the lobby of the Building. Upon written request by Tenant, Landlord agrees to
provide Tenant with additional listings on such directory, at Tenant's sole cost
and expense, provided Tenant shall be limited to a number of listings determined
by multiplying Tenant's Proportionate Share by the total number of spaces for
listings on such directory.
E. Authority. If Tenant is a corporation or partnership, each individual
executing this Lease on behalf of Tenant hereby represents and warrants that
Tenant is a duly formed and validly existing entity qualified to do business in
the State of New York and that Tenant has full right and authority to execute
and
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deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so.
F. Signage. Tenant shall not exhibit, inscribe, paint or affix any sign,
advertisement, notice or other lettering on any portion of the Building or the
outside of the Premises without the prior written consent of Landlord in each
instance. A plan of all signage or other lettering proposed to be exhibited,
inscribed, painted or affixed shall be prepared by Tenant in conformity with
building standard signage requirements and submitted to Landlord for Landlord's
consent. If the proposed signage is acceptable to Landlord, Landlord shall
approve such signage or other lettering by written notice to Tenant. All signage
or other lettering which has been approved by Landlord shall thereafter be
installed by Landlord at Tenant's sole cost and expense. Payment of all charges
therefor shall be deemed additional rent hereunder. In the event Landlord
requires payment in advance for the installation of any such signage or other
lettering, no installation shall be commenced by Landlord until Landlord has
received payment in full.
Upon installation of any such signage or other lettering, such signage or
lettering shall not be removed, changed or otherwise modified in any way without
Landlord's prior written approval. The removal, change or modification of any
signage or other lettering theretofore installed shall be performed solely by
Landlord at Tenant's sole cost and expense. Tenant shall not exhibit, inscribe,
paint or affix on any part of the Premises or the Building visible to the
general public any signage or lettering including the words "temporary" or
"personnel".
Any signage, advertisement, notice or other lettering which shall be
exhibited, inscribed, painted or affixed by or on behalf of Tenant in violation
of the provisions of this section may be removed by Landlord and the cost of any
such removal shall be paid by Tenant as additional rent.
G. Consents and Approvals. Wherever in this Lease Landlord's consent or
approval is required, if Landlord shall delay or refuse such consent or
approval, Tenant in no event shall be entitled to make, nor shall Tenant make,
any claim, and Tenant hereby waives any claim for money damages (nor shall
Tenant claim any money damages by way of set-off, counterclaim or defense) based
upon any claim or assertion by Tenant that Landlord unreasonably withheld or
unreasonably delayed its consent or approval. Tenant's sole remedy shall be an
action or proceeding to enforce any such provision, for specific performance,
injunction or
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declaratory judgment.
IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.
SL GREEN OPERATING PARTNERSHIP, L.P., Landlord
By: SL Green Realty Corp., its general partner
By: /s/ Benjamin P. Feldman
-------------------------------------------
Name: Benjamin P. Feldman
-----------------------------------------
Title: EVP
----------------------------------------
INTRALINKS, INC., Tenant
By: /s/ John Muldoon
-------------------------------------------
Name: JOHN MULDOON
-----------------------------------------
Title: CHIEF FINANCIAL OFFICER
----------------------------------------
13-3899047
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Tenant's Tax I.D. Number
65
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EXHIBIT 1
Floor Plan of Premises
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EXHIBIT 2
Floor Plan of Subleased Premises
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SCHEDULE A
RULES AND REGULATIONS
I. The rights of each tenant in the Building to the entrances, corridors
and elevators of the Building are limited to ingress to and egress from
such tenant's premises and no tenant shall use, or permit the use of
the entrances, corridors, or elevators for any other purpose. No tenant
shall invite to its premises, or permit the visit of persons in such
numbers or under such conditions as to interfere with the use and
enjoyment of any of the plazas, entrances, corridors, elevators and
other facilities of the Building by other tenants. No tenant shall
encumber or obstruct, or permit the encumbrances or obstruction of any
of the sidewalks, plazas, entrances, corridors, elevators, fire exits
or stairways of the Building. Landlord reserves the right to control
and operate the public portions of the Building, the public facilities,
as well as facilities furnished for the common use of the tenants, in
such manner as Landlord deems best for the benefit of the tenants
generally.
II. Landlord may refuse admission to the Building outside of ordinary
business hours to any person not known to the watchman in charge or not
having a pass issued by Landlord or not properly identified, and may
require all persons admitted to or leaving the Building outside of
ordinary business hours to register. Tenants' employees, agents and
visitors shall be permitted to enter and leave the Building whenever
appropriate arrangements have been previously made between Landlord and
the tenant with respect thereto. Each tenant shall be responsible for
all persons for whom it requests such permission and shall be liable to
Landlord for all acts of such persons. Any person whose presence in the
Building at any time shall, in the judgment of Landlord, be prejudicial
to the safety, character, reputation or interests of the Building or
its tenants may be denied access to the Building or may be ejected
therefrom. In ease of invasion, riot, public excitement or other
commotion Landlord may prevent all access to the Building during the
continuance of the same, by closing the doors or otherwise, for the
safety of the tenants and protection of property in the Building.
Landlord may require any person leaving the Building with any package
or other object to exhibit a pass from the tenant from whose premises
the package or object is being removed, but the establishment and
enforcement of such requirement shall not impose any responsibility on
Landlord for the protection of any tenant against the removal of
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property from the premises of tenant. Landlord shall, in no way, be
liable to any tenant for damages or loss arising from the admission,
exclusion or ejection of any person to or from a tenant's premises or
the Building under the provisions of this rule.
III. No tenant shall obtain or accept for use in its premises ice, drinking
water, towels, barbering, boot blacking, floor polishing, lighting
maintenance, cleaning or other similar services from any persons not
authorized by Landlord in writing to furnish such services. Such
services shall be furnished only at such hours, in such places within
the tenant's premises and under such regulation as may be fixed by
Landlord.
IV. No window or other air-conditioning units shall be installed by any
tenant, and only such window coverings as are supplied or permitted by
Landlord shall be used in a tenant's premises.
V. There shall not be used in any space, nor in the public halls of the
Building, either by any tenant or by jobbers, or other in the delivery
or receipt of merchandise, any hand trucks, except those equipped with
rubber tires and side guards.
VI. All entrance doors in each tenant's premises shall be left locked when
the tenant's premises are not in use. Entrance doors shall not be left
open at any time. All windows in each tenant's premises shall be kept
closed at all times and all blinds therein above the ground floor shall
be lowered when and as reasonably required because of the position of
the sun, during the operation of the Building air-conditioning system
to cool or ventilate the tenant's premises.
VII. No noise, including the playing of any musical instruments, radio or
television, which, in the judgment of Landlord, might disturb other
tenants in the Building, shall be made or permitted by any tenant. No
dangerous, inflammable, combustible or explosive object, material or
fluid shall be brought into the Building by any tenant or with the
permission of any tenant.
VIII. All damages resulting from any misuse of the plumbing fixtures shall be
borne by the tenant who, or whose servants, employees, agents, visitors
or licensees, shall have caused the same.
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IX. Each tenant shall be required to use Landlord's designated locksmith
and may only install such locks and other security devices as Landlord
approves. Each tenant shall furnish Landlord with keys to its
respective premises so that Landlord may have access thereto for the
purposes set forth in the Lease. No additional locks or bolts of any
kind shall be placed upon any of the doors or windows in any tenant's
premises and no lock on any door therein shall be changed or altered in
any respect without Landlord's approval. Duplicate keys for a tenant's
premises and toilet rooms shall be procured only from Landlord, which
may make a reasonable charge therefore. Upon the termination of a
tenant's lease, all keys of the tenant's premises and toilet rooms
shall be delivered to Landlord.
X. Each tenant, shall, at its expense, provide artificial light in the
premises for Landlord's agents, contractors and employees while
performing janitorial or other cleaning services and making repairs or
alterations in said premises.
XI. No tenant shall install or permit to be installed any vending machines.
XII. No animals or birds, bicycles, mopeds or vehicles of any kind shall be
kept in or about the Building or permitted therein.
XIII. No furniture, office equipment, packages or merchandise will be
received in the Building or carried up or down in the elevator, except
between such hours as shall be designated by Landlord. Landlord shall
prescribe the charge for freight elevator use and the method and manner
in which any merchandise, heavy furniture, equipment or safes shall be
brought in or taken out of the Building, and also the hours at which
such moving shall be done. No furniture, office equipment, merchandise,
large packages or parcels shall be moved or transported in the
passenger elevators at any time.
XIV. All electrical fixtures hung in offices or spaces along the perimeter
of any tenant's Premises must be fluorescent, of a quality, type,
design and bulb color approved by Landlord unless the prior consent of
Landlord has been obtained for other lamping.
XV. The exterior windows and doors that reflect or admit light and air into
any premises or the halls, passageways or other public places in the
Building, shall not be covered or obstructed by any tenant.
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XVI. Canvassing, soliciting and peddling in the Building is prohibited and
each tenant shall cooperate to prevent same.
XVII. No tenant shall do any cooking, conduct any restaurant, luncheonette or
cafeteria for the sale or service of food or beverages to its employees
or to others, except as expressly approved in writing by Landlord. In
addition, no tenant shall cause or permit any odors of cooking or other
processes or any unusual or objectionable odors to emanate from the
premises. The foregoing shall not preclude tenant from having food or
beverages delivered to the premises, provided that no cooking or food
preparation shall be carried out at the premises.
XVIII. No tenant shall generate, store, handle, discharge or otherwise deal
with any hazardous or toxic waste, substance or material or oil or
pesticide on or about the Real Property.
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SCHEDULE B
TENANT'S INITIAL ALTERATION
I. Tenant shall perform or cause the performance of Alterations in and to
the Premises to prepare same for Tenant's initial occupancy thereof ("Tenant's
Initial Alteration"). All Alterations to be performed by Tenant shall be, at a
minimum, of a quality and standard equivalent to the standards for construction
set by Landlord, from time to time, for the Building, and shall be subject to
the prior approval of Landlord as set forth in Article 3 hereof. Tenant shall
submit to Landlord or, at Landlord's direction, Landlord's Consultant, complete
and detailed architectural, mechanical and engineering plans and specifications
prepared by an architect or engineer licensed in the State of New York and
reasonably approved by Landlord, which plans and specifications shall be stamped
and certified by such architect or engineer, showing Tenant's Initial
Alteration, which plans and specifications shall be prepared by Tenant, at
Tenant's own cost and expense. Tenant's plans and specifications shall include
all information necessary to reflect Tenant's requirements for the design and
installation of any supplemental air-cooling equipment, ductwork, heating,
electrical, plumbing and other mechanical systems and all work necessary to
connect any non-standard facilities to the Building's base mechanical,
electrical and structural systems. Tenant's submission shall include not less
than three (3) sets of sepias and five (5) sets of black and white prints.
II. Tenant shall not perform work which would (a) require changes to
structural components of the Building or the exterior design of the Building,
(b) require any material modification to the Building's mechanical installations
or other Building installations outside the Premises, (c) not be in compliance
with all applicable laws, rules, regulations and requirements of any
governmental department having jurisdiction over the Building and/or the
construction of the Premises, including but not limited to, the Americans with
Disabilities Act of 1990, or (d) be incompatible with the certificate of
Occupancy for the Building. Any changes required by any governmental department
affecting the construction of the Premises shall be performed at Tenant's sole
cost.
III. At the time that Tenant submits its plans and specifications to
Landlord for Landlord's approval, such plans and specifications must be
transmitted to Landlord with a cover letter specifically stating that "the
enclosed plans and specifications are being transmitted to Landlord for its
review and approval pursuant to the terms of the Lease." Landlord or Landlord's
Consultant shall
<PAGE>
respond to Tenant's request for approval of any plans and specifications
described in subsection A above within ten (10) business days following the
submission of such plans and specifications prepared in accordance with the
terms hereof. In the event Landlord or Landlord's Consultant shall disapprove of
all or a portion of any of Tenant's plans and specifications, such disapproval
shall be set forth in writing and shall include the reasons therefor in
reasonable detail, in which event Tenant shall revise such plans and
specifications and resubmit same to Landlord within five (5) business days
thereafter, time being of the essence. Landlord or Landlord's Consultant shall
respond to Tenant's request for consent of any such revised plans within five
(5) business days following resubmission. The approval of plans and
specifications by Landlord or Landlord's Consultant (hereinafter referred to as
the "Final Plans") together with Tenant's satisfactory compliance with the
requirements set forth in items (1) through (4) of Schedule D annexed hereto,
shall be deemed an authorization for Tenant to proceed with Tenant's Initial
Alteration, which shall be performed in accordance with the provisions of
Article 3 and Schedule C of this Lease. Tenant shall reimburse Landlord for any
reasonable fees of Landlord's Consultant incurred in connection with Tenant's
Initial Alteration. Neither the recommendation or designation of an architect or
engineer nor the approval of the final plans and specifications by Landlord or
Landlord's Consultant shall be deemed to create any liability on the part of
Landlord with respect to the design or specifications set forth in the Final
Plans.
IV. Landlord agrees to reimburse Tenant for the cost of Tenant's Initial
Alteration, as approved by Landlord or Landlord's Consultant and made by Tenant
within six (6) months of the Commencement-Date to the extent of the lesser of
(i) $122,072.00 or (ii) the actual cost to Tenant for Tenant's Initial
Alteration ("Landlord's Contribution"). Provided this Lease is in full force and
effect and Tenant is not in default hereunder, Landlord's Contribution shall be
paid by progress payments as follows: on or before the first (1st) day of each
calendar month, Tenant may submit to each of Landlord and Landlord's Consultant
an application and certificate for payment (standard AIA Form G702) for that
portion of Tenant's Initial Alteration previously completed, which application
and certificate for payment must be accompanied by (a) all information and
documents required thereunder and (b) a partial lien waiver executed by the
general contractor (the "General Contractor") and its subcontractors employed in
connection with Tenant's Initial Alteration covering work previously paid for
out of prior progress payments. Provided Landlord's architect verifies in
writing that the work described in any such application and certificate for
payment has been completed in accordance with the Final Plans, Landlord, on or
about the thirtieth (30th) day of such calendar month shall remit to Tenant
ninety percent (90%) of the amount so requisitioned by Tenant or such other
amount as is approved by Landlord, based on the portion of Tenant's Initial
Alteration which has been completed, with ten (10%) percent to be
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retained until final payment of Landlord's Contribution is due pursuant to the
terms of this Subsection IV. Provided this Lease is in full force and effect and
Tenant is not in default hereunder, Landlord shall pay the balance of Landlord's
Contribution to Tenant within thirty (30) days of submission by Tenant of (a)
paid receipts (or such other proof of payment as Landlord shall reasonably
require) for work done in connection with Tenant's Initial Alteration, (b) a
written statement from Tenant's architect or engineer that the work described on
any such invoices has been completed in accordance with the Final Plans, (c) a
lien waiver executed by the general contractor employed by Tenant in connection
with Tenant's Initial Alteration, (d) proof reasonably satisfactory to Landlord
that Tenant has complied with all of the conditions set forth in this Schedule B
(as applicable), which shall include, without limitation, submission of all of
the items described on Schedule D annexed hereto and made a part hereof and (e)
two (2) complete sets of "as-built" Final Plans.
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SCHEDULE C
REQUIREMENTS FOR
"CERTIFICATES OF FINAL APPROVAL"
1. All required Building Department Forms must be properly filled out and
completed by the approved architect/engineer of record or Building
Department expediter, as required.
2. All forms are to be submitted to the Landlord for the owner's review and
signature prior to submission of final plans and forms to the New York
City Building Department, as required.
3. All pertinent forms and filed plans are to be stamped and sealed by a
licensed architect and/or professional engineer, as required. All
controlled inspections are to be performed by the architect/engineer of
record unless approved otherwise by the Landlord.
4. A copy of all approved forms, permits and approved Building Department
plans (stamped and signed by the New York City Building Department) are
to be submitted to the building office prior to start of work.
5. Copies of all completed inspection reports and Building Department
Sign-offs are to be submitted to the building office immediately
following completion of construction, as required.
6. All claims, violations or discrepancies with improperly filed plans,
applications, or improperly completed work shall become the sole
responsibility of the applicant to resolve, as required.
7. All changes to previously approved plans and applications must be filed
under an amended application, as required. The Landlord reserves the
right to withhold approvals to proceed with changes until associated
plans are properly filed with the New York City Building Department, as
required.
8. The architect/engineer of record accepts full responsibility for any and
all discrepancies or violations which arise out of non-compliance with
all local laws and building codes having jurisdiction over the work.
9. The Landlord reserves the right to reject any and all work requests and
new work applications that are not properly filed or accompanied by
approved plans and building permits.
<PAGE>
10. All ACP's and asbestos inspections must be conducted by a licensed and
fully qualified asbestos inspection agency approved by the Landlord.
Checklist of "Certificates of Final Approval" required to be furnished by
Tenant pursuant to Article 3 (Alterations) of Lease.
These forms must be furnished by the Architect/ Engineer of record
or Building Department expediter (filing agency) and approved by the Landlord
prior to submitting all plans and forms to the New York City Building Department
for final approval.
These forms must be furnished in order for Tenant to receive
"Landlord's Contribution."
Form Description
---- -----------
______ * PW-1 Building Notice Application (Plan work
approval application)
______ * PW-1B Plumbing/Mechanical Equipment
Application and Inspection Report
______ * PW-1 Statement Form B
______ * TR-1 Amendment Controlled Inspection
Report
______ * TR-1 Amendment Controlled Inspection
Report
______ * PW-2 Building Permit Form (All Disciplines)
______ * B Form 708 Building Permit "Card"
______ * TR-1 Certification of Completed Inspection and
Certified Completion Letter by
Architect/Engineer of record or Building
Department expediter
______ * PW-3 Cost Affidavit Form
______ * PW-4 Equipment Use Application Form
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______ * PW-6 Revised Certificate of Occupancy for change
in use (if applicable)
______ Form ACP7 New York City Department of
or Environmental Protection Asbestos
Form ACP5 Inspection Report as prepared by a licensed
and approved asbestos inspection agency
Building Department Equipment Use Permits
for all new HVAC equipment installed under
this application
Revised Certificate of Occupancy for change
in use (if applicable)
* These items must be perforated (with the date and New York City Building
Department Stamp) to signify New York City Building Department Approval.
All forms must bear proper approvals and sign-offs prior to authorization
given by the Landlord to proceed with the work.
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SCHEDULE D
TENANT ALTERATION WORK AND NEW CONSTRUCTION
CONDITIONS AND REQUIREMENTS
1. No Alterations are permitted to commence until original Certificates of
Insurance required from Tenant's general contractor (the "General
Contractor") and all subcontractors complying with the attached
requirements are on file with the Building office.
2. All New York City Building Department applications with assigned BN# and
permits must be on file with the Building office prior to starting work.
A copy of the building permit must also be posted on the job site by the
General Contractor. The General Contractor shall make all arrangements
with Landlord's expediter for final inspections and sign-offs prior to
substantial completion.
3. The General Contractor shall comply with all Federal, State and local
laws, building codes, OSHA requirements, and all laws having jurisdiction
over the performance and handling of the Alterations.
4. The existing "Class E" fire alarm system (including all wiring and
controls), if any, must be maintained at all times. Any additions or
alterations to the existing system shall be coordinated with the Building
office as required. All final tie-in work is to be performed by
Landlord's fire alarm vendor and coordinated by the General Contractor.
All costs for the tie-ins are reimbursable to Landlord by Tenant.
5. All wood used, whether temporary or not, such as blocking, form work,
doors, frames, etc. shall be fire rated in accordance with the New York
City Building and Fire Code requirements governing this work.
6. Building standby personnel (i.e. Building operating engineer and/or
elevator operator), required for all construction will be at Landlord's
discretion. Freight elevators used for overtime deliveries must be
scheduled in writing with Landlord at least 24 hours in advance, as
required. All costs associated are reimbursable to Landlord by Tenant.
7. The General Contractor shall comply with the Rules and Regulations of the
Building elevators and the manner of handling materials, equipment and
debris to avoid conflict and interference with Building operations. All
bulk
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deliveries or removals will be made prior to 8:00 a.m. and after 5:00
p.m. or on weekends, as required.
8. No exterior hoisting will be permitted. All products or materials
specified are to be assembled on-site, and delivered to the site in such
a manner so as to allow unobstructed passage through the Building's
freight elevator, lobbies, corridors, etc. The General Contractor will be
responsible for protection of all finished spaces, as required.
9. All construction personnel must use the freight elevator at all times.
Any and all tradesman found riding the passenger elevators without prior
approval from Landlord will be escorted out of the Building and not be
allowed re-entry without written approval from the Building office.
10. During the performance of Alterations, Tenant's construction supervisor
or job superintendent must be present on the job site at all times.
11. During the performance of Alterations, all demolition work shall be
performed after 6:00 p.m. during the week or on weekends. This would
include carting or rubbish removal as well as performing any operations
that would disturb other Building tenants or other occupants (drilling,
chopping, grinding, recircuiting, etc.).
12. No conduits or cutouts are permitted to be installed in the floor slab
without prior written approval from Landlord. Landlord reserves the right
to restrict locations of such items to areas that will not interfere with
the Building's framing system or components. No conduits or cutouts are
permitted outside of Tenant's Premises.
13. Plumbing connections to Building supply, waste and vent lines are to be
performed after normal working hours, and coordinated with the Building
manager, and are to include the following minimum requirements:
A. Separate shutoff valves for all new hot and/or cold water supply
lines (including associated access doors).
B. Patch and repair of existing construction on floor below,
immediately following completion of plumbing work (to be performed
after normal working hours, as required).
14. The General Contractor must coordinate all work to occur in public
spaces, core areas and other tenant occupied spaces with Landlord, and
perform all
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such work after normal working hours (to include associated patch and
repair work). The General Contractor shall provide all required
protection of existing finishes within the affected area(s).
15. The General Contractor must perform all floor coring, drilling or
trenching after normal business hours, and obtain Landlord's permission
and approval of same prior to performing such work.
16. Convector mounted outlets and associated conduits, wiring, boxes, etc.,
shall be located and installed in areas where they will not hinder the
operation or maintenance of existing fan coil units or prevent removal or
replacement of access panels or removable covers.
17. The General Contractor shall be responsible for all final tests,
inspections and approvals associated with all modifications, deletions or
additions to Building Class "E" systems and equipment.
18. Recircuiting of existing power/lighting panels and circuits affecting
Building and/or tenant operations are to be performed after normal
business hours and coordinated with the Building office in advance, as
required.
19. All burning and welding to be performed in occupied or finished areas
shall be performed after normal business hours and coordinated with the
Building office in advance, as required. Proper ventilation of the work
area will be required in order to perform this work.
20. The General Contractor shall provide Grubb & Ellis Management Services,
Inc. and the Building office with all approved submittal and closeout
documents as well as all required final inspections and Building
Department sign-offs just prior to or immediately following completion of
construction.
21. Any and all alterations to the Building sprinkler system (including
draining of system) are to be performed after normal business hours and
coordinated with the Building office, as required. All costs associated
with the shut down, drain and refill of the sprinkler system are
reimbursable to Landlord.
22. The General Contractor shall be responsible for any and all daily cleanup
required to keep the job site clean throughout the entire course of the
Alterations. No debris shall be allowed to accumulate in any public
spaces.
23. The General Contractor shall be responsible for proper protection of all
existing finishes and construction for Alterations to be performed in
common
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Building areas. All Alterations to be performed in occupied areas outside
of the Premises shall be performed after normal business hours and
coordinated with the Building office, as required.
24. The General Contractor shall perform any and all hoisting associated with
the Alterations after normal business hours. The General Contractor will
obtain all required permits and insurance to perform work of this nature.
The General Contractor shall specify hoisting methods and provide all
required permits and insurance to Grubb & Ellis Management Services, Inc.
and the Building office prior to commencement of Alterations.
25. Union labor shall be used by all contractors and subcontractors
performing any and all Alterations within the Building. All contractors
and subcontractors shall perform all work in a professional manner, and
shall work in close harmony with one another as well as with the Building
management and maintenance personnel.
26. The General Contractor shall forward complete copies of all approved
contractor submittal, and Building and Fire Department sign-offs and
Statement of Responsibility forms, to the Building office immediately
following completion of construction.
INSURANCE REQUIREMENTS
LIABILITY LIMITATIONS
A. Comprehensive or Commercial General Liability Insurance written on an
occurrence basis, to afford protection of $3,000,000 combined single
limit for personal injury, bodily injury and/or death and Broad Form
property damage arising out of any one occurrence; and which insurance
shall include coverage for premises-operations (including explosion,
collapse and underground coverage), elevators, contractual liability,
owner's and contractor's protective liability, and completed operations
liability.
B. Comprehensive Auto Liability Insurance covering the use of all owned,
non-owned and hired vehicles providing bodily injury and property damage
coverage, all on a per occurrence basis, at a combined single limit of
$1,000,000.
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C. Worker's Compensation Insurance providing statutory benefits for
contractor's employees and Employer's Liability Coverage in an amount not
less than $100,000/$500,000/$100,000.
D. Property coverage damage to or loss of use of contractor's equipment.
CERTIFICATE HOLDER
SL Green Operating Partnership, L.P.
c/o SL Green Realty Corp.
70 West 36th Street
New York, New York 10018
ADDITIONAL INSUREDS
SL Green Operating Partnership, L.P.
c/o SL Green Realty Corp.
70 West 36th Street
New York, New York 10018
SL Green Management LLC
c/o SL Green Realty Corp.
70 West 36th Street
New York, New York 10018
In addition to listing each of the Additional Insured parties, as noted above,
the Certificate of Insurance, general liability form, shall state that "The
General Aggregate limit applies separately to each project."
The name and address of the Additional Insureds shall appear on the Certificate
of Insurance. The insurance agent's address and telephone number is also
required.
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SCHEDULE E
Landlord's Core Work
I. Landlord agrees, at its sole cost and expense and without charge to Tenant
(except as set forth below), to do the following work in or around the Premises,
which work shall not be considered part of the work subject to Landlord's
Contribution as set forth in Section A of Article II of Schedule B of the Lease
and which work shall be of design, capacity, finish and color of the building
standard adopted by Landlord for the Building (hereinafter called "Building
Standard"):
A. To paint the walls of the common corridor bathrooms on floor 12A of
the Building;
B. To perform general cleaning of the common corridor on floor 12A of
the Building including cleaning of existing carpeting; and
C. To replace three (3) windows in the Premises (on the east side of
the Premises) with new windows; provided Tenant shall contribute
$1500.00 toward the cost of such window replacement simultaneously
with the execution hereof
II. Landlord shall perform Landlord's Core Work simultaneously with Tenant's
Initial Alteration. Tenant shall not interfere with the performance of
Landlord's Core Work and shall coordinate Tenant's Initial Alteration so that it
does not interfere with the performance of Landlord's Core Work.
III. Landlord and Tenant acknowledge that the replacement of the exterior
windows involves the procurement of long lead items and, accordingly, may be
performed after Tenant has taken possession of the Premises. Landlord and Tenant
shall cooperate to mutually determine when such work will be commenced. However,
once the installation of the replacement windows begins, Landlord shall have the
right to complete the installation on a continuous, uninterrupted schedule
without Tenant interference. Tenant acknowledges that the window replacement
shall be performed at such times, including normal business hours, and in such a
manner as Landlord shall reasonably determine, provided that Landlord agrees to
perform such work in a manner intended to minimize material inconvenience to
Tenant. Tenant agrees (a) to cooperate with Landlord or Landlord's agents during
the performance of such work, including, but not limited to, temporarily
removing and relocating Tenant's fixtures, equipment and other personalty by
Tenant and (b) to release Landlord from all losses, costs, damages and expenses,
including, but not limited to, loss of business, incurred as a result of such
work unless arising from Landlord's gross negligence or willful misconduct.
<PAGE>
EXHIBIT 10.15
ASSIGNMENT, dated as of December 17, 1996 between PROSPECTUS PLUS,
INC., a New York corporation, having an office at 630 Ninth Avenue, Suite 1405,
New York, New York 10036-3708 (hereinafter called "Assignor"), and INTRALINKS,
INC., a Delaware Corporation, having an office at c/o Dickerson & Reilly, 780
Third Avenue New York, New York 10017 (hereinafter called "Assignee").
That for and in consideration of the sum of One ($1.00) Dollar paid by
Assignee to Assignor prior to the ensealing and delivery of these presents, and
other goods and valuable consideration, the receipt of which is hereby
acknowledged, Assignor hereby sells, assigns, transfers and sets over unto
Assignee all the right, title and interest of Assignor in and to a certain
sublease dated August 21, 1996 between KBC OF AMERICA, INC., as sublandlord
("Sublandlord"), and Assignor, as subtenant (said sublease as the same may have
been or may hereafter be modified and supplemented being hereinafter called the
"Sublease"), covering a portion of floor 12A substantially as shown on the plan
attached to the Sublease in the building known as 1372 Broadway in the City,
County and State of New York, and the term and estate granted by the Sublease,
to have and to hold the same unto Assignee from and after the date hereof for
all the rest, residue and remainder of the term of the Sublease yet to come and
unexpired.
Nothing herein contained shall be construed to modify, waive, impair
affect any of the covenants, agreements, terms, provisions of conditions
contained in the Sublease (except as may be herein expressly provided); and all
provisions of the Sublease are hereby mutually declared to be in full force and
effect.
Assignee and the successors and assigns of Assignee hereby accept the
within assignment and hereby recognize all of the covenants, agreements, terms,
provisions, and conditions in the Sublease, and hereby assume and agrees to pay
the rent, additional rent, damages and all other sums now and hereafter payable
by subtenant under the Sublease, and to keep and perform, and to permit no
violation of, each and every covenant, agreement, term, provision and condition
therein set forth on the part and on behalf of subtenant to be kept and
performed.
Assignor and Assignee agrees that the provisions of Article 2 of the
Sublease shall, notwithstanding this Assignment, continue to be binding upon
Assignor and Assignee with respect to all future assignments and transfers with
the same effect as if Assignee had been the subtenant named in the Sublease.
Assignee shall be and remain liable and responsible at all times
during the term of the Sublease for the payment of the fixed rent, additional
rent, damages and all other sums payable by subtenant thereunder, and under and
upon all of the covenants, agreements terms, provisions and conditions of the
Sublease on the part and on behalf of subtenant to be kept and performed.
<PAGE>
IN WITNESS WHEREOF, this Assignment has been duly executed by the
parties hereto as of the day and year first above written.
WITNESS PROSPECTUS PLUS, INC., Assignor
ATTEST:
By
- ----------------------------- -----------------------------
12/17/96
WITNESS INTRALINKS, INC., Assignee
ATTEST:
By
- ----------------------------- ------------------------------
12/17/96
<PAGE>
SUBLEASE BETWEEN
KBC OF AMERICA, INC., SUBLANDLORD
AND
PROSPECTUS PLUS, INC., SUBTENANT
SUBLEASE (hereinafter called this "Sublease") made as of the 21 day of
August, 1996, by and between KBC OF AMERICA, INC., a Delaware corporation,
having an office at 1370 Broadway, New York, New York 10018 (hereinafter called
"Sublandlord"), and PROSPECTUS PLUS, INC., a New York corporation, having an
office at 630 Ninth Avenue, Suite 1405, New York, New York 10036-3708
(hereinafter called "Subtenant").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS:
A. By lease dated May 19, 1989, as amended by that certain First
Amendment of Lease dated November 18, 199 1 and that certain letter agreement
dated November 18, 199 1 (which lease as the same has been or may be amended is
hereinafter referred to as the "Overlease"), Nineteen New York Properties
Limited Partnership (hereinafter called "Overlandlord") leased to Sublandlord
certain space (hereinafter called the "Leased Space") in the building known as
1372 Broadway, New York, New York (hereinafter called the "Building") in
accordance with the terms of the Overlease. A copy of the Overlease (from which
certain terms which do not relate to Subtenant's obligations hereunder have been
deleted) is annexed hereto as Exhibit A.
<PAGE>
B. Sublandlord and Subtenant desire to consummate a subleasing of a
portion of the Leased Space on terms and conditions contained in this agreement
(hereinafter called the "Sublease").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, it is hereby agreed as follows:
1. Premises
1.1 Sublandlord hereby leases to Subtenant and Subtenant hereby hires from
Sublandlord Leased Space located on a portion of floor 12A of the Building
(comprising a portion of the Leased Space)' substantially as shown on Exhibit B
annexed hereto and made a part hereof (hereinafter called the "Premises") for a
term (hereinafter called the "Sublease Term") to commence on September 1, 1996
(hereinafter called the "Sublease Commencement Date) and end July 20, 2000
(hereinafter called the "Sublease Expiration Date"), or until such term shall
sooner cease and terminate as herein provided, at the rate of EIGHTY-FIVE
THOUSAND TWENTY AND DOLLARS per annum during the period beginning on the
Sublease Commencement Date and ending on the Sublease Expiration Date set forth
herein shall be paid by Subtenant to Sublandlord at Sublandlord's office (or
such other location as Sublandlord shall designate) by check drawn on a bank
which is a member of the New York Clearing house Association in equal monthly
installments in advance, on the first day of each month during the Sublease Term
without any set-off, off-set, abatement or reduction whatsoever, except as
otherwise provided in Section 1.3 hereof The security deposit payable with
respect to Article 14 hereof shall be paid upon the execution of this Sublease
by Subtenant.
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<PAGE>
1.2. Simultaneously with the execution of this Sublease, Subtenant is
paying to Subland1ord the sum of $7,085.00 which shall be applied by Sublandlord
to the first (1st) monthly installment of fixed annual rent and electricity due
hereunder.
1.3. Notwithstanding anything to the contrary contained in Section 1.1
hereof, provided that Subtenant after expiration ^????^ of any applicable grace
periods with respect to any of the provisions and conditions of this Sublease,
the fixed annual rent shall be partially abated during the period beginning on
the Sublease Commencement Date and ending on October 3 1, 1996, so that
Subtenant shall pay to Sublandlord the sum of $1,090.00 per month on account of
electricity pursuant to the provisions of Article 12 hereof during the foregoing
abatement period.
2. Assignment and Subletting
2.1. Subtenant shall not (a) assign this Sublease, nor (b) permit this
Sublease to be assigned by operation of law underlet ^????^ Premises, nor (d)
permit the Premises or any desk space therein to be occupied by any person(s)
other than Subtenant, nor (e) pledge or encumber this Sublease, the term and
estate hereby granted or the rentals hereunder, without first obtaining:
(i) Overlandlord's consent and all other required consents to such
assignment or subletting as set forth in and pursuant to the Overlease, and
(ii) Sublandlord's consent. Sublandlord agrees that Sublandlord's consent
shall not be required to the underletting or occupancy of a portion of the
Sublet Premises by Subtenant's affiliate Inter-links, Inc., for so long as said
entity remains an affiliate of Subtenant.
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<PAGE>
3. Incorporation of Overlease
--------------------------
3.1. Except as herein otherwise expressly provided and except for the
obligation to pay rent and additional rent under the Overlease, all of the
terms, covenants, conditions and provisions in the Overlease are hereby
incorporated in, and made part of this Sublease, and such rights and obligations
as are contained in the Overlease are hereby imposed upon the respective parties
hereto; the Sublandlord herein being substituted for the Landlord in the
Overlease, and the Subtenant herein being substituted for the Tenant named in
the Overlease; provided, however, that the Sublandlord herein shall not be
liable for any defaults by Overlandlord and, if Overlandlord is not the fee
owner, the owner in fee of the land and Building of which the Premises are a
part. If the Overlease shall be terminated for any reason during the term
hereof, then and in that event this Sublease shall thereupon automatically
terminate and Sublandlord shall have no liability to Subtenant by reason
thereof. Upon the termination of this Sublease, whether by forfeiture, lapse of
time or otherwise, or upon the termination of Subtenant's right to possession,
Subtenant will at once surrender and deliver up the Premises in good condition
and repair, reasonable wear and tear excepted.
3.2. For the purposes of this Sublease, Articles 3 (except as provided in
Article 13 hereof), 12, 13, 27, 29, 3 1, 34, 37(E), 39 and 40, Exhibits 1, 2, 3A
and 3B, Schedules B and C and subsections 1 .A(i)-(iv), 1 .A(vi)-(x), 1
.A.(xii)-(xvii), 1 .A.(xix), 1 .A.(xxv), 1B and l.C of the Overlease shall not
be deemed incorporated in or made a part hereof.
3.3. This Sublease is conditioned upon the consent by Overlandlord to this
Sublease which consent shall be evidenced by Overlandlord's signature appended
hereto or a separate consent in the form utilized by Overlandlord for such
purposes. Subtenant acknowledges that it is familiar with the provisions of
Article 12 of the Overlease. In the event that Overlandlord
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<PAGE>
shall exercise any of its recapture rights pursuant to Article 12 or the
Overlease with respect to the Premises upon Sublandlord's request for
Overlandlord's consent to this Sublease, Sublandlord will so notify Subtenant
and, upon receipt of such notification by Sublandlord, this Sublease shall be
deemed to be null and void and without force or effect, and Sublandlord and
Subtenant shall have no further obligations or liabilities to the other with
respect to this Sublease. In the event Overlandlord shall not exercise any of
its recapture options pursuant to Article 12 of the Overlease with respect to
the Premises, Sublandlord makes no representation with respect to obtaining
Overlandlord's approval of this Sublease and, in the event that Overlandlord
notifies Sublandlord that Overlandlord will not give such approval, Sublandlord
will so notify Subtenant and, upon receipt of such notification by Sublandlord
of the disapproval by Overlandlord, this Sublease shall be deemed to be null and
void and without force or effect, and Sublandlord and Subtenant shall have no
further obligations or liabilities to the other with respect to this Sublease.
4. Condition of Premises
---------------------
4.1. Subtenant has examined the Premises, is aware of the physical
condition thereof, and agrees to take the same "as is" on the date hereof;
subject to ordinary wear and tear, with the understanding that there shall be no
obligation on the part of Sublandlord to incur any expense whatsoever in
connection with the preparation of the Premises for Subtenant's occupancy
thereof Sublandlord agrees to deliver possession of the Premises to Subtenant in
"broom clean" condition with the existing plumbing, electrical, and heating,
ventilating and air-conditioning systems located in the Premises in working
order on the Sublease Commencement Date.
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<PAGE>
5. Use
---
5.1. Subtenant agrees that the Premises shall be occupied only for general
and executive offices with showrooms.
6. Services
--------
6.1. Subtenant acknowledges that the services to be rendered to the
Premises are to be rendered by Overlandlord. Anything in this Sublease to the
contrary notwithstanding, if there exists a breach by Sublandlord of any of its
obligations under this Sublease and, concurrently, a corresponding breach by
Overlandlord under the Overlease of its obligations under the Overlease exists,
then and in such event, Subtenant's sole remedy against Sublandlord in the event
of any breach of obligations under this Sublease shall be the right to pursue a
claim in the name of Sublandlord against Overlandlord, and Sublandlord agrees
that it will, at Subtenant's expense, cooperate with Subtenant in the pursuit of
such claim.
6.2. Anything contained in any provisions of this Sublease to the contrary
notwithstanding, Subtenant agrees, with respect to the Premises, to comply with
and remedy any default claimed by Overlandlord and caused by Subtenant, within
the period allowed to Sublandlord as tenant under the Overlease, even if such
time period is shorter than the period otherwise allowed in the Overlease, due
to the fact that notice of default from Sublandlord to Subtenant is given after
the corresponding notice of default from Overlandlord. Sublandlord agrees to
forward to Subtenant, upon receipt thereof by Sublandlord, a copy of each notice
of default received by Sublandlord in its capacity as tenant under the
Overlease. Subtenant agrees to forward to Sublandlord, upon receipt thereof,
copies of any notices received by Subtenant with respect to the Premises from
Over-landlord or from any governmental authorities.
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<PAGE>
7. Representations
---------------
7.1. Sublandlord represents and covenants (a) that it is the holder of the
interest of the tenant under the Overlease, and (b) that the Overlease is in
full force and effect.
8. Subject to: Subordination
------------------------
8.1. This Sublease is subject to, and Subtenant accepts this Sublease
subject to, any amendments and supplements to the Overlease hereafter made
between Overlandlord and Sublandlord, provided that any such amendment or
supplement to the Overlease will not prevent or adversely affect the use by
Subtenant of the Premises in accordance with the terms of this Sublease,
increase the obligations of Subtenant or decrease its rights under the Sublease
or in any other way materially adversely affect Subtenant.
8.2. This Sublease is subject and subordinate to the Overlease and to ail
ground or underlying leases and to all mortgages which may now or hereafter
affect such leases or the real property of which the Premises are a part and all
renewals, modifications, replacements and extensions of any of the foregoing.
This Section 8.2 shall be self-operative and no further instrument of
subordination shall be required. To confirm such subordination, Subtenant shall
execute promptly any certificate that Sublandlord may request.
The subletting under this Sublease is subject to the condition and by its
acceptance of and entry into this Sublease, Subtenant shall be deemed
conclusively to have thereby agreed from and after the termination of the
Overlease or re-entry by Overlandlord of or if Overlandlord shall otherwise
succeed to Sublandlord's estate in the Leased Space, that Subtenant shall waive
any right to surrender possession or to terminate this Sublease and, at
Overlandlord's election, Subtenant shall be bound to Overlandlord for the
balance of the term of this Sublease and shall attorn to and recognize
Overlandlord, as its Overlandlord, under all of the then executory terms
-7-
<PAGE>
of this Sublease, except that Overlandlord shall not (i) be liable for any
previous act, omission or negligence of Sublandlord under this Sublease, (ii) be
subject to any counterclaim, defense or offset not expressly provided for in
this Sublease which theretofore accrued to Subtenant against Sublandlord, (iii)
be bound by any previous modification or amendment of this Sublease or by any
previous prepayment of rent and additional rent more than 30 days in advance of
its due date which shall be payable as provided in this Sublease, (iv) be
obligated to repair the Premises or the Building or any part thereof, in the
event of total or substantially total damage thereof as is provided in Article
10 of the Overlease unless such repair is otherwise Overlandlord's obligations,
as landlord under the Overlease, (v) be obligated to repair the Premises or the
Building or any part thereof, in the event of partial condemnation beyond such
repair as can reasonably be accomplished from the net proceeds of any award
actually made available to Overlandlord as consequential damages allocable to
the part of the Premises or the Building not taken, or (vi) be obligated to
perform any work in the Premises to prepare them for occupancy, beyond
Overlandlord's obligations pursuant to the Overlease, and Subtenant shall
execute and deliver to Overlandlord any instruments Overlandlord may reasonably
request to evidence and confirm such attornment.
9. Brokerage
---------
9.1. Subtenant covenants, represents and warrants that Subtenant has had no
dealings or communications with any broker or agent in connection with the
consummation of this Sublease other than Newmark & Company Real Estate, Inc.,
which is representing Sublandlord (hereinafter called the "Broker"), and
Subtenant covenants and agrees to pay, hold harmless and indemnify Sublandlord
from and against any and all cost, expense (including reasonable attorneys'
fees) or liability for any compensation, commissions or charges claimed by
-8-
<PAGE>
any broker or agent other than the Broker with respect to this Sublease or the
negotiation thereof. Sublandlord agrees to pay (or cause to be paid) the
commission payable to the Broker in accordance with a separate agreement with
the Broker regarding such commission.
10. Article 28 Rent
---------------
10.1. Subtenant stipulates that it is familiar with the provisions of
Article 28 of the Overlease. In the event of any payment of additional rent by
Sublandlord to Overlandlord during the term of this Sublease which increase is
attributable to the provisions of Article 28 of the Overlease with respect to
Taxes (as defined in the Overlease) or with respect to Energy Costs (as defined,
in the Overlease)(such additional rent payable by Sublandlord pursuant to
Article 28 of the Overlease with respect to Taxes and Energy Costs being
hereinafter called "Article 28 Rent") then Subtenant shall pay as additional
rent pursuant to this Sublease an amount equal to thirty-five (35%) percent of
Article 28 Rent. At any time after Sublandlord shall have received a statement
from the Overlandlord concerning the payment of Article 28 Rent, Sublandlord may
deliver to Subtenant a copy thereof and, within ten (10) days after delivery of
such statement, Subtenant shall pay to Sublandlord additional rent determined as
aforesaid in this Section 10.1. Additional rent payable pursuant to this Section
10.1 shall be based solely upon actual payments required by Sublandlord pursuant
to the provisions of Article 28 of the Overlease; provided, however, that,
notwithstanding anything to the contrary contained herein or in the Overlease,
for purposes of calculating the additional rent payable by Subtenant under this
Section 10.1, (i) all calculations of Article 28 Rent attributable to increases
in Taxes shall be calculated assuming a Base Tax Year commencing July 1, 1996
and ending June 30, 1997, and (ii) all calculations of Article 28 Rent
attributable to increases in Energy Costs shall be calculated assuming a Base
-9-
<PAGE>
Energy Year of 1996. Subtenant shall not have the right to question the
propriety of or the basis for any such payment and Sublandlord shall be under no
obligation to contest any such payment.
10.2. From and after September 1, 1997, Subtenant shall pay to Sublandlord,
on the first day of each month during the remainder of the Sublease Term, as
additional rent in lieu of the additional rent due under Article 28 of the
Original Lease attributable to increases in Labor Rates (as defined in the
Overlease), the following stipulated amounts (hereinafter called the "Escalation
Rent") as agreed-upon escalation payments to reimburse Sublandlord for its
payments to Overlandlord for additional rent due under Article 28 of the
Original Lease attributable to increases in Labor Rates, without regard to
whether or by how much such costs may actually rise:
(i) For the period commencing on September 1, 1997 and ending
on August 31, 1998, both dates inclusive, Escalation Rent at the annual rate of
TWO THOUSAND ONE HUNDRED FIFTY-EIGHT AND 20/100 ($2,158.20) DOLLARS payable in
twelve (12) equal monthly installments of ONE HUNDRED SEVENTY-NINE AND 85/100
($179.85) DOLLARS each;
(ii) For the period commencing on September 1, 1998 and ending
on August 31, 1999, both dates inclusive, Escalation Rent at the annual rate of
FOUR THOUSAND THREE HUNDRED EIGHTY-ONE AND 15/100 ($4,38 1.15) DOLLARS payable
in twelve (12) equal monthly installments of THREE HUNDRED SIXTY-FIVE AND 10/100
($365.10) DOLLARS each;
(iii) For the period commencing on September 1, 1999 and ending
on the Sublease Expiration Date, both dates inclusive, Escalation Rent at the
annual rate of SIX THOUSAND SIX HUNDRED SEVENTY AND 78/100 ($6,670.78) DOLLARS
-10-
<PAGE>
payable in twelve (12) equal monthly installments of FIVE HUNDRED FIFTY-FIVE AND
90/100 ($555.90) DOLLARS each. Subtenant shall not have the right to question
the propriety of or the basis for any such payment and Sublandlord shall be
under no obligation to contest any such payment.
11. Notices
-------
11.1. Any notice, demand or communication which, under the terms of this
Sublease or under any statute or municipal regulation must or may be given or
made by the parties hereto, shall-be in writing and given or made by mailing the
same by registered or certified mail, return receipt requested, addressed to the
party for whom intended at its address as aforesaid, except that, after the
Sublease Commencement Date, Subtenant's address shall be deemed to be the
Building unless Subtenant shall give notice to the contrary. Either party,
however, may designate such new or other address to which such notices, demands
or communications thereafter shall be given, made or mailed by notice given in
the manner prescribed herein. Any such notice, demand or communication shall be
deemed given or served, as the case may be, on the date of the posting thereof
12. Electric
--------
12.1. The annual fixed rent specified in Section 1.1 hereof includes
$13,080.00 per annum (hereinafter called the "Electric Charge") representing the
estimated charge for furnishing electrical service to the Premises. The Electric
Charge is based upon certain theoretical assumptions incorporating estimates of
the probable consumption of electric energy by the lighting fixtures and other
equipment and business machines initially proposed to be installed in the
Premises and associated with a usual office occupancy, the anticipated periods
of operation
-11-
<PAGE>
of such lighting fixtures, equipment and machines and the cost of furnishing
such electric energy consumption therein.
12.2. (1) At any time, and from time to time during the term hereof, the
Electric Charge may be increased to take into account:
A. any material addition to the lighting fixtures, equipment
and machines in the Premises,
B. use by Subtenant of electrical energy in the Premises during
periods of use other than those considered in the last survey made
pursuant to this Section 12.2, or
C. any increase in Sublandlord's costs or expenses for or in
connection with the furnishing by it of electrical energy to
Subtenant which shall be due to any change in the rates charged by
the public utility furnishing electrical energy to the Building or to
any change in taxes based on the amounts charged by said public
utility since the effective date of the Electric Charge then in
effect.
(2) Whenever at any time during the term of this Sublease the Electric
Charge shall be increased pursuant to subdivision A or B of clause (1) of this
Section 12.2, Sublandlord shall furnish to Subtenant a survey setting forth a
new Electric Charge (hereinafter sometimes called an "Adjusted Electric
Charge"). Whenever there shall be an increase in the cost to Sublandlord of
obtaining electric energy pursuant to subdivision C of clause (1) of this
Section 12.2, the Electric Charge or Adjusted Electric Charge shall be increased
in the same proportion as the increase in such cost to Sublandlord.
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<PAGE>
(3) Upon the determination of the Adjusted Electric Charge pursuant
to subdivisions A and/or B of clause (1) of this Section 12.2, Sublandlord shall
furnish Subtenant with a statement in writing recomputing and adjusting the
annual fixed rent payable hereunder by an appropriate sum representing any
increase from the then current Adjusted Electric Charge, which statement shall
be accompanied by the survey upon which said adjustment was based, or, in the
case of any adjustment made pursuant to subdivision C of clause (1) of this
Section 12.2, by the inclusion of sufficient detail to enable Subtenant to
verify the adjustment referred to therein.
(4) Each such increase shall be effective retroactively as of
(i) the effective date of the material addition in usage by
Subtenant, as respects any increase made pursuant to subdivision A or B of
clause (1) of this Section 12.2, or
(ii) the date of the change in rates or taxes, as respects any
increase made pursuant to subdivision C of clause (1) of this Section 12.2
Within twenty (20) days after furnishing of any such statement in writing,
Subtenant shall pay Sublandlord as additional rent the retroactive underpayment
of annual fixed rent.
The cost of any survey and determination to be made pursuant to clause
(1) of this Section 12.2 shall be borne equally between Sublandlord and
Subtenant. The determination of the engineers and experts preparing any such
survey shall be conclusive upon Sublandlord and Subtenant.
(5) All such surveys shall be made by a reputable firm selected by
Sublandlord and engaged primarily in the business of performing commercial
office electrical consumption surveys.
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<PAGE>
(6) Notwithstanding anything contained to the contrary in this
Article 12, the cost to Subtenant for electric energy at any time shall be no
less than the cost to Sublandlord to supply electric energy to Subtenant at the
Premises.
13. Alterations
-----------
13.1. Subtenant may make no changes, alterations, additions, improvements
or decorations in, to or about the Premises without Sublandlord's prior written
consent; provided, however, Subtenant shall have the right, at Subtenant's sole
cost and expense, during the term of this Sublease to remove the non-structural
partitioning wall in accordance with the plans and specifications annexed hereto
and made a part hereof as Exhibit C, provided that same does not adversely
affect the Building's mechanical systems and services and that Tenant shall
repair and restore in a good and workmanlike manner any damage to the Premises
or the Building caused by such removal of such wall, and that the removal of
such wall shall be performed in accordance with Article 3 of the Overlease.
14. Security
--------
14.1. Subtenant is simultaneously herewith delivering to Sublandlord the
sum of $14,170.00 as security for the faithful performance and observance by
Subtenant of the terms, provisions, covenants and conditions of this Sublease;
it is agreed that in the event Subtenant defaults in respect of any of the
terms, provisions, covenants and conditions of this Sublease, including, but not
limited to, the payment of fixed annual rent and additional rent, Sublandlord
may use, apply or retain the whole or any part of the security so deposited to
the extent required for the payment of any fixed annual rent and additional rent
or any other sum as to which Subtenant is in default or for any sum which
Sublandlord may expend or may be required to expend by reason of Subtenant's
default in respect of any of the terms, provisions, covenants and
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<PAGE>
conditions of this Sublease, including but not limited to, any damages or
deficiency accrued before or after summary proceedings or other re-entry by
Sublandlord. In the event that Subtenant shall fully and faithfully comply with
all of the terms, provisions, covenants and conditions of this Sublease, the
security shall be returned to Subtenant after the date fixed as the end of this
Sublease and after delivery of entire possession of the Premises to Sublandlord.
In the event of a transfer or assignment of Sublandlord's interest in the
Premises, Sublandlord shall have the right to transfer the security to the
assignee or transferee and Sublandlord shall thereupon be released by Subtenant
from all liability for the return of such security; and Subtenant agrees to look
solely to the new landlord or sublandlord for the return of said security.
Subtenant further covenants that it will not assign or encumber or attempt to
assign or encumber the monies deposited herein as security and that neither
Sublandlord nor its successors or assigns shall be bound by any such assignment,
encumbrance, attempted assignment or attempted encumbrance. In the event
Sublandlord applies or retains any portion or all of the security deposited,
Subtenant shall forthwith restore the amount so applied or retained so that at
all times the amount deposited shall be $14,170.00.
14.2. In the event Subtenant defaults in respect to any of the terms,
provisions, covenants and conditions of this Sublease, including, but not
limited to, the payment of rent and additional rent, Sublandlord may use, apply
or retain the whole or any part of the security so deposited to the extent
required for the payment of any rent and additional rent or any other sum as to
which Subtenant is in default or for any sum which Sublandlord may expend or may
be required to expend by reason of Subtenant's default in respect of any of the
terms, provisions, covenants, and conditions of this Sublease, including but not
limited to, any damages or deficiency accrued before or after summary
proceedings or other re-entry by Sublandlord.
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<PAGE>
14.3. In the event Sublandlord applies or retains any portion or all of
the security delivered hereunder, Subtenant shall forthwith restore the amount
so applied or retained so that at all times the amount deposited shall be not
less than the security required by Section 14.1.
15. Quiet Enjoyment
--------------
15.1. So long as Subtenant pays all of the rent and additional rent due
under this Sublease and performs all of Subtenant's other obligations hereunder,
Sublandlord shall not disturb or terminate Subtenant's leasehold estate
hereunder, subject, however, to the terms, provisions and obligations of this
Sublease and the Overlease.
16. Sign and Directory Listings.
------------------------------
16.1. Subject to the provisions of Section 37(D) of the Overlease,
Subtenant will have the right to maintain a sign on floor 12A of the Building
outside of the Premises, which sign shall be in conformity with building
standards and installed by Overlandlord at Subtenant's expense. Sublandlord
agrees to provide to Subtenant six (6) listings of the names of Subtenant, and
its partners and employees on the directory in the lobby of Building
(Sublandlord is currently entitled to such directory listings pursuant to the
terms of the Overlease). The listing of any name other than that of Subtenant,
whether on the doors of the Premises, outside of the Premises or on the Building
directory, or otherwise, shall not operate to vest any right or interest in this
Sublease-or in the Premises or be deemed to be the written consent of
Overlandlord or Sublandlord to the occupancy of any portion of the Premises by
such person, firm, association or corporation, it being expressly understood
that any such listing is a privilege extended by Overlandlord revocable at will
by written notice to Subtenant.
-16-
<PAGE>
17. Miscellaneous
-------------
17.1. This Sublease may not be changed orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
17.2. This Sublease shall not be binding upon Sublandlord unless and until
it is signed by Sublandlord and delivered to Subtenant. This Section 17.2 shall
not be deemed to modify the provisions of Article 6 hereof.
17.3. This Sublease constitutes the entire agreement between the parties
and all representations and understandings have been merged herein.
17.4. This Sublease shall inure to the benefit of all of the parties
hereto, their successors and (subject to the provisions hereof) their assigns.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the day and year first above written.
ATTEST: KBC OF AMERICA, INC., Sublandlord
_______________________ By:
----------------------------
Name: BARBET
Title: CEO
ATTEST PROSPECTUS PLUS, INC., Subtenant
/s/ John Muldern By:
- ----------------------- ----------------------------
Name:
Title:
-17-
<PAGE>
EXHIBIT A
---------
Overlease
---------
The following documents are attached hereto:
1. Letter Agreement dated November 18, 1991 between Nineteen New York
Properties Limited Partnership ("19 Properties") and KBC America, Inc.
("KBC");
2. First Amendment of Lease dated November 12, 1991 between 19 Properties
and KBC; and
3. Agreement of Lease dated May 19, 1989 between 19 Properties and KBC.
<PAGE>
EXHIBIT B
---------
PREMISES
--------
<PAGE>
1372 BROADWAY
[FLOOR PLAN APPEARS HERE]
<PAGE>
EXHIBIT C
---------
PLANS FOR WALL TO BE REMOVED
----------------------------
<PAGE>
1372 BROADWAY
[FLOOR PLAN APPEARS HERE]
<PAGE>
EXHIBIT 10.16
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY STATE. THEY MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR THE COMPANY HAS RECEIVED THE OPINION OF
COUNSEL REASONABLY SATISFACTORY TO IT TO THE EFFECT THAT AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
15,384 Warrants December 18, 1997
INTRALINKS INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Landwell Financial Services, Inc. or its assigns or designees
(the "Holder") is the owner of the number of warrants ("Warrants") specified
above, each of which entitles the Holder thereof to purchase, at the time
specified herein but in any event no later than the close of business on or
before December 18, 2005 (the "Final Expiration Date") one fully paid and
non-assessable share of Common Stock, $.01 par value ("Common Stock"), of
IntraLinks Inc., a Delaware corporation (the "Company"), at the Exercise Price
(as hereinafter defined) per share of Common Stock in lawful money of the United
States of America in cash or by certified or cashier's check or a combination of
cash and certified or cashier's check (subject to adjustment as hereinafter
provided).
1. Warrant; Exercise Event
Each Warrant shall entitle the Holder to purchase one Warrant Share
(as hereinafter defined) of the Company upon the occurrence of an Exercise
Event. An "Exercise Event" is herein defined as the earlier to occur of (i) the
consummation by the Company of an equity financing in which the Company receives
gross proceeds of at least $3,000,000 (the "Subsequent Financing"); (ii) the
Company's initial public offering of its securities ("IPO"); or (iii) a Change
in Control of the Company. A "Change in Control" means an event or series of
events as a result of which (i) any "person" or "group" (as such terms are used
in Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) who is not currently a shareholder of the Company acquires
"beneficial ownership" (as determined in accordance with Rule 13d-3 under the
Exchange Act), directly or indirectly, of more than 50% of the total voting
power of the outstanding Voting Stock (as defined below) of the Company;
provided, however, that any such person or group shall not be deemed to be the
beneficial owner of, or to beneficially own, any Voting Stock tendered in a
tender or exchange offer until such Voting Stock is accepted for purchase or
exchange under such tender or exchange offer. For purposes hereof,
<PAGE>
Voting Stock means stock of any class or classes (or equivalent interests) if
the holders of the stock of such class or classes (or equivalent interests) are
ordinarily, in the absence of contingencies, entitled to vote for the election
of a majority of the directors (or Persons (as defined herein) performing
similar functions) of the corporation, association or other such business entity
involved, even though the right so to vote has been suspended by the happening
of a contingency. Persons means any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and any government
or any governmental agency or political subdivision thereof. The shares of
Common Stock issuable upon exercise of the Warrants (and/or other shares of
Common Stock so issuable by reason of any adjustments pursuant to Section 7) are
sometimes referred to herein as the "Warrant Shares."
2. Exercise Price
The exercise price payable upon exercise of the Warrants (the
"Exercise Price") shall be (i) if exercised upon consummation of the Subsequent
Financing, equal to a ten percent (10%) discount to the purchase price per share
of the Company's Common Stock, or equivalent share, purchased in the Subsequent
Financing; (ii) if exercised upon the IPO, equal to a ten percent (10%) discount
to the purchase price per share of the shares of the Company's Common Stock, or
equivalent shares, sold in the IPO; and (iii) if exercised upon a Change in
Control, equal to $6.50 per share, as adjusted pursuant to Section 7 hereof.
3. Manner of Exercise; Expiration
The Company shall provide the Holder with Notice of an Exercise
Event at least ten (10) days before the occurrence of the Exercise Event
("Exercise Event Notice"). The Warrants will be exercisable, at the option of
the Holder, in whole or in part at any time from the time the Holder receives
the Exercise Event Notice until 12:00 p.m. on the day of the Exercise Event
("Expiration Time") and upon surrender of this Warrant Certificate to the
Company, together with a duly completed Notice of Exercise in the form attached
hereto as Exhibit A, and payment of an amount equal to the Exercise Price times
the number of Warrants to be exercised. These Warrants will expire at the
Expiration Time. In the case of exercise of less than all the Warrants
represented by this Warrant Certificate, the Holder shall forfeit the balance of
such Warrants. If an Exercise Event does not occur on or prior to the Final
Expiration Date, this Warrant shall expire on the Final Expiration Date and the
Holder shall have no rights hereunder.
- 2 -
<PAGE>
4. Registration and Transfer on Company Books
4.1 The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
4.2 Prior to due presentment for registration of transfer of this
Warrant Certificate or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
4.3 The Company shall register upon its books any transfer of a
Warrant Certificate upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
5. Reservation of Shares
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares of Common Stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all Warrant Shares shall be duly and validly issued and fully
paid and non-assessable and free from all taxes, liens and charges with respect
to the issue thereof and that upon issuance, such Warrant Shares shall be listed
on each national securities exchange, if any, on which the other shares of such
outstanding capital stock of the Company are then listed.
6. Loss or Mutilation
Upon receipt by the Company of reasonable evidence of the ownership
of and the loss, theft, destruction or mutilation of any Warrant Certificate
and, in the case of loss, theft or destruction, an indemnity reasonably
satisfactory to the Company, or, in the case of mutilation, upon surrender and
cancellation of the mutilated Warrant Certificate, the Company shall execute and
deliver in lieu thereof a new Warrant Certificate representing an equal number
of Warrants.
- 3 -
<PAGE>
7. Adjustment of Exercise Price and Number of Shares Deliverable
7.1 The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Exercise Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by
reclassification of its Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing corporation) other securities of the Company, the number and/or
nature of Warrant Shares purchasable upon exercise of each Warrant
immediately prior thereto shall be adjusted so that the Holder shall be
entitled to receive the kind and number of Warrant Shares or other
securities of the Company which he would have owned or have been entitled
to receive after the happening of any of the events described above had
such Warrant been exercised immediately prior to the happening of such
event or any record date with respect thereto. An adjustment made pursuant
to this Paragraph (a) shall become effective retroactively as of the
record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other
than a consolidation or merger in which the outstanding shares of the
Company's Common Stock are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other
disposition to another corporation of all or substantially all the
properties and assets of the Company, the Holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition that appropriate provisions
shall be made so that such Holder shall thereafter be entitled to
purchase) the kind and amount of shares of stock and other securities and
property (including cash) which the Holder would have been entitled to
receive had such Warrants been exercised immediately prior to the
effective date of such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition; and in any such case,
appropriate adjustments shall be made in the application of the provisions
of this Section 7 with respect to rights and interest thereafter of the
Holder of the Warrants so that the provisions of this Section 7 shall
thereafter be applicable,
- 4 -
<PAGE>
as near as reasonably may be, in relation to any shares or other property
thereafter purchasable upon the exercise of the Warrants. The provisions
of this Section 7.1(b) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales,
transfers or other dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 7.1, the
Exercise Price with respect to the Warrant Shares shall be adjusted by
multiplying such Exercise Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
7.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Exercise Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Exercise Price thereof; provided, however, that any
adjustments which by reason of this Section 7.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
7.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Exercise Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Exercise Price of such Warrant Shares after such
adjustment, and a brief, statement of the facts requiring such adjustment.
7.4 The form of Warrant Certificate need not be changed because of
any change in the Exercise Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 7, and Warrant Certificates issued before or after such change may state
the same Exercise Price, the same number of Warrants and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an
- 5 -
<PAGE>
outstanding Warrant Certificate or otherwise, may be in the form as so changed.
8. Voluntary Adjustment by the Company
The Company may, at its option, at any time during the term of the
Warrants, extend the date of the expiration of the Warrants.
9. Fractional Shares and Warrants; Determination of Market Price Per
Share
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the exercise of Warrants. Warrants may not be exercised in
such number as would result (except for the provisions of this paragraph) in the
issuance of a fraction of a share of Common Stock unless the Holder is
exercising all Warrants then owned by the Holder. In such event, the Company
shall, upon the exercise of all of such Warrants, issue to the Holder the
largest aggregate whole number of shares of Common Stock called for thereby upon
receipt of the Exercise Price for all of such Warrants and pay a sum in cash
equal to the remaining fraction of a share of Common Stock, multiplied by its
Market Price Per Share (as determined pursuant to Section 9.2 below) as of the
last business day preceding the date on which the Warrants are presented for
exercise.
9.2 As used herein, the "Market Price Per Share" with respect to any
class or series of Common Stock on any date shall mean the closing price per
share of such class or series of Common Stock for the trading day immediately
preceding such date. The closing price for each such day shall be the last sale
price regular way or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case on the principal
securities exchange on which the shares of such Common Stock of the Company are
listed or admitted to trading, the last sale price, or in case no sale takes
place on such day, the average of the closing bid and asked prices of such
Common Stock on NASDAQ or any comparable system, or if such Common Stock is not
reported on NASDAQ or a comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share" shall be equal to the fair market value of such Common Stock as
determined in good faith by the Board of Directors of the Company.
- 6 -
<PAGE>
10. Issue Tax
The issuance of certificates for shares of Common Stock upon
exercise of the Warrants shall be made without charge to the holders of such
Warrants for any issuance tax in respect thereof provided that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of any holder of the Warrants.
11. Registration Rights
The rights of the holder hereof with respect to the registration
under the Securities Act of 1933, as amended, of the Warrant Shares are set
forth in the Registration Rights Agreement, of even date herewith by and among
the Company and the several parties to such agreement.
12. Governing Law
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 18th day of December, 1997.
[SEAL] INTRALINKS INC.
By:
---------------------------
Name:
Title:
- 7 -
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 3 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Exercise Price of such shares in full.
---------------------------------------
Name of Holder
---------------------------------------
Signature
Address:
---------------------------------------
---------------------------------------
---------------------------------------
- 8 -
<PAGE>
EXHIBIT 10.17
Warrant Certificate
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS INC.
27,000 Warrants
INTRALINKS INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Perseus Capital, LLC or registered assigns (the "Holder") is the
owner of the number of warrants ("Warrants") specified above, each of which
entitles the Holder thereof to purchase, at any time on or before the Expiration
Date (hereinafter defined) one fully paid and non-assessable share of the Series
B Preferred Stock, par value $0.01 per share ("Series B Preferred Stock"), of
IntraLinks Inc., a Delaware corporation (the "Company"), at a purchase price per
share of Series B Preferred Stock as set forth herein in lawful money of the
United States of America in cash or by certified or cashier's check.
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Series B Preferred Stock of the Company and the purchase price per share of
Series B Preferred Stock payable upon exercise of the Warrants (the "Purchase
Price") shall initially be $6.50; provided, however, that in the event of an
adjustment to the conversion price of the Series B Preferred Stock pursuant to
the Series B Preferred Stock Certificate of Designation dated December 17, 1997,
as amended, the Purchase Price shall be similarly adjusted. The Purchase Price
and number of shares of Series B Preferred Stock issuable upon exercise of each
Warrant are subject to adjustment as provided in Article 6. The shares of
Series B Preferred Stock issuable upon exercise of the Warrants (and/or other
shares of Series B Preferred Stock so issuable by reason of any adjustments
pursuant to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as Exhibit A, and payment of an amount equal to the Purchase Price times
---------
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time
five (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1 The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3 The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
4. Reservation of Shares
---------------------
The Company covenants that it will as promptly as practicable
following the date of this Warrant, reserve and keep available out of its
authorized capital stock, solely for the purpose of issue upon exercise of the
Warrants, such number of shares of Series B Preferred Stock as shall then be
issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of capital stock which shall be issuable upon exercise of the
Warrants shall, at the time of such exercise, be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issue thereof, and that upon
-2-
<PAGE>
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6 Adjustment of Purchase Price and Number of Shares Deliverable
-------------------------------------------------------------
6.1 The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Series B Preferred Stock payable in shares of its
capital stock, (ii) subdivide its outstanding shares of Series B Preferred
Stock through stock split or otherwise, (iii) combine its outstanding
shares of Series B Preferred Stock into a smaller number of shares of
Series B Preferred Stock, or (iv) issue by reclassification of its Series B
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation)
other securities of the Company, the number and/or nature of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Series B Preferred Stock are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other
disposition to another corporation of all or substantially all the
properties and assets of the Company, the Holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition that appropriate provisions
shall be made so that such Holder shall thereafter be entitled to purchase)
the kind and amount of shares
-3-
<PAGE>
of stock and other securities and property (including cash) which the
Holder would have been entitled to receive had such Warrants been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
6.4 The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange
-4-
<PAGE>
or substitution for an outstanding Warrant Certificate or otherwise, may be in
the form as so changed.
7. Conversion Rights.
-----------------
In lieu of exercising this Warrant or any portion hereof, the Holder
hereof shall have the right to convert this Warrant or any portion hereof into
Warrant Shares by executing and delivering to the Company at its principal
office the written Notice of Conversion attached hereto as Exhibit B, specifying
---------
the portion of the Warrant Shares to be converted and accompanied by this
Warrant. The number of Warrant Shares to be issued to Holder upon such
conversion shall be computed using the following formula:
X=(P)(Y)(A-B)/A
where X= the number of Warrant Shares to be issued to the Holder for the
portion of the Warrant being converted.
P= the portion of the Warrant being converted expressed as a decimal
fraction.
Y= the total number of Warrant Shares issuable upon exercise of the
Warrant in full.
A= the fair market value of one Warrant Share shall mean (i) the
fair market value of one share of the Company's Series B
Preferred Stock as of the last business day immediately prior to
the date the notice of conversion is received by the Company, as
determined in good faith by the Company's Board of Directors, or
(ii) if this Warrant is being converted in conjunction with a
public offering of the Company's common stock, par value $.01
(the "Common Stock"), the price to the public per share of Common
Stock pursuant to the offering.
B= the Purchase Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately canceled.
This Warrant or any portion hereof shall be deemed to have been converted
immediately prior to the close of business on the date of its surrender for
conversion as provided above, and the person entitled to receive the Warrant
Shares issuable upon such conversion shall be treated for all purposes as Holder
of such shares of record as of the close of business on such date. As promptly
as practicable after such date, the Company shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of full Warrant Shares issuable upon such conversion. If the Warrant
shall be converted for less than the total number of Warrant Shares then
issuable upon conversion, promptly after surrender of the Warrant upon such
conversion, the Company will execute and deliver a new Warrant, dated the date
hereof,
-5-
<PAGE>
evidencing the right of the Holder to the balance of the Warrant Shares
purchasable hereunder upon the same terms and conditions set forth herein.
8. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
9. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Series B
Preferred Stock in connection with the exercise of Warrants. Warrants may not
be exercised in such number as would result (except for the provisions of this
paragraph) in the issuance of a fraction of a share of Series B Preferred Stock
unless the Holder is exercising all Warrants then owned by the Holder. In such
event, the Company shall, upon the exercise of all of such Warrants, issue to
the Holder the largest aggregate whole number of shares of Series B Preferred
Stock called for thereby upon receipt of the Purchase Price for all of such
Warrants and pay a sum in cash equal to the remaining fraction of a share of
Series B Preferred Stock, multiplied by its Market Price Per Share (as
determined pursuant to Section 9.2 below) as of the last business day preceding
the date on which the Warrants are presented for exercise.
9.2 As used herein, the "Market Price Per Share" with respect to any
share of stock on any specified date shall mean the closing price per share of
such stock for the trading day immediately preceding such date. The closing
price for each such day shall be the last sale price regular way or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the principal securities exchange on which
the shares of such stock of the Company are listed or admitted to trading, the
last sale price, or in case no sale takes place on such day, the average of the
closing bid and asked prices of such stock on NASDAQ or any comparable system,
or if such stock is not reported on NASDAQ, or a comparable system, the average
of the closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If such bid and asked prices are not available, then
"Market Price Per Share" shall be equal to the fair market value of such stock
as determined in good faith by the Board of Directors of the Company.
10. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THESE WARRANTS HAVE NOT BEEN
REGISTERED UNDER THE
-6-
<PAGE>
SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY NOT BE
SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF THESE
WARRANTS IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
11. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
12. Issue Tax
---------
The issuance of Warrant Shares upon exercise of the Warrants
shall be made without charge to the holders of such Warrants for any issuance
tax in respect thereof provided that the Company shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than that of any holder of the
Warrants.
13. Registration Rights
-------------------
The rights of the holder hereof with respect to registration
under the Securities Act of 1933, as amended, of the Warrant Shares are set
forth in the Registration Rights Agreement dated as of December 18, 1997 by and
among the Company and the several parties to such agreement.
-7-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 20th day of August, 1998.
INTRALINKS INC.
By:
---------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise, _____
Warrants of the total number of Warrants owned by the undersigned pursuant to
the accompanying Warrant Certificate, and herewith makes payment of the Purchase
Price of such shares in full.
______________________
Name of Holder
/s/
______________________
Signature
Address:
______________________
______________________
______________________
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion,_______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Series B Preferred Stock of
the Company (the "Shares").
The numnber of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7 of the accompanying Warrant
Certificate.
____________________
Name of Holder
/s/
____________________
Signature
Address:
____________________
____________________
<PAGE>
EXHIBIT 10.18
Warrant Certificate
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS INC.
27,000 Warrants
INTRALINKS INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Catalyst Investments (Belgium) NV or registered assigns (the
"Holder") is the owner of the number of warrants ("Warrants") specified above,
each of which entitles the Holder thereof to purchase, at any time on or before
the Expiration Date (hereinafter defined) one fully paid and non-assessable
share of the Series B Preferred Stock, par value $0.01 per share ("Series B
Preferred Stock"), of IntraLinks Inc., a Delaware corporation (the "Company"),
at a purchase price per share of Series B Preferred Stock as set forth herein in
lawful money of the United States of America in cash or by certified or
cashier's check.
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Series B Preferred Stock of the Company and the purchase price per share of
Series B Preferred Stock payable upon exercise of the Warrants (the "Purchase
Price") shall initially be $6.50; provided, however, that in the event of an
adjustment to the conversion price of the Series B Preferred Stock pursuant to
the Series B Preferred Stock Certificate of Designation dated December 17, 1997,
as amended, the Purchase Price shall be similarly adjusted. The Purchase Price
and number of shares of Series B Preferred Stock issuable upon exercise of each
Warrant are subject to adjustment as provided in Article 6. The shares of
Series B Preferred Stock issuable upon exercise of the Warrants (and/or other
shares of Series B Preferred Stock so issuable by reason of any adjustments
pursuant to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as Exhibit A, and payment of an amount equal to the Purchase Price times
---------
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time
five (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1 The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3 The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
4. Reservation of Shares
---------------------
The Company covenants that it will as promptly as practicable
following the date of this Warrant, reserve and keep available out of its
authorized capital stock, solely for the purpose of issue upon exercise of the
Warrants, such number of shares of Series B Preferred Stock as shall then be
issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of capital stock which shall be issuable upon exercise of the
Warrants shall, at the time of such exercise, be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issue thereof, and that upon
-2-
<PAGE>
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price and Number of Shares Deliverable
-------------------------------------------------------------
6.1 The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Series B Preferred Stock payable in shares of its
capital stock, (ii) subdivide its outstanding shares of Series B Preferred
Stock through stock split or otherwise, (iii) combine its outstanding
shares of Series B Preferred Stock into a smaller number of shares of
Series B Preferred Stock, or (iv) issue by reclassification of its Series B
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation)
other securities of the Company, the number and/or nature of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Series B Preferred Stock are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other
disposition to another corporation of all or substantially all the
properties and assets of the Company, the Holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition that appropriate provisions
shall be made so that such Holder shall thereafter be entitled to purchase)
the kind and amount of shares
-3-
<PAGE>
of stock and other securities and property (including cash) which the
Holder would have been entitled to receive had such Warrants been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
6.4 The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange
-4-
<PAGE>
or substitution for an outstanding Warrant Certificate or otherwise, may be in
the form as so changed.
7. Conversion Rights.
-----------------
In lieu of exercising this Warrant or any portion hereof, the Holder
hereof shall have the right to convert this Warrant or any portion hereof into
Warrant Shares by executing and delivering to the Company at its principal
office the written Notice of Conversion attached hereto as Exhibit B, specifying
---------
the portion of the Warrant Shares to be converted and accompanied by this
Warrant. The number of Warrant Shares to be issued to Holder upon such
conversion shall be computed using the following formula:
X=(P)(Y)(A-B)/A
where X= the number of Warrant Shares to be issued to the Holder for the
portion of the Warrant being converted.
P= the portion of the Warrant being converted expressed as a decimal
fraction.
Y= the total number of Warrant Shares issuable upon exercise of the
Warrant in full.
A= the fair market value of one Warrant Share shall mean (i) the
fair market value of one share of the Company's Series B
Preferred Stock as of the last business day immediately prior to
the date the notice of conversion is received by the Company, as
determined in good faith by the Company's Board of Directors, or
(ii) if this Warrant is being converted in conjunction with a
public offering of the Company's common stock, par value $.01
(the "Common Stock"), the price to the public per share of Common
Stock pursuant to the offering.
B= the Purchase Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately canceled.
This Warrant or any portion hereof shall be deemed to have been converted
immediately prior to the close of business on the date of its surrender for
conversion as provided above, and the person entitled to receive the Warrant
Shares issuable upon such conversion shall be treated for all purposes as Holder
of such shares of record as of the close of business on such date. As promptly
as practicable after such date, the Company shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of full Warrant Shares issuable upon such conversion. If the Warrant
shall be converted for less than the total number of Warrant Shares then
issuable upon conversion, promptly after surrender of the Warrant upon such
conversion, the Company will execute and deliver a new Warrant, dated the date
hereof,
-5-
<PAGE>
evidencing the right of the Holder to the balance of the Warrant Shares
purchasable hereunder upon the same terms and conditions set forth herein.
8. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
9 Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Series B
Preferred Stock in connection with the exercise of Warrants. Warrants may not
be exercised in such number as would result (except for the provisions of this
paragraph) in the issuance of a fraction of a share of Series B Preferred Stock
unless the Holder is exercising all Warrants then owned by the Holder. In such
event, the Company shall, upon the exercise of all of such Warrants, issue to
the Holder the largest aggregate whole number of shares of Series B Preferred
Stock called for thereby upon receipt of the Purchase Price for all of such
Warrants and pay a sum in cash equal to the remaining fraction of a share of
Series B Preferred Stock, multiplied by its Market Price Per Share (as
determined pursuant to Section 9.2 below) as of the last business day preceding
the date on which the Warrants are presented for exercise.
9.2 As used herein, the "Market Price Per Share" with respect to any
share of stock on any specified date shall mean the closing price per share of
such stock for the trading day immediately preceding such date. The closing
price for each such day shall be the last sale price regular way or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the principal securities exchange on which
the shares of such stock of the Company are listed or admitted to trading, the
last sale price, or in case no sale takes place on such day, the average of the
closing bid and asked prices of such stock on NASDAQ or any comparable system,
or if such stock is not reported on NASDAQ, or a comparable system, the average
of the closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If such bid and asked prices are not available, then
"Market Price Per Share" shall be equal to the fair market value of such stock
as determined in good faith by the Board of Directors of the Company.
10. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THESE WARRANTS HAVE NOT BEEN
REGISTERED UNDER THE
-6-
<PAGE>
SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY NOT BE
SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF THESE
WARRANTS IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
11. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
12. Issue Tax
---------
The issuance of Warrant Shares upon exercise of the Warrants shall be
made without charge to the holders of such Warrants for any issuance tax in
respect thereof provided that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of any holder of the
Warrants.
13. Registration Rights
-------------------
The rights of the holder hereof with respect to registration under the
Securities Act of 1933, as amended, of the Warrant Shares are set forth in the
Registration Rights Agreement dated as of December 18, 1997 by and among the
Company and the several parties to such agreement.
-7-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 20th day of August, 1998.
INTRALINKS INC.
By: /s/
-------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
______________________________
Name of Holder
______________________________
Signature
Address:
______________________________
______________________________
______________________________
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Series B Preferred Stock of
the Company (the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7 of the accompanying Warrant
Certificate.
______________________________
Name of Holder
______________________________
Signature
Address:
______________________________
______________________________
<PAGE>
EXHIBIT 10.19
Warrant Certificate
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS INC.
27,000 Warrants
INTRALINKS INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Euclid Partners IV, L.P. or registered assigns (the "Holder") is
the owner of the number of warrants ("Warrants") specified above, each of which
entitles the Holder thereof to purchase, at any time on or before the Expiration
Date (hereinafter defined) one fully paid and non-assessable share of the Series
B Preferred Stock, par value $0.01 per share ("Series B Preferred Stock"), of
IntraLinks Inc., a Delaware corporation (the "Company"), at a purchase price per
share of Series B Preferred Stock as set forth herein in lawful money of the
United States of America in cash or by certified or cashier's check.
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Series B Preferred Stock of the Company and the purchase price per share of
Series B Preferred Stock payable upon exercise of the Warrants (the "Purchase
Price") shall initially be $6.50; provided, however, that in the event of an
adjustment to the conversion price of the Series B Preferred Stock pursuant to
the Series B Preferred Stock Certificate of Designation dated December 17, 1997,
as amended, the Purchase Price shall be similarly adjusted. The Purchase Price
and number of shares of Series B Preferred Stock issuable upon exercise of each
Warrant are subject to adjustment as provided in Article 6. The shares of
Series B Preferred Stock issuable upon exercise of the Warrants (and/or other
shares of Series B Preferred Stock so issuable by reason of any adjustments
pursuant to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as Exhibit A, and payment of an amount equal to the Purchase Price times
---------
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time
five (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1 The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3 The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
4. Reservation of Shares
---------------------
The Company covenants that it will as promptly as practicable
following the date of this Warrant, reserve and keep available out of its
authorized capital stock, solely for the purpose of issue upon exercise of the
Warrants, such number of shares of Series B Preferred Stock as shall then be
issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of capital stock which shall be issuable upon exercise of the
Warrants shall, at the time of such exercise, be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issue thereof, and that upon
-2-
<PAGE>
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price and Number of Shares Deliverable
-------------------------------------------------------------
6.1 The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Series B Preferred Stock payable in shares of its
capital stock, (ii) subdivide its outstanding shares of Series B Preferred
Stock through stock split or otherwise, (iii) combine its outstanding
shares of Series B Preferred Stock into a smaller number of shares of
Series B Preferred Stock, or (iv) issue by reclassification of its Series B
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation)
other securities of the Company, the number and/or nature of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Series B Preferred Stock are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other
disposition to another corporation of all or substantially all the
properties and assets of the Company, the Holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition that appropriate provisions
shall be made so that such Holder shall thereafter be entitled to purchase)
the kind and amount of shares
-3-
<PAGE>
of stock and other securities and property (including cash) which the
Holder would have been entitled to receive had such Warrants been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
6.4 The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange
-4-
<PAGE>
or substitution for an outstanding Warrant Certificate or otherwise, may be in
the form as so changed.
7. Conversion Rights.
-----------------
In lieu of exercising this Warrant or any portion hereof, the Holder
hereof shall have the right to convert this Warrant or any portion hereof into
Warrant Shares by executing and delivering to the Company at its principal
office the written Notice of Conversion attached hereto as Exhibit B, specifying
---------
the portion of the Warrant Shares to be converted and accompanied by this
Warrant. The number of Warrant Shares to be issued to Holder upon such
conversion shall be computed using the following formula:
X=(P)(Y)(A-B)/A
where X= the number of Warrant Shares to be issued to the Holder for the
portion of the Warrant being converted.
P= the portion of the Warrant being converted expressed as a decimal
fraction.
Y= the total number of Warrant Shares issuable upon exercise of the
Warrant in full.
A= the fair market value of one Warrant Share shall mean (i) the
fair market value of one share of the Company's Series B
Preferred Stock as of the last business day immediately prior to
the date the notice of conversion is received by the Company, as
determined in good faith by the Company's Board of Directors, or
(ii) if this Warrant is being converted in conjunction with a
public offering of the Company's common stock, par value $.01
(the "Common Stock"), the price to the public per share of Common
Stock pursuant to the offering.
B= the Purchase Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately canceled.
This Warrant or any portion hereof shall be deemed to have been converted
immediately prior to the close of business on the date of its surrender for
conversion as provided above, and the person entitled to receive the Warrant
Shares issuable upon such conversion shall be treated for all purposes as Holder
of such shares of record as of the close of business on such date. As promptly
as practicable after such date, the Company shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of full Warrant Shares issuable upon such conversion. If the Warrant
shall be converted for less than the total number of Warrant Shares then
issuable upon conversion, promptly after surrender of the Warrant upon such
conversion, the Company will execute and deliver a new Warrant, dated the date
hereof,
-5-
<PAGE>
evidencing the right of the Holder to the balance of the Warrant Shares
purchasable hereunder upon the same terms and conditions set forth herein.
8. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
9. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Series B
Preferred Stock in connection with the exercise of Warrants. Warrants may not
be exercised in such number as would result (except for the provisions of this
paragraph) in the issuance of a fraction of a share of Series B Preferred Stock
unless the Holder is exercising all Warrants then owned by the Holder. In such
event, the Company shall, upon the exercise of all of such Warrants, issue to
the Holder the largest aggregate whole number of shares of Series B Preferred
Stock called for thereby upon receipt of the Purchase Price for all of such
Warrants and pay a sum in cash equal to the remaining fraction of a share of
Series B Preferred Stock, multiplied by its Market Price Per Share (as
determined pursuant to Section 9.2 below) as of the last business day preceding
the date on which the Warrants are presented for exercise.
9.2 As used herein, the "Market Price Per Share" with respect to any
share of stock on any specified date shall mean the closing price per share of
such stock for the trading day immediately preceding such date. The closing
price for each such day shall be the last sale price regular way or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the principal securities exchange on which
the shares of such stock of the Company are listed or admitted to trading, the
last sale price, or in case no sale takes place on such day, the average of the
closing bid and asked prices of such stock on NASDAQ or any comparable system,
or if such stock is not reported on NASDAQ, or a comparable system, the average
of the closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If such bid and asked prices are not available, then
"Market Price Per Share" shall be equal to the fair market value of such stock
as determined in good faith by the Board of Directors of the Company.
10. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THESE WARRANTS HAVE NOT BEEN
REGISTERED UNDER THE
-6-
<PAGE>
SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY NOT BE
SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF THESE
WARRANTS IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
11. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
12. Issue Tax
---------
The issuance of Warrant Shares upon exercise of the Warrants shall be
made without charge to the holders of such Warrants for any issuance tax in
respect thereof provided that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of any holder of the
Warrants.
13. Registration Rights
-------------------
The rights of the holder hereof with respect to registration under the
Securities Act of 1933, as amended, of the Warrant Shares are set forth in the
Registration Rights Agreement dated as of December 18, 1997 by and among the
Company and the several parties to such agreement.
-7-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 20th day of August, 1998.
INTRALINKS INC.
By: /s/
------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
______________________________
Name of Holder
______________________________
Signature
Address:
______________________________
______________________________
______________________________
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Series B Preferred Stock of
the Company (the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7 of the accompanying Warrant
Certificate.
______________________________
Name of Holder
______________________________
Signature
Address:
______________________________
______________________________
<PAGE>
EXHIBIT 10.20
Warrant Certificate
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THESE
WARRANTS AND THE SHARES UNDERLYING THESE WARRANTS ARE
ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SET
FORTH IN THE PURCHASE AGREEMENT OF EVEN DATE HEREWITH,
A COPY OF WHICH MAY BE OBTAINED FROM INTRALINKS INC.
2,700 Warrants
INTRALINKS INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Patrick J. Wack, Jr. Family Trust or registered assigns (the
"Holder") is the owner of the number of warrants ("Warrants") specified above,
each of which entitles the Holder thereof to purchase, at any time on or before
the Expiration Date (hereinafter defined) one fully paid and non-assessable
share of the Series B Preferred Stock, par value $0.01 per share ("Series B
Preferred Stock"), of IntraLinks Inc., a Delaware corporation (the "Company"),
at a purchase price per share of Series B Preferred Stock as set forth herein in
lawful money of the United States of America in cash or by certified or
cashier's check.
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Series B Preferred Stock of the Company and the purchase price per share of
Series B Preferred Stock payable upon exercise of the Warrants (the "Purchase
Price") shall initially be $6.50; provided, however, that in the event of an
adjustment to the conversion price of the Series B Preferred Stock pursuant to
the Series B Preferred Stock Certificate of Designation dated December 17, 1997,
as amended, the Purchase Price shall be similarly adjusted. The Purchase Price
and number of shares of Series B Preferred Stock issuable upon exercise of each
Warrant are subject to adjustment as provided in Article 6. The shares of
Series B Preferred Stock issuable upon exercise of the Warrants (and/or other
shares of Series B Preferred Stock so issuable by reason of any adjustments
pursuant to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as Exhibit A, and payment of an amount equal to the Purchase Price times
---------
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time
five (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1 The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3 The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
4. Reservation of Shares
---------------------
The Company covenants that it will as promptly as practicable
following the date of this Warrant, reserve and keep available out of its
authorized capital stock, solely for the purpose of issue upon exercise of the
Warrants, such number of shares of Series B Preferred Stock as shall then be
issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of capital stock which shall be issuable upon exercise of the
Warrants shall, at the time of such exercise, be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issue thereof, and that upon
-2-
<PAGE>
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price
and Number of Shares Deliverable
--------------------------------
6.1 The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Series B Preferred Stock payable in shares of its
capital stock, (ii) subdivide its outstanding shares of Series B Preferred
Stock through stock split or otherwise, (iii) combine its outstanding
shares of Series B Preferred Stock into a smaller number of shares of
Series B Preferred Stock, or (iv) issue by reclassification of its Series B
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation)
other securities of the Company, the number and/or nature of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Series B Preferred Stock are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other
disposition to another corporation of all or substantially all the
properties and assets of the Company, the Holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition that appropriate provisions
shall be made so that such Holder shall thereafter be entitled to purchase)
the kind and amount of shares
-3-
<PAGE>
of stock and other securities and property (including cash) which the
Holder would have been entitled to receive had such Warrants been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
6.4 The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange
-4-
<PAGE>
or substitution for an outstanding Warrant Certificate or otherwise, may be in
the form as so changed.
7. Conversion Rights.
-----------------
In lieu of exercising this Warrant or any portion hereof, the Holder
hereof shall have the right to convert this Warrant or any portion hereof into
Warrant Shares by executing and delivering to the Company at its principal
office the written Notice of Conversion attached hereto as Exhibit B, specifying
---------
the portion of the Warrant Shares to be converted and accompanied by this
Warrant. The number of Warrant Shares to be issued to Holder upon such
conversion shall be computed using the following formula:
X=(P)(Y)(A-B)/A
where X= the number of Warrant Shares to be issued to the Holder for the
portion of the Warrant being converted.
P= the portion of the Warrant being converted expressed as a decimal
fraction.
Y= the total number of Warrant Shares issuable upon exercise of the
Warrant in full.
A= the fair market value of one Warrant Share shall mean (i) the
fair market value of one share of the Company's Series B
Preferred Stock as of the last business day immediately prior to
the date the notice of conversion is received by the Company, as
determined in good faith by the Company's Board of Directors, or
(ii) if this Warrant is being converted in conjunction with a
public offering of the Company's common stock, par value $.01
(the "Common Stock"), the price to the public per share of Common
Stock pursuant to the offering.
B= the Purchase Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately canceled.
This Warrant or any portion hereof shall be deemed to have been converted
immediately prior to the close of business on the date of its surrender for
conversion as provided above, and the person entitled to receive the Warrant
Shares issuable upon such conversion shall be treated for all purposes as Holder
of such shares of record as of the close of business on such date. As promptly
as practicable after such date, the Company shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of full Warrant Shares issuable upon such conversion. If the Warrant
shall be converted for less than the total number of Warrant Shares then
issuable upon conversion, promptly after surrender of the Warrant upon such
conversion, the Company will execute and deliver a new Warrant, dated the date
hereof,
-5-
<PAGE>
evidencing the right of the Holder to the balance of the Warrant Shares
purchasable hereunder upon the same terms and conditions set forth herein.
8. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
9. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Series B
Preferred Stock in connection with the exercise of Warrants. Warrants may not
be exercised in such number as would result (except for the provisions of this
paragraph) in the issuance of a fraction of a share of Series B Preferred Stock
unless the Holder is exercising all Warrants then owned by the Holder. In such
event, the Company shall, upon the exercise of all of such Warrants, issue to
the Holder the largest aggregate whole number of shares of Series B Preferred
Stock called for thereby upon receipt of the Purchase Price for all of such
Warrants and pay a sum in cash equal to the remaining fraction of a share of
Series B Preferred Stock, multiplied by its Market Price Per Share (as
determined pursuant to Section 9.2 below) as of the last business day preceding
the date on which the Warrants are presented for exercise.
9.2 As used herein, the "Market Price Per Share" with respect to any
share of stock on any specified date shall mean the closing price per share of
such stock for the trading day immediately preceding such date. The closing
price for each such day shall be the last sale price regular way or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the principal securities exchange on which
the shares of such stock of the Company are listed or admitted to trading, the
last sale price, or in case no sale takes place on such day, the average of the
closing bid and asked prices of such stock on NASDAQ or any comparable system,
or if such stock is not reported on NASDAQ, or a comparable system, the average
of the closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If such bid and asked prices are not available, then
"Market Price Per Share" shall be equal to the fair market value of such stock
as determined in good faith by the Board of Directors of the Company.
10. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THESE WARRANTS HAVE NOT BEEN
REGISTERED UNDER THE
-6-
<PAGE>
SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY NOT BE
SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF THESE
WARRANTS IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
11. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
12. Issue Tax
---------
The issuance of Warrant Shares upon exercise of the Warrants shall be
made without charge to the holders of such Warrants for any issuance tax in
respect thereof provided that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of any holder of the
Warrants.
13. Registration Rights
-------------------
The rights of the holder hereof with respect to registration under the
Securities Act of 1933, as amended, of the Warrant Shares are set forth in the
Registration Rights Agreement dated as of December 18, 1997 by and among the
Company and the several parties to such agreement.
-7-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 20/th/ day of August, 1998.
INTRALINKS INC.
By: /s/
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
______________________________
Name of Holder
______________________________
Signature
Address:
______________________________
______________________________
______________________________
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Series B Preferred Stock of
the Company (the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7 of the accompanying Warrant
Certificate.
______________________________
Name of Holder
______________________________
Signature
Address:
______________________________
______________________________
<PAGE>
EXHIBIT 10.21
Warrant Certificate
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS INC.
2,700 Warrants
INTRALINKS INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Eugene A. Tomei or registered assigns (the "Holder") is the
owner of the number of warrants ("Warrants") specified above, each of which
entitles the Holder thereof to purchase, at any time on or before the Expiration
Date (hereinafter defined) one fully paid and non-assessable share of the Series
B Preferred Stock, par value $0.01 per share ("Series B Preferred Stock"), of
IntraLinks Inc., a Delaware corporation (the "Company"), at a purchase price per
share of Series B Preferred Stock as set forth herein in lawful money of the
United States of America in cash or by certified or cashier's check.
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Series B Preferred Stock of the Company and the purchase price per share of
Series B Preferred Stock payable upon exercise of the Warrants (the "Purchase
Price") shall initially be $6.50; provided, however, that in the event of an
adjustment to the conversion price of the Series B Preferred Stock pursuant to
the Series B Preferred Stock Certificate of Designation dated December 17, 1997,
as amended, the Purchase Price shall be similarly adjusted. The Purchase Price
and number of shares of Series B Preferred Stock issuable upon exercise of each
Warrant are subject to adjustment as provided in Article 6. The shares of
Series B Preferred Stock issuable upon exercise of the Warrants (and/or other
shares of Series B Preferred Stock so issuable by reason of any adjustments
pursuant to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as Exhibit A, and payment of an amount equal to the Purchase Price times
---------
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time
five (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1 The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3 The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
4. Reservation of Shares
---------------------
The Company covenants that it will as promptly as practicable
following the date of this Warrant, reserve and keep available out of its
authorized capital stock, solely for the purpose of issue upon exercise of the
Warrants, such number of shares of Series B Preferred Stock as shall then be
issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of capital stock which shall be issuable upon exercise of the
Warrants shall, at the time of such exercise, be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issue thereof, and that upon
-2-
<PAGE>
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price
and Number of Shares Deliverable
--------------------------------
6.1 The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Series B Preferred Stock payable in shares of its
capital stock, (ii) subdivide its outstanding shares of Series B Preferred
Stock through stock split or otherwise, (iii) combine its outstanding
shares of Series B Preferred Stock into a smaller number of shares of
Series B Preferred Stock, or (iv) issue by reclassification of its Series B
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation)
other securities of the Company, the number and/or nature of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Series B Preferred Stock are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other
disposition to another corporation of all or substantially all the
properties and assets of the Company, the Holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition that appropriate provisions
shall be made so that such Holder shall thereafter be entitled to purchase)
the kind and amount of shares
-3-
<PAGE>
of stock and other securities and property (including cash) which the
Holder would have been entitled to receive had such Warrants been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
6.4 The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange
-4-
<PAGE>
or substitution for an outstanding Warrant Certificate or otherwise, may be in
the form as so changed.
7. Conversion Rights.
-----------------
In lieu of exercising this Warrant or any portion hereof, the Holder
hereof shall have the right to convert this Warrant or any portion hereof into
Warrant Shares by executing and delivering to the Company at its principal
office the written Notice of Conversion attached hereto as Exhibit B, specifying
---------
the portion of the Warrant Shares to be converted and accompanied by this
Warrant. The number of Warrant Shares to be issued to Holder upon such
conversion shall be computed using the following formula:
X=(P)(Y)(A-B)/A
where X= the number of Warrant Shares to be issued to the Holder for the
portion of the Warrant being converted.
P= the portion of the Warrant being converted expressed as a decimal
fraction.
Y= the total number of Warrant Shares issuable upon exercise of the
Warrant in full.
A= the fair market value of one Warrant Share shall mean (i) the
fair market value of one share of the Company's Series B
Preferred Stock as of the last business day immediately prior to
the date the notice of conversion is received by the Company, as
determined in good faith by the Company's Board of Directors, or
(ii) if this Warrant is being converted in conjunction with a
public offering of the Company's common stock, par value $.01
(the "Common Stock"), the price to the public per share of Common
Stock pursuant to the offering.
B= the Purchase Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately canceled.
This Warrant or any portion hereof shall be deemed to have been converted
immediately prior to the close of business on the date of its surrender for
conversion as provided above, and the person entitled to receive the Warrant
Shares issuable upon such conversion shall be treated for all purposes as Holder
of such shares of record as of the close of business on such date. As promptly
as practicable after such date, the Company shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of full Warrant Shares issuable upon such conversion. If the Warrant
shall be converted for less than the total number of Warrant Shares then
issuable upon conversion, promptly after surrender of the Warrant upon such
conversion, the Company will execute and deliver a new Warrant, dated the date
hereof,
-5-
<PAGE>
evidencing the right of the Holder to the balance of the Warrant Shares
purchasable hereunder upon the same terms and conditions set forth herein.
8. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
9. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Series B
Preferred Stock in connection with the exercise of Warrants. Warrants may not
be exercised in such number as would result (except for the provisions of this
paragraph) in the issuance of a fraction of a share of Series B Preferred Stock
unless the Holder is exercising all Warrants then owned by the Holder. In such
event, the Company shall, upon the exercise of all of such Warrants, issue to
the Holder the largest aggregate whole number of shares of Series B Preferred
Stock called for thereby upon receipt of the Purchase Price for all of such
Warrants and pay a sum in cash equal to the remaining fraction of a share of
Series B Preferred Stock, multiplied by its Market Price Per Share (as
determined pursuant to Section 9.2 below) as of the last business day preceding
the date on which the Warrants are presented for exercise.
9.2 As used herein, the "Market Price Per Share" with respect to any
share of stock on any specified date shall mean the closing price per share of
such stock for the trading day immediately preceding such date. The closing
price for each such day shall be the last sale price regular way or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the principal securities exchange on which
the shares of such stock of the Company are listed or admitted to trading, the
last sale price, or in case no sale takes place on such day, the average of the
closing bid and asked prices of such stock on NASDAQ or any comparable system,
or if such stock is not reported on NASDAQ, or a comparable system, the average
of the closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If such bid and asked prices are not available, then
"Market Price Per Share" shall be equal to the fair market value of such stock
as determined in good faith by the Board of Directors of the Company.
10. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THESE WARRANTS HAVE NOT BEEN
REGISTERED UNDER THE
-6-
<PAGE>
SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY NOT BE
SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF THESE
WARRANTS IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
11. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
12. Issue Tax
---------
The issuance of Warrant Shares upon exercise of the Warrants shall be
made without charge to the holders of such Warrants for any issuance tax in
respect thereof provided that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of any holder of the
Warrants.
13. Registration Rights
-------------------
The rights of the holder hereof with respect to registration under the
Securities Act of 1933, as amended, of the Warrant Shares are set forth in the
Registration Rights Agreement dated as of December 18, 1997 by and among the
Company and the several parties to such agreement.
-7-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 20/th/ day of August, 1998.
INTRALINKS INC.
By: /s/
--------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
______________________________
Name of Holder
______________________________
Signature
Address:
______________________________
______________________________
______________________________
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Series B Preferred Stock of
the Company (the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7 of the accompanying Warrant
Certificate.
______________________________
Name of Holder
______________________________
Signature
Address:
______________________________
______________________________
<PAGE>
EXHIBIT 10.22
Warrant Certificate
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS INC.
5,400 Warrants
INTRALINKS INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Duncan W. Brown or registered assigns (the "Holder") is the
owner of the number of warrants ("Warrants") specified above, each of which
entitles the Holder thereof to purchase, at any time on or before the Expiration
Date (hereinafter defined) one fully paid and non-assessable share of the Series
B Preferred Stock, par value $0.01 per share ("Series B Preferred Stock"), of
IntraLinks Inc., a Delaware corporation (the "Company"), at a purchase price per
share of Series B Preferred Stock as set forth herein in lawful money of the
United States of America in cash or by certified or cashier's check.
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Series B Preferred Stock of the Company and the purchase price per share of
Series B Preferred Stock payable upon exercise of the Warrants (the "Purchase
Price") shall initially be $6.50; provided, however, that in the event of an
adjustment to the conversion price of the Series B Preferred Stock pursuant to
the Series B Preferred Stock Certificate of Designation dated December 17, 1997,
as amended, the Purchase Price shall be similarly adjusted. The Purchase Price
and number of shares of Series B Preferred Stock issuable upon exercise of each
Warrant are subject to adjustment as provided in Article 6. The shares of
Series B Preferred Stock issuable upon exercise of the Warrants (and/or other
shares of Series B Preferred Stock so issuable by reason of any adjustments
pursuant to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as Exhibit A, and payment of an amount equal to the Purchase Price times
---------
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time
five (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1 The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3 The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
4. Reservation of Shares
---------------------
The Company covenants that it will as promptly as practicable
following the date of this Warrant, reserve and keep available out of its
authorized capital stock, solely for the purpose of issue upon exercise of the
Warrants, such number of shares of Series B Preferred Stock as shall then be
issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of capital stock which shall be issuable upon exercise of the
Warrants shall, at the time of such exercise, be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issue thereof, and that upon
-2-
<PAGE>
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price
and Number of Shares Deliverable
--------------------------------
6.1 The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Series B Preferred Stock payable in shares of its
capital stock, (ii) subdivide its outstanding shares of Series B Preferred
Stock through stock split or otherwise, (iii) combine its outstanding
shares of Series B Preferred Stock into a smaller number of shares of
Series B Preferred Stock, or (iv) issue by reclassification of its Series B
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation)
other securities of the Company, the number and/or nature of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Series B Preferred Stock are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other
disposition to another corporation of all or substantially all the
properties and assets of the Company, the Holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition that appropriate provisions
shall be made so that such Holder shall thereafter be entitled to purchase)
the kind and amount of shares
-3-
<PAGE>
of stock and other securities and property (including cash) which the
Holder would have been entitled to receive had such Warrants been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
6.4 The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange
-4-
<PAGE>
or substitution for an outstanding Warrant Certificate or otherwise, may be in
the form as so changed.
7. Conversion Rights.
-----------------
In lieu of exercising this Warrant or any portion hereof, the Holder
hereof shall have the right to convert this Warrant or any portion hereof into
Warrant Shares by executing and delivering to the Company at its principal
office the written Notice of Conversion attached hereto as Exhibit B, specifying
---------
the portion of the Warrant Shares to be converted and accompanied by this
Warrant. The number of Warrant Shares to be issued to Holder upon such
conversion shall be computed using the following formula:
X=(P)(Y)(A-B)/A
where X= the number of Warrant Shares to be issued to the Holder for the
portion of the Warrant being converted.
P= the portion of the Warrant being converted expressed as a decimal
fraction.
Y= the total number of Warrant Shares issuable upon exercise of the
Warrant in full.
A= the fair market value of one Warrant Share shall mean (i) the
fair market value of one share of the Company's Series B
Preferred Stock as of the last business day immediately prior to
the date the notice of conversion is received by the Company, as
determined in good faith by the Company's Board of Directors, or
(ii) if this Warrant is being converted in conjunction with a
public offering of the Company's common stock, par value $.01
(the "Common Stock"), the price to the public per share of Common
Stock pursuant to the offering.
B= the Purchase Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately canceled.
This Warrant or any portion hereof shall be deemed to have been converted
immediately prior to the close of business on the date of its surrender for
conversion as provided above, and the person entitled to receive the Warrant
Shares issuable upon such conversion shall be treated for all purposes as Holder
of such shares of record as of the close of business on such date. As promptly
as practicable after such date, the Company shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of full Warrant Shares issuable upon such conversion. If the Warrant
shall be converted for less than the total number of Warrant Shares then
issuable upon conversion, promptly after surrender of the Warrant upon such
conversion, the Company will execute and deliver a new Warrant, dated the date
hereof,
-5-
<PAGE>
evidencing the right of the Holder to the balance of the Warrant Shares
purchasable hereunder upon the same terms and conditions set forth herein.
8. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
9. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Series B
Preferred Stock in connection with the exercise of Warrants. Warrants may not
be exercised in such number as would result (except for the provisions of this
paragraph) in the issuance of a fraction of a share of Series B Preferred Stock
unless the Holder is exercising all Warrants then owned by the Holder. In such
event, the Company shall, upon the exercise of all of such Warrants, issue to
the Holder the largest aggregate whole number of shares of Series B Preferred
Stock called for thereby upon receipt of the Purchase Price for all of such
Warrants and pay a sum in cash equal to the remaining fraction of a share of
Series B Preferred Stock, multiplied by its Market Price Per Share (as
determined pursuant to Section 9.2 below) as of the last business day preceding
the date on which the Warrants are presented for exercise.
9.2 As used herein, the "Market Price Per Share" with respect to any
share of stock on any specified date shall mean the closing price per share of
such stock for the trading day immediately preceding such date. The closing
price for each such day shall be the last sale price regular way or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the principal securities exchange on which
the shares of such stock of the Company are listed or admitted to trading, the
last sale price, or in case no sale takes place on such day, the average of the
closing bid and asked prices of such stock on NASDAQ or any comparable system,
or if such stock is not reported on NASDAQ, or a comparable system, the average
of the closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If such bid and asked prices are not available, then
"Market Price Per Share" shall be equal to the fair market value of such stock
as determined in good faith by the Board of Directors of the Company.
10. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THESE WARRANTS HAVE NOT BEEN
REGISTERED UNDER THE
-6-
<PAGE>
SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY NOT BE
SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF THESE
WARRANTS IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
11. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
12. Issue Tax
---------
The issuance of Warrant Shares upon exercise of the Warrants shall be
made without charge to the holders of such Warrants for any issuance tax in
respect thereof provided that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of any holder of the
Warrants.
13. Registration Rights
-------------------
The rights of the holder hereof with respect to registration under the
Securities Act of 1933, as amended, of the Warrant Shares are set forth in the
Registration Rights Agreement dated as of December 18, 1997 by and among the
Company and the several parties to such agreement.
-7-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 20/th/ day of August, 1998.
INTRALINKS INC.
By:
---------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
______________________________
Name of Holder
______________________________
Signature
Address:
______________________________
______________________________
______________________________
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Series B Preferred Stock of
the Company (the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7 of the accompanying Warrant
Certificate.
______________________________
Name of Holder
______________________________
Signature
Address:
______________________________
______________________________
<PAGE>
EXHIBIT 10.23
Warrant Certificate
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS INC.
16,200 Warrants
INTRALINKS INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Sculley Brothers LLC or registered assigns (the "Holder") is the
owner of the number of warrants ("Warrants") specified above, each of which
entitles the Holder thereof to purchase, at any time on or before the Expiration
Date (hereinafter defined) one fully paid and non-assessable share of the Series
B Preferred Stock, par value $0.01 per share ("Series B Preferred Stock"), of
IntraLinks Inc., a Delaware corporation (the "Company"), at a purchase price per
share of Series B Preferred Stock as set forth herein in lawful money of the
United States of America in cash or by certified or cashier's check.
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Series B Preferred Stock of the Company and the purchase price per share of
Series B Preferred Stock payable upon exercise of the Warrants (the "Purchase
Price") shall initially be $6.50; provided, however, that in the event of an
adjustment to the conversion price of the Series B Preferred Stock pursuant to
the Series B Preferred Stock Certificate of Designation dated December 17, 1997,
as amended, the Purchase Price shall be similarly adjusted. The Purchase Price
and number of shares of Series B Preferred Stock issuable upon exercise of each
Warrant are subject to adjustment as provided in Article 6. The shares of
Series B Preferred Stock issuable upon exercise of the Warrants (and/or other
shares of Series B Preferred Stock so issuable by reason of any adjustments
pursuant to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as Exhibit A, and payment of an amount equal to the Purchase Price times
---------
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time
five (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1 The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3 The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
4. Reservation of Shares
---------------------
The Company covenants that it will as promptly as practicable
following the date of this Warrant, reserve and keep available out of its
authorized capital stock, solely for the purpose of issue upon exercise of the
Warrants, such number of shares of Series B Preferred Stock as shall then be
issuable upon the exercise of all outstanding Warrants. The Company covenants
that all shares of capital stock which shall be issuable upon exercise of the
Warrants shall, at the time of such exercise, be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens and charges with
respect to the issue thereof, and that upon
-2-
<PAGE>
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price
and Number of Shares Deliverable
--------------------------------
6.1 The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Series B Preferred Stock payable in shares of its
capital stock, (ii) subdivide its outstanding shares of Series B Preferred
Stock through stock split or otherwise, (iii) combine its outstanding
shares of Series B Preferred Stock into a smaller number of shares of
Series B Preferred Stock, or (iv) issue by reclassification of its Series B
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation)
other securities of the Company, the number and/or nature of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall
be adjusted so that the Holder shall be entitled to receive the kind and
number of Warrant Shares or other securities of the Company which he would
have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. An adjustment made pursuant to this paragraph (a) shall become
effective retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Series B Preferred Stock are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other
disposition to another corporation of all or substantially all the
properties and assets of the Company, the Holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition that appropriate provisions
shall be made so that such Holder shall thereafter be entitled to purchase)
the kind and amount of shares
-3-
<PAGE>
of stock and other securities and property (including cash) which the
Holder would have been entitled to receive had such Warrants been exercised
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
6.4 The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange
-4-
<PAGE>
or substitution for an outstanding Warrant Certificate or otherwise, may be in
the form as so changed.
7. Conversion Rights.
-----------------
In lieu of exercising this Warrant or any portion hereof, the Holder
hereof shall have the right to convert this Warrant or any portion hereof into
Warrant Shares by executing and delivering to the Company at its principal
office the written Notice of Conversion attached hereto as Exhibit B, specifying
---------
the portion of the Warrant Shares to be converted and accompanied by this
Warrant. The number of Warrant Shares to be issued to Holder upon such
conversion shall be computed using the following formula:
X=(P)(Y)(A-B)/A
where X= the number of Warrant Shares to be issued to the Holder for the
portion of the Warrant being converted.
P= the portion of the Warrant being converted expressed as a decimal
fraction.
Y= the total number of Warrant Shares issuable upon exercise of the
Warrant in full.
A= the fair market value of one Warrant Share shall mean (i) the
fair market value of one share of the Company's Series B
Preferred Stock as of the last business day immediately prior to
the date the notice of conversion is received by the Company, as
determined in good faith by the Company's Board of Directors, or
(ii) if this Warrant is being converted in conjunction with a
public offering of the Company's common stock, par value $.01
(the "Common Stock"), the price to the public per share of Common
Stock pursuant to the offering.
B= the Purchase Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately canceled.
This Warrant or any portion hereof shall be deemed to have been converted
immediately prior to the close of business on the date of its surrender for
conversion as provided above, and the person entitled to receive the Warrant
Shares issuable upon such conversion shall be treated for all purposes as Holder
of such shares of record as of the close of business on such date. As promptly
as practicable after such date, the Company shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of full Warrant Shares issuable upon such conversion. If the Warrant
shall be converted for less than the total number of Warrant Shares then
issuable upon conversion, promptly after surrender of the Warrant upon such
conversion, the Company will execute and deliver a new Warrant, dated the date
hereof,
-5-
<PAGE>
evidencing the right of the Holder to the balance of the Warrant Shares
purchasable hereunder upon the same terms and conditions set forth herein.
8. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
9 Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Series B
Preferred Stock in connection with the exercise of Warrants. Warrants may not
be exercised in such number as would result (except for the provisions of this
paragraph) in the issuance of a fraction of a share of Series B Preferred Stock
unless the Holder is exercising all Warrants then owned by the Holder. In such
event, the Company shall, upon the exercise of all of such Warrants, issue to
the Holder the largest aggregate whole number of shares of Series B Preferred
Stock called for thereby upon receipt of the Purchase Price for all of such
Warrants and pay a sum in cash equal to the remaining fraction of a share of
Series B Preferred Stock, multiplied by its Market Price Per Share (as
determined pursuant to Section 9.2 below) as of the last business day preceding
the date on which the Warrants are presented for exercise.
9.2 As used herein, the "Market Price Per Share" with respect to any
share of stock on any specified date shall mean the closing price per share of
such stock for the trading day immediately preceding such date. The closing
price for each such day shall be the last sale price regular way or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices regular way, in either case on the principal securities exchange on which
the shares of such stock of the Company are listed or admitted to trading, the
last sale price, or in case no sale takes place on such day, the average of the
closing bid and asked prices of such stock on NASDAQ or any comparable system,
or if such stock is not reported on NASDAQ, or a comparable system, the average
of the closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Company for that purpose. If such bid and asked prices are not available, then
"Market Price Per Share" shall be equal to the fair market value of such stock
as determined in good faith by the Board of Directors of the Company.
10. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THESE WARRANTS HAVE NOT BEEN
REGISTERED UNDER THE
-6-
<PAGE>
SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY NOT BE
SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF THESE
WARRANTS IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
11. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
12. Issue Tax
---------
The issuance of Warrant Shares upon exercise of the Warrants shall be
made without charge to the holders of such Warrants for any issuance tax in
respect thereof provided that the Company shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of any holder of the
Warrants.
13. Registration Rights
-------------------
The rights of the holder hereof with respect to registration under the
Securities Act of 1933, as amended, of the Warrant Shares are set forth in the
Registration Rights Agreement dated as of December 18, 1997 by and among the
Company and the several parties to such agreement.
-7-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 20/th/ day of August, 1998.
INTRALINKS INC.
By: /s/
-------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
_______________________________
Name of Holder
_______________________________
Signature
Address:
_______________________________
_______________________________
_______________________________
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Series B Preferred Stock of
the Company (the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7 of the accompanying Warrant
Certificate.
_______________________________
Name of Holder
_______________________________
Signature
Address:
_______________________________
_______________________________
<PAGE>
EXHIBIT 10.24
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") OR THE
LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE REGISTERED UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS IF NECESSARY, OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. THESE WARRANTS AND THE SHARES UNDERLYING THESE WARRANTS
ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN
THE AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT DATED AS OF APRIL __,
1999 (THE "SHAREHOLDERS' AGREEMENT"), A COPY OF WHICH MAY BE OBTAINED
FROM INTRALINKS, INC.
192,308 Warrants April 13, 1999
WARRANT CERTIFICATE
INTRALINKS, INC.
This warrant certificate ("Warrant Certificate") certifies that for
value received Ernst & Young U.S. LLP ("E&Y") or registered assigns (the
"Holder") is the owner of the number of warrants (the "Warrants") specified
above, each of which entitles the Holder thereof to purchase, at any time on or
before the Expiration Date (as hereinafter defined), one fully paid and non-
assessable share of Series C Convertible Preferred Stock, $.01 par value (the
"Series C Preferred") of IntraLinks, Inc. (the "Company"), with such rights and
preferences as are established in the Company's Certificate of Designations for
Series C Preferred Stock (subject to adjustment as hereinafter provided), for
the Purchase Price (defined in Section 1 below) in lawful money of the United
States of America (subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant initially shall entitle the Holder to purchase one share of
Series C Preferred of the Company, and the purchase price payable upon exercise
of the Warrant (the "Purchase Price") shall initially be $6.50 per share of
Series C Preferred, subject to adjustment as hereinafter provided. The Purchase
Price and number of shares of Series C Preferred issuable upon exercise of this
Warrant are subject to adjustment as provided in Section 5 hereof. The shares
of Series C Preferred issuable upon exercise of the Warrant (and/or other shares
of stock so issuable by reason of any adjustments pursuant to Section 5) are
sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date; No Fractional Shares; Reservation of Shares
----------------------------------------------------------------------
2.1. The Warrants are exercisable, at the option of the Holder, in whole or
in part on or before the Expiration Date, upon surrender of this Warrant
Certificate to the Company together with a duly completed Notice of Exercise, in
the form attached hereto as Exhibit A, and payment of the Purchase Price. In
---------
the case of exercise of less than the entire Warrant represented by this Warrant
Certificate, the Company shall cancel the Warrant Certificate upon the surrender
thereof and shall execute and deliver a new Warrant Certificate for the balance
of such Warrant.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time on
October 22, 2001, or if such day shall in the State of New York be a holiday or
a day on which banks are authorized to close, then 5:00 p.m. New York time the
next following day which in the State of New York is not a holiday or a day on
which banks are authorized to close.
2.3. No fractional shares shall be issued upon exercise or conversion (in
whole or in part) of the Warrants and the number of shares of Series C Preferred
to be issued shall be rounded down to the nearest whole share, and there shall
be no payment to the Holder for any such rounded fractional shares.
2.4. The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants and conversion of the Series C Preferred to the
common stock of the Company, par value $.01 (the "Common Stock"), such number of
shares of Series C Preferred as shall then be issuable upon the exercise of all
outstanding Warrants and such number of shares of Common Stock as are issuable
upon conversion of the Series C Preferred then issued or issuable upon exercise
of the Warrants. The Company covenants that all shares of capital stock which
shall be issuable upon exercise of the Warrants and upon conversion of the
Series C Preferred shall, upon issuance in accordance with the terms hereof, be
duly and validly issued and fully paid and non-assessable and free from all
taxes, liens, encumbrances and charges with respect to the issue thereof, and
that upon issuance the Company shall use its commercially reasonable efforts to
cause such shares to be listed on each national securities exchange, if any, on
which the other shares of such outstanding capital stock of the Company are then
listed.
2.5. At such time hereafter as all of the Company's outstanding Series C
Preferred has been converted into shares of the Company's Common Stock in
accordance with the Company's Certificate of Incorporation, as amended and/or
restated and effective immediately prior to any such conversion (the
"Certificate"), then this Warrant shall immediately become exercisable for that
number of shares of the Company's Common Stock equal to the number of shares of
Common Stock which would have been received if this Warrant had been exercised
in full and the Series C Preferred received thereupon had been simultaneously
converted into Common Stock immediately prior to the last such conversion of
Series C Preferred Stock. The per share purchase price shall be immediately
adjusted to equal the quotient obtained by dividing (x) the aggregate Purchase
Price of the number of shares of Series C Preferred for which this Warrant was
exercisable immediately prior to such conversion by (y) the number of shares of
Common Stock for which this Warrant is exercisable immediately after such
conversion or redemption. In
2
<PAGE>
the event that this Warrant becomes exercisable for Common Stock, any
adjustments pursuant to Section 5 shall be determined as if the provisions of
Section 5 related to Common Stock and not to Series C Preferred.
3. Registration and Transfer on Company Books
------------------------------------------
3.1. The Company shall maintain books for the registration and transfer of
the Warrants and the registration and transfer of the Warrant Shares.
3.2. Prior to due presentment for registration of transfer of this Warrant
Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
4. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of and
the loss, theft, destruction or mutilation of any Warrant Certificate and, in
the case of loss, theft or destruction, of indemnity reasonably satisfactory to
the Company, or, in the case of mutilation, upon surrender and cancellation of
the mutilated Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate representing an equal number of Warrant
Shares.
5. Adjustment of Purchase Price and Number of Shares Deliverable;
Reorganizations and Recapitalizations
-------------------------------------
5.1. The number of Warrant Shares purchasable upon the exercise of the
Warrants and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Series C Preferred payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Series C Preferred through stock split
or otherwise, (iii) combine its outstanding shares of Series C Preferred into a
smaller number of shares of Series C Preferred, or (iv) issue by
reclassification of its Series C Preferred (including any reclassification in
connection with a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of the Warrants immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which he or
it would have owned or have been entitled to receive after the happening of any
of the events described of such event or any record date with respect thereto.
Any adjustment made pursuant to this paragraph (a) shall become effective
retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than a
consolidation or merger in which the outstanding shares of the
3
<PAGE>
Company's Series C Preferred are not converted into or exchanged for other
rights or interests), or in the case of any sale, transfer or other disposition
to another corporation of all or substantially all the properties and assets of
the Company, the Holder of the Warrants shall thereafter be entitled to purchase
(and it shall be a condition to the consummation of any such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition
that appropriate provisions shall be made so that such Holder shall thereafter
be entitled to purchase) the kind and amount of shares of stock and other
securities and property (including cash) which the Holder would have been
entitled to receive had such Warrant been exercised immediately prior to the
effective date of such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition; and in any such case appropriate
adjustments shall be made in the application of the provisions of this Section 5
with respect to rights and interest thereafter of the Holder of the Warrants to
the end that the provisions of this Section 5 shall thereafter be applicable, as
near as reasonably may be, in relation to any shares or other property
thereafter purchasable upon the exercise of the Warrants. The provisions of this
Section 5.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of the Warrants is adjusted, as provided in this Section 5.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
so purchasable immediately thereafter.
5.2. Whenever the number of Warrant Shares purchasable upon the exercise of
the Warrant or the Purchase Price of such Warrant Shares is adjusted, as herein
provided, the Company shall mail to the Holder, at the address of the Holder
shown on the books of the Company, a notice of such adjustment or adjustments,
prepared and signed by the Chief Financial Officer or Secretary of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, a brief statement of the facts requiring such adjustment and the
computation by which such adjustment was made.
5.3. In the event that at any time prior to the expiration of the Warrants
and prior to their exercise:
(a) the Company shall offer for subscription to the holders of the
Series C Preferred any additional shares of stock of any class or any other
securities convertible into Series C Preferred or any rights to subscribe
thereto; or
(b) the Company shall declare any stock split, stock dividend,
subdivision, combination, or similar distribution with respect to the Series C
Preferred, regardless of the effect of any such event on the outstanding number
of shares of Series C Preferred; or
4
<PAGE>
(c) the Company shall declare a dividend with respect to the Series C
Preferred, other than a dividend payable in shares of the Company's own Series C
Preferred or Common Stock; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation, or winding up of the Company (other than in connection with a
consolidation, merger, or sale of all or substantially all of its property,
assets and business as an entity);
(e) there shall be any capital change in the Company as set forth in
Section 5.1(b);
(each such event hereinafter being referred to as a "Notification Event"), the
Company shall cause to be mailed to the Holder, not less than 10 days prior to
the record date, if any, in connection with such Notification Event (provided,
however, that if there is no record date, or if 10 days prior notice is
impracticable, as soon as practicable) written notice specifying the nature of
such event and the effective date of, or the date on which the books of the
Company shall close or a record shall be taken with respect to, such event.
Such notice shall also set forth facts indicating the effect of such action, if
any (to the extent such effect may be known at the date of such notice), on the
Purchase Price and the kind and amount of the shares of stock or other
securities or property deliverable upon exercise of the Warrant.
6. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
7. Registration Rights
-------------------
The Warrants and the Warrant Shares shall have the registration rights set
forth in the Amended and Restated Registration Rights Agreement of even date
herewith by and among the Company, the Holder and the other securityholders of
the Company named therein.
8. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of law
principles thereof.
5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 13th day of April, 1999.
INTRALINKS, INC.
By: /s/
----------------------------------
Name:
Title:
Attest:
/s/
- ----------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
______________________________________
Signature
Address:
______________________________________
______________________________________
______________________________________
<PAGE>
EXHIBIT 10.25
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") OR THE
LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE REGISTERED UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS IF NECESSARY, OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. THESE WARRANTS AND THE SHARES UNDERLYING THESE WARRANTS
ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN
THE AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT DATED AS OF APRIL
13, 1999 (THE "SHAREHOLDERS' AGREEMENT"), A COPY OF WHICH MAY BE
OBTAINED FROM INTRALINKS, INC.
468,000 Warrants April 13, 1999
WARRANT CERTIFICATE
INTRALINKS, INC.
This warrant certificate ("Warrant Certificate") certifies that for
value received Ernst & Young U.S. LLP ("E&Y") or registered assigns (the
"Holder") is the owner of the number of warrants (the "Warrants") specified
above, each of which entitles the Holder thereof to purchase, at any time after
such warrants vest in accordance with the terms hereof and on or before the
Expiration Date (as hereinafter defined), one fully paid and non-assessable
share of Series D Convertible Preferred Stock, $.01 par value, (the "Series D
Preferred") of IntraLinks, Inc. (the "Company"), with such rights and
preferences as are established in the Company's Certificate of Designations for
Series D Preferred Stock (subject to adjustment as hereinafter provided), for
the Purchase Price (defined in Section 1 below) in lawful money of the United
States of America (subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant initially shall entitle the Holder to purchase one share of
Series D Preferred of the Company, and the purchase price payable upon exercise
of the Warrant (the "Purchase Price") shall initially be $10.00 per share of
Series D Preferred, subject to adjustment as hereinafter provided. The Purchase
Price and number of shares of Series D Preferred issuable upon exercise of this
Warrant are subject to adjustment as provided in Section 5 hereof. The shares
of Series D Preferred issuable upon exercise of the Warrant (and/or other shares
of stock so issuable by reason of any adjustments pursuant to Section 5) are
sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date; No Fractional Shares; Reservation of Shares
----------------------------------------------------------------------
2.1. The Warrants are exercisable, at the option of the Holder, in whole or
in part once vested in accordance with the terms hereof and on or before the
Expiration Date, upon surrender of this Warrant Certificate to the Company
together with a duly completed Notice of Exercise, in the form attached hereto
as Exhibit A, and payment of the Purchase Price. In the case of exercise of less
---------
than the entire Warrant represented by this Warrant Certificate, the Company
shall cancel the Warrant Certificate upon the surrender thereof and shall
execute and deliver a new Warrant Certificate for the balance of such Warrant.
The Warrants shall vest as follows: (x) twelve (12) months from the date hereof
(the "First Anniversary"), a number of Warrants shall vest equal to (1) 312,000,
times (2) the Company's aggregate revenues during the 12-month period ending
March 31, 2000 (the "First Year"), divided by (3) $12,100,000 (up to a maximum
of 312,000 Warrants), provided that if the Company's aggregate revenues for the
First Year are less than $10,000,000 no Warrants shall vest on the First
Anniversary; and (y) twenty four (24) months from the date hereof (the "Second
Anniversary"), an aggregate number of Warrants shall vest equal to (A) minus
(B), where (A) is (1) 468,000, times (2) the Company's aggregate revenues during
the 24-month period ending March 31, 2001, divided by (3) $33,100,000 (up to a
maximum of 468,000 Warrants), provided that if the Company's aggregate revenues
for the twelve (12) months ending March 31, 2001 are less than $18,000,000 no
Warrants shall vest on the Second Anniversary, and (B) is the number of Warrants
that vested on the First Anniversary. If the combined aggregate revenues for the
24-month period from the date hereof are greater than or equal to $33,100,000,
all unvested Warrants will vest on the Second Anniversary. Any warrants which do
not vest on or before the Second Anniversary shall expire at that time.
Notwithstanding the foregoing, in the event of (i) the consummation of an
underwritten public offering of shares of the Company's Common Stock (as defined
herein) resulting in net proceeds to the Company of not less than $25 million at
a per share common stock equivalent price of at least $19.50 or (ii) a change in
control of the Company, any unvested and unexpired warrants shall vest and
become immediately exercisable. As used in the previous sentence, "change of
control" means a merger or consolidation of the Company or the sale of more that
50% of the capital stock or assets of the Company.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time five
years from the date hereof, or if such day shall in the State of New York be a
holiday or a day on which banks are authorized to close, then 5:00 p.m. New York
time the next following day which in the State of New York is not a holiday or a
day on which banks are authorized to close.
2.3. No fractional shares shall be issued upon exercise or conversion (in
whole or in part) of the Warrants and the number of shares of Series D Preferred
to be issued shall be rounded down to the nearest whole share, and there shall
be no payment to the Holder for any such rounded fractional shares.
2.4. The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants and conversion of the Series D Preferred to the
common stock of the Company, par value $.01 (the
2
<PAGE>
"Common Stock"), such number of shares of Series D Preferred as shall then be
issuable upon the exercise of all outstanding Warrants and such number of shares
of Common Stock as are issuable upon conversion of the Series D Preferred then
issued or issuable upon exercise of the Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
and upon conversion of the Series D Preferred shall, upon issuance in accordance
with the terms hereof, be duly and validly issued and fully paid and non-
assessable and free from all taxes, liens, encumbrances and charges with respect
to the issue thereof, and that upon issuance the Company shall use its
commercially reasonable efforts to cause such shares to be listed on each
national securities exchange, if any, on which the other shares of such
outstanding capital stock of the Company are then listed.
2.5. At such time hereafter as all of the Company's outstanding Series D
Preferred has been converted into shares of the Company's Common Stock in
accordance with the Company's Certificate of Incorporation, as amended and/or
restated and effective immediately prior to any such conversion (the
"Certificate"), then this Warrant shall immediately become exercisable for that
number of shares of the Company's Common Stock equal to the number of shares of
Common Stock which would have been received if this Warrant had been exercised
in full and the Series D Preferred received thereupon had been simultaneously
converted into Common Stock immediately prior to the last such conversion of
Series D Preferred Stock. The per share purchase price shall be immediately
adjusted to equal the quotient obtained by dividing (x) the aggregate Purchase
Price of the number of shares of Series D Preferred for which this Warrant was
exercisable immediately prior to such conversion by (y) the number of shares of
Common Stock for which this Warrant is exercisable immediately after such
conversion or redemption. In the event that this Warrant becomes exercisable
for Common Stock, any adjustments pursuant to Section 5 shall be determined as
if the provisions of Section 5 related to Common Stock and not to Series D
Preferred.
3. Registration and Transfer on Company Books
------------------------------------------
3.1. The Company shall maintain books for the registration and transfer of
the Warrants and the registration and transfer of the Warrant Shares.
3.2. Prior to due presentment for registration of transfer of this Warrant
Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
4. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of and
the loss, theft, destruction or mutilation of any Warrant Certificate and, in
the case of loss, theft or destruction, of indemnity reasonably satisfactory to
the Company, or, in the case of mutilation, upon surrender and cancellation of
the mutilated Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate representing an equal number of Warrant
Shares.
3
<PAGE>
5. Adjustment of Purchase Price and Number of Shares Deliverable;
--------------------------------------------------------------
Reorganizations and Recapitalizations
-------------------------------------
5.1. The number of Warrant Shares purchasable upon the exercise of the
Warrants and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Series D Preferred payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Series D Preferred through stock split
or otherwise, (iii) combine its outstanding shares of Series D Preferred into a
smaller number of shares of Series D Preferred, or (iv) issue by
reclassification of its Series D Preferred (including any reclassification in
connection with a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of the Warrants immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which he or
it would have owned or have been entitled to receive after the happening of any
of the events described above, had such Warrants been exercised immediately
prior to the happening of such event or any record date with respect thereto.
Any adjustment made pursuant to this paragraph (a) shall become effective
retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than a
consolidation or merger in which the outstanding shares of the Company's Series
D Preferred are not converted into or exchanged for other rights or interests),
or in the case of any sale, transfer or other disposition to another corporation
of all or substantially all the properties and assets of the Company, the Holder
of the Warrants shall thereafter be entitled to purchase (and it shall be a
condition to the consummation of any such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition that appropriate
provisions shall be made so that such Holder shall thereafter be entitled to
purchase) the kind and amount of shares of stock and other securities and
property (including cash) which the Holder would have been entitled to receive
had such Warrant been exercised immediately prior to the effective date of such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in the
application of the provisions of this Section 5 with respect to rights and
interest thereafter of the Holder of the Warrants to the end that the provisions
of this Section 5 shall thereafter be applicable, as near as reasonably may be,
in relation to any shares or other property thereafter purchasable upon the
exercise of the Warrants. The provisions of this Section 5.1(b) shall similarly
apply to successive reorganizations, reclassifications, consolidations, mergers,
sales, transfers or other dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of the Warrants is adjusted, as provided in this Section 5.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and of
4
<PAGE>
which the denominator shall be the number of Warrant Shares so purchasable
immediately thereafter.
5.2. Whenever the number of Warrant Shares purchasable upon the exercise of
the Warrant or the Purchase Price of such Warrant Shares is adjusted, as herein
provided, the Company shall mail to the Holder, at the address of the Holder
shown on the books of the Company, a notice of such adjustment or adjustments,
prepared and signed by the Chief Financial Officer or Secretary of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, a brief statement of the facts requiring such adjustment and the
computation by which such adjustment was made.
5.3. In the event that at any time prior to the expiration of the Warrants
and prior to their exercise:
(a) the Company shall offer for subscription to the holders of the
Series D Preferred any additional shares of stock of any class or any other
securities convertible into Series D Preferred or any rights to subscribe
thereto; or
(b) the Company shall declare any stock split, stock dividend,
subdivision, combination, or similar distribution with respect to the Series D
Preferred, regardless of the effect of any such event on the outstanding number
of shares of Series D Preferred; or
(c) the Company shall declare a dividend with respect to the Series D
Preferred, other than a dividend payable in shares of the Company's own
Series D Preferred or Common Stock; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation, or winding up of the Company (other than in connection with a
consolidation, merger, or sale of all or substantially all of its property,
assets and business as an entity);
(e) there shall be any capital change in the Company as set forth in
Section 5.1(b);
(each such event hereinafter being referred to as a "Notification Event"), the
Company shall cause to be mailed to the Holder, not less than 10 days prior to
the record date, if any, in connection with such Notification Event (provided,
however, that if there is no record date, or if 10 days prior notice is
impracticable, as soon as practicable) written notice specifying the nature of
such event and the effective date of, or the date on which the books of the
Company shall close or a record shall be taken with respect to, such event.
Such notice shall also set forth facts indicating the effect of such action, if
any (to the extent such effect may be known at the date of such notice), on the
Purchase Price and the kind and amount of the shares of stock or other
securities or property deliverable upon exercise of the Warrant.
5
<PAGE>
6. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
7. Registration Rights
-------------------
The Warrants and the Warrant Shares shall have the registration rights set
forth in the Amended and Restated Registration Rights Agreement of even date
herewith by and among the Company, the Holder and the other securityholders of
the Company named therein.
8. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of law
principles thereof.
6
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 13th day of April, 1999.
INTRALINKS, INC.
By: /s/
------------------------------
Name:
Title:
Attest:
/s/
- ------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
__________________________________
Signature
Address:
__________________________________
__________________________________
__________________________________
<PAGE>
EXHIBIT 10.26
[First Tranche]
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY
STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS IF
NECESSARY, OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THESE
WARRANTS AND THE SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN AMENDED
AND RESTATED SHAREHOLDERS' AGREEMENT, A COPY OF WHICH MAY BE OBTAINED
FROM INTRALINKS, INC.
38,462 Warrants June 30, 1999
- ---------------
WARRANT CERTIFICATE
INTRALINKS, INC.
This warrant certificate ("Warrant Certificate") certifies that for
value received R. W. Johnson Pharmaceutical Research Institute ("PRI") or
registered assigns (the "Holder") is the owner of the number of warrants (the
"Warrants") specified above, each of which entitles the Holder thereof to
purchase, at any time on or before the Expiration Date (as hereinafter defined),
one fully paid and non-assessable share of Common Stock, $.01 par value (the
"Common Stock"), of IntraLinks, Inc. (the "Company"), for the Purchase Price
(defined in Section 1 below) in lawful money of the United States of America
(subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant initially shall entitle the Holder to purchase one share of
Common Stock of the Company, and the purchase price payable upon exercise of the
Warrant (the "Purchase Price") shall initially be $13.00 per share of Common
Stock, subject to adjustment as hereinafter provided. The Purchase Price and
number of shares of Common Stock issuable upon exercise of this Warrant are
subject to adjustment as provided in Section 5 hereof. The shares of Common
Stock issuable upon exercise of the Warrant (and/or other shares of stock so
issuable by reason of any adjustments pursuant to Section 5) are sometimes
referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date; No Fractional Shares; Reservation of Shares
----------------------------------------------------------------------
2.1. The Warrants are exercisable, at the option of the Holder, in whole
or in part on or before the Expiration Date, upon surrender of this Warrant
Certificate to the Company together with a duly completed Notice of Exercise, in
the form attached hereto as Exhibit A, and payment of the Purchase Price. In the
---------
case of exercise of less than the entire Warrant represented by this Warrant
Certificate, the Company shall cancel the Warrant Certificate upon the surrender
thereof and shall execute and deliver a new Warrant Certificate for the balance
of such Warrant.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time on June
30, 2002, or if such day shall in the State of New York be a holiday or a day on
which banks are authorized to close, then 5:00 p.m. New York time the next
following day which in the State of New York is not a holiday or a day on which
banks are authorized to close.
2.3. No fractional shares shall be issued upon exercise or conversion (in
whole or in part) of the Warrants and the number of shares of Common Stock to be
issued shall be rounded down to the nearest whole share, and there shall be no
payment to the Holder for any such rounded fractional shares.
2.4. The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares of Common Stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of capital stock which shall be issuable upon exercise
of the Warrants shall, upon issuance in accordance with the terms hereof, be
duly and validly issued and fully paid and non-assessable and free from all
taxes, liens, encumbrances and charges with respect to the issue thereof, and
that upon issuance the Company shall use its commercially reasonable efforts to
cause such shares to be listed on each national securities exchange, if any, on
which the other shares of such outstanding Common Stock of the Company are then
listed.
3. Registration and Transfer on Company Books
------------------------------------------
3.1. The Company shall maintain books for the registration and transfer of
the Warrants and the registration and transfer of the Warrant Shares.
3.2. Prior to due presentment for registration of transfer of this Warrant
Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3. The Warrants shall be freely assignable by PRI to any affiliate of
PRI, provided that such affiliate, prior to the assignment by PRI, represents to
the Company that it is purchasing the Warrants for investment purposes only and
not with a view of or towards subsequent transfer (except to an affiliate) or
resale and that such sale or transfer is permitted under the securities laws.
2
<PAGE>
4. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of and
the loss, theft, destruction or mutilation of any Warrant Certificate and, in
the case of loss, theft or destruction, of indemnity reasonably satisfactory to
the Company, or, in the case of mutilation, upon surrender and cancellation of
the mutilated Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate representing an equal number of Warrant
Shares.
5. Adjustment of Purchase Price and Number of Shares
Deliverable; Reorganizations and Recapitalizations
--------------------------------------------------
5.1. The number of Warrant Shares purchasable upon the exercise of the
Warrants and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock, (ii)
subdivide its outstanding shares of Common Stock through stock split or
otherwise, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, or (iv) issue by reclassification of its
Common Stock (including any reclassification in connection with a consolidation
or merger in which the Company is the continuing corporation) other securities
of the Company, the number and/or nature of Warrant Shares purchasable upon
exercise of the Warrants immediately prior thereto shall be adjusted so that the
Holder shall be entitled to receive the kind and number of Warrant Shares or
other securities of the Company which he or it would have owned or have been
entitled to receive after the happening of any of the events described above,
had such Warrants been exercised immediately prior to the happening of such
event or any record date with respect thereto. Any adjustment made pursuant to
this paragraph (a) shall become effective retroactively as of the record date of
such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than a
consolidation or merger in which the outstanding shares of the Company's Common
Stock are not converted into or exchanged for other rights or interests), or in
the case of any sale, transfer or other disposition to another corporation of
all or substantially all the properties and assets of the Company, the Holder of
the Warrants shall thereafter be entitled to purchase (and it shall be a
condition to the consummation of any such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition that appropriate
provisions shall be made so that such Holder shall thereafter be entitled to
purchase) the kind and amount of shares of stock and other securities and
property (including cash) which the Holder would have been entitled to receive
had such Warrant been exercised immediately prior to the effective date of such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in the
application of the provisions of this Section 5 with respect to rights and
interest thereafter of the Holder of the Warrants to the end that the provisions
of this Section 5 shall thereafter be applicable, as near
3
<PAGE>
as reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this Section
5.1(b) shall similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, transfers or other dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of the with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
so purchasable immediately thereafter.
5.2. Whenever the number of Warrant Shares purchasable upon the exercise of
the Warrant or the Purchase Price of such Warrant Shares is adjusted, as herein
provided, the Company shall mail to the Holder, at the address of the Holder
shown on the books of the Company, a notice of such adjustment or adjustments,
prepared and signed by the Chief Financial Officer or Secretary of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, a brief statement of the facts requiring such adjustment and the
computation by which such adjustment was made.
5.3. In the event that at any time prior to the expiration of the Warrants
and prior to their exercise:
(a) the Company shall offer for subscription to the holders of the
Common Stock any additional shares of stock of any class or any other securities
convertible into Common Stock or any rights to subscribe thereto; or
(b) the Company shall declare any stock split, stock dividend,
subdivision, combination, or similar distribution with respect to the Common
Stock, regardless of the effect of any such event on the outstanding number of
shares of Common Stock; or
(c) the Company shall declare a dividend with respect to the Common
Stock, other than a dividend payable in shares of the Company's own Common Stock
or Common Stock; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation, or winding up of the Company (other than in connection with a
consolidation, merger, or sale of all or substantially all of its property,
assets and business as an entity);
(e) there shall be any capital change in the Company as set forth in
Section 5.1(b);
(each such event hereinafter being referred to as a "Notification Event"), the
Company shall cause to be mailed to the Holder, not less than 10 days prior to
the record date, if any, in
4
<PAGE>
connection with such Notification Event (provided, however, that if there is no
record date, or if 10 days prior notice is impracticable, as soon as
practicable) written notice specifying the nature of such event and the
effective date of, or the date on which the books of the Company shall close or
a record shall be taken with respect to, such event. Such notice shall also set
forth facts indicating the effect of such action, if any (to the extent such
effect may be known at the date of such notice), on the Purchase Price and the
kind and amount of the shares of stock or other securities or property
deliverable upon exercise of the Warrant.
6. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
7. Registration Rights
-------------------
The Warrant Shares shall have the registration rights set forth in the
Amended and Restated Registration Rights Agreement of even date herewith by and
among the Company, the Holder and the other securityholders of the Company named
therein.
8. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of law
principles thereof.
5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 30/th/ day of June, 1999.
INTRALINKS, INC.
By: /s/
--------------------------
Name:
Title:
Attest:
__________________________________
Name:
Title:
6
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
____________________________________
Signature
Address:
____________________________________
____________________________________
____________________________________
<PAGE>
EXHIBIT 10.27
[Second Tranche]
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY
STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS IF
NECESSARY, OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THESE
WARRANTS AND THE SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS SET FORTH IN
THAT CERTAIN AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT, A COPY OF
WHICH MAY BE OBTAINED FROM INTRALINKS, INC.
76,923 Warrants June 30, 1999
WARRANT CERTIFICATE
INTRALINKS, INC.
This warrant certificate ("Warrant Certificate") certifies that for
value received R. W. Johnson Pharmaceutical Research Institute ("PRI") or
registered assigns (the "Holder") is the owner of the number of warrants (the
"Warrants") specified above, each of which entitles the Holder thereof to
purchase on or before the Expiration Date (as defined herein) one fully paid and
non-assessable share of Common Stock, $.01 par value, (the "Common Stock") of
IntraLinks, Inc. (the "Company"), for the Purchase Price (defined in Section 1
below) in lawful money of the United States of America (subject to adjustment as
hereinafter provided). Upon the occurrence of an Exercise Event (as defined
herein), the Company may require the Holder to exercise immediately all of the
Warrants represented by this Warrant Certificate.
1. Warrant; Purchase Price
-----------------------
Each Warrant initially shall entitle the Holder to purchase one share of
Common Stock of the Company, and the purchase price payable upon exercise of the
Warrant (the "Purchase Price") shall initially be $13.00 per share of Common
Stock , subject to adjustment as hereinafter provided, unless otherwise provided
herein. The Purchase Price and number of shares of
<PAGE>
Common Stock issuable upon exercise of this Warrant are subject to adjustment as
provided in Section 5 hereof. The shares of Common Stock issuable upon exercise
of the Warrant (and/or other shares of stock so issuable by reason of any
adjustments pursuant to Section 5) are sometimes referred to herein as the
"Warrant Shares."
2. Exercise; Expiration Date; No Fractional Shares; Reservation of Shares
----------------------------------------------------------------------
2.1. The Warrants are exercisable, at the option of the Holder, in whole or
in part on or before the Expiration Date, commencing on the earlier of (i) the
second anniversary of the date hereof and (ii) an Exercise Event, upon surrender
of this Warrant Certificate to the Company together with a duly completed Notice
of Exercise, in the form attached hereto as Exhibit A, and payment of the
---------
Purchase Price. In the case of exercise of less than the entire Warrant
represented by this Warrant Certificate, the Company shall cancel the Warrant
Certificate upon the surrender thereof and shall execute and deliver a new
Warrant Certificate for the balance of such Warrant. Notwithstanding any other
provision of this Warrant Certificate, upon the occurrence of an Exercise Event
at a price per share in excess of the Purchase Price, the Company may, at its
sole option, require the Holder to immediately exercise all (but not less than
all) of the Warrants represented by this Warrant Certificate in exchange for
payment of the Purchase Price. The term "Exercise Event" shall mean the
completion of a firm commitment initial public offering of the Company's common
stock or the sale of any shares of the Company owned by Johnson & Johnson
Development Corporation or its permitted assigns as a result of and pursuant to
Section 4.1(c) of that certain Amended and Restated Shareholders' Agreement of
even date herewith by and among the Company and its Shareholders.
2.2. The term "Expiration Date" shall mean the earlier of (i) 5:00 p.m.
New York time thirty months from the date hereof, or if such day shall in the
State of New York be a holiday or a day on which banks are authorized to close,
then 5:00 p.m. New York time the next following day which in the State of New
York is not a holiday or a day on which banks are authorized to close or (ii)
the time that PRI (A) terminates the Collaboration and Service Agreement between
PRI and the Company of even date prior to payment of the second $250,000 payment
described in Article 3 thereof, (B) refuses to collaborate on IntraTrials or (C)
(after the acceptance of IntraTrials) refuses to use IntraTrials.
2.3. No fractional shares shall be issued upon exercise or conversion (in
whole or in part) of the Warrants and the number of shares of Common Stock to be
issued shall be rounded down to the nearest whole share, and there shall be no
payment to the Holder for any such rounded fractional shares.
2.4. The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares of Common Stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of Common Stock which shall be issuable upon exercise
of the Warrants shall, upon issuance in accordance with the terms hereof, be
duly and validly issued and fully paid and non-assessable and free from all
taxes, liens, encumbrances
2
<PAGE>
and charges with respect to the issue thereof, and that upon issuance the
Company shall use its commercially reasonable efforts to cause such shares to be
listed on each national securities exchange, if any, on which the other shares
of such outstanding capital stock of the Company are then listed.
3. Registration and Transfer on Company Books
------------------------------------------
3.1. The Company shall maintain books for the registration and transfer of
the Warrants and the registration and transfer of the Warrant Shares.
3.2. Prior to due presentment for registration of transfer of this Warrant
Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3. The Warrants shall be freely assignable by PRI to any affiliate of
PRI, provided that such affiliate, prior to the assignment by PRI, represents to
the Company that it is purchasing the Warrants for investment purposes only and
not with a view of or towards subsequent transfer (except to an affiliate) or
resale and that such sale or transfer is permitted under the securities laws.
4. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of and
the loss, theft, destruction or mutilation of any Warrant Certificate and, in
the case of loss, theft or destruction, of indemnity reasonably satisfactory to
the Company, or, in the case of mutilation, upon surrender and cancellation of
the mutilated Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate representing an equal number of Warrant
Shares.
5. Adjustment of Purchase Price and Number of Shares
Deliverable; Reorganizations and Recapitalizations
--------------------------------------------------
5.1. The number of Warrant Shares purchasable upon the exercise of the
Warrants and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock, (ii)
subdivide its outstanding shares of Common Stock through stock split or
otherwise, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, or (iv) issue by reclassification of its
Common Stock (including any reclassification in connection with a consolidation
or merger in which the Company is the continuing corporation) other securities
of the Company, the number and/or nature of Warrant Shares purchasable upon
exercise of the Warrants immediately prior thereto shall be adjusted so that the
Holder shall be entitled to receive the kind and number of Warrant Shares or
other securities of the Company which he or it would have owned or have been
entitled to receive after the happening of any of the events
3
<PAGE>
described above, had such Warrants been exercised immediately prior to the
happening of such event or any record date with respect thereto. Any adjustment
made pursuant to this paragraph (a) shall become effective retroactively as of
the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than a
consolidation or merger in which the outstanding shares of the Company's Common
Stock are not converted into or exchanged for other rights or interests), or in
the case of any sale, transfer or other disposition to another corporation of
all or substantially all the properties and assets of the Company, the Holder of
the Warrants shall thereafter be entitled to purchase (and it shall be a
condition to the consummation of any such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition that appropriate
provisions shall be made so that such Holder shall thereafter be entitled to
purchase) the kind and amount of shares of stock and other securities and
property (including cash) which the Holder would have been entitled to receive
had such Warrant been exercised immediately prior to the effective date of such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in the
application of the provisions of this Section 5 with respect to rights and
interest thereafter of the Holder of the Warrants to the end that the provisions
of this Section 5 shall thereafter be applicable, as near as reasonably may be,
in relation to any shares or other property thereafter purchasable upon the
exercise of the Warrants. The provisions of this Section 5.1(b) shall similarly
apply to successive reorganizations, reclassifications, consolidations, mergers,
sales, transfers or other dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of the Warrants is adjusted, as provided in this Section 5.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
so purchasable immediately thereafter.
5.2. Whenever the number of Warrant Shares purchasable upon the exercise
of the Warrant or the Purchase Price of such Warrant Shares is adjusted, as
herein provided, the Company shall mail to the Holder, at the address of the
Holder shown on the books of the Company, a notice of such adjustment or
adjustments, prepared and signed by the Chief Financial Officer or Secretary of
the Company, which sets forth the number of Warrant Shares purchasable upon the
exercise of each Warrant and the Purchase Price of such Warrant Shares after
such adjustment, a brief statement of the facts requiring such adjustment and
the computation by which such adjustment was made.
5.3. In the event that at any time prior to the expiration of the Warrants
and prior to their exercise:
4
<PAGE>
(a) the Company shall offer for subscription to the holders of the
Common Stock any additional shares of stock of any class or any other securities
convertible into Common Stock or any rights to subscribe thereto; or
(b) the Company shall declare any stock split, stock dividend,
subdivision, combination, or similar distribution with respect to the Common
Stock, regardless of the effect of any such event on the outstanding number of
shares of Common Stock ; or
(c) the Company shall declare a dividend with respect to the Common
Stock, other than a dividend payable in shares of the Company's own Common
Stock; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation, or winding up of the Company (other than in connection with a
consolidation, merger, or sale of all or substantially all of its property,
assets and business as an entity);
(e) there shall be any capital change in the Company as set forth in
Section 5.1(b);
(each such event hereinafter being referred to as a "Notification Event"), the
Company shall cause to be mailed to the Holder, not less than 10 days prior to
the record date, if any, in connection with such Notification Event (provided,
however, that if there is no record date, or if 10 days prior notice is
impracticable, as soon as practicable) written notice specifying the nature of
such event and the effective date of, or the date on which the books of the
Company shall close or a record shall be taken with respect to, such event.
Such notice shall also set forth facts indicating the effect of such action, if
any (to the extent such effect may be known at the date of such notice), on the
Purchase Price and the kind and amount of the shares of stock or other
securities or property deliverable upon exercise of the Warrant.
6. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
7. Registration Rights
-------------------
The Warrant Shares shall have the registration rights set forth in the
Amended and Restated Registration Rights Agreement of even date herewith by and
among the Company, the Holder and the other securityholders of the Company named
therein.
8. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of law
principles thereof.
5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 30/th/ day of June, 1999.
INTRALINKS, INC.
By: /s/
---------------------------
Name:
Title:
Attest:
_____________________________
Name:
Title:
SOLELY WITH RESPECT TO THE PENULTIMATE
SENTENCE OF SECTION 2.1 HEREOF
R.W. JOHNSON PHARMACEUTICAL RESEARCH
INSTITUTE
By:
-------------------------------
Name:
Title:
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 30th day of June, 1999.
INTRALINKS, INC.
By:
___________________________
Name:
Title:
Attest:
_____________________________
Name:
Title:
SOLELY WITH RESPECT TO THE PENULTIMATE
SENTENCE OF SECTION 2.1 HEREOF
R.W. JOHNSON PHARMACEUTICAL RESEARCH
INSTITUTE
By:
-------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
____ ____ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the purchase price of such shares in full.
Name of Holder
___________________________________
Signature
Address:
___________________________________
__________________________________
__________________________________
<PAGE>
EXHIBIT 10.28
[Third Tranche]
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY
STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS IF
NECESSARY, OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THESE
WARRANTS AND THE SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN AMENDED
AND RESTATED SHAREHOLDERS' AGREEMENT, A COPY OF WHICH MAY BE OBTAINED
FROM INTRALINKS, INC.
115,385 Warrants June 30, 1999
WARRANT CERTIFICATE
INTRALINKS, INC.
This warrant certificate ("Warrant Certificate") certifies that for
value received R. W. Johnson Pharmaceutical Research Institute ("PRI") or
registered assigns (the "Holder") is the owner of the number of warrants (the
"Warrants") specified above, each of which entitles the Holder thereof to
purchase, at any time after such warrants vest in accordance with the terms
hereof and on or before the Expiration Date (as hereinafter defined), one fully
paid and non-assessable share of Common Stock, $.01 par value (the "Common
Stock"), of IntraLinks, Inc. (the "Company"), for the Purchase Price (defined in
Section 1 below) in lawful money of the United States of America (subject to
adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant initially shall entitle the Holder to purchase one share of
Common Stock of the Company, and the purchase price payable upon exercise of the
Warrant (the "Purchase Price") shall initially be $13.00 per share of Common
Stock, subject to adjustment as hereinafter provided. The Purchase Price and
number of shares of Common Stock issuable upon exercise of this Warrant are
subject to adjustment as provided in Section 5 hereof. The shares of Common
Stock issuable upon exercise of the Warrant (and/or other shares of stock so
issuable by reason of any adjustments pursuant to Section 5) are sometimes
referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date; No Fractional Shares; Reservation of
---------------------------------------------------------------
Shares
- ------
2.1. The Warrants are exercisable, at the option of the Holder, in whole
or in part in accordance with the terms hereof and on or before the Expiration
Date as hereinafter described, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as Exhibit A, and payment of the Purchase Price. In the case of exercise
---------
of less than the entire Warrant represented by this Warrant Certificate, the
Company shall cancel the Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate for the balance of such
Warrant. The Warrants shall be exercisable according to net revenues realized by
the Company's IntraPharma subsidiary (including net revenues derived from PRI)
for the three-year period commencing on the date hereof. In the event that such
net revenues reach $3,000,000 within the three-year period, the Warrants will be
100% exercisable and pro rata for net revenues less than such amount. The
cumulative net revenue of IntraPharma will be determined and the percent
exercisability of these Warrants will be calculated every six months, starting
with the date hereof. At any time, PRI may exercise all or a portion of the
then-exercisable Warrants. Notwithstanding anything contained herein to the
contrary, all of the Warrants shall immediately vest and become exercisable upon
the sale of any shares of the Company owned by Johnson & Johnson Development
Corporation or its permitted assigns as a result of and pursuant to Section
4.1(c) of the Amended and Restated Shareholders' Agreement of even date herewith
by and among the Company and its shareholders.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time five
years from the date hereof, or if such day shall in the State of New York be a
holiday or a day on which banks are authorized to close, then 5:00 p.m. New York
time the next following day which in the State of New York is not a holiday or a
day on which banks are authorized to close.
2.3. No fractional shares shall be issued upon exercise (in whole or in
part) of the Warrants and the number of shares of Common Stock to be issued
shall be rounded down to the nearest whole share, and there shall be no payment
to the Holder for any such rounded fractional shares.
2.4. The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares of Common Stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of capital stock which shall be issuable upon exercise
of the Warrants shall, upon issuance in accordance with the terms hereof, be
duly and validly issued and fully paid and non-assessable and free from all
taxes, liens, encumbrances and charges with respect to the issue thereof, and
that upon issuance the Company shall use its commercially reasonable efforts to
cause such shares to be listed on each national securities exchange, if any, on
which the other shares of such outstanding capital stock of the Company are then
listed.
3. Registration and Transfer on Company Books
------------------------------------------
2
<PAGE>
3.1. The Company shall maintain books for the registration and transfer of
the Warrants and the registration and transfer of the Warrant Shares.
3.2. Prior to due presentment for registration of transfer of this Warrant
Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3. The Warrants shall be freely assignable by PRI to any affiliate of
PRI, provided that such affiliate, prior to the assignment by PRI, represents to
the Company that it is purchasing the Warrants for investment purposes only and
not with a view of or towards subsequent transfer (except to an affiliate) or
resale and that such sale or transfer is permitted under the securities laws.
4. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of and
the loss, theft, destruction or mutilation of any Warrant Certificate and, in
the case of loss, theft or destruction, of indemnity reasonably satisfactory to
the Company, or, in the case of mutilation, upon surrender and cancellation of
the mutilated Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate representing an equal number of Warrant
Shares.
5. Adjustment of Purchase Price and Number of Shares
Deliverable; Reorganizations and Recapitalizations
--------------------------------------------------
5.1. The number of Warrant Shares purchasable upon the exercise of the
Warrants and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock, (ii)
subdivide its outstanding shares of Common Stock through stock split or
otherwise, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock, or (iv) issue by reclassification of its
Common Stock (including any reclassification in connection with a consolidation
or merger in which the Company is the continuing corporation) other securities
of the Company, the number and/or nature of Warrant Shares purchasable upon
exercise of the Warrants immediately prior thereto shall be adjusted so that the
Holder shall be entitled to receive the kind and number of Warrant Shares or
other securities of the Company which he or it would have owned or have been
entitled to receive after the happening of any of the events described above,
had such Warrants been exercised immediately prior to the happening of such
event or any record date with respect thereto. Any adjustment made pursuant to
this paragraph (a) shall become effective retroactively as of the record date of
such event.
(b) In the event of any capital reorganization or any reclassification
of the capital stock of the Company or in case of the consolidation or merger of
the Company with another corporation (other than a consolidation or merger in
which the outstanding shares of the
3
<PAGE>
Company's Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to another
corporation of all or substantially all the properties and assets of the
Company, the Holder of the Warrants shall thereafter be entitled to purchase
(and it shall be a condition to the consummation of any such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition
that appropriate provisions shall be made so that such Holder shall thereafter
be entitled to purchase) the kind and amount of shares of stock and other
securities and property (including cash) which the Holder would have been
entitled to receive had such Warrant been exercised immediately prior to the
effective date of such reorganization, reclassification, consolidation, merger,
sale, transfer or other disposition; and in any such case appropriate
adjustments shall be made in the application of the provisions of this Section 5
with respect to rights and interest thereafter of the Holder of the Warrants to
the end that the provisions of this Section 5 shall thereafter be applicable, as
near as reasonably may be, in relation to any shares or other property
thereafter purchasable upon the exercise of the Warrants. The provisions of this
Section 5.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of the Warrants is adjusted, as provided in this Section 5.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
so purchasable immediately thereafter.
5.2. Whenever the number of Warrant Shares purchasable upon the exercise of
the Warrant or the Purchase Price of such Warrant Shares is adjusted, as herein
provided, the Company shall mail to the Holder, at the address of the Holder
shown on the books of the Company, a notice of such adjustment or adjustments,
prepared and signed by the Chief Financial Officer or Secretary of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, a brief statement of the facts requiring such adjustment and the
computation by which such adjustment was made.
5.3. In the event that at any time prior to the expiration of the Warrants
and prior to their exercise:
(a) the Company shall offer for subscription to the holders of the
Common Stock any additional shares of stock of any class or any other securities
convertible into Common Stock or any rights to subscribe thereto; or
(b) the Company shall declare any stock split, stock dividend,
subdivision, combination, or similar distribution with respect to the Common
Stock, regardless of the effect of any such event on the outstanding number of
shares of Common Stock; or
4
<PAGE>
(c) the Company shall declare a dividend with respect to the Common
Stock, other than a dividend payable in shares of the Company's own Common
Stock;
(d) there shall be a voluntary or involuntary dissolution,
liquidation, or winding up of the Company (other than in connection with a
consolidation, merger, or sale of all or substantially all of its property,
assets and business as an entity); or
(e) there shall be any capital change in the Company as set forth in
Section 5.1(b);
(each such event hereinafter being referred to as a "Notification Event"), the
Company shall cause to be mailed to the Holder, not less than 10 days prior to
the record date, if any, in connection with such Notification Event (provided,
however, that if there is no record date, or if 10 days prior notice is
impracticable, as soon as practicable) written notice specifying the nature of
such event and the effective date of, or the date on which the books of the
Company shall close or a record shall be taken with respect to, such event. Such
notice shall also set forth facts indicating the effect of such action, if any
(to the extent such effect may be known at the date of such notice), on the
Purchase Price and the kind and amount of the shares of stock or other
securities or property deliverable upon exercise of the Warrant.
6. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
7. Registration Rights
-------------------
The Warrant Shares shall have the registration rights set forth in the
Amended and Restated Registration Rights Agreement of even date herewith by and
among the Company, the Holder and the other securityholders of the Company named
therein.
8. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of law
principles thereof.
5
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 30th day of June, 1999.
INTRALINKS, INC.
By: /s/
-------------------------
Name:
Title:
Attest:
__________________________________
Name:
Title:
6
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
__________________________________
Signature
Address:
__________________________________
__________________________________
__________________________________
<PAGE>
EXHIBIT 10.29
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS, INC.
15,050 Warrants
INTRALINKS, INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Lante Corporation or registered assigns (the "Holder") is the
owner of the number of warrants ("Warrants") specified above, each of which
entitles the Holder thereof to purchase, at any time on or before the Expiration
Date (hereinafter defined) one fully paid and non-assessable share of Common
Stock, par value $0.01 per share ("Common Stock"), of IntraLinks, Inc., a
Delaware corporation (the "Company"), at a purchase price of $3.333333 per share
of Common Stock in lawful money of the United States of America in cash or by
certified or cashier's check or a combination of cash and certified or cashier's
check (subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $3.333333 per share of
Common Stock. The Purchase Price and number of shares of Common Stock issuable
upon exercise of each Warrant are subject to adjustment as provided in Article
6. The shares of Common Stock issuable upon exercise of the Warrants (and/or
other shares of Common Stock so issuable by reason of any adjustments pursuant
to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1. The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as EXHIBIT A, and payment of an amount equal to the Purchase Price times
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time
FIVE (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1. The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2. Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3. The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
<PAGE>
4. Reservation of Shares
---------------------
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price
and Number of Shares Deliverable
--------------------------------
6.1. The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
6.1.1. In case the Company shall (i) declare a dividend or make
a distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this paragraph
(a) shall become effective retroactively as of the record date of such
event.
<PAGE>
6.1.2. In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to
another corporation of all or substantially all the properties and assets
of the Company, the Holder of each Warrant shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition that appropriate provisions shall be made so that such
Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
6.1.3. Whenever the number of Warrant Shares purchasable upon
the exercise of each Warrant is adjusted, as provided in this Section 6.1,
the Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2. No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3. Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
<PAGE>
6.4. The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
8. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
8.1. Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the exercise of Warrants. Warrants may not be exercised in
such number as would result (except for the provisions of this paragraph) in the
issuance of a fraction of a share of Common Stock unless the Holder is
exercising all Warrants then owned by the Holder. In such event, the Company
shall, upon the exercise of all of such Warrants, issue to the Holder the
largest aggregate whole number of shares of Common Stock called for thereby upon
receipt of the Purchase Price for all of such Warrants and pay a sum in cash
equal to the remaining fraction of a share of Common Stock, multiplied by its
Market Price Per Share (as determined pursuant to Section 8.2 below) as of the
last business day preceding the date on which the Warrants are presented for
exercise.
8.2. As used herein, the "Market Price Per Share" with respect to any
class or series of Common Stock on any date shall mean the closing price per
share of such class or series of Common Stock for the trading day immediately
preceding such date. The closing price for each such day shall be the last sale
price regular way or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case on the principal
securities exchange on which the shares of such Common Stock of the Company are
listed or admitted to trading, the last sale price, or in case no sale takes
place on such day, the average of the closing bid and asked prices of such
Common Stock on NASDAQ or any comparable system, or if such Common Stock is not
reported on NASDAQ, or a comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share" shall be
<PAGE>
equal to the fair market value of such Common Stock as determined in good faith
by the Board of Directors of the Company.
9. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY
NOT BE SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF
SUCH SHARES IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
10. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 2nd day of October, 1997.
INTRALINKS, INC.
[SEAL] By: __________________________
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
Signature
Address:
<PAGE>
EXHIBIT 10.30
Warrants To Purchase Common Stock
For good and valuable consideration, and in connection with advisory and
consulting services provided and to be provided under a letter Agreement dated
June 10, 1997, IntraLinks, Inc., a Delaware corporation ("IntraLinks" or the
"Company") does hereby grant to Landwell Financial Services, Inc., a New Jersey
corporation ("Landwell") warrants (hereinafter referred to as the "Landwell
Warrants") for the right to purchase 15,000 shares of common stock of IntraLinks
at an exercise price of $50,000.
The Landwell Warrants may be exercised at any time in whole (but not in part)
during the five-year period commencing July 1, 1997 and ending June 30, 2002.
The Landwell Warrants, on an "as-exercised basis", will be governed by the terms
and conditions of Intralinks Shareholders' Agreement, as amended from time to
time (the terms of which are incorporated herein by reference) that apply to
holders of Intralinks' common stock, except that Landwell Warrants will have no
voting rights until such warrants are exercised and converted into actual shares
of IntraLinks common stock. In particular but without limitation, Landwell
Warrants will have the same pre-emptive rights, on an "as-exercised basis", as
other IntraLinks common stock, and Landwell Warrants will have the same exit
rights, including "piggyback" rights and "tag along" rights, as other IntraLInks
common stock, all as provided in the aforesaid IntraLInks Shareholders'
Agreement.
Landwell may not sell, transfer, pledge or assign Landwell Warrants to any party
other than to such party or parties permitted to other IntraLinks common
stockholders under IntraLInks Shareholders' Agreement. In event of a permitted
opportunity for Landwell to sell Landwell Warrants, the Company will use its
best efforts to enable Landwell, at its specific written request, to sell
Landwell Warrants on such terms and conditions that will maximize potential
income tax benefits to landwell from the transaction including,without
limitations the right to sell Landwell Warrants to a buyer in the form of
warrants (without the need to for Landwell first to exercise Landwell Warrants
into shares of IntraLinks common stock.)
Both Landwell and IntraLinks acknowledge, understand and fully agree that
Paragraph 4., "Representations and Warranties", Paragraph 5., Representations of
the Company", and Paragraph 6., "Miscellaneous" of Intralinks' Subscription
Agreement for Series A Preferred Stock, dated January 15, 1997, shall apply to
the Landwell Warrants and that such provisions expressly are incorporated herein
by reference.
In Witness Whereof, the undersigned have caused this agreement to be executed as
of June 10, 1997, and agree to be bound by this agreement
David M. Cromwell Mark S. Adams
------------------------- ---------------------
David M. Cromwell Mark S. Adams
Chairman of the Board Chief Executive Officer
Landwell Financial Services, Inc. Intralinks, Inc.
25 Shrewsbury Drive 1372 Broadway
Rumson, NJ 07760-2007 New York, NY 10018-6106
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1. The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as EXHIBIT A, and payment of an amount equal to the Purchase Price times
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time
FIVE (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1. The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2. Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3. The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
<PAGE>
4. Reservation of Shares
---------------------
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price
and Number of Shares Deliverable
--------------------------------
6.1. The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
6.1.1. In case the Company shall (i) declare a dividend or make
a distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this paragraph
(a) shall become effective retroactively as of the record date of such
event.
<PAGE>
6.1.2. In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to
another corporation of all or substantially all the properties and assets
of the Company, the Holder of each Warrant shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition that appropriate provisions shall be made so that such
Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
6.1.3. Whenever the number of Warrant Shares purchasable upon
the exercise of each Warrant is adjusted, as provided in this Section 6.1,
the Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2. No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3. Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
<PAGE>
6.4. The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
8. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
8.1. Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the exercise of Warrants. Warrants may not be exercised in
such number as would result (except for the provisions of this paragraph) in the
issuance of a fraction of a share of Common Stock unless the Holder is
exercising all Warrants then owned by the Holder. In such event, the Company
shall, upon the exercise of all of such Warrants, issue to the Holder the
largest aggregate whole number of shares of Common Stock called for thereby upon
receipt of the Purchase Price for all of such Warrants and pay a sum in cash
equal to the remaining fraction of a share of Common Stock, multiplied by its
Market Price Per Share (as determined pursuant to Section 8.2 below) as of the
last business day preceding the date on which the Warrants are presented for
exercise.
8.2. As used herein, the "Market Price Per Share" with respect to any
class or series of Common Stock on any date shall mean the closing price per
share of such class or series of Common Stock for the trading day immediately
preceding such date. The closing price for each such day shall be the last sale
price regular way or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case on the principal
securities exchange on which the shares of such Common Stock of the Company are
listed or admitted to trading, the last sale price, or in case no sale takes
place on such day, the average of the closing bid and asked prices of such
Common Stock on NASDAQ or any comparable system, or if such Common Stock is not
reported on NASDAQ, or a comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share" shall be
<PAGE>
equal to the fair market value of such Common Stock as determined in good faith
by the Board of Directors of the Company.
9. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY
NOT BE SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF
SUCH SHARES IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
10. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 2nd day of October, 1997.
INTRALINKS, INC.
[SEAL] By: __________________________
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
Signature
Address:
<PAGE>
EXHIBIT 10.31
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS, INC.
40,000 Warrants
INTRALINKS, INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, John Sculley or registered assigns (the "Holder") is the owner
of the number of warrants ("Warrants") specified above, each of which entitles
the Holder thereof to purchase, at any time on or before the Expiration Date
(hereinafter defined) one fully paid and non-assessable share of Common Stock,
par value $0.01 per share ("Common Stock"), of IntraLinks, Inc., a Delaware
corporation (the "Company"), at a purchase price of $3.333333 per share of
Common Stock in lawful money of the United States of America in cash or by
certified or cashier's check or a combination of cash and certified or cashier's
check (subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $3.333333 per share of
Common Stock. The Purchase Price and number of shares of Common Stock issuable
upon exercise of each Warrant are subject to adjustment as provided in Article
6. The shares of Common Stock issuable upon exercise of the Warrants (and/or
other shares of Common Stock so issuable by reason of any adjustments pursuant
to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1. The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as EXHIBIT A, and payment of an amount equal to the Purchase Price times
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time
FIVE (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1. The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2. Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3. The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
<PAGE>
4. Reservation of Shares
---------------------
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price
and Number of Shares Deliverable
--------------------------------
6.1. The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
6.1.1 In case the Company shall (i) declare a dividend or make
a distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this paragraph
(a) shall become effective retroactively as of the record date of such
event.
<PAGE>
6.1.2. In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to
another corporation of all or substantially all the properties and assets
of the Company, the Holder of each Warrant shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition that appropriate provisions shall be made so that such
Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
6.1.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2. No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3. Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
<PAGE>
6.4. The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
8. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
8.1. Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the exercise of Warrants. Warrants may not be exercised in
such number as would result (except for the provisions of this paragraph) in the
issuance of a fraction of a share of Common Stock unless the Holder is
exercising all Warrants then owned by the Holder. In such event, the Company
shall, upon the exercise of all of such Warrants, issue to the Holder the
largest aggregate whole number of shares of Common Stock called for thereby upon
receipt of the Purchase Price for all of such Warrants and pay a sum in cash
equal to the remaining fraction of a share of Common Stock, multiplied by its
Market Price Per Share (as determined pursuant to Section 8.2 below) as of the
last business day preceding the date on which the Warrants are presented for
exercise.
8.2. As used herein, the "Market Price Per Share" with respect to any
class or series of Common Stock on any date shall mean the closing price per
share of such class or series of Common Stock for the trading day immediately
preceding such date. The closing price for each such day shall be the last sale
price regular way or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case on the principal
securities exchange on which the shares of such Common Stock of the Company are
listed or admitted to trading, the last sale price, or in case no sale takes
place on such day, the average of the closing bid and asked prices of such
Common Stock on NASDAQ or any comparable system, or if such Common Stock is not
reported on NASDAQ, or a comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share" shall be
<PAGE>
equal to the fair market value of such Common Stock as determined in good faith
by the Board of Directors of the Company.
9. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY
NOT BE SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF
SUCH SHARES IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
10. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this ____ day of September,, 1997.
INTRALINKS, INC.
[SEAL] By: __________________________
Name:
Title:
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
Signature
Address:
<PAGE>
EXHIBIT 10.32
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS, INC.
2,250 Warrants
INTRALINKS, INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Ducan Brown or registered assigns (the "Holder") is the
owner of the number of warrants ("Warrants") specified above, each of which
entitles the Holder thereof to purchase, at any time on or before the Expiration
Date (hereinafter defined) one fully paid and non-assessable share of Common
Stock, par value $0.01 per share ("Common Stock"), of IntraLinks, Inc., a
Delaware corporation (the "Company"), at a purchase price of $3.333333 per share
of Common Stock in lawful money of the United States of America in cash or by
certified or cashier's check or a combination of cash and certified or cashier's
check (subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $3.333333 per share of
Common Stock. The Purchase Price and number of shares of Common Stock issuable
upon exercise of each Warrant are subject to adjustment as provided in Article
6. The shares of Common Stock issuable upon exercise of the Warrants (and/or
other shares of Common Stock so issuable by reason of any adjustments pursuant
to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1. The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as EXHIBIT A, and payment of an amount equal to the Purchase Price times
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time
FIVE (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1. The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2. Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3. The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
<PAGE>
4. Reservation of Shares
---------------------
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price
and Number of Shares Deliverable
--------------------------------
6.1. The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
6.1.1. In case the Company shall (i) declare a dividend or make
a distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this paragraph
(a) shall become effective retroactively as of the record date of such
event.
<PAGE>
6.1.2. In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to
another corporation of all or substantially all the properties and assets
of the Company, the Holder of each Warrant shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition that appropriate provisions shall be made so that such
Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
6.1.3. Whenever the number of Warrant Shares purchasable upon
the exercise of each Warrant is adjusted, as provided in this Section 6.1,
the Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2. No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3. Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
<PAGE>
6.4. The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
8. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
8.1. Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the exercise of Warrants. Warrants may not be exercised in
such number as would result (except for the provisions of this paragraph) in the
issuance of a fraction of a share of Common Stock unless the Holder is
exercising all Warrants then owned by the Holder. In such event, the Company
shall, upon the exercise of all of such Warrants, issue to the Holder the
largest aggregate whole number of shares of Common Stock called for thereby upon
receipt of the Purchase Price for all of such Warrants and pay a sum in cash
equal to the remaining fraction of a share of Common Stock, multiplied by its
Market Price Per Share (as determined pursuant to Section 8.2 below) as of the
last business day preceding the date on which the Warrants are presented for
exercise.
8.2. As used herein, the "Market Price Per Share" with respect to any
class or series of Common Stock on any date shall mean the closing price per
share of such class or series of Common Stock for the trading day immediately
preceding such date. The closing price for each such day shall be the last sale
price regular way or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case on the principal
securities exchange on which the shares of such Common Stock of the Company are
listed or admitted to trading, the last sale price, or in case no sale takes
place on such day, the average of the closing bid and asked prices of such
Common Stock on NASDAQ or any comparable system, or if such Common Stock is not
reported on NASDAQ, or a comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share" shall be
<PAGE>
equal to the fair market value of such Common Stock as determined in good faith
by the Board of Directors of the Company.
9. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY
NOT BE SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF
SUCH SHARES IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
10. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 9th day of September, 1997.
INTRALINKS, INC.
[SEAL] By:
-----------------------------
Name: Patrick J. Wack, Jr.
Title: COO
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
Signature
Address:
<PAGE>
EXHIBIT 10.33
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS, INC.
22,250 Warrants
INTRALINKS, INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, JOHN SCULLEY or registered assigns (the "Holder") is the
owner of the number of warrants ("Warrants") specified above, each of which
entitles the Holder thereof to purchase, at any time on or before the Expiration
Date (hereinafter defined) one fully paid and non-assessable share of Common
Stock, par value $0.01 per share ("Common Stock"), of IntraLinks, Inc., a
Delaware corporation (the "Company"), at a purchase price of $3.333333 per share
of Common Stock in lawful money of the United States of America in cash or by
certified or cashier's check or a combination of cash and certified or cashier's
check (subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $3.333333 per share of
Common Stock. The Purchase Price and number of shares of Common Stock issuable
upon exercise of each Warrant are subject to adjustment as provided in Article
6. The shares of Common Stock issuable upon exercise of the Warrants (and/or
other shares of Common Stock so issuable by reason of any adjustments pursuant
to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1. The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as EXHIBIT A, and payment of an amount equal to the Purchase Price times
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time
FIVE (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1. The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2. Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3. The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
<PAGE>
4. Reservation of Shares
---------------------
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price
and Number of Shares Deliverable
--------------------------------
6.1. The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
6.1.1. In case the Company shall (i) declare a dividend or make
a distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this paragraph
(a) shall become effective retroactively as of the record date of such
event.
<PAGE>
6.1.2. In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to
another corporation of all or substantially all the properties and assets
of the Company, the Holder of each Warrant shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition that appropriate provisions shall be made so that such
Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
6.1.3. Whenever the number of Warrant Shares purchasable upon
the exercise of each Warrant is adjusted, as provided in this Section 6.1,
the Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2. No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3. Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by an officer of the Company,
which sets forth the number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price of such Warrant Shares after such
adjustment, and a brief statement of the facts requiring such adjustment.
<PAGE>
6.4. The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
8. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
8.1. Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the exercise of Warrants. Warrants may not be exercised in
such number as would result (except for the provisions of this paragraph) in the
issuance of a fraction of a share of Common Stock unless the Holder is
exercising all Warrants then owned by the Holder. In such event, the Company
shall, upon the exercise of all of such Warrants, issue to the Holder the
largest aggregate whole number of shares of Common Stock called for thereby upon
receipt of the Purchase Price for all of such Warrants and pay a sum in cash
equal to the remaining fraction of a share of Common Stock, multiplied by its
Market Price Per Share (as determined pursuant to Section 8.2 below) as of the
last business day preceding the date on which the Warrants are presented for
exercise.
8.2. As used herein, the "Market Price Per Share" with respect to any
class or series of Common Stock on any date shall mean the closing price per
share of such class or series of Common Stock for the trading day immediately
preceding such date. The closing price for each such day shall be the last sale
price regular way or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case on the principal
securities exchange on which the shares of such Common Stock of the Company are
listed or admitted to trading, the last sale price, or in case no sale takes
place on such day, the average of the closing bid and asked prices of such
Common Stock on NASDAQ or any comparable system, or if such Common Stock is not
reported on NASDAQ, or a comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share" shall be
<PAGE>
equal to the fair market value of such Common Stock as determined in good faith
by the Board of Directors of the Company.
9. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY
NOT BE SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF
SUCH SHARES IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
10. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 16th day of September, 1997.
INTRALINKS, INC.
[SEAL] By: /s/ Patrick J. Wach, Jr.
----------------------------
Name: Patrick J. Wach, Jr.
Title: COO
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
Signature
Address:
<PAGE>
EXHIBIT 10.34
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE
WARRANTS HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM REGISTRATION IS AVAILABLE. THESE WARRANTS AND THE
SHARES UNDERLYING THESE WARRANTS ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN THE
PURCHASE AGREEMENT OF EVEN DATE HEREWITH, A COPY OF WHICH
MAY BE OBTAINED FROM INTRALINKS, INC.
2,250 Warrants
INTRALINKS, INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Bob Lerner or registered assigns (the "Holder") is the owner of
the number of warrants ("Warrants") specified above, each of which entitles the
Holder thereof to purchase, at any time on or before the Expiration Date
(hereinafter defined) one fully paid and non-assessable share of Common Stock,
par value $0.01 per share ("Common Stock"), of IntraLinks, Inc., a Delaware
corporation (the "Company"), at a purchase price of $3.333333 per share of
Common Stock in lawful money of the United States of America in cash or by
certified or cashier's check or a combination of cash and certified or cashier's
check (subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $3.333333 per share of
Common Stock. The Purchase Price and number of shares of Common Stock issuable
upon exercise of each Warrant are subject to adjustment as provided in Article
6. The shares of Common Stock issuable upon exercise of the Warrants (and/or
other shares of Common Stock so issuable by reason of any adjustments pursuant
to Article 6) are sometimes referred to herein as the "Warrant Shares."
<PAGE>
2. Exercise; Expiration Date
-------------------------
2.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon surrender of this Warrant Certificate to the
Company together with a duly completed Notice of Exercise, in the form attached
hereto as EXHIBIT A, and payment of an amount equal to the Purchase Price times
the number of Warrants to be exercised. In the case of exercise of less than
all the Warrants represented by this Warrant Certificate, the Company shall
cancel the Warrant Certificate upon the surrender thereof and shall execute and
deliver a new Warrant Certificate for the balance of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time
FIVE (5) years from the date hereof, or if such day shall in the State of New
York be a holiday or a day on which banks are authorized to close, then 5:00
p.m. New York time the next following day which in the State of New York is not
a holiday or a day on which banks are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
3.1 The Company shall maintain books for the registration and
transfer of the Warrants and the registration and transfer of the Warrant
Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3 The Company shall register upon its books any permitted transfer
of a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
<PAGE>
4. Reservation of Shares
---------------------
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price
and Number of Shares Deliverable
--------------------------------
6.1 The number of Warrant Shares purchasable upon the exercise of
each Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make
a distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record
date with respect thereto. An
<PAGE>
adjustment made pursuant to this paragraph (a) shall become effective
retroactively as of the record date of such event.
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to
another corporation of all or substantially all the properties and assets
of the Company, the Holder of each Warrant shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition that appropriate provisions shall be made so that such
Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(b) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6.2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
6.3 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and
<PAGE>
signed by an officer of the Company, which sets forth the number of Warrant
Shares purchasable upon the exercise of each Warrant and the Purchase Price of
such Warrant Shares after such adjustment, and a brief statement of the facts
requiring such adjustment.
6.4 The form of Warrant Certificate need not be changed because of
any change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
8. Fractional Shares and Warrants;
Determination of Market Price Per Share
---------------------------------------
8.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the exercise of Warrants. Warrants may not be exercised in
such number as would result (except for the provisions of this paragraph) in the
issuance of a fraction of a share of Common Stock unless the Holder is
exercising all Warrants then owned by the Holder. In such event, the Company
shall, upon the exercise of all of such Warrants, issue to the Holder the
largest aggregate whole number of shares of Common Stock called for thereby upon
receipt of the Purchase Price for all of such Warrants and pay a sum in cash
equal to the remaining fraction of a share of Common Stock, multiplied by its
Market Price Per Share (as determined pursuant to Section 8.2 below) as of the
last business day preceding the date on which the Warrants are presented for
exercise.
8.2 As used herein, the "Market Price Per Share" with respect to any
class or series of Common Stock on any date shall mean the closing price per
share of such class or series of Common Stock for the trading day immediately
preceding such date. The closing price for each such day shall be the last sale
price regular way or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case on the principal
securities exchange on which the shares of such Common Stock of the Company are
listed or admitted to trading, the last sale price, or in case no sale takes
place on such day, the average of the closing bid and asked prices of such
Common Stock on NASDAQ or any comparable system, or if such Common Stock is not
<PAGE>
reported on NASDAQ, or a comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share" shall be equal to the fair market value of such Common Stock as
determined in good faith by the Board of Directors of the Company.
9. Restriction Upon Transfer; Securities Law Matters.
-------------------------------------------------
THESE WARRANTS MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF BY THE
HOLDER, EXCEPT AS SPECIFICALLY PROVIDED IN THE PURCHASE AGREEMENT OF EVEN DATE
HEREWITH BETWEEN THE COMPANY AND THE HOLDER. THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR STATE SECURITIES LAWS AND MAY
NOT BE SOLD, ASSIGNED OR TRANSFERRED UNLESS SUCH SALE, ASSIGNMENT OR TRANSFER OF
SUCH SHARES IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR
UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
10. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 9/th/ day of September, 1997.
INTRALINKS, INC.
[SEAL] By: /s/ Patrick J. Wack, Jr.
------------------------------
Name: Patrick J. Wack, Jr.
Title: COO
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
_________________________
Name of Holder
_________________________
Signature
Address:
_________________________
_________________________
_________________________
<PAGE>
EXHIBIT 10.35
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") OR THE
LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE REGISTERED UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS IF NECESSARY, OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE. THESE WARRANTS AND THE SHARES UNDERLYING THESE WARRANTS
ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SET FORTH IN
THE AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT DATED AS OF JANUARY
24, 2000 (THE "SHAREHOLDERS' AGREEMENT"), A COPY OF WHICH MAY BE
OBTAINED FROM INTRALINKS, INC.
1,050,000 January 24, 2000
WARRANT CERTIFICATE
INTRALINKS, INC.
This warrant certificate ("Warrant Certificate") certifies that for
value received The Chase Manhattan Corporation ("Chase") or registered assigns
(collectively, the "Holder") is the owner of the number of warrants (the
"Warrants") specified above, each of which entitles the Holder thereof to
purchase, at any time on or before the Expiration Date (as hereinafter defined),
one fully paid and non-assessable share of Series F Convertible Preferred Stock,
$.01 par value, (the "Series F Preferred") of IntraLinks, Inc. (the "Company"),
with such rights and preferences as are established in the Company's Certificate
of Designations for Series F Preferred Stock (subject to adjustment as
hereinafter provided), for the Purchase Price (defined in Section 1 below) in
lawful money of the United States of America (subject to adjustment as
hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant initially shall entitle the Holder to purchase one share of
Series F Preferred of the Company, and the purchase price payable upon exercise
of the Warrant (the "Purchase Price") shall initially be $17.00 per share of
Series F Preferred, subject to adjustment as hereinafter provided. The Purchase
Price and number of shares of Series F Preferred issuable upon exercise of this
Warrant are subject to adjustment as provided in Section 5 hereof. The shares
of Series F Preferred issuable upon exercise of the Warrant (and/or other shares
of stock so issuable by reason of any adjustments pursuant to Section 5) are
sometimes referred to herein as the "Warrant Shares."
2. Exercise; Expiration Date; No Fractional Shares; Reservation of Shares
----------------------------------------------------------------------
2.1. The Warrants are exercisable, at the option of the Holder, in whole
or in part
<PAGE>
in accordance with the terms hereof and on or before the Expiration
Date, upon surrender of this Warrant Certificate to the Company together with a
duly completed Notice of Exercise, in the form attached hereto as Exhibit A, and
---------
payment of the Purchase Price. In the case of exercise of less than the entire
Warrant represented by this Warrant Certificate, the Company shall cancel the
Warrant Certificate upon the surrender thereof and shall execute and deliver a
new Warrant Certificate for the balance of such Warrant.
2.2. The term "Expiration Date" shall mean 5:00 p.m. New York time four
years from the date hereof, or if such day shall in the State of New York be a
holiday or a day on which banks are authorized to close, then 5:00 p.m. New York
time the next following day which in the State of New York is not a holiday or a
day on which banks are authorized to close.
2.3. No fractional shares shall be issued upon exercise or conversion
(in whole or in part) of the Warrants and the number of shares of Series F
Preferred to be issued shall be rounded down to the nearest whole share, and
there shall be no payment to the Holder for any such rounded fractional shares.
2.4. The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants and conversion of the Series F Preferred to the
voting and non-voting common stock of the Company, par value $.01 (the "Common
Stock"), such number of shares of Series F Preferred as shall then be issuable
upon the exercise of all outstanding Warrants and such number of shares of
voting and non-voting Common Stock as are issuable upon conversion of the Series
F Preferred then issued or issuable upon exercise of the Warrants. The Company
covenants that all shares of capital stock which shall be issuable upon exercise
of the Warrants and upon conversion of the Series F Preferred shall, upon
issuance in accordance with the terms hereof, be duly and validly issued and
fully paid and non-assessable and free from all taxes, liens, encumbrances and
charges with respect to the issue thereof, and that upon issuance the Company
shall use its commercially reasonable efforts to cause such shares to be listed
on each national securities exchange, if any, on which the other shares of such
outstanding capital stock of the Company are then listed.
2.5. At such time hereafter as all of the Company's outstanding Series F
Preferred has been converted into shares of the Company's Common Stock in
accordance with the Company's Certificate of Incorporation, as amended and/or
restated and effective immediately prior to any such conversion (the
"Certificate"), then this Warrant shall immediately become exercisable for that
number of shares of the Company's voting or non-voting Common Stock equal to the
number of shares of Common Stock which would have been received if this Warrant
had been exercised in full and the Series F Preferred received thereupon had
been simultaneously converted into voting or non-voting Common Stock immediately
prior to the last such conversion of Series F Preferred Stock. The per share
purchase price shall be immediately adjusted to equal the quotient obtained by
dividing (x) the aggregate Purchase Price of the number of shares of Series F
Preferred for which this Warrant was exercisable immediately prior to such
conversion by (y) the number of shares of voting or non-voting Common Stock for
which this Warrant is exercisable immediately after such conversion or
redemption. In the event that this Warrant becomes exercisable for Common Stock
(whether voting or non-voting), any
2
<PAGE>
adjustments pursuant to Section 5 shall be determined as if the provisions of
Section 5 related to Common Stock (whether voting or non-voting) and not to
Series F Preferred. At the time of exercise, the Holder shall have the option of
electing to receive voting or non-voting Common Stock upon exercise of this
Warrant by notifying the Company of its election in writing prior to and
concurrent with the delivery to the Company of its Notice to Exercise.
3. Registration and Transfer on Company Books
------------------------------------------
3.1. The Company shall maintain books for the registration and transfer
of the Warrants and the registration and transfer of the Warrant Shares.
3.2. Prior to due presentment for registration of transfer of this Warrant
Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
4. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of and
the loss, theft, destruction or mutilation of any Warrant Certificate and, in
the case of loss, theft or destruction, of indemnity reasonably satisfactory to
the Company, or, in the case of mutilation, upon surrender and cancellation of
the mutilated Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate representing an equal number of Warrant
Shares.
5. Adjustment of Purchase Price and Number of Shares
Deliverable; Reorganizations and Recapitalizations
--------------------------------------------------
5.1. The number of Warrant Shares purchasable upon the exercise of the
Warrants and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Series F Preferred payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Series F Preferred through stock split
or otherwise, (iii) combine its outstanding shares of Series F Preferred into a
smaller number of shares of Series F Preferred, or (iv) issue by
reclassification of its Series F Preferred (including any reclassification in
connection with a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of the Warrants immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which he or
it would have owned or have been entitled to receive after the happening of any
of the events described above, had such Warrants been exercised immediately
prior to the happening of such event or any record date with respect thereto.
Any adjustment made pursuant to this paragraph (a) shall become effective
retroactively as of the record date of such event.
3
<PAGE>
(b) In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than a
consolidation or merger in which the outstanding shares of the Company's Series
F Preferred are not converted into or exchanged for other rights or interests),
or in the case of any sale, transfer or other disposition to another corporation
of all or substantially all the properties and assets of the Company, the Holder
of the Warrants shall thereafter be entitled to purchase (and it shall be a
condition to the consummation of any such reorganization, reclassification,
consolidation, merger, sale, transfer or other disposition that appropriate
provisions shall be made so that such Holder shall thereafter be entitled to
purchase) the kind and amount of shares of stock and other securities and
property (including cash) which the Holder would have been entitled to receive
had such Warrant been exercised immediately prior to the effective date of such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in the
application of the provisions of this Section 5 with respect to rights and
interest thereafter of the Holder of the Warrants to the end that the provisions
of this Section 5 shall thereafter be applicable, as near as reasonably may be,
in relation to any shares or other property thereafter purchasable upon the
exercise of the Warrants. The provisions of this Section 5.1(b) shall similarly
apply to successive reorganizations, reclassifications, consolidations, mergers,
sales, transfers or other dispositions.
(c) Whenever the number of Warrant Shares purchasable upon the
exercise of the Warrants is adjusted as provided in this Section 5.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of the Warrants immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant Shares
so purchasable immediately thereafter.
5.2. Whenever the number of Warrant Shares purchasable upon the exercise
of the Warrant or the Purchase Price of such Warrant Shares is adjusted, as
herein provided, the Company shall mail to the Holder, at the address of the
Holder shown on the books of the Company, a notice of such adjustment or
adjustments, prepared and signed by the Chief Financial Officer or Secretary of
the Company, which sets forth the number of Warrant Shares purchasable upon the
exercise of each Warrant and the Purchase Price of such Warrant Shares after
such adjustment, a brief statement of the facts requiring such adjustment and
the computation by which such adjustment was made.
5.3. In the event that at any time prior to the expiration of the
Warrants and prior to their exercise:
(a) the Company shall offer for subscription to the holders of the
Series F Preferred any additional shares of stock of any class or any other
securities convertible into Series F Preferred or any rights to subscribe
thereto; or
4
<PAGE>
(b) the Company shall declare any stock split, stock dividend,
subdivision, combination, or similar distribution with respect to the Series F
Preferred, regardless of the effect of any such event on the outstanding number
of shares of Series F Preferred; or
(c) the Company shall declare a dividend with respect to the Series F
Preferred, other than a dividend payable in shares of the Company's own Series
F Preferred or Common Stock; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation, or winding up of the Company (other than in connection with a
consolidation, merger, or sale of all or substantially all of its property,
assets and business as an entity);
(e) there shall be any capital change in the Company as set forth in
Section 5.1(b);
(each such event hereinafter being referred to as a "Notification Event"), the
Company shall cause to be mailed to the Holder, not less than 10 days prior to
the record date, if any, in connection with such Notification Event (provided,
however, that if there is no record date, or if 10 days prior notice is
impracticable, as soon as practicable) written notice specifying the nature of
such event and the effective date of, or the date on which the books of the
Company shall close or a record shall be taken with respect to, such event.
Such notice shall also set forth facts indicating the effect of such action, if
any (to the extent such effect may be known at the date of such notice), on the
Purchase Price and the kind and amount of the shares of stock or other
securities or property deliverable upon exercise of the Warrant.
6. Conversion Rights
-----------------
6.1 In lieu of exercise of any portion of the Warrants as provided in
Section 2.1 hereof, the Warrants represented by this Warrant Certificate (or any
portion thereof) may, at the election of the Holder, be converted into the
nearest whole number of shares of Series F Preferred Stock equal to: (1) the
product of (a) the number of Warrants to be so converted, (b) the number of
shares of Series F Preferred Stock then issuable upon the exercise of each
Warrant and (c) the excess, if any, of (i) the Market Price Per Share (as
determined pursuant to Section 6.3) with respect to the date of conversion over
(ii) the Purchase Price in effect on the business day next preceding the date of
conversion, divided by (2) the Market Price Per Share with respect to the date
of conversion.
6.2 The conversion rights provided under this Section 6 may be exercised
in whole or in part and at any time and from time to time while any Warrants
remain outstanding. In order to exercise the conversion privilege, the Holder
shall surrender to the Company, at its offices, this Warrant Certificate
accompanied by a duly completed Notice of Conversion in the form attached hereto
as Exhibit B. The Warrants (or so much thereof as shall have been surrendered
for conversion) shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Warrant Certificate for
conversion in accordance with the foregoing provisions. As promptly as
practicable on or after the conversion date, the Company
5
<PAGE>
shall issue and shall deliver to the Holder (i) a certificate or certificates
representing the number of shares of Series F Preferred Stock to which the
Holder shall be entitled as a result of the conversion, and (ii) if the Warrant
Certificate is being converted in part only, a new certificate in principal
amount equal to the unconverted portion of the Warrant Certificate.
6.3 As used herein, the "Market Price Per Share" with respect to any date
shall mean the closing price per share of Company's Common Stock for the trading
day immediately preceding such date. The closing price for each such day shall
be the last sale price regular way or, in case no such sale takes place on such
day, the average of the closing bid and asked prices regular way, in either case
on the principal securities exchange on which the shares of Common Stock of the
Company are listed or admitted to trading, the last sale price, or in case no
sale takes place on such day, the average of the closing bid and asked prices of
the Common Stock on Nasdaq or any comparable system, or if the Common Stock is
not reported on Nasdaq, or a comparable system, the average of the closing bid
and asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share" shall be equal to the fair market value of the Company's Common Stock as
determined in good faith by the Board of Directors of the Company.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
8. Registration Rights
-------------------
The Warrant Shares shall have the registration rights set forth in the
Amended and Restated Registration Rights Agreement of even date herewith by and
among the Company, the Holder and the other securityholders of the Company named
therein.
9. Governing Law
-------------
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York, without regard to the conflict of law
principles thereof.
6
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized and its corporate
seal to be affixed hereon, as of this 24th day of January, 2000.
INTRALINKS, INC.
By: __________________________________
Name:
Title:
Attest:
__________________________________
Name:
Title:
7
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
__________________________________
Signature
Address:
__________________________________
__________________________________
__________________________________
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 6 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Common Stock of the Company
(the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 6.1 of the accompanying Warrant
Certificate.
________________________________
Name of Holder
________________________________
Signature
Address:
________________________________
________________________________
________________________________
2
<PAGE>
Exhibit 21.1
Subsidiaries of the Registrant
IntraLinks Pharma, Inc.
IntraLinks Ltd.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
IntraLinks, Inc.;
We consent to the use of our report included herein and to the reference to our
firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
New York, New York
March 15, 2000
<TABLE> <S> <C>
<PAGE>
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<S> <C> <C>
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<PERIOD-START> JAN-01-1998 JAN-01-1999
<PERIOD-END> DEC-31-1998 DEC-31-1999
<CASH> 11,188 21,735
<SECURITIES> 0 0
<RECEIVABLES> 617 2,288
<ALLOWANCES> 75 110
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21,701 53,371
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<INTEREST-EXPENSE> 176 9
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