SCIQUEST COM INC
S-1/A, 1999-11-17
BUSINESS SERVICES, NEC
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<PAGE>


 As filed with the Securities and Exchange Commission on November 17, 1999
                                                      Registration No. 333-87433
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               ----------------

                              AMENDMENT NO. 4
                                       TO
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     Under
                           THE SECURITIES ACT OF 1933

                               ----------------

                               SciQuest.com, Inc.
             (Exact Name of Registrant as Specified in its Charter)

        Delaware                     5199                    56-2127592
     (State or other           (Primary Standard          (I.R.S. Employer
     Jurisdiction of              Industrial           Identification Number)
    Incorporation or          Classification Code
      Organization)                 Number)

                               ----------------

                       5151 McCrimmon Parkway, Suite 208
                       Morrisville, North Carolina 27560
                                 (919) 659-2100
               (Address, Including Zip Code and Telephone Number,
       Including Area Code, of Registrant's Principal Executive Offices)

                               ----------------

                                M. Scott Andrews
                     President and Chief Executive Officer
                               SciQuest.com, Inc.
                       5151 McCrimmon Parkway, Suite 208
                       Morrisville, North Carolina 27560
                                 (919) 659-2100
           (Name, Address, Including Zip Code, and Telephone Number,
                   Including Area Code, of Agent for Service)

                               ----------------

                                   Copies to:

 Grant W. Collingsworth,    Fred D. Hutchison, Esq.   Alexander D. Lynch, Esq.
          Esq.              Helga L. Leftwich, Esq.     Babak Yaghmaie, Esq.
 James H. Sinnott, Esq.     Hutchison & Mason PLLC       Brobeck, Phleger &
    Morris, Manning &       3110 Edwards Mill Road          Harrison LLP
     Martin, L.L.P.                Suite 100             1633 Broadway, 47th
 1600 Atlanta Financial     Raleigh, North Carolina             Floor
         Center                      27612            New York, New York 10019
  3343 Peachtree Road,
          N.E.
 Atlanta, Georgia 30326

                               ----------------

   Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement is declared effective.

   If any of the securities being registered on this Form are offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") please 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, please 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, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]

   If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

   If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

                               ----------------

                      CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                           Proposed
                                             Proposed      Maximum
                                             Maximum      Aggregate    Amount of
 Title of Each Class of       Amount      Offering Price   Offering   Registration
 Securities Registered    Registered(1)    Per Share(2)    Price(2)      Fee(3)
- ----------------------------------------------------------------------------------
<S>                      <C>              <C>            <C>          <C>
Common Stock, par value
 $0.001 per share......  8,280,000 shares     $14.00     $115,920,000   $32,226
- ----------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------

(1) Includes 1,080,000 shares subject to the underwriters' over-allotment
    option.

(2) Estimated solely for the purpose of computing the registration fee in
    accordance with Rule 457 under the Securities Act of 1933, as amended.

(3) $27,623 has been previously paid.

                               ----------------

   The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until 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 Section 8(a), may
determine.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+We will amend and complete the information in this prospectus. Although we    +
+are permitted by US Federal Securities laws to offer these securities using   +
+this prospectus, we may not sell them or accept your offers to buy them until +
+the registration statement filed with the SEC relating to these securities    +
+has been declared effective by the SEC. This prospectus is not an offer to    +
+sell these securities or our solicitation of your offer to buy these          +
+securities in any jurisdiction where that would not be permitted or legal.    +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

                 SUBJECT TO COMPLETION - November 17, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Prospectus
     , 1999
LOGO OF SCIQUEST.COM

                               SciQuest.com, Inc.

                        7,200,000 Shares of Common Stock

- --------------------------------------------------------------------------------

    SciQuest.com, Inc.:    The Offering:


    .  We provide a Web-   .  We are offering
       based, interactive     7,200,000 shares
       marketplace for        of our common
       scientific and         stock.
       laboratory
       products.

                           .  The underwriters
                              have an option to
                              purchase an
                              additional
                              1,080,000 shares
                              from us to cover
                              over-allotments.

    .  5151 McCrimmon
       Parkway, Suite
       208, Morrisville,
       NC 27560


    Proposed Symbol and
    Market:
                           .  We currently
                              estimate that the
                              initial public
                              offering price
                              will be between
                              $12.00 and $14.00
                              per share.

    .  SQST/Nasdaq
       National Market

                           .  This is our
                              initial public
                              offering, and no
                              public market
                              currently exists
                              for our common
                              stock.

                           .  Closing:     ,
                              1999

    ---------------------------------------------
<TABLE>
<CAPTION>
                                      Per Share Total
    -------------------------------------------------
     <S>                              <C>       <C>
     Public offering price:            $        $
     Underwriting fees:
     Proceeds to SciQuest.com, Inc.:
    -------------------------------------------------
</TABLE>

    This investment involves risks. See "Risk Factors" beginning on Page 6.

- --------------------------------------------------------------------------------
Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
- --------------------------------------------------------------------------------

Donaldson, Lufkin & Jenrette
          Deutsche Banc Alex. Brown
                     Hambrecht & Quist
                               DLJdirect Inc.
                                                                      E*OFFERING

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                      Page
<S>                                   <C>
Prospectus Summary..................     1
Risk Factors........................     6
Forward-Looking Statements..........    18
Use of Proceeds.....................    19
Dividend Policy.....................    19
Capitalization......................    20
Dilution............................    21
Unaudited Pro Forma Combined
 Statements of Operations Data......    23
Selected Consolidated Financial
 Data...............................    25
Management's Discussion and Analysis
 of Financial Condition and Results
 of Operations......................    26
</TABLE>
<TABLE>
<CAPTION>
                                      Page
<S>                                   <C>
Business............................    36
Management..........................    48
Related Party Transactions .........    54
Principal Stockholders..............    55
Description of Capital Stock........    57
Shares Eligible for Future Sale.....    60
Underwriting........................    62
Legal Matters.......................    64
Experts.............................    64
Change in Accountants...............    65
Where You Can Find More Information.    65
Index to Consolidated Financial
 Statements.........................   F-1
</TABLE>

    "SciQuest," "SciMail" and "BioSupplyNet" are our registered trademarks.
   This prospectus also includes trademarks, service marks and trade names of
                                other companies.

                                       ii
<PAGE>

                               PROSPECTUS SUMMARY

   The information below is only a summary of more detailed information
included in other sections of this prospectus. This summary may not contain all
the information that is important to you or that you should consider before
buying shares in the offering. The other information is important, so please
read this entire prospectus carefully.

                                  SciQuest.com

Our Business

   SciQuest.com is a Web-based, interactive marketplace for scientific and
laboratory products used by pharmaceutical, clinical, biotechnology, chemical,
industrial and educational organizations worldwide. We have used our extensive
industry experience to design a marketplace that streamlines the traditionally
inefficient scientific products supply chain. Our marketplace solutions allow
buyers of scientific products to cross-search content and purchase products
from multiple suppliers with a single order. Our approach does not give
priority to any particular scientific products distributor, which allows us to
create an open and scalable marketplace that we believe is more attractive to
both buyers and sellers. We do not carry inventory or directly supply products.

   Since our founding in 1995, we have developed a comprehensive online
database of over 8,000 suppliers with over 550,000 scientific products. Our
online database is a tool used by scientists and purchasing professionals to
locate supplies and products. On September 29, 1998, we acquired BioSupplyNet,
Inc., which publishes the Source Book, an annual printed catalog of vendors of
biomedical research supplies and equipment and scientific products for the
biomedical research industry. In April 1999, we introduced our e-commerce
marketplace solution to this growing community of online scientific product
buyers and suppliers. In October 1999, we entered into agreements to be the
exclusive third party provider of electronic marketplace services in the United
States for a period of five years for the following leading suppliers: Ambion,
Inc., Amersham Pharmacia Biotech, Inc., BioWhittaker, a Cambrex Company,
Endogen, Inc., NEN Life Science Products, Inc., PerkinElmer, Inc., Pierce
Chemical Company and QIAGEN N.V. In October 1999, we also entered into binding
letters of intent with Dow Chemical Company and DuPont Pharmaceuticals Company
to be their exclusive third party electronic aggregator for purchases of
scientific products in North America for a period of three years, which may be
terminated if definitive agreements are not entered into by December 31, 1999.
Our revenues from these agreements have been immaterial to date.

   To date, our revenues have consisted primarily of banner advertising
revenues from our Web sites and advertising revenue from the Source Book. Since
the introduction of our marketplace, we have also recognized revenues from the
sales of scientific products. We expect these sales to comprise a significant
portion of our revenue in the future. We recognized revenues of $432,000 for
the nine months ended September 30, 1999 from the sale of scientific products,
which represented approximately 35% of our total revenues in this period.

   Our marketplace benefits scientists by reducing the time required to find,
compare, purchase, trace and manage critical laboratory items. Our marketplace
benefits purchasing professionals by reducing procurement costs by automating
order processing, consolidating purchase orders and payments, reducing errors
and providing more control and information to support enterprise purchasing
policies. Our marketplace also serves as a more efficient sales channel that
enables suppliers to expand their market reach and reduce customer acquisition
and order processing costs.

   Based upon data from the Laboratory Products Association and Strategic
Directions International, we estimate that the market for scientific products
in 1999 will be approximately $11.8 billion in North America and $36.4 billion
worldwide. The current scientific products market is characterized by:

  . complex, information-intensive products;

  . a highly fragmented supply chain; and

  . a heavy concentration of manual purchasing processes consisting of
    printed catalogs, paper requisitions and telephone and fax orders.

   As the demand for scientific products grows, the need for efficient
procurement processes becomes more critical.

                                       1
<PAGE>


   Our objective is to be the leading global solution for buying and selling
scientific products. We intend to achieve this objective through the following
strategies:

  . leverage and build upon our current brand equity;

  . enhance customer loyalty to increase repeat purchases;

  . maintain the distributor-neutrality of our marketplace;

  . maximize the enterprise software compatibility of our solutions;

  . expand our portfolio of solutions; and

  . expand our sales and marketing efforts internationally.

   We have incorporated under the laws of the State of Delaware. Our
headquarters is located at 5151 McCrimmon Parkway, Suite 208, Morrisville, NC
27560 and our telephone number is (919) 659-2100. Our Web site is located at
www.sciquest.com. Information contained on our Web site is not part of this
prospectus.

                                       2
<PAGE>


                                  The Offering

<TABLE>
 <C>                                           <S>
 Common stock offered......................... 7,200,000 shares

 Common stock outstanding after this offering. 24,365,604 shares

 Use of proceeds.............................. We intend to use the net
                                               proceeds from this offering to
                                               expand our sales and marketing
                                               efforts, enhance our technology,
                                               add to our online content and
                                               for general corporate purposes,
                                               including working capital needs.

 Proposed Nasdaq Stock Market symbol.......... SQST
</TABLE>

   The share information is based on shares outstanding as of September 30,
1999. This information excludes:

  . 2,372,826 shares of common stock issuable upon exercise of options
    granted under our stock option plan, of which 1,577,953 shares are
    subject to outstanding options at a weighted average exercise price of
    $1.75 per share;

  . 3,724,307 shares of common stock issuable upon exercise of warrants to be
    issued upon consummation of this offering at an exercise price of $0.01
    per share and up to 1,408,112 shares of common stock issuable upon
    exercise of additional warrants that may be issued upon consummation of
    this offering or afterwards at an exercise price of $0.01 per share;

  . 1,183,183 shares of common stock issuable upon exercise of outstanding
    warrants at a weighted average exercise price of $6.87 per share; and

  . 57,545 shares of series B preferred stock issuable upon exercise of
    outstanding warrants at an exercise price of $2.80 per share, which will
    convert upon the consummation of this offering into warrants to purchase
    87,275 shares of our common stock at an exercise price of $1.85.

   Unless we indicate otherwise, all information in this prospectus:

  . reflects the reclassification of all outstanding shares of our class A
    common stock to shares of our common stock and the conversion of all
    outstanding shares of our class B common stock and all outstanding shares
    of our preferred stock into shares of common stock upon the effectiveness
    of this offering;

  . assumes no exercise of the underwriters' over-allotment option; and

  . assumes the effectiveness of a 1.516643-for-one split of common stock
    prior to the effective date of this prospectus.

                                       3
<PAGE>

                             SUMMARY FINANCIAL DATA
                     (In thousands, except per share data)

   The following financial data is a summary of the more complete financial
information provided in our financial statements appearing elsewhere in this
prospectus.

   The amounts below exclude:

  . 2,372,826 shares of common stock issuable upon exercise of options
    granted under our stock option plan, of which 1,577,953 shares are
    subject to outstanding options as of September 30, 1999 at a weighted
    average exercise price of $1.75 per share;

  . 3,724,307 shares of common stock issuable upon exercise of warrants to be
    issued upon consummation of this offering at an exercise price of $0.01
    per share to certain key suppliers and purchasers of scientific products;
    and up to 1,408,112 shares of common stock issuable upon exercise of
    additional warrants that may be issued upon consummation of this offering
    or afterwards at an exercise price of $0.01 per share to other key
    suppliers and purchasers of scientific products;

  . 1,183,183 shares of common stock issuable upon exercise of outstanding
    warrants as of September 30, 1999 at a weighted average exercise price of
    $6.87 per share; and

  . 57,545 shares of series B preferred stock issuable upon exercise of
    outstanding warrants at an exercise price of $2.80 per share, which will
    convert upon consummation of this offering into 87,275 warrants to
    purchase shares of our common stock at an exercise price of $1.85 per
    share.

   The pro forma statement of operations data for the year ended December 31,
1998 and the nine months ended September 30, 1998 reflect the acquisition of
BioSupplyNet, Inc., which occurred on September 29, 1998, as if it had occurred
on January 1, 1998. The pro forma net loss per common share reflects the
conversion of our preferred stock into common stock and the exercise of
warrants to purchase 1,183,095 shares of our common stock at an exercise price
of $0.01 per share, which may be issued to the holders of our series B and
series D preferred stock.

<TABLE>
<CAPTION>
                                                                     Nine Months
                                     Years Ended                 Ended September 30,
                                    December 31,                     (unaudited)
                          ------------------------------------ --------------------------
                                                                          Pro
                                                    Pro Forma            Forma
                           1996    1997    1998       1998      1998     1998      1999
                                                   (unaudited)
<S>                       <C>     <C>     <C>      <C>         <C>      <C>      <C>
Statement of Operations
 Data:
Revenues................  $  --   $  196  $   478    $ 1,098   $   308  $   928  $  1,244
Gross profit............     --      196      436        702       308      574       421
Operating loss..........    (536)   (658)  (4,356)    (4,427)   (2,077)  (2,148)  (16,060)
Net loss................    (545)   (690)  (4,222)    (4,140)   (2,065)  (1,983)  (15,141)
Net loss available to
 common stockholders....  $ (545) $ (690) $(4,550)   $(4,468)  $(2,177) $(2,095) $(61,788)
                          ======  ======  =======    =======   =======  =======  ========
Net loss per common
 share--basic and
 diluted................  $(0.16) $(0.20) $ (1.33)   $ (1.31)  $ (0.64) $ (0.61) $ (17.60)
Weighted average common
 shares outstanding.....   3,412   3,412    3,412      3,412     3,412    3,412     3,511
Pro forma net loss per
 common share--basic and
 diluted................                  $ (0.62)   $ (0.61)                    $  (1.08)
Pro forma weighted
 average common shares
 outstanding--basic and
 diluted................                    6,806      6,806                       13,976
</TABLE>

                                       4
<PAGE>


   The following balance sheet data is presented:

  . on an unaudited actual basis;

  . on an unaudited pro forma basis to the reflect the reclassification of
    all outstanding shares of our class A common stock to shares of our
    common stock and the conversion of all outstanding shares of our class B
    common stock and all outstanding shares of our preferred stock into
    shares of our common stock; and

  . on an unaudited pro forma as adjusted basis to reflect the
    reclassification of all outstanding shares of our class A common stock to
    shares of our common stock and the conversion of all outstanding shares
    of our class B common stock and all outstanding shares of our preferred
    stock into shares of common stock and our receipt of the estimated net
    proceeds from our sale of 7,200,000 shares of our common stock at an
    assumed initial public offering price of $13.00 per share, after
    deducting underwriting discounts and commissions and offering expenses
    payable by us.

<TABLE>
<CAPTION>
                                                      September 30, 1999
                                                -------------------------------
                                                                     Pro Forma
                                                 Actual   Pro Forma As Adjusted
<S>                                             <C>       <C>       <C>
Balance Sheet Data:
Cash and cash equivalents...................... $  4,911   $ 4,911   $ 90,969
Working capital................................   14,950    14,950    101,008
Total assets...................................   34,761    34,761    120,819
Long term liabilities..........................    1,156     1,156      1,156
Mandatorily redeemable convertible preferred
 stock.........................................   92,664       --         --
Stockholders' equity (deficit).................  (62,838)   29,826    115,884
</TABLE>

                                       5
<PAGE>

                                  RISK FACTORS

   An investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below before making an investment
decision. You should also refer to the other information in this prospectus,
including our financial statements and accompanying notes appearing elsewhere
in this prospectus.

                         Risks Relating to Our Business

Since we have a limited operating history, forecasting future performance may
be difficult.

   We commenced operations in 1995, first recognized revenues in 1997 and
launched our interactive e-commerce Web site in April 1999. Accordingly, we
have only a limited operating history on which to evaluate our business. As a
result of our limited operating history, the emerging nature of the online
scientific products market and the evolving nature of our business model, we
may be unable to accurately forecast our revenues. We incur expenses based
predominantly on operating plans and estimates of future revenues. Our expenses
are to a large extent fixed. We may be unable to adjust our spending in a
timely manner to compensate for any unexpected revenue shortfalls. Accordingly,
a failure to meet our revenue projections will have an immediate and negative
impact on profitability. In addition, we cannot be certain that our evolving
business model will be successful, particularly in light of our limited
operating history.

We have a history of losses and anticipate incurring losses in the future. We
may not achieve profitability.

   We incurred net losses of $4.2 million for the year ended December 31, 1998
and $15.1 million for the nine months ended September 30, 1999. As of September
30, 1999, we had an accumulated deficit of $63.8 million. We expect to incur
substantial operating losses and continued negative cash flow from operations
for the foreseeable future. In fact, we expect these losses to increase
significantly through at least December 31, 2000 because, as part of our
strategy to achieve profitability, we intend to significantly increase our
spending on items such as sales and marketing, content development, technology
and operating infrastructure. If these expenses do not generate increased
revenues, our earnings may be materially and adversely affected and anticipated
net losses may be greater than expected. We may not be able to increase
revenues sufficiently to achieve profitability.

Unless a broad range of purchasers and suppliers of scientific products adopt
our e-commerce solution, we will not be successful.

   Our success will require, among other things, that our solutions gain broad
market acceptance by our customers, suppliers, users and strategic partners.
For example, purchasers may continue purchasing products through their existing
methods and may not adopt a Web-based solution because of:

  . their comfort with current purchasing habits and direct supplier
    relationships;

  . the costs and resources required to switch purchasing methods;

  . the need for products not offered through Sciquest.com;

  . security and privacy concerns; or

  . general reticence about technology or the Internet.

If we do not successfully market the SciQuest.com brand, our business may
suffer.

   We believe that establishing, maintaining and enhancing the SciQuest.com
brand is critical in attracting and expanding traffic to our Web sites. There
are a number of Web sites that offer competing services. Some of these sites
already have well-established brands in either online services or the
scientific products industry. As a result, it is critical that we establish and
enhance the SciQuest.com brand. We believe that increased competition

                                       6
<PAGE>

may make establishing our brand significantly more expensive. Promotion of our
brand will depend largely on expanding our sales and marketing capabilities and
providing a high-quality online experience. We intend to use a portion of the
proceeds of this offering to expand our sales and marketing activities and
further develop our online services. We cannot be certain that we will be
successful in marketing the SciQuest.com brand. If we are unable to
successfully promote our brand, or if we incur substantial expenses in
attempting to do so, our revenues and earnings could be materially and
adversely affected.

If we are unable to increase our transaction volume, our future revenues may
suffer.

   We expect that a substantial portion of our future revenues will be
generated by the products offered by us for sale through our e-commerce
marketplace. Accordingly, our revenues will be highly dependent on the dollar
volume of transactions conducted through our Web sites. Our profits depend upon
the discount levels we are able to negotiate with our suppliers. To maintain
revenue growth, we will need to increase the total dollar value of transactions
conducted through our Web sites. In order to increase our transaction volume,
we will need to:

  . generate higher and continuously increasing levels of traffic, from both
    new and repeat visitors, to our Web sites;

  . increase the percentage of visitors to our Web sites who purchase
    scientific products; and

  . increase the average transaction size.

Failure to do one or more of the foregoing could have a material adverse effect
on our revenues.

Unless we negotiate favorable pricing terms with our suppliers, our profit
margins will be adversely affected.

   Our profits depend upon the prices we are able to negotiate with our
suppliers. We anticipate that the prices we negotiate with our suppliers will
vary based on a number of factors such as:

  . size of supplier;

  . product portfolio;

  . relationship with key SciQuest.com customers;

  . degree to which products are critical to our customers;

  . extent to which transactions are conducted electronically; and

  . extent that costs are shared with us.

   Our profit margins may decline in the future, particularly as competition in
the scientific products industry increases. A significant decline in profit
margins without a corresponding increase in transaction volume would adversely
affect our earnings.

If we cannot timely and accurately add supplier product data to our e-commerce
database, we may lose sales and customers, which would adversely affect our
revenues.

   Currently, we are responsible for loading supplier product information into
our database and categorizing the information for search purposes. We currently
have a backlog of varying amounts of product data from 148 companies to be
loaded in our e-commerce marketplace. We anticipate that a majority of these
products will be loaded into the e-commerce marketplace by the end of the first
quarter of 2000. However, we continuously receive new product data to load. We
will not derive revenue from these products until this data is loaded into our
system. Timely loading of these products into our database depends upon a
number of factors, including the file formats of the data provided to us by
suppliers and our ability to further automate and expand our

                                       7
<PAGE>

operations to accurately load this data into our product database, any of which
could delay the actual loading of these products beyond the dates estimated by
us.

   In addition, we are generally obligated under our supplier agreements to
load updated product data into our database for access through our marketplace
within a reasonable period of time following their delivery from the supplier.
Our current supplier data backlog could make it difficult for us to meet these
data update obligations to our suppliers. While we intend to further automate
the loading and updating of supplier data on our system, we cannot assure you
that we will be able to do so in a timely manner. Although we screen our
suppliers' information before we make it available to our customers and users,
we cannot guarantee that the product information available in our e-commerce
marketplace will always be accurate, complete and current, or comply with
governmental regulations. This could expose us to liability or result in
decreased adoption and use of our Internet-based purchasing solution, which
could reduce our revenues and therefore have a negative effect on our results
of operations and financial condition.

Sales to larger customers may increase the length of our sales cycle and
decrease our profit margins.

   Increasing sales to larger buyers is an important element of our business
strategy. As we sell more sophisticated solutions to larger organizations, we
expect the time from initial contact to final approval to increase. During this
sales cycle, we may expend substantial funds and management resources without
any corresponding revenue. If approval is delayed or does not occur, our
financial condition and operating results for a particular period may be
adversely affected. Approvals are subject to delays over which we have little
or no control, including the following:

  . potential customers' internal approval processes;

  . implementation of systems integration solutions;

  . customers' concerns about implementing a new strategy and method of doing
    business; and

  . seasonal and other timing effects.

   Increased sales to larger accounts may result in lower or negative profit
margins as larger customers typically have greater leverage in negotiating the
price and other terms of business relationships. We also typically incur costs
associated with customization of our systems with a sale to a large account. If
we do not generate sufficient transaction volume to offset any lower margins or
these increased costs, our operating results may be materially and adversely
affected. Also, the time between billing and receipt of revenues is often
longer when dealing with larger accounts due to increased administrative
overhead.

If we are unable to list a broad range of products on commercially favorable
terms, our marketplace will be less attractive to potential buyers.

   A number of factors could significantly reduce the number of products and
product sources listed on our Web sites, including the following:

  . consolidation among suppliers; and

  . exclusive arrangements signed by suppliers with our competitors.

   If the number of products and product sources that are available for listing
is reduced, the effectiveness of our Web sites and their attractiveness to
potential buyers could be materially and adversely affected.

If we are unable to retain a critical mass of suppliers and customers, our
ability to grow our business will be adversely affected.

   Our business model depends in large part on our ability to build a critical
mass of products and suppliers. To attract and maintain suppliers we must build
a critical mass of customers. However, customers must

                                       8
<PAGE>

perceive value in our purchasing solution which, in large part, depends upon
the breadth of the product offerings from our suppliers. Creating a network
effect, where the value to buyers and suppliers alike increases as the number
of participants increases, is a key component of our strategy. If we are unable
to increase the number of suppliers and draw more customers to our Web sites,
we will not be able to benefit from this network effect. As a result, the
overall value of our purchasing solution would be harmed, which would
negatively affect our revenues and earnings.

If suppliers terminate their agreements with us, our product offerings may
suffer.

   Following an initial one-year term, many of our standard supplier agreements
may be terminated by either party on 90 days' notice. After expiration of the
initial term, such suppliers may terminate or seek to renegotiate their
agreements. If a significant number of suppliers terminate their agreements
with us, the range of products we can offer would be adversely affected. The
ability of suppliers to terminate their agreements may result in negotiating
new agreement terms that are less favorable to us, which could have a material
adverse effect on our earnings.

If our exclusive suppliers elect to terminate the exclusive nature of their
agreements with us, our business could be adversely affected.

   Our exclusive supplier agreements have a five-year term, but the exclusive
nature of such agreements may be terminated after 18 months. If a significant
number of the exclusive suppliers terminate the exclusive nature of such
agreements, the volume of our order flow will be reduced significantly. We may
also be forced to negotiate new agreements with terms that are less favorable
to us.

If we do not enter into definitive agreements with Dow Chemical Company and
Monsanto Company by December 31, 1999, our business could be adversely
affected.

   Under the terms of binding letters of intent with Dow Chemical Corporation
and Monsanto Company, either party may terminate the relationship on or after
December 31, 1999 if we do not enter into definitive agreements before such
time. A failure to enter into mutually satisfactory definitive agreements could
have a material adverse effect on our business.

We have relied and continue to rely on a limited number of large customers for
a significant portion of our revenues. Losing one or more of these customers
may adversely affect our revenues.

   We expect that for the foreseeable future we will generate a significant
portion of our revenues from a limited number of large customers. Further, our
large customers are not obligated to use our purchasing solution exclusively or
for any minimum number of transactions or dollar amounts. In addition, our
contracts with our customers are for limited terms and our customers may
discontinue use of our system at any time upon short notice and without
penalty. If we lose any of our large customers or if we are unable to add new
large customers, our revenues will not increase as expected. In addition, our
reputation and brand name would be harmed. For the nine months ended September
30, 1999, one customer, PPD Development, Inc., accounted for twelve percent of
revenues.

Since we rely on third-party suppliers and carriers to fulfill orders for our
customers, we have limited control over the timing and accuracy of order
fulfillment. As a result, we may not be able to guarantee customer
satisfaction.

   We do not carry inventory or directly supply products. As a result, we rely
on our suppliers and carriers for rapid order fulfillment and other customer
service functions to ensure buyer satisfaction. If our suppliers do not provide
high quality customer service, our business reputation and customer
satisfaction could be materially and adversely affected. Most of our supplier
arrangements do not guarantee the availability of merchandise,

                                       9
<PAGE>

establish guaranteed prices or require continuity of pricing practices. As a
result, we have little or no control over the fulfillment of buyers' orders. In
order to be successful, we must maintain relationships with suppliers that will
produce, stock and deliver high quality products to buyers through our Web
sites.

   We rely on third-party carriers to ensure accurate and timely delivery of
products to buyers. Although suppliers are responsible for product shipment, we
designate the carrier and are responsible for carrier charges. We cannot be
certain that our carriers will consistently provide high quality performance.
If our carriers fail to deliver products accurately and on a timely basis, our
reputation and business could be materially and adversely affected.

If our Web sites and transaction processing systems are not able to adequately
service increasing traffic levels, our ability to satisfy our customers and
maintain revenue growth may suffer.

   Our success depends in large part on the number of buyers who use our Web
sites to purchase scientific supplies and products. Accordingly, our Web sites,
transaction-processing systems and network infrastructure must be able to
service increasing traffic levels while maintaining adequate buyer service
levels. Any system interruptions or delays in our transaction system would
reduce the volume of sales and the attractiveness of our service offerings,
which could have a material adverse effect on our customer satisfaction and our
ability to maintain revenue growth. We have experienced infrequent system
interruptions in the past during implementation of system upgrades. These
interruptions could continue to occur from time to time and could have a
material adverse effect on our service offerings. Substantial increases in the
volume of traffic on our Web sites or the number of purchases made by buyers
will require expansion and upgrades of our technology, transaction-processing
systems and network infrastructure. We cannot be certain that our transaction-
processing systems and network infrastructure will be able to accommodate
traffic in the future.

If we are not able to successfully integrate our systems with the internal
systems of our key suppliers and buyers, our operating costs and relationships
with our suppliers and buyers will be adversely affected.

   A key component of all services is the efficiencies created for suppliers
and buyers through our online systems. In order to create these efficiencies,
it will often be necessary that our systems integrate with each major
supplier's and buyer's internal systems, such as inventory, customer service,
technical service, freight programs and financial systems. In addition, there
is little uniformity in the systems used by our suppliers and buyers. The
integration with our suppliers' systems also involves the downloading of a
significant amount of data, which increases the resources needed to execute the
integration. If these systems are not successfully integrated, our operating
costs and relationships with our suppliers and buyers would be adversely
affected, which could have a material adverse effect on our financial condition
and results of operations.

Our computer and telecommunications systems are in a single location, which
makes them more vulnerable to damage or interruption.

   Substantially all of our computer and telecommunications systems are located
in the same geographic area. These systems are vulnerable to damage or
interruption from fire, flood, power loss, telecommunications failure, break-
ins and similar events. While we have business interruption insurance, this
coverage may not adequately compensate us for lost business. Although we have
implemented network security measures, our systems, like all systems, are
vulnerable to computer viruses, physical or electronic break-ins and similar
disruptions. These disruptions could lead to interruptions, delays, loss of
data or the inability to accept and confirm buyer purchases. Any of these
occurrences could have a material adverse effect on our revenues.

If our exclusive sales representative does not perform adequately, our
advertising revenues could be adversely affected.

   To date, a majority of our revenues has come from the sale of print and
online advertising to our suppliers, although we expect advertising revenue as
a percentage of total revenue to decrease significantly in the future. Cahners
Business Information is the exclusive sales representative for online
advertising on our Web sites and

                                       10
<PAGE>

for print advertising in our Source Book. Accordingly, our advertising revenues
are highly dependent on the success of Cahners' efforts. We cannot assure you
that Cahners will be successful in selling advertising for us.

We bear the risk of credit sales on SciQuest.com, which could put a significant
strain on our liquidity and capital resources.

   Our supplier agreements generally require us to pay the supplier for any
orders processed through our Web sites as we usually take title to these
products at the time of shipment. Accordingly, if a buyer fails to pay for the
products it purchased, we would be obligated to pay the supplier. Thus, we bear
the risk of collection. We also may be required to refund payments to buyers
for products returned to the supplier. Slow payment by buyers for products
purchased would negatively impact our cash flows. As our transaction volume and
average transaction size grow, these risks will increase. We generally do not
process an order from a buyer without a credit card or other payment
confirmation although we do extend credit terms to certain qualified buyers.
However, we cannot be certain that our credit confirmation practices will be
effective to protect us against these payment obligations. If a significant
number of buyers default on their payment obligations, or suppliers fail to
refund payments to us for products returned by our buyers, or buyers do not pay
their obligations to us on time, we could incur significant and immediate cash
payment obligations or suffer significant cash flow constraints. These
obligations could put a significant strain on our liquidity and capital
resources, which could prevent us from using our working capital to further
expand our business or require us to obtain additional financing.

If we are not able to effectively manage our growth, our business may suffer.

   We are rapidly expanding our operations. In particular, we have
significantly expanded our operations and sales, marketing and technology
staffs. We have also expanded our management and administration to support this
growth. We expect this expansion to continue at an accelerated rate. This
expansion has placed, and is expected to continue to place, a significant
strain on our management, operational and financial resources. For example, we
may be unable to increase the scale of our operations (including order
fulfillment, customer service, transaction processing and other "back office"
operations) to account for the increase in transaction volume that our supplier
and buyer growth creates. If we are unable to manage the growth of our business
effectively, our earnings could be materially and adversely affected.

   Many of our employees have only recently joined us. Additionally, several of
our key executives have been employed by us for one year or less. If our
employees do not work well together or some of our employees do not succeed in
their designated roles, our financial condition and results of operations could
be materially adversely affected. We cannot be certain that our management,
operational and financial resources will be adequate to support our future
operations.

If we fail to attract and retain key employees, our business may suffer.

   A key factor of our success will be the continued services and performance
of our executive officers and other key personnel. If we lose the services of
any of our executive officers, our financial condition and results of
operations could be materially and adversely affected. We do not have long-term
employment agreements with any of our key personnel. Our success also depends
upon our ability to identify, hire and retain other highly skilled technical,
managerial, editorial, marketing and customer service professionals.
Competition for this personnel is intense. In particular, it is important that
we hire additional customer service personnel in order to maintain high quality
service and maintain buyer and supplier loyalty. We cannot be certain of our
ability to identify, hire and retain sufficiently qualified personnel. For
example, we may encounter difficulties in attracting a sufficient number of
qualified software developers and operations personnel for our online services
and transaction-processing systems. Failure to identify, hire and retain
necessary technical, managerial, editorial, merchandising, marketing and buyer
service personnel could have a material adverse effect on our financial
condition and results of operations.


                                       11
<PAGE>

If we are unable to adapt our services to rapid technological change in online
commerce, our revenues and profits could be adversely affected.

   The Internet and the online commerce industry undergo rapid changes in
technology, products and services, user profiles and operating standards. These
changes could render our Web sites and proprietary technology and systems
obsolete. We must continually improve the performance, features and reliability
of our online services, particularly in response to our competition. Our
success will depend, in part, on our ability to:

  . enhance our existing services;

  . develop new services and technology that address the increasingly
    sophisticated and varied needs of our target markets; and

  . respond to technological advances and emerging industry standards and
    practices on a cost-effective and timely basis.

   We cannot be certain of our success in accomplishing the foregoing. If we
are unable, for technical, legal, financial or other reasons, to adapt to
changing market conditions or buyer requirements, our market share could be
materially adversely affected.

We may become exposed to product liability claims, which could result in
substantial costs and liability.

   The sale of scientific products involves the risk of product liability
claims. We face potential liability for claims based on the type and adequacy
of the information and data that suppliers publish on our Web sites as well as
the nature of the products that are sold through our Web sites, including
claims for breach of warranty, product liability, misrepresentation, violation
of governmental regulations and other commercial claims. Although we maintain
general liability insurance and product liability insurance, our insurance may
not cover some claims and may not be adequate to fully indemnify us for
liabilities that may be imposed. A product liability claim against us, if
successful, could result in a significant liability that would have a material
adverse effect on our liquidity and capital resources. In addition, even the
successful defense of a product liability claim could result in substantial
costs and diversion of our management's efforts.

If we are not able to offer new services, we may not be able to maintain
revenue growth.

   We plan to introduce new and expanded services and to expand our third-party
relationships in order to attract more buyers and suppliers to our Web sites
and increase transaction volume. We cannot be certain that we will be able to
offer these services in a cost-effective or timely manner. Any new services
that are not favorably received by buyers or suppliers could damage our
reputation or brand name. Expansion of our services will require us to develop
a significant amount of time and money and may strain our management, financial
and operating resources. The failure to generate profits from our expanded
services could have a material adverse effect on our earnings.

The content of our Web sites may expose us to various claims, which could
result in substantial costs and liabilities.

   Our Web sites contain information concerning the products offered by
suppliers, including product descriptions, specifications and pricing. This
information is provided by suppliers, and we generally do not independently
verify this information. As a result, we could potentially face liability for
fraud, negligence, copyright, patent or trademark infringement and other claims
based on the information contained on our Web sites. A successful claim could
subject us to significant liability that would have a material adverse effect
on our liquidity and capital resources. In addition, even the successful
defense of a claim could result in substantial costs and division of our
management's efforts and damage to our brand perception by our customers.


                                       12
<PAGE>

If we are unable to protect our intellectual property rights, our business
could be adversely affected.

   Our software technology is not patented and existing copyright laws offer
only limited practical protection. We cannot guarantee that the legal
protections that we rely on will be adequate to prevent misappropriation of our
technology. Also, these protections do not prevent independent third-party
development of competitive products or services. Failure to protect against the
misappropriation of our intellectual property could have a material adverse
effect on our business operations.

We are dependent on proprietary technology licensed from third parties, the
loss of which could be costly.

   We license a portion of the content for our online services from third
parties. Additionally, we intend to license a significant portion of our
transaction fulfillment systems from third parties. These third-party content
licenses may not be available to us on favorable terms, or at all, in the
future. In addition, we must be able to successfully integrate this content in
a timely and cost-effective manner to create an effective finished product. If
we fail to obtain necessary content on favorable terms or are unable to
successfully integrate this content or if we are unable to continue to license
our order fulfillment transaction systems on favorable terms, it could have a
material adverse effect on our business operations.

Our products, trademarks and other proprietary rights may infringe on the
proprietary rights of third parties, which may expose us to litigation.

   While we believe that our products, trademarks and other proprietary rights
do not infringe upon the proprietary rights of third parties, we cannot provide
any guarantees about the third party products that are sold on our Web site or
guarantee that third parties will not assert infringement claims against us in
the future or that any such assertion will not require us to enter into a
license agreement or royalty agreement with the party asserting a claim. If the
third party products sold on our Web site infringe the proprietary rights of
third parties, we may be deemed to infringe those rights by selling such
products. Even the successful defense of an infringement claim could result in
substantial costs and diversion of our management's efforts.

The failure to integrate successfully other businesses that we acquire could
adversely affect our business.

   In September 1998, we acquired BioSupplyNet, Inc. in a stock acquisition. In
July 1999, we acquired Internet Auctioneers International, Inc. in a stock
acquisition. While we have no current agreements or binding commitments
regarding any potential acquisitions, an element of our strategy is to broaden
the scope and content of our products and services through the acquisition of
existing products, technologies, services and businesses. Acquisitions entail
numerous risks, including:

  . the integration of new operations, products, services and personnel;

  . the diversion of resources from our existing businesses, sites and
    technologies;

  . the inability to generate revenues from new products and services
    sufficient to offset associated acquisition costs;

  . the maintenance of uniform standards, controls, procedures and policies;

  . accounting effects that may adversely affect our financial results;

  . the impairment of employee and customer relations as a result of any
    integration of new management personnel;

  . dilution to existing stockholders from the issuance of equity securities;
    and

   .liabilities or other problems associated with an acquired business,


                                       13
<PAGE>

   Any problems we encounter in connection with our acquisitions could have a
material adverse effect on our business.

Our planned international expansion will require significant financial
resources and management attention and could have a negative effect on our
earnings.

   We intend to invest resources and capital to expand internationally. As a
result, we may need to establish international operations, hire additional
personnel and establish relationships with additional suppliers and customers.
This expansion will require significant financial resources and management
attention and could have a negative effect on our earnings. We cannot assure
you that we will be successful in creating international demand for our e-
commerce solutions and services. In addition, our international business may be
subject to a variety of risks, including, among other things, increased costs
associated with maintaining international marketing efforts, applicable
government regulation, fluctuations in foreign currency, difficulties in
collecting international accounts receivable and the enforcement of
intellectual property rights. We cannot assure you that these factors will not
have an adverse effect on future international sales and earnings. In addition,
we are currently contemplating registering our trademarks in other countries.
We cannot assure you that we will be able to do so.

We rely on our suppliers and carriers in complying with government regulations
regarding the sale and distribution of regulated products, and their failure to
so comply could result in substantial civil and criminal liability.

   Many of the products offered through our Web sites are subject to direct
regulation by governmental agencies, which includes numerous laws and
regulations generally applicable to the chemical, pharmaceutical, controlled
substances, human and biological reagents, nuclear chemical businesses, and
environmental spills. Because of our presence in the distribution chain, we may
be subject to significant liability for violations of these regulations
regardless of our actual involvement in a violation. We could be fined or
exposed to civil or criminal liability, including monetary fines and
injunctions for any violations. We have historically relied, and will in the
future rely, upon our suppliers to meet all packaging, distribution, labeling,
hazard and health information notices to purchasers, record keeping and
licensing requirements applicable to transactions conducted through our system.
In addition, we rely upon our carriers to comply with regulations regarding the
shipment of hazardous materials sold through our system. We cannot assure you
that our suppliers and carriers will comply with all applicable government
regulations.

Potential year 2000 problems could adversely affect our business.

   Many currently installed computer systems and software products are coded to
accept only two digit entries in the date code field. These systems cannot
reliably distinguish dates beginning on January 1, 2000 from dates prior to the
year 2000.

   Our internally developed software has been designed to accept only four
digit entries in order to resolve year 2000 ambiguities. However, we also
utilize third-party equipment and software that may not be year 2000 compliant.
We cannot guarantee that the systems of our suppliers or service providers will
be year 2000 compliant. The failure of such parties to correct year 2000
problems could substantially disrupt our business and may have a material
adverse effect on our financial condition and results of operations.

   In addition, the computer systems necessary to maintain the viability of the
Internet or any of the Web sites that direct buyers to our Web sites may not be
year 2000 compliant. The computers of potential buyers also may not be year
2000 compliant, thus preventing such buyers from accessing and making purchases
through our Web sites. To the extent that major buyers experience such year
2000 difficulties, our business could be materially adversely affected.


                                       14
<PAGE>

   Finally, we are dependent upon third-party carriers and suppliers to
efficiently ship and fulfill orders from buyers. We cannot be certain that
these carriers or suppliers will be year 2000 compliant. Failure of these
carriers or suppliers to correct any year 2000 problems could disrupt our
ability to distribute purchased products, which could have a material adverse
effect on our revenues.

   Please see "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Year 2000" for a more complete discussion of year 2000
related issues.

                         Risks Relating To Our Industry

Our future revenue growth would be adversely affected by a reduction in
spending in the scientific products industry.

   We derive substantially all of our revenue from the scientific products
industry. We expect our future growth to depend on spending levels in this
industry. Any reduction in spending in the scientific products industry would
have a material adverse effect on our revenues.

Unless Web-based purchasing achieves widespread acceptance, we will have
difficulty achieving revenue growth.

   Use of the Internet to purchase products, particularly in the scientific
products market, is at an early stage of development. Convincing buyers to
purchase scientific products online may be particularly difficult as such
buyers have traditionally relied on distributors of scientific products and
mail order catalogs to purchase their scientific products. If the use of e-
commerce services does not grow in the future, our Web site traffic and
resulting revenue could be materially and adversely affected.

   The continued growth of e-commerce services is dependent upon a number of
factors that are beyond our control, including the following:

  . continued growth in the number of buyers who use e-commerce services;

  . continued development of transaction security technology;

  . continued development of e-commerce technology;

  . continued development and successful implementation of enterprise
    software solutions;

  . emergence of standard and common nomenclature and methodology for e-
    commerce; and

  . development of complementary services and products.

The online scientific products market is highly competitive, which makes
achieving market share and profitability more difficult.

   The online scientific products market is new, rapidly evolving and intensely
competitive. Our primary competition includes e-commerce providers, online
scientific communities and suppliers' e-commerce initiatives.

   Competition is likely to intensify as this market matures. As competitive
conditions intensify, competitors may:

  . enter into strategic or commercial relationships with larger, more
    established and well-financed companies;

  . secure services and products from suppliers on more favorable terms;

  . devote greater resources to marketing and promotional campaigns;

  . secure exclusive deals with buyers that impede our sales; and

  . devote substantially more resources to Web site and systems development.

                                       15
<PAGE>

   In addition, new technologies and the expansion of existing technologies may
increase competitive pressures. As a result of increased competition, we may
experience reduced operating margins, as well as loss of market share and brand
recognition. We may not be able to compete successfully against current and
future competitors. These competitive pressures could have a material adverse
effect on our revenue growth and earnings.

Online commerce and database security concerns could adversely affect traffic
on our Web site and our revenues.

   The secure transmission of confidential information over public networks is
a fundamental requirement for online commerce. Concerns over the security of
transactions and commercial online services and other privacy issues may also
inhibit the growth of the Internet and the online commerce industry. We license
encryption and authentication technology for the transmission of confidential
information, such as buyer credit card numbers, through our online system. In
addition, we maintain an extensive confidential database of buyer profiles and
transaction information. Technological advances, including new discoveries in
the field of cryptography, could result in a compromise or breach of our
security systems. Security breaches could have a material adverse effect on our
reputation, financial condition and results of operations. An intruder who
breaches our security measures could misappropriate proprietary information or
cause interruptions in our operations. We could be required to spend a
significant amount of time and money to protect against security breaches or to
alleviate problems caused by such breaches. Security breaches could also expose
us to a risk of loss or litigation and possible liability. We cannot be certain
that our security measures will prevent security breaches.

Additional regulation of online commerce could adversely affect demand for our
products and services.

   There are currently few laws and regulations directly applicable to the
Internet and e-commerce services. However, we expect that additional regulation
may be adopted covering issues such as user privacy, pricing, content,
copyrights, distribution, antitrust and characteristics and quality of products
and services. In addition, the growth and development of e-commerce may prompt
calls for more stringent buyer protection laws that may impose additional
burdens on those companies conducting business online. The adoption of any
additional laws or regulations may decrease the growth of the Internet or
commercial online services, which could, in turn, decrease the demand for our
products and services. Additional regulation could also increase our cost of
doing business.

The application of sales and other taxes to online commerce could adversely
affect demand for our products and services and are administratively
burdensome.

   The application of sales and other taxes by state and local governments to
online commerce is uncertain and may take years to resolve. In particular, a
number of states are currently reviewing the appropriate tax treatment of
online commerce, and new state tax regulations may subject us and/or the
suppliers and buyers that use our Web sites to additional state sales and
income taxes. The imposition of additional sales taxes on transactions
conducted through our Web sites could make this service less valuable to buyers
and adversely impact transaction volume. The imposition of any such taxes or
other regulations could have a material adverse effect on our revenues and
earnings. In addition, the collection and payment of such taxes may cause us to
incur significant administrative effort and expense. Our failure to properly
collect and pay such taxes in any jurisdiction could subject us to penalties
that could adversely affect our earnings.

                         Risks Relating To Our Offering

Investors will incur immediate dilution and may experience further dilution.

   The initial public offering price of our common stock will be substantially
higher than the net tangible book value per share of the outstanding common
stock immediately after the offering. If you purchase common stock in this
offering, you will incur immediate and substantial dilution in the pro forma
net tangible book value per share of the common stock from the price you pay
for common stock. We also have a large number of options and warrants to
purchase the common stock with exercise prices significantly below the
estimated initial public offering price of our common stock. To the extent
these options and warrants are exercised, there will be further substantial
dilution. See "Dilution."

                                       16
<PAGE>

We may be required to issue additional warrants in connection with the
conversion of our series B and series D preferred stock, which would result in
additional dilution to investors.

   The terms of our series B and series D preferred stock provide that these
shares will convert automatically into shares of our common stock upon
consummation of this offering only if the initial public offering price is at
least $12.20 per share. Otherwise, the holders of 70% of the series B preferred
stock and two-thirds of the series D preferred stock must approve an amendment
to these terms to permit such conversion. Holders of a sufficient number of
these shares have indicated that they may not approve the conversion at an
initial public offering price of less than $12.20 per share unless we issue to
them additional warrants to acquire shares of common stock at an exercise price
of $0.01 per share. We would expect the number of warrants so issued to be the
amount necessary to compensate these holders for the difference in the value of
their shares at the actual initial public offering price and the value of their
shares if the initial public offering price were $12.20. For example, if the
initial public offering price is $12.00 per share, we could be required to
issue warrants to acquire up to approximately 180,000 shares. The issuance of
these warrants would result in additional dilution to purchasers in this
offering.

Significant fluctuation in the market price of our common stock could result in
securities class action claims against us.

   Significant price and value fluctuations have occurred with respect to the
securities of Internet-related companies. Our common stock price is likely to
be volatile in the future. In the past, following periods of downward
volatility in the market price of a company's securities, class action
litigation has often been pursued against such companies. If similar litigation
were pursued against us, it could result in substantial costs and a diversion
of our management's attention and resources.


                                       17
<PAGE>

                           FORWARD-LOOKING STATEMENTS

   Some of the statements contained in this prospectus contain forward-looking
information. These statements are found in the sections entitled "Prospectus
Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business" and
elsewhere in this prospectus. They include statements concerning:

  . our business strategy;

  . liquidity and capital expenditures;

  . our use of the proceeds of the offering;

  . future sources and nature of revenues;

  . future expenses and investments;

  . future profitability;

  . expansion of our products and services;

  . sales trends;

  . trends in Internet activity generally;

  . year 2000 preparations;

  . trends in government regulation; and

  . payment of dividends.

   You can identify these statements by forward-looking words such as "expect,"
"anticipate," "believe," "goal," "plan," "intend," "estimate," "predict,"
"potential," "continue," "may," "will," and "should" or similar words. You
should be aware that these statements are subject to known and unknown risks,
uncertainties and other factors, including those discussed in the section
entitled "Risk Factors," that could cause the actual results to differ
materially from those suggested by the forward-looking statements.

                                       18
<PAGE>

                                USE OF PROCEEDS

   We estimate the net proceeds to us from this offering, after deducting the
underwriting discounts and offering expenses payable by us, will be
approximately $86,058,000, or $99,115,200 if the underwriters exercise their
over-allotment option in full, assuming an initial public offering price of
$13.00 per share.

   As of the date of this prospectus, we have not made any specific plans with
respect to the proceeds of this offering. Therefore, we cannot specify with
certainty the particular uses for the net proceeds to be received upon
completion of this offering. Accordingly, our management will have significant
flexibility in applying the net proceeds of the offering. We intend to use the
net proceeds from this offering to expand our sales and marketing efforts,
enhance our technology and add to our online content and for general corporate
purposes, including working capital needs. We also may use a portion of the net
proceeds of this offering to acquire or invest in complementary businesses or
technologies, although we have no present commitments or agreements with
respect to any material acquisition or investment. Pending the application of
the proceeds towards one of the above uses, we intend to invest the net
offering proceeds in short-term, interest-bearing, investment-grade securities.

   The principal purposes of this offering are to increase our working capital,
to create a public market for our common stock, to facilitate future access to
the public capital markets and to increase our visibility in the marketplace.

   The description above represents our present intentions based upon present
plans and business conditions. They may vary significantly and are subject to
change at our discretion depending upon certain factors, including economic or
industry conditions, changes in the competitive environment and strategic
opportunities that may arise.

                                DIVIDEND POLICY

   We have never declared or paid cash dividends on our capital stock and we do
not anticipate declaring or paying any cash dividends for the foreseeable
future. We currently expect to retain all earnings, if any, for investment in
our business.

                                       19
<PAGE>

                                CAPITALIZATION

   The following table sets forth our capitalization as of September 30, 1999.
Our capitalization is presented:

  . on an actual basis after giving effect to the 1.516643-for-one common
    stock split;

  . on an unaudited pro forma basis to reflect the reclassification of all
    outstanding shares of our class A common stock to shares of our common
    stock and the conversion of all outstanding shares of our class B common
    stock and all outstanding shares of our preferred stock into shares of
    our common stock; and

  . on an unaudited pro forma as adjusted basis to reflect the
    reclassification of all outstanding shares of our class A common stock to
    shares of our common stock and the conversion of all outstanding shares
    of our class B common stock and all outstanding shares of our preferred
    stock into shares of our common stock and our receipt of the estimated
    net proceeds from our sale of 7,200,000 shares of common stock at an
    assumed initial public offering price of $13.00 per share, after
    deducting underwriting discounts and commissions and offering expenses
    payable by us.

<TABLE>
<CAPTION>
                                                  As of September 30, 1999
                                              ----------------------------------
                                                                      Pro Forma
                                               Actual      Pro Forma As Adjusted
                                                       (In Thousands)
<S>                                           <C>       <C>          <C>
Debt and capital lease obligations, long-
 term portion...............................  $  1,035    $  1,035    $  1,035
Mandatorily redeemable convertible preferred
 stock, $0.001 par value, 7,147,900 shares
 authorized actual; no shares authorized pro
 forma or pro forma as adjusted:
 Series B--3,835,180 shares designated;
  3,777,626 issued and outstanding actual;
  no shares designated, issued or
  outstanding pro forma or pro forma as
  adjusted..................................    56,098          --          --
 Series D--3,312,720 shares designated;
  3,312,720 issued and outstanding actual;
  no shares designated, issued or
  outstanding pro forma or pro forma as
  adjusted..................................    36,566          --          --
                                              --------    --------    --------
   Total mandatorily redeemable convertible
    preferred stock.........................    92,664          --          --
Stockholders' deficit:
 Series A convertible preferred stock,
  $0.001 par value, 769,231 shares
  designated; 769,221 shares issued and
  outstanding actual; no shares designated,
  issued or outstanding pro forma or pro
  forma as adjusted.........................       683          --          --
 Series C convertible preferred stock,
  $0.001 par value, 700,000 shares
  designated; 635,813 shares issued and
  outstanding actual; no shares designated,
  issued or outstanding pro forma or pro
  forma as adjusted.........................     1,774          --          --
 Series E convertible preferred stock,
  $0.001 par value, 126,500 shares
  designated; 114,995 shares issued and
  outstanding actual; no shares designated,
  issued or outstanding pro forma or pro
  forma as adjusted.........................     1,256          --          --
 Preferred stock, undesignated, $0.001 par
  value, 10,000,000 shares authorized; no
  shares issued or outstanding actual; no
  shares authorized, issued or outstanding
  pro forma or pro forma as adjusted........
 Common stock, $0.001 par value; 90,000,000
  shares authorized; 3,727,548 shares
  issued and outstanding actual; 17,165,604
  shares issued and outstanding pro forma;
  24,365,604 shares issued and outstanding
  pro forma as adjusted.....................         4          17          24
 Class B common stock, $0.001 par value,
  250,020 shares authorized, issued and
  outstanding actual; no shares issued or
  outstanding pro forma or pro forma
  adjusted..................................       100          --          --
 Additional paid-in capital.................        --      96,464     182,515
 Deferred compensation......................    (2,842)     (2,842)     (2,842)
 Accumulated deficit........................   (63,813)    (63,813)    (63,813)
                                              --------    --------    --------
   Total stockholders' equity (deficit).....   (62,838)     29,826     115,884
                                              --------    --------    --------
     Total capitalization...................  $ 30,861    $ 30,861    $116,919
                                              ========    ========    ========
</TABLE>

                                      20
<PAGE>

                                    DILUTION

   As of September 30, 1999, our pro forma net tangible book value was
approximately $28.1 million, or $1.64 per share of common stock. Pro forma net
tangible book value per share represents the amount of our total tangible
assets less total liabilities, divided by the number of shares of common stock
outstanding after giving effect to the conversion of all outstanding shares of
our class B common stock and all outstanding shares of our preferred stock into
common stock. After giving effect to our sale of 7,200,000 shares of common
stock in this offering at an assumed initial public offering price of $13.00
per share and the application of the estimated net proceeds from this sale, our
pro forma as adjusted net tangible book value at September 30, 1999 would have
been approximately $114.1 million, or $4.68 per share of common stock. This
represents an immediate increase in such pro forma as adjusted net tangible
book value of $3.04 per share to existing stockholders and an immediate
decrease in pro forma as adjusted net tangible book value of $8.32 per share to
new investors. The following table illustrates this per share dilution to new
investors:

<TABLE>
   <S>                                                             <C>   <C>
   Assumed initial public offering price per share (weighted
    average)......................................................       $13.00
                                                                         ------
     Pro forma net tangible book value per share at September 30,
      1999........................................................ $1.64
     Increase attributable to new investors ......................  3.04
                                                                   -----
   Pro forma as adjusted net tangible book value per share after
    this offering.................................................         4.68
                                                                         ------
   Dilution per share to new investors in this offering...........       $ 8.32
                                                                         ======
</TABLE>

   The following table summarizes, as of September 30, 1999, differences
between the existing stockholders and new investors with respect to the number
of shares of common stock purchased, the total consideration paid and the
average price paid per share.

<TABLE>
<CAPTION>
                            Shares Purchased  Total Consideration
                           or to be Purchased  Paid or to be Paid
                           ------------------ -------------------- Average Price
                             Number   Percent    Amount    Percent   Per Share
<S>                        <C>        <C>     <C>          <C>     <C>
Existing stockholders..... 17,165,604   70.5% $ 48,907,959   34.3%    $ 2.85
New investors.............  7,200,000   29.5    93,600,000   65.7      13.00
                           ----------  -----  ------------  -----     ------
  Total................... 24,365,604  100.0% $142,507,959  100.0%    $ 5.85
                           ==========  =====  ============  =====     ======
</TABLE>

   The discussion and table assumes no exercise of options outstanding under
our stock option plan and no exercise of warrants that will remain outstanding
after this offering. As of September 30, 1999, there were 2,372,826 shares of
common stock reserved for issuance upon exercise of options granted under our
stock option plan, of which options to purchase 1,577,953 shares were
outstanding as of September 30, 1999 at exercise prices ranging from $0.002 to
$7.58 per share and a weighted average exercise price of $1.75 per share. There
were also 1,183,183 shares of common stock issuable upon exercise of warrants
outstanding as of September 30, 1999 at a weighted average exercise price of
$6.87 per share. In addition, there were 57,545 warrants outstanding for
purchase of our series B preferred stock at an exercise price of $2.80 per
share, which will convert upon consummation of this offering into 87,275
warrants to purchase our common stock at an exercise price of $1.85 per share.
The exercise of these options and warrants will have the effect of increasing
the dilution per share to new investors in this offering. In addition, we have
agreed to issue upon consummation of this offering warrants to acquire up to
3,724,307 shares of common stock at an exercise price of $0.01 per share to
certain key suppliers and purchasers of scientific products and may in the
future issue warrants to acquire up to an additional 1,408,112 shares of common
stock at an exercise price of $0.01 per share to other key suppliers and
purchasers of scientific products. Assuming that all outstanding options and
warrants discussed above are exercised, the dilution to new investors upon
completion of this offering would be approximately $8.78 per share and shares
held by new investors would comprise approximately 23.3% of outstanding shares.

                                       21
<PAGE>


   Assuming full exercise of the underwriters' over-allotment option, the
percentage of shares held by existing stockholders would be 67.5% of the total
number of shares of common stock to be outstanding after the offering, and the
number of shares held by new stockholders would be increased to 8,280,000
shares, or 32.5% of the total number of shares of common stock to be
outstanding after this offering.

                                       22
<PAGE>

           UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS DATA

   The unaudited pro forma combined statements of operations data for the year
ended December 31, 1998 and the nine months ended September 30, 1998 combine
the historical statements of operations of SciQuest.com and BioSupplyNet as if
the acquisition of BioSupplyNet, which occurred on September 29, 1998, had been
completed on January 1, 1998. The total cost of the acquisition was
approximately $2.0 million and has been accounted for using the purchase method
of accounting. The unaudited pro forma statement of operations and the
accompanying notes should be read in conjunction with the historical financial
statements (including the related notes) of SciQuest.com and BioSupplyNet, and
Management's Discussion and Analysis of Financial Condition and Results of
Operations, appearing elsewhere in this prospectus.

   The pro forma adjustments reflecting the consummation of the acquisition are
based on the purchase method of accounting, available financial information and
certain estimates and assumptions set forth in the notes to the unaudited pro
forma statements of operations data. The unaudited pro forma statements of
operations data reflects SciQuest.com's best estimates; however, the actual
financial position and results of operations may differ significantly from the
pro forma amounts reflected herein due to various factors, including, without
limitation, access to additional information and changes in value. The pro
forma adjustments do not reflect any operating efficiencies or cost savings
that may be achievable with respect to the combined businesses of SciQuest.com
and BioSupplyNet.

   The unaudited pro forma financial data for the year ended December 31, 1998
and the nine months ended September 30, 1998, do not purport to represent what
the actual results of the combined businesses would have been if the
acquisition of BioSupplyNet had occurred on January 1, 1998, nor does this
information purport to project our results for any future period.

<TABLE>
<CAPTION>
                                          Year Ended December 31, 1998
                          ------------------------------------------------------------------
                                                                   Pro Forma      Pro Forma
                          SciQuest.com  BioSupplyNet  Combined    Adjustments     Combined
                           (audited)    (unaudited)  (unaudited)  (unaudited)    (unaudited)
<S>                       <C>           <C>          <C>          <C>            <C>
Revenues................  $   477,818    $ 620,359   $ 1,098,177   $     --      $ 1,098,177
Cost of revenues........      (41,880)    (354,361)     (396,241)        --         (396,241)
                          -----------    ---------   -----------   ---------     -----------
  Gross profit..........      435,938      265,998       701,936         --          701,936
                          -----------    ---------   -----------   ---------     -----------
Product development.....    1,191,135      132,840     1,323,975     121,383 (a)   1,445,358
Sales and marketing.....    1,706,033      370,601     2,076,634                   2,076,634
General and
 administrative.........    1,104,010      120,261     1,224,271     382,801 (a)   1,607,072
Purchased in process
 research and
 development............      791,102          --        791,102    (791,102)(b)         --
                          -----------    ---------   -----------   ---------     -----------
    Total operating
     expenses...........    4,792,280      623,702     5,415,982    (286,918)      5,129,064
                          -----------    ---------   -----------   ---------     -----------
Operating loss..........   (4,356,342)    (357,704)   (4,714,046)    286,918      (4,427,128)
Interest income.........      110,565        1,608       112,173         --          112,173
Interest expense........      (30,524)     (12,997)      (43,521)        --          (43,521)
                          -----------    ---------   -----------   ---------     -----------
Loss before income
 taxes..................   (4,276,301)    (369,093)   (4,645,394)    286,918      (4,358,476)
Income tax benefit......       54,695          --         54,695     164,085 (c)     218,780
                          -----------    ---------   -----------   ---------     -----------
Net loss................   (4,221,606)    (369,093)   (4,590,699)    451,003      (4,139,696)
Accretion on mandatorily
 redeemable convertible
 preferred stock........      328,723          --        328,723         --          328,723
                          -----------    ---------   -----------   ---------     -----------
Net loss available to
 common stockholders....  $(4,550,329)   $(369,093)  $(4,919,422)  $ 451,003     $(4,468,419)
                          ===========    =========   ===========   =========     ===========
Net loss per common
 share..................                                                         $     (1.31)
Weighted average common
 shares outstanding.....                                                           3,412,447
</TABLE>

                                       23
<PAGE>

<TABLE>
<CAPTION>
                                      Nine Months Ended September 30, 1998
                          ------------------------------------------------------------------
                                                                   Pro Forma      Pro Forma
                          SciQuest.com  BioSupplyNet  Combined    Adjustments     Combined
                          (unaudited)   (unaudited)  (unaudited)  (unaudited)    (unaudited)
<S>                       <C>           <C>          <C>          <C>            <C>
Revenues................  $   308,365    $ 620,359   $   928,724   $    --       $   928,724
Cost of revenues........          --      (354,361)     (354,361)       --          (354,361)
                          -----------    ---------   -----------   --------      -----------
  Gross profit..........      308,365      265,998       574,363        --           574,363
                          -----------    ---------   -----------   --------      -----------
Product development.....      389,901      132,840       522,741    121,383 (d)      644,124
Sales and marketing.....      828,294      370,601     1,198,895        --         1,198,895
General and
 administrative.........      375,793      120,261       496,054    382,801 (d)      878,855
Purchased in-process
 research and
 development............      791,102          --        791,102   (791,102)(b)          --
                          -----------    ---------   -----------   --------      -----------
    Total operating
     expenses...........    2,385,090      623,702     3,008,792   (286,918)       2,721,874
                          -----------    ---------   -----------   --------      -----------
Operating loss..........   (2,076,725)    (357,704)   (2,434,429)   286,918       (2,147,511)
Interest income.........       34,259        1,608        35,867        --            35,867
Interest expense........      (22,638)     (12,997)      (35,635)       --           (35,635)
                          -----------    ---------   -----------   --------      -----------
Loss before income
 taxes..................   (2,065,104)    (369,093)   (2,434,197)   286,918       (2,147,279)
Income tax benefit......          --           --            --     164,085 (e)      164,085
                          -----------    ---------   -----------   --------      -----------
Net loss................   (2,065,104)    (369,093)   (2,434,197)   451,003       (1,983,194)
Accretion on mandatorily
 redeemable convertible
 preferred stock........      112,155          --        112,155        --           112,155
                          -----------    ---------   -----------   --------      -----------
Net loss available to
 common stockholders....  $(2,177,259)   $(369,093)  $(2,546,352)  $451,003      $(2,095,349)
                          ===========    =========   ===========   ========      ===========
Net loss per common
 share..................  $     (0.64)                                            $    (0.61)
Weighted average common
 shares outstanding.....    3,412,447                                              3,412,447
</TABLE>

Notes to the Unaudited Pro Forma Statements of Operations Data

   The following pro forma adjustments were made to our consolidated statements
operations to arrive at our unaudited pro forma statements of operations data:

  (a) We recorded additional amortization of intangible assets and goodwill
      related to the acquisition of BioSupplyNet for all twelve months of
      1998.

  (b) We eliminated the charge to operations related to the portion of the
      purchase price of BioSupplyNet allocated to in-process research and
      development.

  (c) We recorded a deferred tax benefit related to reduction in deferred tax
      liabilities resulting from the increased amortization of the intangible
      assets and goodwill recorded with the acquisition of BioSupplyNet for
      all twelve months of 1998.

  (d) We recorded amortization of intangible assets and goodwill related to
      the acquisition of BioSupplyNet for the period from January 1, 1998 to
      September 30, 1998.

  (e) We recorded a deferred tax benefit related to reduction in deferred tax
      liabilities resulting from the increased amortization of the intangible
      assets and goodwill recorded with the acquisition of BioSupplyNet
      during the period from January 1, 1998 to September 30, 1998.

                                       24
<PAGE>

                      SELECTED CONSOLIDATED FINANCIAL DATA
                     (In thousands, except per share data)

   Our selected financial data set forth below should be read in conjunction
with our financial statements and accompanying notes appearing elsewhere in
this prospectus and "Management's Discussion and Analysis of Financial
Condition and Results of Operations." The historical statements of operations
data for the years ended December 31, 1996, 1997 and 1998, and the balance
sheet data as of December 31, 1997 and 1998 are derived from, and are qualified
by reference to, our financial statements, which have been audited by
PricewaterhouseCoopers LLP. The balance sheet data as of December 31, 1996 is
derived from an audited balance sheet not included in this prospectus. The
acquisition of BioSupplyNet has been accounted for using the purchase method of
accounting. Accordingly, the actual consolidated statement of operations data
reflects the results of operations of BioSupplyNet since its acquisition on
September 29, 1998. The statement of operations data for the nine months ended
September 30, 1998 and 1999 and the balance sheet data as of September 30, 1999
are derived from our unaudited financial statements appearing elsewhere in this
prospectus. In the opinion of our management, the unaudited financial
statements have been prepared on a basis consistent with the financial
statements which appear elsewhere in the prospectus, and include all
adjustments, consisting only of normal recurring adjustments necessary for a
fair statement of the financial position and results of operations for these
unaudited periods. Historical results are not necessarily indicative of results
to be expected in the future.

<TABLE>
<CAPTION>
                                                                            Nine Months
                               Year Ended December 31,                  Ended September 30,
                          ------------------------------------- -----------------------------------
                                                     Pro Forma               Pro Forma
                           1996    1997     1998       1998        1998        1998        1999
                                                    (unaudited) (unaudited) (unaudited) (unaudited)
<S>                       <C>     <C>     <C>       <C>         <C>         <C>         <C>
Statement of Operations
 Data:
Revenues................  $  --   $  196  $    478   $  1,098    $    308    $    928    $   1,244
Cost of revenues........     --      --         42        396         --          354          823
                          ------  ------  --------   --------    --------    --------    ---------
 Gross profit...........     --      196       436        702         308         574          421
Operating expenses:
 Product development....      85     140     1,191      1,445         390         644        6,299
 Sales and marketing....     150     257     1,706      2,077         828       1,199        6,219
 General and administra-
  tive..................     301     457     1,104      1,607         376         879        3,963
 Purchased in process
  research and
  development...........     --      --        791        --          791         --           --
                          ------  ------  --------   --------    --------    --------    ---------
Total operating ex-
 penses.................     536     855     4,792      5,129       2,385       2,722       16,481
                          ------  ------  --------   --------    --------    --------    ---------
Operating loss..........    (536)   (658)   (4,356)    (4,427)     (2,077)     (2,148)     (16,060)
Net interest income (ex-
 pense).................      (9)    (32)       80         69          12           1          755
                          ------  ------  --------   --------    --------    --------    ---------
Loss before income tax-
 es.....................    (545)   (690)   (4,276)    (4,358)     (2,065)     (2,147)     (15,305)
Income tax benefit......     --      --         54        218         --          164          164
                          ------  ------  --------   --------    --------    --------    ---------
Net loss................    (545)   (690)   (4,222)    (4,140)     (2,065)      1,983      (15,141)
Accretion on mandatorily
 redeemable preferred
 stock..................     --      --        328        328         112         112       46,647
                          ------  ------  --------   --------    --------    --------    ---------
Net loss available to
 common stockholders....  $ (545) $ (690) $ (4,550)  $ (4,468)   $ (2,177)   $ (2,095)   $ (61,788)
                          ======  ======  ========   ========    ========    ========    =========
Net loss per common
 share--basic and dilut-
 ed.....................  $(0.16) $(0.20) $  (1.33)  $  (1.31)   $  (0.64)   $  (0.61)   $  (17.60)
Weighted average common
 shares outstanding.....   3,412   3,412     3,412      3,412       3,412       3,412        3,511
Pro forma net loss per
 common share--basic and
 diluted................                  $  (0.62)  $  (0.61)                           $   (1.08)
Pro forma weighted aver-
 age common shares
 outstanding............                     6,806      6,806                               13,976
</TABLE>

<TABLE>
<CAPTION>
                                           As of December 31,         As of
                                           ---------------------  September 30,
                                           1996   1997    1998        1999
                                                                   (unaudited)
<S>                                        <C>    <C>    <C>      <C>
Balance Sheet Data:
Cash and cash equivalents................. $   9  $ 331  $ 5,391    $  4,911
Working capital (deficit).................  (227)   (28)   6,413      14,950
Total assets..............................    77    385    9,173      34,761
Long-term liabilities.....................    66     79      385       1,156
Mandatorily redeemable convertible pre-
 ferred stock.............................   --     --    10,883      92,664
Stockholders' equity (deficit)............  (254)   (81)  (3,102)    (62,838)
</TABLE>

                                       25
<PAGE>

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

   The following discussion should be read in conjunction with the consolidated
financial statements and accompanying notes, which appear elsewhere in this
prospectus. It contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those
anticipated in these forwarding-looking statements as a result of various
factors, including those discussed below and elsewhere in this prospectus,
particularly under the heading "Risk Factors."

Overview

   SciQuest.com is a Web-based, interactive marketplace for scientific and
laboratory products used by pharmaceutical, clinical, biotechnology, chemical,
industrial and educational organizations worldwide. We have used our extensive
industry expertise to design a marketplace that streamlines the traditionally
inefficient scientific products supply chain. Our marketplace solutions allow
buyers of scientific products to cross-search content and purchase products
from multiple suppliers with a single order. Our approach does not give
priority to any particular scientific products distributor, which allows us to
create an open and scalable marketplace that we believe is more attractive to
both buyers and sellers.

   We were incorporated in November 1995 and commenced operations in January
1996. During 1996, we focused on developing our business model and the required
technology. We did not begin to recognize any revenues until 1997.

   On September 29, 1998, we acquired BioSupplyNet in exchange for the issuance
of 546,405 shares of our series C convertible preferred stock and 162,718
warrants to purchase our common stock at an exercise price of $1.85 per share.
In addition, we issued 192,280 options to purchase our common stock with
exercise prices ranging from $0.002 to $0.18 per share primarily to former
employees of BioSupplyNet who became our employees. The series C convertible
preferred stock, at the option of the holder, is convertible into shares of our
common stock at a 1.516643-for-one conversion ratio and automatically converts
to common stock upon the closing of a firm commitment underwritten public
offering. This acquisition was accounted for using the purchase method of
accounting with a total purchase price of approximately $2.0 million. Of the
total purchase price, $0.8 million was allocated to in-process research and
development and immediately charged to operations because the in-process e-
commerce technology acquired had not reached technological feasibility at the
date of the acquisition and had no alternative future use. At the date of the
acquisition, BioSupplyNet's e-commerce technology was approximately 50%
complete. We estimated at the acquisition date that we would incur
approximately $1.9 million to complete the development of this e-commerce
technology and that the development would be completed by March 2000. Since the
date of the acquisition of BioSupplyNet we have completed the development of
the e-commerce taxonomy and ontology functionality and made significant
progress in the completion of the Web-based directory services and search
engine technology that was being developed by BioSupplyNet. The development of
the BioSupplyNet e-commerce technology is approximately 20% complete at
September 30, 1999 and there have been no significant changes in the estimated
scope of the work to be performed since the date of the acquisition. The
remaining $1.2 million of the purchase price of BioSupplyNet was allocated to
the tangible and intangible assets of BioSupplyNet. The fair values assigned to
in-process research and development, tangible and intangible assets of
BioSupplyNet were based on an management's valuation.

   BioSupplyNet publishes the Source Book, an annual printed catalogue of
vendors of biomedical research supplies and equipment and scientific products
for the biomedical research industry. In addition, at the time of acquisition,
BioSupplyNet was in the process of developing e-commerce technology to allow
research scientists, lab technicians and purchasing agents to quickly identify
suppliers of specific scientific products. We intend to continue to enhance and
develop this technology. Since the acquisition of BioSupplyNet, we have derived
revenues from the sale of advertising in the Source Book.

   On July 30, 1999, we acquired all of the outstanding common stock of
Internet Auctioneers International, Inc. in exchange for the issuance of
114,995 shares of our series E convertible preferred stock. Each share of

                                       26
<PAGE>

series E convertible preferred stock is convertible at the option of the holder
into 1.516643 shares of our common stock and will automatically convert to
common stock upon the closing of this offering. Internet Auctioneers
International provides auction services to laboratories for the sale of used
equipment. We will receive a commission for performing these services, which
will be recognized as revenues at the time the sale is finalized.

   In October 1999, we entered into strategic relationships with a number of
key suppliers and buyers of scientific products, whereby we agreed to issue
warrants to these suppliers and buyers to purchase approximately 3,724,307
shares of common stock at an exercise price of $0.01 per share. These warrants
will be issued upon consummation of this offering, will vest over a period of
three to five years and will be exercisable until 2004. In addition, we have
set aside warrants to purchase approximately 1,408,112 shares of common stock
at an exercise price of $0.01 per share that may be issued to additional
strategic partners. We intend to issue these additional warrants as we enter
into similar agreements with a limited number of other key suppliers and buyers
of scientific products. We have issued, and intend to issue, these warrants in
connection with these agreements as we believe that these relationships are an
integral component of our business plan.

   These strategic relationships include agreements to be the exclusive third
party provider of electronic marketplace services in the United States for a
period of five years for eight key suppliers. Under the terms of these
agreements, these suppliers are not required to sell a minimum amount of
products through our electronic marketplace. The warrants to purchase our
common stock that will be issued in connection with these agreements will vest
over a four or five year period regardless of the level of sales by the
suppliers through our electronic marketplace.

   These strategic relationships also include binding letters of intent with
Dow Chemical Company, DuPont Pharmaceuticals Company and Monsanto Company to be
their exclusive third party electronic aggregator for purchases of scientific
products in North America for a period of three years. Although these buyers
have agreed to use reasonable efforts to purchase at least $5 million of
scientific products annually through our marketplace, there are no minimum
purchase commitments. The warrants to be issued in connection with these
relationships will vest over a period of three years regardless of their level
of purchases through our electronic marketplace. These letters of intent may be
terminated by either party on or after December 31, 1999 in the event that the
parties have not completed mutually satisfactory definitive agreements.

   We will record a charge of approximately $48.4 million upon consummation of
this offering related to the warrants to purchase 3,724,307 shares of common
stock that we have agreed to issue. In the event the remaining available
warrants are issued prior to consummation of this offering, an additional
charge of approximately $18.3 million will be recorded. These charges will be
amortized to operating expense over the term of the related strategic
relationship, which in the case of the buyer agreements is three years and in
the case of the supplier agreements is five years.

   We have also agreed to issue to Dow Chemical Company, DuPont Pharmaceuticals
Company and Monsanto Company additional incentive warrants, the number of which
will be based on each purchaser's volume of purchases through our marketplace
during the years 2000, 2001 and 2002. These incentive warrants will be issued
on February 15, 2001, 2002 and 2003, at an exercise price equal to the initial
public offering price, will be exercisable upon issuance and will be
exercisable for five years after issuance. A charge will be recognized as a
reduction of net revenues upon each issuance of the incentive warrants in an
amount equal to the difference between the fair market value of our common
shares on the issuance date less the exercise price for these warrants.

   Revenues consist of (1) sales of scientific products in e-commerce
transactions originating on our Web sites, (2) banner advertising revenues from
our Web sites and (3) advertising revenues from the Source Book. Prior to the
launch of our e-commerce marketplace in April 1999, substantially all of our
revenues were derived from advertising on our Web Sites and in the Source Book.
Revenues from e-commerce transactions

                                       27
<PAGE>

became a significant source of our revenues in the third quarter of 1999 and
are expected to continue to increase. For the nine months ended September 30,
1999, one customer, PPD Development, Inc., accounted for twelve percent of
revenues.

   We offer various Web-based solutions where potential buyers can cross-search
content from multiple suppliers and build a multiple line item order for
products from various suppliers. When a purchaser places an order through our
marketplace, we purchase that item from the supplier at either a pre-negotiated
price or at a discount from the supplier's list price and arrange for shipment
to the purchaser. We take legal title to the products purchased at the date of
shipment and relinquish title to our customers upon delivery. After the
supplier ships the product, we begin the collection process by presenting a
consolidated invoice to the buyer for the products and vendors represented in
the order. Payment by the buyer to us is then made by credit card/procurement
card or through a more traditional account setup and payment system. For each
transaction, we recognize revenue in the amount of the sales price of the item
to the purchaser and recognize the amount paid to the supplier plus shipping
costs as cost of goods sold. The difference between revenues and cost of goods
sold is our gross profit.

   Revenues from sales of scientific products in e-commerce transactions are
recorded as product revenues and are recognized upon notification from our
suppliers that the items ordered have been shipped to the customer.

   Advertising revenues on banner contracts are recognized ratably over the
period in which the advertisement is displayed. Revenues from advertising
included in the Source Book are recognized at the date the Source Book is
published and distributed. Advertising on our Web sites is sold by Cahners
Business Information. Cahners will pay us a percentage of the total advertising
revenues which it receives.

Results of Operations

   The following table sets forth certain operating data as a percentage of
total revenues for the periods indicated. We did not generate revenues prior to
1996.

<TABLE>
<CAPTION>
                                         Year Ended          Nine Months
                                        December 31,      Ended September 30
                                       ----------------   -------------------
                                        1997     1998       1998      1999
<S>                                    <C>      <C>       <C>       <C>
Statement of Operations Data:
Revenues..............................  100.0%    100.0%     100.0%     100.0%
Cost of revenues......................    --        8.8        --        66.2
                                       ------   -------   --------  ---------
Gross profit..........................  100.0      91.2      100.0       33.8
                                       ------   -------   --------  ---------
Operating expenses:
  Product development.................   71.6     249.3      126.4      506.4
  Sales and marketing.................  130.7     357.0      268.6      500.0
  General and administrative..........  232.7     231.0      121.9      318.6
  Purchased in process-research and
   development........................    --      165.6      256.6        --
                                       ------   -------   --------  ---------
Total operating expenses..............  435.0   1,002.9      773.5    1,325.0
                                       ------   -------   --------  ---------
Operating loss........................ (335.0)   (911.7)    (673.5)  (1,291.2)
                                       ------   -------   --------  ---------
Net interest income (expense).........  (16.2)     16.7        3.8       60.7
                                       ------   -------   --------  ---------
Loss before income taxes.............. (351.2)   (895.0)    (669.7)  (1,230.5)
Income tax benefit....................    --       11.5        --        13.2
                                       ------   -------   --------  ---------
Net loss.............................. (351.2)   (883.5)    (669.7)  (1,217.3)
Accretion on mandatorily redeemable
 preferred stock......................    --       68.8       36.4    3,750.4
                                       ------   -------   --------  ---------
Net loss available to common
 stockholders......................... (351.2)%  (952.3)%  (706.1)%  (4,967.7)%
                                       ======   =======   ========  =========
</TABLE>


                                       28
<PAGE>

Nine Months Ended September 30, 1999 and 1998

 Revenues

   Revenues have been derived primarily from advertising revenues from the
Source Book, the sale of scientific products in e-commerce transactions and
banner advertising.

   Revenues increased to $1.2 million for the nine months ended September 30,
1999 from $0.3 million for the nine months ended September 30, 1998. This
increase was primarily due to $0.7 million in advertising revenues generated by
BioSupplyNet for the nine months ended September 30, 1999 compared to zero in
the nine months ended September 30, 1998 as we did not acquire BioSupplyNet
until September 29, 1998. Revenues from the sale of scientific products in e-
commerce transactions totaled $0.4 million for the nine months ended September
30, 1999 as compared to zero for the nine months ended September 30, 1998 as
our e-commerce marketplace was not implemented until April 1999. Banner
advertising revenues decreased to $0.1 million for the nine months ended
September 30, 1999 from $0.3 million for the nine months ended September 30,
1998.

 Cost of Revenues

   Cost of revenues consists of the purchase price of scientific products sold
in e-commerce transactions and related shipping costs for these products,
publishing and distribution costs related to the Source Book, and our Web site
advertising development costs.

   Total cost of revenues increased to $0.8 million for the nine months ended
September 30, 1999 from zero for the nine months ended September 30, 1998. Cost
of revenues increased primarily due to $0.4 million in costs incurred related
to BioSupplyNet's advertising revenues and $0.4 million in costs related to the
sale of scientific products in e-commerce transactions during the nine months
ended September 30, 1999.

 Gross Profit

   Gross profit increased to $0.4 million for the nine months ended September
30, 1999 from $0.3 million for the nine months ended September 30, 1998. Gross
profit increased as product sales began with the launch of the SciQuest.com
marketplace in April 1999 and as a result of advertising revenues generated
from the sale of advertising by BioSupplyNet, which was acquired in September
1998.

 Operating Expenses

   Product Development Expenses. Product development expenses consist primarily
of personnel and related costs used to develop and maintain our Web sites.
Product development costs increased to $6.3 million for the nine months ended
September 30, 1999 from $0.4 million for the nine months ended September 30,
1998. This increase resulted from additional expenses incurred to develop the
e-commerce functionality of our Web sites, including an increase in the product
development staff and the costs of continuing the development of the e-commerce
technology acquired with BioSupplyNet. We expect that our product development
expenses will continue to increase as we continue to enhance and develop
functionality on our Web sites, complete the development of the BioSupplyNet e-
commerce technology and develop customized private Web sites for major
customers.

   Sales and Marketing Expenses. Sales and marketing expenses consist primarily
of salaries and other related costs for sales and marketing personnel, travel
expenses, public relations expenses and marketing materials. Sales and
marketing expenses increased to $6.2 million for the nine months ended
September 30, 1999 from $0.8 million for the nine months ended September 30,
1998. This increase resulted primarily from the hiring of additional sales and
marketing personnel to market our products and services and increased expenses
to advertise and promote our Web sites and to a lesser extent sales and
marketing expenses related to BioSupplyNet. We expect that our sales and
marketing expenses will continue to increase in the next 12

                                       29
<PAGE>

months as we add sales and marketing personnel, and as we continue to incur
expenses to promote the services provided by our Web sites.

   General and Administrative Expenses.  General and administrative expenses
consist primarily of personnel and related costs for general corporate
functions, including finance, accounting, legal, human resources, facilities
and information systems expenses. General and administrative expenses increased
to $4.0 million for the nine months ended September 30, 1999 from $0.4 million
for the nine months ended September 30, 1998. General and administrative
expenses increased primarily as a result of increased payroll costs due to the
increase in the number of general and administrative personnel, and other
expenses, including professional fees and facilities costs incurred to support
the growth of our business. We expect general and administrative expenses to
continue to increase in the next 12 months as we add administrative personnel
to support the growth of our business.

 Interest Income (Expense)

   Net interest income (expense) consists of interest income earned on cash
deposited in money market accounts and invested in short and long term U.S.
Government obligations reduced by interest expense incurred on notes payable
and capital lease obligations. Net interest income (expense) increased to net
interest income of $0.8 million for the nine months ended September 30, 1999
from net interest income of $12,000 for the nine months ended September 30,
1998. The increase in net interest income was primarily the result of interest
earned on funds received from the sale of our series B mandatorily redeemable
convertible preferred stock in September 1998 and series D mandatorily
redeemable convertible preferred stock in May and June 1999.

 Income Tax Benefit

   Income tax benefit increased to $0.2 million the nine months ended September
30, 1999 from zero for the nine months ended September 30, 1998. The increase
in income tax benefit was the result of the reduction in net deferred tax
liabilities during the nine months ended September 30, 1999 due to the
amortization of the goodwill and other intangible assets recorded with our
acquisition of BioSupplyNet in September 1998.

 Accretion of Mandatorily Redeemable Convertible Preferred Stock

   Accretion of mandatorily redeemable preferred stock increased to $46.6
million in the nine months ended September 30, 1999 from $0.1 million in the
nine months ended September 30, 1998 as a result of the accretion of the series
B mandatorily redeemable convertible preferred stock to its estimated
redemption amount at September 30, 1999 and accretion of the series D
mandatorily redeemable convertible preferred stock to its redemption amount
over the period from the date of issuance to the first redemption date. Our
series B mandatorily redeemable convertible preferred stock has a redemption
price that is variable in amount (See Note 12 to our financial statements), and
its carrying value is required to be adjusted to the estimated redemption
amount at each balance sheet date rather than being accreted to the redemption
amount over the period from date of issuance to the first redemption date. This
resulted in accretion of $45.2 million on the series B mandatorily redeemable
preferred stock being recognized in the nine month period ended September 30,
1999.

Years Ended December 31, 1998 and 1997

 Revenues

   Revenues increased to $0.5 million for the year ended December 31, 1998 from
$0.2 million for the year ended December 31, 1997. This increase was primarily
a result of hiring additional sales staff responsible for marketing advertising
space on our Web sites and the acquisition of BioSupplyNet in September 1998.
All of our revenues for the year ended December 31, 1998 and substantially all
of our revenues for the year ended December 31, 1997 were generated from the
sale of advertising with the remainder of these revenues being generated from
the creation of Web-based content and development services.

                                       30
<PAGE>

 Cost of Revenues

   Cost of revenues increased to $42,000 for the year ended December 31, 1998
from zero for the year ended December 31, 1997. This increase resulted
primarily from costs associated with the development of advertising for display
on our Web sites and cost of revenues of BioSupplyNet, which was acquired in
September 1998.

 Gross Profit

   Gross profit increased to $0.4 million for the year ended December 31, 1998
from $0.2 million for the year ended December 31, 1997. Gross profit increased
as a result of the increase in advertising revenues from sale of advertising on
our Web sites, which has a relatively low amount of associated costs.

 Operating Expenses

   Product Development Expenses. Product development expenses increased to $1.2
million for the year ended December 31, 1998 from $0.1 million for the year
ended December 31, 1997. This increase resulted primarily from the development
of the e-commerce functionality of our Web sites, which began during the fourth
quarter of 1998. Product development expenses incurred during the year ended
December 31, 1997 consisted primarily of the costs of developing and
maintaining our Web site, which functions were limited to providing a source
for data about scientific products.

   Sales and Marketing Expenses. Sales and marketing expenses increased to $1.7
million for the year ended December 31, 1998 from $0.3 million for the year
ended December 31, 1997. The increased sales and marketing expenses were
primarily due to an increase in the number of sales and marketing personnel
during the year ended December 31, 1998 and sales and marketing expenses of
BioSupplyNet from the date of the acquisition through December 31, 1998.

   General and Administrative Expenses. General and administrative expenses
increased to $1.1 million for the year ended December 31, 1998 from $0.5
million for the year ended December 31, 1997. This increase primarily resulted
from hiring additional general and administrative staff to support the rapid
growth of our business, and we incurred $0.3 million of general and
administrative expense in 1998 as a result of the acquisition of BioSupplyNet
in September 1998.

   Purchased In Process Research and Development Expense. For the year ended
December 31, 1998, we recognized an in-process research and development charge
of $0.8 million as a result of the acquisition of BioSupplyNet. Based on our
valuation of BioSupplyNet and its assets, we allocated a portion of the
BioSupplyNet purchase price to in-process e-commerce technology being developed
by BioSupplyNet which had not reached technological feasablity and had no
alternative use at the date of the acquisition of BioSupplyNet. We are using
this technology in the development of the e-commerce and scientific products
search capabilities on our Web sites. At the date of the acquisition, the e-
commerce technology being developed by BioSupplyNet was approximately 50%
complete. We estimate that we will incur approximately $1.9 million to complete
the development of this e-commerce technology. We expect to complete
substantially all of the development by March 2000.

 Interest Income (Expense)

   Net interest income (expense) increased to net interest income of $0.1
million for the year ended December 31, 1998 from net interest expense of
$32,000 for the year ended December 31, 1997. Net interest income increased
primarily as a result of interest earned on funds received from sale of our
series B mandatorily redeemable convertible preferred stock between September
and November 1998.


                                       31
<PAGE>

 Income Tax Benefit

   The income tax benefit increased to $55,000 for the year ended December 31,
1998 from zero for the year ended December 31, 1997. The income tax benefit
increased as a result of a reduction in deferred tax liabilities due to the
amortization of the goodwill and other intangible assets recorded as a result
of the acquisition of BioSupplyNet in September 1998.

 Accretion of Mandatorily Redeemable Convertible Preferred Stock

   Accretion of mandatorily redeemable convertible preferred stock increased to
$0.3 million in the year ended December 31, 1998 from zero in the year ended
December 31, 1997. Prior to September 30, 1998, we did not have any mandatorily
redeemable convertible preferred stock outstanding; therefore, we did not
recognize any accretion in the year ended December 31, 1997. At December 31,
1998, our series B mandatorily redeemable convertible preferred stock was
mandatorily redeemable with a redemption price that was variable in amount and
was therefore required to be stated at its redemption value at December 31,
1998.

Years Ended December 31, 1997 and 1996

 Revenue

   Revenues increased to $0.2 million for the year ended December 31, 1997
compared to zero for the year ended December 31, 1996. Revenues increased due
to the sale of banner advertisements to be displayed on our Web site during the
year ended December 31, 1997.

 Operating Expenses

   Product Development Expenses. Product development expenses increased to $0.1
million for the year ended December 31, 1997 from $85,000 for the year ended
December 31, 1996. This increase resulted primarily from expenses incurred
related to the development of our Web sites during the year ended December 31,
1997.

   Sales and Marketing Expenses. Sales and marketing expenses increased to $0.3
million for the year ended December 31, 1997 from $0.2 million for the year
ended December 31, 1996. This increase was primarily due to the hiring of
additional sales and marketing personnel during the year ended December 31,
1997.

   General and Administrative Expenses. General and administrative expenses
increased to $0.5 million for the year ended December 31, 1997 from $0.3
million for the year ended December 31, 1996. This increase resulted primarily
from the hiring of additional general and administrative staff to manage and
maintain supplier information on the Web site.

 Interest Income (Expense)

   Net interest expense increased to net interest expense of $32,000 for the
year ended December 31, 1997 from net interest expense of $9,000 for the year
ended December 31, 1996. We obtained additional financing between the years
ended December 31, 1997 and December 31, 1996, and as a result we incurred
additional interest and expenses.

Liquidity and Capital Resources

   We have primarily funded our operations through private placements of our
preferred stock. As of September 30, 1999, we had cash and cash equivalents of
$4.9 million, short term investments of $12.6 million and long term investments
of $12.4 million.

   Cash used in operating activities during the nine months ended September 30,
1999 was $12.9 million and during the years ended December 31, 1998, 1997 and
1996 was $3.1 million, $0.4 million and $0.3 million,

                                       32
<PAGE>

respectively. Cash used in operating activities was principally for the
development of our Web sites, the development of our e-commerce marketplace,
the expansion of our sales and marketing force and the expansion of the
administrative and operations staff to support our growth.

   Cash used in investing activities during the nine months ended September 30,
1999 was $23.7 million and during the years ended December 31, 1998, 1997 and
1996 was $2.2 million, zero and $27,000, respectively. Cash used in investing
activities has primarily been comprised of purchases of investments in US
government obligations and corporate bonds.

   Cash provided by financing activities during the nine months ended September
30, 1999 was $36.1 million and during the years ended December 31, 1998, 1997
and 1996 was $10.4 million, $0.7 million and $0.3 million, respectively.
Between March and September 1997, we received an aggregate of $80,000 in the
form of bridge loans. These bridge loans were converted into 90,702 shares of
series A convertible preferred stock in October 1997. In October 1997, we
raised an aggregate of $617,450 through the issuance of 678,519 shares of our
series A convertible preferred stock at a price of $0.91 per share. Between
March and June 1998, we received $515,000 in the form of bridge loans. These
bridge loans were converted into 187,394 shares of series B mandatory
redeemable convertible preferred stock in July 1998. Between July and November
1998, we raised an aggregate of $10,038,979 through the issuance of 3,590,232
shares of our series B mandatorily redeemable convertible preferred stock at a
price of $2.80 per share. Purchasers of the series B mandatorily redeemable
convertible preferred stock whose shares were issued pursuant to the conversion
of bridge loans also received 57,545 warrants to purchase series B mandatorily
redeemable convertible preferred stock at an exercise price of $2.80. In May
and June 1999, we raised an aggregate of $37,506,616 through the issuance of
3,312,720 shares of our series D mandatorily redeemable convertible preferred
stock at a price of $11.32 per share. Purchasers of the series D mandatorily
redeemable convertible preferred stock also received 1,004,829 warrants to
purchase our common stock at an exercise price of $7.46 per share. In March
1999, we sold 89,408 shares of series C convertible preferred stock to an
executive officer for $250,000, or $2.80 per share.

   We believe that our existing liquidity and capital resources, including the
proceeds resulting from the sale of our common stock in this offering, will be
sufficient to satisfy our cash requirements for the next twenty-four months. To
the extent that such amounts are insufficient, we will be required to raise
additional funds through equity or debt financing. There can be no assurance
that we will be able to raise such funds on favorable terms, or at all.

New Accounting Pronouncements

   In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Investments
and Hedging Activities" (SFAS No. 133). SFAS No. 133 establishes a new model
for accounting for derivatives and hedging activities and supercedes a number
of existing standards. SFAS No. 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 2000. The adoption of SFAS No. 133, as
amended, is not expected to have a material impact on our consolidated
financial position or results of operations.

   In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants ("AICPA") issued Statements of
Position No. 98-1, "Software for Internal Use" (SOP No. 98-1), which provides
guidance regarding when software developed or obtained for internal use should
be capitalized. SOP No. 98-1 is effective for financial statements for fiscal
years beginning after December 15, 1998. Our adoption of SOP No. 98-1 on
January 1, 1999 had no impact on our consolidated financial position or results
of operations.

   In April 1998, the Accounting Standards Executive Committee of the AICPA
issued Statement of Position No. 98-5, "Reporting on the Costs of Start-Up
Activities" (SOP No. 98-5), which is effective for fiscal years beginning after
December 15, 1998. SOP 98-5 requires companies to expense as incurred all pre-
opening,

                                       33
<PAGE>

startup and organizational costs that are not capitalizable as long-lived
assets. Our adoption of SOP 98-5 on January 1, 1999 had no impact on our
consolidated financial position or results of operations.

Year 2000

 Impact of Year 2000 Computer Issues

   The year 2000 computer problem refers to the potential for system and
processing failures of date-related data as a result of computer-controlled
systems using two digits rather than four to define the applicable year. For
example, computer programs that have time-sensitive software may recognize a
date represented as "00" as the year 1900 rather than the year 2000. This
situation could result in system failures or miscalculations causing
disruptions in the operations of any business. As a result, many companies'
software and computer systems may need to be upgraded or replaced to comply
with year 2000 requirements. Our ability to operate is dependent upon delivery
of accurate, electronic information via the Internet. To the extent year 2000
issues result in the long-term inoperability of the Internet or our Web sites,
our business could be materially and adversely affected.

   We completed an assessment of our information technology systems for year
2000 problems in June 1999. We have not replaced any of our systems based on
the results of our assessment. However, we have made modifications to some
systems based on our assessment, at a cost to us of approximately $175,000.

 Testing of Our Online Marketplace Application Software

   We have internally reviewed our application software. We have performed
industry-standard procedures to test our internally developed applications for
year 2000 compliance. Based on our testing, we believe that our internally
developed applications and systems are designed to be year 2000 compliant.

 Assessment of Third-Party Equipment and Software

   We utilize third-party equipment and software that may not be year 2000
compliant. Failure of third-party equipment or software, or the interface of
our applications with this equipment or software, could cause our applications
to malfunction and have a material adverse effect on our earnings. We are
continuing our assessment of the year 2000 risks of our third-party desktop
systems. We have contacted the vendors of most of our third-party software and
equipment to assess the year 2000 risks of our third-party systems. We have
received year 2000 compliance letters from 100% of these vendors. We are also
in the process of contacting the few remaining vendors with whom we have not
yet contacted in order to assess their year 2000 compliance. Based on these
vendors' representations, we believe that there are a number of third-party
hardware and software systems, some of which are material to our operations,
that require some upgrade in order to be year 2000 compliant. The failure of
these vendors to address their year 2000 issues may require us to seek
alternative vendors or, if possible, to develop our own solutions. The time and
resources required to find alternative vendors and to transition our systems
could increase our costs of doing business, require us to allocate our own
resources away from our core business, and delay development of our own
technology and operations. We plan to complete our assessment of the risk posed
by these third-party systems to our operations by the end of 1999. This process
has resulted in an insignificant amount of costs to us through September 30,
1999. We expect any remaining costs to also be insignificant.

 Interaction of Our Marketplace with Supplier and Customer Systems

   Furthermore, the success of our efforts may depend on the success of our
suppliers, customers and strategic partners in dealing with their year 2000
issues. Many of these organizations' systems may not yet be year 2000
compliant, and the impact of failure of these systems on our marketplace is
difficult to determine. The availability of products from our suppliers and the
purchasing patterns of our customers or potential customers may be affected by
year 2000 issues.

                                       34
<PAGE>

 Our Contingency Planning Effort

   We are engaged in an ongoing year 2000 assessment and are gathering
information for the development of contingency plans. We are in the process of
contacting our strategic partners, major customers and critical suppliers to
gauge their year 2000 compliance and are requesting year 2000 compliance
information and letters. We have received responses from a majority of our
critical suppliers, strategic partners and major customers and expect to
receive responses from the remainder by the middle of November 1999. We are
continuing to develop our contingency plans based on the responses received
from our critical suppliers, strategic partners and major customers.

 Reasonably Likely Worst Case Scenario

   The failure of our internal systems or of the products or systems including
hardware and software of third parties upon which we rely could result in:

  . our inability to effective manage sales leads, which in turn could result
    in fewer sales and lower revenue;

  . the failure of our systems to function properly, which in turn could
    result in our incurring significant costs and diverting significant human
    resources in our efforts to comply with obligations under warranty and/or
    service agreements;

  . our inability to properly process orders from our customers; and

  . our inability to properly invoice and process payments from our customers
    and errors or omissions in accounting and financial data.

   The occurrence of any of these events could have a material adverse effect
on our business.

 Quantitative and Qualitative Disclosures About Market Risk

   Most of our cash equivalents, short-term and long-term investments and
capital lease obligations are at fixed interest rates, therefore the fair value
of these investments is affected by changes in market interest rates. However,
because our investment portfolio is primarily comprised of investments in U.S.
Government obligations and high grade commercial paper, an immediate 10% change
in market interest rates would not have a material effect on the fair market
value of our portfolio. Therefore, we would not expect our operating results or
cash flows to be affected to any significant degree by the effect of a sudden
change in market interest rates on our investment portfolio.

                                       35
<PAGE>

                                    BUSINESS

Overview

   SciQuest.com is a Web-based, interactive marketplace for scientific and
laboratory products used by pharmaceutical, clinical, biotechnology, chemical,
industrial and educational organizations worldwide. We have used our extensive
industry expertise to design a marketplace that streamlines the traditionally
inefficient scientific products supply chain. Our marketplace solutions allow
buyers of scientific products to cross-search content and purchase products
from multiple suppliers with a single order. Our approach does not give
priority to any particular scientific products distributor, which allows us to
create an open and scalable marketplace that we believe is more attractive to
both buyers and sellers.

   Our marketplace benefits three distinct customers: scientists, purchasing
professionals and suppliers. Our solutions reduce the time scientists require
to find, compare, purchase, track and manage critical laboratory items, thus
allowing them to spend more time on research and testing. Our solutions allow
purchasing professionals to reduce procurement costs by automating order
processing, consolidating purchase orders and payments, reducing errors and
providing more control and information to support enterprise purchasing
policies. Our solutions serve as a more efficient sales channel that enables
suppliers to expand their market reach and reduce customer acquisition and
order processing costs.

   Since our founding in 1995, we have expended significant resources to
develop our brand and assemble the most comprehensive online database of over
8,000 suppliers. Our easy-to-use, interactive database currently consists of
over 550,000 scientific products. Since July 1996, tens of thousands of
scientists and purchasing professionals from over 60 countries have used this
database to locate supplies and products. In April 1999, we introduced our e-
commerce marketplace solution to this growing community of online scientific
product buyers and suppliers. We intend to capitalize on this existing user
base to accelerate the utilization of our marketplace. In October 1999, we
entered into agreements to be the exclusive third party provider of electronic
marketplace services in the United States for a period of five years for the
following suppliers: Ambion, Inc., Amersham Pharmacia Biotech, Inc.,
BioWhittaker, a Cambrex Company, Endogen, Inc., NEN Life Science Products,
Inc., PerkinElmer, Inc., Pierce Chemical Company and QIAGEN N.V. In October
1999, we also entered into agreements with Dow Chemical Company and DuPont
Pharmaceuticals Company to be their exclusive third party electronic aggregator
for purchases of scientific products in North America for a period of three
years.

   The illustration below summarizes the procurement process through our online
marketplace:

                                    [GRAPH]

                                       36
<PAGE>

Industry Background

 The Scientific Products Market

   Based upon data from the Laboratory Products Association, a trade
association for laboratory product businesses, and Strategic Directions
International, an international management consulting firm specializing in
analytical instruments, we estimate that the market for scientific products in
1999 will be approximately $11.8 billion in North America and $36.4 billion
worldwide. These expenditures are driven, to a large extent, by increases in
scientific research and development investments, which are expected to continue
to grow. Every year, approximately 200,000 laboratories around the world
purchase scientific products from thousands of different suppliers to
facilitate research and testing activities. As the demand for scientific
products grows, the need for efficient procurement processes becomes more
critical.

   The current scientific products market is characterized by:

  . complex, information-intensive products;

  . a highly fragmented supply chain; and

  . a heavy concentration of manual purchasing processes consisting of
    printed catalogs, paper requisitions and telephone and fax orders.

   There are, generally, three types of scientific products: (1) highly
technical specialty items used for specific research and testing applications,
(2) commodity products that are used in a broad range of scientific
applications, and (3) highly technical instruments and other capital equipment.
Suppliers typically sell specialty scientific products and instruments directly
to customers, whereas commodity products are typically sold through
distributors.

 Limitations of the Traditional Supply Chain

   The traditional supply chain in the scientific products industry does not
adequately address the needs of scientists, purchasing professionals or
suppliers.

   Scientists. Because scientists are continually developing applications and
testing new theories, they are typically unable to forecast many of the
chemicals, supplies and equipment that they will need to conduct their research
and testing. For this reason scientists often:

  . have immediate needs for critical items that are highly technical and
    have exacting criteria;

  . need new products that they have not purchased before; and

  . must purchase these items from new and different suppliers.

   As a result, it is difficult and time-consuming for scientists to identify,
compare and purchase the scientific products required to meet their needs using
the traditional approach. In fact, we estimate that a typical laboratory spends
up to four hours weekly searching through paper catalogs and product literature
and requesting technical data from various suppliers.

   Purchasing Professionals. The product ordering process traditionally has
been a paper-based process that requires manual preparation of purchase orders
and order tracking. Traditionally, scientists requisition supplies through
purchasing professionals within their organizations who place orders with
multiple suppliers by telephone, fax and e-mail. This multi-step manual process
is highly susceptible to errors. Additionally, the traditional process makes it
difficult for purchasing professionals to enforce purchasing policies among
scientists who specify and request products. Buying organizations in a variety
of industries that were surveyed by the Aberdeen Group, a computer and
communications research and consulting organization, reported that it typically
costs $107 per requisition for orders processed manually, compared with $30 on
average to process an order through an Internet automated procurement system.

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   Suppliers. Traditionally, suppliers have used two sales channels:
traditional distributors and direct sales. While traditional distributors can
give a supplier access to a broad market, distributors separate suppliers from
the ultimate customer and may lack the ability to provide the technical
assistance required to sell specialty scientific products and instruments. As a
result, traditional distributors normally focus on selling commodity products.
Conversely, direct sales provide suppliers with greater control and contact
with their customers, enabling them to provide the technical assistance
necessary for the sale of specialty scientific products. However, direct sales
are often expensive and inefficient. Many suppliers have Web sites that are
essentially online versions of their catalogs, but these sites do not address
the primary cause of inefficiency for buyers --the inability to find products
and consolidate orders from different suppliers quickly and easily through a
single service.

 The Online Market Opportunity

   The limitations of the traditional scientific products supply chain and the
significant information needs of scientists make the scientific products market
well-suited to an automated e-commerce solution. Moreover, the scientific
community is already accustomed to using the Internet. According to a recent
study by BioInformatics, Inc., 80% of the 680 scientists surveyed had ordered a
consumer product or service through the Internet and approximately 38% of them
had purchased life science products over the Internet. We believe this
indicates that scientists will be comfortable adopting e-commerce solutions for
purchases of scientific products. The following percentage of scientists
responding to the study rated e-commerce superior to traditional purchasing in
each of the following areas:

  .82% of the 650 respondents rated e-commerce superior in reducing
   administrative costs;

  .73% of the 656 respondents rated e-commerce superior in speed of delivery
   to end users; and

  .70% of the 663 respondents rated e-commerce superior in fast, accurate
   ordering.

   Source: BioInformatics, Inc. 319611985. BioInformatics, Inc. is a market
research and consulting firm, specializing in supporting marketing and sales
executives in the life science, medical device and pharmaceutical industries.

   For these reasons, we believe that the scientific products market will be an
early adopter of e-commerce solutions and that we are well positioned to take
advantage of this market opportunity.

The SciQuest.com Marketplace Solution

   The SciQuest.com marketplace solution provides comprehensive public Web
sites and customized private sites that address the current limitations of the
scientific products supply chain by streamlining the process of buying and
selling of scientific products and reducing associated transaction costs. Our
distributor-neutral approach allows us to create an open and scalable
marketplace that we believe is more attractive to both buyers and sellers.

   Our solutions serve three primary and distinct customers:

   Scientists. Our solutions offer scientists online tools to streamline the
process of finding, comparing, purchasing, tracking and managing laboratory
supplies. By reducing the time scientists spend on these functions, our
solutions allow them to be more productive and spend more time on research and
testing. Our solutions enable a scientist to:

  . search our extensive database, using our industry-leading taxonomies, to
    compare products, attributes and technical data across multiple
    suppliers;

  . locate a specific chemical, equipment or supply item; and

  . consolidate, purchase and track orders from multiple suppliers through
    the convenience of a single Web site, 24 hours a day, seven days a week.

   Purchasing Professionals. Our solutions allow purchasing professionals to
automate order processing, consolidate purchase orders and payments and obtain
purchasing information. This provides purchasing professionals with greater
access to purchasing information to better monitor and control purchasing
patterns

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and to implement and enforce uniform purchasing policies that reduce
procurement costs. Our solutions enable purchasing professionals to:

  . consolidate purchases from multiple suppliers onto one order;

  . streamline the purchasing process and reduce the likelihood of errors;

  . communicate and control purchasing policies and rules; and

  . access detailed purchasing information and reports.

   In addition, our solutions are designed to be compatible with leading
enterprise software systems and do not require organizations to install
additional enterprise software systems. This compatibility allows organizations
to avoid the expense, time and training typically required to install and
support new enterprise software.

   Suppliers. Our solutions offer suppliers a more efficient sales channel that
cost-effectively provides many of the benefits of direct sales and
distribution. As a result, by participating in our marketplace suppliers can
expand their market reach and reduce customer acquisition and order processing
costs. Our solutions enable suppliers to:

  . more cost-effectively market and sell products through access to our
    global audience of scientists and purchasing professionals;

  . access valuable market and customer data;

  . leverage our e-commerce functionality without capital investment;

  . easily update product information;

  . introduce new products to qualified buyers quickly and economically; and

  . maintain contact with their customers.

Strategy

   Our objective is to be the leading global solution for buying and selling
scientific products. We intend to achieve this objective through the following
strategies:

   Leverage and Build Brand Equity. We have invested significant resources over
the past four years to establish a strong brand identity. Our brand recognition
has enabled us to attract a growing user base of qualified scientific buyers
and participating suppliers. We intend to continue to invest heavily in
building the SciQuest.com brand by accelerating our marketing, sales,
advertising and public relations efforts.

   Enhance Customer Loyalty to Increase Repeat Purchases. We intend to continue
to emphasize a high level of customer service in order to enhance customer
loyalty and facilitate repeat purchases by our customers. In addition, we will
continue to provide our customers with a comprehensive portfolio of solutions
that delivers a compelling user experience and an efficient fulfillment
process.

   Maintain Distributor Neutrality. We intend to maintain our distributor
neutral position to better serve our users and maximize our market opportunity.
We believe that our distributor neutral approach has and will continue to allow
us to provide our users access to broad and unbiased product information. We
believe that this will maximize the attractiveness of our marketplace to all
customer and supplier segments.

   Maximize Enterprise Software Compatibility. We will continue to concentrate
our efforts on integrating our marketplace solution with the leading enterprise
software vendors. This integration will allow us to accelerate buyer adoption
of our services, offer suppliers a broader sales channel and maximize our
market opportunity. In addition, our platform independence will allow us to
concentrate our technology spending on

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<PAGE>

our core procurement solutions rather than diverting our resources to create
redundant and potentially competitive enterprise software functionality.

   Expand Our Product and Service Offerings. We intend to advance our market
leadership by continuing to expand the selection of scientific products offered
on our Web sites, which will allow us to attract additional purchasing
professionals and accelerate adoption by scientists. We are also committed to
growing our portfolio of services to provide the most efficient and
comprehensive buying and selling experience for the scientific community. We
intend to develop additional services and functionality internally as well as
explore acquisitions of complementary service offerings.

   Expand Internationally. We believe that the global reach of the Internet and
worldwide demand for scientific products presents a significant opportunity for
us to expand internationally. Our Web sites have to date been accessed by
buyers located in over 60 countries. As we continue to expand our product
offerings, we believe that we will attract a larger base of users globally. We
intend to invest resources and capital to expand our sales and marketing
efforts internationally in order to better address the needs of our customers
worldwide.

Products and Services

   SciQuest.com is a Web-based marketplace that serves the needs of scientists
and purchasing professionals by providing an easy to use comprehensive
portfolio of solutions. Leveraging our existing customer base and extensive
industry knowledge, we have built a market-driven portfolio of services. In
addition to our primary offering, an e-commerce marketplace for public and
private buyers, we offer customers extensive online products and services,
including a comprehensive sourcing guide, used equipment auctions, discounted
products and other resources. In addition to these Web-based services, we
publish and distribute a printed Source Book. Our services enable buyers and
suppliers to efficiently gather and update product information, conduct
transactions and facilitate post-order activities. We believe this
comprehensive service offering provides our customers with a unique online
marketplace for scientific products. Set forth below is a detailed description
of our products and services.

 SciQuest.com Marketplace Solutions

   A primary component of the SciQuest.com marketplace solution is our
electronic purchasing service that allows users to buy over 300,000 chemicals,
supplies, lab equipment and other scientific products from our growing database
of over 235 suppliers. Buyers are able to search our proprietary life science
taxonomy, a hierarchical classification structure for organizing product
content, developed by Cold Spring Harbor Laboratory and our analytical and
basic laboratory supply taxonomy developed by Cahners Business Information.
Buyers can also search across multiple suppliers' products simultaneously,
compare product attributes, order products from multiple suppliers on one
consolidated order form, track order status, receive one invoice and have a
single point of contact for customer service. Buyers can also track order
history and create a customized list of frequently purchased products for easy
repurchase.

   Once a buyer submits an order to us, our customer care professionals oversee
the order fulfillment process. We purchase the items from suppliers at either a
pre-negotiated price or at a discount from the suppliers' list price and
arrange for shipment from the suppliers directly to the purchaser. We do not
physically take possession of the products. After the suppliers ship the items,
we present to the buyer a consolidated invoice for the products purchased.
Buyers then pay us by credit card/procurement card or through a more
traditional account setup and payment system.

   For customers requiring specific customization, such as pre-negotiated
pricing discounts from preferred suppliers or more advanced integration with
enterprise systems, we offer customized versions of our marketplace that allow
scientists in leading pharmaceutical, clinical, biotechnology, chemical,
industrial and educational organizations to access enterprise-specific pricing
while also facilitating internal approval, workflow routing and financial
system integration.

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<PAGE>

 Sourcing Guide

   In addition to our e-commerce offerings, our proprietary, online Sourcing
Guide provides a broad database of product information from more than 8,000
suppliers and service providers. Given the large number of industry suppliers
and fragmented nature of the scientific products market, having a comprehensive
database of suppliers and products is an important value-added service for our
customers. If a potential buyer is unable to purchase the desired products
through our e-commerce solutions, our Sourcing Guide provides a means of
identifying an alternative source for that product. We believe this unique
service engenders loyalty, repeat usage and customer satisfaction relative to
competitive offerings.

 SciQuest.com Auctions

   Our Web-based Auctions service enables customers to buy and sell used and
refurbished capital equipment and instrumentation through online auctions.
Auctions allows suppliers and laboratories to easily sell used equipment while
maximizing its value through the auction process. Auctions provides buyers an
economically attractive alternative to buying new products.

 SciQuest.com LabDeals

   Our Web-based LabDeals service is devoted to the sale of surplus scientific
products at discount prices. LabDeals provides suppliers with an additional
sales outlet for slow moving, obsolete or excess inventory. LabDeals provides
buyers access to an inventory of surplus scientific products at prices
discounted below manufacturers' suggested list price.

 SciQuest.com Resources

   Our Resources area offers a broad range of information and reference
materials for laboratory scientists. For instance, molecular biologists can
access our proprietary BioToolKit, one of the most comprehensive annotated
listings of databases related to molecular biology research currently available
on the Web. Our Ask Joe service helps customers locate hard-to-find items by
putting them in touch with our staff scientists. Our SciMail allows buyers to
simultaneously broadcast requests for technical data, product information and
price quotations to multiple suppliers. We intend to further expand our
Resources area to offer a broader array of information and reference materials
for laboratory scientists.

 Source Book

   In addition to our web-based products and services, we also offer the Source
Book, the dominant print product directory for life scientists. The Source Book
utilizes the product taxonomy, a hierarchical classification structure for
organizing product content, developed by Cold Spring Harbor Laboratory and
contains product listings from more than 1,400 suppliers. In 1999, we expect
80,000 copies of the Source Book to be distributed to scientists in
pharmaceutical, clinical, biotechnology, chemical, industrial and educational
organizations. Its corresponding Web site, www.biosupplynet.com, which went
online in 1995, was the first Web-based product directory for the biomedical
research community. The Source Book helps accelerate buyer adoption of our web-
based purchasing solutions.

Sales & Marketing

   We market and sell our portfolio of solutions through direct sales,
traditional and Internet marketing initiatives and co-marketing relationships.
Our primary audiences in the pharmaceutical, clinical, biotechnology, chemical,
industrial and educational markets are laboratory scientists, who drive the
decision-making process, and purchasing professionals, who drive the
procurement process.

   Our experienced sales force concentrates on selling our enterprise
compatible solutions to larger purchasing organizations. We also sell our
purchasing solutions to medium-sized and smaller buyers. In

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<PAGE>

addition, our sales team assists suppliers in offering their products through
our e-commerce solutions. Our sales professionals average over 17 years of
scientific products industry experience. By leveraging their experience, we
expect to continue to attract and retain scientists, purchasing professionals
and suppliers, thereby growing our installed customer base and increasing
repeat purchases.

   We leverage a variety of marketing channels to build our brand equity as
well as promote our solutions to both buyers and suppliers. These channels
include direct marketing, print and online advertising, trade shows and
seminars. We intend to use public relations group to communicate new product
and service offerings and other enhancements to industry analysts and targeted
scientific and business press on a regular basis through a combination of press
releases, phone briefings, in-person meetings and trade show appointments.

   As of September 30, 1999, we had 46 people in our sales and marketing group.

Strategic Relationships

   We believe that a key element to the successful implementation of our
business strategy is to establish strategic relationships with prominent buyers
and suppliers of scientific products. We believe these relationships will
assist us in accelerating our aggregation of content, increasing the
transaction volume on the SciQuest marketplace, achieving further brand
awareness and building a critical mass of important core customers.

 Purchasing Relationships

   We have entered into binding letters of intent with Dow Chemical Company,
DuPont Pharmaceuticals Company and Monsanto Company to establish purchasing
relationships. Pursuant to these letters of intent, SciQuest will be the
exclusive third party electronic aggregator for purchases of scientific
products in North America for Dow Chemical Company and DuPont Pharmaceuticals
Company and an approved third party electronic aggregator for purchases of
scientific products in North America for Monsanto Company for a period of three
years. As an exclusive third party electronic aggregator, SciQuest will be the
sole electronic means by which Dow Chemical Company and DuPont Pharmaceuticals
Company purchase scientific products that are not sold primarily through
traditional distributors. As a third party electronic aggregator, SciQuest will
be an electronic means by which Monsanto may purchase scientific products that
are not sold primarily through traditional distributors. Each of these letters
of intent provides that:

  .  the purchaser will use its reasonable efforts to purchase at least $5
     million of scientific products annually through our marketplace but
     otherwise there are no minimum purchase commitments; and

  .  the purchaser will participate in case studies of our marketplace and
     otherwise promote our marketplace within the scientific products
     industry.

   In connection with these relationships, we have agreed to issue warrants to
purchase 113,748 shares of our common stock at an exercise price of $0.01 per
share to Dow Chemical Company, warrants to purchase 75,000 shares of our common
stock at an exercise price of $0.01 per share to DuPont Pharmaceuticals Company
and warrants to purchase 15,166 shares of our common stock at an exercise price
of $0.01 per share to Monsanto Company. These warrants vest in equal annual
installments over three years. In addition, we have agreed to issue to each of
these purchasers additional incentive warrants, the number of which will be
based on that purchaser's volume of purchases through the SciQuest marketplace
during the years 2000, 2001 and 2002. These incentive warrants will be issued
on February 15, 2001, 2002 and 2003, at an exercise price equal to the price to
the public in this offering, and will be exercisable upon issuance for a period
of five years.

   We intend to enter into purchasing agreements with Dow Chemical Company,
DuPont Pharmaceuticals Company and Monsanto Company to supplement the terms of
the binding letters of intent. However, under the terms of the binding letters
of intent with Dow Chemical Company and Monsanto Company, either party may
terminate the relationship on or after December 31, 1999 in the event that the
parties have not completed mutually satisfactory definitive agreements.
Furthermore, Monsanto's obligation to enter into the transactions contemplated
by the letter of intent is contingent on the satisfactory completion of a
mutually agreed-upon trial period during which Monsanto will evaluate the
performance of the SciQuest system.

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<PAGE>

 Supplier Relationships

   We have entered into agreements to be the exclusive third party provider of
electronic marketplace services in the United States for a period of five years
for the following suppliers of scientific products:

  .  Ambion, Inc.
  .  Amersham Pharmacia Biotech, Inc.
  .  BioWhittaker, a Cambrex Company
  .  Endogen, Inc.
  .  NEN Life Science Products, Inc.
  .  PerkinElmer, Inc.
  .  Pierce Chemical Company; and
  .  QIAGEN N.V.

   These agreements provide that:

  .  SciQuest will be the exclusive third party provider of electronic
     marketplace services in the United States for a period of five years;

  .  the suppliers will promote our marketplace, including participating in
     co-marketing and advertising programs;

  .  these suppliers will have the opportunity to elect four of the seven
     members of our Board of Governors, which will consist of various members
     of the scientific products industry and will serve as an advisory board
     for our management by providing suggestions and feedback and reviewing
     potential new services;

  .  these suppliers will utilize our marketplace for their purchases of
     scientific products;

  .  these suppliers may terminate the exclusive nature of the agreement
     after 18 months, subject to forfeiture of outstanding warrants; and

  .  these agreements may be terminated by either party for material breach
     or upon the occurrence of bankruptcy or similar events.

   In connection with these agreements, we have agreed to issue warrants to
purchase up to an aggregate of 3,520,392 shares of our common stock at an
exercise price of $0.01 per share. These warrants generally vest in equal
installments over four or five years. A supplier's warrants will terminate
automatically if that supplier terminates the exclusive nature of our
relationship or otherwise terminates the agreement.

   In addition, we may issue warrants to purchase up to an additional 1,408,112
shares of our common stock at an exercise price of $0.01 per share in
connection with additional strategic relationships that we may enter into in
the future. Any relationships we enter into may be on substantially different
terms than the relationships described above. We cannot assure you that we will
enter into any additional strategic relationships or issue any additional
warrants.

   We believe that these exclusive supplier relationships will provide us with
a competitive advantage by assisting us in accelerating our aggregation of
product content and providing potential buyers with a broader range of
products.

 Co-Marketing Relationships

   We have entered into co-marketing agreements with several leading Web-based
scientific communities, such as ChemWeb and BioMedNet. Through the
relationships with ChemWeb and BioMedNet, we gain access to their over 550,000
members. Under these agreements, ChemWeb and BioMedNet maintain on their sites
a hyperlink to a co-branded page from which their members can link directly to
our e-commerce marketplace, in the case of ChemWeb, or, in the case of
BioMedNet, to the BioSupplyNet search directory, from which

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<PAGE>

members then link to our e-commerce marketplace. Under the agreements with
ChemWeb and BioMedNet, we have agreed to pay usage fees for each month in which
a minimum number of members accesses the co-branded page, plus a per search
charge. ChemWeb and BioMedNet have also agreed to collaborate with us on
certain co-marketing activities and to share certain demographic information.
Both agreements terminate on December 31, 2000.

   We also have entered into a Joint Marketing and Cooperation Agreement with
Cold Spring Harbor Laboratory that gives us access to its global audience of
laboratory manual buyers. Under the terms of this agreement, Cold Spring Harbor
Laboratory has agreed to provide marketing support for BioSupplyNet and the
Source Book until September 29, 2003, including distribution of the Source Book
and promotional materials, publication of advertisements in its publications
and the publications of the Cold Spring Harbor Press, creation of links from
its sites, and access to the Cold Spring Harbor Press customer mailing lists.
The Cold Spring Harbor Laboratory Press publishes the leading laboratory
techniques manuals in the life science community. The Source Book is referenced
in the manuals as being the source to turn to when one needs to find suppliers
for needed products. In addition, the Source Book is distributed with every
laboratory manual sold in the United States and at all of the Cold Spring
Harbor Laboratory scientific meetings and courses throughout the year.

   In March 1999, we entered into a Collaboration Agreement with Cahners
Business Information, a division of Reed Elsevier, under which we are able to
offer timely new product information to our users for products listed on the
Cahners sites by linking to the new product information contained on certain
Cahners' Web sites. The agreement also provides for the creation of links
between our Web sites and Cahners' Web sites that contain product directories.
Through our relationship with Cahners, we can offer our customers access to
Cahners' analytical and basic laboratory supply taxonomy. Under the agreement,
we have agreed to pay referral fees for all product sales by customers referred
to us from or through Cahners when the aggregate sales exceed a specified
minimum amount in any twelve month period. The agreement also appoints Cahners
as our exclusive sales representative for online advertisements on our public
Web sites and gives us the right to place online or print advertisements on
Cahners' Web sites and in Cahners' publications. The agreement has a two-year
term and is automatically renewed thereafter. Either party may terminate the
agreement upon a material breach by the other party or in the event of
bankruptcy or similar events, or upon 90 days' notice or anytime after August
1, 1999. Under a second agreement with Cahners entered into in August 1999,
Cahners was appointed as our exclusive sales representative for advertisements
for the Source Book for a period of one year. The agreement automatically
renews for one year periods thereafter. The agreement is terminable by us for
breach, by Cahners upon bankruptcy or similar events, at any time by mutual
agreement or by either of us upon 90 days' notice.

Technology

   We have integrated a broad array of specialized site management, search and
buyer interaction technologies, content management applications and transaction
processes and fulfillment services. We are using our own proprietary programs
and, where appropriate, commercially available, licensed technologies.

   We have developed our e-commerce solutions utilizing development
methodologies and tools that enable rapid development and deployment of
customized versions of our public marketplace. We believe this will allow us to
quickly deliver customer specific solutions while minimizing development time
and costs. Our database is designed to be scalable to accommodate the expected
growth in the number of products offered. We also convert and maintain the
product data provided by suppliers for inclusion in our database.

   We own all of our front-office and back-office production servers and Web
site hardware. Our Web sites run off multiple redundant product application
servers. Our production servers are located at a third party network operating
center located in Durham, North Carolina, which provides 24-hour systems
support, as well as connectivity to all major Internet bandwidth via redundant
high speed T-3 connections. The server and network architecture is designed to
provide high speed and reliability for the operation of our Web sites and all
our communications.

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   As of September 30, 1999, we had 60 people in our product development and
data management groups. Product development expenses were $85,000 in 1996,
$140,000 in 1997, $1.2 million in 1998 and $6.3 million through September 30,
1999. We intend to continue to invest significantly in enhancing our
technology.

Intellectual Property

   We rely on a combination of trade secret, copyright and trademark laws,
license agreements, nondisclosure and other contractual provisions and
technical measures to protect our proprietary rights in our products,
technology and processes. We pursue the registration of our trademarks in the
United States and internationally, however, we may not be able to secure
adequate protection for our trademarks in the United States and other
countries. We have applied for registration of the marks SCIQUEST.COM,
LABDEALS.COM and the SciQuest.com logo in the United States and for SCIQUEST in
the European Union. SCIQUEST, SCIMAIL and BIOSUPPLYNET are our registered
trademarks in the United States. Our software technology is not patented and
existing copyright laws offer only limited practical protection. We cannot
guarantee that the legal protections on which we rely will be adequate to
prevent misappropriation of our technology. Moreover, these protections do not
prevent independent third-party development of competitive products or
services. Furthermore, the validity, enforceability and scope of protection of
intellectual property in Internet-related industries is uncertain and still
evolving. The laws of some foreign countries do not protect intellectual
property to the same extent as do the laws of the United States. We believe our
products, trademarks and other proprietary rights do not infringe upon the
proprietary rights of third parties. However, we cannot provide any guarantees
about the third party products sold on our Web site or that third parties will
not assert infringement claims against us in the future or that any such
assertion will not require us to enter into a license agreement or royalty
agreement with the party asserting a claim. If the products sold on our Web
site infringe the proprietary rights of third parties, we may be deemed to
infringe those rights by selling such products. Even the successful defense of
an infringement claim could result in substantial costs and diversion of our
management's efforts.

   We also license, and will continue to license, certain content for our
online services from third parties. Additionally, we intend to license a
significant portion of our transaction fulfillment system from third parties.
These third-party content licenses may not be available to us on favorable
terms in the future. In addition, we must be able to successfully integrate
this content in a timely and cost-effective manner to create an effective
finished product. If we fail to obtain necessary content on favorable terms,
are unable to successfully integrate this content or if we are unable to
continue to license our order fulfillment transaction systems on favorable
terms, it could have a material adverse effect on our business operations.

Competition

   The online scientific products market is new, rapidly evolving and intensely
competitive. Our primary competition includes the following:

   E-Commerce Providers. A number of e-commerce providers have established
online marketplaces and are attempting to build an online e-commerce brand in
the scientific products market. These competitors include companies such as
Chemdex Corporation.

   Online Scientific Communities. There are a number of Web sites that have
created e-communities to serve the information needs of the scientists.
Traditionally, these communities have provided a means of retrieving scientific
information as well as providing discussion groups, bulletin boards and
directories. Increasingly, these communities include an e-commerce function
that may compete with our product offerings. These communities are operated by
companies such as VerticalNet.

   Suppliers' E-Commerce Initiatives. Many suppliers have developed their own
e-commerce enabled Web sites. As the online market for scientific products and
services grows, we expect that these and other scientific suppliers will
further develop their own online services.


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<PAGE>

   We believe that companies in this market compete based on:

  . brand recognition;

  . number and quality of product offerings;

  . price;

  . ease of use; and

  . customer service and fulfillment capabilities.

   Competition is likely to intensify as this market matures. As competitive
conditions intensify, competitors may:

  . enter into strategic or commercial relationships with larger, more
    established and well-financed companies;

  . secure services and products from suppliers on more favorable terms;

  . devote greater resources to marketing and promotional campaigns;

  . secure exclusive arrangements with buyers that impede our sales; and

  . devote substantially more resources to Web site and systems development.

   Our current and potential competitors' Web sites may achieve greater market
acceptance than ours. Many of our existing and potential competitors, including
large traditional distributors, have longer operating histories in the
scientific products market, greater name recognition, larger customer bases and
greater financial, technical and market resources than we do.

   In addition, new technologies and the expansion of existing technologies may
increase competitive pressures. As a result of increased competition, we may
experience reduced operating margins, as well as loss of market share and brand
recognition. We cannot be certain that we will be able to compete successfully
against current and future competitors and competition could have a material
adverse effect on our revenue growth and earnings.

Government Regulations

   We are subject to various laws and regulations relating to our business,
which include numerous laws and regulations generally applicable to the
chemical, pharmaceutical, controlled substances, human and biological reagents,
and nuclear chemical businesses, and environmental spills. Although we take
legal title to the products offered through our marketplace, we do not take
physical possession of a shipment during any part of the transaction. Legal
title generally passes to the buyer at the time of product shipment. As a
result, we have historically relied, and will in the future rely to a
substantial degree, upon our suppliers to meet all packaging, distribution,
labeling, hazard and healthy information notices to purchasers, record keeping
and licensing requirements applicable to transactions conducted through our
system. In addition, we rely upon our carriers to comply with regulations
regarding the shipment of hazardous materials sold through our system. At
times, we may be unable to verify the accuracy of our suppliers' regulatory
staff determinations and regulatory compliance. We could be fined or exposed to
civil or criminal liability, including monetary fines and injunctions, if the
applicable governmental regulatory requirements are not fully met by our
suppliers, carriers or by us directly.

   Due to the increasing popularity and use of the Internet, it is possible
that a number of laws and regulations may be adopted or interpreted in the
United States and abroad with particular applicability to the Internet. It is
also possible that new laws and regulations may be adopted or interpreted by
the United States and foreign governments, to address the sale and distribution
of scientific research products utilizing the Internet. In addition, it is
possible that governments may enact legislation that may be applicable to us in
areas

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<PAGE>

such as content, product distribution, network security, encryption and the use
of key escrow, data and privacy protection, electronic authentication or
"digital" signatures, illegal and harmful content, access charges and re-
transmission activities. Moreover, the applicability to the Internet of
existing laws governing issues such as property ownership, content, taxation,
defamation, personal privacy, product liability and environmental protection,
as well as the necessity for governmental permits, labeling, certifications and
the need to supply information to relevant parties, is uncertain. Most of these
laws were adopted before the widespread use and commercialization of the
Internet and, as a result, do not contemplate or address the unique issues of
the Internet and related technologies. Any export or import restrictions, new
legislation or regulation or governmental enforcement of existing regulations
may limit the growth of the Internet, increase our cost of doing business or
increase our legal exposure. Any of these factors could have a negative effect
on our business, revenues, results of operations and financial condition.

   We collect sales taxes in the jurisdictions where we are required to do so.
Our failure to properly collect and pay such taxes in all of such jurisdictions
could subject us to penalties that could adversely affect our earnings. Even if
we do collect taxes properly for each of the jurisdictions required, the
collection and payment of such taxes causes us to incur significant
administrative effort and expense.

Facilities

   Our headquarters are located in Morrisville, North Carolina, where we
currently sublease approximately 24,000 square feet of office space. This lease
expires in February 2002. We have entered into a five-year lease for an
additional 69,000 square feet of office space at our headquarters location. We
also sublease approximately 5,400 square feet of office space in Durham, North
Carolina through February 2000. We expect these facilities to be sufficient for
the foreseeable future.

   We maintain an office in Plainview, New York, where our wholly-owned
subsidiary, BioSupplyNet, is located. This space is shared with Cold Spring
Harbor Laboratory Press and is rented on a month to month basis.

   We have also entered into a sublease for approximately 2,300 square feet of
office space extending to December 31, 2002 for the offices of our subsidiary,
Internet Auctioneers International, Inc., located in Mountain View, California.

Employees

   As of September 30, 1999, we had 150 full-time employees. None of our
employees are covered by a collective bargaining agreement. We consider our
relations with our employees to be good.

Legal Proceedings

   We are not a party to any material legal proceedings.

                                       47
<PAGE>

                                   MANAGEMENT

Directors and Executive Officers

   Our directors and executive officers and their ages as of the date of this
Prospectus are as follows:

<TABLE>
<CAPTION>
Name                              Age Position
<S>                               <C> <C>
M. Scott Andrews.................  34 President, Chief Executive Officer and
                                       Director
Peyton C. Anderson...............  33 Vice President of Business Development and
                                       Director
Lyle A. Brecht...................  52 Chief Business Development Officer
Antony Francis...................  49 Vice President of Operations
Robert M. Fusillo................  32 Chief Information Officer
Cecil Kost.......................  46 Executive Vice President
James J. Scheuer.................  52 Chief Financial Officer
Bruce J. Boehm...................  45 Director
Noel J. Fenton...................  61 Director
Gautam A. Prakash................  30 Director
Alan J. Taetle...................  36 Director
Timothy T. Weglicki..............  48 Director
</TABLE>

   M. Scott Andrews co-founded SciQuest.com in November 1995 and serves as our
President and Chief Executive Officer and as a director. From October 1991 to
January 1996, Mr. Andrews was a sales professional for Baxter Healthcare
Corporation, a scientific products company, which was acquired by VWR
Scientific Products Corporation. From May 1987 to October 1991, Mr. Andrews
served in the U.S. Army as an aviation officer. Mr. Andrews received an M.B.A.
from the University of North Carolina at Chapel Hill and a B.S. in business
management from the United States Military Academy at West Point. Mr. Andrews
currently serves as a director of the North Carolina BioScience Fund.

   Peyton C. Anderson co-founded SciQuest.com in November 1995 and serves as
our Vice President of Business Development and as a director. From August 1989
to January 1996, Mr. Anderson was a sales manager for Butler Manufacturing
Company, a metal buildings company. Mr. Anderson is a director of the Council
for Entrepreneurial Development, a mentoring organization for the North
Carolina entrepreneurial community. Mr. Anderson received an M.B.A. from the
University of North Carolina at Chapel Hill and a B.A. from the University of
Richmond, Phi Beta Kappa.

   Lyle A. Brecht has served as Chief Business Development Officer since August
1999, Vice President of Data Services from December 1998 to August 1999 and
Executive Vice President from October 1998 to December 1998. From October 1996
to December 1998, Mr. Brecht served as President and Chief Operating Officer
and was co-founder of BioSupplyNet, Inc., a life science resource company that
was acquired by SciQuest.com in September 1998. From March 1996 to October
1996, Mr. Brecht served as a consultant for Harris & Harris Group, PC, business
development investment firm. From October 1994 to January 1995, Mr. Brecht
served as President of Applied Research and Technology, Inc., an Internet
commerce company. From July 1991 to December 1994, Mr. Brecht served as
President of Blue Heron Group, Inc., a publishing and data analysis company.
Mr. Brecht received an M.B.A. from Harvard University, and an M.S. in applied
ecology and a B.A. in psychology and mathematics from the University of
Minnesota.

   Antony Francis has served as our Vice President of Operations since February
1999. From June 1994 to January 1999, Mr. Francis served as Vice
President/General Manager of the Logistics, E-commerce and Customer Services
Division for the Federal Express Corporation at the European, Middle Eastern
and African headquarters. While at Federal Express, Mr. Francis also worked as
managing director of Financial Controls and Reporting and as managing director
and regional controller for the European headquarters from September, 1988 to
June, 1994. Mr. Francis also served as Finance and Administration Director for
subsidiaries of the Guinness Group and Elf Aquitaine from 1979 to 1988, after
ten years with Ernst & Young. Mr. Francis is a chartered public accountant
(England and Wales certified) and a Fellow of the Institute of Transport &
Logistics (UK).

                                       48
<PAGE>

   Robert M. Fusillo has served as our Chief Information Officer since November
1998. From September 1990 to October 1998, Mr. Fusillo served as Director of
Applications Development in the Information Systems Division of Wal-Mart
Stores, Inc. Prior to his employment with Wal-Mart, Mr. Fusillo was a senior
programmer for the Carrier Access Billing System at Nynex, a telecommunications
service company. Mr. Fusillo received a B.S. in computer science from State
University of New York at Buffalo.

   Cecil Kost has served as our Executive Vice President since September 1999.
From March 1996 to December 1998, Mr. Kost served as President and Chief
Operating Officer of Oncor, Inc., a biotechnology company. From June 1976 to
October 1995, Mr. Kost served as Senior Vice President of Curtin Matheson
Scientific, a distributor of scientific products where he was responsible for
their industrial, clinical and international business sectors and clinical
diagnostic manufacturing operations. Mr. Kost is a former Chairman of the
Laboratory Products Association, a trade association of businesses serving
industrial and research laboratories. Mr. Kost received a B.S. in biology from
Tulane University.

   James J. Scheuer has served as our Chief Financial Officer since September
1998. From March 1996 to March 1998, Mr. Scheuer served as Chief Operating
Officer and later Chief Financial Officer for Boise Marketing Services, Inc., a
subsidiary of Boise Cascade Office Products Corporation, and its predecessor.
From December 1989 to March 1996, Mr. Scheuer served as Senior Vice President--
Group Executive/Chief Financial Officer of Hickory Farms, Inc., and the
President of Canadian Hickory Farms, Ltd. From 1970 to 1989, Mr. Scheuer was
employed by Deloitte Haskins & Sells and was the partner in charge of its
Jacksonville, Florida office from 1985 to 1989. Mr. Scheuer is a certified
public accountant and received his B.A. in business administration from the
University of Wisconsin--Oshkosh.

   Bruce J. Boehm has served as a director of SciQuest.com since October 1997.
Mr. Boehm has been active as an originator of and investor in early stage
technology companies since 1992. Mr. Boehm holds M.B.A. and M.S. degrees from
Stanford University and a B.S. from the Massachusetts Institute of Technology.

   Noel J. Fenton has served as a director of SciQuest.com since November 1998.
Mr. Fenton has been a Managing General Partner of Trinity Ventures since 1986.
From 1964 to 1986, he was a co-founder of three venture capital backed start-up
companies, for two of which, Acurex Corporation and Covalent Systems
Corporation, he served as CEO. Mr. Fenton received an M.B.A. from Stanford
University and a B.S. from Cornell University.

   Gautam A. Prakash has served as a director of SciQuest.com since October
1998. Mr. Prakash is a partner with Bessemer Venture Partners, which he joined
in 1993. He is a director of a number of privately held electronic commerce and
healthcare companies. Prior to joining Bessemer, Mr. Prakash worked for
McKinsey & Co. Mr. Prakash graduated from Yale University with a B.S. in
molecular biophysics and biochemistry and a B.A. in economics.

   Alan J. Taetle has served as a director of SciQuest.com since August 1998.
Mr. Taetle has been a General Partner with Noro-Moseley Partners, a venture
capital firm, since May 1998. From March 1995 to April 1998, Mr. Taetle was
Executive Vice President of Marketing and Business Development for MindSpring
Enterprises, an Internet service provider. From November 1992 to March 1995,
Mr. Taetle served as Director of Operations and Product Management at CogniTech
Corporation, a developer of retail management software. Mr. Taetle received an
M.B.A. from Harvard Business School and a B.A. in Economics from the University
of Michigan.

   Timothy T. Weglicki has served as a director of SciQuest.com since May 1999.
Since December 1993, he has been principally employed as a Managing Member of
ABS Partners, L.P., the General Partner of ABS Capital Partners, L.P., a
private equity fund. Prior to that date, he was principally employed as a
Managing Director of Alex. Brown & Sons Incorporated where he established and
headed its Capital Markets Group. Mr. Weglicki holds an M.B.A. from the Wharton
Graduate School of Business and a B.A. from Johns Hopkins University. Mr.
Weglicki is a director of ElderTrust, a healthcare real estate investment
trust, and a number of privately held companies.

                                       49
<PAGE>

   There are no family relationships between any of our directors or executive
officers.

Terms of Directors

   Concurrently with the effective date of this offering, the board of
directors will be divided into three classes, with members serving for
staggered three-year terms. The board will be comprised of three Class I
directors (Messrs. Boehm, Prakash and Taetle), two Class II directors (Messrs.
Fenton and Weglicki) and two Class III directors (Messrs. Anderson and
Andrews). At each annual meeting of stockholders, a class of directors will be
elected for a three-year term to succeed the directors of the same class whose
terms are then expiring. The terms of the initial Class I directors, Class II
directors and Class III directors will expire upon the election and
qualification of successor directors at the 2000, 2001 and 2002 annual meetings
of stockholders, respectively.

Committees of the Board of Directors

   Messrs. Fenton, Weglicki and Boehm are members of the Audit Committee. The
Audit Committee reviews the scope and timing of our audit services and any
other services our independent auditors are asked to perform, the auditor's
report on our financial statements following completion of their audit and
their policies and procedures with respect to internal accounting and financial
controls. In addition, the Audit Committee makes annual recommendations to the
board of directors for the appointment of independent auditors for the
following year.

   Messrs. Prakash, Taetle and Boehm are members of the Compensation Committee.
The Compensation Committee reviews and evaluates the compensation and benefits
of all our officers, reviews general policy matters relating to compensation
and employee benefits and makes recommendations concerning these matters to the
board of directors. The Compensation Committee also administers our stock
option plan.

Compensation of Directors

   Our directors do not receive any compensation for services performed in
their capacity as directors. We reimburse each director for reasonable out-of-
pocket expenses incurred in attending meetings of the Board of Directors and
any of its committees.

Compensation Committee Interlocks and Insider Participation

   No member of the Compensation Committee is or will be an executive officer
of SciQuest.com.

Executive Compensation

   The following table sets forth the total compensation paid by SciQuest.com
during the year ended December 31, 1998 to our Chief Executive Officer. No
executive officer was paid total annual salary and bonuses determined in excess
of $100,000 during 1998.

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                    Long-Term
                                                                   Compensation
                                           Annual Compensation        Awards
                                        -------------------------- ------------
                                                                    Number of
                                                                    Securities
                                                       All Other    Underlying
Name and Principal Position             Salary  Bonus Compensation   Options
<S>                                     <C>     <C>   <C>          <C>
M. Scott Andrews....................... $68,288  --       --           --
 President and Chief Executive Officer
</TABLE>


                                       50
<PAGE>

   No options were granted to or exercised by Mr. Andrews during the fiscal
year ended December 31, 1998.

 Stock Plans

   SciQuest.com, Inc. 1999 Stock Incentive Plan. The SciQuest.com Stock
Incentive Plan was adopted by our Board in October 1999 and approved by our
stockholders in November 1999. Upon the consummation of this offering, the
incentive plan will replace our original plan, the Sci.Quest.com, Inc. Stock
Option Plan.

   A maximum of 2,854,998 shares is authorized for issuance under the incentive
plan. The incentive plan provides for the grant of incentive and nonqualified
stock options, restricted stock or other stock-based awards to our employees,
including directors who are employees, and for the grant of nonqualified stock
options, restricted stock or other stock-based awards to our non-employee
directors, consultants and advisors.

   Our incentive plan is administered by our Compensation Committee. For so
long as our common stock is registered under the Securities Exchange Act of
1934, as amended, a Board-appointed committee of not less than two members,
each of whom qualifies as a non-employee director, is empowered to grant awards
and take other action under the incentive plan with respect to individuals
deemded to be insiders for purposes of Section 16 of the Securities Exchange
Act.

   Our incentive plan provides that any option granted to a person who is
subject to the provisions of Section 16 of the Securities Exchange Act will not
become exercisable for a period of at least six months following the date of
grant. Other restrictions on the terms applicable to incentive stock options
are imposed under the incentive plan to ensure compliance with the requirements
for incentive stock options under Section 422 of the Internal Revenue Code.

   The incentive plan permits common stock purchased upon the exercise of
options to be paid in cash or by check or through a broker-facilitated cashless
exercise procedure, or, to the extent permitted by applicable law, by delivery
of previously owned shares, a promissory note or other means approved by our
Board of Directors.

   Our Board may also grant restricted stock awards under the incentive plan.
These awards entitle recipients to acquire shares of our common stock, subject
to our right to repurchase all or a part of the shares. The other terms
applicable to restricted stock awards are determined by our Board. Any
restricted stock award granted to a participant who is subject to the
provisions of Section 16 of the Securities Exchange Act restricts the release
of the shares subject to the award for a period of at least six months
following the date of grant.

   Our Board has the authority to grant other awards based on our common stock
having terms and conditions as determined by our Board. Except as our Board may
otherwise provide in a particular award, no awards granted under the incentive
plan may be transferred or assigned by the holder other than by will or the
laws of descent or distribution.

   In the event that:

  .  we merge with or consolidate into another corporation, which results in
     our stockholders owning less than 50% of the voting power of the voting
     securities of the surviving or successor corporation following the
     transaction;

  .  we sell all or substantially all of our assets;

  .  we completely liquidate; or

  .  someone acquires 50% or more of the voting power of our outstanding
     securities, except through a merger, consolidation or an acquisition of
     our securities directly from us.

   then any options, stock appreciation rights and any restricted stock awards
or other then stock-based awards that would have become vested within the next
twelve months become vested and free of all

                                       51
<PAGE>

restrictions. Our Board may, in its discretion, terminate any unexercised
options or stock appreciation rights, or permit the acquiring or succeeding
corporation to assume or substitute equivalent options or stock appreciation
rights for ours.

   Our Board may terminate or amend the incentive plan at any time. Our
stockholders must approve any increase in the total number of shares available
under the incentive plan. No awards may be made under the incentive plan after
October 2009.

   SciQuest.com, Inc. 1997 Stock Option Plan. After its adoption and approval
by our Board and our stockholders in September 1997, the SciQuest, Inc. Stock
Option Plan was amended by our Board (and approved by our stockholders) in
September 1998, February 1999 and August 1999 to increase the number of shares
available for issuance thereunder. The option plan was also amended in March
1999 to change the name of the plan to the SciQuest.com, Inc. Stock Option
Plan.

   Under the option plan, our Board has the power to grant incentive and
nonqualified stock options to our employees, including directors who are
employees, and nonqualified stock options to our non-employee directors,
consultants and advisors. The option plan is administered by our Board in
conjunction with the Compensation Committee.

   The option plan permits common stock purchased upon the exercise of options
to be paid in cash or by check.

   In the event that:

  . we merge with or consolidate into another corporation, which results in
    our stockholders owning less than 50% of the voting power of the voting
    securities of the surviving corporation; or

  . we sell, lease or otherwise dispose of all or substantially all of our
    assets;

   then that portion of any outstanding options that would have become vested
within the next twelve months will become vested as of a date prior to the
change of control. Our Board may also, in its discretion, provide that any
other unvested and unexercisable portion of an outstanding option shall become
immediately vested and exercisable. Any accelerated vesting under this
provision is conditioned upon the consummation of the change of control event.
Our Board may, in its discretion, terminate any unexercised options that become
vested and exercisable solely because of this provision.

   As of September 30, 1999, we had outstanding 1,577,953 stock options under
the option plan, at a weighted average exercise price of $1.75 per share, and
274,421 options have been exercised. Our Board has determined not to grant any
additional options under the option plan subsequent to this offering, and
amended the plan, in November 1999, to decrease the number of shares authorized
under the plan to 2,056,060.

   Provisions Applicable to Both Plans. The exercise price of options granted
under both the incentive plan and the option plan is determined by our Board;
however, the exercise price of incentive stock options granted under the plan
must be equal to at least the fair market value of our common stock on the date
of grant (or 110% of the fair market value if the grant is made to a 10% or
more stockholder). Other restrictions on the terms applicable to incentive
stock options are imposed under the plan to ensure compliance with the
requirements for incentive stock options under Section 422 of the Internal
Revenue Code.

   In the event an optionee ceases to be employed by us for any reason other
than death or disability, each outstanding option held by such optionee will
terminate and cease to be exercisable no later than three months after the date
of such cessation of employment. Should the optionee's employment terminate by
reason of death or disability (including death within three months following
cessation of employment), each outstanding option held by such optionee will
terminate and cease to be exercisable no later than twelve months after the
date of such cessation of employment.


                                       52
<PAGE>

   401(k) Profit Sharing Plan. We maintain a 401(k) Profit Sharing Plan. In
general, all of our employees who have completed 30 days of service are
eligible to participate. Our 401(k) Plan includes a salary deferral
arrangement pursuant to which participants may contribute, subject to certain
Code limitations, a maximum of 15% of their salary or $10,000 on a pre-tax
basis. We currently do not match any portion of the employee's contribution. A
separate account is maintained for each participant in the 401(k) Plan.
Distributions from our 401(k) Plan may be made in the form of a lump-sum cash
payment or in installment payments.

 Employment Agreements

   Our principal employees, including executive officers, are required to sign
an agreement prohibiting their disclosure of any of our confidential or
proprietary information and restricting their ability to compete with us
during their employment and for a period of two years thereafter, restricting
solicitation of customers and employees following their employment with us and
providing for ownership and assignment of intellectual property rights to us.

 Limitation of Liability and Indemnification of Officers and Directors

   Our certificate of incorporation limits personal liability for breach of
the fiduciary duty of our directors to the fullest extent provided by the
Delaware General Corporation Law. Our certificate of incorporation provides
that no director of SciQuest.com shall have personal liability to us or to our
stockholders for monetary damages for breach of fiduciary duty of care or
other duty as a director. However, these provisions do not eliminate or limit
the liability of a director:

  . for any breach of a director's duty of loyalty to us or our stockholders;

  . for acts or omissions not in good faith or which involve intentional
    misconduct or a knowing violation of law;

  . for voting or assenting to unlawful distributions; or

  . for any transaction from which the director derived an improper personal
    benefit.

   Any amendment to or repeal of such provisions will not eliminate or reduce
the effect of such provisions in respect of any act or failure to act, or any
cause of action, suit or claim that would accrue or arise prior to any
amendment, repeal or adoption of such an inconsistent provision. If the
Delaware General Corporation Law is subsequently amended to provide for
further limitations on the personal liability of directors of corporations for
breach of duty of care or other duty as a director, then the personal
liability of our directors will be further limited to the greatest extent
permitted by the Delaware General Corporation Law.

   Our certificate of incorporation provides that we will indemnify our
directors and executive officers and may indemnify our other corporate agents
to the fullest extent permitted by law. We believe that indemnification under
our bylaws covers at least negligence and gross negligence on the part of
indemnified parties. Our bylaws also permit us to secure insurance on behalf
of any officer, director, employee or other agent for any liability arising
out of his or her actions in such capacity, regardless of whether the bylaws
would permit indemnification.

   We have purchased directors' and officers' liability insurance policies in
the total amount of $15 million.

                                      53
<PAGE>

                           RELATED PARTY TRANSACTIONS

Equity Transactions

   In October 1997, as part of our sale of 711,486 shares of series A
convertible preferred stock at a price of $0.91 per share, we sold 109,890
shares to Bruce Boehm, one of our directors. Mr. Boehm acquired these shares on
the same terms as other purchasers in this transaction.

   In July 1998, as part of our sale of 3,777,626 shares of series B
mandatorily redeemable convertible preferred stock at a price of $2.80 per
share and warrants to purchase 57,545 shares of our series B mandatorily
redeemable convertible preferred stock at an exercise price of $2.80 per share,
we sold 21,873 shares and warrants to purchase 6,705 shares of common stock to
Bruce Boehm and 21,447 shares and warrants to purchase 3,910 shares of common
stock to family members of Peyton Anderson, one of our officers and directors.
Mr. Boehm and Mr. Anderson's family members acquired these shares and warrants
on the same terms as other purchasers in this transaction.

   On March 1, 1999, we sold 89,408 shares of our series C convertible
preferred stock, at a price of $2.80 per share to Antony Francis, our Vice
President of Operations. The shares vest over a two-year period. Mr. Francis
was granted registration rights with respect to these shares.

   In May and June 1999, as part of our sale of 3,312,720 shares of our series
D mandatorily redeemable convertible preferred stock at a price of $11.32 per
share and warrants to purchase 1,004,829 shares of common stock at an exercise
price of $7.46 per share, we sold:

  . 662,544 shares of series D mandatorily convertible preferred stock and
    warrants to purchase 200,969 shares of common stock to affiliates of
    Timothy Weglicki, one of our directors;

  . 163,469 shares of series D mandatorily redeemable convertible preferred
    stock and warrants to purchase 49,584 shares of common stock to
    affiliates of Gautam Prakash, one of our directors;

  . 111,561 shares of series D mandatorily redeemable convertible preferred
    stock and warrants to purchase 33,839 shares of common stock to
    affiliates of Alan Taetle, one of our directors;

  . 151,638 shares of series D mandatorily redeemable convertible preferred
    stock and warrants to purchase 45,995 shares of common stock to
    affiliates of Noel Fenton, one of our directors;

  . 15,085 shares of series D mandatorily redeemable convertible preferred
    stock and warrants to purchase 4,576 shares of common stock to Dwight
    Sawin, who was then one of our directors; and

  . 7,371 shares of series D mandatorily redeemable convertible preferred
    stock and warrants to purchase 2,236 shares of common stock to family
    members of Peyton Anderson, one of our officers and directors.

   These individuals acquired these shares and warrants on the same terms as
other purchasers in this transaction.

Other Transactions

   In December 1998, we entered into a Content Conversion Services Agreement
with Requisite Technology, Inc. Under this agreement, Requisite converts
product information content received by us from our suppliers to electronic
catalog format for use on our Web sites. The agreement has an initial 12 month
term with automatic renewal thereafter. It may be terminated by either party
for material breach or upon the occurrence of bankruptcy or similar events.
Noel Fenton, one of our directors, also serves as a director of Requisite
Technology, Inc.

                                       54
<PAGE>

                            PRINCIPAL STOCKHOLDERS

   The following table sets forth information with respect to the beneficial
ownership of our capital stock as of September 30, 1999 and as adjusted to
reflect our sale of common stock in this offering by:

    .  all those known by us to be beneficial owners of more than five
       percent of the outstanding shares of common stock;

     .  all executive officers;

     .  each of our directors; and

     .  all executive officers and directors as a group.

   For purposes of calculating the percentage beneficially owned, the number
of shares of common stock deemed outstanding prior to this offering consists
of 17,165,604 shares outstanding as of September 30, 1999. The number of
shares of common stock deemed outstanding after this offering includes an
additional 7,200,000 shares that are being offered for sale by us in this
offering, but does not include shares issuable upon the exercise of warrants
that may be issued to the holders of our series B and series D preferred stock
in connection with the conversion of those shares.

   Options that are exercisable within sixty days are deemed to be outstanding
and to be beneficially owned by the stockholder holding the options for the
purpose of computing that stockholder's percentage ownership but are not
treated as outstanding for the purpose of computing the percentage ownership
of any other stockholder. Beneficial ownership is determined in accordance
with the rules of the Securities and Exchange Commission that deem shares to
be beneficially owned by any person or group who has or shares voting or
investment power with respect to such shares. Unless otherwise indicated, the
persons named on this table have sole voting and investment control with
respect to all shares beneficially owned.

<TABLE>
<CAPTION>
                                Shares               Shares
                             Beneficially         Beneficially
                            Owned Prior to         Owned After
                               Offering             Offering
                           -------------------- --------------------
Name                        Shares      Percent  Shares      Percent
<S>                        <C>          <C>     <C>          <C>
Trinity Ventures VI,       2,119,096(2)  12.3%  2,119,096(2)  8.7%
 L.P.(1).................
 3000 Sand Hill Road
 Building 1, Suite 240
 Menlo Park, CA 94025

Bessemer Venture Partners  1,653,497(4)   9.6%  1,653,497(4)  6.8%
 IV L.P.(3)..............
 1400 Old Country Road
 Suite 407
 Westbury, NY 11590

Noro-Moseley Partners IV,  1,559,028(6)   9.1%  1,559,028(6)  6.4%
 L.P.(5).................
 9 North Parkway Square
 4200 Northside Parkway,
  NW
 Atlanta, GA 30327

ABS Capital Partners III,  1,205,812(7)   6.9%  1,205,812(7)  4.9%
 L.P. ...................
 1 South Street, 25th
  Floor
 Baltimore, MD 21202-3220

M. Scott Andrews.........    840,979      4.9%    840,979     3.5%
 5151 McCrimmon Parkway
 Suite 208
 Morrisville, NC 27560

Peyton C. Anderson.......    853,112      5.0%    853,112     3.5%
 5151 McCrimmon Parkway
 Suite 208
 Morrisville, NC 27560

</TABLE>

                                      55
<PAGE>

<TABLE>
<CAPTION>
                                         Shares                Shares
                                      Beneficially          Beneficially
                                     Owned Prior to          Owned After
                                        Offering              Offering
                                    --------------------- ---------------------
Name                                 Shares       Percent  Shares       Percent
<S>                                 <C>           <C>     <C>           <C>
Wakefield Group II LLC.............   935,417(8)    5.4%    935,417(8)    3.8%
 1110 E. Morehead Street
 Charlotte, NC 28204

Bruce J. Boehm.....................   210,007(9)    1.2%    210,007(9)    0.9%

Noel J. Fenton..................... 2,119,096(10)  12.3%  2,119,096(10)   8.7%

Gautam A. Prakash.................. 1,653,497(11)   9.6%  1,653,497(11)   6.8%

Alan J. Taetle..................... 1,559,028(12)   9.1%  1,559,028(12)   6.4%

Timothy T. Weglicki................ 1,205,812(13)   6.9%  1,205,812(13)   4.9%

All directors and executive
 officers as a group (12 persons)
 (9)(10)(11)(12)(13)(14)........... 8,769,832        50%  8,769,832      35.3%
</TABLE>
- --------
 (1) Includes shares owned by Trinity VI Side-By-Side Fund, L.P., which is an
     affiliate of Trinity Ventures VI, L.P.
 (2) Includes 45,995 shares subject to warrants that are currently
     exercisable.
 (3) Includes shares owned by Bessemer Venture Investors L.P. and Bessec
     Ventures IV L.P., which are affiliates of Bessemer Venture Partners IV
     L.P.
 (4) Includes 49,584 shares subject to warrants that are currently
     exercisable.
 (5) Includes shares owned by Noro-Moseley Partners IV-B Fund L.P., which is
     an affiliate of Noro-Moseley Partners IV, L.P.
 (6) Includes 33,840 shares subject to warrants that are currently
     exercisable.
 (7) Includes 200,969 shares subject to warrants that are currently
     exercisable.

 (8) Mr. Thomas S. Nelson and Mrs. Anna S. Nelson may be deemed to control the
     Wakefield Group II LLC and may be deemed to be the beneficial owners of
     these shares. Mr. and Mrs. Nelson disclaim beneficial ownership. Also
     includes 20,304 shares subject to a warrant that is currently
     exercisable.
 (9) Includes 10,169 shares subject to a warrant that is currently
     exercisable.
(10) Consists of shares owned by Trinity Ventures VI, L.P. and Trinity VI
     Side-By-Side Fund, L.P. Mr. Fenton is managing general partner of these
     entities and may be deemed to be a beneficial owner of these shares. Mr.
     Fenton disclaims beneficial ownership.
(11) Consists of shares owned by Bessemer Venture Partners IV L.P., Bessemer
     Venture Investors L.P. and Bessec Ventures IV L.P. Mr. Prakash is a
     principal of these entities and may be deemed to be a beneficial owner of
     these shares. Mr. Prakash disclaims beneficial ownership.
(12) Consists of shares owned by Noro-Moseley Partners IV L.P. and Noro-
     Moseley Partners IV-B Fund, L.P. Mr. Taetle is a principal of these
     entities and may be deemed to be a beneficial owner of these shares.
     Mr. Taetle disclaims beneficial ownership.
(13) Mr. Weglicki is Managing Member of ABS Partners III, L.L.C., which is the
     general partner of ABS Capital Partners III, L.P., and may be deemed to
     be a beneficial owner of these shares. Mr. Weglicki disclaims beneficial
     ownership.
(14) Includes 136,767 shares subject to options that are exercisable within 60
     days.

                                      56
<PAGE>

                          DESCRIPTION OF CAPITAL STOCK

General

   Our authorized capital stock of 100,000,000 shares consists of 90,000,000
shares of common stock, $0.001 par value per share, and 10,000,000 shares of
preferred stock, $0.001 par value per share. As of September 30, 1999, we had
issued and outstanding 17,165,604 shares of common stock.

Common Stock

   Upon the closing of this offering, there will be 24,365,604 shares of common
stock outstanding assuming no exercise of the underwriters' over-allotment
option and no-exercise of outstanding options or warrants and excluding the
issuance of warrants that may be issued in connection with the conversion of
our series B and series D preferred stock. Our class B common stock
automatically converts into shares of our common stock upon completion of this
offering. Holders of shares of our common stock are entitled to one vote for
each share on all matters to be submitted to a vote of our stockholders and do
not have cumulative voting rights. Subject to the rights of any holders of
preferred stock which may be issued in the future, the holders of shares of our
common stock are entitled to share ratably in such dividends as may be declared
and paid out of funds legally available. In the event of a liquidation or
winding up of SciQuest.com, holders of common stock are entitled to share
ratably in all assets remaining after payment of all liabilities and
liquidation preferences, if any. Holders of common stock have no preemptive,
subscription, redemption or conversion rights. The outstanding shares of common
stock are, and the shares of common stock to be issued in this offering will
be, duly authorized, validly issued, fully paid and nonassessable.

Preferred Stock

   Upon completion of this offering, all of our outstanding preferred stock
will automatically convert into common stock if the initial public offering
price is at least $12.20 per share. If the initial public offering price is
less than $12.20 per share, we expect that all of our outstanding shares of
preferred stock would still convert into common stock; but we would also expect
to issue additional warrants to holders of our series B and series D preferred
stock in exchange for their consent to conversion at an initial public offering
price of less than $12.20. Accordingly, upon completion of this offering,
10,000,000 shares of preferred stock will be authorized, and no shares will be
outstanding. The board has the authority, without further stockholder approval,
to issue such shares of preferred stock in one or more series and to fix or
alter the designations, preferences, rights and any qualifications, limitations
or restrictions on the shares of each such series, including the dividend
rights, dividend rates, conversion rights, voting rights, terms of redemption
(including sinking fund provisions), redemption price or prices, liquidation
preferences and the number of shares constituting any series or designations of
such series. The issuance of our preferred stock may have the effect of
delaying, deferring or preventing a change of control of SciQuest.com. There
are no outstanding shares of preferred stock and no series have been
designated.

Options and Warrants

   As of September 30, 1999, we had outstanding options to purchase an
aggregate of 1,577,953 shares of common stock at a weighted average exercise
price of $1.75 per share and warrants to purchase an aggregate of 1,183,183
shares of common stock at a weighted average exercise price of $6.87 per share.
In addition, we had warrants to purchase an aggregate of 57,545 shares of
series B preferred stock at an exercise price of $2.80 per share, which will
convert upon completion of this offering into warrants to purchase 87,275
shares of our common stock at an exercise price of $1.85 per share. All
outstanding options and warrants provide for antidilution adjustments in the
event of certain mergers, consolidations, reorganizations, recapitalizations,
stock dividends, stock splits or other changes in the corporate structure of
SciQuest.com. An aggregate of 1,004,829 warrants provide for antidilution
adjustment in the event of certain dilutive issuances of securities by us at
less than $7.46 per share.

   In addition, we have agreed to issue warrants to acquire up to 3,724,307
shares of common stock at an exercise price of $0.01 per share and may in the
future issue warrants to acquire up to an additional 1,408,112 shares of

                                       57
<PAGE>

common stock at an exercise price of $0.01 per share. As noted above, we may
also be required to issue warrants to acquire shares of our common stock at an
exercise price of $0.01 per share in connection with the conversion of our
series B and series D preferred stock. See "Risk Factors--Risks Relating to
this Offering--We may be required to issue additional warrants in connection
with conversion of our series B and series D preferred stock."

Anti-takeover Effects of Provisions of Certificate of Incorporation and Bylaws

   Under Delaware law, all stockholder actions must be effected at a duly
called annual or special meeting. Our bylaws provide that, except as otherwise
required by law, special meetings of the stockholders can only be called by the
board of directors or our Chief Executive Officer or Chairman. In addition, our
bylaws establish an advance notice procedure for stockholder proposals to be
brought before an annual meeting of stockholders, including proposed
nominations of persons for election to the board. Stockholders at an annual
meeting may only consider proposals or nominations specified in the notice of
meeting or brought before the meeting by or at the direction of the board of
directors or by a stockholder of record on the record date for the meeting, who
is entitled to vote at the meeting and who has delivered timely written notice
in proper form to our Secretary of the stockholder's intention to bring such
business before the meeting. The holders of a majority of our outstanding
shares will consist of a quorum for the transaction of business. Each
stockholder has one vote per share of stock. Except as explained below or
provided by Delaware law, approval of a majority of those stockholders who are
present is required to take any action.

   Our certificate of incorporation and bylaws provide that a director may be
removed from office only with cause by the affirmative vote of at least 75% of
all shares voting on the removal. Cause is defined as incompetence, mental or
physical incapacity, breach of fiduciary duty involving dishonesty, personal
profit, a failure to perform stated duties or a violation of law. Our board of
directors is classified into the three-year terms. In addition, the provisions
of our certificate of incorporation that relate to the election and removal of
directors and the prohibition on the calling of special meetings by
stockholders and actions by stockholders by written consent may only be amended
by a vote of 75% of our outstanding shares of voting stock. Our bylaws may only
be amended by our board of directors or by a vote of 75% of our outstanding
shares of voting stock.

   These provisions of our certificate of incorporation and bylaws are intended
to discourage types of transactions that may involve an actual or threatened
change of control of SciQuest.com. Such provisions are designed to reduce the
vulnerability of SciQuest.com to an unsolicited acquisition proposal and,
accordingly, could discourage potential acquisition proposals and could delay
or prevent a change in control of SciQuest.com. Such provisions are also
intended to discourage tactics that may be used in proxy fights but could,
however, have the effect of discouraging others from making tender offers for
our shares and, consequently, may also inhibit fluctuations in the market price
of our shares that could result from actual or rumored takeover attempts. These
provisions may also have the effect of preventing changes in the management of
SciQuest.com.

Effect of Delaware Anti-takeover Statute

   We are subject to Section 203 of the Delaware General Corporation Law, or
the anti-takeover law, which regulates corporate acquisitions. The anti-
takeover law prevents certain Delaware corporations, including those whose
securities are listed for trading on the Nasdaq National Market, from engaging
under certain circumstances in a "business combination" with any "interested
stockholder" for three years following the date that such stockholder became an
interested stockholder. For purposes of the anti-takeover law, a "business
combination" includes, among other things, a merger or consolidation involving
SciQuest.com, and the interested stockholder and the sale of more than 10% of
SciQuest.com's assets. In general, the anti-takeover law defines an "interested
stockholder" as any entity or person beneficially owning 15% or more the
outstanding voting stock of SciQuest.com and any entity or person affiliated
with or controlling or controlled by such entity or person. A Delaware
corporation may "opt out" of the anti-takeover law with an express provision in
its original certificate of incorporation or an express provision in its
certificate of incorporation or bylaws resulting from amendments approved by
the holders of at least a majority of the corporation's outstanding voting
shares. We have not "opted out" of the provisions of the anti-takeover law.

                                       58
<PAGE>

Registration Rights

   Upon completion of this offering, holders of 16,840,971 shares of our common
stock and 1,209,755 shares of our common stock issuable upon the exercise of
outstanding warrants will be entitled to certain rights with respect to the
registration of these shares under the Securities Act.

   If we register any of our common stock, either for our own account or for
the account of other security holders, the holders are entitled to notice of
the registration and to include their shares of common stock in the
registration. All of these rights to register securities in connection with
this offering have been waived as required by the respective agreements
granting these rights.

   On or after July 30, 2000, holders of 5,729,310 shares of common stock,
representing shares issued in conversion of our series B mandatorily redeemable
convertible preferred stock, may require that we register all or part of these
securities for sale under the Securities Act. Beginning 12 months after the
completion of this offering, subject to specified limitations, holders of
6,029,043 shares of common stock, representing shares issued in conversion of
our series D mandatorily redeemable convertible preferred stock and issuable in
exercise of outstanding warrants, may require that we register all or part of
these securities for sale under the Securities Act. Until we are entitled to
register our shares on Form S-3, a short form registration statement, these
holders may only make two such demands. Once we are entitled to use Form S-3,
which may be as early as November, 2000, all of these holders may make such
demands for registrations on Form S-3 on an unlimited number of occasions.

   In all cases, a holder's right to include shares in a registration is
subject the ability of the underwriters to limit the number of shares included
in the offering. All fees, costs and expenses of all of these registrations
will be paid by us, and all selling expenses will be paid by the holders of the
securities being registered.

Listing

   We have applied for trading and quotation of our common stock on The Nasdaq
National Market under the trading symbol "SQST."

Transfer Agent

   The transfer agent for our common stock is SunTrust Bank, Atlanta.

                                       59
<PAGE>

                        SHARES ELIGIBLE FOR FUTURE SALE

   Sales of substantial amounts of our common stock in the public market after
this offering, or the perception that such sales may occur, could materially
and adversely affect prevailing market prices of our common stock and our
ability to raise equity capital in the future.

   Upon completion of this offering, we will have outstanding an aggregate of
24,365,604 shares of our common stock, assuming no exercise of the
underwriters' over-allotment option and no exercise of outstanding options or
warrants and excluding the issuance of warrants that may be issued in
connection with the conversion of our series B and series D preferred stock. Of
these shares, all shares sold in this offering will be freely tradable without
restriction or registration under the Securities Act, unless such shares are
purchased by our "affiliates" as that term is defined in Rule 144 under the
Securities Act. The remaining 17,165,604 shares of our common stock are held by
existing stockholders. Such shares, as well as any shares sold in this offering
that are purchased by one of our affiliates, are restricted securities that may
be sold in the public market only if registered or if they qualify for an
exemption from registration under Rule 144, 144(k) or 701 promulgated under the
Securities Act, which rules are summarized below.

   As a result of the contractual restrictions and the lock-up agreements
described below and the provisions of Rules 144, 144(k) and 701, the restricted
securities will be available for sale in the public market as follows:

  . 12,136 shares may be eligible for sale in accordance with the applicable
    requirements of Rule 144 beginning 90 days after the date of this
    prospectus;

  . 16,148,625 shares may be eligible for sale in accordance with the
    requirements of Rule 144 upon expiration of the lock-up agreements; and

  . 1,004,843 shares may be eligible for sale in accordance with the
    requirements of Rule 144 beginning on June 8, 2000, and 174,406 shares
    may be eligible for sale in accordance with the requirements of Rule 144
    on July 30, 2000.

Lock-up Agreements

   All of our officers, directors and substantially all of our stockholders
have signed lock-up agreements under which they have agreed not to offer,
pledge, 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, lend or otherwise dispose of, other than by operation of law,
directly or indirectly, any shares of our common stock or any securities
convertible into or exercisable or exchangeable for our common stock or enter
into any swap or other arrangement that transfers to another person in whole or
in part, any of the economic consequences of ownership of our common stock for
a period of 180 days after the date of this prospectus, without the prior
written consent of Donaldson, Lufkin & Jenrette Securities Corporation.
Further, the holders of our common stock who have registration rights are
prohibited under the terms of their respective registration rights agreements
from offering, selling or otherwise transferring their shares of common stock
or securities convertible or exchangeable into common stock for a period of 180
days after the date of this prospectus.

Rule 144

   In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned shares of our
common stock for at least one year would be entitled to sell within any three-
month period a number of restricted securities that does not exceed the greater
of 1% of the number of shares of our common stock then outstanding, which will
equal approximately 243,656 shares immediately after this offering, or the
average weekly trading volume of our common stock on the Nasdaq National Market
during the four calendar weeks preceding such sale. Sales under Rule 144 are
also subject to specific manner-of-sale provisions and notice requirements and
to the availability of current public information about us.

Rule 144(k)

   Under Rule 144(k), a person who is not one of our affiliates at any time
during the 90 days preceding a sale and who has beneficially owned the shares
proposed to be sold for at least two years, including the holding

                                       60
<PAGE>

period of any prior owner other than one of our affiliates, is entitled to sell
such shares without complying with the manner of sale, public information,
volume limitation or notice provisions of Rule 144. Therefore, unless otherwise
restricted, "144(k) shares" may be sold immediately upon completion of this
offering.

Rule 701

   In general, under Rule 701 of the Securities Act as currently in effect,
each of our employees, consultants or advisors who purchases shares from us in
connection with a compensatory stock plan or other written agreement is
eligible to resell such shares 90 days after the date of this prospectus in
reliance on Rule 144, but without compliance with various restrictions.
Specifically, shares acquired pursuant to Rule 701 may be sold by nonaffiliates
without regard to the holding period, volume limitations or information or
notice requirements of Rule 144, and by our affiliates without regard to the
holding period requirement.

Registration Rights

   Upon completion of this offering, the holders of 16,840,971 shares of common
stock and the holders of 1,209,755 shares of common stock issuable upon the
exercise of outstanding warrants, or their transferees, will be entitled to
rights with respect to the registration of such shares under the Securities
Act. See "Description of Capital Stock--Registration Rights." After such a
registration, these shares become freely tradable without restriction under the
Securities Act.

Stock Options and Warrants

   Options to purchase an aggregate of 140,133 shares of our common stock are
fully vested as of September 30, 1999. Of the total shares issuable pursuant to
these vested options, 117,722 are subject to the 180-day lock-up agreements
described above. As of September 30, 1999, options to purchase an additional
1,437,820 shares of common stock were outstanding but subject to future vesting
and an additional 794,874 shares of common stock were available for future
grants under our stock option plan. As of September 30, 1999, 1,183,183 shares
of common stock are subject to currently exercisable warrants. We also had
outstanding warrants to purchase an aggregate of 57,545 shares of series B
preferred stock at an exercise price of $2.80 per share, which will convert
upon the consummation of this offering into warrants to purchase 87,275 shares
of our common stock at an exercise price of $1.85 per share. In addition, we
have agreed to issue upon consummation of this offering warrants to acquire up
to 3,724,307 shares of common stock at an exercise price of $0.01 per share and
may in the future issue warrants to acquire up to an additional 1,408,112
shares of common stock at an exercise price of $0.01 per share. We may also be
required to issue warrants to acquire shares of our common stock at an exercise
price of $0.01 per share in connection with the conversion of our series B and
series D preferred stock.

   Following this offering, we intend to file one or more registration
statements on Form S-8 under the securities Act to register all shares of
common stock subject to outstanding stock options and options issuable pursuant
to our stock option plans. Subject to the lock-up agreements, shares covered by
these registration statements will be eligible for sale in the public markets,
other than shares owned by our affiliates, which may be sold in the public
market if they qualify for an exemption from registration under Rule 144 or
701.

                                       61
<PAGE>

                                  UNDERWRITING

   Subject to the terms and conditions of an underwriting agreement, dated
     , 1999, the underwriters named below, who are represented by Donaldson,
Lufkin & Jenrette Securities Corporation, Deutsche Banc Securities Inc.,
Hambrecht & Quist LLC, DLJdirect Inc. and E*OFFERING Corp. have severally
agreed to purchase from SciQuest.com the respective number of shares of common
stock shown opposite their names below.

<TABLE>
<CAPTION>
                                                                        Number
Underwriters:                                                          of Shares
<S>                                                                    <C>
Donaldson, Lufkin & Jenrette Securities Corporation...................
Deutsche Banc Securities Inc..........................................
Hambrecht & Quist LLC.................................................
DLJdirect Inc. .......................................................
E*OFFERING Corp. .....................................................
                                                                         ----
Total.................................................................
                                                                         ====
</TABLE>

   The underwriting agreement provides that the obligations of the several
underwriters to purchase and accept delivery of the shares of common stock
offered in this offering are subject to approval of certain legal matters and
to certain other conditions. The underwriters must purchase and accept delivery
of all the shares, other than those shares covered by the over-allotment option
described below, if any are purchased.

   The underwriters propose to initially offer some of the shares of common
stock directly to the public at the public offering price on the cover page of
this prospectus and some of the shares to dealers at the public offering price
less a concession not in excess of $    per share. The underwriters may allow,
and these dealers may re-allow a concession not in excess of $    per share on
sales to other dealers. After the initial offering of the shares to the public,
the representatives of the underwriters may change the public offering price
and such concessions. The underwriters do not intend to confirm sales to any
accounts over which they exercise discretionary authority.

   The following table shows the underwriting fees to be paid to the
underwriters by us in connection with this offering. These amounts are shown
assuming both no exercise and full exercise of the underwriters' option to
purchase additional shares of our common stock.

<TABLE>
<CAPTION>
                                                                  No      Full
                                                               Exercise Exercise
<S>                                                            <C>      <C>
Per share.....................................................  $         $
Total.........................................................  $         $
</TABLE>

   We will pay the offering expenses, estimated to be $990,000.

   DLJdirect Inc., an affiliate of Donaldson, Lufkin & Jenrette Securities
Corporation and E*OFFERING Corp., are facilitating the distribution of the
shares sold in this offering over the Internet. E*OFFERING Corp. has agreed to
allocate a portion of the shares that it purchases to E*TRADE Securities, Inc.,
for further distribution to E*TRADE Securities, Inc. retail customers.
E*OFFERING Corp. and E*TRADE Securities, Inc. will allocate shares to their
respective customers in accordance with usual and customary industry practices.
An electronic prospectus is available on the Web sites maintained by DLJdirect
and E*OFFERING Corp. Other than the prospectus in electronic format, the
information on these Web sites relating to the offering is not part of this
prospectus and has not been approved or endorsed by us or the underwriters, and
should not be relied on by prospective investors.

   We have granted to the underwriters an option, exercisable for 30 days after
the date of the underwriting agreement, to purchase up to 1,080,000 additional
shares of common stock at the initial public offering price less the
underwriting fees. The underwriters may exercise this option solely to cover
over-allotments, if any, made

                                       62
<PAGE>

in connection with this offering. To the extent that the underwriters exercise
this option, each underwriter will become obligated, subject to various
conditions, to purchase a number of additional shares proportionate to such
underwriter's initial purchase commitment.

   We have agreed to indemnify the underwriters against various civil
liabilities, including liabilities under the Securities Act, or to contribute
the payments that the underwriters may be required to make in respect of these
liabilities.

   We and our executive officers and directors, and substantially all of our
stockholders either have agreed, or are contractually bound, for a period of
180 days after the date of this prospectus, not to, without the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation:

  . offer, pledge, 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
    convertible into or exercisable or exchangeable for common stock; or

  . enter into any swap or other arrangement that transfers all or a portion
    of the economic consequences associated with the ownership of any common
    stock.

   Either of the foregoing transfer restrictions will apply regardless of
whether a covered transaction is to be settled by the delivery of common stock
or such other securities, in cash or otherwise. In addition, during this 180-
day period, we have also agreed not to file any registration statement for, and
each of our executive officers, directors and several stockholders have agreed
not to make any demand for, or exercise any right of, the registration of any
shares of common stock or any securities convertible into or exercisable or
exchangeable for common stock without the prior written consent of Donaldson,
Lufkin & Jenrette Securities Corporation.

   Prior to the offering, there has been no established trading market for our
common stock. The initial public offering price for the shares of common stock
offered by this prospectus will be determined by negotiations among us and the
representatives of the underwriters. The factors to be considered in
determining the initial public offering price include:

  . the history of and the prospects for the industry in which we compete;

  . our past and present operations;

  . our historical results of operations;

  . our prospects for future earnings;

  . the recent market prices of securities of generally comparable companies;
    and

  . the general condition of the securities markets at the time of the
    offering.

   We have applied for quotation of our common stock on the Nasdaq National
Market under the symbol "SQST."

   Other than in the United States, no action has been taken by us or the
underwriters that would permit a public offering of the shares of common stock
included in this offering in any jurisdiction that requires action for that
purpose. The shares included in this offering may not be offered or sold,
directly or indirectly, nor may this prospectus or any other offering material
or advertisements in connection with the offer and sale of any of these shares
be distributed or published in any jurisdiction, except under circumstances
that will result in compliance with the applicable rules and regulations of
that jurisdiction. We advise persons who receive this prospectus to inform
themselves about and to observe any restrictions relating to the offering of
the common stock and the distribution of this prospectus. This prospectus is
not an offer to sell or a solicitation of an offer

                                       63
<PAGE>

to buy any shares of our common stock included in this offering in any
jurisdiction where such an offer or a solicitation would not be permitted or
legal.

   In connection with this offering, some underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
common stock. Specifically, the underwriters may over-allot this offering,
creating a syndicate short position. The underwriters may bid for and purchase
shares of our common stock in the open market to cover syndicate short
positions or to stabilize the price of the common stock. The underwriting
syndicate may reclaim selling concessions if the syndicate repurchases
previously distributed common stock in syndicate covering transactions, in
stabilization transactions or in some other way or if Donaldson, Lufkin &
Jenrette Securities Corporation receives a report that indicates clients of
such syndicate members have "flipped" the common stock. 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.

   At our request, the underwriters have reserved for sale at the initial
public offering price up to 10% of the shares of common stock to be sold in
this offering for sale to our employees, friends and persons having
relationships with us. The number of shares available for sale to the general
public will be reduced to the extent that any reserved shares are purchased.
Any reserved shares not so purchased will be offered by the underwriters on the
same basis as the other shares offered through this prospectus.

   Hambrecht & Quist LLC and persons associated with Hambrecht & Quist
beneficially own 31,060 shares of our series D mandatorily redeemable
convertible preferred stock and warrants to purchase 9,421 shares of class A
common stock at an exercise price of $7.46 per share, which warrants expire in
May 2004. Additionally, Access Technology Partners, L.P., a fund of outside
investors that is managed by an affiliate of Hambrecht & Quist, owns 124,235
shares of our series D mandatorily redeemable convertible preferred stock and
warrants to purchase 37,684 shares of class A common stock at an exercise price
of $7.46 per share, which warrants expire in May, 2004.

   ABS Capital Partners III, L.P., BT Investment Partners, Inc. and persons
associated with Deutsche Banc Securities, Inc. own 839,222 shares of series D
mandatorily redeemable convertible preferred stock and warrants to purchase
254,561 shares of class A common stock at an exercise price of $7.46 per share,
which warrants expire in May 2004.

   Hambrecht & Quist LLC has provided financial advisory services to us in the
past and has received compensation at market rates for these services. In
addition, Donaldson Lufkin & Jenrette has provided and will continue to provide
financial advisory services to us and will receive compensation at market rates
for these services.

                                 LEGAL MATTERS

   The validity of the issuance of the shares of the common stock to be sold in
this offering and other legal matters related to this offering will be passed
upon for us by Hutchison & Mason PLLC, Raleigh, North Carolina and other legal
matters relating to this offering will be passed on for us by Morris, Manning &
Martin, L.L.P., Atlanta, Georgia. Legal matters in connection with this
offering will be passed upon for the Underwriters by Brobeck, Phleger &
Harrison LLP, New York, New York.

                                    EXPERTS

   The financial statements of SciQuest.com as of December 31, 1998 and 1997
and for each of the three years in the period ended December 31, 1998, and the
financial statements of BioSupplyNet, Inc. as of June 30, 1998 and 1997 and for
the years then ended included in this prospectus have been so included in
reliance on

                                       64
<PAGE>

the report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.

                             CHANGE IN ACCOUNTANTS

   Effective February 8, 1999, we dismissed Hughes, Pittman and Gupton LLP and
engaged PricewaterhouseCoopers LLP as our independent accountants. Our board of
directors approved the decision to change independent accountants. The report
of Hughes, Pittman and Gupton LLP on our financial statements for the year
ended December 31, 1997 did not contain any adverse opinion or disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope or
accounting principles. In connection with its audits through December 31, 1997
and through February 8, 1999, there were no disagreements with Hughes, Pittman
and Gupton LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedures, which disagreements, if
not resolved to the satisfaction of Hughes, Pittman and Gupton LLP, would have
caused them to make reference thereto in their report on the financial
statements for the applicable year.

                      WHERE YOU CAN FIND MORE INFORMATION

   We have filed with the SEC a registration statement on Form S-1 under the
Securities Act, and the rules and regulations promulgated thereunder, with
respect to the shares of common stock offered by this prospectus. This
prospectus, which constitutes a part of the registration statement, does not
contain all of the information set forth in the registration statement and the
exhibits thereto. Statements contained in this prospectus as to the contents of
any contract or other document that is filed as an exhibit to the registration
statement are not necessarily complete and each such statement is qualified in
all respects by reference to the full text of such contract or document.

   You may read and copy all or any portion of the registration statement and
the exhibits at the SEC's public reference room at 450 Fifth Street N.W.,
Washington, D.C. 20549, and at the regional offices of the SEC located at Seven
World Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. You can request
copies of these documents, upon payment of a duplication fee, by writing to the
SEC. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the SEC's public reference rooms. Also, the SEC maintains a World
Wide Web site on the Internet at http:/www.sec.gov that contains reports, proxy
and information statements and other information regarding registrants that
file electronically with the SEC.

   As a result of this offering, we will become subject to the information and
periodic reporting requirements of the Exchange Act and, in accordance
therewith, will file periodic reports, proxy and information statements and
other information with the SEC. These periodic reports, proxy and information
statements and other information will be available for inspection and copying
at the public reference facilities, regional offices and SEC's Web site
referred to above.

                                       65
<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                           Page
<S>                                                                        <C>
SciQuest.com, Inc.:

Report of Independent Accountants........................................   F-2

Consolidated Balance Sheets as of December 31, 1997 and 1998 and
 September 30, 1999......................................................   F-3

Consolidated Statements of Operations for the Years Ended December 31,
 1996, 1997 and 1998 and
 the Nine Months Ended September 30, 1998 and 1999.......................   F-4

Consolidated Statements of Stockholders' Deficit for the Years Ended
 December 31, 1996, 1997 and 1998 and the Nine Months Ended September 30,
 1999....................................................................   F-5

Consolidated Statements of Cash Flows for the Years Ended December 31,
 1996, 1997 and 1998 and the Nine Months Ended September 30, 1998 and
 1999....................................................................   F-6

Notes to Consolidated Financial Statements...............................   F-7

BioSupplyNet, Inc.:

Report of Independent Accountants........................................  F-28

Balance Sheets as of June 30, 1997 and 1998..............................  F-29

Statements of Operations for the Years Ended June 30, 1997 and 1998......  F-30

Statements of Stockholders' Deficit for the Years Ended June 30, 1997 and
 1998....................................................................  F-31

Statements of Cash Flows for the Years ended June 30, 1997 and 1998......  F-32

Notes to Financial Statements............................................  F-33
</TABLE>

                                      F-1
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
SciQuest.com, Inc.

   In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of stockholders' deficit, and of cash
flows present fairly, in all material respects, the financial position of
SciQuest.com, Inc. and its subsidiary (the "Company") at December 31, 1998 and
1997, and the results of their operations and their cash flows for the three
years in the period ended December 31, 1998, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP

August 20, 1999 except with respect to Note 16, for which such date is November
12, 1999
Raleigh, North Carolina

                                      F-2
<PAGE>

                               SciQuest.com, Inc.

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                        Pro Forma
                           December 31,  December 31,  September 30,  September 30,
                               1997          1998          1999           1999
                                                        (unaudited)    (unaudited)
                                                                        (note 1)
<S>                        <C>           <C>           <C>            <C>
         Assets
Current assets:
 Cash and cash
  equivalents............  $   330,836   $ 5,391,462   $  4,911,440   $  4,911,440
 Short-term investments..          --      1,886,693     12,600,275     12,600,275
 Accounts receivable.....       20,658       104,082        311,229        311,229
 Prepaid expenses and
  other assets...........        7,227        37,057        906,876        906,876
                           -----------   -----------   ------------   ------------
   Total current assets..      358,721     7,419,294     18,729,820     18,729,820
                           -----------   -----------   ------------   ------------
Restricted cash..........          --         82,236            --             --
Long-term investments....          --            --      12,416,587     12,416,587
Property and equipment,
 net.....................       19,412       357,460      1,757,310      1,757,310
Other assets.............        7,152     1,314,109      1,857,531      1,857,531
                           -----------   -----------   ------------   ------------
   Total assets..........  $   385,285   $ 9,173,099   $ 34,761,248   $ 34,761,248
                           ===========   ===========   ============   ============
     Liabilities and
  Stockholders' Deficit
Current liabilities:
 Accounts payable........  $    82,926   $   694,611   $  1,982,181   $  1,982,181
 Accrued liabilities.....      142,267       280,003      1,682,651      1,682,651
 Current maturities of
  capital lease
  obligations............        2,758        18,048         19,190         19,190
 Current maturities of
  notes payable..........      159,238        14,060         96,000         96,000
                           -----------   -----------   ------------   ------------
   Total current
    liabilities..........      387,189     1,006,722      3,780,022      3,780,022
                           -----------   -----------   ------------   ------------
Deferred income taxes....          --        285,005        120,920        120,920
Capital lease
 obligations, less
 current maturities......          --         35,082      1,034,755      1,034,755
Notes payable, less
 current maturities......       79,188        65,128            --             --
Commitments and
 contingencies (Note 14).          --            --             --             --
Mandatorily redeemable
 convertible preferred
 stock...................          --     10,882,702     92,664,441            --
Stockholders' deficit:
 Series A convertible
  preferred stock,
  $0.001 par value;
  769,231 shares
  designated; 769,221
  shares issued and
  outstanding as of
  December 31, 1997 and
  1998 and September 30,
  1999, no shares
  designated, issued or
  outstanding pro forma
  (unaudited)............      683,135       683,135        683,135            --
 Series C convertible
  preferred stock,
  $0.001 par value;
  700,000 shares
  designated; no shares
  issued or outstanding
  as of December 31,
  1997, 546,405 and
  635,813 shares issued
  and outstanding as of
  December 31, 1998 and
  September 30, 1999,
  respectively, no
  shares designated,
  issued or outstanding
  pro forma (unaudited)..          --      1,524,470      1,774,470            --
 Series E convertible
  preferred stock,
  $0.001 par value;
  126,500 shares
  designated; no shares
  issued or outstanding
  as of December 31,
  1997 or 1998, 114,995
  shares issued and
  outstanding as of
  September 30, 1999, no
  shares designated,
  issued or outstanding
  pro forma (unaudited)..          --            --       1,255,616            --
 Preferred stock,
  undesignated,
  10,000,000 shares
  authorized; none
  issued or outstanding
  actual or pro forma
  (unaudited)............          --            --             --             --
 Common stock, $0.001
  par value; 90,000,000
  shares authorized;
  3,412,447 shares
  issued and outstanding
  as of December 31,
  1997 and 1998 and
  3,727,548 shares
  issued and outstanding
  as of September 30,
  1999, actual;
  17,165,604 shares
  issued and outstanding
  pro forma (unaudited)..        3,412         3,412          3,728         17,166
 Class B common stock,
  $0.001 par value,
  250,020 shares
  authorized, issued and
  outstanding as of
  December 31, 1997 and
  1998 and September 30,
  1999, no shares
  authorized, issued or
  outstanding pro forma
  (unaudited)............      100,000       100,000        100,000            --
Additional paid-in
 capital.................      366,588        49,949            --      96,464,224
Deferred compensation....          --            --      (2,842,490)    (2,842,490)
Accumulated other
 comprehensive loss......          --         (6,673)           --             --
Accumulated deficit......   (1,234,227)   (5,455,833)   (63,813,349)   (63,813,349)
                           -----------   -----------   ------------   ------------
 Total stockholders'
  equity (deficit).......      (81,092)   (3,101,540)   (62,838,890)    29,825,551
                           -----------   -----------   ------------   ------------
   Total liabilities and
    stockholders'
    deficit..............  $   385,285   $ 9,173,099   $ 34,761,248   $ 34,761,248
                           ===========   ===========   ============   ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-3
<PAGE>

                               SciQuest.com, Inc.

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                       Year Ended                    Nine Months Ended
                          -------------------------------------  --------------------------
                                                     December                   September
                          December 31, December 31,     31,      September 30,     30,
                              1996         1997        1998          1998          1999
                                                                  (unaudited)  (unaudited)
<S>                       <C>          <C>          <C>          <C>           <C>
Revenues................   $     --     $ 196,381   $   477,818   $   308,365  $  1,243,787
Cost of revenues........         --           --         41,880           --        823,236
                           ---------    ---------   -----------   -----------  ------------
    Gross profit........         --       196,381       435,938       308,365       420,551
                           ---------    ---------   -----------   -----------  ------------
Operating expenses:
  Product development...      85,025      140,520     1,191,135       389,901     6,298,444
  Sales and marketing...     149,560      256,699     1,706,033       828,294     6,218,888
  General and
   administrative.......     300,822      457,058     1,104,010       375,793     3,963,188
  Purchased in-process
   research and
   development..........         --           --        791,102       791,102           --
                           ---------    ---------   -----------   -----------  ------------
    Total operating
     expenses...........     535,407      854,277     4,792,280     2,385,090    16,480,520
                           ---------    ---------   -----------   -----------  ------------
    Operating loss......    (535,407)    (657,896)   (4,356,342)   (2,076,725)  (16,059,969)
                           ---------    ---------   -----------   -----------  ------------
Interest income
 (expense):
  Interest income.......         --         3,235       110,565        34,259       762,287
  Interest expense......      (9,113)     (35,028)      (30,524)      (22,638)       (7,026)
                           ---------    ---------   -----------   -----------  ------------
    Net interest income
     (expense)..........      (9,113)     (31,793)       80,041        11,621       755,261
                           ---------    ---------   -----------   -----------  ------------
    Loss before income
     taxes..............    (544,520)    (689,689)   (4,276,301)   (2,065,104)  (15,304,708)
Income tax benefit......         --           --         54,695           --        164,086
                           ---------    ---------   -----------   -----------  ------------
Net loss................    (544,520)    (689,689)   (4,221,606)   (2,065,104)  (15,140,622)
Accretion of mandatorily
 redeemable convertible
 preferred stock........         --           --        328,723       112,155    46,646,901
                           ---------    ---------   -----------   -----------  ------------
Net loss available to
 common stockholders....   $(544,520)   $(689,689)  $(4,550,329)  $(2,177,259) $(61,787,523)
                           =========    =========   ===========   ===========  ============
Net loss per common
 share--basic and
 diluted................      $(0.16)      $(0.20)       $(1.33)       $(0.64)      $(17.60)
Weighted average common
 shares outstanding--
 basic and diluted......   3,412,447    3,412,447     3,412,447     3,412,447     3,511,340
Pro forma net loss per
 common share--basic and
 diluted (unaudited)....                                 $(0.62)                     $(1.08)
Pro forma weighted
 average shares
 outstanding--basic and
 diluted (unaudited)....                              6,805,787                  13,976,390
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-4
<PAGE>

                              SciQuest.com, Inc.

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT

<TABLE>
<CAPTION>
                       Series A          Series C           Series E                           Class B
                   Preferred Stock   Preferred Stock    Preferred Stock     Common Stock     Common Stock   Additional
                   ---------------- ------------------ ------------------ ---------------- ----------------  Paid in
                   Shares   Amount  Shares    Amount   Shares    Amount    Shares   Amount Shares   Amount   Capital
<S>                <C>     <C>      <C>     <C>        <C>     <C>        <C>       <C>    <C>     <C>      <C>
Balance at
December 31,
1996.............      --  $    --      --  $      --      --  $      --  3,412,447 $3,412 250,020 $100,000 $  186,588
 Noncash
 management
 compensation
 expense.........      --       --      --         --      --         --        --     --      --       --     180,000
 Issuance of
 Series A
 convertible
 preferred stock
 at $0.91 per
 share in
 exchange for
 cash and
 conversion of
 promissory note,
 net.............  769,221  683,135     --         --      --         --        --     --      --       --         --
 Net loss........      --       --      --         --      --         --        --     --      --       --         --
                   ------- -------- ------- ---------- ------- ---------- --------- ------ ------- -------- ----------
Balance at
December 31,
1997.............  769,221  683,135     --         --      --         --  3,412,447  3,412 250,020  100,000    366,588
 Issuance of
 Series C
 convertible
 preferred stock
 at $2.80 per
 share in
 exchange for
 shares of
 BioSupplyNet,
 Inc.............      --       --  546,405  1,524,470     --         --        --     --      --       --         --
 Issuance of
 stock warrants..      --       --      --         --      --         --        --     --      --       --      12,084
 Accretion of
 mandatorily
 redeemable
 preferred stock.      --       --      --         --      --         --        --     --      --       --    (328,723)
 Net loss........      --       --      --         --      --         --        --     --      --       --         --
 Other
 comprehensive
 loss--
 unrealized loss
 on investments..      --       --      --         --      --         --        --     --      --       --         --
                   ------- -------- ------- ---------- ------- ---------- --------- ------ ------- -------- ----------
Balance at
December 31,
1998.............  769,221  683,135 546,405  1,524,470     --         --  3,412,447  3,412 250,020  100,000     49,949
 Issuance of
 Series C
 convertible
 preferred stock
 at $2.80 per
 share in
 exchange for
 cash
 (unaudited).....      --       --   89,408    250,000     --         --        --     --      --       --         --
 Deferred
 compensation
 related to grant
 of stock options
 (unaudited).....      --       --      --         --      --         --        --     --      --       --   2,547,215
 Issuance of
 Series E
 convertible
 preferred stock
 at $11.32 per
 share in
 exchange for
 shares of IAI,
 Inc.
 (unaudited).....      --       --      --         --  114,995  1,255,616       --     --      --       --         --
 Deferred
 compensation
 related to
 acquisition of
 IAI, Inc.
 (unaudited).....      --       --      --         --      --         --        --     --      --       --         --
 Reclassification
 of investments
 to held-to-
 maturity
 (unaudited).....      --       --      --         --      --         --        --     --      --       --         --
 Accretion of
 mandatorily
 redeemable
 preferred stock
 (unaudited).....      --       --      --         --      --         --        --     --      --       --  (3,430,007)
 Exercise of
 common stock
 options
 (unaudited).....      --       --      --         --      --         --    274,422    275     --       --      31,747
 Exercise of
 common stock
 warrants
 (unaudited).....      --       --      --         --      --         --     40,679     41     --       --      74,959
 Issuance of
 common stock
 warrants in
 connection with
 Series D
 preferred stock
 (unaudited).....      --       --      --         --      --         --        --     --      --       --     726,137
 Amortization of
 deferred
 compensation
 related to stock
 options
 (unaudited).....      --       --      --         --      --         --        --     --      --       --         --
 Amortization of
 deferred
 compensation
 related to
 employment
 agreement
 (unaudited).....      --       --      --         --      --         --        --     --      --       --         --
 Net loss
 (unaudited).....      --       --      --         --      --         --        --     --      --       --         --
                   ------- -------- ------- ---------- ------- ---------- --------- ------ ------- -------- ----------
Balance at
September 30,
1999 (unaudited).  769,221 $683,135 635,813 $1,774,470 114,995 $1,255,616 3,727,548 $3,728 250,020 $100,000 $      --
                   ======= ======== ======= ========== ======= ========== ========= ====== ======= ======== ==========
<CAPTION>
                                 Other                    Total
                    Deferred    Compre-    Accumu-        Stock-
                     Compen-    hensive     lated        holders'
                     sation      Loss      Deficit       Deficit
<S>                <C>          <C>      <C>           <C>
Balance at
December 31,
1996.............  $       --   $  --    $   (544,538) $   (254,538)
 Noncash
 management
 compensation
 expense.........          --      --             --        180,000
 Issuance of
 Series A
 convertible
 preferred stock
 at $0.91 per
 share in
 exchange for
 cash and
 conversion of
 promissory note,
 net.............          --      --             --        683,135
 Net loss........          --      --        (689,689)     (689,689)
                   ------------ -------- ------------- -------------
Balance at
December 31,
1997.............          --      --      (1,234,227)      (81,092)
 Issuance of
 Series C
 convertible
 preferred stock
 at $2.80 per
 share in
 exchange for
 shares of
 BioSupplyNet,
 Inc.............          --      --             --      1,524,470
 Issuance of
 stock warrants..          --      --             --         12,084
 Accretion of
 mandatorily
 redeemable
 preferred stock.          --      --             --       (328,723)
 Net loss........          --      --      (4,221,606)   (4,221,606)
 Other
 comprehensive
 loss--
 unrealized loss
 on investments..          --   (6,673)           --         (6,673)
                   ------------ -------- ------------- -------------
Balance at
December 31,
1998.............          --   (6,673)    (5,455,833)   (3,101,540)
 Issuance of
 Series C
 convertible
 preferred stock
 at $2.80 per
 share in
 exchange for
 cash
 (unaudited).....          --      --             --        250,000
 Deferred
 compensation
 related to grant
 of stock options
 (unaudited).....   (2,547,215)    --             --            --
 Issuance of
 Series E
 convertible
 preferred stock
 at $11.32 per
 share in
 exchange for
 shares of IAI,
 Inc.
 (unaudited).....          --      --             --      1,255,616
 Deferred
 compensation
 related to
 acquisition of
 IAI, Inc.
 (unaudited).....     (400,000)    --             --       (400,000)
 Reclassification
 of investments
 to held-to-
 maturity
 (unaudited).....          --    6,673            --          6,673
 Accretion of
 mandatorily
 redeemable
 preferred stock
 (unaudited).....          --      --     (43,216,894)  (46,646,901)
 Exercise of
 common stock
 options
 (unaudited).....          --      --             --         32,022
 Exercise of
 common stock
 warrants
 (unaudited).....          --      --             --         75,000
 Issuance of
 common stock
 warrants in
 connection with
 Series D
 preferred stock
 (unaudited).....          --      --             --        726,137
 Amortization of
 deferred
 compensation
 related to stock
 options
 (unaudited).....       71,392     --             --         71,392
 Amortization of
 deferred
 compensation
 related to
 employment
 agreement
 (unaudited).....       33,333     --             --         33,333
 Net loss
 (unaudited).....          --      --     (15,140,622)  (15,140,622)
                   ------------ -------- ------------- -------------
Balance at
September 30,
1999 (unaudited).  $(2,842,490) $  --    $(63,813,349) $(62,838,890)
                   ============ ======== ============= =============
</TABLE>

  The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>

                               SciQuest.com, Inc.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                       Year Ended                     Nine Months Ended
                         --------------------------------------  ---------------------------
                         December 31, December 31, December 31,  September 30, September 30,
                             1996         1997         1998          1998          1999
                                                                  (unaudited)   (unaudited)
<S>                      <C>          <C>          <C>           <C>           <C>
Cash flows from
 operating activities
 Net loss..............   $(544,520)   $(689,689)  $(4,221,606)   $(2,065,104) $(15,140,622)
 Adjustments to
  reconcile net loss to
  net cash used in
  operating activities
 Depreciation and
  amortization.........       8,773       12,421       205,122         17,285       803,223
 Noncash management
  compensation expense.     180,000      180,000           --             --            --
 Amortization of debt
  discount.............         --           --         12,084         12,084           --
 Purchased in process
  research and
  development..........         --           --        791,102        791,102           --
 Deferred tax benefit..         --           --        (54,695)           --       (164,086)
 Amortization of
  deferred
  compensation.........         --           --            --             --        104,725
 Realized loss on sale
  of investments.......         --           --            --             --          1,447
 Changes in operating
  assets and
  liabilities
  Accounts receivable..     (27,118)       6,460       (61,425)       (60,240)     (189,740)
  Prepaid expenses and
   other assets........      (2,849)      (4,830)      (47,535)         5,075      (956,847)
  Accounts payable.....      69,801       13,125       469,833         89,173     1,287,572
  Accrued liabilities..      53,111       91,659      (184,467)        50,432     1,338,184
                          ---------    ---------   -----------    -----------  ------------
   Net cash used in
    operating
    activities.........    (262,802)    (390,854)   (3,091,587)    (1,160,193)  (12,916,144)
                          ---------    ---------   -----------    -----------  ------------
Cash flows from
 investing activities
 Purchase of property
  and equipment........     (27,208)         --       (273,341)      (110,499)   (1,356,166)
 Cash received from
  acquisitions.........         --           --          9,173          9,173         4,916
 Proceeds from sale of
  equipment............         --           --            --             --        704,522
 Maturity of
  investments..........         --           --            --             --      5,473,205
 Purchase of
  investments,
  including restricted
  cash.................         --           --     (1,975,602)           --    (28,515,911)
                          ---------    ---------   -----------    -----------  ------------
   Net cash used in
    investing
    activities.........     (27,208)         --     (2,239,770)      (101,326)  (23,689,434)
                          ---------    ---------   -----------    -----------  ------------
Cash flows from
 financing activities
 Borrowings under notes
  payable..............     197,714      211,581       562,110        547,108           --
 Repayment of notes
  payable..............         --       (90,869)     (206,348)      (188,132)      (79,188)
 Repayment of capital
  lease obligations....         --        (8,322)       (2,758)        (4,959)      (13,253)
 Proceeds from exercise
  of common stock
  warrants.............         --           --            --             --         75,000
 Proceeds from exercise
  of common stock
  options..............         --           --            --             --         32,022
 Proceeds from issuance
  of Class B common
  stock, net...........     100,000          --            --             --            --
 Proceeds from issuance
  of Series A
  convertible preferred
  stock, net...........         --       600,596           --             --            --
 Proceeds from issuance
  of Series C
  convertible preferred
  stock, net...........         --           --            --             --        250,000
 Proceeds from issuance
  of Series B
  mandatorily
  redeemable
  convertible preferred
  stock, net...........         --           --     10,038,979      4,033,503           --
 Proceeds from issuance
  of Series D
  mandatorily
  redeemable
  convertible preferred
  stock, net...........         --           --            --             --     35,860,975
                          ---------    ---------   -----------    -----------  ------------
   Net cash provided by
    financing
    activities.........     297,714      712,986    10,391,983      4,387,520    36,125,556
                          ---------    ---------   -----------    -----------  ------------
Net increase (decrease)
 in cash and cash
 equivalents...........       7,704      322,132     5,060,626      3,126,001      (480,022)
Cash and cash
 equivalents at
 beginning of period...       1,000        8,704       330,836        330,836     5,391,462
                          ---------    ---------   -----------    -----------  ------------
Cash and cash
 equivalents at end of
 period................   $   8,704    $ 330,836   $ 5,391,462    $ 3,456,837  $  4,911,440
                          =========    =========   ===========    ===========  ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                      F-6
<PAGE>

                               SciQuest.com, Inc.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The Company

   SciQuest.com, Inc. ("SciQuest.com" or the "Company"), which began operations
on November 27, 1995, is a Web-based, interactive marketplace for scientific
and laboratory products used by pharmaceutical, clinical, biotechnology,
chemical, industrial and educational organizations worldwide. The Company's
marketplace solutions utilize enabling Internet technologies and leverage its
extensive industry expertise to streamline the traditionally inefficient
scientific products supply chain. The Company's distributor-neutral approach
allows it to create an open and scalable marketplace that it believes is more
attractive to both buyers and sellers. The Company earns revenues from e-
commerce transactions generated by purchases made through the SciQuest.com Web
sites. In addition, SciQuest.com earns revenue for banner advertising on its
Web sites and advertising in the printed catalogue of scientific products (the
"Source Book"), which is prepared and distributed by the Company's subsidiary,
BioSupplyNet, Inc. ("BioSupplyNet"). SciQuest.com's technology allows buyers to
quickly find vendors of the scientific products and services they need and then
order these products directly from the supplier using SciQuest.com's Web sites.

2. Summary of Significant Accounting Policies

  Unaudited Interim Financial Statements

   The statements of operations and of cash flows for the nine month periods
ended September 30, 1998 and 1999 and consolidated balance sheet at September
30, 1999 are unaudited and reflect all adjustments (consisting of normal
recurring adjustments) which are, in the opinion of the Company's management,
necessary for a fair presentation of the Company's results of operations. All
financial statement disclosures related to the nine month periods ended
September 30, 1998 and 1999 are unaudited.

  Unaudited Pro Forma Balance Sheet

   The Board of Directors has authorized the Company to file a Registration
Statement with the Securities and Exchange Commission permitting the Company to
sell shares of common stock in an initial public offering ("IPO"). If the IPO
is consummated as presently anticipated, all shares of the Class B common stock
and the Series A, Series B, Series C and Series D preferred stock will
automatically convert into shares of common stock at a 1.516643-for-1
conversion ratio. The unaudited pro forma balance sheet reflects the subsequent
conversion of Class B common stock and the Series A, Series B, Series C, Series
D and Series E preferred shares into common stock as if such conversion had
occurred as of September 30, 1999.

  Use of Estimates

   The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

  Principles of Consolidation

   The consolidated financial statements include the accounts of SciQuest.com,
Inc. and its wholly-owned subsidiary, BioSupplyNet, Inc. All significant
intercompany accounts and transactions have been eliminated.


                                      F-7
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

  Cash and Cash Equivalents

   The Company considers all highly liquid investments with a maturity of three
months or less at the date of purchase to be cash equivalents.

  Investments

   The Company considers all investments that are not considered cash
equivalents and with a maturity of less than one year from the balance sheet
date to be short term investments. The Company considers all investments with a
maturity of greater than one year to be long term investments. At December 31,
1998, all investments were considered as available-for-sale and were carried at
fair value with unrealized gains and losses recognized as a component of other
comprehensive income. At September 30, 1999, all investments are considered as
held-to-maturity and are carried at amortized cost, as the Company has both the
positive intent and ability to hold them to maturity. The unrealized holding
loss of $6,673 on the Company's investments at December 31, 1998 was amortized
to interest income over the period from the date of the transfer of the
investments to held-to-maturity to the maturity date of the related
investments. Interest income includes interest, amortization of investment
purchases premiums and discounts, and realized gains and losses on sales of
securities. The cost of securities sold is based on the specific identification
method.

  Restricted Cash

   Restricted cash was comprised of a certificate of deposit which served as
collateral on the Company's bank loan. This certificate of deposit was to be
maintained until the bank loan was repaid. During the nine month period ended
September 30, 1999, the Company repaid the bank loan, and therefore this
certificate of deposit is no longer restricted.

  Accounts Receivable

   The Company bears all risk of loss on credit sales of scientific products in
e-commerce transactions. Accounts receivable are presented net of an allowance
for uncollectable accounts which is not significant at December 31, 1997 and
1998 and September 30, 1999.

  Property and Equipment

   Property and equipment is primarily comprised of furniture and computer
equipment which are recorded at cost and depreciated using the straight-line
method over their estimated useful lives which range from three to five years.
Property and equipment includes certain equipment under capital leases. These
items are depreciated over the shorter of the lease period or the estimated
useful life of the equipment.

  Product Development Costs

   Product development costs include expenses incurred by the Company to
develop, enhance, manage, monitor and operate the Company's Web site. Product
development costs are expensed as incurred. The software development costs
component of product development costs are required to be capitalized beginning
when a product's technological feasibility has been established 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 the date of general release have
substantially coincided. Costs incurred by the Company between the completion
of the working model and the point at which the product is ready for general
release have been insignificant.


                                      F-8
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

  Capitalized Software Costs

   Software development costs are required to be capitalized beginning when a
product's technological feasibility has been established and ending when a
product is available for general release to customers. Capitalized software
costs result from the acquisition of BioSupplyNet (see Note 3) and were
determined by an independent valuation of BioSupplyNet.

   These capitalized software costs are primarily associated with a search
engine with e-commerce capabilities and high level electronic taxonomy and
ontological conventions under development by BioSupplyNet at the date of
acquisition. As a result of the rapid changes in technology in the Internet,
these costs are being amortized over a period of 27 months.

  Intangible Assets

   Intangible assets, which resulted primarily from the acquisition of
BioSupplyNet, were determined by valuations prepared by management and are
primarily associated with the Source Book and contracts with certain Web sites
(the "Web Site Agreements") to provide a link to the SciQuest.com Web site.
Because the Source Book is a printed publication, which must be updated on an
annual basis, capitalized costs related to the Source Book are being amortized
over a period of 15 months. Capitalized costs related to the Web Site
Agreements are being amortized over a 12 month period which is the remaining
term of such agreements.

   Goodwill represents the excess of the purchase price of BioSupplyNet and
Internet Auctioneers International, Inc. over the fair value of the assets
acquired. Goodwill is being amortized over a period of five years because of
the rapid changes in technology in the Internet industry.

  Purchased In-Process Research and Development

   The acquisition cost of in-process technology that at the date of purchase
has not achieved technological feasibility and has no alternative future use is
charged to operations in the period such technology is acquired. Purchased in-
process research and development costs for the year ended December 31, 1998
relate to the acquisition of BioSupplyNet (see Note 3).

  Fair Value of Financial Instruments

   The carrying value of cash and cash equivalents, accounts payable and
accounts receivable at December 31, 1998 and 1999 and September 30, 1999
approximated their fair value due to the short-term nature of these items. The
fair value of the Company's short-term and long-term investments at December
31, 1998 and 1999 and September 30, 1999, based on market quotes, approximated
their carrying values.

  Impairment of Long-Lived Assets

   The Company evaluates the recoverability of its property and equipment and
intangible assets in accordance with Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of," ("SFAS No. 121"). SFAS No. 121 requires
recognition of impairment of long-lived assets in the event the net book value
of such assets exceeds the future undiscounted cash flows attributable to such
assets or the business to which such assets relate. No impairments were
required to be recognized during the years ended December 31, 1996, 1997 and
1998 or the nine month period ended September 30, 1999.


                                      F-9
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

  Revenue Recognition

   The Company's revenues have historically been derived from services provided
to customers for development of Internet services, short term contracts for
banner advertising on its Web sites and from the sale of advertising included
in the Source Book. In April 1999, the Company began selling scientific
products through its e-commerce Web sites.

   Service revenues are recognized upon completion of the development of
Internet services and approved by the customer. The Company generated an
insignificant amount of service revenues during the year ended December 31,
1998 and had no service revenues during the nine months ended September 30,
1999.

   Advertising revenues on banner contracts are recognized ratably over the
period in which the advertisement is displayed, provided that the Company has
no significant remaining obligations to the advertiser and that collection of
the resulting receivable is probable. Revenues from advertising included in the
Source Book are recognized at the date the Source Book is published and
distributed to the purchasers of scientific products as the Company has met all
of its obligations to the advertisers at that date.

   Revenues received from e-commerce transactions are recorded as product
revenues and are recognized by the Company upon notification from the suppliers
of scientific products that the items ordered have been shipped to purchasers.
A reserve for returns is recognized for estimated product returns to the
suppliers. Product revenues totaled approximately $432,000 for the nine months
ended September 30, 1999.

  Cost of Revenues

   Cost of product revenues represents the purchase price to the Company of the
scientific products sold through its e-commerce Web sites and the cost of
maintaining such Web sites. We generally take legal title to the scientific
products purchased at the date of shipment and relinquish title to our
customers upon delivery.

   Cost of advertising and subscription revenue includes the cost of preparing
the banner ads for display on the Company's Web sites and the cost of
publishing and distributing the Source Book. Advertising production costs are
recorded as cost of revenues the first time an advertisement appears on the
Company's Web sites.

  Sales and Marketing Expenses

   Sales and marketing expenses consist primarily of costs, including salaries
and sales commissions, of all personnel involved in the sales process. Sales
and marketing expenses also include costs of advertising, trade shows and
certain indirect costs. All costs of advertising the services and products
offered by the Company are expensed as incurred. Advertising expense totaled
$13,000, $15,000 and $181,000 for the years ended December 31, 1996, 1997 and
1998, respectively and was $782,500 for the nine months ended September 30,
1999.

  Income Taxes

   The Company accounts for income taxes using the liability method which
requires the recognition of deferred tax assets or liabilities for the
temporary differences between financial reporting and tax bases of the
Company's assets and liabilities and for tax carryforwards at enacted statutory
tax rates in effect for the years in which the differences are expected to
reverse. The effect on deferred taxes of a change in tax rates is recognized in
income in the period that includes the enactment date. In addition, valuation
allowances are established when necessary to reduce deferred tax assets to the
amounts expected to be realized.


                                      F-10
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

  Stock Based Compensation

   The Company accounts for stock based compensation in accordance with the
provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees", ("APB No. 25") which states that no compensation expense
is recognized for stock options or other stock-based awards to employees that
are granted with an exercise price equal to or above the estimated fair value
per share of the Company's common stock on the grant date. In the event that
stock options are granted with an exercise price below the estimated fair
market value of the Company's common stock at the grant date, the difference
between the fair market value of the Company's common stock and the exercise
price of the stock option is recorded as deferred compensation. Deferred
compensation is amortized to compensation expense over the vesting period of
the stock option. The Company has adopted the disclosure requirements of
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation" ("SFAS 123"), which requires compensation expense to be
disclosed based on the fair value of the options granted at the date of the
grant.

  Credit Risk, Significant Customers and Concentrations

   Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents, accounts
receivable and investments. Cash and cash equivalents are deposited with high
credit quality financial institutions which invest primarily in U.S. Government
securities, highly rated commercial paper and certificates of deposit
guaranteed by banks which are members of the FDIC. The counterparties to the
agreements relating to the Company's investments consist primarily of the U.S.
Government and various major corporations with high credit standings.

   No single customer accounted for more than 10% of the Company's revenues
during the year ended December 31, 1996 or during the year ended December 31,
1998. In 1997, one customer accounted for 30% of revenues. For the nine month
period ended September 30, 1999, one customer accounted for 12% of revenues.
Concentrations of credit risk with respect to accounts receivable are limited
due to the large number of customers comprising the Company's customer base and
because all customers are located in the United States. There were no
significant individual customer balances as of December 31, 1996. As of
December 31, 1997, two customers comprised 18% and 34% of the accounts
receivable balance. As of December 31, 1998, one customer comprised 30% of the
accounts receivable balance. As of September 30, 1999, two customers comprised
25% and 35% of the accounts receivable balance. All of the Company's revenues
are from sales transactions originating in the United States.

   SciQuest.com relies on a number of third party suppliers for various
services, including e-commerce fulfillment services. While SciQuest.com
believes it could obtain these services from other qualified suppliers on
similar terms and conditions, a disruption in supply of these services by the
current suppliers could materially harm the business.

  Cash Flows

   The Company made cash payments for interest of $8,438, $33,416 and $18,521
during the years ended December 31, 1996, 1997 and 1998, respectively, and
$9,392 during the nine months ended September 30, 1999.

   The Company acquired property and equipment through the assumption of
capital lease obligations amounting to $11,080, $0 and $55,130 during the years
ended December 31, 1996, 1997 and 1998, respectively, and $1,014,068 during the
nine months ended September 30, 1999.


                                      F-11
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

  Comprehensive Income (Loss)

   Effective January 1, 1998, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income,"
("SFAS No. 130"). SFAS No. 130 establishes standards for reporting
comprehensive income and its components in financial statements. Comprehensive
income, as defined, includes all changes in equity during a period from non-
owner sources. The Company's only item of other comprehensive income during
each of the three years in the period ended December 31, 1998 is the unrealized
gain on investments in debt securities considered as available-for-sale. The
Company had no items of other comprehensive income for the nine months ended
September 30, 1998 or 1999.

  Segment Reporting

   In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information," ("SFAS No. 131"). This statement
establishes standards for the way companies report information about operating
segments in annual financial statements. It also establishes standards for
related disclosures about products and services, geographic areas and major
customers. The disclosures prescribed by SFAS No. 131 are effective for the
year ended December 31, 1998. The Company has determined that it does not have
any separately reportable operating segments as of December 31, 1998 or
September 30, 1999.

  Internal Use Software

   In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants ("AICPA") issued Statements of
Position No. 98-1, "Software for Internal Use," ("SOP No. 98-1") which provides
guidance regarding when software developed or obtained for internal use should
be capitalized. SOP No. 98-1 is effective for financial statements for fiscal
years beginning after December 15, 1998. The Company adopted SOP No. 98-1
effective January 1, 1999. The adoption of SOP No. 98-1 did not have a material
impact on the Company's consolidated financial statements.

  Start Up Costs

   In April 1998, the Accounting Standards Executive Committee of the AICPA
issued Statement of Position No. 98-5, "Reporting on the Costs of Start-Up
Activities," ("SOP No. 98-5") which is effective for fiscal years beginning
after December 15, 1998. SOP No. 98-5 requires companies to expense as incurred
all preopening, startup and organizational costs that are not capitalizable as
long-lived assets. The Company's adopted SOP No. 98-5 effective January 1,
1999. The adoption of SOP No. 98-5 had no impact on the Company's financial
condition or results of operations.

  Net Income (Loss) Per Common Share

  Historical

   The Company computes net income (loss) per common share in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings Per Share,"
("SFAS No. 128") and SEC Staff Accounting Bulletin No. 98 ("SAB No. 98"). Under
the provisions of SFAS No. 128 and SAB No. 98, basic net income (loss) per
common share ("Basic EPS") is computed by dividing net income (loss) available
to common stockholders by the weighted average number of common shares
outstanding. Diluted net income (loss) per common share ("Diluted EPS") is
computed by dividing net income (loss) available to common stockholders by the
weighted average number of common shares and dilutive potential common share
equivalents then outstanding. Potential common shares consist of shares
issuable upon the exercise of stock options and warrants and shares issuable

                                      F-12
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

upon conversion of Class B common stock and convertible preferred stock. The
calculation of the net loss per share available to common stockholders for the
years ended December 1996, 1997 and 1998 and the nine months ended September
30, 1999, does not include zero, 545, 5,325,054 and 17,026,675, respectively,
potential shares of common stock equivalents, as their impact would be anti-
dilutive.

  Pro Forma Net Income (Loss) Per Common Share (Unaudited)

   Pro forma net income (loss) per common share is calculated assuming the
reclassification of all outstanding shares of Class A common stock to common
stock and the conversion of all outstanding shares of Class B common stock and
all outstanding shares of all series of preferred stock into common stock upon
the effectiveness of the Company's initial public offering (see Note 11).
Therefore, accretion of mandatorily redeemable preferred stock of $328,723 for
the year ended December 31, 1998 and $46,646,901 for the nine months ended
September 30, 1999 is excluded from the calculation of pro forma net income
(loss) per common share.

   The calculation of pro forma net loss per common share for the year ended
December 31, 1998 and the nine months ended September 30, 1999 does not include
178,568 and 1,154,930, respectively, potential shares of common stock
equivalents, as their impact would be anti-dilutive.

  Recent Accounting Pronouncements

   In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Investments
and Hedging Activities," ("SFAS No. 133"). SFAS No. 133 establishes a new model
for accounting for derivatives and hedging activities and supercedes several
existing standards. SFAS No. 133, as amended by SFAS No. 137, is effective for
all fiscal quarters of fiscal years beginning after June 15, 2000. The Company
does not expect that the adoption of SFAS No. 133 will have a material impact
on the consolidated financial statements.

3. Acquisitions

   On September 29, 1998, the Company purchased all of the outstanding common
and preferred stock of BioSupplyNet in exchange for the issuance of 546,405
shares of the Company's Series C convertible preferred stock and 162,718
warrants to purchase the Company's common stock at an exercise price of $1.85
per share. In addition, the Company issued 192,280 options to purchase the
Company's common stock primarily to former employees of BioSupplyNet who became
employees of the Company. Of those options, 189,297 were issued with an
exercise price of $0.18 per share which was the fair value of the Company's
common stock on the date of the grant. The remaining 2,983 options were
replacement options with an exercise price of $0.002 per share. The Company did
not record any compensation expense related to the 2,983 options issued with an
exercise price of $0.002 per share, as the value of the options as calculated
in accordance with SFAS No. 123 was determined to be de minimis. The
acquisition has been accounted for using the purchase method of accounting and,
accordingly, the purchase price allocated to the assets acquired and
liabilities assumed based on our estimates of fair value at the acquisition
date. The fair value assigned to intangible assets acquired was based on a
valuation prepared by management of the Company of the purchased in-process
research and development, developed technology, the Source Book and the
management of BioSupplyNet. The fair value of the tangible and intangible
assets acquired and purchased in-process research and development was
determined by a valuation prepared by the management of the Company using the
average of a risk-adjusted income approach based on stage of completion and the
estimated cost actually incurred by BioSupplyNet in developing the technology,
for acquired research and development and completed technology, and a risk-
adjusted income approach for the Source Book and the Web Site Agreements. The
excess of the purchase price over the fair values of assets acquired less
liabilities assumed was allocated to goodwill.

                                      F-13
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The total purchase price of $1,988,524 consisted of 546,405 shares of the
Company's Series C preferred stock with an estimated fair value of $2.80 per
share, based on the per share price of the Company's Series B mandatorily
redeemable convertible preferred stock which was sold between July and November
1998, and the assumption of $464,054 of net liabilities of BioSupplyNet. Of the
total purchase price, $791,102 was allocated to acquired in process research
and development and immediately charged to operations because the in-process
technology acquired had not reached the stage of technological feasibility at
the date of the acquisition and had no alternative future use. In addition,
$364,148 of the purchase price was allocated to capitalized software costs for
completed technology, $378,592 was allocated to the Source Book, $80,766 was
allocated to the Web Site Agreements and $79,809 was allocated to the tangible
assets of BioSupplyNet, which were comprised of cash, accounts receivable and
furniture and equipment. The remaining purchase price of $294,107 was allocated
to goodwill.

   Of the total purchase price, $791,102 represents purchased in-process
research and development related to an e-commerce product offering being
developed by BioSupplyNet that had not yet reached technological feasibility
and had no alternative future use. The value assigned to in-process research
and development was based on a valuation prepared by management of the Company.
The value assigned to e-commerce technology being developed by BioSupplyNet was
adjusted to reflect the relative value of this e-commerce technology based on
stage of completion, complexity of the work completed at the date of the
acquisition, difficulty of completing the development, the development costs
already incurred by BioSupplyNet and projected costs to complete the
development of the e-commerce technology and resulting projected net cash flows
from the e-commerce technology. The value assigned to purchased in-process
research and development was based on key assumptions, including projected
revenues from the e-commerce product offering, current and expected industry
trends and acceptance of the e-commerce products technology. BioSupplyNet had
projected that it would generate revenues from its e-commerce technology during
its fiscal year ended June 30, 2000 and positive gross margins beginning in its
fiscal year ended June 30, 2002. A risk adjusted discount rate of 45% was used
to discount the projected cash flows from the e-commerce technology from the
fiscal year ended June 30, 2000 through June 30, 2004, which is the date at
which management of BioSupplyNet projected the e-commerce technology would be
obsolete.

   BioSupplyNet had incurred approximately $1,000,000 in development costs
related to its e-commerce technology, which was approximately 50% complete,
prior to its acquisition by SciQuest.com. The Company expects to incur
approximately $1,900,000 to complete development of all aspects of
BioSupplyNet's e-commerce technology. This development is projected to be
completed by March 2000.

   As the acquisition of BioSupplyNet was a stock for stock transaction which
was structured as a tax free exchange, the purchase price of BioSupplyNet was
in excess of the carryover tax basis of the assets acquired. This resulted in
the immediate recognition of a deferred tax liability of and additional
goodwill of $339,700 as the difference between the recognized fair value of the
acquired assets and their historical tax basis is not deductible for tax
purposes.


                                      F-14
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

   The following unaudited pro forma consolidated financial information
reflects the results of operations of the Company for the years ended December
31, 1997 and 1998, and the nine months ended September 30, 1998 as if the
acquisition of BioSupplyNet had occurred on January 1, 1997 and 1998,
respectively, and after giving effect to the purchase accounting adjustments.
These pro forma results are not necessarily indicative of what the Company's
operating results would have been had the acquisition actually taken place on
January 1, 1997 or January 1, 1998, and may not be indicative of future
operating results.

<TABLE>
<CAPTION>
                                          Year Ended
                                    ------------------------
                                     December     December    Nine Months Ended
                                        31,          31,        September 30,
                                       1997         1998            1998
                                    (unaudited)  (unaudited)     (unaudited)
   <S>                              <C>          <C>          <C>
   Revenue......................... $   558,791  $ 1,098,177     $   928,724
   Operating loss.................. $  (919,308) $(4,427,128)    $(2,147,511)
   Net loss........................ $(1,158,359) $(4,139,696)    $(1,983,194)
   Net loss available to common
    stockholders................... $(1,158,359) $(4,468,419)    $(2,095,349)
   Net loss per common share....... $     (0.34) $     (1.31)    $     (0.61)
</TABLE>

   On July 30, 1999, the Company purchased all of the outstanding common stock
of Internet Auctioneers International, Inc. ("IAI") in exchange for the
issuance of 114,995 shares of the Company's series E convertible preferred
stock. In connection with the purchase of IAI, a former shareholder and officer
of IAI entered into a two year employment agreement with the Company. In the
event that this individual voluntarily terminates his employment prior to the
end of the two year period, this individual would be required to pay an amount
equal to $400,000, reduced by $50,000 upon completion of each 90 day period of
continuous employment, payable either in cash or by surrendering a number of
Series E preferred shares of an equivalent value, as determined in the
individual's employment agreement. The Company also entered into a three year
non-compete agreement with this individual.

   The purchase price of $1,416,000 consisted of the 114,995 shares of the
company's Series E preferred, with an estimated fair value of $11.32 per share,
based on the per share price of the Company's Series D preferred that was sold
in May and June 1999, and the assumption of $160,000 of net liabilities of IAI.
The excess of the purchase price over the fair value of assets acquired less
liabilities assumed was allocated to goodwill. Of the total purchase price,
$22,000 was allocated to the tangible assets of IAI, which were comprised of
cash and accounts receivable. In addition, $400,000 was allocated to the
employment agreement with the former shareholder and recorded as deferred
compensation, and $994,000 was allocated to goodwill.

4.Management Services

   During the years ended December 31, 1996 and 1997, certain members of the
Company's management provided services to the Company on a full time basis for
no consideration. A charge to general and administrative expenses and an
increase to additional paid in capital for $180,000 in each of 1996 and 1997
were recorded to reflect the value of these services. The amount of this charge
was based on management's estimate of the market rate of compensation for these
individuals in a start-up company environment.


                                      F-15
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

5. Investments

   The aggregate fair values of investment securities at December 31, 1998 and
September 30, 1999 along with unrealized gains and losses determined on an
individual security basis are as follows:

   December 31, 1998

<TABLE>
<CAPTION>
                                                          Gross        Market
                Description                 Cost     Unrealized Loss    Value
   <S>                                   <C>         <C>             <C>
   Short-Term Investments:
     U.S. Government obligations........ $ 1,893,366    $ (6,673)    $ 1,886,693
                                         ===========    ========     ===========

   September 30, 1999 (unaudited)

<CAPTION>
                                                          Gross        Market
                Description                 Cost     Unrealized Loss    Value
   <S>                                   <C>         <C>             <C>
   Short-Term Investments:
     U.S. Government obligations........ $12,600,275         --      $12,600,275
                                         -----------    --------     -----------
   Long-Term Investments:
     U.S. Government obligations........  12,095,390         --       12,095,390
     Corporate Bonds....................     321,197         --          321,197
                                         -----------    --------     -----------
                                         $12,416,587    $    --      $12,416,587
                                         ===========    ========     ===========
</TABLE>

   The Company had no outstanding investment securities at December 31, 1997.

6. Property and Equipment

   Property and equipment consist of the following:

<TABLE>
<CAPTION>
                                                 December 31,
                                               ------------------  September 30,
                                                 1997      1998        1999
                                                                    (unaudited)
   <S>                                         <C>       <C>       <C>
   Furniture and equipment.................... $    --   $ 42,094   $  240,579
   Computer software and equipment............   40,606   408,752    1,780,999
   Leasehold improvements.....................      --        --        47,689
                                               --------  --------   ----------
     Total costs..............................   40,606   450,846    2,069,267
   Less accumulated depreciation..............  (21,194)  (93,386)    (311,957)
                                               --------  --------   ----------
     Net book value........................... $ 19,412  $357,460   $1,757,310
                                               ========  ========   ==========
</TABLE>

   The Company leases certain equipment under capital lease agreements. The
cost of equipment under capital leases at September 30, 1999 was approximately
$1,080,000. For the years ended December 31, 1997 and 1998 the cost of
equipment under capital leases was approximately $66,000.


                                      F-16
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

7. Other Assets

   Other assets are comprised of the following:

<TABLE>
<CAPTION>
                                                  December 31,
                                                -----------------  September 30,
                                                 1997     1998         1999
                                                                    (unaudited)
   <S>                                          <C>    <C>         <C>
   Goodwill.................................... $  --  $  638,416   $1,627,561
   Web site agreements.........................    --      80,766       80,766
   Source Book.................................    --     378,592      378,592
   Capitalized software costs..................    --     364,148      364,148
   Deposits....................................    --         --       111,642
   Other.......................................  7,152     20,248        1,050
                                                ------ ----------   ----------
                                                 7,152  1,482,170    2,563,759
   Less accumulated amortization...............    --    (168,061)    (706,228)
                                                ------ ----------   ----------
                                                $7,152 $1,314,109   $1,857,531
                                                ====== ==========   ==========
</TABLE>

8. Accrued Liabilities

   Accrued liabilities are comprised of the following:

<TABLE>
<CAPTION>
                                                   December 31,
                                                 ----------------- September 30,
                                                   1997     1998       1999
                                                                    (unaudited)
   <S>                                           <C>      <C>      <C>
   Deferred revenues............................ $ 87,750 $136,024  $    9,305
   Accrued compensation.........................   45,921  139,219     870,031
   Professional services........................      --       --      440,000
   Other........................................    8,596    4,760     363,315
                                                 -------- --------  ----------
                                                 $142,267 $280,003  $1,682,651
                                                 ======== ========  ==========
</TABLE>

9. Income Taxes

   The components of the Company's income tax benefit for the year ended
December 31, 1997, 1998 and the nine months ended September 30, 1999 consist of
the following:

<TABLE>
<CAPTION>
                                           For the Year Ended       For the
                                              December 31,     Nine Months Ended
                                           ------------------    September 30,
                                            1997      1998           1999
                                                                  (unaudited)
   <S>                                     <C>     <C>         <C>
   Current:
     Federal.............................. $   --  $      --       $     --
     State................................     --         --             --
                                           ------- ----------      ---------
                                               --         --             --
                                           ------- ----------      ---------
   Deferred:
     Federal..............................     --     (44,158)      (132,474)
     State................................     --     (10,537)       (31,612)
                                           ------- ----------      ---------
                                               --     (54,695)      (164,086)
                                           ------- ----------      ---------
       Total.............................. $   --  $  (54,695)     $(164,086)
                                           ======= ==========      =========
</TABLE>

                                      F-17
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The Company recognized a deferred tax benefit of $54,695 and $164,086 for
the year ended December 31, 1998 and the nine months ended September 30, 1999,
respectively, resulting primarily from the reduction of the difference between
the book and tax basis of the assets and liabilities recorded in conjunction
with the acquisitions of BioSupplyNet and IAI.

   The Company did not have an income tax provision for the years ended
December 31, 1996 and 1997 due to net operating losses incurred during the
portion of these years that the Company was a taxable entity (see Note 2).

   As of December 31, 1997 and 1998 and September 30, 1999 the Company had
federal and state net operating loss carryforwards of approximately $1,800,000,
$4,400,000, and $34,000,000, respectively. The use of these federal net
operating loss carryfowards may be subject to limitation under the rules
regarding a change in stock ownership and separate return limitations years as
determined by the Internal Revenue Code. The federal and state net operating
loss carryforwards will begin to expire in 2012.

   Significant components of the Company's deferred tax assets and liabilities
at December 31, 1996, 1997 and 1998 and September 30, 1999 consisted of the
following:

<TABLE>
<CAPTION>
                                               December 31,
                                           ----------------------  September 30,
                                             1997        1998          1999
                                                                    (unaudited)
   <S>                                     <C>        <C>          <C>
   Net operating loss carryforwards....... $ 139,094  $ 1,708,406   $ 6,560,967
   Accrual to cash adjustment.............    76,852      324,514     1,124,498
   Other..................................     7,786       30,832        56,359
                                           ---------  -----------   -----------
     Total deferred tax assets............   223,732    2,063,752     7,741,824
     Valuation allowance for deferred.....  (223,732)  (2,063,752)   (7,741,824)
                                           ---------  -----------   -----------
     Deferred tax assets..................       --           --            --
                                           ---------  -----------   -----------
   Acquired intangibles...................       --      (285,005)     (120,920)
                                           ---------  -----------   -----------
     Total deferred tax liabilities.......       --      (285,005)     (120,920)
                                           ---------  -----------   -----------
     Net deferred tax liability........... $     --   $  (285,005)  $  (120,920)
                                           =========  ===========   ===========
</TABLE>

   During 1998, the Company recorded deferred tax liabilities of $339,700 in
conjunction with the acquisition of BioSupplyNet.

   The Company has provided a valuation allowance against the balance of its
deferred tax assets since realization of these benefits cannot be reasonably
assured. The change in valuation allowance was an increase of $142,374, $81,358
and $1,840,020 in 1996, 1997 and 1998, respectively, and $5,602,531 for the
nine months ended September 30, 1999. The charge primarily relates to
additional operating losses in those years. The 1998 deferred tax asset has
been adjusted to reflect the net operating loss carryforward of BioSupplyNet.


                                      F-18
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

   Taxes computed at the statutory federal income tax rate of 34% are
reconciled to the provision (benefit) for income taxes as follows:

<TABLE>
<CAPTION>
                                                        Year Ended
                                          --------------------------------------
                                          December 31, December 31, December 31,
                                              1996         1997         1998
<S>                                       <C>          <C>          <C>
Effective rate..........................       0%           0%          (1%)
                                           ---------    ---------   -----------
United States Federal tax at statutory
 rate...................................   $(185,137)   $(234,494)  $(1,453,942)
State taxes (net of Federal benefit)....     (26,954)     (34,140)     (211,677)
Change in valuation allowance...........     142,374       81,358     1,840,020
Acquired research and development write-
 off....................................         --           --        312,963
Nondeductible compensation..............      70,110       70,110           --
Acquired net operating losses...........         --           --       (583,029)
Other nondeductible expenses............         --           --         48,688
Other...................................        (393)     117,166        (7,718)
                                           ---------    ---------   -----------
Provision (benefit) for income tax......   $     --     $     --    $   (54,695)
                                           =========    =========   ===========
</TABLE>

10. Notes Payable

   The Company's debt consists of the following:

<TABLE>
<CAPTION>
                                        December 31, December 31, September 30,
                                            1997         1998         1999
                                                                   (unaudited)
<S>                                     <C>          <C>          <C>
Notes payable to officers and
 stockholders..........................  $ 146,851     $    --       $76,000
Bank loan..............................     91,575       79,188          --
Other..................................        --           --        20,000
                                         ---------     --------      -------
                                           238,426       79,188       96,000
Less current maturities................   (159,238)     (14,060)     (96,000)
                                         ---------     --------      -------
Long-term debt.........................  $  79,188     $ 65,128      $   --
                                         =========     ========      =======
</TABLE>

   In October 1998, the Company refinanced the remaining outstanding balance on
the bank loan. The bank loan was refinanced at a 7.75% interest rate and was
collateralized by a certificate of deposit held at a bank, which was shown as
restricted cash in the accompanying consolidated balance sheets. During the
nine month period ended September 30, 1999, the bank loan was repaid.

   In connection with the acquisition of IAI (See Note 3) the Company assumed
convertible notes payable to stockholders with interest between 7% and 10% per
annum which are due in April, 2000. The Company also acquired other notes
payable of $20,000 with interest rates of 10% per annum, which are due upon
demand. These notes were repaid in October 1999.

   The notes payable to officers and stockholders had a stated interest rate of
15% and were payable on demand. These notes were repaid in July 1998.

                                      F-19
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   Annual maturities of long-term debt for the years subsequent to December 31,
1998 are as follows:

<TABLE>
        <S>                                                              <C>
        1999............................................................ $14,060
        2000............................................................  15,189
        2001............................................................  16,409
        2002............................................................  17,727
        2003............................................................  15,803
                                                                         -------
          Total......................................................... $79,188
                                                                         =======
</TABLE>

11. Capital Stock

   In June 1997, the Company issued a common stock dividend of 21 1/2 shares
for each issued and outstanding share of common stock. In September 1997, the
Company converted 250,020 shares of common stock to Class B common stock. All
share and per share amounts in the accompanying financial statements for all
periods presented have been retroactively adjusted to reflect these events.

   During the year ended December 31, 1998, the Company's Articles of
Incorporation were amended to authorize 10,000,000 shares of preferred stock
with no par value, of which 769,231 shares were designated as Series A
convertible preferred stock (the "Series A preferred"), 3,835,180 shares were
designated as Series B convertible preferred stock (the "Series B preferred")
which are mandatorily redeemable, 601,046 shares were designated as Series C
convertible preferred stock (the "Series C preferred"), and 4,794,543 shares
were undesignated. The Company authorized 30,203,689 shares of common stock
with no par value, of which 250,020 shares were designated as Class B common
stock and 29,953,669 were designated as Class A common stock. In February 1999,
the Company's Articles of Incorporation were amended and restated to increase
the number of authorized shares of Series C preferred to 700,000 and to
decrease the number of undesignated preferred shares to 4,695,589. In March
1999, the Company reincorporated under the laws of the State of Delaware and
amended and restated its Certificate of Incorporation to assign a par value of
$0.001 to all classes of capital stock. In June 1999, the Company's Certificate
of Incorporation was amended whereby 3,312,720 shares of preferred stock were
designated as Series D convertible preferred stock (the "Series D preferred"),
which are mandatorily redeemable, and the number of undesignated preferred
shares were decreased to 1,382,869. In July 1999, the Company filed a
Certificate of Designation whereby 126,500 shares of preferred stock were
designated a Series E convertible preferred stock (the "Series E preferred"),
and which decreased the number of undesignated preferred shares to 1,256,369.
At all times, the Company shall reserve a number of shares of unissued Class A
common stock for the purpose of effecting the conversion of its issued and
outstanding shares of all series of preferred stock and Class B common stock
and the exercise of all outstanding warrants and options to purchase the
Company's Class A common stock.

   In July 1996, the Company sold 250,020 shares of Class A common stock to an
investor for $50,000 in cash and the cancellation of convertible debt of
$50,000. These shares were converted to Class B common stock in September 1997.

   In October 1997, the Company sold 678,519 shares of Series A preferred in a
private placement transaction in exchange for proceeds of $600,596, net of
issuance costs of $16,854, and issued 90,702 shares of Series A preferred in
exchange for the cancellation of notes payable of $80,000 and accrued interest
of $2,539. The notes payable were issued between March and September 1997, and
bore interest at 10% per annum. Certain notes were issued with a total of
14,583 warrants, which expire in 2000, for the purchase of common stock with
exercise prices of $1.25 per share. The Company did not record any additional
paid in capital related to the value of these warrants because the fair market
value of the warrants at the date of issuance, as calculated using the Black-
Scholes option pricing model, was de minimis.


                                      F-20
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

   In September 1998, the Company issued 546,405 shares of Series C preferred
and 192,280 options and 162,718 warrants to purchase the Company's common stock
to the former stockholders, option holders and warrant holders of BioSupplyNet
in exchange for all of the outstanding common and preferred stock, options and
warrants of BioSupplyNet (see Note 3).

   In March 1999, the Company sold 89,408 shares of Series C preferred to an
officer of the Company at $2.80 per share, which shares are subject to vesting
over a two year period.

  Rights, Preference and Terms of Capital Stock

   The following is a summary of the rights, preferences, and terms of the
Company's outstanding series of common and preferred stock:

  Dividends

   No dividends may be paid with respect to the holders of common stock, Series
A preferred, Series B preferred, Series C preferred or Series E preferred until
equivalent dividends have been declared and paid on all outstanding shares of
the Series D preferred. The Company cannot pay any dividends to the
stockholders of Series A preferred shares until equivalent dividends have been
declared and paid to the holders of Series B preferred shares. The holders of
Series A preferred shall be entitled to receive in any fiscal year, when and if
declared by the board of directors, non-cumulative dividends of at least 5% of
the per share purchase price of the Series A preferred. The Company cannot pay
any dividends to the holders of Series C or Series E preferred shares until
equivalent dividends have been declared and paid to the holders of Series A and
Series B preferred shares. The Company is under no obligation to pay dividends
unless dividends are declared by the board of directors.

  Liquidity

   In the event of any liquidation, dissolution, or winding up of the Company,
holders of Series D preferred shares shall be entitled to receive an amount
equal to the greater of $11.32 per share, adjusted for any stock splits or
dividends, plus any unpaid or accrued dividends, plus an amount equal to 10%
return per annum when combined with any dividends paid or the amount per share
that would have been received if all shares of Series D preferred had been
converted into common stock immediately prior to the liquidation, dissolution,
or winding up of the Company. After payments have been made to the holders of
Series D preferred shares, holders of Series B preferred shares shall be
entitled to receive, prior to payments to any holders of Class A common stock,
Class B common stock, Series A preferred shares, Series C preferred shares, or
Series E preferred shares an amount equal to $2.80 per share, adjusted for any
stock splits or dividends, plus any accrued but unpaid dividends, plus an
amount equal to a 10% return per annum when combined with any dividends paid or
the amount per share that would have been received if all shares of Series D
and B preferred had been converted into common stock immediately prior to the
liquidation dissolution, or winding up of the Company. After payment has been
made to the holders of Series D and B preferred shares, holders of Series A
preferred shares shall be entitled to receive in liquidation, prior to payments
to any holders of Series C or Series E preferred shares and holders of Class A
common stock and Class B common stock, an amount equal to $0.91 per share,
adjusted for any stock splits or dividends, plus any accrued but unpaid
dividends. After payments have been made to the holders of Series D, Series B
and Series A preferred shares, holders of Series C and Series E preferred shall
be entitled to receive in liquidation, prior to payments to holders of Class A
common stock and Class B common stock, an amount equal to $1.85 and $7.46 per
share, respectively, on a pro rata basis, adjusted for any stock splits or
dividends, plus any accrued but unpaid dividends. After payment has been made
to the holders of Series D, Series B, Series A, Series C, and Series E
preferred shares, the

                                      F-21
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

holders of Class B common stock shall be entitled to receive in liquidation, an
amount equal to $0.40 per share plus any accrued and unpaid dividends. After
payments have been made to the holders of Series D, Series B, Series A, and
Series C preferred shares and Class B common shares any remaining assets of the
Company will be distributed to holders of common shares and no further
distributions will be made to the Class B common stockholders or to the
preferred stockholders unless the amount per share distributed to the holders
of common stock would be greater than the amount paid to the holders of the
Class B common stock, in which case an additional amount will be paid to the
holders of Class B common stock.

   The following is a summary of the liquidation values for the Series D,
Series B, Series A, Series C, and Series E preferred shares, and Class B common
stock as of December 31, 1998 and September 30, 1999, in the order of
preference:

<TABLE>
<CAPTION>
                                                      December 31, September 30,
                                                          1998         1999
                                                                    (unaudited)
   <S>                                                <C>          <C>
   Series D mandatorily preferred stock.............. $       --    $36,566,695
   Series B mandatorily preferred stock..............  10,882,702    11,719,480
   Series A preferred stock..........................     683,135       683,135
   Series C and E preferred stock....................   1,524,470     3,076,213
   Class B common stock..............................     100,000       100,000
                                                      -----------   -----------
     Total........................................... $13,190,307   $52,145,523
                                                      ===========   ===========
</TABLE>

  Voting

   Holders of Series A, Series B, Series C, Series D, and Series E preferred
shares, and Class B common shares have voting rights on an as if converted
basis.

  Conversion

   Each share of Series A, Series B, Series C, Series D, and Series E preferred
and Class B common stock, at the option of the holder, is convertible into
shares of common stock of the Company at 1.516643-for-1 conversion ratio,
subject to certain adjustments as defined. Conversion is automatic for holders
of Series A preferred shares upon the closing of a firm commitment underwritten
public offering with gross proceeds of at least $5,000,000 at a minimum price
of $1.65 per share. Conversion is automatic for holders of Series B and Series
D preferred shares upon the closing of a qualified initial public offering of
the Company's common stock. Conversion is automatic for holders of Series C and
E preferred shares upon the closing of a firm commitment underwritten public
offering. Class B common stockholders shall have the same conversion rights and
obligations as Series A preferred.

  Preemptive Rights

   Holders of Series B and D preferred shares have the right of first refusal
to purchase any new securities, as defined in the Certificate of Incorporation,
that the Company may propose to sell and issue. These rights terminate upon
closing of a qualifying initial public offering. Holders of Series A preferred
shares and Class B common shares have contractual rights of first refusal to
purchase certain new securities that the Company may propose to sell and issue.
These rights also terminate upon the closing of a qualified initial public
offering.

                                      F-22
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


12. Mandatorily Redeemable Convertible Preferred Stock

   In July 1998, the Company sold 1,442,500 shares of Series B preferred in a
private placement transaction for $2.80 per share which resulted in net
proceeds of $4,033,503 and issued 187,394 shares of Series B preferred in
exchange for the cancellation of notes payable in the aggregate principal
amount of $515,000. The notes payable were issued between March and June 1998
and bore interest at 6% per annum. Attached to the notes were warrants to be
issued upon repayment or conversion of such notes. The number of warrants was
determined based on a formula as set forth in the agreements. When the notes
payable were converted to Series B preferred, the Company issued 57,545
warrants to purchase shares of Series B preferred with exercise prices of $2.80
per share. The Company recorded a debt discount of $12,084 for the value of
these warrants as determined using the Black-Scholes option pricing model. In
October and November of 1998, the Company sold 2,147,732 shares of Series B
preferred in private placement transactions in exchange for proceeds of
$6,005,476.

   Upon any request by any holder of Series B preferred shares at any time
after July 30, 2003, the Company must redeem the Series B preferred in three
equal annual installments. The redemption price will be equal to the greater of
the appraised value of the Series B preferred shares at the date of the
redemption request or an amount equal to the invested amount plus interest at a
rate of 10% per annum, less the aggregate amount of all dividends actually paid
since the issuance date.

   As the redemption price of the Series B preferred is variable in amount, its
carrying value is required to be adjusted to the estimated redemption amount at
each balance sheet date. The Company recorded charges to stockholders' equity
of $328,723 for the year ended December 31, 1998 and $45,215,043 for the nine
months ended September 30, 1999, to reflect the Series B preferred at its
estimated fair value at each date based on the price of the most recent sales
of the Company's preferred stock and the projected initial public offering
pricing range, respectively.

   In May and June, 1999, the Company sold 3,312,720 shares of Series D
preferred in a private placement transaction for $11.32 per share which
resulted in proceeds of $35,860,975, net of issuance costs of $1,645,641. In
addition, the Company issued 1,004,829 warrants to purchase the Company's
common stock at an exercise price of $7.46 per share and 41,733 warrants to
purchase the Company's common stock at an exercise price of $9.33 per share.
The estimated fair value of the warrants of $726,137 according to the Black-
Scholes pricing model using an estimated fair value of $3.30 per common share
for the Company's common stock was recorded as a reduction in the carrying
value of the Series D preferred and an increase to additional paid in capital.
The Company recorded a charge to stockholders' equity of $1,431,858 during the
nine months ended September 30, 1999 to record the accretion on the Series D
Preferred Stock.

   Upon any request by any holder of Series D preferred shares at any time
after the Initial Redemption Exercise Date, the Company must redeem the Series
D preferred at the amount invested per share plus a per annum interest charge
for the period the share has been outstanding of 10% compounded annually and
prorated for any partial year less the aggregate amount of all dividends
actually paid since the issuance date.

                                      F-23
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


   The following table summarizes the Company's outstanding shares and carrying
value of mandatorily redeemable convertible preferred stock at December 31,
1998 and September 30, 1999:

<TABLE>
<CAPTION>
                                    December 31, 1998      September 30, 1999
                                 ----------------------- -----------------------
                                   Shares     Carrying     Shares     Carrying
                                 Outstanding    Value    Outstanding    Value
<S>                              <C>         <C>         <C>         <C>
Series B preferred..............  3,777,626  $10,882,702  3,777,626  $56,097,746
Series D preferred..............        --           --   3,312,720   36,566,695
                                  ---------  -----------  ---------  -----------
                                  3,777,626  $10,882,702  7,090,346  $92,664,441
                                  =========  ===========  =========  ===========
</TABLE>

13. Stock Options and Warrants

  Stock Options

   In September 1997, the Company adopted the SciQuest, Inc. Stock Option Plan
(the "Plan") which provided for the grant of up to 341,245 employee stock
options. In September 1998, the Plan was amended to provide for the grant of up
to 1,272,299 employee stock options. In February 1999, the Plan was amended to
provide for the grant of up to 1,484,820 employee stock options. In August
1999, the Plan was further amended to allow for the grant of up to 2,647,247
employee stock options. Stock options granted under the Plan are for periods
not to exceed ten years. Options granted under the Plan during the years ended
December 31, 1997 and 1998 and the nine months ended September 30, 1999
generally vest in periods between three and five years as determined by the
board of directors, although certain grants have been vested immediately upon
the grant of the option.

   The Company did not grant any stock options during the year ended December
31, 1996. The Company continues to apply APB No. 25 and related interpretations
in accounting for the Plan. The Company recognized $71,392 in non-cash
compensation expense related to amortization of deferred compensation during
the nine months ended September 30, 1999. No deferred compensation or
compensation expense was recorded related to stock option grants during the
years ended December 31, 1996, 1997 and 1998. Had compensation expense for the
Plan been determined based on the fair value at the grant dates for awards
under the Plan consistent with the methods of SFAS No. 123, the Company's net
loss for the years ended December 31, 1997 and 1998, and the nine months ended
September 30, 1999 would have been increased to the pro forma amounts indicated
below:

<TABLE>
<CAPTION>
                         December 31, 1997 December 31, 1998 September 30, 1999
                         ----------------- ----------------- ------------------
<S>                      <C>               <C>               <C>
Net loss available to
 common stockholders:
  As reported...........     $689,689         $4,550,329        $61,787,523
  Pro Forma.............     $691,591         $4,554,641        $61,971,305
</TABLE>

   The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted average
assumptions used for grants during the years ended December 31, 1997 and 1998
and the nine months ended September 30, 1999: risk free interest of 5.5%, 6.0%,
and 6.0%, respectively; expected lives of five years; dividend yields of 0%;
and volatility factors of 0%. The weighted average fair value of options
granted during the years ended December 31, 1997 and 1998, and the nine months
ended September 30, 1999 according to the Black-Scholes pricing model was
$0.05, $0.02, and $3.42, respectively.


                                      F-24
<PAGE>

                              SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

   A summary of the status of the Plan as of December 31, 1997 and 1998, and
September 30, 1999 and changes during the years then ended is presented below:

<TABLE>
<CAPTION>
                                        Year Ended
                          ----------------------------------------  Nine Months Ended
                                 1997                1998          September 30, 1999
                          ------------------- -------------------- --------------------
                                     Weighted             Weighted             Weighted
                            Shares   Average    Shares    Average    Shares    Average
                          Underlying Exercise Underlying  Exercise Underlying  Exercise
                           Options    Price    Options     Price    Options     Price
<S>                       <C>        <C>      <C>         <C>      <C>         <C>
Outstanding at beginning
 of year................       --     $  --     117,596    $0.06   1,004,310    $0.13
Granted.................   117,596     0.06     887,958     0.15     955,746     2.37
Exercised...............       --       --          --       --     (274,421)    0.18
Forfeited...............       --       --       (1,244)    0.18    (107,682)    0.12
                           -------    -----   ---------    -----   ---------    -----
Outstanding at end of
 period.................   117,596    $0.06   1,004,310    $0.13   1,577,953    $1.75
                           =======    =====   =========    =====   =========    =====
</TABLE>

   All incentive stock options granted during the years ended December 31,
1997 and 1998 were granted with an exercise price equal to the fair value of
the underlying common stock on the grant date, as determined by the board of
directors. The Company recorded $2,547,215 of deferred compensation during the
nine months ended September 30, 1999 to reflect the difference between the
aggregate fair market value and exercise price of all stock options granted
during this period with an exercise price below the fair market value of the
Company's common stock at the date of the grant.

   The following table summarizes information about the Company's stock
options at September 30, 1999:

<TABLE>
<CAPTION>
                                                 Weighted   Weighted
                                      Number      Average   Average   Number of
         Range of                   of Options  Contractual Exercise   Options
       Exercise Prices              Outstanding    Life      Price   Exercisable
       <S>                          <C>         <C>         <C>      <C>
       $0.002 - 0.07...............    166,223      8.3      $0.03      81,184
       $0.18.......................    791,921      9.1       0.18      58,949
       $2.08.......................     88,074      9.6       2.08         --
       $3.30.......................    374,914      9.9       3.30         --
       $7.58.......................    156,821       10       7.58         --
                                     ---------      ---      -----     -------
                                     1,577,953      9.3      $1.75     140,133
                                     =========      ===      =====     =======
</TABLE>

   Stock option grants subsequent to September 30, 1999 (unaudited) are as
follows:

<TABLE>
<CAPTION>
                                                   Shares       Weighted Average
      Month of Grant                         Underlying Options  Exercise Price
      <S>                                    <C>                <C>
      October 1999..........................       44,438            $7.58
</TABLE>

   The Company recorded approximately $346,000 of deferred compensation
related to this grant to reflect the difference between the aggregate fair
market value and exercise price of these options.

  Warrants

   At December 31, 1997 and 1998, and September 30, 1999, the Company had
14,583, 177,300, and 1,183,183, respectively, warrants outstanding and
exercisable to purchase the Company's Class A common stock at prices ranging
from $0.82 to $9.33. These warrants expire at various dates between 2000 and
2004. At December 31, 1998 and September 30, 1999, the Company had 57,545
warrants outstanding and exercisable to purchase the Company's Series B
preferred at exercise prices of $2.80. These Series B warrants will convert
into warrants to purchase 87,275 shares of the Company's common stock at an
exercise price of $1.85 per share upon an IPO and expire in 2003 if
unexercised.

                                     F-25
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


14. Commitments and Contingencies

   The Company leases certain equipment under various noncancellable capital
leases and leases its office space and certain equipment under operating
leases. Future minimum lease payments required under the leases at December 31,
1998 are as follows:

<TABLE>
<CAPTION>
                                                 Capital Leases Operating Leases
   <S>                                           <C>            <C>
   1999........................................     $ 22,076        $59,234
   2000........................................       22,076          9,754
   2001........................................       15,672          2,145
                                                    --------        -------
     Total minimum lease payments..............       59,824         71,133
                                                                    =======
   Less amount representing interest from 12 to
    32%........................................       (6,694)
                                                    --------
   Present value of net minimum lease payment..       53,130
   Less current maturities.....................      (18,048)
                                                    --------
   Long-term maturities of capital lease
    obligations................................     $ 35,082
                                                    ========
</TABLE>

   Rent expense recognized under operating leases totaled zero, $3,400 and
$34,490 for the years ended December 31, 1996, 1997 and 1998, respectively. For
the nine months ended September 30, 1999, rent expense under operating leases
totaled $278,370.

   In February 1999, the Company entered into a lease agreement for additional
office space for a period of three years with a monthly rental of $16,771.

   During the nine months ended September 30, 1999, the Company entered into a
leasing agreement with a leasing Company. The Company obtained a total
commitment amount of $2,500,000 from the leasing Company which expires in
August 2000. The Company may purchase furniture and equipment and lease the
items over a three and a half year term. Payments are due monthly. Prior to the
end of the lease term, the Company has the option to either purchase the
equipment or renew the lease at a price not to exceed fifteen percent of the
equipment cost.

   In connection with this agreement, the Company was entitled to enter into a
sale and leaseback transaction of approximately $700,000 for its existing
furniture and equipment located at the facility in North Carolina. No gain or
loss was recognized on this transaction. For accounting purposes, the Company
has treated the transaction as a financing agreement and has recognized the
resulting liability for future lease payments as a capital lease obligation.

   The Company is involved in certain legal proceedings as a part of its normal
course of business. Management does not believe that the ultimate resolution of
these matters will have a material impact on the Company's results of
operations or financial position in any quarterly or annual period.

15. Strategic Partnerships (unaudited)

   In late October 1999, the Company entered into strategic relationships with
a number of key suppliers and buyers of scientific products. As a part of these
arrangements, the Company committed to issue to these companies 3,724,307
warrants to purchase the Company's common stock at an exercise price of $0.01
per share upon consummation of the Company's planned initial public offering.
These warrants will be issued concurrent with the effectiveness of this
offering. In addition, the Company has available 1,408,112 warrants with an
exercise price of $0.01 per share to issue as additional strategic
relationships are formed. The Company will record a charge of approximately
$48,400,000 upon the consummation of the offering which will be

                                      F-26
<PAGE>

                               SciQuest.com, Inc.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

amortized to operating expense over the related term of the strategic
relationships, which are for periods ranging from three to five years. In the
event that the Company commits to issue additional warrants to purchase its
common stock as more strategic relationships are formed, the Company will be
required to record a charge equal to the difference between the fair value of
the Company's common stock on the date the warrants are issued and the exercise
price of the warrants of $0.01.

   These strategic relationships include agreements to be the exclusive third
party provider of electronic marketplace services in the United States for a
period of five years for eight key suppliers. Under the terms of these
agreements, these suppliers are not required to sell a minimum amount of
products through the Company's electronic marketplace. The warrants to purchase
the Company's common stock that will be issued in connection with these
agreements will vest over a four or five year period regardless of the level of
sales by the suppliers through the Company's electronic marketplace.

   These strategic relationships also include binding letters of intent with
Dow Chemical Company, DuPont Pharmaceuticals Company and Monsanto Company to be
their exclusive third party electronic aggregator for purchases of scientific
products in North America for a period of three years. Although these buyers
have agreed to use reasonable efforts to purchase at least $5 million of
scientific products annually through the Company's marketplace, there are no
minimum purchase commitments. The warrants to be issued in connection with
these relationships will vest over a period of three years regardless of their
level of purchases through the Company's electronic marketplace. These letters
of intent may be terminated by either party on or after December 31, 1999 in
the event that the parties have not completed mutually satisfactory definitive
agreements.

   In addition, the Company has agreed to issue to Dow Chemical, DuPont
Pharmaceuticals Company and Monsanto Company additional incentive warrants, the
number of which will be based on each purchaser's volume of purchases through
the Company's market place during the years 2000, 2001 and 2002. These
incentive warrants will be issued on February 15, 2001, 2002 and 2003, at an
exercise price equal to the price in the Company's initial public offering, and
will be exercisable upon issuance. A charge will be amortized over the
remaining term of the agreement to operating expense upon each issuance of the
incentive warrants in an amount equal to the difference between the fair market
value of the Company's common shares on the issuance date, less the exercise
price for these warrants.

16. Stock Split

   On October 22, 1999, the Board of Directors approved a 1.516643-for-1 Class
A common stock split which was declared effective on November 12, 1999. The
Company's $0.001 par value Class A common stock will be split and then
reclassified as common stock with a par value of $0.001 per share. All share
and per share information in the financial statements has been retroactively
restated to reflect the effect of this stock split and the reclassification of
the Company's Class A common stock to common stock. In addition, the number of
authorized shares of the Company's common stock was increased to 90,000,000
shares and the Company authorized 10,000,000 shares of preferred stock.

                                      F-27
<PAGE>

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
BioSupplyNet, Inc.

   In our opinion, the accompanying balance sheets and the related statements
of operations, of stockholders' equity (deficit), and of cash flows present
fairly, in all material respects, the financial position of BioSupplyNet, Inc.
(the "Company") at June 30, 1998 and 1997, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP

April 1, 1999
Raleigh, North Carolina

                                      F-28
<PAGE>

                               BioSupplyNet, Inc.

                                 BALANCE SHEET

<TABLE>
<CAPTION>
                                                        June 30,    June 30,
                                                          1997        1998
<S>                                                    <C>         <C>
                        Assets
Current assets:
  Cash and cash equivalents........................... $  435,678  $    14,097
  Accounts receivable.................................     52,325       93,911
                                                       ----------  -----------
    Total current assets..............................    488,003      108,008
                                                       ----------  -----------
Property and equipment, net...........................     64,240       48,639
Other assets, net.....................................     75,000       15,000
                                                       ----------  -----------
    Total assets...................................... $  627,243  $   171,647
                                                       ==========  ===========
    Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
  Accounts payable.................................... $  233,364  $   121,617
  Accrued expenses....................................     28,715       21,765
  Deferred revenue....................................        --        48,771
  Advances from related party.........................        --       235,000
                                                       ----------  -----------
    Total current liabilities.........................    262,079      427,153
                                                       ----------  -----------
Stockholders' equity (deficit):
  Series A convertible preferred stock, $0.001 par
   value, 1,200,000 shares authorized, issued and
   outstanding........................................      1,200        1,200
  Common stock, $0.001 par value, 3,000,000 shares
   authorized, 327,833 shares issued and outstanding..        328          328
  Additional paid-in capital..........................  1,187,394    1,187,394
  Accumulated deficit.................................   (823,758)  (1,444,428)
                                                       ----------  -----------
  Total stockholders' equity (deficit)................    365,164     (255,506)
                                                       ----------  -----------
    Total liabilities and stockholders' equity (defi-
     cit)............................................. $  627,243  $   171,647
                                                       ==========  ===========
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F-29
<PAGE>

                               BioSupplyNet, Inc.

                            STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                          June 30,   June 30,
                                                            1997       1998
<S>                                                       <C>        <C>
Revenues................................................. $ 281,762  $ 627,404
Cost of revenues.........................................   342,417    371,473
                                                          ---------  ---------
    Gross profit (loss)..................................   (60,655)   255,931
                                                          ---------  ---------
Operating expenses:
  Product development....................................   417,196    201,970
  Sales and marketing....................................   243,298    517,470
  General and administrative.............................   120,301    155,420
                                                          ---------  ---------
    Total operating expenses.............................   780,795    874,860
                                                          ---------  ---------
    Operating loss.......................................  (841,450)  (618,929)
                                                          ---------  ---------
Interest income (expense):
  Interest income........................................    17,692      3,756
  Interest expense.......................................       --      (5,497)
                                                          ---------  ---------
    Net interest income (expense)........................    17,692     (1,741)
                                                          ---------  ---------
    Net loss............................................. $(823,758) $(620,670)
                                                          =========  =========
</TABLE>



   The accompanying notes are an integral part of these financial statements.

                                      F-30
<PAGE>

                               BioSupplyNet, Inc.

                  STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                         Preferred Stock   Common Stock  Additional
                         ---------------- --------------  Paid-in   Accumulated
                          Shares   Amount Shares  Amount  Capital     Deficit      Total
                         --------- ------ ------- ------ ---------- -----------  ----------
<S>                      <C>       <C>    <C>     <C>    <C>        <C>          <C>
Balance at June 30,
 1996...................       --  $  --      --   $--   $      --  $       --   $      --
 Issuance of common
  stock in exchange for
  assets................       --     --  327,833   328     119,672         --      120,000
 Issuance of convertible
  preferred stock....... 1,200,000  1,200     --    --    1,067,722         --    1,068,922
 Net loss...............       --     --      --    --          --     (823,758)   (823,758)
                         --------- ------ -------  ----  ---------- -----------  ----------
Balance at June 30,
 1997................... 1,200,000  1,200 327,833   328   1,187,394    (823,758)    365,164
Net loss................       --     --      --    --          --     (620,670)   (620,670)
                         --------- ------ -------  ----  ---------- -----------  ----------
Balance at June 30,
 1998................... 1,200,000 $1,200 327,833  $328  $1,187,394 $(1,444,428) $ (255,506)
                         ========= ====== =======  ====  ========== ===========  ==========
</TABLE>




   The accompanying notes are an integral part of these financial statements.

                                      F-31
<PAGE>

                               BioSupplyNet, Inc.

                            STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                          June 30,   June 30,
                                                            1997       1998
<S>                                                      <C>         <C>
Cash flows from operating activities
 Net loss............................................... $ (823,758) $(620,670)
 Adjustments to reconcile net loss to net cash used in
  operating activities:
  Depreciation and amortization.........................     60,601     75,601
  Changes in operating assets and liabilities:
   Accounts receivable..................................    (52,325)   (41,586)
   Accounts payable.....................................    233,364   (111,747)
   Deferred revenue.....................................        --      48,771
   Accrued expenses.....................................     28,715     (6,950)
                                                         ----------  ---------
    Net cash used in operating activities...............   (553,403)  (656,581)
                                                         ----------  ---------
Cash flows from investing activities
 Purchase of property and equipment.....................    (79,841)       --
                                                         ----------  ---------
    Net cash used in investing activities...............    (79,841)       --
                                                         ----------  ---------
Cash flows from financing activities
 Advances from related party............................        --     235,000
 Proceeds from issuance of preferred stock, net.........  1,068,922        --
                                                         ----------  ---------
    Net cash provided by financing activities...........  1,068,922    235,000
                                                         ----------  ---------
    Net increase (decrease) in cash and cash
     equivalents........................................    435,678   (421,581)
Cash and cash equivalents at beginning of year..........        --     435,678
                                                         ----------  ---------
Cash and cash equivalents at end of year................ $  435,678  $  14,097
                                                         ==========  =========
</TABLE>



   The accompanying notes are an integral part of these financial statements.

                                      F-32
<PAGE>

                               BioSupplyNet, Inc.

                         NOTES TO FINANCIAL STATEMENTS

1. The Company

   BioSupplyNet, Inc. (the "Company") was incorporated in February 1996 and
began operations in October 1996. The Company provided the biomedical research
industry with an annual printed catalogue of vendors of biomedical research
supplies and equipment and of scientific products, "The BioSupplyNet Source
Book" (the "Source Book"). Research scientists, lab technicians, and purchasing
agents use the Source Book to locate companies and supplies and equipment used
in biomedical research. Users were provided the Source Book at no charge. The
Company primarily generated revenues from the sale of advertisements in the
Source Book. In addition, the Company was developing an e-commerce product
offering to allow research scientists, lab technicians and purchasing agents to
quickly identify suppliers of specific scientific products.

2. Summary of Significant Accounting Policies

Use of Estimates

   The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

   The Company considers all highly liquid investments with a maturity of three
months or less at the date of purchase to be cash equivalents.

Property and Equipment

   Property and equipment is primarily comprised of furniture and computer
equipment which are recorded at cost and depreciated using the straight-line
method over their estimated useful lives which range from three to seven years.

Intangible Assets

   Intangible assets, which resulted from the issuance of common stock in
exchange for the rights to the Source Book in October 1996 (see Note 6) were
recorded at the estimated fair market value of the Source Book and are being
amortized over a two year period. Amortization expense related to intangible
assets was $45,000 and $60,000 during the years ended June 30, 1997 and 1998,
respectively.

Product Development Costs

   Product development costs include expenses incurred by the Company to
develop, enhance, manage, monitor and operate the Company's Web sites and the
cost of development of the Company's search engine and electronic taxonomy and
ontology conventions. Product development costs are expensed as incurred.
Product development costs are required to be capitalized beginning when a
product's technological feasibility has been established and ending when a
product is available for general release to customers. To date, completion of a
working model of the Company's Web sites and major enhancements to the Web
sites and the date of general release of the Web sites have substantially
coincided.


                                      F-33
<PAGE>

                               BioSupplyNet, Inc.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

Fair Value of Financial Instruments

   The Company's financial instruments, including cash and cash equivalents,
accounts receivable, accounts payable and advances from related party are
carried at cost. The carrying value of cash and cash equivalents, accounts
receivable, accounts payable and advances from related party approximates their
fair value, due to the short term nature of these items.

Impairment of Long-Lived Assets

   The Company evaluates the recoverability of its property and equipment and
intangible assets in accordance with Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" ("SFAS No. 121"). SFAS No. 121 requires
recognition of impairment of long-lived assets in the event the net book value
of such assets exceeds the future undiscounted cash flows attributable to such
assets or the business to which such intangible assets relate. No impairments
were required to be recognized during the years ended June 30, 1997 and 1998.

Income Taxes

   The Company accounts for income taxes using the liability method which
requires the recognition of deferred tax assets or liabilities for the
temporary differences between financial reporting and tax bases of the
Company's assets and liabilities and for tax carryforwards at enacted statutory
tax rates in effect for the years in which the differences are excepted to
reverse. The effect on deferred taxes of a change in tax rates is recognized in
income in the period that includes the enactment date. In addition, valuation
allowances are established when necessary to reduce tax assets to the amounts
expected to be realized.

Revenue Recognition

   The Company's revenues have historically been derived from the sale of
advertising to be included in the Source Book in printed form.

   Revenues from advertising included in the Source Book are recognized at the
date the Source Book is published and distributed to the purchasers of
scientific products as the Company has met all of its obligations to the
advertisers at that date.

Cost of Revenue

   Cost of revenue is primarily comprised of the costs of publishing and
distributing the Source Book.

Sales and Marketing Expenses

   Sales and marketing expenses consist primarily of costs, including salaries
and sales commissions, of all personnel involved in the sales process. Sales
and marketing expenses also include costs of advertising, trade shows and
certain indirect costs.

   Advertising expense totaled $9,000 for the year ended June 30, 1997. There
was no advertising expense for the year ended June 30, 1998.

Stock Based Compensation

   The Company accounts for stock-based employee compensation arrangements in
accordance with provisions of Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees"

                                      F-34
<PAGE>

                               BioSupplyNet, Inc.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

("APB No. 25"), and complies with the disclosure provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"). Under APB No. 25, compensation expense is based
on the difference, if any, on the date of the grant, between the fair value of
the Company's stock and the exercise price of the stock option. The Company
accounts for stock issued to non-employees in accordance with the provisions of
SFAS No. 123. No compensation expense was recognized related to stock option
grants during the years ended June 30, 1997 and 1998.

Concentration of Credit Risk

   Financial instruments that potentially subject the Company to a
concentration of credit risk consist of cash and cash equivalents and accounts
receivable. Cash and cash equivalents are deposited with high credit quality
financial institutions. Concentrations of credit risk with respect to accounts
receivable are limited due to the large number of customers comprising the
Company's customer base and because all customers are located in the United
States.

3. Property and Equipment

   Property and equipment consist of the following at June 30, 1997 and 1998:

<TABLE>
<CAPTION>
                                                               1997      1998
   <S>                                                       <C>       <C>
   Furniture and fixtures................................... $  6,426  $  6,426
   Computer hardware........................................   73,415    73,415
                                                             --------  --------
     Total costs............................................   79,841    79,841
   Less accumulated depreciation............................  (15,601)  (31,202)
                                                             --------  --------
     Property and equipment, net............................ $ 64,240  $ 48,639
                                                             ========  ========
</TABLE>

4. Advances from Related Party

   On June 30, 1997, the Company entered into a revolving credit agreement,
secured by the Company's advertisement confirmations, with a major shareholder
of the Company. Advances under the revolving credit line may not exceed the
lessor of $450,000 or 80% of the dollar amount of the then outstanding
advertising confirmations.

   The revolving credit line expired on June 30, 1998 and amounts outstanding
became due on demand. Interest accrues at 10% per annum on the outstanding
advances under the revolving credit line. In addition, the Company must issue
to the lender warrants to purchase the number of shares of common stock of the
Company equal to the principal amount of all advances provided, however, the
number of shares of common stock subject to warrants shall not exceed 450,000.
The exercise price of any warrants granted will be $1.00 per share. At June 30,
1998, outstanding borrowings under the line of credit totaled $235,000.
Accordingly, the Company granted 235,000 warrants to the lender in fiscal 1999.
The fair value of the warrants of $14,100, as calculated by the Black Scholes
pricing method, was recorded as additional borrowing cost in fiscal 1998. The
warrants are exercisable for ten years from the date of issuance. The
outstanding balance of the advance from related party was paid in fiscal 1999.


                                      F-35
<PAGE>

                               BioSupplyNet, Inc.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

5. Income Taxes

   Significant components of the Company's deferred tax assets and liabilities
at June 30, 1997 and 1998, consisted of the following:

<TABLE>
<CAPTION>
                                                               1997      1998
   <S>                                                       <C>       <C>
   Domestic net operating loss carryforwards................ $305,466  $522,822
                                                             --------  --------
     Total deferred tax assets..............................  305,466   522,822
   Valuation allowance for deferred assets.................. (305,466) (519,105)
                                                             --------  --------
     Net deferred tax assets................................      --      3,717
                                                             --------  --------
   Fixed assets.............................................      --     (3,717)
                                                             --------  --------
     Total deferred tax liabilities.........................      --     (3,717)
                                                             --------  --------
     Net deferred tax asset (liability)..................... $    --   $    --
                                                             ========  ========
</TABLE>

   The Company has provided a full valuation allowance against its net deferred
tax assets since realization of these benefits could not be reasonably assured.
The change in valuation allowance was an increase of $305,466 and $213,639 in
1997 and 1998, respectively, and relates to the net operating losses incurred
in these years.

   As of June 30, 1997 and 1998 the Company had federal and state net operating
loss carryforwards of approximately $778,000 and $1,331,000, respectively. The
use of the federal net operating loss carryforwards may be subject to
limitation under the rules regarding a change in stock ownership and separate
return limitation years as determined by the Internal Revenue Code. The federal
and state net operating losses will begin to expire in 2012.

6. Capital Stock

   On October 16, 1996, the Company issued 327,833 shares of common stock to
Cold Spring Harbor Laboratory in exchange for the rights to the Source Book,
the BioSupplyNet web site and other intangible assets. The Company recorded
this acquisition based on the fair values of the assets acquired as determined
based on the historical gross profit generated by the Source Book rather than
the fair value of the Company's common stock as the fair value of the assets
acquired were more readily determinable than the fair value of the Company's
common stock. This resulted in a value of $120,000 being allocated to the
assets acquired.

   On October 16, 1996, the Company sold 1,000,000 shares of its Series A
Convertible Preferred Stock for $1,000,000. In June 1997, the Company sold an
additional 200,000 shares of Series A convertible preferred stock for $200,000.
The combined net proceeds to the Company were $1,068,922, net of related
expenses of $131,078. Each share of Series A convertible preferred stock is
convertible into one share of common stock. Preferred shares have the same
voting rights as common shares.

   The holders of Series A convertible preferred stock are entitled to receive
dividends at the rate of $.08 per share per annum, payable out of funds legally
available therefore. Such dividends shall be payable only when, and if declared
by the Board of Directors, but shall accrue and be cumulative (whether or not
declared) from and after the second anniversary of the date of initial issuance
of Series A Preferred Stock.

   In the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, the holders' of the Series A preferred stock
are entitled to receive, prior and in preference to the holders of the common
stock, $1 per share plus all accrued or declared but unpaid dividends.


                                      F-36
<PAGE>

                               BioSupplyNet, Inc.

                   NOTES TO FINANCIAL STATEMENTS--(Continued)

7. Stock Options and Warrants

   In December 1996, the Company adopted the 1996 Stock Plan (the "1996 Plan")
for which the Company reserved 492,000 common shares for issuance upon exercise
of options. The 1996 Plan provides that options may be granted to employees,
directors and consultants at exercise prices equal to the fair market value of
the Company's common stock on the date of grant for incentive stock options,
and at exercise prices below the fair value of the stock for non-qualified
options. Options are granted for periods up to ten years from the date of the
grant, except for incentive stock options granted to an employee owning more
than ten percent of the outstanding common stock, in which case the maximum
period is five years.

   In addition to options granted under the 1996 Plan, 5,500 non-qualified
stock options were granted in fiscal 1997 under a separate agreement. Such
options are exercisable at $.001 per share at any time through October 16,
2001.

   Transactions involving the 1996 Plan are summarized as follows:

<TABLE>
<CAPTION>
                                       1997                      1998
                             ------------------------- -------------------------
                               Shares      Weighted      Shares      Weighted
                             Underlying    Average     Underlying    Average
                              Options   Exercise Price  Options   Exercise Price
   <S>                       <C>        <C>            <C>        <C>
   Outstanding at beginning
    of year................   357,200       $0.10       357,200       $0.10
   Granted.................       --          --            --          --
   Forfeited...............       --          --            --          --
                              -------       -----       -------       -----
   Outstanding at end of
    year...................   357,200       $0.10       357,200       $0.10
                              =======       =====       =======       =====
</TABLE>

   The exercise price of all options outstanding under the 1996 Plan at June
30, 1998 was $.10 per share, the fair market value of the Company's common
stock on the date of grant as determined by the Company's Board of Directors.
The options vest over four years, and as of June 30, 1997 and 1998, 49,463 and
93,425 options respectively, were exercisable.

   The Company continues to apply APB Opinion No. 25 in accounting for its
stock options grants and, accordingly, no compensation cost has been recognized
in the financial statements for its stock options which have exercise prices
equal to or greater than the fair value of the stock on the date of grant. Had
the Company determined compensation cost based on the fair value at the grant
date for its stock options under SFAS No. 123, the Company's net loss would
have been increased to the pro forma amounts indicated below:

<TABLE>
<CAPTION>
                                                                 1997     1998
   <S>                                                         <C>      <C>
   Net Loss:
     As reported.............................................. $620,670 $823,758
     Pro forma................................................  622,632  825,604
</TABLE>

   The per share weighted average fair value of stock options granted during
fiscal 1997 and 1998 was $0.02 on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions for 1997
and 1998: expected dividend yield of 0%; risk free interest rate of 6%; an
expected option life of approximately four years; and a volatility factor of
0%.

8. Subsequent Event

   On September 29, 1998, SciQuest.com, Inc. (the "Buyer") purchased all of the
outstanding common and preferred stock, stock options, and warrants of the
Company in exchange for 546,405 shares of the Buyer's Series C preferred,
126,780 options to purchase the Buyer's common stock, of which 124,813 were
granted at an exercise price of $0.28 per share and 1,967 were granted at an
exercise price of $0.003 per share, and 107,288 warrants to purchase the
Buyer's common stock at an exercise price of $2.80 per share.


                                      F-37
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
       , 1999

                             [LOGO OF SCIQUEST.COM]

                               SciQuest.com, Inc.
                        7,200,000 Shares of Common Stock

                            ----------------------

                                   PROSPECTUS

                            ----------------------

                          Donaldson, Lufkin & Jenrette

                           Deutsche Banc Alex. Brown

                               Hambrecht & Quist

                                 DLJdirect Inc.

                                   E*OFFERING

- --------------------------------------------------------------------------------

We have not authorized any dealer, salesperson or other person to give you
written information other than this prospectus or to make representations as to
matters not stated in the prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where that
would not be permitted or legal. Neither the delivery of this prospectus nor
sales made hereunder after the date of this prospectus should create an
implication that the information contained in this prospectus or the affairs of
SciQuest.com have not changed since the date of this prospectus.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Until       , 1999 (25 days after the date of this prospectus), all dealers
that effect transactions in these shares of common stock may be required to
deliver a prospectus. This is in addition to the dealer's obligation to deliver
a prospectus when acting as an underwriter and with respect to their unsold
allotments or subscriptions.

- --------------------------------------------------------------------------------
<PAGE>

                                    PART II

Item 13. Other Expenses of Issuance and Distribution

<TABLE>
   <S>                                                                 <C>
   Securities and Exchange Commission registration fee................ $ 32,226
   National Association of Securities Dealers, Inc. fee............... $  9,000
   Nasdaq Stock Market listing fee.................................... $ 90,000
   Accountants' fees and expenses..................................... $270,000
   Legal fees and expenses............................................ $430,000
   Blue Sky fees and expenses......................................... $ 10,000
   Transfer Agent's fees and expenses................................. $ 20,000
   Printing and engraving expenses.................................... $125,000
   Miscellaneous...................................................... $  3,774
                                                                       --------
     Total Expenses................................................... $990,000
                                                                       ========
</TABLE>

Item 14. Indemnification of Directors and Officers

   Our Amended and Restated Certificate of Incorporation limits personal
liability for breach of the fiduciary duty of our directors to the fullest
extent provided by the Delaware General Corporation Law. Such provisions
provide that no director of SciQuest.com shall have personal liability to us or
to our stockholders for monetary damages for breach of fiduciary duty of care
or other duty as a director. However, such provisions shall not eliminate or
limit the liability of a director

  . for any breach of the director's duty of loyalty to us or our
    stockholders;

  . for acts or omissions not in good faith or which involve intentional
    misconduct or a knowing violation or law;

  . for voting or assenting to unlawful distributions; or

  . for any transaction for which the director derived an improper personal
    benefit.

   The Delaware General Corporation Law provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under our bylaws,
any agreement, a vote of our stockholders or otherwise. Our certificate of
incorporation eliminates the personal liability of directors to the fullest
extent permitted by Section 102(b)(7) of the Delaware General Corporation Law
and provides that the registrant shall fully indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding (whether civil, criminal, administrative
or investigative) by reason of the fact that such person is or was our director
or officer or is or was serving at our request as a director or officer of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding.

   At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under our certificate of incorporation. We are not aware
of any threatened litigation or proceeding that may result in a claim for such
indemnification.

   Section 7 of the Underwriting Agreement filed as Exhibit 1.1 hereto also
contains certain provisions pursuant to which certain officers, directors and
controlling persons of the Company may be entitled to be indemnified by the
underwriters named therein.

                                      II-1
<PAGE>

Item 15. Recent Sales of Unregistered Securities

   The share numbers presented below are provided with respect to our shares of
common stock and Series A convertible preferred stock, Series B mandatorily
redeemable convertible preferred stock, Series C convertible preferred stock,
Series D mandatorily redeemable convertible preferred stock and Series E
convertible preferred stock and reflect (1) various stock splits and (2) the
recapitalization of the Series A convertible preferred stock, Series B
mandatorily redeemable convertible preferred stock, Series C convertible
preferred stock, Series D mandatorily redeemable convertible preferred stock
and Series E convertible preferred stock into common stock, which will occur
immediately prior to completion of this offering.

   Except as described below, there have been no securities sold by us within
the last three years that were not registered under the Securities Act.

   (a) Issuances of Securities

   On July 30, 1999, we issued an aggregate of 114,995 shares of Series E
convertible preferred stock in connection with our acquisition of Internet
Auctioneers International, Inc., in exchange for the shares of capital stock of
the former stockholders of Internet Auctioneers International, Inc.

   In May and June 1999, we sold an aggregate of 3,312,720 shares of Series D
mandatorily redeemable convertible preferred stock to certain of our existing
stockholders and new investors, with attached stock purchase warrants
exercisable for an aggregate of 1,004,829 shares of common stock, at an
aggregate offering price of $37,500,000.

   On March 1, 1999, we sold 89,408 shares of restricted Series C convertible
preferred stock to Antony Francis, our vice president of operations, at an
aggregate purchase price of $250,000.

   On September 29, 1998, we (i) issued an aggregate of 546,405 shares of
Series C convertible preferred stock in connection with our acquisition of
BioSupplyNet, Inc., in exchange for the shares of capital stock of the former
stockholders of BioSupplyNet, Inc., and (ii) issued stock purchase warrants
exercisable into an aggregate of 162,718 shares of common stock to former
holders of stock purchase warrants to purchase shares of capital stock of
BioSupplyNet, Inc., at an exercise price of $1.85 per share.

   Between March 13, 1998 and June 15, 1998, we issued convertible promissory
notes in the aggregate principal amount of $515,000, which were converted into
an aggregate of 187,394 shares of Series B mandatorily redeemable convertible
preferred stock (including shares issued in respect of accrued interest on the
convertible promissory notes) on July 30, 1998. We also issued warrants to the
holders of the convertible promissory notes to purchase an aggregate of 57,545
shares of Series B mandatorily redeemable convertible preferred stock. Between
July 30, 1998 and November 19, 1998, we sold a total of 3,590,232 additional
shares of Series B mandatorily redeemable convertible preferred stock
(excluding the shares issued upon conversion of the convertible promissory
notes) to certain investors, at an aggregate offering price of $10,038,979.

   Between March 6, 1997 and September 11, 1997, we issued convertible
promissory notes to certain individuals in the aggregate principal amount of
$80,000, which were converted into a total of 90,702 shares of Series A
convertible preferred stock (including shares issued in respect of accrued
interest on the notes). We also issued warrants to certain holders of the
convertible promissory notes to purchase an aggregate of 14,583 shares of Class
A common stock. Between October 2, 1997 and October 17, 1997, we sold a total
of 678,519 additional shares of Series A convertible preferred stock (excluding
the shares issued on conversion of the convertible promissory notes) to certain
investors at an aggregate offering price of $617,452.

   On August 15, 1996, we sold an aggregate of 250,020 shares of Class A common
stock to an investor for $50,000 in cash and cancellation of convertible debt
of $50,000, which were converted in September, 1997 into 250,020 shares of
Class B common stock.

   From September 15, 1997 through September 30, 1999, we issued options to
certain employees, consultants and others to purchase an aggregate of 1,961,300
shares of common stock at a weighted average

                                      II-2
<PAGE>

exercise price of $1.58 per share. As of September 30, 1999, 274,421 of such
options have been exercised, 108,926 of such options have been terminated and
1,577,953 of such options remain outstanding at a weighted average exercise
price of $1.75 per share.

   In October 1999, we agreed to issue warrants to acquire an aggregate of
3,724,307 shares of common stock at an exercise price of $0.01 to Ambion, Inc.,
Amersham Pharmacia Biotech, Inc., BioWhittaker, a Cambrex Company, Dow Chemical
Company, DuPont Pharmaceuticals Company, Monsanto Company, Endogen, Inc., NEN
Life Science Products, Inc., PerkinElmer, Inc., Pierce Chemical Company and
QIAGEN N.V.

   We may be required to issue warrants to purchase shares of our common stock
at an exercise price of $0.01 per share to the holders of our series B and
series D preferred stock in connection with the conversion of the series B and
series D preferred stock if the inital public offering price is less than
$12.20 per share.

   (b) Hambrecht & Quist, LLC, served as placement agent in connection with the
offer and sale by us of our Series D convertible preferred stock and related
warrants to purchase Class A common stock and has received compensation in the
form of cash and warrants for such services. Except as so noted, underwriters
were involved in connection with the sales of securities referred to in
paragraph (a) of this Item 15.

   (c) The convertible promissory notes, the warrants and the shares of Class B
common stock, Series A convertible preferred stock, Series B mandatorily
redeemable convertible preferred stock, Series C convertible preferred stock,
Series D mandatorily redeemable convertible preferred stock and Series E
convertible preferred stock described in paragraph (a) of this Item 15 were
issued in reliance on the exemption provided by Section 4(2) and/or Rule 506 of
Regulation D promulgated pursuant to the Securities Act. The issuances of stock
options and the shares of common stock issuable upon the exercise of the
options as described in paragraph (a) of this Item 15 were issued in reliance
on the exemption provided by Section 3(b) of the Securities Act and Rule 701
promulgated thereunder, as well as Section 4(2) of the Securities Act.
Appropriate legends are affixed to the stock certificates issued in the
aforementioned transactions. All recipients either received adequate
information about us or had access, through employment or other relationships,
to such information.

Item 16. Exhibits

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
   1.1   Form of Underwriting Agreement.

   3.1+  Second Amended and Restated Certificate of Incorporation of the
         Registrant.

   3.2+  Amended and Restated Bylaws of the Registrant.

   3.3   Certificate of Amendment of Amended and Restated Certificate of
         Incorporation dated November 12, 1999.

   4.1+  See Exhibits 3.1 and 3.2 for provisions of the Second Amended and
         Restated Certificate of Incorporation and Amended and Restated Bylaws
         of the Registrant defining rights of the holders of Common Stock of
         the Registrant.

   4.2+  Specimen Stock Certificate.

   5.1+  Opinion of Hutchison & Mason PLLC, Counsel to the Registrant, as to
         the legality of the shares being registered.

  10.1+  SciQuest.com, Inc. Stock Option Plan dated as of September 4, 1997.

  10.2+  Amendment No. 1 to SciQuest.com, Inc. Stock Option Plan dated as of
         September 11, 1998.

  10.3+  Amendment No. 2 to SciQuest.com, Inc. Stock Option Plan dated as of
         February 26, 1999.

  10.4+  Amendment No. 3 to SciQuest.com, Inc. Stock Option Plan dated as of
         March 1, 1999.

  10.5+  Amendment No. 4 to SciQuest.com, Inc. Stock Option Plan dated as of
         August 27, 1999.

  10.6+  Agreement of Sublease by and between Inspire Pharmaceuticals, Inc. and
         the Registrant dated July 31, 1998.

  10.7+  Sublease Agreement by and between Applied Innovation, Inc. and the
         Registrant dated March 11, 1999.

  10.8+  Sublease Agreement by and between Vascular Therapeutics, Inc. and the
         Registrant dated August 19, 1999.

</TABLE>


                                      II-3
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
 10.9+   Master Lease Agreement by and between Comdisco, Inc. and the
         Registrant dated May 21, 1999, as amended.

 10.10+  Stock Restriction Agreement by and between the Registrant and Antony
         Francis dated March 1, 1999.

 10.11+  Registration Rights Agreement by and among the Registrant and the
         purchasers of Class B Common Stock and the purchasers of Series A
         Convertible Preferred Stock dated October 17, 1997, as amended.

 10.12+  Registration Rights Agreement by and among the Registrant and the
         purchasers of Series C Convertible Preferred Stock dated September 29,
         1998.

 10.13+  Registration Rights Agreement by and among the Registrant and Antony
         Francis dated March 1, 1999.

 10.14+  Registration Rights Agreement by and among the Registrant, the holders
         of Series B Mandatorily Redeemable Convertible Preferred Stock and the
         purchasers of Series D Mandatorily Redeemable Convertible Preferred
         Stock dated May 18, 1999, as amended.

 10.15+  Registration Rights Agreement by and among the Registrant and the
         holders of Series E Convertible Preferred Stock dated July 27, 1999.

 10.16+  Merger Agreement by and among the Registrant, SciQuest Merger
         Subsidiary, Inc., Internet Auctioneers International, Inc. and Mark
         Atlas as dated July 27, 1999.

 10.17+  Merger Agreement by and among the Registrant, SciQuest Acquisition,
         Inc. and BioSupplyNet, Inc. dated September 29, 1998.

 10.18+  Lease Agreement by and between Duke-Weeks Realty Limited Partnership
         and the Registrant dated as of October 19, 1999.

 10.19   Content Conversion Services Agreement by and between the Registrant
         and Requisite Technology, Inc. dated December 18, 1998.

 10.20** Form of Strategic Alliance Plus Agreement with SciQuest.com.

 10.21** Letter Agreement between the Registrant and Monsanto Company dated
         October 21, 1999.

 10.22** Letter Agreement between the Registrant and Dow Chemical Co. dated
         October 20, 1999.

 10.23   Amendment No. 5 to SciQuest.com, Inc. Stock Option Plan.

 10.24   SciQuest.com, Inc. 1999 Stock Incentive Plan dated as of October 12,
         1999.

 10.25** Letter Agreement between the Registrant and DuPont Pharmaceuticals
         Company dated October 25, 1999.
 16.1+   Letter from Hughes, Pittman and Gupton LLP.

 21.1+   List of Subsidiaries.
 23.1    Consent of PricewaterhouseCoopers LLP.

 23.2+   Consent of Hutchison & Mason PLLC (included in Exhibit 5.1).

 24.1+   Powers of Attorney (included on the signature page to the original
         filing of this registration statement).

 27.1+   Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.

** We have requested confidential treatment of certain portions of this
   exhibit pursuant to Rule 406 of the Securities Act of 1933. A redacted
   version of this agreement has been filed. The entire agreement has been
   filed separately with the Securities and Exchange Commission.
+ Previously filed.

                                     II-4

<PAGE>

Item 17. Undertakings

   (a) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

   (b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, 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
Securities 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
Securities Act and will be governed by the final adjudication of such issue.

   (c) The Registrant hereby undertakes that:

    (i) For purposes of determining any liability under the Securities Act,
  the information omitted from the form of prospectus filed as part of this
  Registration Statement in reliance upon Rule 430A and contained in the 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 the
  Registration Statement as of the time it was declared effective.

    (ii) For purposes of determining any liability under the Securities Act,
  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, the Registrant has duly
caused this Amendment No. 4 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Morrisville, State of North Carolina on the 16th day of November, 1999.

                                          SciQuest.com, Inc.

                                                  /s/ M. Scott Andrews
                                          By: _________________________________
                                                     M. Scott Andrews,
                                               President and Chief Executive
                                                          Officer

   Pursuant to the requirements of the Securities Act, this Amendment No. 4 to
the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
              Signature                          Title                   Date
              ---------                          -----                   ----

<S>                                    <C>                        <C>
       /s/ M. Scott Andrews            President, Chief Executive  November 16, 1999
______________________________________  Officer and Director
           M. Scott Andrews             (Principal Executive
                                        Officer)

                  *                    Vice President of Business  November 16, 1999
______________________________________  Development and Director
          Peyton C. Anderson

                  *                    Chief Financial Officer     November 16, 1999
______________________________________  (Principal Financial and
           James J. Scheuer             Accounting Officer)

                  *                    Director                    November 16, 1999
______________________________________
            Noel J. Fenton

                  *                    Director                    November 16, 1999
______________________________________
          Gautam A. Prakash

                  *                    Director                    November 16, 1999
______________________________________
            Alan J. Taetle

                  *                    Director                    November 16, 1999
______________________________________
            Bruce J. Boehm

                  *                    Director                    November 16, 1999
______________________________________
         Timothy T. Weglicki

       /s/ M. Scott Andrews
*By __________________________________
           M. Scott Andrews
           Attorney-in-Fact
</TABLE>

                                      II-6

<PAGE>

                                                                     EXHIBIT 1.1


                               __________ Shares

                               SCIQUEST.COM, INC.

                                  Common Stock

                             UNDERWRITING AGREEMENT
                             ----------------------

                                                                __________, 1999

DONALDSON, LUFKIN & JENRETTE
 SECURITIES CORPORATION
DEUTSCHE SECURITIES, INC.
HAMBRECHT & QUIST LLC
As representatives of the several Underwriters
 named in Schedule I hereto
 c/o Donaldson, Lufkin & Jenrette Securities Corporation
 277 Park Avenue
 New York, New York 10172

Dear Sirs:

     SciQuest.com, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell ____________ shares of its common stock, $0.001 par value per
share (the "Firm Shares"), to the several underwriters named in Schedule I
hereto (the "Underwriters").  The Company also proposes to issue and sell to the
several Underwriters not more than an additional _______ shares of its common
stock, $0.001 par value per share (the "Additional Shares"), if requested by the
Underwriters as provided in Section 2 hereof.  The Firm Shares and the
Additional Shares are hereinafter referred to collectively as the "Shares". The
shares of common stock of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the "Common Stock".

     SECTION 1.  Registration Statement and Prospectus. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1, including a prospectus, relating
to the Shares. The registration statement, as amended at the time it became
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the "Registration Statement"; and the
prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "Prospectus". If the Company has filed or is required
pursuant to the terms hereof to file a registration statement pursuant to Rule
462(b) under the Act registering additional shares of Common Stock (a "Rule
462(b) Registration
<PAGE>

Statement"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement.

     SECTION 2.  Agreements to Sell and Purchase and Lock-Up Agreements.  On the
basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell, and
each Underwriter agrees, severally and not jointly, to purchase from the Company
at a price per Share of $______ (the "Purchase Price") the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I hereto.

     On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to _______ Additional Shares from the
Company at the Purchase Price.  Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares.  The Underwriters may exercise their right to purchase
Additional Shares in whole or in part from time to time by giving written notice
thereof to the Company within 30 days after the date of this Agreement.  You
shall give any such notice on behalf of the Underwriters and such notice shall
specify the aggregate number of Additional Shares to be purchased pursuant to
such exercise and the date for payment and delivery thereof, which date shall be
a business day (i) no earlier than two business days after such notice has been
given (and, in any event, no earlier than the Closing Date (as hereinafter
defined)) and (ii) no later than ten business days after such notice has been
given.  If any Additional Shares are to be purchased, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased from the Company as the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I bears to the total
number of Firm Shares.

     The Company hereby agrees not to (i) offer, pledge, 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
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 180 days after the date of the Prospectus without the prior written
consent of Donaldson, Lufkin & Jenrette Securities Corporation. Notwithstanding
the foregoing, during such period (i) the Company may grant stock options
pursuant to the Company's existing 1997 Stock Option Plan and 1999 Stock
Incentive Plan; (ii) the Company may issue shares of Common Stock upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof; and (iii) the Company may issue shares of Common Stock and
other securities convertible into or exercisable or exchangeable for shares of
Common Stock in connection with acquisitions (including asset acquisitions) and
strategic partner relationships; provided that each holder of such Common Stock
or such other securities shall, prior to or concurrently with the issuance of
such Common Stock or other securities, agree in writing to be bound by
restrictions set forth in the agreements described in the last sentence of this
paragraph.

                                       2
<PAGE>

The Company also agrees not to file any registration statement (other than a
registration statement on Form S-8 registering Common Stock issuable under the
Company's existing stock option and incentive plans) with respect to any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock for a period of 180 days after the date of the
Prospectus without the prior written consent of Donaldson, Lufkin & Jenrette
Securities Corporation. The Company shall, prior to or concurrently with the
execution of this Agreement, deliver an agreement executed by (i) each of the
directors and officers of the Company and (ii) each stockholder listed on Annex
I hereto to the effect that such person will not, except as provided therein,
during the period commencing on the date such person signs such agreement and
ending 180 days after the date of the Prospectus, without the prior written
consent of Donaldson, Lufkin & Jenrette Corporation, (A) engage in any of the
transactions described in the first sentence of this paragraph or (B) make any
demand for, or exercise any right with respect to, the registration of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.

     SECTION 3.  Terms of Public Offering. The Company is advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.

     SECTION 4.  Delivery and Payment. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as Donaldson, Lufkin & Jenrette Securities Corporation
shall request no later than two business days prior to the Closing Date or the
applicable Option Closing Date (as defined below), as the case may be.  The
Company shall deliver the Shares, with any transfer taxes thereon duly paid by
the Company, to Donaldson, Lufkin & Jenrette Securities Corporation through the
facilities of The Depository Trust Company ("DTC"), for the respective accounts
of the several Underwriters, against payment to the Company of the Purchase
Price therefor by wire transfer of Federal or other funds immediately available
in New York City.  The certificates representing the Shares shall be made
available for inspection not later than 9:30 A.M., New York City time, on the
business day prior to the Closing Date or the applicable Option Closing Date, as
the case may be, at the office of DTC or its designated custodian (the
"Designated Office").  The time and date of delivery and payment for the Firm
Shares shall be 9:00 A.M., New York City time, on ________, 1999 or such other
time on the same or such other date as Donaldson, Lufkin & Jenrette Securities
Corporation and the Company shall agree in writing.  The time and date of
delivery for the Firm Shares are hereinafter referred to as the  "Closing Date".
The time and date of delivery and payment for any Additional Shares to be
purchased by the Underwriters shall be 9:00 A.M., New York City time, on the
date specified in the applicable exercise notice given by you pursuant to
Section 2 or such other time on the same or such other date as Donaldson, Lufkin
& Jenrette Securities Corporation and the Company shall agree in writing.  The
time and date of delivery for any Additional Shares are hereinafter referred to
as an "Option Closing Date".

     The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 8 of this Agreement
shall be delivered at the offices of Brobeck, Phleger & Harrison LLP, 1633
Broadway, 47th Floor, New York, New York 10019

                                       3
<PAGE>

and the Shares shall be delivered at the Designated Office, all on the Closing
Date or such Option Closing Date, as the case may be.

     SECTION 5.  Agreements of the Company.  The Company agrees with you:

     (a) To advise you promptly and, if requested by you, to confirm such advice
in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, (iii) when any amendment to the
Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective and
(v) of the happening of any event during the period referred to in Section 5(d)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.

     (b) To furnish to you three (3) signed copies of the Registration Statement
as first filed with the Commission and of each amendment to it, including all
exhibits, and to furnish to you and each Underwriter designated by you such
number of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request.

     (c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the Commission
within the applicable period specified in Rule 424(b) under the Act; during the
period specified in Section 5(d) below, not to file any further amendment to the
Registration Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to which you
shall reasonably object after being so advised; and, during such period, to
prepare and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or amendment or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause any such
amendment to the Registration Statement to become promptly effective.

     (d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.

     (e) If during the period specified in Section 5(d), any event shall occur
or condition shall exist as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to

                                       4
<PAGE>

amend or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare and file with the Commission an appropriate amendment or
supplement to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply with
applicable law, and to furnish to each Underwriter and to any dealer as many
copies thereof as such Underwriter or dealer may reasonably request.

     (f) Prior to any public offering of the Shares, to cooperate with you and
counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.

     (g) To mail and make generally available to its stockholders as soon as
practicable an earnings statement covering the twelve month period ending
_______, 2000 that shall satisfy the provisions of Section 11(a) of the Act, and
to advise you in writing when such statement has been so made available.

     (h) During the period of three years after the date of this Agreement, to
furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed and such other publicly available
information concerning the Company and its subsidiaries as you may reasonably
request.

     (i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the registration and delivery of
the Shares under the Act and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Registration Statement
(including financial statements and exhibits), any preliminary prospectus, the
Prospectus and all amendments and supplements to any of the foregoing, including
the mailing and delivering of copies thereof to the Underwriters and dealers in
the quantities specified herein, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon, (iii) all costs of printing or producing this
Agreement and any other agreements or documents in connection with the offering,
purchase, sale or delivery of the Shares, (iv) all expenses in connection with
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing

                                       5
<PAGE>

any Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and reasonable fees and disbursements of one counsel
for the Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and reasonable fees and
disbursements of one counsel for the Underwriters in connection with the review
and clearance of the offering of the Shares by the National Association of
Securities Dealers, Inc., (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating to the
Common Stock and all costs and expenses incident to the listing of the Shares on
the Nasdaq National Market , (vii) the cost of printing certificates
representing the Shares, (viii) the costs and charges of any transfer agent,
registrar and/or depositary, and (ix) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section.

     (j)  To use its best efforts to list for quotation the Shares on the Nasdaq
National Market and to maintain the listing of the Shares on the Nasdaq National
Market for a period of three years after the date of this Agreement.

     (k) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.

     (l)  If the Registration Statement at the time of the effectiveness of this
Agreement does not cover all of the Shares, to file a Rule 462(b) Registration
Statement with the Commission registering the Shares not so covered in
compliance with Rule 462(b) by 10:00 P.M., New York City time, on the date of
this Agreement and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.

     SECTION 6.  Representations and Warranties of the Company.  The Company
represents and warrants to each Underwriter that:

     (a) The Registration Statement has become effective (other than any Rule
462(b) Registration Statement to be filed by the Company after the effectiveness
of this Agreement); any Rule 462(b) Registration Statement filed after the
effectiveness of this Agreement will become effective no later than 10:00 P.M.,
New York City time, on the date of this Agreement; and no stop order suspending
the effectiveness of the Registration Statement is in effect, and no proceedings
for such purpose are pending before or, to the Company's best knowledge,
threatened by the Commission.

     (b) (i) The Registration Statement (other than any Rule 462(b) Registration
Statement to be filed by the Company after the effectiveness of this Agreement),
when it became effective, did not contain and, as amended, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement) and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all

                                       6
<PAGE>

material respects with the Act, (iii) if the Company is required to file a Rule
462(b) Registration Statement after the effectiveness of this Agreement, such
Rule 462(b) Registration Statement and any amendments thereto, when they become
effective (A) will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (B) will comply in all material respects
with the Act and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.

     (c) Each preliminary prospectus filed as part of the registration statement
as originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all material respects with the
Act, and did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in any preliminary
prospectus based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use therein.

     (d) Each of the Company and its subsidiaries has been duly incorporated, is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to carry
on its business as described in the Prospectus and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole.

     (e) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued by
the Company or any of its subsidiaries relating to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of the Company
or any of its subsidiaries, except as otherwise disclosed in the Registration
Statement.

     (f) All the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights; and the Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor as provided by this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to any
preemptive or similar rights.

     (g) All of the outstanding shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable, and are

                                       7
<PAGE>

owned by the Company, directly or indirectly through one or more subsidiaries,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature.

     (h) The authorized capital stock of the Company conforms, in all material
respects, as to legal matters to the description thereof contained in the
Prospectus.

     (i)  Neither the Company nor any of its subsidiaries is in violation of its
respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition that is material to the Company and
its subsidiaries, taken as a whole, contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or their respective property is bound.

     (j) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be required under the
Act and securities or Blue Sky laws of the various states), (ii) conflict with
or constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property or (iv) result
in the suspension, termination or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or any other impairment of the
rights of the holder of any such Authorization.

     (k) There are no legal or governmental proceedings pending or, to the
Company's best knowledge, threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their respective property
is or could be subject that are required to be described in the Registration
Statement or the Prospectus and are not so described; nor are there any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed as
required.

     (l) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or any provisions
of the Foreign Corrupt Practices Act, or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a material adverse effect on the business, prospects, financial
condition or results of operation of the Company and its subsidiaries, taken as
a whole.

                                       8
<PAGE>

     (m) Each of the Company and its subsidiaries has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals (each, an
"Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole. Each such Authorization is valid and in full
force and effect and each of the Company and its subsidiaries is in compliance
with all the terms and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with respect thereto;
and, to the Company's best knowledge, no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; except where such failure to be valid and
in full force and effect or to be in compliance, the occurrence of any such
event or the presence of any such restriction would not, singly or in the
aggregate, have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole.

     (n) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
Authorization, any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole.

     (o) This Agreement has been duly authorized, executed and delivered by the
Company.

     (p) PricewaterhouseCoopers LLP are independent public accountants with
respect to the Company and its subsidiaries as required by the Act.

     (q) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with related schedules and notes, present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and its subsidiaries on the basis stated therein at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in accordance with generally accepted
accounting principles the information required to be stated therein; and the
other financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company.

                                       9
<PAGE>

     (r) The Company is not and, after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described in the
Prospectus, will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.

     (s) Except as disclosed in the Registration Statement, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares registered
pursuant to the Registration Statement other than such rights as have been
waived.

     (t) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus, including the financial
statements (and notes thereto) contained therein (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement), (i) there has not
occurred any material adverse change or any development involving a prospective
material adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent.

     (u) Each certificate signed by any officer of the Company and delivered to
the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.

     (v) The Company and its Subsidiaries have good and marketable title to all
personal property owned by them that is material to the business of the Company
and its subsidiaries, taken as a whole, in each case free and clear of all
liens, encumbrances and defects except such as are described in the Prospectus
or such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries, taken as a whole, in each case
except as described in the Prospectus.

     (w) The Company and its subsidiaries own, or possess valid and enforceable
licenses to, or rights to use, all patents, patent rights, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names ("Intellectual Property") currently
employed by the Company and its subsidiaries in connection with the business now
operated by them, except where the failure to own or possess licenses for or
rights to use such Intellectual Property would not, singly or in the aggregate,
have a material adverse effect on the business, prospects, financial condition
or results of operation of the Company and its subsidiaries, taken as a whole.
Neither the Company, nor its subsidiaries, has received any written notice, nor
are they aware of facts which would form a reasonable basis for any such claim,
that: (i) challenges the Company's or its subsidiaries' rights in or to any
Intellectual Property; (ii) challenges the

                                       10
<PAGE>

validity or scope of any Intellectual Property; (iii) any third party has or
will be able to establish any rights in the Intellectual Property, except for
the ownership rights of the owners of the Intellectual Property which is
licensed to the Company or the rights of parties to whom the Company has granted
licenses of such Intellectual Property; (iv) the Intellectual Property infringes
or otherwise violates any patent, copyright, trade secret, trademark or other
proprietary right of any third party; or (v) there is infringement of the
Intellectual Property by any third party, which, in the case of any such claim
specified in clauses (i), (ii), (iii), (iv) or (v) above, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a material adverse effect on the business, prospects, financial condition
or results of operations of the Company and its subsidiaries, taken as a whole.

     (x) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are, in the reasonable judgment of the Company, prudent and customary
in the businesses in which they are engaged; and neither the Company nor any of
its subsidiaries (i) has received notice from any insurer or agent of such
insurer that substantial capital improvements or other material expenditures
will have to be made in order to continue such insurance or (ii) has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers at a cost that would not have a material adverse effect on the
business, prospects, financial conditions or results of operations of the
Company and its subsidiaries, taken as a whole.

     (y) No relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any of its subsidiaries
on the other hand, which is required by the Act to be described in the
Registration Statement or the Prospectus which is not so described.

     (z) There is no (i) significant unfair labor practice complaint, grievance
or arbitration proceeding pending or, to the Company's best knowledge,
threatened against the Company or any of its subsidiaries before the National
Labor Relations Board or any state or local labor relations board, (ii) strike,
labor dispute, slowdown or stoppage pending or, to the Company's best knowledge,
threatened against the Company or any of its subsidiaries, or (iii) union
representation question existing with respect to the employees of the Company
and its subsidiaries, except for such actions specified in clause (i), (ii) or
(iii) above, which, singly or in the aggregate, would not have a material
adverse effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole. To the best of
the Company's knowledge, no collective bargaining organizing activities are
taking place with respect to the Company or any of its subsidiaries.

     (aa) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

                                       11
<PAGE>

     (bb) All material tax returns required to be filed by the Company and each
of its subsidiaries in any jurisdiction have been filed, other than when
extensions to file have been obtained or as to those filings being contested in
good faith, and all material taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Company or any of its subsidiaries
have been paid, other than those being contested in good faith and for which
adequate reserves have been provided.

     (cc) The Company has reviewed its operations and is in the process of
reviewing any third parties with which the Company has a material relationship
to evaluate the extent to which the business or operations of the Company will
be affected by the Year 2000 Problem. As a result of such review, the Company
has no reason to believe, and does not believe, that the Year 2000 Problem will
have a material adverse effect on the business, prospects, financial condition
or results of operation of the Company. The "Year 2000 Problem" as used herein
means any significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of mechanical or
electrical systems of any kind will not be able to reliably distinguish dates
beginning on January 1, 2000 from dates prior to January 1, 2000.

     (dd) The Company has not at any time during the last five (5) years (i)
made any unlawful contribution to any candidate for foreign office or failed to
disclose fully any contribution in violation of law, or (ii) made any payment to
any federal or state governmental officer or official, or other person charged
with similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof.

     (ee) The Company has not taken and will not take, directly or indirectly,
any action designed to or that might reasonably be expected to cause or result
in stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares.

     SECTION 7.  Indemnification.  (a) The Company agrees to indemnify and hold
harmless each Underwriter, its directors, its officers and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), from and against any and all losses, claims, damages, liabilities and
judgments (including, without limitation, any reasonable legal or other expenses
incurred in connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter who failed to deliver a Prospectus, as then
amended or supplemented (so long as the Prospectus and any amendments or
supplements thereto was provided by the Company to

                                       12
<PAGE>

the several Underwriters in the requisite quantity and on a timely basis to
permit proper delivery on or prior to the Closing Date) to the person asserting
any losses, claims, damages, liabilities or judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in such
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured in the Prospectus, as so
amended or supplemented, and such Prospectus was required by law to be delivered
at or prior to the written confirmation of sale to such person.

     (b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to such Underwriter but only with
reference to information relating to such Underwriter furnished in writing to
the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.

     (c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all reasonable fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not be
required to assume the defense of such action pursuant to this Section 7(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of such Underwriter).  Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the reasonable fees and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party, or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party).  In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
indemnified parties and all such fees and expenses shall be reimbursed as they
are incurred.  Such firm shall be designated in writing by Donaldson, Lufkin &
Jenrette Securities Corporation, in the case of parties indemnified pursuant to
Section 7(a), and by the Company, in the case of parties indemnified pursuant to
Section 7(b). The indemnifying party shall indemnify and hold harmless the

                                       13
<PAGE>

indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than thirty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.

     (d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 7(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations.  The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions, but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page of the Prospectus.  The
relative fault of the Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

     The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable

                                       14
<PAGE>

legal or other expenses incurred by such indemnified party in connection with
investigating or defending any matter, including any action, that could have
given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 7(d) are several in proportion to the respective number of Shares
purchased by each of the Underwriters hereunder and not joint.

     (e) The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.

     SECTION 8. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Firm Shares under this Agreement are subject
to the satisfaction of each of the following conditions:

     (a) All the representations and warranties of the Company contained in this
Agreement shall be true and correct on the Closing Date with the same force and
effect as if made on and as of the Closing Date.

     (b) If the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., New York City time, on the
date of this Agreement; and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or contemplated by
the Commission.

     (c) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by M. Scott Andrews and James J. Scheuer, in their
capacities as the President and Chief Executive Officer and Chief Financial
Officer of the Company, confirming the matters set forth in Sections 6(t), 8(a)
and 8(b) and that the Company has complied with all of the agreements and
satisfied all of the conditions herein contained and required to be complied
with or satisfied by the Company on or prior to the Closing Date.

     (d) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or

                                       15
<PAGE>

obligation, direct or contingent, the effect of which, in any such case
described in clause 8(d)(i), 8(d)(ii) or 8(d)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.

     (e) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Underwriters), dated the Closing Date, of Morris,
Manning & Martin L.L.P. and Hutchison & Mason PLLC, counsel for the Company, to
the effect that:

          (i) each of the Company and its subsidiaries has been duly
     incorporated, is validly existing as a corporation in good standing under
     the laws of its jurisdiction of incorporation and has the corporate power
     and authority to carry on its business as described in the Prospectus and
     to own, lease and operate its properties;

          (ii) each of the Company and its subsidiaries is duly qualified and is
     in good standing as a foreign corporation authorized to do business in each
     jurisdiction in which the nature of its business or its ownership or
     leasing of property requires such qualification, except where the failure
     to be so qualified or in good standing would not have a material adverse
     effect on the business, prospects, financial condition or results of
     operations of the Company and its subsidiaries, taken as a whole;

          (iii) all the outstanding shares of capital stock of the Company have
     been duly authorized and validly issued and are fully paid, non-assessable
     and not subject to any preemptive or, to the knowledge of such counsel,
     similar contractual rights;

          (iv) the Shares have been duly authorized and, when issued and
     delivered to the Underwriters against payment therefor as provided by this
     Agreement, will be validly issued, fully paid and non-assessable, and the
     issuance of such Shares will not be subject to any preemptive or, to the
     knowledge of such counsel, similar contractual rights;

          (v) all of the outstanding shares of capital stock of each of the
     Company's subsidiaries have been duly authorized and validly issued and are
     fully paid and non-assessable, and are owned by the Company, directly or
     indirectly through one or more subsidiaries, free and clear of any security
     interest, claim, lien, encumbrance or adverse interest of any nature;

          (vi) this Agreement has been duly authorized, executed and delivered
     by the Company;

          (vii) the authorized capital stock of the Company conforms, in all
     material respects, as to legal matters to the description thereof contained
     in the Prospectus;

          (viii) the Registration Statement has become effective under the Act,
     no stop order suspending its effectiveness has been issued and no
     proceedings for that purpose are, to such counsel's knowledge after due
     inquiry, pending before or contemplated by the Commission;

                                       16
<PAGE>

          (ix) the statements under the captions "Risk Factors--Our certificate
     of incorporation and bylaws and Delaware law could make an acquisition by a
     third party more difficult", "Business--Government Regulations", "Legal
     Proceedings", "Description of Capital Stock", "Shares Eligible for Future
     Sale" and "Underwriting" in the Prospectus and Items 14 and 15 of Part II
     of the Registration Statement, insofar as such statements constitute a
     summary of the legal matters, documents or proceedings referred to therein,
     fairly present, in all material respects, the information called for with
     respect to such legal matters, documents and proceedings;

          (x) the execution, delivery and performance of this Agreement by the
     Company, the compliance by the Company with all the provisions hereof and
     the consummation of the transactions contemplated hereby will not (A)
     require any consent, approval, authorization or other order of, or
     qualification with, any court or governmental body or agency (except such
     as may be required under the Act and the securities or Blue Sky laws of the
     various states), (B) conflict with or constitute a breach of any of the
     terms or provisions of, or a default under, the charter or by-laws of the
     Company or any of its subsidiaries or any indenture, loan agreement,
     mortgage, lease or other agreement or instrument that is filed as an
     exhibit to the Registration Statement, (C) to such counsel's knowledge,
     violate or conflict with any applicable law or any rule, regulation,
     judgment, order or decree of any court or any governmental body or agency
     having jurisdiction over the Company, any of its subsidiaries or their
     respective property or (D) result in the suspension, termination or
     revocation of any Authorization of the Company or any of its subsidiaries
     that is material to the business of the Company and its subsidiaries, taken
     as a whole;

          (xi) after due inquiry, such counsel does not know of any legal or
     governmental proceedings pending or threatened to which the Company or any
     of its subsidiaries is or could be a party or to which any of their
     respective property is or could be subject that are required to be
     described in the Registration Statement or the Prospectus and are not so
     described, or of any statutes, regulations, contracts or other documents
     that are required to be described in the Registration Statement or the
     Prospectus or to be filed as exhibits to the Registration Statement that
     are not so described or filed as required;

          (xii) the Company is not and, after giving effect to the offering and
     sale of the Shares and the application of the proceeds thereof as described
     in the Prospectus, will not be, an "investment company" as such term is
     defined in the Investment Company Act of 1940, as amended;

          (xiii) to such counsel's knowledge, except as disclosed in the
     Registration Statement, there are no contracts, agreements or
     understandings between the Company and any person granting such person the
     right to require the Company to file a registration statement under the Act
     with respect to any securities of the Company or to require the Company to
     include such securities with the Shares registered pursuant to the
     Registration Statement other than such rights as have been waived; and

                                       17
<PAGE>

          In addition, such counsel shall state that (A) the Registration
     Statement and the Prospectus and any supplement or amendment thereto
     (except for the financial statements and other financial data included
     therein as to which no opinion need be expressed) comply as to form with
     the Act, (B) no facts have come to the attention of such counsel that cause
     such counsel to have reason to believe that at the time the Registration
     Statement became effective or on the date of this Agreement, the
     Registration Statement and the prospectus included therein (except for the
     financial statements and other financial data as to which such counsel need
     not express any belief) contained any untrue statement of a material fact
     or omitted to state a material fact required to be stated therein or
     necessary to make the statements therein not misleading and (C) no facts
     have come to the attention of such counsel that cause such counsel to have
     reason to believe that the Prospectus, as amended or supplemented, if
     applicable (except for the financial statements and other financial data,
     as aforesaid) contains any untrue statement of a material fact or omits to
     state a material fact necessary in order to make the statements therein, in
     the light of the circumstances under which they were made, not misleading.

     The opinions of Morris, Manning & Martin, L.L.P. and Hutchison & Mason PLLC
described in Section 8(e) above shall be rendered to you at the request of the
Company and shall so state therein.

     (f) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Brobeck, Phleger & Harrison LLP, counsel for the Underwriters,
as to the matters referred to in Sections 8(e)(iv), 8(e)(vi), 8(e)(ix) (but only
with respect to the statements under the caption "Description of Capital Stock"
and "Underwriting") and 8(e)(xvii).

     In giving such opinions with respect to the matters covered by Section
8(e)(xvii), Morris, Manning & Martin, L.L.P., Hutchison & Mason PLLC, and
Brobeck, Phleger & Harrison LLP may state that their opinion and belief are
based upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.

     (g) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from PriceWaterhouseCoopers, LLP,
independent public accountants, containing the information and statements of the
type ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.

     (h) The Company shall have delivered to you the agreements specified in
Section 2 hereof which agreements shall be in full force and effect on the
Closing Date.

     (i) The Shares shall have been duly listed for quotation on the Nasdaq
National Market.

     (j) The Company shall not have failed on or prior to the Closing Date to
perform or comply with any of the agreements herein contained and required to be
performed or complied with by the Company on or prior to the Closing Date.

                                       18
<PAGE>

     The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.

     SECTION 9.  Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.

     This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred:  (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.

     If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each non-
defaulting Underwriter shall be obligated severally, in the proportion which the
number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this Section 9 by an
amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter.  If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-

                                       19
<PAGE>

tenth of the aggregate number of Firm Shares to be purchased by all Underwriters
and arrangements satisfactory to you and the Company for purchase of such Firm
Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter and
the Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
such Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.

     SECTION 10.  Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to SciQuest.com,
Inc., 5151 McCrimmon Parkway, Suite 208, Morrisville, North Carolina 27560,
Attention: James Scheuer, Chief Financial Officer, and (ii) if to any
Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette Securities
Corporation, 277 Park Avenue, New York, New York 10172, Attention: Syndicate
Department, or in any case to such other address as the person to be notified
may have requested in writing.

     The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Shares,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company, (ii)
acceptance of the Shares and payment for them hereunder and (iii) termination of
this Agreement.

     If for any reason the Shares are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 9), the Company agrees to reimburse the several
Underwriters for all reasonable out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof.  The Company also agrees to reimburse
the several Underwriters, their directors and officers and any persons
controlling any of the Underwriters for any and all fees and expenses
(including, without limitation, the reasonable fees disbursements of counsel)
incurred by them in connection with enforcing their rights hereunder (including,
without limitation, pursuant to Section 7 hereof).

     Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Underwriters, the
Underwriters' directors and

                                       20
<PAGE>

officers, any controlling persons referred to herein, the Company's directors
and the Company's officers who sign the Registration Statement and their
respective successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Shares from any of the several Underwriters merely
because of such purchase.

     This Agreement shall be governed and construed in accordance with the laws
of the State of New York.

     This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.

                                       21
<PAGE>

     Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.

<TABLE>
<CAPTION>
                                                             Very truly yours,
                                                             SciQuest.com, Inc.

                                                             By:
                                                                -------------------------------------------------
                                                                Title:
<S>                                                          <C>
DONALDSON, LUFKIN & JENRETTE
  SECURITIES CORPORATION
DEUTSCHE BANC SECURITIES, INC.
HAMBRECHT & QUIST LLC

Acting severally on behalf of themselves
  and the several Underwriters named
  in Schedule I hereto

By:     DONALDSON, LUFKIN & JENRETTE
        SECURITIES CORPORATION

        By:
           -------------------------

</TABLE>

                                       22
<PAGE>

                                  SCHEDULE I
                                  ----------



<TABLE>
<CAPTION>
Underwriters                                                                       Number of Firm Shares
                                                                                      to be Purchased
<S>                                                                       <C>
Donaldson, Lufkin & Jenrette Securities Corporation

Deutsche Banc Securities, Inc.

Hambrecht & Quist LLC

[Other Underwriters]
                                                                           Total
</TABLE>

<PAGE>

                                    Annex I
                                    -------

[Insert names of stockholders of the Company who will be required to sign lock
ups]

                                       24

<PAGE>


                                                                     EXHIBIT 3.3


                            CERTIFICATE OF AMENDMENT
                                       OF
               AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                               SCIQUEST.COM, INC.

                            Pursuant to Section 242
                           Of the General Corporation
                          Law of the State of Delaware

     SCIQUEST.COM, INC., a corporation organized and existing under the laws of
the State of Delaware (the "Corporation"), hereby certifies as follows:

     FIRST:  That the Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended as set forth below so as to reclassify each
authorized, issued and outstanding share of Class A Common Stock as Common Stock
and provide for a forward stock split of each issued and outstanding share of
such Common Stock:

     (a)  By deleting the first paragraph of Article II in its entirety and
inserting the following in lieu thereof:

               "The total number of shares which the Corporation
          shall have the authority to issue is Thirty Two Million
          (32,000,000) shares, of which Twenty One Million Seven
          Hundred Forty Nine Thousand Nine Hundred Eighty
          (21,749,980) shares shall be Common Stock, $0.001 par
          value per share (the "Common Stock"), Two Hundred Fifty
          Thousand Twenty (250,020) shares shall be Class B Common
          Stock, $0.001 par value per share (the "Class B Common
          Stock"), and Ten Million (10,000,000) shares shall be
          Preferred Stock, $0.001 par value per share (the
          "Preferred Stock").

               Each share of the Corporation's Common Stock, par
          value $0.001 per share, issued and outstanding as of the
          record date approved by the Board of Directors of the
          Corporation shall be converted and reclassified into
          1.516643 shares of the Corporation's Common Stock, par
          value $0.001 per share, so that each share of the
          Corporation's Common Stock issued and outstanding as of
          such date is hereby converted and reclassified.  No
          fractional interests resulting from such conversion shall
          be issued, but in lieu thereof, the Corporation will
          round the number of shares of Common Stock issuable as a
          result of the stock split up to the nearest whole share of
          Common Stock."


     (b)  By deleting Section A.1 of Article II in its entirety and substituting
          the following in lieu thereof:
<PAGE>

          "A.   COMMON STOCK AND CLASS B COMMON STOCK.
                -------------------------------------

          1.  General.  All shares of the Common Stock of the Corporation issued
              -------
          between January 1, 1996 and July 30, 1996 shall be designated Class B
          Common Stock. Except as otherwise provided in Sections A(4) and A(5)
          of this Article II, the Common Stock and the Class B Common Stock have
          identical preferences, limitations and relative rights.  The voting,
          dividend and liquidation rights of the holders of the Common Stock and
          the Class B Common Stock are subject to and qualified by the rights of
          the holders of the Preferred Stock of any series as may be designated
          by the Board of Directors upon any issuance of the Preferred Stock of
          any series."

(i)  By deleting "Class A Common Stock" where it appears in Article II beginning
     with Section A.2 and substituting "Common Stock" in lieu thereof.

(ii) By adding "and Class B Common Stock" to "Common Stock" where it appears in
     Article II beginning with Section A.2.

     SECOND:  That the foregoing amendments of the Amended and Restated
Certificate of Incorporation of the Corporation were duly authorized by written
consent of the stockholders of the Corporation on November 12, 1999, after first
having been declared advisable by the Board of Directors of the Corporation, all
in accordance with the provisions of Section 242 of the General Corporation Law
of the State of Delaware.

     IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by M. Scott Andrews, its President, this 12th day of
November, 1999.

                                        SCIQUEST.COM, INC.


                                        By /s/ M. Scott Andrews
                                          ---------------------------
                                          M. Scott Andrews, President

<PAGE>

                                                                   Exhibit 10.19

                           REQUISITE TECHNOLOGY, INC.
                     CONTENT CONVERSION SERVICES AGREEMENT

                      Effective Date: December 18, 1998


     This Content Conversion Services Agreement (the "Services Agreement") is
made and entered into as of the Effective Date by and between Requisite
Technology, Inc., a Delaware corporation with offices at 4888 Pearl East Circle,
Suite 300W, Boulder, Colorado 80301 ("Requisite"), and SciQuest a North Carolina
corporation with offices at 4222 Emperor Boulevard, Suite 225, Durham, NC  27703
("SciQuest").

                                    Recitals

     A.  Requisite is in the business of creating and delivering electronic
catalog search engines and electronic catalog authoring software, providing
services related to the development, enhancement or publishing of product
information in electronic formats and acting as an electronic catalog provider
by gathering and compiling product information within certain industries,
organizing that product information in a formal manner and providing finding
technology to enable end users to utilize the catalog information.

     B.  SciQuest is in the business of making a marketplace of aggregated
demand and providing for the sourcing, purchase, and virtual distribution of
laboratory equipment, supplies, and services for scientists and their support.

     C.  Requisite and SciQuest desire to enter into a certain Product
Information Title Distribution Agreement and, in connection with that agreement,
enter into an agreement whereby Requisite will perform of even date herewith
certain services regarding the creation and conversion of SciQuest's Product
Information to Requisite's electronic catalog format and SciQuest's Net.Commerce
electronic format or another mutually acceptable format as determined by
SciQuest, as well as other services as may be defined from time-to-time.

     Now, Therefore, in consideration of the foregoing premises and the
covenants contained herein, the parties hereby agree as follows:

                                   Agreement

     1.  Definitions.  In this Services Agreement the following words and
expressions shall have the meaning set forth below.

         (a)  "Content Services" means content conversion services whereby
     Requisite will convert product information from electronic or print sources
     into Requisite's electronic catalog format or any other mutually acceptable
     electronic catalog format that will be billed on a per-item basis or per
     the attached pricing on the attached Task Orders. Such Content Services
     shall be considered as performed under the definition of "work made for
     hire", as such term is defined in 17 U.S.C. (S) 101, the copyright of which
     shall be owned solely, completely and exclusively by SciQuest. If any of
     the aforementioned are considered to be work not included in the categories
     of work covered by the "work made for hire" definition contained in 17
     U.S.C. (S) 101, such work shall be owned solely by SciQuest and Requisite
     hereby assigns and agrees to assign to SciQuest all right, title and
     interest in and to such work.

                                       1
<PAGE>

         (b)  "SciQuest Product Information" means the supplier data, supplier
     product information, product categories, SciQuest Creative Materials, and
     Updates to such information whether in electronic or paper form, or
     contained in a Requisite-managed XML data store regarding all scientific
     products and services available for sourcing purposes and for purchase
     through SciQuest and SciQuest' affiliates and/or subsidiaries.

         (c)  "Deliverables" means the specific materials, devices, products or
     other deliverables that are provided by Requisite to SciQuest as a result
     of performing Services and that are specified in the Task Orders.

         (d)  "IP Rights" means the rights of recognized intellectual property
     such as patents and patent applications, copyrights, trademarks, trade
     secrets, industrial designs, know how, design flows, methodologies and any
     and all other legal rights protecting intangible proprietary information.

         (e)  "Requisite Technology" means Requisite's proprietary information
     and materials relating to electronic catalog systems, including electronic
     catalog formats, electronic product catalog design tools and search engines
     and related software tools, computer programs, documentation, computer
     languages, methods, methodologies, algorithms and product catalogs and
     other databases.

         (f)  "Services" means the services including any Content Services
     described in the Task Orders Provided by Requisite or any subsidiary or
     subcontractor or consultant to Requisite.

         (g)  "Task Orders" means the description of the Services and
     Deliverables to be provided hereunder from time to time, which may include
     single or multiple Task Orders.

     2.  Services.

         (a)  Task Orders.  Requisite will provide to SciQuest the Services that
     are described in the mutually approved initial Task Orders attached hereto
     as Exhibit A, and any subsequent Task Orders agreed to in writing by both
     parties under the terms and conditions of this Services Agreement. Such
     Task Orders may be amended or modified by supplementary work orders agreed
     to by both parties hereto and attached to the Task Orders, and thereafter
     the Services shall be deemed to include the services described in such
     supplementary task orders.

         (b)  Manner of Performance.  Requisite will provide such resources and
     utilize such employees and/or design consultants, as it deems necessary to
     perform the Services. The manner and means used by Requisite to perform the
     Services desired by SciQuest are in the sole discretion and control of
     Requisite. All work shall be performed at Requisite's facilities unless
     otherwise mutually agreed. Requisite shall use commercially reasonable
     efforts to meet the schedules and time of performance for the Services as
     set forth in the Task Orders. In the event that Requisite seeks to engage
     the assistance of any third party consultant with respect to the Services,
     such consultant shall be subject to Requisite's standard terms for
     retention of consultants, which shall include agreements satisfactory to
     SciQuest regarding the confidentiality of SciQuest's proprietary and
     confidential information and assignment of certain IP Rights to SciQuest.

         (c)  SciQuest Assistance.  SciQuest and Requisite agree to cooperate in
     good faith to achieve completion of the Services in a timely and
     professional manner. SciQuest understands and agrees that Requisite's
     provision of the Services may depend on completion of

                                       2
<PAGE>

     certain SciQuest tasks or adherence to SciQuest schedules within SciQuest's
     control; consequently, the schedule for completion of the Services or any
     portion thereof may require adjustments or changes in the event such
     SciQuest tasks or schedules change or are modified or are not completed as
     anticipated. Requisite shall bear no liability or otherwise be responsible
     for delays in the provision of Services or any portion thereof occasioned
     by SciQuest's failure to timely complete a SciQuest task or adhere to a
     SciQuest schedule.

     3.  Products and Deliverables.

         (a)  Deliverables.  The Task Orders attached hereto have been prepared,
     and any subsequent Task Orders will be prepared, jointly by both parties
     considering SciQuest's specifications and Requisite's capabilities and
     prior obligations. Each Task Order will accurately reflect the
     specifications for the Services and the Deliverable(s) (the
     "Specifications"), or, if provided in a Task Order, the acceptance criteria
     applicable to the Deliverable(s) (the "Acceptance Criteria"). In
     performing the Services, Requisite shall use commercially reasonable
     efforts to design, develop and/or make for SciQuest the Deliverables
     specified in the Task Orders.  Requisite shall use commercially reasonable
     efforts in order to ensure that the Deliverables meet the Specifications,
     if any, set forth in the Task Orders for such Deliverables.

         (b)  Acceptance Testing.  Requisite will notify SciQuest in writing
     when each such Deliverable is available for testing, and SciQuest will
     perform or have performed such tests under normal circumstances
     substantially in accordance with the Specifications or Acceptance Criteria,
     if any. If SciQuest fails to deliver a report to Requisite containing a
     detailed description of any nonconformity between the Deliverable as
     delivered and the Specifications and/or Acceptance Criteria for such
     Deliverable in the Task Orders (a "Deficiency") within twenty (20) business
     days after delivery of any Deliverable to SciQuest (such period shall be
     referred to as the "Acceptance Period"), such Deliverable shall be deemed
     accepted.

         (c)  Remedy of Deficiencies.  With respect to any Deliverable
     containing a Deficiency, SciQuest's sole recourse and Requisite's sole
     obligation shall be the prompt modification of such Deliverable in order to
     conform such Deliverable in all material respects to the applicable
     Specifications, provided that such Deficiency is not due to a defect,
     contradiction, inconsistency or other flaw in the Specifications requested
     by SciQuest or any other material supplied by SciQuest. Requisite agrees to
     modify, at its sole expense, the Deliverable in order to remedy any
     Deficiencies promptly after receipt of a timely deficiency notice from
     SciQuest, or within such longer period as the parties may agree. After
     delivery of such modified Deliverable to SciQuest, SciQuest shall have
     fifteen (15) business days to review or retest the Deliverable (testing to
     be performed as set forth in Section 3(b)). By the day of completion of
     such review or re-testing period, SciQuest may either: (i) deliver a
     Deficiency report to Requisite, and modification and re-testing of the
     Deliverable shall recommence; or (ii) as SciQuest's sole remedy, return the
     Deliverable to Requisite and the applicable Task Order shall be deemed
     terminated. Failure of SciQuest to do any of the foregoing, shall be deemed
     an acceptance.

         (d)  No Implied Licenses.  Except as expressly provided under this
     Services Agreement, neither party is providing or licensing to the other
     party any existing technology or proprietary property, or any IP Rights
     thereto, including any software, product catalogs or other Requisite or
     SciQuest products. Neither party may acquire licenses under such products
     or technology other than under the terms of a separate software license
     agreement or subscription agreement.

     4.  Term of Agreement.  This Services Agreement commences on the Effective
Date and shall continue for the period during which the Product Information
Title Distribution

                                       3
<PAGE>

Agreement executed by the parties hereto and of even date herewith (the
"Distribution Agreement") remains in effect, including any renewal periods of
the Distribution Agreement; provided, however, that upon expiration or
termination of the Distribution Agreement, this Services Agreement shall remain
in force with respect to any outstanding Task Orders until completion and
acceptance or termination of all Services pursuant to such Task Orders. This
Services Agreement may be earlier terminated as provided in Section 8 below.

     5.  Compensation.

         (a)  Services Fees and Expenses.  For the Services and Deliverables
     provided by Requisite, SciQuest agrees to pay Requisite the fees set forth
     in the Fee Schedule of the Task Orders attached hereto plus any applicable
     sales or use taxes or other charges as discussed in Section 5(c). SciQuest
     also shall reimburse Requisite for actual, reasonable travel and out-of-
     pocket expenses incurred for any Services that must be performed away from
     Requisite facilities (subject to SciQuest's prior approval).

         (b)  Milestone Payments.  In performance of the Services, the Task
     Orders and any supplements thereto may provide for certain milestone
     events, achievement of which by Requisite will trigger the obligation by
     SciQuest to pay the applicable Milestone Payment as listed in the Payment
     Schedule. Upon achievement of the Milestone, Requisite will provide to
     SciQuest a statement in a form satisfactory to SciQuest showing achievement
     of the milestone and an invoice for the amount of the applicable Milestone
     Payment in accordance with the Task Orders.

         (c)  Taxes.  The amounts payable to Requisite set forth in the Payment
     Schedule are exclusive of any sales or use or other taxes or governmental
     charges. SciQuest shall be responsible for payment of all such taxes or
     charges except for any taxes based solely on Requisite's net income or
     Requisite's employees. If SciQuest is required to pay any taxes based on
     this Section 5(c), then SciQuest shall pay such taxes with no reduction or
     offset in the amounts payable to Requisite hereunder.

         (d)  Invoices and Payments.  Requisite shall invoice SciQuest for fees
     and expenses owed under a Task Order. All invoices shall be due and payable
     30 days from the invoice date; provided, however, that no amounts shall be
     due or payable to Requisite for any Deliverable until and unless such
     Deliverable has been accepted or deemed accepted hereunder by SciQuest.
     Overdue amounts that are not subject to good faith dispute by SciQuest
     shall accrue interest at the rate of the lesser of one and one half percent
     (1.5 %) per month or the highest interest rate legally permissible by law.

     6.  Intellectual Property Rights.  In providing the Services, Requisite
will exercise and utilize certain of its IP Rights. Except as otherwise set
forth herein, neither this Services Agreement, nor the provision of Services
hereunder, shall give either Requisite or SciQuest any ownership interest in or
rights to the IP Rights of the other party. All IP Rights that are owned or
controlled by a party at the commencement of this Services Agreement shall
remain under the ownership or control of such party throughout the term of this
Services Agreement and thereafter.

     7.  Limited Warranties and Exceptions.

         (a)  By Requisite.  Requisite warrants the following to SciQuest:

              (i)   The Services provided hereunder will be performed in a
         professional manner consistent with industry-recognized quality of
         service performance;

                                       4
<PAGE>

              (ii)  The Services Agreement has been duly authorized, executed
         and delivered by Requisite; Requisite has the full power and authority
         to enter into the Services Agreement and perform its obligations and is
         free to enter into the Services Agreement; the Services Agreement
         constitutes a valid and binding obligation of Requisite, enforceable in
         accordance with its terms; the making of the Services Agreement by
         Requisite does not violate any agreement, right or obligation existing
         between Requisite and any other person, firm or corporation;

              (iii) With respect to Requisite's IP Rights, no consents of any
         third parties need be obtained for Requisite to enter into the Services
         Agreement or perform the Services, or any such consents have been
         obtained as of the Effective Date;

              (iv)  The Deliverables, in the form delivered to SciQuest
         hereunder, and any Requisite-owned IP Rights incorporated therein,
         shall be free of all liens and encumbrances and there will be no
         claims, demands or actions pending or, to the best of Requisite's
         knowledge, threatened with respect thereto;

         (b)  By SciQuest.  SciQuest warrants the following to Requisite:

              (i)   The Services Agreement has been duly authorized, executed
         and delivered by SciQuest; SciQuest has the full power and authority to
         enter into the Services Agreement and perform its obligations and is
         free to enter into the Services Agreement; the Services Agreement
         constitutes a valid and binding obligation of SciQuest, enforceable in
         accordance with its terms; the making of the Services Agreement by
         SciQuest does not violate any agreement, right or obligation existing
         between SciQuest and any other person, firm or corporation;

              (ii)  With respect to the SciQuest Product Information provided to
         Requisite, no consents of any third parties need be obtained for
         SciQuest to enter into the Services Agreement, or any such consents
         have been obtained as of the Effective Date; and

              (iii)

         (c)  Disclaimers.  THE WARRANTIES ABOVE ARE EXCLUSIVE AND IN LIEU OF
     ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
     WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WHICH
     ARE EXPRESSLY DISCLAIMED.

     8.  Termination.

         (a)  Termination for Breach.  This Services Agreement may be terminated
     by either party upon thirty (30) days prior written notice if the other
     party materially breaches or fails to perform any material term hereof and
     the breaching party fails to cure such breach within the 30-day notice
     period. The foregoing thirty (30) day cure period shall apply to any
     failure of SciQuest to timely pay fees and charges due hereunder, which
     uncured breach shall be a material default of this Services Agreement.

         (b)  Other Termination.  If either Requisite or SciQuest files a
     petition in bankruptcy or is adjudged a bankrupt, or if a petition in
     bankruptcy is filed against either party, or if either party becomes
     insolvent, or makes an assignment for the benefit of creditors, or if
     either party discontinues its business, or if a receiver is appointed for
     either party's business who is not discharged within sixty (60) days, such
     event shall constitute a material breach of this Services

                                       5
<PAGE>

     Agreement by such party. In the event of bankruptcy proceeding commenced
     with respect to Requisite, and this agreement is not otherwise terminated,
     to the extent permitted by law, SciQuest may suspend all further
     performance of this Services Agreement, except for payment for Services and
     products delivered and accepted, until Requisite assumes this Services
     Agreement and provides adequate assurance of performance thereof or rejects
     this Services Agreement pursuant to Section 365 of the Bankruptcy Code or
     any similar or successor provision. Any such suspension of further
     performance by SciQuest pending Requisite's assumption or rejection will
     not affect SciQuest' rights to pursue or enforce any of its rights under
     this Services Agreement.

         (c)  Effects of Termination.  Each party's obligations under Sections
     6, 8(c), 9, 10, 11 and 13 of the Services Agreement shall survive
     termination or expiration of the Services Agreement. Within thirty (30)
     days of termination of this Services Agreement for any reason, Requisite
     shall submit to SciQuest an itemized invoice for any fees or expenses
     accrued and unpaid under this Services Agreement prior to the date of such
     termination. Termination of this Services Agreement pursuant to this
     Section will not preclude or otherwise adversely affect any rights either
     party may have under the terms of this Services Agreement or at law or
     equity.

     9.  Indemnification.

         (a)  By Requisite.  Subject to the provisions of Section 9(c),
     Requisite agrees, at its expense, to defend SciQuest, its divisions,
     affiliates and subsidiaries, and its officers, directors and employees
     ("SciQuest Indemnitees"), from and against all third party claims, suits
     and proceedings brought against the SciQuest Indemnitees, and will pay all
     final judgments awarded or settlements including reasonable attorney's fees
     entered into on such claim, proceeding or suit ("Claims"), arising out of
     or resulting from (i) any material breach of the terms, representations and
     warranties of this Agreement; (ii) any injuries suffered by Requisite
     employees except for injuries caused by negligence or intentional harm of
     SciQuest or its employees or agents; and (iii) a Claim that the
     Deliverables or Services provided by Requisite to SciQuest, infringe any
     copyright, trade secret, duly issued United States patent or other IP
     Right.  Requisite shall not be obligated to defend or be liable for Claims
     if the infringement claim arises out of or results from: (x) compliance
     with SciQuest' specifications or requirements, to the extent such
     infringement could not reasonably be avoided without failing to satisfy
     such SciQuest's specifications or requirements, (y) additions or
     modifications by SciQuest or any third party to the Deliverables in a
     manner to become infringing, or (z) a combination of the Deliverables
     and/or Services provided by Requisite under this Services Agreement with
     other products or items developed or made by third parties if such
     infringement could have been avoided either by the use of the Deliverables
     and/or Services with commercially acceptable non-infringing products or
     items, or by not making or composing such combination of the products or
     items.  Should any Deliverable or Service become or in Requisite's opinion
     be likely to become, the subject of any such suit or action for
     infringement, Requisite shall, as soon as reasonably possible after notice
     of such suit or action, at Requisite's option and expense, procure for
     SciQuest the right to continue using such Deliverable or Service or replace
     or modify such Deliverable or Service so that it becomes non-infringing;
     and (iv) a claim for breach of warranties set forth in Section 7(a)(ii) and
     7(a)(iii).

         (b)  By SciQuest.  Subject to the provisions of Section 9(c), SciQuest
     agrees, at its expense, to defend Requisite, its divisions, affiliates and
     subsidiaries, and its officers, directors and employees ("Requisite
     Indemnitees"), from and against all third party claims, suits and
     proceedings brought against the Requisite Indemnitees, and will pay all
     final judgments awarded or settlements including reasonable attorney's fees
     entered into on such claim,

                                       6
<PAGE>

     proceeding or suit ("Claims"), arising out of or resulting from (i) any
     material breach of the terms, representations and warranties of this
     Agreement; (ii) any injuries suffered by SciQuest employees, except for
     injuries caused by negligence or intentional harm of Requisite or its
     employees or agents, or (iii) a Claim that the use by the Requisite
     Indemnitees of the SciQuest Product Information or any modification of the
     Deliverables by SciQuest infringes any third party United States copyright,
     trade secret, duly issued United States patent, or other IP Right that, but
     for SciQuest' modification of the Deliverable would not infringe such third
     party rights.

         (c)  Indemnification Procedure.  The indemnifying party's
     indemnification obligations under this Section 9 are conditioned upon the
     indemnified party: (i) giving prompt notice of the claim or action; (ii)
     granting sole control of the defense or settlement of the claim or action
     to the indemnifying party (except that the indemnified party's prior
     written approval will be required for any settlement that reasonably can be
     expected to require a material affirmative obligation of, result in any
     ongoing material liability to or materially prejudice or detrimentally
     impact the indemnified party in any way); and (iii) providing reasonable
     cooperation and, at the indemnifying party's request and expense,
     assistance in the defense or settlement of the claim or action.

         (d)  THE FOREGOING STATES SCIQUEST'S AND REQUISITE'S SOLE AND EXCLUSIVE
     REMEDIES WITH RESPECT TO CLAIMS OF INFRINGEMENT OF THIRD PARTY PROPRIETARY
     RIGHTS OF ANY KIND.

    10.  Limitations on Liability.

    EXCEPT FOR EACH PARTY'S LIABILITY EXPRESSLY ASSUMED UNDER SECTION 9 ABOVE,
IN NO EVENT SHALL EITHER PARTY BE LIABLE UNDER THIS SERVICES AGREEMENT FOR ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE OR EXEMPLARY DAMAGES, OR
LOST PROFITS OR FOR THE COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES,
HOWEVER CAUSED, WHETHER FOR BREACH OF WARRANTY, CONTRACT, TORT NEGLIGENCE,
STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. Neither party's total liability under this Services
Agreement to the other shall exceed the total amount actually paid by SciQuest
hereunder; provided, however, that there shall be no limit on either party's
liability under the infringement indemnification provisions set forth in Section
9 above.

    11.  Confidentiality and Non-Use.

         (a)  Confidential Information.  By virtue of this Services Agreement,
     each party hereto may disclose to the other party information that is
     confidential and otherwise proprietary. Subject to the exceptions listed
     below, a party's "Confidential Information" means information disclosed by
     such party to the other party under this Agreement, including any trade
     secrets of such party and other information about such party's business,
     technology or products that is not generally known in the industry and
     which derives independent economic value, actual or potential, from not
     being generally known to the public or to persons who can derive economic
     value from its disclosure or use, and which is either clearly marked or
     otherwise clearly designated as "confidential" or the equivalent or is
     disclosed under circumstances such that a reasonable person would expect
     such information to be held in confidence, and with respect to SciQuest,
     shall include all third party supplier data provided to Requisite
     hereunder. However, a party's Confidential Information shall not include
     any information that the party asserting such exception proves by clear and
     convincing evidence that: (i) is or becomes a part of the public domain
     through no act or omission of the receiving party; or (ii) was in the
     receiving party's

                                       7
<PAGE>

     lawful possession prior to the disclosure; or (iii) is independently
     developed by the receiving party by employees or agents without access
     to the disclosing party's Confidential Information; or (iv) is
     lawfully disclosed to the receiving party by a third party without
     restriction on disclosure. The Confidential Information of a party is
     and shall remain the property of such party, notwithstanding any
     permissible disclosure of such information under this Services
     Agreement.

          (b)  Confidentiality Obligations. Except for trade secrets which are
     defined under applicable law and shall remain confidential, each party
     agrees, for the term of this Services Agreement and five (5) years
     after its expiration or termination, (i) to hold the other party's
     Confidential Information in strict confidence, (ii) not to disclose
     such Confidential Information to third parties not authorized by the
     disclosing party to receive such Confidential Information, and (iii)
     not to use such Confidential Information for any purpose except as
     expressly permitted hereunder. Each party agrees to take reasonable
     steps to protect the other party's Confidential Information to ensure
     that such Confidential Information is not disclosed, distributed or
     used in violation of the provisions of this Services Agreement. The
     foregoing prohibition on disclosure of Confidential Information shall
     not apply to the extent certain Confidential Information is required
     to be disclosed by the receiving party as a matter of law or by order
     of a court, provided that the receiving party uses reasonable efforts
     to provide the disclosing party with prior notice of such obligation
     to disclose and reasonably assists in obtaining a protective order
     therefor.

          (c)  Disclosure to Consultants. Each party may disclose Confidential
     Information to third party consultants or contractors who have a need
     to access such Confidential Information in connection with such
     party's performance of services pursuant to this Services Agreement
     subject to the restrictions under this Services Agreement; provided,
     however, that this provision shall not be construed to prohibit the
     disclosure of this Agreement by either party as may be reasonably
     required in connection with lending and capital-raising transactions
     undertaken by such party. Each party shall ensure that any third party
     consultants or contractors that receive access to the Confidential
     Information shall execute a non-disclosure agreement that preserves
     the confidentiality and proprietary aspects of the Confidential
     Information to the same extent as that required under this Services
     Agreement.

          (d)  Return of Confidential Information. Upon termination of this
     Agreement, Confidential Information of each party shall be returned to
     the owner of the Confidential Information or destroyed.

     12.  Independent Contractors.  Requisite shall perform the Services as an
independent contractor, and nothing contained in this Services Agreement shall
be construed to create or imply a joint venture, partnership, principal-agent or
employment relationship between the parties.  Neither party shall take any
action or permit any action to be taken on its behalf that purports to be done
in the name of or on behalf of the other party and shall have no power or
authority to bind the other party to assume or create any obligation or
responsibility express or implied on the other party's behalf or in its name,
nor shall such party represent to any one that it has such power or authority.

     13.  Dispute Resolution.

          (a)  The parties shall attempt in good faith to resolve any dispute
     arising under this agreement informally according to the following
     procedure. Upon written request of either party identifying a dispute to be
     resolved, each party will designate an executive officer

                                       8
<PAGE>

     with the responsibility and authority to resolve the dispute. These
     officers shall meet within fifteen (15) days after the request to
     identify the scope of the dispute and the information needed to
     discuss and attempt to resolve such dispute. These officers shall then
     gather relevant information regarding the dispute and shall meet to
     discuss the issue and to negotiate in good faith to resolve the issue.

          (b)  In the event the parties are unable to resolve the dispute within
     thirty (30) days after the first meeting of the designated officers a
     specified above (or such longer time as the parties agree), then the
     dispute may, upon written agreement of the parties, be resolved by
     binding arbitration under the terms of this Section. The arbitration
     shall be in accordance with the then existing commercial arbitration
     rules of the American Arbitration Association, as modified hereunder.
     The arbitration shall be conducted by three arbitrators, each of whom
     shall be an expert in the subject matter of the dispute and not
     associated with either party. Each party shall have the right to
     select one of the arbitrators, and the two selected arbitrators shall
     select the third. The decision of the arbitrators shall be binding
     upon the parties, and judgment in accordance with that decision may be
     entered in any court having jurisdiction thereof.

          (c)  Nothing in this Section shall restrict the right o either party
     to apply to a court of competent jurisdiction for emergency equitable
     relief prior to or pending final determination of a claim by arbitration in
     accordance with this Section. The prevailing party in any arbitration or
     judicial action brought to enforce or interpret this Services Agreement or
     for relief for its breach shall be entitled to recover its costs (including
     its share of arbitration fees) and its reasonable attorney(s)' fees therein
     incurred.

     14.  Miscellaneous.

          (a)  Assignment. Neither party shall assign, delegate, or subcontract
     any portion of its rights, duties, or obligations under this Services
     Agreement without the prior written consent of the other party, which
     consent will not be unreasonably withheld or delayed, and any attempt to do
     so shall be void, provided, however, that Requisite may subcontract the
     performance of services to be provided hereunder to its subsidiaries and
     such subsidiaries shall be bound by the terms and conditions of this
     Service Agreement. Either party may assign or transfer this Services
     Agreement in connection with (i) the sale of all or substantially all of
     the assets of such party or (ii) a merger, consolidation or other action or
     event that effectively causes a change in control of such party.

          (b)  Notices. All notices, statements and/or payments to be given to
     the parties hereunder shall be addressed to the parties at the addresses
     set forth on the signature page below or at such other address as the
     parties shall designate in writing from time to time. All notices shall be
     in writing and shall either be served by personal delivery (to an officer
     of each company), certified or registered mail return receipt requested,
     facsimile (if confirmed by certified or registered mail return receipt
     requested or personal delivery of a hard copy), all charges prepaid. Except
     as otherwise provided herein, such notices shall be deemed given when
     delivered, except that notices of change of address shall be effective only
     after the actual receipt thereof. Copies of all notices to SciQuest should
     be sent to the attention of the SciQuest representative designated in
     writing by SciQuest. All notices to Requisite should be sent Attention:
     Contracts Administration.

          (c)  Severability. If any term or provision of this Services Agreement
     is determined to be invalid or unenforceable for any reason, it shall be
     adjusted rather than voided, if possible, to achieve the intent of the
     parties to extent possible. In any event, all other terms and provisions
     shall be deemed valid and enforceable to the maximum extent possible.

                                       9
<PAGE>

          (d)  Force Majeure. Neither party shall be liable for any loss,
     damage, or penalty arising from delay due to causes beyond its reasonable
     control (a "Force Majeure Event"). In the event that a Force Majeure Event
     continues for a period of thirty (30) days, either party shall have the
     right to terminate this Services Agreement upon thirty (30) days prior
     written notice to the other party. Both parties agree to use commercially
     reasonable efforts to minimize the extent of any delay caused by a Force
     Majeure Event.

          (e)  Export Administration. If any Deliverable or custom software is
     exported for use outside the United States, both parties agrees to comply
     fully with all relevant regulations of the U.S. Department of Commerce and
     with the U.S. Export Administration Act to assure that such are not
     exported in violation of U.S. law and to comply fully with any other
     regulations or laws relating to such export or import into another country.
     The exporting party shall be responsible for any duties, customs charges or
     other taxes or fees relating to such export.

          (f)  Complete Agreement. The parties acknowledge that they have read,
     understand and agree to be bound by this Services Agreement and that the
     Services Agreement is the complete and exclusive statement of the agreement
     between the parties regarding the subject matter hereof, which supersedes
     all proposals, oral or written, and all other communications between the
     parties relating to such subject matter.

          (g)  Modification. Any terms and conditions of any purchase order or
     other instrument issued by SciQuest or Requisite in connection with the
     Services Agreement that are in addition to or inconsistent with the terms
     and conditions of this Services Agreement shall be of no force or effect.
     This Services Agreement may be modified only by a written instrument duly
     executed by an authorized representative of Requisite and SciQuest.

          (h)  No Waiver. The failure of a party to enforce any provision of
     this Services Agreement shall not constitute a waiver of such provision or
     the right of such party to enforce such provision or any other provision.

          (i)  Governing Law and Jurisdiction. All questions concerning the
     validity and operation of this Agreement and performance of the
     obligations imposed upon the parties hereunder shall be governed by the
     substantive laws of the State of Colorado.

          (j)  Counterparts. This Agreement may be executed in counterparts or
     by facsimile, each of which shall be an original, and all of which
     together shall constitute one and the same agreement.

          (k)  This Services Agreement shall be binding upon the parties solely
     after its mutual execution by both parties.

                  [Rest of Document Intentionally Left Blank]

                                       10
<PAGE>

     In Witness Whereof, the parties hereto have executed this Services
Agreement as of the Effective Date.

SciQuest, Inc.                                Requisite Technology, Inc.



Signature: /s/ Lyle Brecht                    Signature:  /s/ Barbara Mowry
          -------------------------------               ------------------------
Name:     Lyle Brecht                         Name:    Barbara Mowry
     ------------------------------------          ----------------------------
Title:    Executive Vice President            Title:   President & CFO
      -----------------------------------           ---------------------------
Date:     12-18-98                            Date:    12/18/98
     ------------------------------------          ----------------------------
Address: 4222 Emperor Boulevard Suite 225     4888 Pearl East Circle Suite 300W
         Durham, NC  27703                    Boulder, CO  80301

                                       11

<PAGE>

                                   Exhibit A

                             COMMITTED TASK ORDERS

The purpose of Task Orders 1 through 5 of Exhibit A is to take product
information provided to SciQuest from multiple suppliers in both electronic and
paper formats and convert this content into SciQuest Product Information that
meets SciQuest's requirements for publishing this information to its electronic
commerce site and to Requisite's Product Information Titles for Requisite's ESV
partner applications.

Task Order 1

<TABLE>
<S>                        <C>
Task Order Name:           .  Content Conversion:  Paper Catalog Content Conversion - "Rich Content"
- -----------------------------------------------------------------------------------------------------------
Dependencies:              .  SciQuest delivery of paper catalogs and determination of products requiring
                              Rich Content" format according to following schedule:
                              .  33% of Products by December 28, 1998
                              .  33% of Products by January 13, 1999
                              .  33% of Products by January 20, 1999
- -----------------------------------------------------------------------------------------------------------
Deliverables:              .  Populated database of product information in "Rich Content" format
- -----------------------------------------------------------------------------------------------------------
Estimated Schedule:        .  Project start date - December14, 1998:   Project completion date - February
                              15, 1999
- -----------------------------------------------------------------------------------------------------------
Scope of Work:             .  50,000 items converted from paper catalog source material
                           .  Catalog page scanning, clean-up, and CD creation
                           .  Graphic image capture/association in GIF/TIFF/JPEG format
                           .  Line item conversion, field population, cleansing, and parametric attribute
                              extraction
                           .  BugsEye genus category schema creation where applicable
- -----------------------------------------------------------------------------------------------------------
Fee Schedule:              .  (See Attached) - Paper Catalog Content Conversion Price Schedule - "Rich
                              Content"
                           .  Services will be invoiced monthly
- -----------------------------------------------------------------------------------------------------------
Rebilled Expenses:
- -----------------------------------------------------------------------------------------------------------
Estimated Cost:            .  $87,500
- -----------------------------------------------------------------------------------------------------------
</TABLE>

                                       12
<PAGE>

This task order is hereby incorporated as part of the Services Agreement between
Requisite Technology, Inc. and SciQuest dated December ___, 1998.

SciQuest.                             Requisite Technology, Inc.



Signature:                            Signature:
          --------------------------            --------------------------
Name:                                 Name:
     -------------------------------       -------------------------------
Title:                                Title:
      ------------------------------        ------------------------------
Date:                                 Date:
     -------------------------------       -------------------------------

                                       13
<PAGE>

                                   Exhibit A

                             COMMITTED TASK ORDERS

Task Order 2

<TABLE>
<S>                           <C>
Task Order Name:           .  Content Conversion:  Paper Catalog Content Conversion - "Basic Content"
- -----------------------------------------------------------------------------------------------------------
Dependencies:              .  SciQuest delivery of paper catalogs and determination of products requiring
                              "Basic Content" according to following schedule
                              .  33% of Products by December 28, 1998
                              .  33% of Products by January 13, 1999
                              .  33% of Products by January 20, 1999
- -----------------------------------------------------------------------------------------------------------
Deliverables:              .  Populated database of product information in "Basic Content" format
- -----------------------------------------------------------------------------------------------------------
Estimated Schedule:        .  Project start date - December 14, 1998;   Project completion date - February
                              15, 1999
- -----------------------------------------------------------------------------------------------------------
Scope of Work:             .  50,000 items converted from paper catalog source material
                           .  Catalog page scanning, clean-up, and CD creation
                           .  Line item conversion, field population, and cleansing for "Basic Content"
                           .  BugsEye genus category schema creation where applicable
- -----------------------------------------------------------------------------------------------------------
Fee Schedule:              .  (See Attached) - Paper Catalog Content Conversion Price Schedule - "Basic
                              Content" and Upgrades to "Rich Content"
                           .  Services will be invoiced monthly
- -----------------------------------------------------------------------------------------------------------
Rebilled Expenses:
- -----------------------------------------------------------------------------------------------------------
Estimated Cost:            .  $45,000
- -----------------------------------------------------------------------------------------------------------
</TABLE>

                                       14
<PAGE>

This task order is hereby incorporated as part of the Services Agreement between
Requisite Technology, Inc. and SciQuest dated December ___, 1998.


SciQuest.                             Requisite Technology, Inc.



Signature:                            Signature:
          ------------------------              ------------------------
Name:                                 Name:
     -----------------------------         -----------------------------
Title:                                Title:
      ----------------------------          ----------------------------
Date:                                 Date:
     -----------------------------         -----------------------------

                                       15
<PAGE>

                                   Exhibit A

                             COMMITTED TASK ORDERS

Task Order 3

<TABLE>

<S>                         <C>
Task Order Name:           .  Content Conversion:  Electronic File Content Conversion - "Basic Content"
- -----------------------------------------------------------------------------------------------------------
Dependencies:              .  SciQuest and SciQuest's suppliers delivery of properly formatted electronic
                              files of products requiring "Basic Content" according to following schedule:
                              .  50% of Products by December 28, 1998
                              .  50% of Products by January 20, 1999
- -----------------------------------------------------------------------------------------------------------
Deliverables:              .  Populated database of product information in "Basic Content" format
- -----------------------------------------------------------------------------------------------------------
Estimated Schedule:        .  Project start date - December 14, 1998;   Project completion date - February
                              15, 1999
- -----------------------------------------------------------------------------------------------------------
Scope of Work:             .  100,000 items converted from supplier submitted electronic files
                           .  Line item conversion, field population, and cleansing for "Basic Content"
                           .  BugsEye genus category schema creation where applicable
- -----------------------------------------------------------------------------------------------------------
Fee Schedule:              .  (See Attached) - Electronic File Content Conversion Price Schedule - "Basic
                              Content" and Upgrades to "Rich Content"
                           .  Services will be invoiced monthly
- -----------------------------------------------------------------------------------------------------------
Rebilled Expenses:
- -----------------------------------------------------------------------------------------------------------
Estimated Cost:            .  $50,000
- -----------------------------------------------------------------------------------------------------------
</TABLE>

This task order is hereby incorporated as part of the Services Agreement between
Requisite Technology, Inc. and SciQuest dated December ___, 1998.

SciQuest.                             Requisite Technology, Inc.



Signature:                            Signature:
          -------------------------             -------------------------
Name:                                 Name:
     ------------------------------        ------------------------------
Title:                                Title:
      -----------------------------         -----------------------------
Date:                                 Date:
     ------------------------------        ------------------------------

                                       16
<PAGE>

                                   Exhibit A

                             COMMITTED TASK ORDERS

Task Order 4

<TABLE>
<S>                        <C>

Task Order Name:           .  Content Conversion:  Electronic File and Paper Content Conversion - "Basic
                                                                   ---
                              Content"
- -----------------------------------------------------------------------------------------------------------
Dependencies:              .  SciQuest and SciQuest's suppliers delivery of properly formatted electronic
                              files and paper catalogs of products requiring "Basic Content according to the
                              following schedule:
                              .  A minimum of 25,000 items received by December 28, 1998
                              .  A minimum of 25,000 items received weekly beginning January 4, 1999
- -----------------------------------------------------------------------------------------------------------
Deliverables:              .  Populated database of product information in "Basic Content" format
- -----------------------------------------------------------------------------------------------------------
Estimated Schedule:        .  Project start date - December 14, 1998;   Project completion date - March
                              26, 1999
- -----------------------------------------------------------------------------------------------------------
Scope of Work:             .  300,000 items converted from supplier submitted paper catalogs and
                              electronic files of product information
                              .  Requisite production of 25,000 items weekly commencing week of January 11,
                                 1999
                           .  Line item conversion, field population, and cleansing for "Basic Content"
                           .  BugsEye genus category schema creation where applicable
- -----------------------------------------------------------------------------------------------------------
Fee Schedule:              .  (See Attached) - Electronic File Content Conversion/Augmentation from Paper
                              Catalogs Price Schedule - "Basic Content" and Upgrades to "Rich Content"
                           .  Services will be invoiced monthly
- -----------------------------------------------------------------------------------------------------------
Rebilled Expenses:
- -----------------------------------------------------------------------------------------------------------
Estimated Cost:            .  $270,000
- -----------------------------------------------------------------------------------------------------------
</TABLE>

                                       17
<PAGE>

This task order is hereby incorporated as part of the Services Agreement between
Requisite Technology, Inc. and SciQuest dated December ___, 1998.

SciQuest.                             Requisite Technology, Inc.



Signature:                            Signature:
          -------------------------             -------------------------
Name:                                 Name:
     ------------------------------        ------------------------------
Title:                                Title:
      -----------------------------         -----------------------------
Date:                                 Date:
     ------------------------------        ------------------------------

                                       18
<PAGE>

                                   Exhibit A

                             COMMITTED TASK ORDERS

Task Order 5

<TABLE>
<S>                        <C>

Task Order Name:           .  Miscellaneous Requisite Services for SciQuest Content Conversion Tasks 1, 2,
                              3, 4
- -----------------------------------------------------------------------------------------------------------
Dependencies:
- -----------------------------------------------------------------------------------------------------------
Deliverables:
- -----------------------------------------------------------------------------------------------------------
Estimated Schedule:
- -----------------------------------------------------------------------------------------------------------
Scope of Work:
- -----------------------------------------------------------------------------------------------------------
Fee Schedule:              .  SciQuest Supplier FTP Data Collection Site
                              .  Initial Set-up Fee    $ 5,000
                              .  Monthly Maintenance Fee  $   800
                           .  Schema Consulting  $150.00 per hour
                           .  Preparation of export files & data loading assistance  $100.00 per hour
                           .  Services will be invoiced monthly
- -----------------------------------------------------------------------------------------------------------
Rebilled Expenses:
- -----------------------------------------------------------------------------------------------------------
Estimated Cost:
- -----------------------------------------------------------------------------------------------------------
</TABLE>

This task order is hereby incorporated as part of the Services Agreement between
Requisite Technology, Inc. and SciQuest dated December ___, 1998.

SciQuest, Inc.                        Requisite Technology, Inc.



Signature:                            Signature:
          -------------------------             -------------------------
Name:                                 Name:
     ------------------------------        ------------------------------
Title:                                Title:
      -----------------------------         -----------------------------
Date:                                 Date:
     ------------------------------        ------------------------------

                                       19
<PAGE>

       Paper Catalog Content Conversion Price Schedule - "Rich Content"

<TABLE>
<CAPTION>
             Description of Service                Rich Content
- -----------------------------------------------------------------------------------------
<S>                                                <C>

Content extraction from paper catalog to create    $35.00 per catalog page
 textual data in Spreadsheet form suitable for
 import
- -----------------------------------------------------------------------------------------
Image Capture/Association from Paper catalogs in
 GIF/TIFF/JPEG format
 .  Black & White line drawing
 .  Black & White half-tone picture                 $0.45 per image
 .  Full color picture                              $0.60 per image
                                                   $0.95 per image

- -----------------------------------------------------------------------------------------
Conversion, cleansing, and parametric attribute    Per line item/per catalog
 population into database using Data
 Transformation techniques per volume table
 below:
1  to  1,000 items                                 $0.95
1,001  to  5,000 items                             $0.90
5,001  to  10,000 items                            $0.85
10,001  to  25,000 items                           $0.80
25,001    and above                                $0.75
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>


Notes--

1-  "Rich Content" is fully described and enriched product information.  Part
numbers, manufacturer names, long and short product descriptions and associated
graphical content are organized into database fields.  Short product
descriptions are cleansed and/or constructed from available information
provided.  Available product-level attributes are extracted and populated into a
genus class category structure.

                                       20
<PAGE>

  Paper Catalog or Electronic File Content Conversion Price Schedule - "Basic
                --
                    Content" and Upgrades to "Rich Content"

<TABLE>
<CAPTION>

           Description of Service             Basic Content                  UPGRADE TO
                                                                            RICH CONTENT
- ----------------------------------------------------------------------------------------------------------------
<S>                                           <C>                           <C>
Content extraction from paper catalog to      $20.00 per catalog page        $ 20.00 per catalog  page if
create textual data in Spreadsheet form        if applicable                 previously scanned; $35.00
suitable for import                                                          per catalog page for initial scan

- ----------------------------------------------------------------------------------------------------------------
Image Capture/Association from Paper
catalogs in GIF/TIFF/JPEG format
 .  Black & White line drawing
 .  Black & White half-tone picture              N/A                    $0.45 per image
 .  Full color picture                           N/A                    $0.60 per image
                                                N/A                    $0.95 per image

                                                                       $0.25 per image from electronic source

- ----------------------------------------------------------------------------------------------------------------
Conversion, cleansing, and parametric          Per line item/per catalog    Per line item/per catalog
attribute population into database using
Data Transformation techniques per volume
table below:
1  to  1,000 items                             $0.50                     $0.50
1,001  to  5,000 items                         $0.47                     $0.47
5,001  to  10,000 items                        $0.45                     $0.45
10,001  to  25,000 items                       $0.43                     $0.43
25,001    and above                            $0.40                     $0.40

Parametric attribute capture and population
 applicable only to "Upgrade to Rich
 Content" column

- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>

Notes--

1-  "Rich Content" is fully described and enriched product information.  Part
numbers, manufacturer names, long and short product descriptions and associated
graphical content are organized into database fields.  Short product
descriptions are cleansed and/or constructed from available information
provided.  Available product-level attributes are extracted and populated into a
genus class category structure.

2-  "Basic Content" is product information that delivers at a minimum, the
required fields as specified in the SciQuest Product Information Content Table,
attached hereto as Exhibit B from available information and includes the BugsEye
genus classification for such product information.

                                       21
<PAGE>

3-  "Upgrade to Rich Content" is the augmentation of "Basic Content" to "Rich
Content" through use of additional information available through paper catalog
sources.

                                       22

<PAGE>

                                                                   Exhibit 10.21

                               SciQuest.com, Inc.

                             5151 McCrimmon Parkway
                                   Suite 208
                             Morrisville, NC 27560

                                October 19, 1999

                                                       STRICTLY CONFIDENTIAL
                                                       ---------------------

Monsanto Company
800 N. Lindbergh
St. Louis, MO 63167
Attn. Darrel Kalbfleisch

     Re:  Strategic Relationship between SciQuest.com, Inc. ("SciQuest") and
          ------------------------------------------------------------------
          Monsanto ("Monsanto")
          ---------------------

Dear :

     This Letter Agreement, together with the attached Term Sheet, set forth the
general terms and conditions of the proposed business transaction between
SciQuest and Monsanto.  The proposed business transaction will involve
Monsantoagreeing to utilize SciQuest as its exclusive third party direct
laboratory products electronic aggregator for North America and to grant
SciQuest a right of first offer to act as its exclusive third party direct
laboratory products electronic aggregator for territories outside of North
America ("Third Party Aggregator").  This Agreement constitutes a binding
agreement to consummate the transactions described herein, except as expressly
provided in the Term Sheet.  The summary of important terms and conditions of
the proposed transaction and the intentions of the parties are set forth herein
and in the attached Term Sheet, the terms of which are incorporated herein by
reference.

     1.  Definitive Agreements.  The terms, conditions and intentions set forth
         ---------------------
herein and in the Term Sheet are to be supplemented by mutually acceptable,
additional agreements to be negotiated and executed by SciQuest and
Monsanto("Additional Agreements").  Such Additional Agreements shall contain
such warranties, representations, covenants, agreements that are typically found
in transactions of the type contemplated herein in addition to such other
provisions agreed to by the parties at that time.  SciQuest and Monsantowill
cooperate with each other to the fullest extent in connection with the prompt
negotiation and execution of Additional Agreements and other necessary
documentation.

     2.  Confidentiality and Trade Secrets.  In the performance of this Letter
         ---------------------------------
Agreement, each party may disclose to the other certain Proprietary Information.
For the purposes of this Letter Agreement, (i) "Proprietary Information" means
Trade Secrets and any other information that is of value to its owner and
<PAGE>

is treated as confidential and includes proprietary information received from
Monsanto's Purchasing Department; (ii) "Trade Secrets" means business or
technical information, including, but not limited to, a formula, pattern,
program, device, compilation of information, method, technique, or process that:
(y) derives independent actual or potential commercial value from not being
generally known or readily ascertainable through independent development or
reverse engineering by persons who can obtain economic value from its disclosure
or use; and (z) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy; (iii) "Owner" refers to the party
disclosing Proprietary Information hereunder, whether such party is SciQuest or
Monsanto and whether such disclosure is directly from Owner or through Owner's
employees or agents; and (iv) "Recipient" refers to the party receiving any
Proprietary Information hereunder. Standard exceptions to the confidentiality
obligations shall apply and be more fully described in the definitive
agreements.

     Recipient acknowledges and agrees that the Proprietary Information shall
remain the sole and exclusive property of Owner or a third party providing such
information to Owner.  The disclosure of the Proprietary Information to
Recipient does not confer upon Recipient any license, interest, or rights of any
kind in or to the Proprietary Information, except as provided under this Letter
Agreement.  Recipient shall require any Recipient of Proprietary Information to
abide by the restrictions of this Agreement concerning the Proprietary
Information before disclosing such Proprietary Information to the Recipient.
Subject to the terms set forth herein, Recipient shall protect the Proprietary
Information of Owner with the same degree of protection and care Recipient uses
to protect its own Proprietary Information, but in no event less than reasonable
care. With regard to Confidential Information and the Trade Secrets, the
obligations in this Section shall continue for a period of three (3) years after
disclosure.

     3.  Termination.  Either party may terminate this Letter Agreement  on or
         ------------
after December 31, 1999 in the event the parties have not completed the mutually
satisfactory definitive agreements or upon a material breach of this Letter
Agreement by the other party, which breach shall continue for at least thirty
days following delivery of written notice of such breach.  The provisions of
paragraph 2 shall survive the termination of this Letter Agreement.

     4.  Closing.  The transactions contemplated herein shall occur on a date to
         -------
be set pursuant to the terms of the Additional Agreements, in the offices of
SciQuest, but, in any event, no later than 10:00 a.m. on December 31, 1999 (the
"Closing").

     5.  Most Favored Nations Pricing.   SciQuest represents that the prices and
         ----------------------------
payment terms offered by SciQuest under its system are the optimum offered by
SciQuest to any customer with comparable business terms, a comparable purchase
pattern and comparable annual dollar volume. In the event any other customer is
given better prices and/or terms by SciQuest, SciQuest shall automatically
extend the same prices and/or terms to Monsanto retroactive to the date on which
such terms were first offered.

     6.  Expenses.  Each party will bear and pay its own costs and expense
         --------
incurred with respect to the transactions contemplated herein.
<PAGE>

     7.  Publicity.  Neither SciQuest nor Monsantoshall issue a publicity
         ---------
release or public announcement or otherwise make any disclosure (other than
disclosure by SciQuest relating to the registration statement on Form S-1 filed
by it in connection with its initial public offering) concerning this Letter
Agreement or the transactions contemplated hereby, without prior review and
written consent by the other party hereto.

     8.  Entire Understanding.  This Letter Agreement and the attached Term
         --------------------
Sheet embody the entire understanding of the parties hereto with respect to the
transactions contemplated herein and supersede all prior or contemporaneous
written or oral understandings or arrangements and commitments with respect
thereto.  This Letter Agreement and the attached Term Sheet may be amended,
modified, superseded or canceled only by a written instrument which specifically
states that it amends this such document, executed by an authorized officer of
each entity to be bound thereby.

     9.  Governing Law.  This Letter Agreement shall be governed by and
         -------------
construed in accordance with the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof.

     If this Letter Agreement is acceptable to you, please do so signify by
signing this copy of the Letter Agreement and returning it to the undersigned no
later than October__, 1999.


                                    Respectfully,

                                    SCIQUEST.COM, INC.


                                    By:  /s/ Scott Andrews
                                       ---------------------------------------
                                         Mr. M. Scott Andrews
                                         President and Chief Executive Officer

ACCEPTED AND AGREED TO BY:

MONSANTO


     By:     /s/ Janet L. Horgan
             -------------------------
     Name:   JANET L. HORGAN
             -------------------------
     Title:  ASSISTANT GENERAL COUNSEL
             -------------------------


Date:  10/21/99
      -------------------------------
<PAGE>

                                   TERM SHEET

                               SciQuest.com, Inc.
                                      and
                                    Monsanto

                                October 12, 1999

<TABLE>
<CAPTION>
<S>                       <C>
- ------------------------------------------------------------------------------------------------------------------
Parties:                                              SciQuest.com, Inc. - "SciQuest"
                                                        Monsanto Company- "Monsanto"
- ------------------------------------------------------------------------------------------------------------------

Relationship:             Monsanto shall use its best efforts to use SciQuest as its  preferred third party
                          direct laboratory products electronic aggregator for North America. In addition,
                          Monsanto shall not enter into any agreement with a third party to serve as a third
                          party direct laboratory products electronic aggregator in any territory outside of
                          North America unless Monsanto shall have first notified SciQuest of such opportunity
                          and shall have negotiated in good faith for SciQuest to act as its third party direct
                          laboratory products electronic aggregator in such territory. Monsanto's shall make best
                          faith efforts to use SciQuest as its exclusive third party electronic channel for
                          marketing and selling its used, refurbished and surplus scientific equipment through an
                          electronic distribution system.
- ------------------------------------------------------------------------------------------------------------------
Term:                     3 years.
- ------------------------------------------------------------------------------------------------------------------
Minimum Volume:           Monsanto shall use reasonable efforts to purchase a minimum of $5 million in Qualified
                          Scientific Products through the SciQuest system in each calendar year during the term
                          of the relationship.  Failure to reach this above stated minimum volume in any year
                          shall not be considered a breach of agreement.  The minimum volume shall include any
                          purchases by "Monsanto Subsidiaries".  Monsanto Subsidiaries shall be defined as any
                          foreign or domestic subsidiary, including any incorporated or unincorporated company,
                          joint venture or partnership, which is at least fifty percent (50%) owned, directly or
                          indirectly by Monsanto, or if not fifty percent (50%) owned, then the maximum percent
                          ownership permitted by law in the relevant country, and shall include any company or
                          enterprise which, irrespective of ownership, is operated by Monsanto or a "Monsanto
                          Subsidiary".  Only subsidiaries having the express authorization of Monsanto shall be
                          included.
- ------------------------------------------------------------------------------------------------------------------
Initial Warrants:         In partial consideration for Monsanto's entering into the relationship, directing  its
                          suppliers to participate in the SciQuest system, participating in reasonable case
                          studies and promoting as agreed to between the parties from time to time the SciQuest
                          solution, SciQuest shall issue to Monsanto, upon the execution of Definitive
                          Agreements, a warrant to acquire 10,000 shares of SciQuest common stock at an exercise
                          price of $0.001 per share.  One-third of the Initial Warrant shall be exercisable upon
                          each anniversary of the date the Initial Warrant is granted.
- ------------------------------------------------------------------------------------------------------------------
Monsanto's Suppliers:     Monsanto shall use its best efforts to direct  all of its suppliers of scientific
                          products and supplies to use SciQuest as the Third Party Aggregator for Monsanto
                          purchases.  Monsanto agrees to the use of customary and reasonable letters, meetings
                          and other communications designed to lead to the acceptance by such suppliers of
                          SciQuest as Monsanto's electronic purchasing intermediary.
- ------------------------------------------------------------------------------------------------------------------
Participation in Case     Monsanto will, if it deems appropriate, participate in reasonable case studies to be
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE> <CAPTION>
<S>                      <C>
- ------------------------------------------------------------------------------------------------------------------
 Study:                   conducted by SciQuest regarding electronic distribution of scientific products and
                          supplies and the SciQuest system.  Monsanto acknowledges that by so agreeing it may
                          incur certain reasonable expenses and that the results of such case studies may be used
                          by SciQuest in its marketing efforts, if approved by Monsanto.  Monsanto specifically
                          agrees to allow SciQuest to use  the fact that Monsanto is a customer of SciQuest in
                          all reasonable business uses, if approved by Monsanto, and if specifically agreed to in
                          writing, may consider allowing SciQuest to use its name in publications, etc.
- ------------------------------------------------------------------------------------------------------------------
Promotion of SciQuest     As agreed by the parties on a case by case basis, Monsanto shall promote the SciQuest
 Solution:                solution in the scientific products industry, to scientific product suppliers and to
                          other buyers of scientific products and supplies.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S>                       <C>
- ------------------------------------------------------------------------------------------------------------------
Incentive Warrants:       To encourage maximum utilization of the SciQuest system by Monsanto, SciQuest shall
                          issue to Monsanto, on February 15th 2001, 2002 and 2003, additional warrants to acquire
                          that number of shares of SciQuest common stock determined below, at the price to the
                          public in the initial public offering of SciQuest's common stock (the "Incentive
                          Warrants").  The number of shares of common stock eligible to be purchased pursuant to
                          the Incentive Warrants for each calendar year shall be determined as follows:

                          .  For 2000 (which shall consist of the period from the date of this Term Sheet until
                          December 31, 2000), the number of shares shall be equal to the quotient of (i) the
                          annual volume of Qualified Scientific Products sold to Monsanto through the SciQuest
                          system divided by (ii) [++++++++].
                          .  For 2001, the number of shares shall be equal to the quotient of (i) the annual
                          volume of  Qualified Scientific Products sold to Monsanto through the SciQuest system
                          less year 2000 volume) divided by (ii) [++++++++].
                          .  For 2002, the number of shares shall be equal to the quotient of (i) the annual
                          volume of Qualified Scientific Products sold to Monsanto through the SciQuest system
                          less year 2001 volume) divided by (ii) [++++++++].

                          Incentive Warrants shall be exercisable upon issuance.  [++++++++++++++++++++]
- ------------------------------------------------------------------------------------------------------------------
Termination of Warrants:  The Initial warrants and the Incentive warrants shall terminate, to the extent not
                          already exercised, upon the termination of the Definitive Agreements and, in any event,
                          five years after issuance.
- ------------------------------------------------------------------------------------------------------------------
Adjustment of Shares:     All references to share information, including number of shares and price per share,
                          shall be deemed automatically adjusted to reflect any stock dividend, stock split,
                          reverse stock dividend or reverse stock split or any recapitalization of SciQuest.
- ------------------------------------------------------------------------------------------------------------------
Qualified Scientific      Qualified Scientific Products are scientific products or supplies sold through the
 Products                 SciQuest system on standard terms; provided, however, that Qualified Scientific
                          Products shall not include orders of scientific products or supplies that are sold
                          pursuant to terms negotiated by Monsanto with the supplier and that yield SciQuest a
                          nominal commission or discount.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                                                   EXHIBIT 10.22

                               SciQuest.com, Inc.

                             5151 McCrimmon Parkway
                                   Suite 208
                             Morrisville, NC 27560

                                October 18, 1999

                                                           STRICTLY CONFIDENTIAL
                                                           ---------------------
The Dow Chemical Company
2020 Dow Center
Midland , Michigan
Attention: Dennis Merens

     Re:  Strategic Relationship between SciQuest.com, Inc. ("SciQuest") and
          ------------------------------------------------------------------
          The Dow Chemical Company ("Dow")
          --------------------------------

Dear Dennis:

     This Letter Agreement, together with the attached Term Sheet, set forth the
general terms and conditions of the proposed business transaction between
SciQuest and Dow.  The proposed business transaction will involve Dow agreeing
to utilize SciQuest as its exclusive third party direct scientific and
laboratory products electronic aggregator for North America and to grant
SciQuest a right of first offer to act as its exclusive third party direct
laboratory products electronic aggregator for territories outside of North
America ("Third Party Aggregator").  This Agreement constitutes a binding
agreement to consummate the transactions described herein, except as expressly
provided in the Term Sheet.  The summary of important terms and conditions of
the proposed transaction and the intentions of the parties are set forth herein
and in the attached Term Sheet, the terms of which are incorporated herein by
reference.

     1.  Definitive Agreements.  The terms, conditions and intentions set forth
         ---------------------
herein and in the Term Sheet are to be supplemented by mutually acceptable,
additional agreements to be negotiated and executed by SciQuest and Dow
("Additional Agreements").  Such Additional Agreements shall contain such
warranties, representations, covenants, agreements that are typically found in
transactions of the type contemplated herein in addition to such other
provisions agreed to by the parties at that time.  SciQuest and Dow will
cooperate with each other to the fullest extent in connection with the prompt
negotiation and execution of Additional Agreements and other necessary
documentation.

2.  Confidentiality and Trade Secrets.  In the performance of this Letter
    ---------------------------------
Agreement, each party may disclose to the other certain Proprietary Information.
For the purposes of this Letter Agreement, (i)
<PAGE>

"Proprietary Information" means Trade Secrets and any other information that is
of value to its owner and is treated as confidential and includes proprietary
information received from Dow's Purchasing Department; (ii) "Trade Secrets"
means business or technical information, including, but not limited to, a
formula, pattern, program, device, compilation of information, method,
technique, or process that: (y) derives independent actual or potential
commercial value from not being generally known or readily ascertainable through
independent development or reverse engineering by persons who can obtain
economic value from its disclosure or use; and (z) is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy; (iii)
"Owner" refers to the party disclosing Proprietary Information hereunder,
whether such party is SciQuest or Dow and whether such disclosure is directly
from Owner or through Owner's employees or agents; and (iv) "Recipient" refers
to the party receiving any Proprietary Information hereunder. Standard
exceptions to the confidentiality obligations shall apply and be more fully
described in the definitive agreements.

     Recipient acknowledges and agrees that the Proprietary Information shall
remain the sole and exclusive property of Owner or a third party providing such
information to Owner.  The disclosure of the Proprietary Information to
Recipient does not confer upon Recipient any license, interest, or rights of any
kind in or to the Proprietary Information, except as provided under this Letter
Agreement.  Recipient shall require any Recipient of Proprietary Information to
abide by the restrictions of this Agreement concerning the Proprietary
Information before disclosing such Proprietary Information to the Recipient.
Subject to the terms set forth herein, Recipient shall protect the Proprietary
Information of Owner with the same degree of protection and care Recipient uses
to protect its own Proprietary Information, but in no event less than reasonable
care. With regard to Confidential Information and the Trade Secrets, the
obligations in this Section shall continue for a period of three (3) years after
disclosure.

     3.  Termination.  Either party may terminate this Letter Agreement  on or
         -----------
after December 31, 1999 in the event the parties have not completed the mutually
satisfactory definitive agreements or upon a material breach of this Letter
Agreement by the other party, which breach shall continue for at least thirty
days following delivery of written notice of such breach.

     4.  Closing.  The transactions contemplated herein shall occur on a date to
         -------
be set pursuant to the terms of the Additional Agreements, in the offices of
SciQuest, but, in any event, no later than 10:00 a.m. on December 31, 1999 (the
"Closing").

     5.  Negotiations With Third Parties.  Commencing on the date on which
         -------------------------------
SciQuest and Dow execute this Letter Agreement and ending on the earlier to
occur of (i) December 31, 1999 or (ii) Closing,  Dow , nor any of its officers,
directors, employees, agents, shareholders or representatives (including but not
limited to, brokers, bankers, finders, accountants, attorneys or trustees
engaged by or representing it or any other related party) shall engage in any
discussions with respect to a Third Party Aggregator , and shall suspend any
such discussions in progress on the date of acceptance of this Letter Agreement.

     6.  Most Favored Nations Pricing.   SciQuest represents that the prices and
         ----------------------------
payment terms offered by SciQuest under its system are the optimum offered by
SciQuest to any customer with comparable business terms, a comparable purchase
pattern and comparable annual dollar volume.  In the
<PAGE>

event any other customer is given better prices and/or terms by SciQuest,
SciQuest shall automatically extend the same prices and/or terms to Dow
retroactive to the date on which such terms were first offered.

     7.  Expenses.  Each party will bear and pay its own costs and expenses
         --------
incurred with respect to the transactions contemplated herein.

     8.  Publicity.  Neither SciQuest nor Dow shall issue a publicity release or
         ---------
public announcement or otherwise make any disclosure (other than disclosure by
SciQuest relating to the registration statement on Form S-1 filed by it in
connection with its initial public offering) concerning this Letter Agreement or
the transactions contemplated hereby, without prior review and written consent
by the other party hereto (which consent shall not be unreasonably withheld).

     9.  Entire Understanding.  This Letter Agreement and the attached Term
         --------------------
Sheet embody the entire understanding of the parties hereto with respect to the
transactions contemplated herein and supersede all prior or contemporaneous
written or oral understandings or arrangements and commitments with respect
thereto.  This Letter Agreement and the attached Term Sheet may be amended,
modified, superseded or canceled only by a written instrument which specifically
states that it amends this such document, executed by an authorized officer of
each entity to be bound thereby.


     10.  Governing Law.  This Letter Agreement shall be governed by and
          -------------
construed in accordance with the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof.

     If this Letter Agreement is acceptable to you, please do so signify by
signing this copy of the Letter Agreement and returning it to the undersigned no
later than October 20, 1999.


                                    Respectfully,

                                    SCIQUEST.COM, INC.


                                    By:  /s/ James J. Scheuer
                                         --------------------
                                         Mr. James J. Scheuer
                                         Chief Financial Officer

ACCEPTED AND AGREED TO BY:

THE DOW CHEMICAL COMPANY


     By:  /s/ Gary K. Veurzinc
          --------------------
     Name:   Gary K. Veurzinc
             ----------------
     Title:  Vice President
             --------------
<PAGE>

Date:  10/20/99
       --------
<PAGE>

                                  TERM SHEET

                              SciQuest.com, Inc.
                                      and
                           The Dow Chemical Company

                               October 12, 1999

<TABLE>
<S>                       <C>
Parties:                  SciQuest.com, Inc. - "SciQuest"
                          The Dow Chemical Company - "Dow"

Exclusivity:              Dow shall use SciQuest as its exclusive third party direct laboratory products
                          electronic aggregator for North America.  As such, Dow shall not, directly or
                          indirectly  use any other person or firm for its third party direct scientific and
                          laboratory products electronic aggregator other than SciQuest or a party designated by
                          SciQuest as a SciQuest strategic partner or affiliate (the "Exclusivity Arrangement").
                          In addition, Dow shall not enter into any agreement with a third party to serve as a
                          third party direct laboratory products electronic aggregator in any territory outside
                          of North America unless Dow shall have first notified SciQuest of such opportunity and
                          shall have negotiated in good faith for SciQuest to act as its exclusive third party
                          direct laboratory products electronic aggregator in such territory.  SciQuest shall
                          also be Dow's exclusive third party electronic channel for marketing and selling its
                          used, refurbished and surplus scientific equipment through an electronic distribution
                          system.

Term:                     3 years.

Minimum Volume:           Dow shall use its best efforts to purchase a minimum of $5 million in Qualified
                          Scientific Products through the SciQuest system in each calendar year during the term
                          of the Exclusivity Arrangement.  The minimum volume shall include any purchases by "Dow
                          Subsidiaries".  Dow Subsidiaries shall be defined as any foreign or domestic
                          subsidiary, including any incorporated or unincorporated company, joint venture or
                          partnership, which is at least fifty percent (50%) owned, directly or indirectly by
                          Dow, or if not fifty percent (50%) owned, then the maximum percent ownership permitted
                          by law in the relevant country, and shall include any company or enterprise which,
                          irrespective of ownership, is operated by Dow or a "Dow Subsidiary".  Only subsidiaries
                          having the express authorization of Dow shall be included.

Initial Warrants:         In partial consideration for Dow's entering into the Exclusivity Arrangement, directing
                          its suppliers to participate in the SciQuest system, participating in reasonable case
                          studies and promoting as agreed to between the parties from time to time the SciQuest
                          solution, SciQuest shall issue to Dow, upon the execution of Definitive Agreements, a
                          warrant to acquire  75,000 shares of SciQuest common stock at an exercise price of
                          $0.001 per share.  One-third of the Initial Warrant shall be exercisable upon each
                          anniversary of the date the Initial Warrant is granted.

Dow's Suppliers:          Except for products and supplies that Dow decides in its sole discretion to purchase
                          directly, Dow shall use its best efforts to direct  all of its suppliers of scientific
                          products and supplies to use SciQuest as the Third Party Aggregator for Dow purchases.
                          Dow agrees to the use of customary and reasonable letters, meetings and other
                          communications designed to lead to the acceptance by such suppliers of SciQuest as
</TABLE>
<PAGE>

<TABLE>
<S>                       <C>
                          Dow's electronic purchasing intermediary.

Participation in Case     Dow shall participate in reasonable case studies to be conducted by SciQuest regarding
 Study:                   electronic distribution of scientific products and supplies and the SciQuest system.
                          Dow acknowledges that by so agreeing it may incur certain reasonable expenses and that
                          the results of such case studies may be used by SciQuest in its marketing efforts.  Dow
                          specifically agrees to allow SciQuest to use  the fact that Dow is a customer of
                          SciQuest in all reasonable business uses and if specifically agreed to in writing, may
                          consider allowing SciQuest to use its name in publications, etc.

Promotion of SciQuest     As agreed by the parties on a case by case basis, Dow shall promote the SciQuest
 Solution:                solution in the scientific and laboratory products industry, to scientific product
                          suppliers and to other buyers of scientific products and supplies.

Incentive Warrants:       To encourage maximum utilization of the SciQuest system by Dow, SciQuest shall issue to
                          Dow, on February 15th 2001, 2002 and 2003, additional warrants to acquire that number
                          of shares of SciQuest common stock determined below, at the price to the public in the
                          initial public offering of SciQuest's common stock (the "Incentive Warrants").  The
                          number of shares of common stock eligible to be purchased pursuant to the Incentive
                          Warrants for each calendar year shall be determined as follows:

                          .  For 2000 (which shall consist of the period from the date of this Term Sheet until
                             December 31, 2000), the number of shares shall be equal to the quotient of (i) the
                             annual volume of Qualified Scientific Products sold to Dow through the SciQuest system
                             divided by (ii) [++++++++].

                          .  For 2001, the number of shares shall be equal to the quotient of (i) the annual
                             volume of  Qualified Scientific Products sold to Dow through the SciQuest system less
                             year 2000 volume) divided by (ii) [++++++++].

                          .  For 2002, the number of shares shall be equal to the quotient of (i) the annual
                             volume of Qualified Scientific Products sold to Dow through the SciQuest system less
                             year 2001 volume) divided by (ii) [++++++++].

                          Incentive Warrants shall be exercisable upon issuance.  [+++++++++++++++++++]

Termination of Warrants:  The Initial warrants and the Incentive warrants shall terminate, to the extent not
                          already exercised, upon the termination of the Definitive Agreements and, in any event,
                          five years after issuance.

Purchase of Shares:       Dow has expressed an indication of interest in purchasing,175,000 shares of SciQuest
                          common stock at a price equal to 80% of the price to the public in the initial public
                          offering of SciQuest's common stock (based upon an assumed $21.00 price to the public),
                          which indication of interest does not constitute an agreement to purchase.  Such sale
                          of shares to Dow, if such shares are offered and if such sale is consummated, would be
                          consummated no sooner than the sale to the public of the shares of common stock to be
                          sold in SciQuest's initial public offering.  Further, if the sale of shares to Dow is
                          consummated, Dow shall not sell such shares for a period of 180 days following the date
                          of such sale.  Any such sale of shares to Dow shall not be contingent upon the
                          execution of the Definitive Agreements.

Adjustment of Shares:     All references to share information, including number of shares and price per share,
                          shall be deemed automatically adjusted to reflect any stock dividend, stock split,
                          reverse stock
</TABLE>
<PAGE>

<TABLE>
<S>                       <C>
                          dividend or reverse stock split or any recapitalization of SciQuest.

Qualified Scientific      Qualified Scientific Products are scientific and laboratory products or supplies sold
 Products                 through the SciQuest system under the Standard SciQuest Supplier Agreement negotiated
                          by SciQuest directly with the supplier.  Qualified Scientific Products shall not
                          include orders of scientific products or supplies that are sold pursuant to terms
                          negotiated by Dow with the supplier and which would yield SciQuest less than a nominal
                          commission or discount.
</TABLE>

<PAGE>

                                                                   Exhibit 10.23

                                FIFTH AMENDMENT
                             OF SCIQUEST.COM, INC.
                               STOCK OPTION PLAN


     THIS FIFTH AMENDMENT of SciQuest.com, Inc. Stock Option Plan dated as of
the effective date of the SciQuest.com, Inc. 1999 Stock Incentive Plan (the "New
Plan") is conditioned upon the adoption of the New Plan and shall become
effective immediately upon the effectiveness of the New Plan.

     WHEREAS, the Board of Directors of SciQuest.com, Inc. (the "Company") has
adopted and the stockholders of the Company have approved the SciQuest.com, Inc.
Stock Option Plan, as amended (the "Plan"); and

     WHEREAS, the Board of Directors deems it to be in the best interests of the
Company to further amend the Plan in order to decrease the maximum number of
shares issuable pursuant to options granted under the Plan from 2,647,248 to
2,056,060 (as adjusted to reflect the Company's 1.516643-for-1 stock split
effective November 12, 1999).

     NOW, THEREFORE, the Plan shall be amended as follows:

     1.   The second sentence of Paragraph 4 of the Plan shall be deleted in its
entirety and the following substituted in lieu thereof:

          "The maximum number of shares of Stock which may be issued under the
          Plan shall be 2,056,060 (as adjusted to reflect the Company's
1.516643-for-1 stock split effective November 12, 1999).

     2.   Except as herein amended, the terms and provisions of the Plan shall
remain in full force and effect as originally adopted and approved.

     IN WITNESS WHEREOF, the undersigned hereby certifies that this Fifth
Amendment was duly adopted by the Board of Directors of the Company and shall be
effective as provided above.


                                                   SCIQUEST.COM, INC.
[CORPORATE SEAL]

                                                   By:    /s/  M. Scott Andrews
                                                         ----------------------
ATTEST:                                                   M. Scott Andrews
                                                          President

By:    /s/ Peyton C. Anderson
     -----------------------------
     Peyton C. Anderson
     Secretary

<PAGE>

                                                                   EXHIBIT 10.24

                              SCIQUEST.COM, INC.
                           1999 STOCK INCENTIVE PLAN


1.   Purpose
     -------

     The SciQuest.com, Inc. 1999 Stock Incentive Plan (the "Plan") is
established to advance the interests of the Company's stockholders by creating
an incentive for, and enhancing the Company's ability to attract, retain and
motivate, key employees, directors and consultants or advisors of the Company
and any successor corporations thereto (collectively, the "Company") or future
parent and/or subsidiary corporations of such corporation (as defined in
Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder (the "Code")) (all of whom, along with
the Company, sometimes being individually referred to as a "Participating
Company" and collectively referred to as the "Participating Company Group") by
providing such persons with equity ownership opportunities and performance-based
incentives and thereby better aligning the interests of such persons with those
of the Company's stockholders.

2.   Eligibility
     -----------

     All of the Company's employees, officers, directors, consultants and
advisors are eligible to be granted options, restricted stock or other stock-
based awards (each, an "Award") under the Plan.  Any person who has been granted
an Award under the Plan shall be deemed a "Participant."  The Board of Directors
of the Company (the "Board"), in its sole discretion, shall determine which
persons shall be granted Awards under the Plan.  A director of the Company shall
be eligible to be granted an Incentive Stock Option (as hereinafter defined)
only if the director is also an employee of the Company.  A consultant or
advisor to the Company or a non-employee director of the Company shall be
eligible to be granted only Awards other than Incentive Stock Options.
Participants may, if otherwise eligible, be granted additional Awards.

3.   Administration; Delegation
     --------------------------

     (a) Administration by Board.  The Plan shall be administered by the Board.
The Board shall have authority to grant Awards and to adopt, amend and repeal
such administrative rules, guidelines and practices relating to the Plan as it
shall deem advisable from time to time.  The Board may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem expedient to carry the Plan into
effect and it shall be the sole and final judge of such expediency.  No member
of the Board shall be liable for any action or determination relating to the
Plan.  All decisions by the Board shall be made in the Board's sole discretion
and shall be final and binding on all persons having or claiming any interest in
the Plan or in any Award.  No director or person acting pursuant to the
authority delegated by the Board shall be liable for any action or determination
under the Plan made in good faith.

     (b) Delegation to Executive Officers.  To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make
<PAGE>

Awards and exercise such other powers under the Plan as the Board may determine,
provided that the Board shall fix the maximum number of shares subject to Awards
and the maximum number of shares for any one Participant to be made by such
executive officers.

     (c) Appointment of Committees.  To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (each, a "Committee").  For so long as
the common stock, $0.001 par value per share (the "Common Stock"), of the
Company is registered under the Securities Exchange Act of 1934 (the "Exchange
Act"), the Board shall appoint one such Committee of not less than two members,
each member of which shall be a "non-employee director" as defined in Rule 16b-3
promulgated under the Exchange Act.  All references in the Plan to the "Board"
shall mean a Committee or the Board or the executive officer referred to in
Section 3(b) to the extent that the Board's powers or authority under the Plan
have been delegated to such Committee or executive officer.

4.   Stock Available For Awards
     --------------------------

     (a) Number of Shares.  Subject to adjustment under Section 4(b), Awards may
be made under the Plan for up to a maximum of Two Million, Eight Hundred
Fifty-Four, Nine Hundred Ninety-Eight (2,854,998) shares of Common Stock. If any
Award expires or is terminated, surrendered or canceled without having been
fully exercised or is forfeited in whole or in part or results in any Common
Stock not being issued, the unused Common Stock covered by such Award shall
again be available for the grant of Awards under the Plan, subject, however, in
the case of Incentive Stock Options, to any limitation required under the Code.
Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.

     (b) Adjustments to Common Stock.  In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a normal cash dividend, (i) the number and class of securities available
under this Plan, (ii) the number and class of security and exercise price per
share subject to each outstanding Option (as defined below), (iii) the
repurchase price per security subject to each outstanding Restricted Stock Award
(as defined below), and (iv) the terms of each other outstanding stock-based
Award, if any, shall be appropriately adjusted by the Company (or substituted
Awards may be made, if applicable) to the extent the Board shall determine, in
good faith, that such an adjustment (or substitution) is necessary and
appropriate.  If this Section 4(b) applies and Section 9(a) also applies to any
event, Section 9(a) shall be applicable to such event, and this Section 4(b)
shall not be applicable.

5.   Stock Options
     -------------

     (a) General.  The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable.  Any Option granted to a Participant who is subject to
the

2
<PAGE>

provisions of Section 16 of the Exchange Act shall not become exercisable for a
period of at least six (6) months following the date of grant. An Option which
is not intended to be or does not qualify as an Incentive Stock Option shall be
designated or deemed a "Nonstatutory (or Non-Qualified) Stock Option."

     (b) Incentive Stock Options.  An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and construed consistently with the requirements of Section 422 of
the Code.  The Company shall have no liability to a Participant who has been
awarded an Option (an "Optionee"), or any other party, if an Option (or any part
thereof) which is intended to be an Incentive Stock Option is not an Incentive
Stock Option.

     (c) Exercise Price.  The Board shall establish, in its sole discretion, the
exercise price at the time each Option is granted and specify it in the
applicable option agreement; provided, however, that (i) the exercise price per
share for an Incentive Stock Option shall be not less than the fair market value
of a share of Common Stock on the date of grant of such Incentive Stock Option,
as determined by the Board in good faith (the "Fair Market Value"),  and (ii)
the exercise price per share of an Incentive Stock Option granted to an Optionee
who at the time the Incentive Stock Option is granted owns stock possessing more
than ten percent (10%) of the total combined voting power of all classes of
stock of a Participating Company within the meaning of Section 422(b)(6) of the
Code (a "Ten Percent Owner Optionee") shall be not less than one hundred ten
percent (110%) of the Fair Market Value.  Notwithstanding the foregoing, an
Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be
granted by the Board in its discretion with an exercise price lower than the
minimum exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner qualifying under the
provisions of Section 424(a) of the Code.  Nothing hereinabove shall require
that any such assumption or modification result in the Option having the same
characteristics, attributes or tax treatment as the Option for which it is
substituted.

     (d) $100,000 Limitation.  The aggregate fair market value, determined as of
the date on which an Incentive Stock Option is granted, of the shares of Common
Stock with respect to which Incentive Stock Options (determined without regard
to this subsection) are first exercisable during any calendar year (under this
Plan or under any other plan of the Participating Company Group) by any Optionee
shall not exceed $100,000.  If such limitation would be exceeded with respect to
an Optionee for a calendar year, the Incentive Stock Option shall be deemed a
Nonstatutory Stock Option to the extent of such excess.

     (e) Time for Granting Incentive Stock Options. All Incentive Stock Options
must be granted, if at all, within ten (10) years from the earlier of the date
the Plan is adopted by the Board or the date the Plan is duly approved by the
stockholders of the Company.

     (f) Duration of Options. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board may specify in the applicable
option agreement; provided, however, that (i) no Incentive Stock Option shall be
exercisable after the expiration of ten (10) years after the date such Incentive
Stock Option is granted, (ii) no Incentive Stock Option granted to a Ten Percent
Owner Optionee shall be exercisable after the expiration of five

3
<PAGE>

(5) years after the date such Incentive Stock Option is granted and (iii) no
Incentive Stock Option shall be exerciseable after the date the Optionee's
employment with the Participating Company Group is terminated for cause (as
determined in the sole discretion of the Board); and provided, further, that an
Option shall terminate and cease to be exercisable no later than three (3)
months after the date on which the Optionee terminates employment with the
Participating Company Group, unless Optionee's employment with the Participating
Company Group shall have terminated as a result of the Optionee's death or
disability (within the meaning of Section 22(e)(3) of the Code), in which event
the Option shall terminate and cease to be exercisable no later than twelve (12)
months from the date on which the Optionee's employment terminated. For this
purpose, an Optionee's employment shall be deemed to have terminated on account
of death if the Optionee dies within three (3) months following the Optionee's
termination of employment.

     (g)  Exercise of Options.  Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 5(f) for the number of shares for
which the Option is exercised.

     (h)  Payment Upon Exercise.  Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:

          (1) in cash or by check, payable to the order of the Company;

          (2) except as the Board may otherwise provide in an option agreement,
by delivery of an irrevocable and unconditional undertaking by a creditworthy
broker to deliver promptly to the Company sufficient funds to pay the exercise
price, or delivery by the Optionee to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price;

          (3) to the extent permitted by the Board and expressly provided in an
option agreement, (i) by delivery of shares of Common Stock owned by the
Optionee valued at their Fair Market Value, which Common Stock was owned by the
Optionee at least six (6) months prior to such delivery, (ii) to the extent
permitted by applicable law, by delivery of a promissory note of the Optionee to
the Company secured by valuable collateral acceptable to the Board and on other
terms determined by the Board, or (iii) by payment of such other lawful
consideration as the Board may determine; or

          (4) any combination of the above permitted forms of payment.

6.   Restricted Stock
     ----------------

     (a) Grants. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award, and subject to such other terms and
conditions as the Board shall

4
<PAGE>

determine (each, a "Restricted Stock Award").

     (b) Terms and Conditions. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the duration of
restrictions, conditions for repurchase (or forfeiture) and the issue price, if
any; provided, however, that any Restricted Stock Award granted to a Participant
who is subject to the provisions of Section 16 of the Exchange Act shall
restrict the release of shares under the Restricted Stock Award for a period of
at least six (6) months from the date of grant. Any stock certificates issued in
respect of a Restricted Stock Award shall be registered in the name of the
Participant and held in escrow by the Company, together with a stock power
endorsed in blank, with the Company (or its designee). At the expiration of the
applicable restriction periods, the Company (or such designee) shall deliver the
certificates no longer subject to such restrictions to the Participant or if the
Participant has died, to the beneficiary designated, in a manner determined by
the Board, by a Participant to receive amounts due or exercise rights of the
Participant in the event of the Participant's death (the "Designated
Beneficiary"). In the absence of an effective designation by a Participant,
Designated Beneficiary shall mean the Participant's estate.

7.   Other Stock-based Awards
     ------------------------

     The Board shall have the right to grant other Awards based upon the Common
Stock having such terms and conditions as the Board may determine, including the
grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation rights.

8.   General Provisions Applicable to Awards
     ---------------------------------------

     (a) Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, to the extent relevant in
the context, shall include references to authorized transferees.

     (b) Documentation. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine. Each Award may
contain terms and conditions in addition to those set forth in the Plan.

     (c) Board Discretion. Except as otherwise provided by the Plan, each type
of Award may be made alone or in addition or in relation to any other type of
Award. The terms of each type of Award need not be identical, and the Board need
not treat Participants uniformly.

     (d) Termination of Status. The Board shall determine the effect on an Award
of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.

5
<PAGE>

     (e) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. The Board may allow Participants to
satisfy such tax obligations in whole or in part in shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law, deduct
any such tax obligations from any payment of any kind otherwise due to a
Participant.

     (f) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same of a different type, changing the date or exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that (other than in the case of a deemed conversion of an
Incentive Stock Option to a Nonstatutory Stock Option by reason of the failure
of such Option to qualify (or continue to qualify) as an Incentive Stock Option
under applicable law, to which deemed conversion this provision shall not apply)
the Participant's consent to such action shall be required unless the Board
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

     (g) Conditions on Delivery of Stock. The Company shall not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations. Notwithstanding anything herein to the contrary, the Board of
Directors may not change the exercise price of any Option previously granted
except pursuant to Section 4(b) and Section 424(a) of the Code.

9.   Acquisition Events
     ------------------

     (a) Consequences of Acquisition Events.  Except to the extent otherwise
provided in the instrument evidencing the Award or in any other agreement
between the Participant and the Company:

               (i) Upon the occurrence of an Acquisition Event (as hereinafter
defined),

                   (A) any portion of a Restricted Stock Award then outstanding
that will become vested within twelve (12) months after the Acquisition Event
shall become vested and immediately free of all restrictions; and

                   (B) any portion of any other stock-based Awards, other than
Options and stock appreciation rights, that will become vested within twelve
(12) months after the Acquisition Event, shall become immediately exercisable,
realizable or vested, or shall be

6

<PAGE>

immediately free of all restrictions or conditions, as the case may be.

                   (C) any portion of any Option or stock appreciation right
then outstanding that will become vested within twelve (12) months after the
Acquisition Event shall become vested and immediately exercisable upon the
occurrence of the Acquisition Event or such earlier date as may be specified by
the Board by written notice to the Participants, and, as applicable, the Board
may take one or both of the following additional actions with respect to then
outstanding Options and stock appreciation rights: (i) provide that such Options
and stock appreciation rights shall be assumed, or equivalent Options or stock
appreciation rights be substituted by the acquiring or succeeding corporation
(or an affiliate thereof), or (ii) upon written notice to the Participants,
provide that all then unexercised Options and stock appreciation rights, or, in
the Board's discretion, such portions thereof as become vested solely by reason
of this provision, will terminate to the extent not exercised by the
Participants prior to the consummation of such Acquisition Event or such earlier
date as may be specified by the Board by written notice to Participants.

     As used herein, an "Acquisition Event" shall mean: (a) any merger or
consolidation which results in the voting securities of the Company outstanding
immediately prior thereto representing (either by remaining outstanding or by
being converted into voting securities of the surviving or acquiring entity)
less than 50% of the combined voting power of the voting securities of the
Company or such surviving or acquiring entity outstanding immediately after such
merger or consolidation; (b) any sale of all or substantially all of the assets
of the Company; (c) the complete liquidation of the Company; or (d) the
acquisition of "beneficial ownership" (as defined in Rule 13d-3 under the
Exchange Act) of securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding securities (other than
through a merger or consolidation or an acquisition of securities directly from
the Company) by any "person," as such term is used in Section 13(d) and 14(d) of
the Exchange Act, other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any corporation
owned directly or indirectly by the stockholders of the Company.

     (b)  Assumption of Options Upon Certain Events.  The Board may grant Awards
under the Plan in substitution for stock and stock-based awards held by
employees of another corporation who become employees of the Company as a result
of a merger or consolidation of the employing corporation with the Company or
the acquisition by the Company of property or stock of the employing
corporation. The substitute Awards shall be granted on such terms and conditions
as the Board considers appropriate in the circumstances.

10.  Miscellaneous
     -------------

     (a)  No Right to Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

7
<PAGE>

     (b) No Rights as Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any right as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.

     (c) Status of Rights to Payments under Plan. To the extent that any person
acquires a right to receive payments from the Company under the Plan, such right
shall, except as otherwise provided by the Board, be no greater than the right
of an unsecured general creditor of the Company. All payments to be made
hereunder shall be paid from the general funds of the Company, and no special or
separate fund shall be established and no segregation of assets shall be made to
assure payment of such amounts, except as otherwise provided by the Committee.
With respect to any payments not yet made to a Participant by the Company,
nothing contained herein shall give any such Optionee any rights that are
greater than those of a general creditor of the Company.

     (d) Subject to Law. The Plan and the grant of Awards hereunder shall be
subject to all applicable federal and state laws, rules, and regulations and to
such approvals by any United States government or regulatory agency as may be
required.

     (e) Severability. If any provision of this Plan or an option agreement is
or becomes or is deemed invalid, illegal or unenforceable in any jurisdiction,
or would disqualify the Plan or any agreement evidencing an Award under any law
deemed applicable by the Board, such provision shall be construed or deemed
amended to conform to applicable laws or, if it cannot be construed or deemed
amended without, in the determination of the Board, materially altering the
intent of the Plan or the agreement, it shall be stricken and the remainder of
the Plan or the agreement shall remain in full force and effect.

     (f) Effective Date and Term of Plan. The Plan shall become effective on the
date on which it is adopted by the Board, but no Incentive Stock Option granted
to an Optionee shall be effective unless and until the Plan has been approved by
the Company's stockholders. No Awards shall be granted under the Plan after the
completion of ten years from the earlier of (i) the date on which the Plan was
adopted by the Board or (ii) the date the Plan was approved by the Company's
stockholders, but Awards previously granted may extend beyond that date.

     (g) Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, provided that no increase in the total
number of shares available for Awards under the Plan (except by operation of the
provisions of Section 4(b) above) or for grants of Incentive Stock Options under
the Plan may be made, unless and until such amendment shall have been approved
by the Company's stockholders.

     (h) Stockholder Approval. For purposes of this Plan, stockholder approval
shall mean approval by a vote of the stockholders in accordance with the
requirements of Section 422 of the Code.

8
<PAGE>

     (i) Governing Law. The provisions of the Plan and all Awards made hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Delaware, without regard to any applicable conflicts of law.


                                        Adopted by the Board of Directors
                                        on October 12, 1999, conditioned upon
                                        and effective upon the completion of
                                        the initial public offering of the
                                        Company's stock.

                                        Approved by the stockholders of the
                                        Company on November 12, 1999,
                                        conditioned upon and effective upon the
                                        completion of the initial public
                                        offering of the Company's stock.

9


<PAGE>

                                                                   EXHIBIT 10.25

                               SciQuest.com, Inc.

                             5151 McCrimmon Parkway
                                   Suite 208
                             Morrisville, NC 27560


                                October 25, 1999

                                                           STRICTLY CONFIDENTIAL
                                                           ---------------------
Dupont Pharmaceuticals Company
Attention:  Ms. Laurie Strehl



     Re:  Strategic Relationship between SciQuest.com, Inc. ("SciQuest") and
          ------------------------------------------------------------------
          Dupont Pharmaceuticals Company ("Dupont Pharmaceuticals")
          ---------------------------------------------------------

Laurie:

     This Letter Agreement, together with the attached Term Sheet, set forth the
general terms and conditions of the proposed business transaction between
SciQuest and Dupont Pharmaceuticals.  This Agreement constitutes a binding
agreement to consummate the transactions described herein, except as expressly
provided in the Term Sheet.  The summary of important terms and conditions of
the proposed transaction and the intentions of the parties are set forth herein
and in the attached Term Sheet, the terms of which are incorporated herein by
reference.

     1.  Definitive Agreements.  The terms, conditions and intentions set forth
         ---------------------
herein and in the Term Sheet are to be supplemented by mutually acceptable,
additional agreements to be negotiated and executed by SciQuest and Dupont
Pharmaceuticals ("Additional Agreements").  Such Additional Agreements shall
contain such warranties, representations, covenants, agreements that are
typically found in transactions of the type contemplated herein in addition to
such other provisions agreed to by the parties at that time.  SciQuest and
Dupont Pharmaceuticals will cooperate with each other to the fullest extent in
connection with the prompt negotiation and execution of Additional Agreements
and other necessary documentation.

     2.  Confidentiality and Trade Secrets.  In the performance of this Letter
         ---------------------------------
Agreement, each party may disclose to the other certain Proprietary Information.
For the purposes of this Letter Agreement, (i) "Proprietary Information" means
Trade Secrets and any other information that is of value to its owner and is
treated as confidential; (ii) "Trade Secrets" means business or technical
information, including, but not limited to, a formula, pattern, program, device,
compilation of information, method, technique, or process that:  (y) derives
independent actual or potential commercial value from not being generally known
or
<PAGE>

Dupont Pharmaceuticals Company
October 7, 1999
Page 2


readily ascertainable through independent development or reverse engineering
by persons who can obtain economic value from its disclosure or use; and (z) is
the subject of efforts that are reasonable under the circumstances to maintain
its secrecy; (iii) "Owner" refers to the party disclosing Proprietary
Information hereunder, whether such party is SciQuest or Dupont Pharmaceuticals
and whether such disclosure is directly from Owner or through Owner's employees
or agents; and (iv) "Recipient" refers to the party receiving any Proprietary
Information hereunder.

     Recipient acknowledges and agrees that the Proprietary Information shall
remain the sole and exclusive property of Owner or a third party providing such
information to Owner.  The disclosure of the Proprietary Information to
Recipient does not confer upon Recipient any license, interest, or rights of any
kind in or to the Proprietary Information, except as provided under this Letter
Agreement.  Recipient shall require any Recipient of Proprietary Information to
abide by the restrictions of this Agreement concerning the Proprietary
Information before disclosing such Proprietary Information to the Recipient.
Subject to the terms set forth herein, Recipient shall protect the Proprietary
Information of Owner with the same degree of protection and care Recipient uses
to protect its own Proprietary Information, but in no event less than reasonable
care.  With regard to Trade Secrets, the obligations in this Section shall
continue for so long as such information continues to be a Trade Secret.  With
regard to Confidential Information, the obligations in this Section shall
continue for a period of four (4) years after disclosure.

     3.  Termination.  Either party may terminate this Letter Agreement upon a
         ------------
material breach of this Letter Agreement by the other party, which breach shall
continue for at least thirty days following delivery of written notice of such
breach.

     4.  Closing.  The transactions contemplated herein shall occur on a date to
         -------
be set pursuant to the terms of the Additional Agreements, in the offices of
SciQuest, but, in any event, no later than 10:00 a.m. on December 31, 1999 (the
"Closing").

     5.  Negotiations With Third Parties.  Commencing on the date on which
         -------------------------------
SciQuest and Dupont Pharmaceuticals execute this Letter Agreement and ending on
the earlier to occur of (i) December 31, 1999 or (ii) Closing, neither Dupont
Pharmaceuticals nor its affiliates, nor any of its officers, directors,
employees, agents, shareholders or representatives (including but not limited
to, brokers, bankers, finders, accountants, attorneys or trustees engaged by or
representing it or any other related party) shall engage in any discussions with
respect to the type of business transactions contemplated herein, and shall
suspend any such discussions in progress on the date of acceptance of this
Letter Agreement.

     6.  Expenses.  Each party will bear and pay its own costs and expenses
         --------
incurred with respect to the transactions contemplated herein.

     7.  Publicity.  Neither SciQuest nor Dupont Pharmaceuticals shall issue a
         ----------
publicity release or public announcement or otherwise make any disclosure (other
than disclosure by SciQuest relating to the registration statement on Form S-1
filed by it in connection with its initial public offering) concerning this
Letter Agreement or the transactions contemplated hereby, without prior review
and consent by the other party hereto (which consent shall not be unreasonably
withheld).
<PAGE>

Dupont Pharmaceuticals Company
October 7, 1999
Page 3


     8.  Entire Understanding.  This Letter Agreement and the attached Term
         --------------------
Sheet embody the entire understanding of the parties hereto with respect to the
transactions contemplated herein and supersede all prior or contemporaneous
written or oral understandings or arrangements and commitments with respect
thereto.  This Letter Agreement and the attached Term Sheet may be amended,
modified, superseded or canceled only by a written instrument which specifically
states that it amends this such document, executed by an authorized officer of
each entity to be bound thereby.

     9.  Governing Law.  This Letter Agreement shall be governed by and
         -------------
construed in accordance with the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof.

     If this Letter Agreement is acceptable to you, please do so signify by
signing this copy of the Letter Agreement and returning it to the undersigned no
later than October 28, 1999.


                                    Respectfully,

                                    SCIQUEST.COM, INC.


                                    By:  /s/ Scott Andrews
                                         -----------------
                                         Mr. M. Scott Andrews
                                         President and Chief Executive Officer

ACCEPTED AND AGREED TO BY:

Dupont Pharmaceuticals Company


     By:  /s/ Richard E. Gin
          ------------------
     Name:   Richard E. Gin
             --------------
     Title:  CFO
             ---


Date:  10/28/99
       --------
<PAGE>

Dupont Pharmaceuticals Company
October 7, 1999
Page 4


                                  TERM SHEET

                              SciQuest.com, Inc.
                                      and
                        Dupont Pharmaceuticals Company

                               October 25, 1999

<TABLE>

<S>                       <C>

Parties:                  SciQuest.com, Inc. - "SciQuest"
                          Dupont Pharmaceuticals Company- "Dupont"

Relationship:             Dupont shall use SciQuest as its exclusive third party direct laboratory products
                          electronic aggregator for North America . In addition, Dupont shall not enter into any
                          agreement with a third party to serve as a third party direct laboratory products
                          electronic aggregator in any territory outside of North America unless Dupont shall
                          have first notified SciQuest of such opportunity and shall have negotiated in good
                          faith for SciQuest to act as its third party direct laboratory products electronic
                          aggregator in such territory. Dupont shall use SciQuest as its exclusive third party
                          electronic channel for marketing and selling its used, refurbished and surplus
                          scientific equipment through an electronic distribution system.  Dupont reserves the
                          right to purchase goods directly from vendors if, at Dupont's sole discretion,  it
                          deems necessary; provided however that SciQuest is given reasonable notice and an
                          opportunity to provide services that would satisfy Dupont's requirements.

Term:                     3 years.

Dupont Purchasing Site    SciQuest shall create, develop, and maintain a private purchasing site accessible by
                          Dupont at no cost to Dupont  (the "Buyer Site").  The Buyer Site shall be a customer
                          specific version of the SciQuest Marketplace.  SciQuest shall have control over the
                          development of the Buyer Site subject to Dupont's approval.    SciQuest shall integrate
                          the Buyer Site with the enterprise procurement application chosen and implemented by
                          Dupont as reasonably requested by Dupont.

Minimum Volume:           Dupont shall use its best efforts to purchase a minimum of $5 million in Qualified
                          Scientific Products through the SciQuest system in each calendar year during the term
                          of the relationship.  The minimum volume shall include any purchases by "Dupont
                          Subsidiaries".  The minimum volume shall be prorated for each portion of a calendar
                          year for which this contract is in effect.  Dupont Subsidiaries shall be defined as any
                          foreign or domestic subsidiary, including any incorporated or unincorporated company,
                          joint venture or partnership, which is at least fifty percent (50%) owned, directly or
                          indirectly by Dupont, or if not fifty percent (50%) owned, then the maximum percent
                          ownership permitted by law in the relevant country, and shall include any company or
                          enterprise which, irrespective of ownership, is operated by Dupont or a "Dupont
                          Subsidiary".  Only subsidiaries having the express authorization of Dupont shall be
                          included.

Initial Warrants:         In partial consideration for Dupont's entering into the relationship, directing  its
                          suppliers to participate in the SciQuest system, participating in reasonable case
                          studies and promoting as agreed to between the parties from time to time the SciQuest
                          solution, SciQuest shall issue to Dupont, upon the execution of Definitive Agreements,
                          a warrant to acquire 75,000 shares of SciQuest common stock at an exercise price of
                          $0.001 per
</TABLE>
<PAGE>

Dupont Pharmaceuticals Company
October 7, 1999
Page 5

<TABLE>

<S>                       <C>
                          share.  One-third of the Initial Warrant shall be exercisable upon each
                          anniversary of the date the Initial Warrant is granted.

Dupont's Suppliers:       Dupont shall use its best efforts to direct  all of its suppliers of scientific
                          products and supplies to use SciQuest as the Third Party Aggregator for Dupont
                          purchases.  Dupont agrees to the use of customary and reasonable letters, meetings and
                          other communications designed to lead to the acceptance by such suppliers of SciQuest
                          as Dupont's electronic purchasing intermediary.  Dupont shall have final approval on
                          all communications coming from Dupont.

Participation in Case     Dupont shall participate in reasonable case studies to be conducted by SciQuest
 Study:                   regarding electronic distribution of scientific products and supplies and the SciQuest
                          system.  Dupont acknowledges that by so agreeing it may incur certain reasonable
                          expenses and that the results of such case studies may be used by SciQuest in its
                          marketing efforts, if approved by Dupont (such approval to be not unreasonably
                          withheld).  Dupont specifically agrees to allow SciQuest to use  the fact that Dupont
                          is a customer of SciQuest in all reasonable business uses, if approved by Dupont (such
                          approval to be not unreasonably withheld), and if specifically agreed to in writing,
                          may consider allowing SciQuest to use its name in publications, etc.

Promotion of SciQuest     As agreed by the parties on a case by case basis, Dupont shall promote the SciQuest
 Solution:                solution in the scientific products industry, to scientific product suppliers and to
                          other buyers of scientific products and supplies.

Incentive Warrants:       To encourage maximum utilization of the SciQuest system by Dupont, SciQuest shall issue
                          to Dupont, on February 15th 2001, 2002 and 2003, additional warrants to acquire that
                          number of shares of SciQuest common stock determined below, at the price to the public
                          in the initial public offering of SciQuest's common stock (the "Incentive Warrants").
                          The number of shares of common stock eligible to be purchased pursuant to the Incentive
                          Warrants for each calendar year shall be determined as follows:

                          .  For 2000 (which shall consist of the period from the date of this Term Sheet until
                             December 31, 2000), the number of shares shall be equal to the quotient of (i) the
                             annual volume of Qualified Scientific Products sold to Dupont through the SciQuest
                             system divided by (ii) [++++++++].

                          .  For 2001, the number of shares shall be equal to the quotient of (i) the annual
                             volume of  Qualified Scientific Products sold to Dupont through the SciQuest system
                             less year 2000 volume) divided by (ii) [++++++++].

                          .  For 2002, the number of shares shall be equal to the quotient of (i) the annual
                             volume of Qualified Scientific Products sold to Dupont through the SciQuest system less
                             year 2001 volume) divided by (ii) [++++++++].

                          Incentive Warrants shall be exercisable upon issuance.  [++++++++++++++++++++]

Termination of Warrants:  The Initial warrants and the Incentive warrants shall terminate, to the extent not
                          already exercised, upon the termination of the Definitive Agreements and, in any event,
                          five years after issuance.

Adjustment of Shares:     All references to share information, including number of shares and price per share,
                          shall be deemed automatically adjusted to reflect any stock dividend, stock split,
                          reverse stock
</TABLE>
<PAGE>

Dupont Pharmaceuticals Company
October 7, 1999
Page 6

<TABLE>

<S>                       <C>
                          dividend or reverse stock split or any recapitalization of SciQuest.

Qualified Scientific      Qualified Scientific Products are scientific and laboratory products or supplies sold
 Products                 through the SciQuest system on terms and conditions that are mutually agreeable to
                          SciQuest and Dupont.  If requested by Dupont, SciQuest shall enter into good faith
                          negotiations with the primary laboratory products partner (the "Primary Partner") to
                          agree upon terms and conditions for inclusion of Primary Partner's products in the
                          SciQuest system on terms mutually agreed to by SciQuest, Dupont, and Primary Partner.

Assignability             Dupont may assign the Letter Agreement, these Terms and Conditions, the Definitive
                          Agreements, and any Warrants granted hereunder to any successor in interest to the
                          assets of Dupont, whether by merger, acquisition, joint venture or otherwise.  SciQuest
                          shall retain reciprocal rights with respect to this Assignability section.

Limitation on Liability   Dupont's liability for breach of the Letter Agreement, these Terms and Conditions, the
                          Definitive Agreements, and any Warrants issued hereunder shall be limited to the return
                          of any warrants or stock purchased thereunder, or the net proceeds of such stock if
                          sold by Dupont.
</TABLE>

<PAGE>

                                                                    EXHIBIT 23.1


                      CONSENT OF INDEPENDENT ACCOUNTANTS
                      ----------------------------------

We hereby consent to the use in this Amendment No. 4 to the Registration
Statement on Form S-1 of our report dated August 20, 1999 relating to the
financial statements of SciQuest.com, Inc., and our report dated April 1, 1999
relating to the financial statements of BioSupplyNet, Inc., which appear in such
Registration Statement. We also consent to the references to us under the
headings "Experts" and "Selected Financial Data" in such Registration Statement.


/s/ PricewaterhouseCoopers LLP

Raleigh, NC
November 17, 1999






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