EXHIBIT 4.2
AMENDMENT No. 5
TO
RIGHTS AGREEMENT
THIS AMENDMENT No. 5 TO RIGHTS AGREEMENT (the "Amendment"), dated as of
July 24, 2002, is between divine, inc., a Delaware corporation formerly known as
divine interVentures, inc. (the "Company"), and Computershare Investor Services,
LLC, a Delaware limited liability company (the "Rights Agent").
RECITALS
A. The Company and the Rights Agent are parties to a Rights Agreement
dated as of February 12, 2001, as amended by Amendment No. 1 dated as of July 8,
2001; Amendment No. 2 dated as of August, 15, 2001; Amendment No. 3 dated as of
May 29, 2002; and Amendment No. 4 dated as of July 16, 2002 (as amended, the
"Rights Agreement");
B. Pursuant to Section 27 of the Rights Agreement, the Company and the
Rights Agent may supplement or amend the Rights Agreement from time to time in
accordance with the provisions of Section 27 thereof;
C. The Company has entered into a Second Amended and Restated
Securities Purchase Agreement dated July 24, 2002 (the "Second Amended and
Restated Securities Purchase Agreement"), pursuant to which the Company will
issue shares of its Series B-1 Convertible Preferred Stock (the "Series B-1
Preferred Stock") to certain persons identified therein as "Buyers" (including,
but not limited to, Oak Investment Partners X, Limited Partnership; Oak X
Affiliates Fund, Limited Partnership; Oak Investment Partners IX, Limited
Partnership; Oak IX Affiliates Fund, Limited Partnership; and Oak IX Affiliates
Fund-A, Limited Partnership);
D. The Board of Directors of the Company has determined that the
issuance and sale of its Series B-1 Preferred Stock and the other transactions
contemplated by the Second Amended and Restated Securities Purchase Agreement
are fair to and in the best interests of the Company and its stockholders; and
E. The Board of Directors of the Company has determined that it is
desirable to amend the Rights Agreement in connection with the transactions
contemplated by the Second Amended and Restated Securities Purchase Agreement.
AGREEMENTS
Accordingly, the parties agree as follows:
1. AMENDMENT OF SECTION 1(A). The definition of "Acquiring Person" in
Section 1(a) of the Rights Agreement is hereby amended and restated in its
entirety as follows:
(a) "ACQUIRING PERSON" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee
benefit plan of the Company, or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the
terms of any such plan, (iv) any Person who becomes the Beneficial Owner of
fifteen percent (15%) or more of the shares of Common Stock then outstanding as
a result of a reduction in the number of shares of Common Stock outstanding due
to the repurchase of shares of Common Stock by the Company unless and until such
Person, after becoming aware that such Person has become the Beneficial Owner of
fifteen percent (15%) or more of the then outstanding shares of Common Stock,
acquires beneficial ownership of additional shares of Common Stock representing
one percent (1%) or more of the shares of Common Stock then outstanding, (v) any
Person who is or becomes a party to that certain Securities Purchase Agreement,
dated on or about May 28, 2002, (the "Original Securities Purchase Agreement"),
by and among the Company and the Persons identified therein as "Buyers"
(including, but not limited to, Oak Investment Partners X, Limited Partnership;
Oak X Affiliates Fund, Limited Partnership; Oak Investment Partners IX, Limited
Partnership; Oak IX Affiliates Fund, Limited Partnership; Oak IX Affiliates
Fund-A, Limited Partnership; and their Affiliates or Associates (collectively,
the "Oak Group")), and/or any subsequent amendment to or restatement of the
Original Securities Purchase Agreement, including the Amended and Restated
Securities Purchase Agreement dated as of July 16, 2002 by and among the Company
and the Persons identified therein as "Buyers" (including, but not limited to,
the Oak Group), and the Second Amended and Restated Securities Purchase
Agreement, dated July 24, 2002, by and among the Company and the Persons
identified therein as "Buyers" (including, but not limited to, the Oak Group),
but only to the extent such Person would become an Acquiring Person due to the
Beneficial Ownership of Common Stock issued or issuable upon conversion or
exercise of Series B Convertible Preferred Stock, Series B-1 Convertible
Preferred Stock, or any other securities issued pursuant to the Original
Securities Purchase Agreement and/or any amendment thereto or restatement
thereof, respectively, or (vi) any Person which beneficially owns 10% or more of
the shares of Common Stock outstanding on February 12, 2001, unless and until
such time as such Person together with its Affiliates and Associates, directly
or indirectly, becomes the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding, in which event such Person shall immediately
become an Acquiring Person.
2. EFFECTIVENESS. This Amendment shall be deemed effective as of July
24, 2002, as if executed on such date. Except as amended hereby, the Rights
Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.
3. MISCELLANEOUS. This Amendment shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of the State of Delaware applicable
to contracts to be made and performed entirely within the State of Delaware.
This Amendment may be executed in any number of counterparts, each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument. If any
term, provision, covenant, or restriction of this Amendment is held by a court
of competent jurisdiction or other authority to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants, and
restrictions of this Amendment shall remain in full force and effect and shall
in no way be affected, impaired, or invalidated.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
DIVINE, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President,
Chief Financial Officer,
and Treasurer
COMPUTERSHARE INVESTOR SERVICES, LLC
By /s/ ▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇
Title: Relationship Manager
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