{"id":41181,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/note-purchase-agreement-navisite-inc-compaq-financial-service.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"note-purchase-agreement-navisite-inc-compaq-financial-service","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/note-purchase-agreement-navisite-inc-compaq-financial-service.html","title":{"rendered":"Note Purchase Agreement &#8211; NaviSite Inc., Compaq Financial Service Corp. and CMGI Inc."},"content":{"rendered":"<pre>\n                                                                  Execution Copy\n                                                                  --------------\n\n                            NOTE PURCHASE AGREEMENT\n\n                          dated as of October 29, 2001\n\n                                     among\n\n                                NAVISITE, INC.,\n\n                     COMPAQ FINANCIAL SERVICES CORPORATION\n\n                                      AND\n\n                                   CMGI, INC.\n\n \n                               TABLE OF CONTENTS\n\n                                   ARTICLE 1\n                                  Definitions\n\n                                                                           PAGE\n                                                                           ----\n\nSection 1.01.  Certain Defined Terms.......................................  1\nSection 1.02.  Index Of Defined Terms......................................  7\nSection 1.03.  Accounting Terms And Determinations.........................  8\nSection 1.04.  Other Definitional Provisions...............................  8\n\n                                   ARTICLE 2\n                           Purchase And Sale Of Notes\n\nSection 2.01.  Purchase And Sale Of Notes..................................  9\n\n                                   ARTICLE 3\n                                    Closing\n\nSection 3.01.  The Closing.................................................  9\n\n                                   ARTICLE 4\n                 Representations And Warranties Of The Company\n\nSection 4.01.  Corporate Existence and Power...............................  9\nSection 4.02.  Due Authorization...........................................  9\nSection 4.03.  Binding Effect; Liens of Security Documents................. 10\nSection 4.04.  Governmental Consents....................................... 10\nSection 4.05.  Non-contravention........................................... 10\nSection 4.06.  SEC Reports; Financial Statements........................... 11\nSection 4.07.  Capitalization.............................................. 11\nSection 4.08.  Valid Issuance of Stock..................................... 13\nSection 4.09.  Litigation.................................................. 14\nSection 4.10.  Ownership of Property....................................... 14\nSection 4.11.  No Default.................................................. 14\nSection 4.12.  Absence of Certain Changes.................................. 14\nSection 4.13.  No Burdensome Restrictions.................................. 14\nSection 4.14.  Subsidiaries; Other Equity Investments...................... 14\nSection 4.15.  Investment Company Act...................................... 15\nSection 4.16.  Taxes....................................................... 15\nSection 4.17.  Employment Matters.......................................... 15\nSection 4.18.  Compliance with ERISA....................................... 15\nSection 4.19.  Brokers..................................................... 16\nSection 4.20.  Related Transactions........................................ 16\nSection 4.21.  Employment, Shareholders and Subscription Agreements........ 16\n\n                                       i\n\n \n                                                                           PAGE\n                                                                           ----\n\nSection 4.22.  Representations and Warranties Incorporated from the \n               Security Documents.......................................... 16\nSection 4.23.  Environmental and Safety Laws............................... 16\nSection 4.24.  Invention Assignment and Confidentiality Agreement.......... 16\nSection 4.25.  Intellectual Property....................................... 17\nSection 4.26.  Registration Rights......................................... 17\nSection 4.27.  Real Property Interests..................................... 17\n\n                                   ARTICLE 5\n                             Affirmative Covenants\n\nSection 5.01.  Financial Statements And Other Reports...................... 18\nSection 5.02.  Payment Of Obligations...................................... 20\nSection 5.03.  Conduct Of Business And Maintenance Of Existence............ 20\nSection 5.04.  Maintenance Of Property Insurance........................... 20\nSection 5.05.  Compliance With Laws; Filings Of Reports.................... 21\nSection 5.06.  Inspection Of Property, Books And Records................... 22\nSection 5.07.  Reservation Of Shares....................................... 22\nSection 5.08.  Purchasers' Meetings........................................ 22\nSection 5.09.  Board Of Directors Meetings................................. 23\nSection 5.10.  Meeting Of Stockholders; Stockholder Approval............... 23\n\n                                   ARTICLE 6\n                               Negative Covenants\n\nSection 6.01.  Debt........................................................ 23\nSection 6.02.  Negative Pledge............................................. 24\nSection 6.03.  Consolidations, Mergers And Sales Of Assets................. 24\nSection 6.04.  Restricted Payments......................................... 25\nSection 6.05.  Purchase Of Assets; Investments............................. 25\nSection 6.06.  Transactions With Affiliates................................ 25\nSection 6.07.  Notice Of Issuance Of Securities............................ 25\nSection 6.08.  Amendments And Waivers...................................... 26\n\n                                   ARTICLE 7\n                               Events Of Default\n\nSection 7.01.  Events Of Default........................................... 26\n\n                                   ARTICLE 8\n                                   Conditions\n\nSection 8.01.  Conditions To Closing....................................... 28\n\n                                      ii\n\n \n                                                                           PAGE\n                                                                           ----\n                                   ARTICLE 9\n                Expenses, Indemnity, Taxes And Right To Perform\n\nSection 9.01.  Expenses.................................................... 29\nSection 9.02.  Indemnity................................................... 30\n\n                                   ARTICLE 10\n                                 Miscellaneous\n\nSection 10.01.  Survival................................................... 30\nSection 10.02.  No Waivers................................................. 30\nSection 10.03.  Security Agreement......................................... 31\nSection 10.04.  Notices.................................................... 31\nSection 10.05.  Payments................................................... 32\nSection 10.06.  Severability............................................... 32\nSection 10.07.  Amendments And Waivers..................................... 33\nSection 10.08.  Successors And Assigns; Registration....................... 33\nSection 10.09.  Lost Or Destroyed Notes.................................... 34\nSection 10.10.  Headings................................................... 35\nSection 10.11.  Confidentiality............................................ 35\nSection 10.12.  Governing Law; Submission To Jurisdiction.................. 35\nSection 10.13.  Waiver Of Jury Trial....................................... 36\nSection 10.14.  Counterparts; Integration.................................. 36\n \n \nEXHIBIT A - Form of Initial Note........................................... A-1\n\nEXHIBIT B - Form of Guarantee and Security Agreement....................... B-1\n\nEXHIBIT C - Form of Amendment to and Restatement of the Investor \n            Rights Agreement............................................... C-1\n \n                                      iii\n\n \n                            NOTE PURCHASE AGREEMENT\n\n     This Note Purchase Agreement (this \"AGREEMENT\") is made and entered into as\nof October 29, 2001 among NaviSite, Inc., a Delaware corporation (the\n\"COMPANY\"), Compaq Financial Services Corporation, a Delaware corporation\n(\"CFS\"), and CMGI, Inc., a Delaware corporation (\"CMGI,\" together with CFS, the\n\"PURCHASERS\").\n\n     WHEREAS, as more fully described in the Transaction Agreement, the Company\nwill issue to CFS a senior, secured, convertible note in an aggregate principal\namount equal to the sum of $55,000,000 plus an amount equal to the interest that\nwould have accrued on $35,000,000 of such note from November 1, 2001 up to and\nincluding the Closing Date had such note been issued on November 1, 2001 (the\n\"CFS NOTE\"), and the Company will issue to CMGI a senior, secured, convertible\nnote in the principal amount of $10,000,000 (the \"CMGI NOTE,\" together with the\nCFS Note, the \"NOTES\"), in each case, substantially in the form attached hereto\nas Exhibit A;\n\n     WHEREAS, on or prior to the Closing Date, (i) the Company and the\nCollateral Representative will enter into a Guarantee and Security Agreement\nsubstantially in the form attached hereto as Exhibit B (the \"SECURITY\nAGREEMENT\") and (ii) the Company and the Purchasers will enter into the\nAmendment to and Restatement of the Investor Rights Agreement substantially in\nthe form attached hereto as Exhibit C (the \"INVESTOR RIGHTS AGREEMENT\nAMENDMENT\");\n\n     NOW, THEREFORE, in consideration of the foregoing recitals and the\nrepresentations, warranties, covenants and agreements set forth herein and other\ngood and valuable consideration, the receipt and sufficiency of which are hereby\nacknowledged, the parties hereto agree as follows:\n\n                                   ARTICLE 1\n                                  Definitions\n\n     Section 1.01. Certain Defined Terms. The following terms have the\nfollowing meanings:\n\n     \"AFFILIATE\" means (i) any Person that directly or indirectly controls the\nCompany, (ii) any Person (other than the Company or any of its Subsidiaries)\nwhich is controlled by or is under common control with such controlling Person\nand (iii) in the case of an individual, the parents, descendants, siblings and\nspouse of such individual.  As used herein, the term \"control\" of a Person means\nthe possession, directly or indirectly, of the power to vote 10% or more of any\nclass of voting securities of such Person or to direct or cause the direction of\nthe \n\n \nmanagement or policies of a Person, whether through the ownership of voting\nsecurities, by contract or otherwise.\n\n     \"AFFILIATE OBLIGATIONS\" means obligations of the Company to CMGI arising\nfrom (i) services and benefits provided by CMGI to the Company including but not\nlimited to, employee benefits, insurance, consulting, professional and legal\nservices, security services, recruiting fees, telecommunication charges,\nsoftware licenses, office supplies, human resources, facilities, finance,\ninformation technology, public relations and (ii) invoices for goods or services\nbilled to and paid for by CMGI on behalf of the Company including but not\nlimited to, legal fees, office equipment leasing, office space rent, bank fees,\nconsulting agency fees, payroll services, telephony, relocation services,\nshipping and handling services, tax consulting fees and real estate fees, in\neach case solely to the extent consistent with the past business practices of\nCMGI and the Company with respect to such services, benefits and invoices.\n\n     \"BUSINESS DAY\" means any day except a Saturday, Sunday or other day on\nwhich commercial banks in New York City are authorized by law to close.\n\n     \"CAPITAL LEASE\" of any Person means any lease of any property by such\nPerson as lessee which would, in accordance with GAAP, be required to be\naccounted for as a capital lease on the balance sheet of such Person.\n\n     \"CAPITAL STOCK\" of any Person means any and all shares, interests,\nparticipations or other equivalents however designated of corporate stock or\nother equity participations, including partnership interests, whether general or\nlimited, of such Person and any rights (other than debt securities convertible\nor exchangeable into an equity interest), warrants or options to acquire an\nequity interest in such Person.\n\n     \"CHANGE OF CONTROL\" means, with respect to the Company, the occurrence of\neither of the following:\n\n     (a)  if\n\n          (x) any \"person\" or \"group\" (as such terms are used in Section 13(d)\n          and Section 14(d) of the Exchange Act or any successor provisions to\n          either of the foregoing), including any group acting for the purpose\n          of acquiring, holding, voting or disposing of securities within the\n          meaning of Rule 13d-5(b)(1) under the Exchange Act becomes the\n          \"beneficial owner\" (as defined in Rule 13d-3 under the Exchange Act,\n          except that a person will be deemed to have \"beneficial ownership\" of\n          all shares that any such person has the right to acquire, whether such\n          right is exercisable immediately or only after the passage of time,\n          and such person or group shall be deemed to beneficially own any\n          Voting Stock of a \n\n                                       2\n\n \n          corporation held by another corporation so long as such person or\n          group beneficially owns, directly or indirectly, in the aggregate a\n          majority of the total voting power of the Voting Stock of such other\n          corporation), directly or indirectly, of a percentage of the total\n          voting power of the Voting Stock of the Company that is greater than\n          the percentage of the total voting power of the Voting Stock of the\n          Company held by CMGI and its Subsidiaries, or\n\n          (y) any Permitted Holder files a Schedule 13D or TO (or any successor\n          schedule, form or report under the Exchange Act) in connection with a\n          transaction or event as a result of which (a) such person becomes the\n          \"beneficial owner\" of additional shares of Common Stock and (b) the\n          Common Stock ceases, or immediately upon consummation of or\n          immediately following such transaction or event, will cease, to be\n          listed on a U.S. national securities exchange or approved for\n          quotation on the Nasdaq National Market or any similar U.S. system for\n          automated dissemination of quotations of securities prices; or\n\n     (b)  if during any period of two consecutive years, individuals who at the\n          beginning of such period constituted the board of directors (together\n          with new directors whose election or appointment by the board of\n          directors or whose nomination for election by the Company's\n          stockholders was approved by a vote of a majority of the directors\n          then still in office who were either directors at the beginning of\n          such period or whose election or nomination for election was\n          previously so approved) cease for any reason to constitute a majority\n          of the Company's board of directors then in office.\n\n     \"COLLATERAL\" means all property, now existing or hereafter acquired,\nmortgaged or pledged to or purported to be subjected to a Lien in favor of, the\nCollateral Representative for the benefit of the Purchasers pursuant to the\nSecurity Documents.\n\n     \"COLLATERAL REPRESENTATIVE\" means CFS in its capacity as collateral\nrepresentative for the Purchasers under the Security Documents, and its\nsuccessors in such capacity.\n\n     \"DEBT\" of a Person means at any date, without duplication, (i) all\nobligations of such Person for borrowed money, (ii) all obligations of such\nPerson evidenced by bonds, debentures, notes or other similar instruments, (iii)\nall obligations of such Person to pay the deferred purchase price of property or\nservices, except trade accounts payable or Affiliate Obligations in each case\narising and paid in the ordinary course of business, (iv) all Capital Leases of\nsuch Person, (v) all obligations of such Person to purchase securities (or other\n\n                                       3\n\n \nproperty) which arise out of or in connection with the issuance or sale of the\nsame or substantially similar securities (or property), (vi) all non-contingent\nobligations of such Person to reimburse any bank or other Person in respect of\namounts paid under a letter of credit or similar instrument, (vii) all equity\nsecurities of such Person subject to repurchase or redemption otherwise than at\nthe sole option of such Person, (viii) all Debt secured by a Lien on any asset\nof such Person, whether or not such Debt is otherwise an obligation of such\nPerson, and (ix) all Debt of others Guaranteed by such Person.\n\n     \"DEFAULT\" means any condition or event which constitutes an Event of\nDefault or which with the giving of notice or lapse of time or both would,\nunless cured or waived, become an Event of Default.\n\n     \"ERISA\" means the Employee Retirement Income Security Act of 1974.\n\n     \"EXCHANGE ACT\" means the Securities Exchange Act of 1934.\n\n     \"FINANCING DOCUMENTS\" means this Agreement, the Notes, the Security\nDocuments, the Investor Rights Agreement Amendment and any documents or\nagreements contemplated therein.\n\n     \"FISCAL YEAR\" means a fiscal year of the Company.\n\n     \"GUARANTEE\" by any Person means any obligation, contingent or otherwise, of\nsuch Person directly or indirectly guaranteeing any Debt or other obligation of\nany other Person and, without limiting the generality of the foregoing, any\nobligation, direct or indirect, contingent or otherwise, of such Person (i) to\npurchase or pay (or advance or supply funds for the purchase or payment of) such\nDebt or other obligation (whether arising by virtue of partnership arrangements,\nby agreement to keep-well, to purchase assets, goods, securities or services, to\ntake-or-pay, or to maintain financial statement conditions or otherwise) or (ii)\nentered into for the purpose of assuring in any other manner the obligee of such\nDebt or other obligation of the payment thereof or to protect such obligee\nagainst loss in respect thereof (in whole or in part), provided that the term\nGuarantee shall not include endorsements for collection or deposit in the\nordinary course of business.  The term \"Guarantee\" used as a verb has a\ncorresponding meaning.\n\n     \"INVESTMENT\" means any investment in any Person, whether by means of\nacquiring or holding securities, capital contribution, loan, time deposit,\nadvance, Guarantee or otherwise.\n\n     \"INVESTOR RIGHTS AGREEMENT\" means the agreement dated October 27, 1999, as\namended on June 8, 2000 and December 12, 2000, between the Company and CMGI.\n\n                                       4\n\n \n     \"LIEN\" means, with respect to any asset, any mortgage, lien, pledge,\ncharge, security interest or encumbrance of any kind, or any other type of\npreferential arrangement that has the practical effect of creating a security\ninterest, in respect of such asset.  For the purposes of this Agreement and the\nother Financing Documents, the Company or its Subsidiaries shall be deemed to\nown subject to a Lien any asset which it has acquired or holds subject to the\ninterest of a vendor or lessor under any conditional sale agreement, capital\nlease or other title retention agreement relating to such asset.\n\n     \"MATERIAL ADVERSE EFFECT\" means, with respect to any event, act, condition\nor occurrence of whatever nature (including any adverse determination in any\nlitigation, arbitration, or governmental investigation or proceeding), whether\nsingly or in conjunction with any other event or events, act or acts, condition\nor conditions, occurrence or occurrences, whether or not related, a material\nadverse change in, or a material adverse effect upon, any of (i) the financial\ncondition, operations, business, properties or prospects of the Company and its\nSubsidiaries, taken as a whole, (ii) the rights and remedies of the Collateral\nRepresentative or the Purchasers under the Financing Documents, or the ability\nof any of the Company or its Subsidiaries to perform its obligations under the\nFinancing Documents to which it is a party, (iii) the legality, validity or\nenforceability of any Financing Document, or (iv) the existence, perfection or\npriority of any security interest granted in the Financing Documents with\nrespect to, or the value of, any material Collateral.\n\n     \"MATERIAL DEBT\" means Debt of the Company or any of its Subsidiaries,\narising in one or more related or unrelated transactions, in an aggregate\nprincipal or face amount exceeding $1,000,000.\n\n     \"OFFICER'S CERTIFICATE\" means a certificate executed on behalf of a Person\nby its chairman of the board (if an officer), chief executive officer, president\nor chief financial officer.\n\n     \"ORGANIZATIONAL DOCUMENTS\" means, with respect to any Person other than a\nnatural person, the documents by which such Person was organized (such as a\ncertificate of incorporation, articles of organization or partnership agreement)\nor which relate to the internal governance of such Person (such as by-laws).\n\n     \"PERMITTED CONTEST\" means a contest maintained in good faith by appropriate\nproceedings promptly instituted and diligently conducted and with respect to\nwhich such reserve or other appropriate provision, if any, as shall be required\nin conformity with GAAP shall have been made; provided that compliance with the\nobligation that is the subject of such contest is effectively stayed during such\nchallenge.\n\n     \"PERMITTED HOLDER\" means:\n\n                                       5\n\n \n     o  CMGI and any of its Subsidiaries,\n\n     o  CFS and any of its Subsidiaries or Affiliates,\n\n     o  any corporation, the outstanding voting power of the Capital Stock of\n        which is beneficially owned, directly or indirectly, by the Company's\n        stockholders in substantially the same proportions as their ownership of\n        the voting power of the Company's Capital Stock, or\n\n     o  the Company or any Subsidiary of the Company.\n\n     \"PERMITTED LIENS\" means Liens permitted pursuant to Section 6.02.\n\n     \"PERSON\" means any natural person, corporation, limited liability company,\nprofessional association, limited partnership, general partnership, joint stock\ncompany, joint venture, association, company, trust, bank, trust company, land\ntrust, business trust or other organization, whether or not a legal entity, and\nany government or agency or political subdivision thereof.\n\n     \"PROPERTY INSURANCE POLICY\" means any insurance policy maintained by the\nCompany or any Subsidiary covering losses with respect to tangible real or\npersonal property or improvements or losses from business interruption.\n\n     \"REQUIRED HOLDERS\" means the holders of more than 50% of the aggregate\noutstanding principal amount of the Notes.\n\n     \"RESTRICTED PAYMENT\" means as to any Person (i) any dividend or other\ndistribution on any equity interest in such Person (except those payable solely\nin equity interests of the same class) or (ii) any payment on account of (a) the\npurchase, redemption, retirement, defeasance, surrender or acquisition of any\nequity interests in such Person or any claim respecting the purchase or sale of\nany equity interest in such Person or (b) any option, warrant or other right to\nacquire any equity interests in such Person.\n\n     \"SECURITIES ACT\" means the Securities Act of 1933.\n\n     \"SECURITY DOCUMENTS\" means the Security Agreement and any other agreement\npursuant to which the Company or any of its Affiliates provides a Lien on its\nassets in favor of the Collateral Representative for the benefit of the\nPurchasers, and all supplementary assignments, security agreements, pledge\nagreements, acknowledgments or other documents delivered or to be delivered\npursuant to the terms hereof or of any other Security Document.\n\n     \"SUBSIDIARY\" means, with respect to any Person, any corporation or other\nentity of which securities or other ownership interests having ordinary voting\n\n                                       6\n\n \npower to elect a majority of the board of directors or other persons performing\nsimilar functions are at the time directly or indirectly owned by such Person.\nUnless otherwise specified, the term Subsidiary shall refer to a Subsidiary of\nthe Company.\n\n     \"TEMPORARY CASH INVESTMENT\" means any Investment in (i) direct obligations\nof the United States or any agency thereof, or obligations guaranteed by the\nUnited States or any agency thereof, (ii) commercial paper rated at least A-1 by\nStandard &amp; Poor's Ratings Service and P-1 by Moody's Investors Services, Inc.,\n(iii) time deposits with, including certificates of deposit issued by, any\noffice located in the United States of any bank or trust company which is\norganized under the laws of the United States or any State thereof and has\ncapital, surplus and undivided profits aggregating at least $500,000,000 and\nwhich issues (or the parent of which issues) certificates of deposit or\ncommercial paper with a rating described in clause (ii) above, (iv) repurchase\nagreements with respect to securities described in clause (i) above entered into\nwith an office of a bank or trust company meeting the criteria specified in\nclause (iii) above, provided in each case that such Investment matures within\none year from the date of acquisition thereof by the Company or any Subsidiary,\nor (v) any money market or mutual fund which invests only in the foregoing and\nthe liquidity of which is satisfactory to the Required Holders.\n\n     \"TRANSACTION AGREEMENT\" means the agreement dated October 29, 2001 among\nCMGI, the Company, CFS, AltaVista Company, a Delaware corporation, Compaq\nComputer Corporation, a Delaware corporation, Compaq Financial Services Company,\nan unlimited company having a share capital formed under the laws of Ireland, \nand Compaq Financial Services Canada Corporation, a corporation incorporated \nunder the Nova Scotia Business Corporation Act.\n\n     \"UCC\" has the meaning set forth in the Security Agreement.\n\n     \"VOTING STOCK\" of any Person means Capital Stock of such Person which\nordinarily has voting power for the election of directors, or persons performing\nsimilar functions, of such persons, whether at all times or only for so long as\nno senior class of securities has such voting power by reason of any\ncontingency.\n\n     Section 1.02. Index Of Defined Terms. The following terms shall have the\nrespective meanings given to them in the sections indicated below:\n\nDEFINED TERM                                               SECTION\n\n\"Agreement\"..............................................  Preamble\n\"CFS\"....................................................  Preamble\n\"CFS Note\"...............................................  Recitals\n\"Closing\"................................................  3.01\n\n                                       7\n\n \nDEFINED TERM                                               SECTION\n\n\"Closing Date\"...........................................  3.01\n\"CMGI\"...................................................  Preamble\n\"CMGI Note\"..............................................  Recitals\n\"Common Stock\"...........................................  Recitals\n\"Company\"................................................  Preamble\n\"Company Reports\"........................................  4.06\n\"Conversion Shares\"......................................  4.08\n\"Event of Default\".......................................  7.01\n\"GAAP\"...................................................  1.03\n\"Indemnitees\"............................................  9.02\n\"Intellectual Property\"..................................  4.25\n\"Investor Rights Agreement Amendment\"....................  Recitals\n\"Non-Assigning Purchaser\"................................  10.08(b)\n\"Note Register\"..........................................  10.08(d)\n\"Notes\"..................................................  Recitals\n\"Proxy Statement\"........................................  5.10(a)\n\"Purchaser\"..............................................  Preamble\n\"Security Agreement\".....................................  Recitals\n\"SEC\"....................................................  4.06\n\"Stockholders' Meeting\"..................................  5.10(b)\n\n     Section 1.03.  Accounting Terms And Determinations.  Unless otherwise\nspecified herein, all accounting terms used herein shall be interpreted, all\naccounting determinations hereunder shall be made, and all financial statements\nrequired to be delivered hereunder shall be prepared in accordance with\ngenerally accepted accounting principles as in effect from time to time\n(\"GAAP\"), applied on a basis consistent (except for changes concurred in by the\nCompany's independent public accountants) with the most recent audited\nconsolidated financial statements of the Company and its consolidated\nSubsidiaries delivered to the Purchasers.\n\n     Section 1.04. Other Definitional Provisions. References in this Agreement\nto \"Articles\", \"Sections\", \"Schedules\" or \"Exhibits\" shall be to Articles,\nSections, Schedules or Exhibits of or to this Agreement unless otherwise\nspecifically provided. Any term defined herein may be used in the singular or\nplural. \"Include\", \"includes\" and \"including\" shall be deemed to be followed by\n\"without limitation\". \"Writing\", \"written\" and comparable terms refer to\nprinting, typing and other means of reproducing words in a visible form.\nReferences to any agreement or contract are to such agreement or contract as\namended, modified or supplemented from time to time. References to any Person\ninclude the successors and assigns of such Person. References to \"from\" or\n\"through\" any date mean, unless otherwise specified, \"from and including\" or\n\"through and including\", respectively. References to any statute or act shall\ninclude all related current regulations and all amendments and any successor\nstatutes, acts and regulations.\n\n                                       8\n\n \n                                   ARTICLE 2\n                           Purchase And Sale Of Notes\n\n     Section 2.01. Purchase And Sale Of Notes. On the Closing Date (as defined\nin Section 3.01 hereof), (i) CFS shall (x) consummate the other transactions\ndescribed in the Transaction Agreement and (y) deliver $20,000,000 to the\nCompany by wire transfer of immediately available funds, against delivery of the\nCFS Note to CFS by the Company and (ii) CMGI shall deliver $10,000,000 to the\nCompany by wire transfer of immediately available funds against delivery of the\nCMGI Note to CMGI. The Notes shall be convertible, in accordance with their\nterms, into shares of the Company's common stock, par value $0.01 per share (the\n\"COMMON STOCK\").\n\n                                   ARTICLE 3\n                                    Closing\n\n     Section 3.01. The Closing. The closing of the purchase and sale of the\nNotes (the \"CLOSING\") shall take place at the offices of Davis Polk &amp; Wardwell,\n450 Lexington Avenue, New York, New York as soon as possible (and not less than\nsix Business Days after the date hereof), but in no event later than 10 Business\nDays, after satisfaction of the conditions set forth in Section 8.01, or at such\nother time or place as the Company, CMGI and CFS may agree (the \"CLOSING DATE\").\n\n                                   ARTICLE 4\n                 Representations And Warranties Of The Company\n\n     The Company represents and warrants to the Purchasers, as of the date\nhereof and the date of the Closing, that:\n\n     Section 4.01. Corporate Existence and Power. The Company is an entity duly\norganized, validly existing and in good standing under the laws of the State of\nDelaware, and has all powers and all governmental licenses, authorizations,\nconsents and approvals required to carry on its business as now conducted and as\nwill be conducted after the transactions contemplated by the Transaction\nAgreement, except where the failure to have such licenses, authorizations,\nconsents and approvals would not have a Material Adverse Effect. Each of the\nCompany and its Subsidiaries is qualified to do business as a foreign entity in\neach jurisdiction in which it is required to be so qualified, except where the\nfailure to be so qualified would not have a Material Adverse Effect.\n\n     Section 4.02. Due Authorization. All corporate action on the part of each\nof the Company and its Subsidiaries pursuant to its Organizational Documents,\nwhich is necessary for the authorization, execution and delivery of, and the\n\n                                       9\n\n \nperformance of all obligations of the Company and its Subsidiaries under the\nFinancing Documents has been taken, other than the approval of stockholders of\nthe Company of the conversion of the Notes to Common Stock.\n\n     Section 4.03.  Binding Effect; Liens of Security Documents.  Each of the\nFinancing Documents to which the Company is a party (other than the Notes) and\nto which any of the Company's Subsidiaries is a party constitutes a valid and\nbinding agreement, and each of the Notes, when executed and delivered in\naccordance with this Agreement, will constitute valid and binding obligations of\nthe Company, in each case enforceable against such Person in accordance with its\nrespective terms, except as the enforceability thereof may be limited by\nbankruptcy, insolvency or other similar laws relating to the enforcement of\ncreditors' rights generally and by general equitable principles, other than the\napproval of stockholders of the Company of the conversion of the Notes to Common\nStock.\n\n     Section 4.04.  Governmental Consents.  No consent, approval, order or\nauthorization of, or registration, qualification, designation, declaration or\nfiling with, any federal, state or local governmental authority on the part of\nthe Company or any of its Subsidiaries is required in connection with the\nconsummation of the transactions contemplated by the Financing Documents, except\n(i) as may be required under the Securities Act and the rules and regulations\nthereunder and all applicable state securities laws in connection with the\ntransactions contemplated by the Financing Documents and obtaining approval of\nstockholders of the Company of the conversion of the Notes to Common Stock and\n(ii) for such consents, approvals, orders, authorizations, qualifications,\ndesignations, declarations or filings the failure of which to obtain or make,\nindividually or in the aggregate, would not have a Material Adverse Effect. All\nsuch consents, approvals, orders, authorizations and qualifications will be\neffective and all such designations, declarations and filings will be made\nwithin the time prescribed by law.\n\n     Section 4.05. Non-contravention. The execution, delivery and performance by\nthe Company and its Subsidiaries of the Financing Documents, and the\nconsummation by the Company and its Subsidiaries of the transactions\ncontemplated hereby and thereby, other than the approval of stockholders of the\nCompany of the conversion of the Notes to Common Stock, do not: (i) contravene\nor conflict with the Company's or any of its Subsidiaries' Organizational\nDocuments; (ii) constitute a violation of any provision of any federal, state,\nlocal or foreign law or rule, regulation or requirement binding upon or\napplicable to the Company or any of its Subsidiaries; (iii) constitute a\nviolation of any rule, regulation or requirement of the National Association of\nSecurities Dealers, Inc.; or (iv) constitute a default or require any consent\nunder, give rise to any right of termination, cancellation or acceleration of,\nor to a loss of any benefit to which the Company or any of its Subsidiaries is\nentitled under, or result in the creation or imposition of any Lien under, any\ncontract to which the Company or any of its \n\n                                       10\n\n \nSubsidiaries is a party (other than as contemplated by the Financing Documents)\nor any permit, license or similar right relating to the Company or any of its\nSubsidiaries or by which the Company or any of its Subsidiaries may be bound or\naffected, except any such default, consent, right of termination, cancellation\nor acceleration, loss or lien, claim or encumbrance which, individually or in\nthe aggregate, would not have a Material Adverse Effect.\n\n     Section 4.06. SEC Reports; Financial Statements. The Company has previously\nfurnished or made available to the Purchasers its (i) Annual Report on Form 10-K\nfor the fiscal year ended July 31, 2000, (ii) Definitive Proxy Statement filed\nwith the Securities and Exchange Commission (the \"SEC\") on November 16, 2000 and\n(iii) all other periodic and current reports filed by the Company with the SEC\nunder the Exchange Act since July 31, 2000 in each case, as amended prior to the\ndate hereof (collectively, the \"COMPANY REPORTS\"). As of their respective dates\nthe Company Reports (or, if any of the Company Reports shall have been amended,\nas of the date of such amendment), complied in all material respects with\napplicable requirements of the Exchange Act and did not contain any untrue\nstatement of a material fact or omit to state a material fact required to be\nstated therein or necessary to make the statements therein, in light of the\ncircumstances under which such statements were made, not misleading. The Company\nhas timely filed with the SEC, and the Company Reports constitute, all reports\nrequired to be filed under Sections 13, 14 or 15(d) of the Exchange Act since\nJuly 31, 2000. The audited financial statements and unaudited interim financial\nstatements of the Company included in the Company Reports (i) comply as to form\nin all material respects with the published rules and regulations of the SEC\nwith respect thereto, (ii) have been prepared in accordance with generally\naccepted accounting principles applied on a consistent basis throughout the\nperiods covered thereby (except as may be indicated therein or in the notes\nthereto, and in the case of quarterly financial statements, as permitted by Form\n10-Q under the Exchange Act), (iii) fairly present the consolidated financial\ncondition, results of operations and cash flows of the Company as of the\nrespective dates thereof and for the periods referred to therein and (iv) are\nconsistent with the books and records of the Company.\n\n     Section 4.07.  Capitalization. (a) As of the date hereof the authorized\nCapital Stock of the Company consists of: (i) 150,000,000 shares of Common\nStock, of which 62,336,563 shares are issued and outstanding and (ii) 5,000,000\nshares of preferred stock, par value $0.01 per share, of which none are issued\nand outstanding.  All of such shares of Capital Stock have been duly authorized\nfor issuance, and all of such shares which are issued and outstanding have been\nvalidly issued and are fully paid, nonassessable and free of any liens or\nencumbrances other than any liens or encumbrances created by or imposed upon the\nholders thereof.  The Company has reserved: (i) 15,000,000 shares of Common\nStock for issuance to officers, directors, employees, consultants or Affiliates\nunder the Company's 1998 Equity Incentive Plan, of which 5,769,680 are subject\nto outstanding options granted thereunder; (ii) 250,000 shares of \n\n                                       11\n\n \nCommon Stock for issuance to non-employee directors of the Company under the\nCompany's 1998 Director Stock Option Plan, of which 150,000 are subject to\noutstanding options granted thereunder; (iii) 500,000 shares of Common Stock for\nissuance to non-employee directors of the Company under the Company's 1999 Stock\nOption Plan for Non-Employee Directors, of which 71,770 are subject to\noutstanding options granted thereunder; (iv) 1,000,000 shares of Common Stock\nfor issuance under the Company's 2000 Stock Option Plan, of which 461,995 are\nsubject to outstanding options granted thereunder; and (v) 250,000 shares of\nCommon Stock for issuance under the Company's Employee Stock Purchase Plan, of\nwhich 249,860 are issued and outstanding. All shares of Common Stock subject to\nissuance as aforesaid, upon issuance on the terms and conditions specified in\nthe instruments pursuant to which they are issuable, are duly authorized and\nwill be validly issued, fully paid and nonassessable. Other than (i) the\nNaviSite Warrant No. 1 dated December 15, 2001 to purchase 2,601,626 shares of\nthe Company's Common Stock at an exercise price per share equal to $5.765625\n(\"NAVISITE WARRANT 1\"), (ii) the NaviSite Warrant No. 2 dated December 15, 2001\nto purchase 2,601,626 shares of the Company's Common Stock at an exercise price\nper share equal to $6.91875 (\"NAVISITE WARRANT 2\", together with the NaviSite\nWarrant 1, the \"NAVISITE WARRANTS\"), (iii) the 7.5% Convertible Subordinated\nNotes of NaviSite held by CMGI due December 12, 2003 in the principal amounts of\n$50,000,000 and $30,000,000 and (iv) as set forth above in this paragraph (a),\nthere are no other equity securities, options, warrants, calls, rights,\ncommitments or agreements of any character to which the Company is a party or by\nwhich it is bound obligating the Company to issue, deliver, sell, repurchase or\nredeem, or cause to be issued, delivered, sold, repurchased or redeemed, any\nshares of the Capital Stock of the Company or obligating the Company to grant,\nextend or enter into any such equity security, option, warrant, call, right,\ncommitment or agreement. Except as disclosed in the Company Reports, to the\nCompany's knowledge there are no stockholder agreements, voting agreements or\nvoting trusts relating to any shares of Capital Stock of the Company.\n\n     (b) On the Closing Date after giving effect to the transactions\ncontemplated by the Transaction Agreement, the authorized Capital Stock of the\nCompany will consist of: (i) 150,000,000 shares of Common Stock, of which\n86,678,394 shares will be issued and outstanding (as such number may be\nincreased pursuant to the exercise of stock options described in the second\nsentence of Section 4.08(a) above in accordance with their terms on or prior to\nthe Closing Date) and (ii) 5,000,000 shares of preferred stock, par value $0.01\nper share, of which none will be issued and outstanding. All of such shares of\nCapital Stock will have been duly authorized for issuance, and all of such\nshares which shall at such time be issued and outstanding will have been validly\nissued and will be fully paid, nonassessable and free of any liens or\nencumbrances other than any liens or encumbrances created by or imposed upon the\nholders thereof. On the Closing Date after giving effect to the transactions\ncontemplated by the \n\n                                       12\n\n \nTransaction Agreement the Company will have reserved: (i) 15,000,000 shares of\nCommon Stock for issuance to officers, directors, employees, consultants or\nAffiliates under the Company's 1998 Equity Incentive Plan, of which 5,769,680\nwill be subject to outstanding options granted thereunder; (ii) 250,000 shares\nof Common Stock for issuance to non-employee directors of the Company under the\nCompany's 1998 Director Stock Option Plan, of which 150,000 will be subject to\noutstanding options granted thereunder; (iii) 500,000 shares of Common Stock for\nissuance to non-employee directors of the Company under the Company's 1999 Stock\nOption Plan for Non-Employee Directors, of which 71,770 will subject to\noutstanding options granted thereunder; (iv) 1,000,000 shares of Common Stock\nfor issuance under the Company's 2000 Stock Option Plan, of which 461,995 will\nbe subject to outstanding options granted thereunder; and (v) 250,000 shares of\nCommon Stock for issuance under the Company's Employee Stock Purchase Plan, of\nwhich 249,860 will be issued and outstanding (as the number of shares specified\nin clauses (i) through (v) above that are subject to options or issued and\noutstanding may be increased by the exercise on or prior to the Closing Date of\nstock options outstanding on the date hereof in accordance with their terms).\nAll shares of Common Stock subject to issuance as aforesaid, upon issuance on\nthe terms and conditions specified in the instruments pursuant to which they are\nissuable, will at the Closing Date be duly authorized and will be validly\nissued, fully paid and nonassessable. At the Closing Date, after giving effect\nto the transactions contemplated by the Transaction Agreement, other than (i)\nthe NaviSite Warrants, (ii) the Notes and (iii) as set forth above in this\nparagraph (b), there will be no other equity securities, options, warrants,\ncalls, rights, commitments or agreements of any character to which the Company\nis a party or by which it is bound obligating the Company to issue, deliver,\nsell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased\nor redeemed, any shares of the Capital Stock of the Company or obligating the\nCompany to grant, extend or enter into any such equity security, option,\nwarrant, call, right, commitment or agreement. Except as disclosed in the\nCompany Reports, at the Closing Date there will, to the Company's knowledge be\nno stockholder agreements, voting agreements or voting trusts relating to any\nshares of Capital Stock of the Company.\n\n     Section 4.08.  Valid Issuance of Stock.  (a) Subject to the vote of the\nstockholders at the Stockholders Meeting to approve or ratify the authorization\nand issuance of the shares of Common Stock to be issued upon conversion, if any,\nby the Purchasers, (the \"CONVERSION SHARES\"), the Conversion Shares have been\nduly and validly reserved for issuance and, upon issuance, sale and delivery in\naccordance with the terms of the Notes will be duly and validly issued, fully\npaid, nonassessable and free of preemptive rights binding on the Company.\n\n     (b) Assuming the correctness of the representations made by the Purchasers\nin Section 10.08 hereof, no change in applicable law and no unlawful\ndistribution of the Notes or the Conversion Shares by the Purchasers or other\nPersons, the Notes and the Conversion Shares will be issued to the Purchasers in\n\n                                       13\n\n \ncompliance with applicable exemptions from (i) the registration and prospectus\ndelivery requirements of the Securities Act and (ii) the registration and\nqualification requirements of all applicable securities laws of the states of\nthe United States.\n\n     Section 4.09. Litigation. Except as set forth in the Company Reports, there\nis no action, suit or proceeding pending against, or to the knowledge of the\nCompany threatened against or affecting, any of the Company or its Subsidiaries\nbefore any court or arbitrator or any governmental body, agency or official in\nwhich there is a reasonable likelihood of an adverse decision which could have a\nMaterial Adverse Effect or which draws into question the validity of any of the\nFinancing Documents or the Transaction Agreement.\n\n     Section 4.10. Ownership of Property. Except as disclosed on Schedule 4.10,\non and as of the Closing Date, after giving effect to the transactions\ncontemplated by the Transaction Agreement, the Company is the lawful owner of,\nhas good and marketable title to and is in lawful possession of, or has valid\nleasehold interests in, all properties and other assets (real or personal,\ntangible, intangible or mixed) purported to be owned or leased (as the case may\nbe) by the Company on the balance sheet referred to in Section 5.01, except as\ndisposed of in the ordinary course of business.\n\n     Section 4.11. No Default. Except as disclosed on Schedule 4.11, no Default\nor Event of Default has occurred and is continuing and neither the Company nor\nany of its Subsidiaries is in default under or with respect to any material\ncontract, agreement, lease or other instrument to which it is a party or by\nwhich its property is bound or affected.\n\n     Section 4.12. Absence of Certain Changes. Except as set forth in the\nCompany Reports, since March 31, 2001, the businesses and operations of the\nCompany and each of its Subsidiaries have been conducted in the ordinary course\nconsistent with past practice and there has not been or occurred any event or\ncondition which, individually or in the aggregate, has had or is reasonably\nlikely to have a Material Adverse Effect.\n\n     Section 4.13. No Burdensome Restrictions. Except as set forth in the\nCompany Reports, no contract, lease, agreement or other instrument to which the\nCompany or any of its Subsidiaries is a party or by which any of its property is\nbound or affected, no charge, corporate restriction, judgment, decree or order\nand no provision of applicable law or governmental regulation is reasonably\nlikely to have a Material Adverse Effect.\n\n     Section 4.14.  Subsidiaries; Other Equity Investments.  Each Subsidiary is\nduly organized, validly existing and in good standing under the laws of its\njurisdiction of organization, and has all powers and all material governmental\nlicenses, authorizations, consents and approvals required to carry on its\nbusiness \n\n                                       14\n\n \nas now conducted, except where the failure to have such licenses,\nauthorizations, consents and approvals would not have a Material Adverse Effect.\nNeither the Company nor any of its Subsidiaries is engaged in any joint venture\nor partnership with any other Person.\n\n     Section 4.15.  Investment Company Act.  Neither the Company nor any of its\nSubsidiaries is an \"Investment Company\" as defined in the Investment Company Act\nof 1940.  The consummation of the transactions contemplated by the Financing\nDocuments or the Transaction Agreement do not and will not violate any provision\nof such act or any rule, regulation or order issued by the SEC thereunder.\n\n     Section 4.16.  Taxes.  All material Federal, state and local tax returns,\nreports and statements required to be filed by or on behalf of each of the\nCompany and its Subsidiaries have been filed with the appropriate governmental\nagencies in all jurisdictions in which such returns, reports and statements are\nrequired to be filed, and all taxes (including real property taxes) and other\ncharges shown to be due and payable have been timely paid prior to the date on\nwhich any fine, penalty, interest, late charge or loss may be added thereto for\nnonpayment thereof.  All state and local sales and use taxes required to be paid\nby each of the Company and its Subsidiaries have been paid.  All material\nFederal and state returns have been filed by each of the Company and its\nSubsidiaries for all periods for which returns were due with respect to employee\nincome tax withholding, social security and unemployment taxes, and the amounts\nshown thereon to be due and payable have been paid in full or adequate\nprovisions therefor have been made.\n\n     Section 4.17. Employment Matters. The Company (i) has withheld all amounts\nrequired by law or agreement to be withheld from wages, salaries and other\npayments to its employees and former employees or has remedied any failure to do\nso, (ii) is not liable for any arrearages of wages and (iii) is not liable for\ntaxes or penalties for failure to withhold or pay wages when due. There are no\ncomplaints pending or, to the Company's knowledge, threatened before any\ngovernmental authority alleging unfair labor practices or unlawful\ndiscrimination nor, to the Company's knowledge, is there any basis for any such\nclaim. There are no existing or, to the Company's knowledge, threatened labor\nstrikes, disputes, grievances, controversies or other labor troubles affecting\nthe Company which would individually or in the aggregate, have a Material\nAdverse Effect. The Company is not a party to any collective bargaining\nagreement with any labor union.\n\n     Section 4.18. Compliance with ERISA. Except as disclosed on Schedule 4.18,\nneither the Company nor any of its Subsidiaries sponsors or participates in any\nemployee benefit plan subject to ERISA. Neither the Company nor any of its\nSubsidiaries is required to contribute to any \"multiemployer plan\" as defined in\n\n                                       15\n\n \nERISA Section 3(37), nor has the Company or any of its Subsidiaries ever\ncontributed to or withdrawn from such a multiemployer plan.\n\n     Section 4.19.  Brokers.  Except as disclosed on Schedule 4.19, no broker,\nfinder or other intermediary has brought about the obtaining, making or closing\nof the transactions contemplated by the Financing Documents or the Transaction\nAgreement, and neither the Company nor any of its Subsidiaries has or will have\nany obligation to any Person in respect of any finder's or brokerage fees in\nconnection herewith or therewith.\n\n     Section 4.20.  Related Transactions.  No Person has waived any condition\nprecedent to its obligations to close as set forth in the Financing Documents or\nthe Transaction Agreement.\n\n     Section 4.21. Employment, Shareholders and Subscription Agreements. Except\nfor the Financing Documents or the Transaction Agreement and the other\nagreements described in Schedule 4.21, and except as set forth in the Company\nReports there are no (i) employment agreements covering the management of the\nCompany or any of its Subsidiaries, (ii) collective bargaining agreements or\nother labor agreements covering any employees of the Company or any its\nSubsidiaries, (iii) material agreements for managerial, consulting or similar\nservices to which the Company or any of its Subsidiaries is a party or by which\nit is bound, or (iv) material agreements regarding the Company or any of its\nSubsidiaries, its assets or operations or any investment therein to which any of\nits equityholders is a party or by which it is bound.\n\n     Section 4.22. Representations and Warranties Incorporated from the Security\nDocuments. As of the Closing Date, each of the representations and warranties\nmade in the Security Documents by the Company and its Subsidiaries is true and\ncorrect in all material respects, and such representations and warranties are\nhereby incorporated herein by reference with the same effect as though set forth\nin their entirety herein, as qualified therein, except to the extent that such\nrepresentation or warranty relates to a specific date, in which case such\nrepresentation and warranty shall be true as of such earlier date.\n\n     Section 4.23. Environmental and Safety Laws. To the Company's knowledge,\nthe Company is not in violation of any applicable statute, law or regulation\nrelating to the environment or occupational health and safety which would\nreasonably be expected to have a Material Adverse Effect, except as set forth in\nthe Company Reports.\n\n     Section 4.24.   Invention Assignment and Confidentiality Agreement.  Each\nemployee and consultant or independent contractor of the Company or any of its\nSubsidiaries whose material duties include the development of products or\nIntellectual Property (as defined in Section 4.25), and each former employee and\nconsultant or independent contractor whose material duties included the\n\n                                       16\n\n \ndevelopment of products or Intellectual Property, has entered into and executed\nan invention assignment and confidentiality agreement or an employment or\nconsulting agreement containing terms with respect to invention assignments and\nconfidentiality, in each case, except where failure to do the same would not\nhave a Material Adverse Effect.\n\n     Section 4.25.  Intellectual Property.  (a) The Company or one of its\nSubsidiaries has sole title to and owns, or is licensed or otherwise possesses\nlegally enforceable rights to use, or reasonably expects that it will be able to\nobtain licenses or legally enforceable rights to use, all patents or patent\napplications, software, know-how, registered or unregistered trademarks and\nservice marks and any applications therefor, registered or unregistered\ncopyrights and trade names and any applications therefor, trade secrets or other\nconfidential or proprietary information ( the \"INTELLECTUAL PROPERTY\") necessary\nto enable the Company and its Subsidiaries to carry on their respective\nbusinesses as currently conducted or as proposed to be conducted except where\nthe failure to own or have rights to use such Intellectual Property would not\nhave a Material Adverse Effect or except as disclosed in the Company Reports.\n\n     (b) Neither the Company nor any of its Subsidiaries is currently subject\n(whether as licensor or licensee) to any exclusive licenses (whether such\nexclusivity is temporary or permanent) to any material portion of the\nIntellectual Property utilized by the Company or any of its Subsidiaries. There\nare not outstanding any licenses or agreements of any kind relating to any\nIntellectual Property owned by the Company or any of its Subsidiaries, except\nfor agreements with customers of the Company or any such Subsidiary entered into\nin the ordinary course of business. Neither the Company nor any of its\nSubsidiaries is obligated to pay any royalties or other payments to third\nparties with respect to any Intellectual Property (other than off-the-shelf\ncommercial applications), except as it may be so obligated in the ordinary\ncourse of its business.\n\n     (c) To the Company's knowledge, neither the Company nor any of its\nSubsidiaries is violating or infringing, and neither the Company nor any of its\nSubsidiaries has received any communication alleging that either the Company,\nany of its Subsidiaries or any of their respective employees or consultants has\nviolated or infringed any Intellectual Property of any other Person which would\nreasonably be expected to have a Material Adverse Effect.\n\n     Section 4.26. Registration Rights. Except as provided in the Investor\nRights Agreement, as amended, the Company has not granted or agreed to grant to\nany Person any rights (including piggyback registration rights) to have any\nsecurities of the Company registered with the SEC or registered or qualified\nwith any other governmental authority.\n\n     Section 4.27. Real Property Interests. Except for the ownership, leasehold\nor other interests set forth in Schedule 4.27, and except as set forth in \n\n                                       17\n\n \nthe Company Reports, the Company and its Subsidiaries have, as of the Closing\nDate, no ownership, leasehold or other interest in real property.\n\n                                   ARTICLE 5\n                             Affirmative Covenants\n\n     The Company agrees that from the date hereof until the Closing Date and\nthereafter so long as any of the Notes remain outstanding:\n\n     Section 5.01.  Financial Statements And Other Reports.  The Company will\nmaintain a system of accounting established and administered in accordance with\nsound business practices to permit preparation of financial statements in\naccordance with GAAP and to provide the information required to be delivered to\nthe Purchasers hereunder, and will deliver to the Purchasers:\n\n     (a) as soon as practicable and in any event within 30 days after the end of\neach month, a consolidated balance sheet of the Company and its consolidated\nSubsidiaries as at the end of such month and the related consolidated statements\nof operations and cash flows for such month, and for the portion of the Fiscal\nYear ended at the end of such month setting forth in each case in comparative\nform the figures for the corresponding periods of the previous Fiscal Year and\nthe figures for such month and for such portion of the Fiscal Year ended at the\nend of such month set forth in the annual operating and capital expenditure\nbudgets and cash flow forecast delivered pursuant to Section 5.01(h), all in\nreasonable detail and certified by the chief financial officer of the Company as\nfairly presenting the financial condition and results of operations of the\nCompany and its consolidated Subsidiaries and as having been prepared in\naccordance with GAAP applied on a basis consistent with the audited financial\nstatements of the Company, subject to changes resulting from audit and normal\nyear-end adjustments;\n\n     (b) as soon as available and in any event within 90 days after the end of\neach Fiscal Year, a consolidated balance sheet of the Company and its\nconsolidated Subsidiaries as of the end of such Fiscal Year and the related\nconsolidated statements of operations, stockholders' equity and cash flows for\nsuch Fiscal Year, setting forth in each case in comparative form the figures for\nthe previous Fiscal Year and the figures for such Fiscal Year set forth in the\nannual operating and capital expenditure budgets and cash flow forecast\ndelivered pursuant to Section 5.01(h), certified (solely with respect to such\nconsolidated statements) without qualification by KPMG LLP or other independent\npublic accountants acceptable to the Required Holders of nationally recognized\nstanding;\n\n     (c) together with each delivery of financial statements pursuant to Section\n5.01(a) and 5.01(b) above, an Officer's Certificate of the Company (i) stating\nthat the officer executing such certificate has reviewed the terms of this\nAgreement and has made, or caused to be made under supervision, a review in\n\n                                       18\n\n \nreasonable detail of the transactions and condition of the Company during the\naccounting period covered by such financial statements and that such review has\nnot disclosed the existence during or at the end of such accounting period, and\nthat such officer does not have knowledge of the existence as at the date of\nsuch Officer's Certificate of any Default, or, if any such Default existed or\nexists, specifying the nature and period of existence thereof and what action\nthe Company has taken or is taking or proposes to take with respect thereto,\n(ii) providing details of all transactions between the Company and any Person\nreferred to in Section 6.06 and (iii) if not specified in the financial\nstatements delivered pursuant to Section 5.01(a) and 5.01(b) above, as the case\nmay be, specifying the aggregate amount of interest paid or accrued and the\naggregate amount of depreciation and amortization charged, during such\naccounting period;\n\n     (d) promptly upon receipt thereof, copies of all reports submitted to the\nCompany by independent public accountants in connection with each annual,\ninterim or special audit of the financial statements of the Company made by such\naccountants, including the comment letter submitted by such accountants to\nmanagement in connection with their annual audit;\n\n     (e) promptly upon their becoming available, copies of (i) all financial\nstatements, reports, notices and proxy statements sent or made available\ngenerally by the Company to its security holders, (ii) all regular and periodic\nreports and all registration statements and prospectuses filed by the Company\nwith any securities exchange or with the SEC or any successor and (iii) all\npress releases and other statements made available generally by the Company\nconcerning material developments in the business of the Company;\n\n     (f) promptly upon any executive officer of the Company obtaining knowledge\n(i) of the existence of any Default, or becoming aware that the holder of any\nDebt of the Company has given any notice or taken any other action with respect\nto a claimed default thereunder, (ii) of any change in the Company's independent\npublic accountant or any resignation, or decision not to stand for re-election,\nby any member of the Company's board of directors (or comparable body), (iii)\nthat any Person has given any notice (other than a notice received by the\nCompany within 30 days of the Closing Date with respect to a default under a\nmaterial lease that has been cured or waived on or prior to 60 days after the\nClosing Date) to the Company with respect to a claimed default under any\nmaterial agreement or instrument (other than the Financing Documents) to which\nthe Company is a party or by which any of its assets is bound, or (iv) of the\ninstitution of any litigation or arbitration involving an alleged liability of\nthe Company equal to or greater than $1,000,000 or any adverse determination in\nany litigation or arbitration involving a potential liability of the Company\nequal to or greater than $1,000,000, an Officer's Certificate of the Company\nspecifying the nature and period of existence of any such condition or event, or\nspecifying the notice given or action taken by such holder or Person and the\nnature of such \n\n                                       19\n\n \nclaimed default (including any Default), event or condition, and what action the\nCompany has taken, is taking or proposes to take with respect thereto;\n\n     (g) simultaneously with the financial statements referred to in Section\n5.01(a) above, operating plans and financial forecasts, including cash flow\nprojections covering proposed fundings, repayments, additional advances,\ninvestments and other cash receipts and disbursements, in each case to the\nextent prepared from time to time by the management of the Company for internal\nuse;\n\n     (h) at the conclusion of each Fiscal Year, the Company's annual operating\nand capital expenditure budgets and cash flow forecast for the following Fiscal\nYear presented on a monthly basis, which shall be in a format reasonably\nconsistent with projections, budgets and forecasts theretofore provided to the\nPurchasers;\n\n     (i) with reasonable promptness, such other information and data with\nrespect to the Company as from time to time may be reasonably requested by\neither of the Purchasers.\n\n     Section 5.02.  Payment Of Obligations.  The Company (i) shall pay and\ndischarge, and cause its Subsidiaries to pay and discharge, at or before\nmaturity, all of their respective material obligations and liabilities,\nincluding tax liabilities, except where the same may be the subject of a\nPermitted Contest, in each case to the extent that the failure to do the same\nwould not have a Material Adverse Effect, (ii) shall maintain, and cause its\nSubsidiaries to maintain, in accordance with GAAP, appropriate reserves for the\naccrual of any of the same and (iii) shall not breach or permit its Subsidiaries\nto breach, in any material respect, or permit to exist any material default\nunder, the terms of any lease, commitment, contract, instrument or obligation to\nwhich it is a party, or by which its properties or assets are bound, in each\ncase to the extent that such breach or default would not have a Material Adverse\nEffect.\n\n     Section 5.03. Conduct Of Business And Maintenance Of Existence. The Company\nwill continue, and will cause its Subsidiaries to continue, to engage in\nbusiness of the same general type as they now conduct and will preserve, renew\nand keep in full force and effect, and will cause its Subsidiaries to preserve,\nrenew and keep in full force and effect their respective existence and their\nrespective material rights, privileges and franchises necessary or desirable in\nthe normal conduct of business.\n\n     Section 5.04. Maintenance Of Property Insurance. (a) The Company will keep,\nand will cause its Subsidiaries to keep, all property useful and necessary in\nits business in good working order and condition, ordinary wear and tear\nexcepted.\n\n                                       20\n\n \n     (b) The Company will maintain, and will cause its Subsidiaries to maintain,\n(i) physical damage insurance on all real and personal property on an all risks\nbasis (including the perils of flood and quake), covering the repair and\nreplacement cost of all such property and consequential loss coverage for\nbusiness interruption and extra expense, (ii) public liability insurance\n(including products\/completed operations liability coverage) and (iii) such\nother insurance coverage in such amounts and with respect to such risks as the\nPurchasers may reasonably request. All such insurance shall be provided by\ninsurers having an A.M. Best policyholders rating of not less than B+ or such\nother insurers as the Required Holders may approve in writing.\n\n     (c) On or prior to the Closing Date, the Company shall cause the Collateral\nRepresentative to be named as an additional insured and loss payee on each\ninsurance policy required to be maintained pursuant to this Section 5.04. The\nCompany will deliver to the Purchasers (i) on the Closing Date, a certificate\nfrom the Company's insurance broker dated such date showing the amount of\ncoverage as of such date, and certifying that such policies will include\neffective waivers (whether under the terms of any such policy or otherwise) by\nthe insurer of all claims for insurance premiums against all loss payees and\nadditional insureds and all rights of subrogation against all loss payees and\nadditional insureds, and that if all or any part of such policy is canceled, is\nterminated or expires, the insurer will forthwith give notice thereof to each\nadditional insured and loss payee and that no cancellation, reduction in amount\nor material change in coverage thereof shall be effective until at least 30 days\nafter receipt by each additional insured and loss payee of written notice\nthereof, (ii) upon the request of either of the Purchasers from time to time\nfull information as to the insurance carried, (iii) within five days of receipt\nof notice from any insurer, a copy of any notice of cancellation, nonrenewal or\nmaterial change in coverage from that existing on the date of this Agreement,\nand (iv) forthwith, notice of any cancellation or nonrenewal of coverage by the\nCompany.\n\n     (d) Any proceeds to the Company or its Subsidiaries in excess of $2,000,000\nfrom any Property Insurance Policy in respect of any claim, or from any\ncondemnation award or other compensation in respect of a condemnation (or any\ntransfer or disposition of property in lieu of condemnation), shall be paid to\nthe Collateral Representative to be held, applied, deposited or released for\napplication in accordance with Section 7 of the Security Agreement and with this\nAgreement. The Company hereby appoints the Collateral Representative as its\nattorney-in-fact to make proof of loss, claim for insurance and adjustments with\ninsurers, and to execute or endorse all documents, checks or drafts in\nconnection with payments under Property Insurance Policies.\n\n     Section 5.05.  Compliance With Laws; Filings Of Reports.  The Company will\ncomply, and cause its Subsidiaries to comply, in all material respects with all\napplicable laws, ordinances, rules, regulations, and requirements of\ngovernmental authorities (including ERISA and the rules and regulations\nthereunder).  The \n\n                                       21\n\n \nCompany will, for so long as it has securities registered under the Exchange Act\nor has an effective registration statement under the Securities Act, make timely\nfiling of such reports as are required to be filed by it with the SEC.\n\n     Section 5.06.  Inspection Of Property, Books And Records.  The Company will\nkeep, and will cause its Subsidiaries to keep, proper books of record and\naccount in which full, true and correct entries shall be made of all dealings\nand transactions in relation to its business and activities; and will permit,\nand will cause its Subsidiaries to permit, representatives of either of the\nPurchasers, at such Purchaser's expense, to visit and inspect any of their\nrespective properties, to examine and make abstracts or copies from any of their\nrespective books and records, to conduct a collateral audit and analysis of\ntheir respective inventories and accounts receivable and to discuss their\nrespective affairs, finances and accounts with their respective officers and\nemployees, all at such reasonable times during normal business hours and as\noften as may reasonably be desired; provided that prior to the occurrence of a\nDefault or Event of Default, such visits shall be limited to one visit during\neach fiscal quarter of the Company.\n\n     Section 5.07. Reservation Of Shares. The Company will at all times after\nthe Stockholders of the Company approve or ratify the authorization and issuance\nof the Conversion Shares, reserve and keep available, solely for issuance and\ndelivery upon the conversion of the Notes, all such shares of Common Stock, or\nsuch other stock, securities and property as from time to time are issuable upon\nthe conversion of the Notes. The Company will not avoid or seek to avoid the\nobservance or performance of any of the terms of the Notes, but will at all\ntimes in good faith assist in the carrying out of all such terms and in the\ntaking of all such action as may be necessary or appropriate in order to protect\nthe rights of the Purchasers thereunder. In addition, the Company will promptly\ntake all commercially reasonable action as may from time to time be required in\norder to permit the Purchasers to convert the Notes and to duly and effectively\nissue shares of Common Stock pursuant thereto, including, without limitation,\ncomplying with any applicable premerger notification, reporting and waiting\nperiod requirements specified in 15 U.S.C. Section 18a and all regulations\npromulgated thereunder, with costs associated with compliance with such\nrequirements to be borne by the Company.\n\n     Section 5.08.  Purchasers' Meetings.  Within 30 days after the end of each\nfiscal quarter, at the request of the Purchasers the Company will conduct a\nmeeting with the Purchasers to discuss such fiscal quarter's results and the\nfinancial condition of the Company at which shall be present the chief executive\nofficer and the chief financial officer of the Company and such other officers\nof the Company as the Company's chief executive officer shall designate.  Such\nmeetings shall be held at a time and place convenient to the Purchasers and to\nthe Company.\n\n                                       22\n\n \n     Section 5.09. Board Of Directors Meetings. The Company will notify the\nPurchasers of all meetings and actions by written consent of the board of\ndirectors and each committee thereof at the same time and in the same manner as\nnotice of any meetings is required to be given to such Persons who do not waive\nsuch notice (or, if such action requires no notice, then two Business Days'\nwritten notice thereof describing the matters upon which action is to be taken).\nEach Purchaser shall have the right to send a representative selected by it to\neach such meeting, who shall be permitted to attend such meeting and any\nadjournments thereof; provided that representatives of the Purchasers shall not\nhave the right to attend the portion of any such meeting during which the\nCompany intends to discuss information, the disclosure of which is reasonably\nlikely to result in the waiver of the Company's attorney client privilege\napplicable to such information, but solely to the extent that the Company\nprovides to the Purchasers all non privileged information discussed during such\nportion of such meeting.\n\n     Section 5.10.  Meeting Of Stockholders; Stockholder Approval. The Company\nshall:\n\n     (a) promptly prepare and file with the SEC a proxy statement covering the\nsolicitation of proxies for use at the Stockholders' Meeting (defined in Section\n5.10(b) hereof) (the \"PROXY STATEMENT\") and respond to any comments of the SEC\nwith respect to the Proxy Statement and cause the Proxy Statement to be mailed\nto its stockholders;\n\n     (b) call and give notice of, as soon as practicable following the clearance\nof the Proxy Statement by the SEC, the annual meeting of its stockholders (the\n\"STOCKHOLDERS' MEETING\") to be duly called and held as soon as reasonably\npracticable (and shall use its best efforts to cause such meeting to be held no\nlater than December 31, 2001), for the purpose of voting to approve or ratify\nthe authorization and issuance of the Conversion Shares and shall use its best\nefforts to obtain such stockholder approval or ratification; and\n\n     (c) recommend approval or ratification, of the issuance of the Conversion\nShares, and include such recommendation in the Proxy Statement, and take all\nlawful action to solicit such stockholder approval or ratification.\n\n                                   ARTICLE 6\n                               Negative Covenants\n\n     The Company agrees that from the date hereof until the Closing Date and\nthereafter so long as any of the Notes remain outstanding:\n\n     Section 6.01.  Debt.  The Company will not, and will not permit any of its\nSubsidiaries to, directly or indirectly, create, incur, assume, guarantee or\notherwise become or remain directly or indirectly liable with respect to, any\nDebt, \n                                       23\n\n \nor any contingent obligations which would be Debt hereunder if they were\nnon-contingent, except for\n \n     (a) Debt or such contingent obligations outstanding on the date of this\nAgreement as set forth in Schedule 6.01 plus any renewals, extensions,\nreplacements or other refinancing thereof, provided that after giving effect to\nsuch renewal, extension, replacement or other refinancing, Debt permitted\npursuant to this Section 6.01(a) does not exceed the amount listed on Schedule\n6.01 as of the Closing Date;\n\n     (b)  Debt under the Financing Documents;\n\n     (c) Debt incurred or assumed for the purpose of financing all or any part\nof the cost of acquiring any asset (including through Capital Leases), in an\naggregate principal amount at any time outstanding not greater than $5,000,000;\nand\n\n     (d)  Debt to a wholly-owned Subsidiary.\n\n     Section 6.02. Negative Pledge. The Company will not, and will not permit\nany of its Subsidiaries to, create, assume or suffer to exist any Lien on any\nasset now owned or hereafter acquired by it, except:\n\n     (a) any Lien on any asset securing Debt permitted under Section 6.01(c)\nincurred or assumed for the purpose of financing all or any part of the cost of\nacquiring such asset, provided that such Lien attaches solely to such asset and\nconcurrently with or within 90 days after the acquisition thereof;\n\n     (b) Liens existing on the date of this Agreement securing Debt permitted by\nSection 6.01(a) in an aggregate principal amount not exceeding $1,000,000;\n\n     (c) inchoate Liens for taxes, assessments or governmental charges or levies\nnot yet due or payable;\n\n     (d) other Liens arising in the ordinary course of its business which (i) do\nnot secure Debt, (ii) do not secure any obligation in an amount exceeding\n$500,000 and (iii) do not in the aggregate materially detract from the value of\nits assets or materially impair the use thereof in the operation of its\nbusiness; and\n\n     (e)  Liens created by the Security Documents.\n\n     Section 6.03. Consolidations, Mergers And Sales Of Assets. The Company will\nnot, and will not permit any of its Subsidiaries to, (i) consolidate or merge\nwith or into any other Person or (ii) sell, lease or otherwise transfer,\ndirectly or indirectly, any of its or their assets, other than (x) dispositions\nof Temporary Cash Investments, (y) dispositions for cash and fair value of\nassets \n                                       24\n\n \nthat the board of directors (or comparable body) of the Company determines in\ngood faith are no longer used or useful to or necessary for the business of the\nCompany and its Subsidiaries and (z) the disposition of the Company's \"streaming\nmedia\" business.\n\n     Section 6.04. Restricted Payments. The Company will not, and will not\npermit any of its Subsidiaries to, directly or indirectly, declare, order, pay,\nmake or set apart any sum for any Restricted Payment.\n\n     Section 6.05. Purchase Of Assets; Investments. The Company will not, and\nwill not permit any of its Subsidiaries to, acquire any assets other than in the\nordinary course of business. The Company will not, and will not permit any of\nits Subsidiaries to, make, acquire or own any Investment in any Person other\nthan (a) Temporary Cash Investments and (b) Investments in Subsidiaries;\nprovided that the aggregate amount of Investments in Subsidiaries (whether now\nexisting or hereafter created or acquired) made after the date hereof shall not\nexceed $500,000. Without limiting the generality of the foregoing, the Company\nwill not, and will not permit any of its Subsidiaries to, (i) acquire or create\nany Subsidiary unless such Subsidiary becomes a Lien Grantor (as defined in the\nSecurity Agreement) pursuant to Section 15 of the Security Agreement or (ii)\nengage in any joint venture or partnership with any other Person, in each case\nwithout the prior written consent of the Required Holders; provided that the\nforegoing clause (ii) shall not prohibit the Company or any Subsidiary from\nentering into a strategic alliance which does not involve the transfer of cash\nor other assets, or equity of the Company or any such Subsidiary.\n\n     Section 6.06.  Transactions With Affiliates.  Except as disclosed in the\nCompany Reports or on Schedule 6.06 and except for transactions on fair and\nreasonable terms and conditions no less favorable to the Company as the terms\nand conditions which would apply in a comparable transaction with a Person other\nthan an Affiliate, the Company will not, and will not permit any of its\nSubsidiaries to, directly or indirectly, enter into or permit to exist any\ntransaction (including the purchase, sale, lease or exchange of any property or\nthe rendering of any service) with any Affiliate of the Company without the\nprior written consent of the Required Holders.\n\n     Section 6.07. Notice Of Issuance Of Securities. The Company shall not issue\nany securities from the date of this Agreement until the conversion of the\nNotes, in their entirety, without the prior written consent of the Required\nHolders, such consent not to be unreasonably withheld; provided that, the\nCompany shall not be required to obtain such consent in connection with (i) any\nissuance of securities pursuant to the exercise or conversion of any securities\noutstanding as of the date of this Agreement, (ii) the issuance of any shares of\nCommon Stock, or options or other rights to purchase or acquire shares of Common\nStock, or the issuance of any other securities, to directors, employees,\nconsultants or advisors to the Company, pursuant to a formal plan duly adopted\nby the board of directors, \n\n                                       25\n\n \n(iii) the issuance by the Company of Common Stock to any Person that is not an\nAffiliate of the Company or (iv) the issuance by the Company of Common Stock to\nany Purchaser as payment of interest on any Note or in satisfaction of Affiliate\nObligations.\n\n     Section 6.08. Amendments And Waivers. Without the prior written consent of\nthe Required Holders, the Company will not, nor will the Company permit any of\nits Subsidiaries to, agree to (i) any amendment to or waiver of or in respect of\nthe Organizational Documents of the Company or such Subsidiary or any Financing\nDocument or (ii) any other material amendment to or waiver of any material\ncontract constituting a part of the Collateral, if in each case, such amendments\nor waiver would adversely affect the rights or remedies of any Purchaser under\nthe Financing Documents.\n\n                                   ARTICLE 7\n                               Events Of Default\n\n     Section 7.01 . Events Of Default. If any one or more of the following\nevents (each an \"EVENT OF DEFAULT\") shall occur and be continuing for any reason\nwhatsoever (whether voluntary or involuntary, by operation of law or otherwise):\n\n     (a) the Company shall fail to pay any principal, when due, or shall fail to\npay within 5 days of the due date any interest or premium on any Note, any fees\nor any other amount payable hereunder;\n\n     (b)  the Company shall fail to observe or perform any covenant contained in\nArticle 6 hereof, or Section 5(b), 5(e) or 7 of the Security Agreement;\n\n     (c) the Company or any of its Subsidiaries shall fail to observe or perform\nany covenant or agreement contained in the Financing Documents (other than those\ncovered by Section 7.01(a) or 7.01(b) above) for 10 days after written notice\nthereof has been given to the Company by either Purchaser;\n\n     (d) any representation, warranty, certification or statement made by the\nCompany or any of its Subsidiaries in any Financing Document or in any\ncertificate, financial statement or other document delivered pursuant to any\nFinancing Document shall prove to have been incorrect in any respect (or in any\nmaterial respect if such representation, warranty, certification or statement is\nnot by its terms already qualified as to materiality) when made (or deemed\nmade);\n\n     (e) the Company or any of its Subsidiaries shall fail to make any payment\nin respect of any Material Debt (other than the Notes);\n\n                                       26\n\n \n\n     (f) any event or condition shall occur which (i) results in the\nacceleration of the maturity of any Material Debt (other than the Notes) of the\nCompany or any of its Subsidiaries, or (ii) enables (or, with the giving of\nnotice or lapse of time or both, would enable) the holder of such Material Debt\nor any Person acting on such holder's behalf to accelerate the maturity thereof,\nor (iii) results in a violation of, or a default under, any provision of the\ncertificate of incorporation of the Company or any of its Subsidiaries;\n\n     (g) the Company or any of its Subsidiaries shall commence a voluntary case\nor other proceeding seeking liquidation, reorganization or other relief with\nrespect to itself or its debts under any bankruptcy, insolvency or other similar\nlaw now or hereafter in effect or seeking the appointment of a trustee,\nreceiver, liquidator, custodian or other similar official of it or any\nsubstantial part of its property, or shall consent to any such relief or to the\nappointment of or taking possession by any such official in an involuntary case\nor other proceeding commenced against it, or shall make a general assignment for\nthe benefit of creditors, or shall fail generally to pay its debts as they\nbecome due, or shall take any corporate action to authorize any of the\nforegoing;\n\n     (h) an involuntary case or other proceeding shall be commenced against the\nCompany or any of its Subsidiaries seeking liquidation, reorganization or other\nrelief with respect to it or its debts under any bankruptcy, insolvency or other\nsimilar law now or hereafter in effect or seeking the appointment of a trustee,\nreceiver, liquidator, custodian or other similar official of it or any\nsubstantial part of its property, and such involuntary case or other proceeding\nshall remain undismissed and unstayed for a period of 60 days; or an order for\nrelief shall be entered against the Company or any of its Subsidiaries under the\nfederal bankruptcy laws as now or hereafter in effect;\n\n     (i) one or more judgments or orders for the payment of money aggregating in\nexcess of $1,000,000 shall be rendered against the Company or any of its\nSubsidiaries and such judgments or orders shall continue unsatisfied and\nunstayed for a period of 10 days;\n\n     (j)  there shall occur a Change of Control;\n\n     (k) through no fault of the Purchasers, the Lien created by any of the\nSecurity Documents shall at any time fail to constitute a valid and perfected\nLien on any material portion of the Collateral purported to be secured thereby,\nsubject to no prior or equal Lien except Permitted Liens, or the Company or any\nof its Subsidiaries shall so assert in writing;\n\n     (l) the Company or any of its Subsidiaries shall be prohibited or otherwise\nmaterially restrained from conducting the business theretofore conducted by it\nby virtue of any determination, ruling, decision, decree or order of any court\nor regulatory authority of competent jurisdiction and such \n\n                                       27\n\n \ndetermination, ruling, decision, decree or order remains unstayed and in effect\nfor any period of 10 days; or\n \n     (m) any of the Financing Documents shall for any reason fail to constitute\nthe valid and binding agreement of any party thereto, or any such party shall so\nassert in writing;\n\n     then, and in every such event and at any time thereafter during the\ncontinuance of such event, the Required Holders may by notice to the Company\ndeclare the Notes (together with accrued interest thereon) to be, and the Notes\nshall thereupon become, immediately due and payable without presentment, demand,\nprotest or other notice of any kind, all of which are hereby waived by the\nCompany and the Company will pay the same; provided that in the case of any of\nthe Events of Default specified in Section 7.01(g) or 7.01(h) above, without any\nnotice to the Company or any other act by the Purchasers, the Notes (together\nwith accrued interest thereon) shall become immediately due and payable without\npresentment, demand, protest or other notice of any kind, all of which are\nhereby waived by the Company and the Company will pay the same.\n\n                                   ARTICLE 8\n                                   Conditions\n\n     Section 8.01.  Conditions To Closing.  The obligation of each Purchaser to\npurchase the Notes on the Closing Date shall be subject to the satisfaction of\nthe following conditions precedent:\n\n     (a)  receipt by CFS of a duly executed CFS Note;\n\n     (b)  receipt by CMGI of a duly executed CMGI Note;\n\n     (c) receipt by each Purchaser of evidence satisfactory to it in its\nreasonable and good faith discretion of the satisfaction (without waiver) of all\nconditions to the closing of the transactions contemplated by the Transaction\nAgreement on the Closing Date;\n\n     (d) receipt by each Purchaser of evidence satisfactory to it of the\neffectiveness of and a copy of all Financing Documents required to be effective\non the Closing Date, all in form and substance reasonably satisfactory to such\nPurchaser, in each case in its reasonable and good faith discretion;\n\n     (e) receipt by each Purchaser of an opinion of counsel for the Company\n(which shall be a nationally recognized law firm reasonably acceptable to the\nPurchasers), satisfactory in form and substance to such Purchaser and covering\nsuch matters relating to the transactions contemplated hereby as either\nPurchaser may reasonably request (by its execution and delivery of this\nAgreement, the \n\n                                       28\n\n \nCompany authorizes and directs such counsel to deliver such opinions to the\nPurchasers);\n \n     (f) receipt by each Purchaser of all amounts due and payable to it on or\nprior to the Closing Date under each Financing Document;\n\n     (g) receipt by each Purchaser of a certificate signed by the chief\nfinancial officer or treasurer of the Company to the effect that, both before\nand immediately after the purchase and sale of the Notes and the other\ntransactions contemplated to take place on the Closing Date, including those\ncontemplated by the Transaction Agreement (i) no Default shall have occurred and\nbe continuing and (ii) the representations and warranties of the Company and its\nSubsidiaries made in or pursuant to the Financing Documents are true;\n\n     (h)  receipt by each Purchaser of the certificate referred to in Section\n5.04(c); and\n\n     (i) receipt by each Purchaser of all documents either Purchaser may\nreasonably request relating to the existence of the Company and its\nSubsidiaries, the authority for and the validity of the Financing Documents, and\nany other matters relevant hereto, all in form and substance satisfactory to\neach Purchaser, in its sole good faith discretion.\n\n     The certificates and opinions referred to in this Section shall be dated\nthe Closing Date.\n\n                                   ARTICLE 9\n                Expenses, Indemnity, Taxes And Right To Perform\n\n     Section 9.01. Expenses. Whether or not the transactions contemplated hereby\nshall be consummated, each party hereto shall bear its own (i) costs and\nexpenses of preparation of this Agreement and the other Financing Documents and\n(ii) the fees, expenses and disbursements of each of its counsel to, and each of\nits independent appraisers and consultants retained in connection with the\nnegotiation, preparation, execution and administration of this Agreement and the\nother Financing Documents. The Company agrees to pay (i) the reasonable fees,\nexpenses and disbursements of counsel to, and independent appraisers and\nconsultants retained by, the Purchasers in connection with the negotiation,\npreparation, and execution of any amendments to or any waivers of this Agreement\nor any other Financing Document, (ii) all reasonable costs and expenses of\ncreating, perfecting and maintaining Liens pursuant to the Financing Documents,\nincluding title investigations and fees and expenses of such local counsel as\neither Purchaser shall request; provided that any such costs in excess of $5,000\nper Lien Grantor shall be payable by the Purchasers, pro-rata to the outstanding\nprincipal amount of each Purchaser's Note, (iii) the reasonable fees, \n\n                                       29\n\n \nexpenses and disbursements of independent accountants or other experts retained\nby the Purchasers in connection with not more than two accounting and collateral\naudits or reviews of the Company and its affairs during any calendar year and\n(iv) if an Event of Default occurs, all out-of-pocket expenses incurred by each\nPurchaser, including fees and disbursements of counsel and all expenses of\nprotecting, storing, insuring, handling, maintaining or selling any Collateral,\nin connection with such Event of Default and collection, bankruptcy, insolvency\nand other enforcement proceedings resulting therefrom.\n\n     Section 9.02. Indemnity. Whether or not the transactions contemplated\nhereby shall be consummated, the Company agrees to indemnify, pay and hold\nharmless the Purchasers and any subsequent holder of any of the Notes and the\nofficers, directors, and employees of the Purchasers and such holders\n(collectively called the \"INDEMNITEES\") from and against any and all\nliabilities, obligations, losses, damages, penalties, actions, judgments, suits,\nclaims, costs, expenses and disbursements of any kind or nature whatsoever\n(including the fees and disbursements of counsel for such Indemnitee) in\nconnection with any investigative, administrative or judicial proceeding,\nwhether or not such Indemnitee shall be designated a party thereto and including\nany such proceeding initiated by or on behalf of the Company, and the reasonable\nexpenses of investigation by engineers, environmental consultants and similar\ntechnical personnel and any commission, fee or compensation claimed by any\nbroker (other than any broker retained by the Purchasers) asserting any right to\npayment for the transactions contemplated hereby, which may be imposed on,\nincurred by or asserted against such Indemnitee as a result of or in connection\nwith the transactions contemplated hereby or by the other Financing Documents\nand the use or intended use of the proceeds of the Notes, except that the\nCompany shall have no obligation hereunder to an Indemnitee with respect to any\nliability resulting from the gross negligence or willful misconduct of such\nIndemnitee. To the extent that the undertaking set forth in the immediately\npreceding sentence may be unenforceable, the Company shall contribute the\nmaximum portion which it is permitted to pay and satisfy under applicable law to\nthe payment and satisfaction of all such indemnified liabilities incurred by the\nIndemnitees or any of them.\n\n                                  ARTICLE 10\n                                 Miscellaneous\n\n     Section 10.01. Survival. The indemnities and agreements set forth in\nArticle 9 shall survive the payment of the Notes and any termination of this\nAgreement.\n\n     Section 10.02.  No Waivers.  No failure or delay by any Purchaser in\nexercising any right, power or privilege under any Financing Document shall\noperate as a waiver thereof nor shall any single or partial exercise thereof\npreclude any other or further exercise thereof \n\n                                       30\n\n \nor the exercise of any other right, power or privilege. The rights and remedies\nherein and therein provided shall be cumulative and not exclusive of any rights\nor remedies provided by law.\n \n     Section 10.03.  Security Agreement.  The Purchasers hereby approve the\nprovisions of the Security Agreement and agree to be bound by the provisions\nthereof, including, without limitation, Section 13 thereof.\n\n     Section 10.04.  Notices.  All notices, requests and other communications to\nany party hereunder shall be in writing (including prepaid overnight courier,\nfacsimile transmission or similar writing) and shall be given to such party at\nits address or facsimile number set forth below (other than notices, requests or\nother communications provided to CFS under Section 5.01, which shall be given to\nCFS at the address or facsimile number set forth below) or at such other address\nor facsimile number as such party may hereafter specify for the purpose by\nnotice to the Company.\n\nIf to the Company to:                  NaviSite, Inc.\n                                       400 Minuteman Road\n                                       Andover, MA 01810\n                                       Attention:  General Counsel\n                                       Facsimile:  (978) 682-8100\n \nIf to CFS generally, to:               Compaq Financial Services Corporation\n                                       420 Mountain Avenue\n                                       Murray Hill, NJ 07974\n                                       Attention :  General Counsel\n                                       Facsimile: (908) 898-4137\n\nWith a copy to:                        Davis Polk &amp; Wardwell\n                                       450 Lexington Avenue\n                                       New York, New York  10017\n                                       Attention:  Chris Mayer\n                                       Facsimile:  (212) 450-4800\n\nIf to CFS pursuant to Section 5.01:    Compaq Financial Services Corporation\n                                       420 Mountain Avenue\n                                       Murray Hill, NJ 07974\n                                       Attention: Vice President and  \n                                       Managing Director Global   \n                                       Structured Finance\n\n                                       31\n\n \n                                       Facsimile:  (908) 898-4138\n \nWith a copy to:                        Davis Polk &amp; Wardwell\n                                       450 Lexington Avenue\n                                       New York, New York  10017\n                                       Attention:  Chris Mayer\n                                       Facsimile:  (212) 450-4800\n\nIf to CMGI to:                         CMGI, Inc.\n                                       100 Brickstone Square\n                                       Andover, MA 01810\n                                       Attention:  General Counsel\n                                       Facsimile:  (978) 684-3601\n\n\nWith a copy to:                        Hale and Dorr LLP\n                                       60 State Street\n                                       Boston, MA 02109\n                                       Attention:  Mark G. Borden, Esq.\n                                       Facsimile:  (617) 526-5000\n\nEach such notice, request or other communication shall be effective (i) when\ndelivered to such party at its address specified above, (ii) when sent to such\nparty by facsimile, addressed to it at its facsimile number specified above, and\nsuch party sends back an electronic confirmation of receipt, or (iii) ten days\nafter being sent to such party by certified or registered United States mail,\naddressed to it at its address specified below, with first class or airmail\npostage.\n\n     Section 10.05.  Payments.  Each payment of principal on the Notes and each\npayment of interest on the Notes shall be allocated pro rata among the\nPurchasers in accordance with the respective principal amounts of their\noutstanding Notes.  Any amounts paid by the Company under the Notes shall be\napplied in the following order: first, to the payment of any interest accrued up\nto the date of such payment on any overdue amount under the Notes; second, to\nthe payment of any interest on the principal of the Notes, provided that such\ninterest is due and payable at such date; and third, to the payment of any\noutstanding principal amount of the Notes, provided that such principal amount\nis due and payable at such date.\n\n     Section 10.06.  Severability.  In case any provision of or obligation under\nthis Agreement or the Notes or any other Financing Document shall be invalid,\nillegal or unenforceable in any jurisdiction, the validity, legality and\nenforceability of the remaining provisions or obligations, or of such provision\nor obligation in any other jurisdiction, shall not in any way be affected or\nimpaired thereby.\n\n                                       32\n\n \n     Section 10.07.  Amendments And Waivers.  Any provision of this Agreement or\nthe Notes may be amended or waived if, but only if, such amendment or waiver is\nin writing and is signed by the Company and the Required Holders; provided that\nno such amendment or waiver shall, unless signed by all of the Purchasers (i)\nreduce the principal of or rate of interest on any Note or (ii) postpone the\ndate fixed for any payment of principal on any Note or of interest on any Note.\n\n     Section 10.08. Successors And Assigns; Registration. (a) The provisions of\nthis Agreement shall be binding upon and inure to the benefit of the parties\nhereto and their respective successors and assigns (including any transferee of\nany Note), except that the Company may not assign or otherwise transfer any of\nits rights under this Agreement without the prior written consent of the\nRequired Holders.\n\n     (b) Either of the Purchasers may at any time assign or transfer all, or a\nproportionate part of all of its rights and obligations under this Agreement and\nthe Notes only with the prior written consent of the Company and each other\nPurchaser (each, a \"NON-ASSIGNING PURCHASER\"), which consent shall not be\nunreasonably withheld or delayed; provided that the consent of the Company and\nthe Non-Assigning Purchasers shall not be required for such assignments or\ntransfers (i) to an Affiliate of a Purchaser or (ii) to another Purchaser.\nSubject to the restriction contained in the foregoing sentence, the terms and\nprovisions of this Agreement shall inure to the benefit of any transferee or\nassignee of any Note and, in the event of such transfer or assignment, the\nrights and privileges herein conferred upon the assigning Purchaser shall\nautomatically extend to and be vested in such transferee or assignee, all such\nto the terms and conditions hereof.\n\n     (c) Upon any assignment of any Note, the assigning Purchaser shall\nsurrender its Note to the Company for exchange or registration of transfer, and\nthe Company will promptly execute and deliver in exchange therefor a new Note or\nNote of the same tenor, and registered in the name of the assignor Purchaser (if\nless than all of such Purchaser's Notes are assigned) and the name of the\nassignee Purchaser.\n \n     (d) The Company shall maintain a register (the \"NOTE REGISTER\") of the\nPurchasers and all assignee Purchasers that are the holders of all the Notes\nissued pursuant to this Agreement. The Company will allow any Purchaser to\ninspect and copy such list at the Company's principal place of business during\nnormal business hours. Prior to the due presentment for registration of transfer\nof any Note, the Company may deem and treat the Person in whose name a Note is\nregistered as the absolute owner of such Note for the purpose of receiving\npayment of principal of and premium and interest on such Note and for all other\npurposes whatsoever, and the Company shall not be affected by notice to the\ncontrary.\n                                       33\n\n \n     (e) Each Purchaser (including any assignee Purchaser at the time of such\nassignment) represents that it (i) is acquiring its Note solely for investment\npurposes and not with a view toward, or for sale in connection with, any\ndistribution thereof, (ii) has received and reviewed such information as it\ndeems necessary to evaluate the merits and risks of its investment in the Notes,\n(iii) is an \"accredited investor\" within the meaning of Rule 501(a) under the\nSecurities Act, and (iv) has such knowledge and experience in financial and\nbusiness matters as to be capable of evaluating the merits and risks of its\ninvestment in the Notes, including a complete loss of its investment.\n\n     (f) Each Purchaser understands that the Notes are being offered only in a\ntransaction not involving any public offering within the meaning of the\nSecurities Act, and that, if in the future such Purchaser decides to resell,\npledge or otherwise transfer any of the Notes, such Notes may be resold, pledged\nor transferred only (i) to the Company, (ii) to a person who such Purchaser\nreasonably believes is a qualified institutional buyer that purchases for its\nown account or for the account of a qualified institutional buyer to whom notice\nis given that such resale, pledge or transfer is being made in reliance on Rule\n144A under the Securities Act, or (iii) pursuant to an exemption from\nregistration under the Securities Act.\n\n     (g) Each Purchaser understands that the Notes will, unless otherwise agreed\nby the Company and the holder thereof, bear a legend to the following effect:\n\n     THIS SECURITY IS NOT BEING REGISTERED UNDER THE SECURITIES ACT OF 1933, AS\nAMENDED (THE \"SECURITIES ACT\").  THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,\nAGREES FOR THE BENEFIT OF THE ISSUER THAT THIS SECURITY MAY BE RESOLD, PLEDGED\nOR OTHERWISE TRANSFERRED, ONLY (1) TO THE COMPANY OR (2) PURSUANT TO AN\nEXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.\n\n     Section 10.09. Lost Or Destroyed Notes. If any Note becomes mutilated and\nis surrendered by the Purchaser with respect thereto to the Company, or if any\nPurchaser claims that its Note has been lost, destroyed or wrongfully taken, the\nCompany shall execute and deliver to such Purchaser a replacement Note, upon \nthe affidavit of such Purchaser attesting to such loss, destruction or wrongful\ntaking with respect to such Note and such lost, destroyed, mutilated,\nsurrendered or wrongfully taken Note shall be deemed to be canceled for all\npurposes hereof.\n                                       34\n\n \nSuch affidavit shall be accepted as satisfactory evidence of the loss, wrongful\ntaking or destruction thereof and no indemnity shall be required as a condition\nof the execution and delivery of a replacement Note. Any costs and expenses of\nthe Company in replacing any such Note shall be for the account of such\nPurchaser.\n\n     Section 10.10.  Headings.  Headings and captions used in the Financing\nDocuments (including the Exhibits and Schedules hereto and thereto) are included\nfor convenience of reference only and shall not be given any substantive effect.\n\n     Section 10.11. Confidentiality. In handling any confidential information of\nthe Company or any of its Subsidiaries, the Purchasers shall exercise the same\ndegree of care that it exercises with respect to its own proprietary information\nof the same types to maintain the confidentiality of any non-public information\nthereby received or received pursuant to this Agreement except that disclosure\nof such information may be made (i) to the agents, employees, Subsidiaries or\nAffiliates of such Person in connection with its present or prospective business\nrelations with the Company and its Subsidiaries arising out of the Financing\nDocuments, but only to the extent that each such agent, employee, Subsidiary or\nAffiliate has been directed to maintain the confidentiality of such information\nin accordance with the provisions of this Section 10.11, (ii) to prospective\ntransferees or purchasers of any interest in the Notes, provided that they have\nagreed to be bound by the provision of this Section 10.11, (iii) as required by\nlaw, regulations, rule, request or order, subpoena, judicial order or similar\norder and in connection with any litigation, and (iv) as may be required in\nconnection with the examination, audit or similar investigation of such Person.\nThe Purchasers will not use or allow the use of confidential information for any\npurpose except in connection with the transactions and agreements contemplated\nby the Financing Documents. Confidential information shall include only such\ninformation identified as such in writing at the time provided to the Purchasers\nor upon written notice to the Purchasers at any time thereafter and shall not\ninclude information that either: (i) is in the public domain, or becomes part of\nthe public domain after disclosure to such Person through no fault of such\nPerson or (ii) is disclosed to such Person by a third party, provided the\nPurchasers do not have actual knowledge that such third party is prohibited from\ndisclosing such information.\n\n     Section 10.12 . Governing Law; Submission To Jurisdiction. THIS AGREEMENT\nAND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF\nTHE STATE OF NEW YORK. THE COMPANY HEREBY SUBMITS TO THE NONEXCLUSIVE\nJURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF\nNEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES\nOF ALL LEGAL PROCEEDINGS ARISING OUT OF OR \n\n                                       35\n\n \nRELATING TO THIS AGREEMENT, ANY OTHER FINANCING DOCUMENT OR THE TRANSACTIONS\nCONTEMPLATED HEREBY OR THEREBY. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST\nEXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE\nLAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM\nTHAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN\nINCONVENIENT FORUM. EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO SERVICE\nOF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.03. NOTHING IN THIS\nAGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS\nIN ANY OTHER MANNER PERMITTED BY LAW.\n\n     Section 10.13. Waiver Of Jury Trial. EACH OF THE COMPANY AND THE PURCHASERS\nHEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL\nPROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE\nTRANSACTIONS CONTEMPLATED THEREBY AND TO THE FULLEST EXTENT PERMITTED BY LAW\nWAIVES ANY RIGHTS THAT IT MAY HAVE TO CLAIM OR RECEIVE CONSEQUENTIAL OR SPECIAL\nDAMAGES IN CONNECTION WITH ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO\nTHE FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY.\n\n     Section 10.14.  Counterparts; Integration.  This Agreement may be signed in\nany number of counterparts, each of which shall be an original, with the same\neffect as if the signatures thereto and hereto were upon the same instrument.\nThis Agreement, the other Financing Documents and the Transaction Agreement\nconstitute the entire agreement and understanding among the parties hereto and\nsupersede any and all prior agreements and understandings, oral or written,\nrelating to the subject matter hereof.\n\n                                       36\n\n \n     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of\nthe date and year first above written.\n\n                                             NAVISITE, INC.\n\n                                             By: \/s\/ Patricia Gilligan\n                                                 ----------------------------\n                                                 Name: Patricia Gilligan\n                                                 Title: President and Chief\n                                                        Executive Officer\n\n\n                                             COMPAQ FINANCIAL SERVICES \n                                              CORPORATION\n\n                                             By: \/s\/ Edward W. Andrews, Jr.\n                                                 ----------------------------\n                                                 Name: Edward W. Andrews, Jr.\n                                                 Title: Vice President and\n                                                        Managing Director\n\n\n                                             CMGI, INC.\n\n                                             By: \/s\/ George A. McMillan\n                                                 ----------------------------\n                                                 Name: George A. McMillan\n                                                 Title: CFO\n\n                                       37\n\n \n                                                                       EXHIBIT A\n\n                                  FORM OF NOTE\n\n     THIS SECURITY IS NOT BEING REGISTERED UNDER THE SECURITIES ACT OF 1933, AS\nAMENDED (THE \"SECURITIES ACT\").  THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,\nAGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY BE RESOLD, PLEDGED\nOR OTHERWISE TRANSFERRED, ONLY (1) TO THE COMPANY, OR (2) PURSUANT TO AN\nEXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.\n\n     THE HOLDER OF THIS NOTE IS ENTITLED TO THE BENEFITS OF THE GUARANTEE AND\nSECURITY AGREEMENT DATED OCTOBER __, 2001 AMONG THE COMPANY, CERTAIN SUBSIDIARY\nGUARANTORS THERETO AND COMPAQ FINANCIAL SERVICES CORPORATION, AS AMENDED,\nMODIFIED AND SUPPLEMENTED FROM TIME TO TIME.  ADDITIONALLY, THE HOLDER OF THIS\nNOTE IS ENTITLED TO THE BENEFITS OF THE AMENDMENT TO AND RESTATEMENT OF TO THE\nINVESTOR RIGHTS AGREEMENT DATED OCTOBER __, 2001 AMONG THE COMPANY, COMPAQ\nFINANCIAL SERVICES CORPORATION AND CMGI, INC., AS AMENDED, MODIFIED AND\nSUPPLEMENTED FROM TIME TO TIME.\n\n                                 NAVISITE, INC.\n\n                     12% Convertible, Senior, Secured Note\n                             Due December 31, 2007\n\nU.S. $_______                                                   October __, 2001\n\n     FOR VALUE RECEIVED, the undersigned, NaviSite, Inc., a Delaware corporation\n(the \"COMPANY\"), hereby promises to pay to __, a Delaware corporation (the\n\"PURCHASER\"), the principal sum of US$____ in twelve equal quarterly\ninstallments (each a \"PRINCIPAL PAYMENT\"), together with accrued but unpaid\ninterest thereon, commencing on the first Interest Payment Date (as defined\nbelow) in 2005 and continuing on each Interest Payment Date thereafter (each\ndate on which a Principal Payment is made, a \"PRINCIPAL PAYMENT DATE\") \n\n \nuntil December 31, 2007 (the \"MATURITY DATE\"). The Company may not prepay this\nNote. Interest on the outstanding principal shall be at a rate of 12% per annum\n(\"INTEREST\"), calculated on the basis of a 360 day year consisting of twelve 30\nday months, and will be payable quarterly in arrears on March 31, June 30,\nSeptember 30 and December 31 of each year (each an \"INTEREST PAYMENT DATE\")\nbeginning December 31, 2001 until the Maturity Date. Interest for first Interest\nPayment Date shall be calculated from the date of issuance hereof to the first \nInterest Payment Date. If all or a portion of a Principal Payment or Interest\nshall not be paid when due (whether at its stated maturity, by acceleration or\notherwise), the Company hereby promises to pay, on demand, interest on such\noverdue amount from and including the due date to, but excluding, the date such\namount is paid in full at 14% per annum (and until the date such overdue amount\nis paid in full, \"Interest\" on such overdue amount shall mean interest at such\nrate).\n\n     This Note is being delivered pursuant to a Note Purchase Agreement, dated\nas of October 29, 2001, among the Company, the Purchaser and [CFS\/CMGI] (the\n\"NOTE PURCHASE AGREEMENT\").  This Note is one of the Notes referred to in the\nNote Purchase Agreement, which among other things, contains provisions for the\nacceleration of the maturity hereof upon the happening of certain events and for\nthe amendment or waiver of certain provisions of the Note Purchase Agreement,\nall upon the terms and conditions therein specified.\n\n     1. Certain Definitions. As used herein, the following terms have the\nfollowing meanings:\n\n     \"CLOSING PRICE\" shall mean, on any day, (i) the closing price of the Common\nStock (or any other security for which a closing price must be determined) on a\nnational securities exchange or as quoted on the Nasdaq National Market on such\nday, as reported by the Wall Street Journal or (ii) if the Common Stock (or any\nsuch other security) is quoted on the Nasdaq National Market but no sale occurs\non such day, the average of the closing bid and asked prices of the Common Stock\n(or any such other security) on the Nasdaq National Market on such day, as\nreported by the Wall Street Journal or (iii) if the Common Stock (or any such\nother security) is not so listed or quoted, the average of the closing bid and\nasked prices of the Common Stock (or any such other security) in the U.S. over-\nthe-counter market or (iv) if no such trading market is readily available, the\nfair market value of the Common Stock (or any such other security) as determined\nin accordance with Section 5(b) hereof.\n\n     \"CURRENT MARKET PRICE\" of the Common Stock means the average of the daily\nClosing Prices of the Common Stock for the five consecutive trading days\nselected by the board of directors commencing not more than 20 trading days\nbefore, and ending not later than the date immediately preceding the record date\nfixed in connection with such event or, if there is no record date, the date of\nsuch event; provided, that the Current Market Price of the Common Stock in\nconnection with a Spin-Off shall mean the average of the daily Closing Prices of\n\n                                       2\n\n \nthe Common Stock for the same five consecutive trading days used to determine\nthe Fair Market Value of the securities being distributed in such Spin-Off.\n\n     \"FAIR MARKET VALUE\" of the securities to be distributed to the holders of\nthe Common Stock in connection with a Spin-Off shall mean the average of the\ndaily Closing Prices of such securities for a five consecutive trading day\nperiod selected by the board of directors during the period beginning on the\nfirst day of trading of such securities after the effectiveness of such Spin-Off\nand ending not later than 20 days after the effectiveness of the Spin-Off.\n\n     All capitalized terms used but not otherwise defined herein shall have the\nmeaning ascribed to such terms in the Note Purchase Agreement.\n\n     2. Security.\n\n     The Purchaser's right to payment pursuant to the terms of this Note shall\nbe secured to the extent and on the terms and conditions set forth in the\nSecurity Agreement, and the terms and provisions of the Security Agreement are\nincorporated herein by reference.\n\n     3. Payment.\n\n     Principal Payments on each Principal Payment Date and Interest on each\nInterest Payment Date shall be made by bank cashier's check payable to the\nPurchaser at the Purchaser's principal address set forth in Section 10.04 of the\nNote Purchase Agreement (or at such other place as the Purchaser hereof shall\nnotify the Company in writing) or, if the Purchaser so specifies, by written\nnotice to the Company given not less than two Business Days prior to the\nPrincipal Payment Date or the Interest Payment Date, as the case may be, by bank\nwire transfer, in immediately available funds, to the account so specified, in\nlawful money of the United States of America; provided that, at the election of\nthe Company, so long as the Company is listed on the Nasdaq National Market, up\nto [one-sixth - CFS Note]\/[100% - CMGI Note] of the amount of Interest due on\nany Interest Payment Date through and including the Interest Payment Date in\nDecember [2003 -CFS Note]\/[2007-CMGI Note] may be paid in shares of Common\nStock.  The number of shares of Common Stock to be issued in payment of the\nInterest due on such Interest Payment Date shall equal the amount of such\nInterest to be paid in Common Stock divided by the average of the Closing Prices\nper share of the Common Stock on the five consecutive trading days ending on the\ntrading day immediately preceding such Interest Payment Date.  If any Principal\nPayment Date or any Interest Payment Date occurs on a date that is not a\nBusiness Day, then the Principal Sum or Interest then due shall be paid on the\nnext succeeding Business Day.\n\n     4. Conversion.\n\n                                       3\n\n \n     (a) Conversion Rights. Subject to and in accordance with the provisions of\nthis Section 4, at any time on or prior to the Maturity Date, the Purchaser may\nelect, in its sole discretion, to effect the conversion (the \"CONVERSION\") of\nall or any portion of the outstanding principal and interest due on this Note\ninto shares of Common Stock. The number of shares of Common Stock into which the\noutstanding principal and accrued but unpaid interest (or portion thereof) shall\nbe converted pursuant to this Section 4(a) shall be determined by dividing the\namount of outstanding principal and interest the Purchaser has elected to\nconvert by $0.26. The Conversion Price is subject to adjustment as provided in\nSection 5 hereof.\n\n     (b) Manner of Effecting the Conversion. If the Purchaser elects to effect\nthe Conversion pursuant to Section 4(a) hereof, the Purchaser shall deliver a\nduly executed written notice to the Company of such election (the \"CONVERSION\nNOTICE\"), and in such event the Conversion shall be deemed to have been effected\nat the close of business on the date such Conversion Notice is given. Upon any\nConversion of this Note in accordance with the terms hereof, the rights of the\nPurchaser with respect to the outstanding principal and all interest pursuant to\nthis Note shall cease and the Purchaser shall be deemed to have become the\nholder of record of the shares of Common Stock into which this Note shall have\nbeen converted, provided that, if the Purchaser elects to convert only a portion\nof the outstanding principal and interest pursuant to Section 4(a) hereof, then\nthe Company will deliver a new note to the Purchaser, on the same terms and\nconditions as this Note, with respect to the portion of the outstanding\nprincipal and interest that is not converted (the \"NEW NOTE\"). Concurrently with\nthe delivery of a Conversion Notice, the Purchaser shall surrender this Note to\nthe Company. Promptly upon its receipt of a Conversion Notice, the Company shall\n(i) deliver to or upon the written order of the Purchaser, a certificate or\ncertificates for the number of shares of Common Stock issuable upon such\nConversion, (ii) make a cash payment in respect of any fraction of a share as\nprovided in Section 4(c) hereof and (iii) if applicable, deliver a New Note as\nset forth in this Section 4(b).\n\n     (c) Fractional Shares. No fractional shares shall be issued upon any\nConversion. Instead of any fractional share which would otherwise be issuable\nupon a Conversion, the Company shall pay a cash amount in respect of such\nfractional share in an amount based upon the Closing Price of the Common Stock\non the trading day immediately preceding such Conversion.\n\n     (d) Notwithstanding anything contained herein, this Note may not be\nconverted until the Company has obtained the stockholder approvals required in\naccordance with Rule 4350(i) of the National Association of Securities Dealers\nManual and Delaware corporate law.\n\n                                       4\n\n \n     5. Antidilution Provisions.\n\n     (a) The Conversion Price shall be subject to adjustment from time to time\nas follows:\n\n          (i) STOCK SPLITS AND COMBINATIONS. In case the Company shall at any\n     time or from time to time after the Closing Date (A) subdivide or split the\n     outstanding shares of Common Stock, (B) combine or reclassify the\n     outstanding shares of Common Stock into a smaller number of shares or (C)\n     issue by reclassification of the shares of Common Stock any shares of\n     Capital Stock of the Company, then, and in each such case, the Conversion\n     Price in effect immediately prior to such event or the record date\n     therefor, whichever is earlier, shall be adjusted so that the holder of\n     this Note thereafter surrendered for conversion shall be entitled to\n     receive the number of shares of Common Stock or other securities of the\n     Company which such holder would have owned or have been entitled to receive\n     after the occurrence of any of the events described above, had such Note\n     been surrendered for conversion immediately prior to the occurrence of such\n     event or the record date therefor, whichever is earlier. An adjustment made\n     pursuant to this subparagraph (i) shall become effective at the close of\n     business on the day upon which such corporate action becomes effective.\n     Such adjustment shall be made successively whenever any event listed above\n     shall occur.\n\n          (ii) STOCK DIVIDENDS IN COMMON STOCK. In case the Company shall at any\n     time or from time to time after the Closing pay a dividend or make a\n     distribution in shares of Common Stock on any class of Capital Stock of the\n     Company other than dividends or distributions of shares of Common Stock or\n     other securities with respect to which adjustments are provided in Section\n     5(a)(i) above, the Conversion Price shall be adjusted so that the holder of\n     this Note shall be entitled to receive upon conversion thereof, the number\n     of shares of Common Stock determined by multiplying (A) the applicable\n     Conversion Price by (B) a fraction, the numerator of which shall be the\n     number of shares of Common Stock theretofore outstanding and the\n     denominator of which shall be the sum of such number of shares and the\n     total number of shares issued in such dividend or distribution.\n\n          (iii) ISSUANCE OF RIGHTS OR WARRANTS. In case the Company shall issue\n     to all holders of Common Stock rights or warrants entitling such holders to\n     subscribe for or purchase Common Stock at a price per share less than the\n     Current Market \n\n                                       5\n\n \n     Price, the Conversion Price in effect immediately prior to the close of\n     business on the record date fixed for determination of stockholders\n     entitled to receive such rights or warrants shall be reduced by multiplying\n     such Conversion Price by a fraction, the numerator of which is the sum of\n     the number of shares of Common Stock outstanding at the close of business\n     on such record date and the number of shares of Common Stock that the\n     aggregate offering price of the total number of shares of Common Stock so\n     offered for subscription or purchase would purchase at such Current Market\n     Price and the denominator of which is the sum of the number of shares of\n     Common Stock outstanding at the close of business on such record date and\n     the number of additional shares of Common Stock so offered for subscription\n     or purchase. For purposes of this subparagraph (iii), the issuance of\n     rights or warrants to subscribe for or purchase securities convertible into\n     Common Stock shall be deemed to be the issuance of rights or warrants to\n     purchase the Common Stock into which such securities are convertible at an\n     aggregate offering price equal to the sum of the aggregate offering price\n     of such securities and the minimum aggregate amount (if any) payable upon\n     conversion of such securities into Common Stock. Such adjustment shall be\n     made successively whenever any such event shall occur.\n\n          (iv) DISTRIBUTION OF INDEBTEDNESS, SECURITIES OR ASSETS. In case the\n     Company shall distribute to all holders of Common Stock (whether by\n     dividend or in a merger, amalgamation or consolidation or otherwise)\n     evidences of indebtedness, shares of Capital Stock of any class or series,\n     other securities, cash or assets (other than Common Stock, rights or\n     warrants referred to in subparagraph (iii) above and other than as a result\n     of a Fundamental Change (as defined below)), the Conversion Price in effect\n     immediately prior to the close of business on the record date fixed for\n     determination of stockholders entitled to receive such distribution shall\n     be reduced by multiplying such Conversion Price by a fraction, the\n     numerator of which is the Current Market Price on such record date less the\n     fair market value (as determined in good faith by the board of directors,\n     except in the case of a Spin-Off (as defined below)) of the portion of such\n     evidences of indebtedness, shares of capital stock, other securities, cash\n     and assets so distributed applicable to one share of Common Stock, and the\n     denominator of which is the Current Market Price. Such adjustment shall be\n     made successively whenever any such event shall occur.\n\n          In respect of a dividend or other distribution of shares of Capital\n     Stock of any class or series, or similar equity interests, \n\n                                       6\n\n \n     of or relating to a subsidiary or other business unit of the Company (a\n     \"SPIN-OFF\"), the adjustment to the Conversion Price under this subparagraph\n     (iv) shall occur 20 trading days after the effective date of the Spin-Off.\n\n          (v) ISSUANCE OF COMMON STOCK. In case the Company shall issue or sell\n     any shares of Common Stock at a price per share less than the Current\n     Market Price (other than any (i) such transaction as to which an adjustment\n     is otherwise provided for in this Section 5, (ii) the issuance by the\n     Company of Common Stock to pay interest pursuant to Section 3 hereof or in\n     satisfaction of Affiliate Obligations or (iii) the issuance by the Company\n     to directors, employees, consultants or advisors of the Company of shares\n     of Common Stock, or grant of options or other rights to purchase or acquire\n     Common Stock, at a price, or exercise price, as the case may be, no lower\n     than the fair market value of the Common Stock (as reasonably determined by\n     the independent directors of the Company in good faith as of the time of\n     issuance or grant, as the case may be), so long as the aggregate number of\n     shares of Common Stock that are so issued or with respect to which an\n     option or other right is so granted under this clause (iii) does not exceed\n     14,500,000 shares or (iv) the issuance by the Company of Common Stock\n     pursuant to the NaviSite warrants in accordance with their terms as of the\n     date hereof the Conversion Price in effect immediately prior to the close\n     of business on the date immediately preceding such issuance or sale shall\n     be reduced by multiplying such Conversion Price by a fraction, the\n     numerator of which is the sum of the number of shares of Common Stock\n     outstanding at the close of business on the date immediately preceding such\n     issuance or sale (giving assumed effect to the conversion of all\n     convertible securities outstanding on the date hereof) to and the number of\n     shares of Common Stock that the aggregate price paid for the total number\n     of shares of Common Stock so issued or sold on such date would purchase at\n     such Current Market Price and the denominator of which is the sum of the\n     number of shares of Common Stock outstanding at the close of business on\n     the date immediately preceding such issuance or sale (giving assumed effect\n     to the conversion of all convertible securities outstanding on the date\n     hereof) and the number of additional shares of Common Stock so issued or\n     sold. For purposes of this subparagraph (v), the issuance of rights,\n     options or warrants to purchase Common Stock or securities convertible or\n     exchangeable for Common Stock shall be deemed to be the issuance of the\n     Common Stock into which such securities are exercisable at an aggregate\n     price equal to the sum of the aggregate price paid for such securities and\n     the minimum aggregate amount (if any) payable upon exercise or conversion\n     of such options, rights, warrants or securities for Common Stock,\n\n                                       7\n\n \n     and the date of issuance and sale for purposes hereof shall be the date\n     upon which such options, rights or warrants were issued or amended. Such\n     adjustment shall be made successively whenever any such event shall occur;\n     provided that no adjustment shall be made upon exercise of any option,\n     right or warrant. If an adjustment is made as the result of the issuance of\n     an option, right, warrant or convertible security and such option, right,\n     warrant or security expires unexercised or unconverted, the Conversion\n     Price shall be readjusted to the price that would have been in effect if no\n     such adjustment had been made.\n\n          (vi) FUNDAMENTAL CHANGES. In case any transaction or event (including,\n     without limitation, any merger, consolidation, combination,\n     recapitalization, sale of assets, tender or exchange offer,\n     reclassification, compulsory share exchange or liquidation) shall occur in\n     which all or substantially all outstanding shares of Common Stock are\n     converted into or exchanged or acquired for or constitute the right to\n     receive stock, other securities, cash, property or assets (each, a\n     \"FUNDAMENTAL CHANGE\"), the holder of this Note outstanding immediately\n     prior to the occurrence of such Fundamental Change shall have the right\n     upon any subsequent conversion to receive (but only out of legally\n     available funds, to the extent required by applicable law) the kind and\n     amount of stock, other securities, cash, property or assets that such\n     holder would have received if such share had been converted immediately\n     prior thereto.\n\n     (b) (i) Subject to paragraph (b)(ii) below, each determination of the\nClosing Price pursuant to clause (iv) of the definition of \"Closing Price\" shall\nbe made in good faith by the Company. Upon each determination of the fair market\nvalue of the Common Stock by the Company hereunder, the Company shall promptly\ngive notice thereof to each Purchaser, setting forth in reasonable detail the\ncalculation of such fair market value and the method and basis of determination\nthereof (the \"Company Determination\").\n\n          (ii) If the Required Holders shall disagree with the Company\n     Determination and shall by notice to the Company given within 10 days after\n     the Company's notice of the Company Determination (an \"Appraisal Notice\")\n     elect to dispute the Company Determination, such dispute shall be resolved\n     as set forth in paragraph (b)(iii) below; provided that such procedure\n     shall not apply to any determination of fair market value made pursuant to\n     Section 5(a)(v)(ii).\n\n                                       8\n\n \n          (iii) The Company shall within 10 days after an Appraisal Notice shall\n     have been given pursuant to paragraph (b)(i) above engage an investment\n     bank or other qualified appraisal firm reasonably acceptable to the\n     Required Holders (the \"APPRAISER\") to make an independent determination of\n     the fair market value of the Common Stock (the \"APPRAISER DETERMINATION\").\n     The Appraiser Determination shall be final and binding on the Company and\n     the Purchasers. If the Company Determination and the Appraiser\n     Determination differ by an amount of 15% or less of the Company\n     Determination, then the costs of conducting the appraisal shall be borne\n     equally by the Company and the Purchasers; if the Company Determination is\n     greater than the Appraiser Determination by more than 15% of the Company\n     Determination, then the costs of conducting the appraisal shall be borne\n     entirely by the Purchasers; and if the Appraiser Determination is greater\n     than the Company Determination by more than 15% of the Company\n     Determination, then the costs of conducting the appraisal shall be borne\n     entirely by the Company; provided that in each case costs separately\n     incurred by the Company and any Purchasers shall be separately borne by\n     them.\n\n     (c) Anything in paragraph (a) to the contrary notwithstanding, the Company\nshall not be required to give effect to any adjustment in the Conversion Price\nunless and until the net effect of one or more adjustments (each of which shall\nbe carried forward until counted toward adjustment), determined as above\nprovided, shall have resulted in a change of the Conversion Price by at least\n1%, and when the cumulative net effect of more than one adjustment so determined\nshall be to change the Conversion Price by at least 1%, such change in the\nConversion Price shall thereupon be given effect. In the event that, at any time\nas a result of the provisions of this paragraph (b), the holder of this Note\nupon subsequent conversion shall become entitled to receive any shares of\nCapital Stock of the Company other than Common Stock, the number of such other\nshares so receivable upon conversion of this Note shall thereafter be subject to\nadjustment from time to time in a manner and on terms as nearly equivalent as\npracticable to the provisions contained herein.\n\n     (d) In any case in which paragraph (a) requires that an adjustment as a\nresult of any event is to become effective from and after a record date, the\nCompany may elect to defer until after the occurrence of such event (i) issuing\nto the holder of this Note converted after such record date and before the\noccurrence of such event the additional shares of Common Stock issuable upon\nsuch conversion over and above the shares issuable on the basis of the\nConversion Price in effect immediately prior to \n\n                                       9\n\n \nadjustment and (ii) paying to such holder any amount in cash in lieu of a\nfractional share of Common Stock.\n\n     (e) If the Company shall take a record of the holders of its Common Stock\nfor the purpose of entitling them to receive a dividend or other distribution,\nand shall thereafter and before the distribution to stockholders thereof legally\nabandon its plan to pay or deliver such dividend or distribution, then\nthereafter no adjustment in the number of shares of Common Stock issuable upon\nexercise of the right of conversion or in the Conversion Price then in effect\nshall be required by reason of the taking of such record.\n\n     (f) Upon any adjustment of the Conversion Price or the number of shares of\nCommon Stock issuable upon the Conversion of this Note, a certificate, signed by\n(i) the Company's president and chief financial officer or (ii) any independent\nfirm of certified public accountants of recognized national standing the Company\nselects at its own expense, setting forth in reasonable detail the events\nrequiring the adjustment and the method by which such adjustment was calculated,\nshall be mailed to the Purchaser at the address set forth in Section 10.04 of\nthe Note Purchase Agreement hereof and shall specify the adjusted Conversion\nPrice and the number of shares of Common Stock issuable upon the Conversion of\nthe Note after giving effect to the adjustment.\n\n     (g) The Company shall not, by amendment of its Certificate of Incorporation\nor through any reorganization, recapitalization, transfer of assets,\nconsolidation, merger, dissolution, issue or sale of securities or any other\nvoluntary action, avoid or seek to avoid the observance or performance of any of\nthe terms to be observed or performed hereunder by the Company, but shall at all\ntimes in good faith assist in the carrying out of all provisions of this Section\n5 and in the taking of all such action as may be necessary or appropriate in\norder to protect the rights of the Purchaser against impairment.\n\n     (h) Except as otherwise provided herein, all sections of this Section 5 are\nintended to operate independently of one another. If an event occurs that\nrequires the application of more than one section, all applicable sections shall\nbe given independent effect.\n\n     6. Governing Laws.\n\n     This Note shall be governed by, and construed in accordance with, the laws\nof the State of New York in all respects, including all matters of construction,\nvalidity and performance, without regard to the choice of law provisions\nthereof.\n\n                                      10\n\n \n     IN WITNESS WHEREOF, the Company has caused this Note to be signed on its\nbehalf, in its corporate name, by its duly authorized officer as an instrument\nunder seal, as of the day and year first above written.\n\n                                              NAVISITE, INC.\n\n                                              By:\n                                                  ----------------------\n                                                  Name:\n                                                  Title:\n\n\n                                      11\n\n \n                                                                       EXHIBIT B\n\n                                                  to the Note Purchase Agreement\n\n \n                       GUARANTEE AND SECURITY AGREEMENT\n                                                            \n                                                            \n                                  dated as of\n                                                            \n                                                            \n                               October __, 2001\n                                                            \n                                                            \n                                     among\n                                                            \n                                                            \n                                NAVISITE, INC.\n                                                            \n                                                            \n                          THE GUARANTORS PARTY HERETO\n                                                            \n                                                            \n                                      and\n                                                            \n                                                            \n                    COMPAQ FINANCIAL SERVICES CORPORATION,\n                         as Collateral Representative\n\n \n                              TABLE OF CONTENTS \n               ---------------------------------------------    \n\nSECTION 1.  Definitions......................................................  1\nSECTION 2.  Guarantees by Guarantors.........................................  6\nSECTION 3.  Grant of Transaction Liens.......................................  8\nSECTION 4.  General Representations and Warranties...........................  9\nSECTION 5.  Further Assurances; General Covenants............................ 11\nSECTION 6.  Investment Property.............................................. 13\nSECTION 7.  Collateral Accounts.............................................. 14\nSECTION 8.  Remedies upon Event of Default................................... 15\nSECTION 9.  Application of Proceeds.......................................... 16\nSECTION 10.  Fees and Expenses; Indemnification.............................. 17\nSECTION 11.  Authority to Administer Collateral.............................. 18\nSECTION 12.  Limitation on Duty in Respect of Collateral..................... 19\nSECTION 13.  General Provisions Concerning the Collateral Representative..... 19\nSECTION 14.  Termination of Transaction Liens; Release of Collateral......... 21\nSECTION 15.  Additional Guarantors and Lien Grantors......................... 22\nSECTION 16.  Notices......................................................... 22\nSECTION 17.  No Implied Waivers; Remedies Not Exclusive...................... 23\nSECTION 18.  Successors and Assigns.......................................... 23\nSECTION 19.  Amendments and Waivers.......................................... 23\nSECTION 20.  Choice of Law................................................... 23\nSECTION 21.  Waiver of Jury Trial............................................ 23\nSECTION 22.  Severability.................................................... 24\n\n \nSCHEDULES:\n---------\n\n    SCHEDULE 1   Equity Interests in Subsidiaries and Affiliates Owned by\n                 Original Lien Grantors\n\nEXHIBITS:\n--------\n\n    EXHIBIT A    Security Agreement Supplement\n\n    EXHIBIT B    Perfection Certificate\n\n    EXHIBIT C    Issuer Control Agreement\n\n\n                                      ii\n\n \n                       GUARANTEE AND SECURITY AGREEMENT\n\n     AGREEMENT dated as of October __, 2001 among NAVISITE, INC., the GUARANTORS\nparty hereto and COMPAQ FINANCIAL SERVICES CORPORATION, as Collateral\nRepresentative.\n\n     WHEREAS, the Company is entering into the Note Purchase Agreement (as this\nand other capitalized terms are defined in Section 1 hereof), pursuant to which\nthe Company intends to issue the Notes to the Purchasers;\n\n     WHEREAS, the Company is willing to secure its obligations under the Notes\nand the Note Purchase Agreement by granting Liens on its assets to the\nCollateral Representative as provided in the Security Documents;\n\n     WHEREAS, the Company is willing to cause each of its Subsidiaries to\nguarantee the foregoing obligations of the Company and to secure its guarantee\nthereof by granting Liens on its assets to the Collateral Representative as\nprovided in the Security Documents;\n\n     WHEREAS, the Purchasers are not willing to purchase the Notes unless (i)\nthe foregoing obligations of the Company are secured and guaranteed as described\nabove and (ii) each guarantee thereof is secured by Liens on assets of the\nrelevant Guarantor as provided in the Security Documents;\n\n     NOW, THEREFORE, in consideration of the foregoing and other good and\nvaluable consideration, the receipt and sufficiency of which are hereby\nacknowledged, the parties hereto agree as follows:\n\n     SECTION 1.  Definitions.\n\n     (a) Terms Defined in Note Purchase Agreement. Terms defined in the Note\nPurchase Agreement and not otherwise defined in subsection (b) or (c) of this\nSection have, as used herein, the respective meanings provided for therein.\n\n     (b) Terms Defined in UCC.  As used herein, each of the following terms\nhas the meaning specified in the UCC:\n\nTerm                                                    UCC\n----                                                    ---\nAccount                                                9-102\nAuthenticate                                           9-102\nCertificated Security                                  8-102\nChattel Paper                                          9-102\nDocument                                               9-102\n\n \nEquipment                                              9-102           \nFinancial Asset                                        8-102 &amp; 103     \nGeneral Intangibles                                    9-102           \nInstrument                                             9-102           \nInventory                                              9-102           \nInvestment Property                                    9-102           \nPayment Intangible                                     9-102           \nRecord                                                 9-102           \nSecurities Intermediary                                8-102           \nSecurity                                               8-102 &amp; 103     \nSupporting Obligations                                 9-102           \nUncertificated Security                                8-102            \n\n    (c)  Additional Definitions.  The following additional terms, as used\nherein, have the following meanings:\n\n    \"ARTICLE 9\" means Article 9 of the Uniform Commercial Code as set forth in\nthe 1998 Official Text thereof; provided that, when used with respect to any\njurisdiction on or after the date when such Article 9 (with or without local\nchanges therein) first becomes effective in such jurisdiction, \" Article 9\"\nrefers to Article 9 as in effect in such jurisdiction from time to time.\n\n    \"COLLATERAL\" means all property, whether now owned or hereafter acquired, on\nwhich a Lien is granted or purports to be granted to the Collateral\nRepresentative pursuant to the Security Documents. When used with respect to a\nspecific Lien Grantor, the term \"Collateral\" means all its property on which\nsuch a Lien is granted or purports to be granted.\n\n    \"COLLATERAL ACCOUNT\" has the meaning specified in Section 7.\n\n    \"COLLATERAL REPRESENTATIVE\" means Compaq Financial Services Corporation, a\nDelaware corporation, in its capacity as representative of the Secured Parties\nunder the Security Documents, and its successors in such capacity.\n\n    \"COMPANY\" means NaviSite, Inc., a Delaware corporation.\n\n    \"EQUITY INTEREST\" means (i) in the case of a corporation, any shares of its\ncapital stock, (ii) in the case of a limited liability company, any membership\ninterest therein, (iii) in the case of a partnership, any partnership interest\n(whether general or limited) therein, (iv) in the case of any other business\nentity, any participation or other interest in the equity or profits thereof or\n(v) any warrant, option or other right to acquire any Equity Interest described\nin this definition.\n\n                                       2\n\n \n    \"GUARANTORS\" means each Subsidiary listed on the signature pages hereof\nunder the caption \"Guarantors\" and each Subsidiary that shall, at any time after\nthe date hereof, become a \"Guarantor\" pursuant to Section 15.\n\n    \"ISSUER CONTROL AGREEMENT\" means an Issuer Control Agreement substantially\nin the form of Exhibit C (with any changes that the Collateral Representative\nshall have approved).\n\n    \"LIEN GRANTORS\" means the Company and the Guarantors.\n\n    \"LLC INTEREST\" means a membership interest or similar interest in a limited\nliability company.\n\n    \"NOTE\" has the meaning specified in the Note Purchase Agreement.\n\n    \"NOTE DOCUMENTS\" means the Note Purchase Agreement, the Notes, the\nRegistration Rights Agreement and the Security Documents and any documents or\nagreements contemplated therein.\n\n    \"NOTE PURCHASE AGREEMENT\" means the Note Purchase Agreement of even date\nherewith among the Company and the Purchasers named therein.\n\n    \"OPINION OF COUNSEL\" means a written opinion of legal counsel (who may be\ncounsel to a Lien Grantor or other counsel, in either case reasonably acceptable\nto the Collateral Representative) addressed and delivered to the Collateral\nRepresentative.\n\n    \"ORIGINAL LIEN GRANTOR\" means any Lien Grantor that grants a Lien on any of\nits assets hereunder on the Effective Date.\n\n    \"OWN\" refers to the possession of sufficient rights in property to grant a\nsecurity interest therein as contemplated by UCC Section 9-203, and \"ACQUIRE\"\nrefers to the acquisition of any such rights.\n\n    \"PARTNERSHIP INTEREST\" means a partnership interest, whether general or\nlimited.\n\n    \"PERFECTION CERTIFICATE\" means, with respect to any Lien Grantor, a\ncertificate substantially in the form of Exhibit B, completed and supplemented\nwith the schedules contemplated thereby to the satisfaction of the Collateral\nRepresentative, and signed by an officer of such Lien Grantor.\n\n\n                                       3\n\n \n    \"PERMITTED LIENS\" means (i) the Transaction Liens and (ii) any other Liens\non the Collateral permitted to be created or assumed or to exist pursuant to\nSection 6.02 of the Note Purchase Agreement.\n\n    \"PLEDGED\", when used in conjunction with any type of asset, means at any\ntime an asset of such type that is included (or that creates rights that are\nincluded) in the Collateral at such time. For example, \"Pledged Equity Interest\"\nmeans an Equity Interest that is included in the Collateral at such time.\n\n    \"POST-PETITION INTEREST\" means any interest that accrues after the\ncommencement of any case, proceeding or other action relating to the bankruptcy,\ninsolvency or reorganization of the Company (or would accrue but for the\noperation of applicable bankruptcy or insolvency laws), whether or not such\ninterest is allowed or allowable as a claim in any such proceeding.\n\n    \"PROCEEDS\" means all proceeds of, and all other profits, products, rents or\nreceipts, in whatever form, arising from the collection, sale, lease, exchange,\nassignment, licensing or other disposition of, or other realization upon, any\nCollateral, including all claims of the relevant Lien Grantor against third\nparties for loss of, damage to or destruction of, or for proceeds payable under,\nor unearned premiums with respect to, policies of insurance in respect of, any\nCollateral, and any condemnation or requisition payments with respect to any\nCollateral.\n\n    \"PURCHASERS\" has the meaning specified in the Note Purchase Agreement.\n\n    \"RELATED PARTIES\" means, with respect to any specified Person, such Person's\nAffiliates and the respective directors, officers, employees, agents and\nadvisors of such Person and its Affiliates.\n\n    \"RELEASE CONDITIONS\" means the following condition for releasing all the\nSecured Guarantees and terminating all the Transaction Liens: all Secured\nObligations shall have been paid in full.\n\n    \"REQUIRED HOLDERS\" means the holders of more than 50% of the aggregate\noutstanding principal amount of the Notes.\n\n    \"SECURED AGREEMENT\", when used with respect to any Secured Obligation,\nrefers collectively to each instrument, agreement or other document that sets\nforth obligations of the Company, obligations of a guarantor and\/or rights of\nthe holder with respect to such Secured Obligation.\n\n                                       4\n\n \n    \"SECURED GUARANTEE\" means, with respect to each Guarantor, its guarantee of\nthe Secured Obligations under Section 2 hereof or Section 1 of a Security\nAgreement Supplement.\n\n    \"SECURED OBLIGATIONS\" means all principal of all Notes outstanding from time\nto time under the Note Purchase Agreement, all interest (including Post-Petition\nInterest) on such Notes and all other amounts now or hereafter payable by the\nCompany pursuant to the Note Documents.\n\n    \"SECURED PARTIES\" means the holders from time to time of the Secured\nObligations.\n\n    \"SECURITY AGREEMENT SUPPLEMENT\" means a Security Agreement Supplement,\nsubstantially in the form of Exhibit A, signed and delivered to the Collateral\nRepresentative for the purpose of adding a Subsidiary as a party hereto pursuant\nto Section 15 and\/or adding additional property to the Collateral.\n\n    \"SECURITY DOCUMENTS\" means this Agreement, the Security Agreement\nSupplements and all other supplemental or additional security agreements,\ncontrol agreements, mortgages or similar instruments delivered pursuant to the\nNote Documents.\n\n    \"SUPPORTING LETTER OF CREDIT\" means a letter of credit that supports the\npayment or performance of one or more items included in the Collateral.\n\n    \"TRANSACTION LIENS\" means the Liens granted by the Lien Grantors under the\nSecurity Documents.\n\n    \"UCC\" means the Uniform Commercial Code as in effect from time to time in\nthe State of New York; provided that, if perfection or the effect of perfection\nor non-perfection or the priority of any Transaction Lien on any Collateral is\ngoverned by the Uniform Commercial Code as in effect in a jurisdiction other\nthan New York, \"UCC\" means the Uniform Commercial Code as in effect from time to\ntime in such other jurisdiction for purposes of the provisions hereof relating\nto such perfection, effect of perfection or non-perfection or priority.\n\n    (a) Terms Generally. The definitions of terms herein (including those\nincorporated by reference to the UCC or to another document) apply equally to\nthe singular and plural forms of the terms defined. Whenever the context may\nrequire, any pronoun includes the corresponding masculine, feminine and neuter\nforms. The words \"INCLUDE\", \"INCLUDES\" and \"INCLUDING\" shall be deemed to be\nfollowed by the phrase \"WITHOUT LIMITATION\". The word \"WILL\" shall be construed\n\n                                       5\n\n \nto have the same meaning and effect as the word \"SHALL\". Unless the context\nrequires otherwise, (a) any definition of or reference to any agreement,\ninstrument or other document herein shall be construed as referring to such\nagreement, instrument or other document as from time to time amended,\nsupplemented or otherwise modified (subject to any restrictions on such\namendments, supplements or modifications set forth herein), (b) any reference\nherein to any Person shall be construed to include such Person's successors and\nassigns, (c) the words \"HEREIN\", \"HEREOF\" and \"HEREUNDER\", and words of similar\nimport, shall be construed to refer to this Agreement in its entirety and not to\nany particular provision hereof, (d) all references herein to Sections, Exhibits\nand Schedules shall be construed to refer to Sections of, and Exhibits and\nSchedules to, this Agreement and (e) the word \"PROPERTY\" shall be construed to\nrefer to any and all tangible and intangible assets and properties, including\ncash, securities, accounts and contract rights.\n\n    SECTION 2.  Guarantees by Guarantors.\n\n    (a) Secured Guarantees.  Each Guarantor unconditionally guarantees the\nfull and punctual payment of each Secured Obligation when due (whether at stated\nmaturity, upon acceleration or otherwise). If the Company fails to pay any\nSecured Obligation punctually when due, each Guarantor agrees that it will\nforthwith on demand pay the amount not so paid at the place and in the manner\nspecified in the relevant Secured Agreement.\n\n    (b) Secured Guarantees Unconditional. The obligations of each Guarantor\nunder its Secured Guarantee shall be unconditional and absolute and, without\nlimiting the generality of the foregoing, shall not be released, discharged or\notherwise affected by:\n\n        (i)   any extension, renewal, settlement, compromise, waiver or release \n    in respect of any obligation of the Company, any other Guarantor or any \n    other Person under any Secured Agreement, by operation of law or otherwise;\n\n        (ii)  any modification or amendment of or supplement to any\n    Secured Agreement;\n\n        (iii) any release, impairment, non-perfection or invalidity of any\n    direct or indirect security for any obligation of the Company, any other\n    Guarantor or any other Person under any Secured Agreement;\n\n        (iv)  any change in the corporate existence, structure or ownership\n    of the Company, any other Guarantor or any other Person or any of their\n\n                                       6\n\n \n    respective subsidiaries, or any insolvency, bankruptcy, reorganization or\n    other similar proceeding affecting the Company, any other Guarantor or any\n    other Person or any of their assets or any resulting release or discharge of\n    any obligation of the Company, any other Guarantor or any other Person under\n    any Secured Agreement;\n\n        (v)   the existence of any claim, set-off or other right that such\n    Guarantor may have at any time against the Company, any other Guarantor, any\n    Secured Party or any other Person, whether in connection with the Notes or\n    any unrelated transactions, provided that nothing herein shall prevent the\n    assertion of any such claim by separate suit or compulsory counterclaim;\n                      \n        (vi) any invalidity or unenforceability relating to or against the\n    Company, any other Guarantor or any other Person for any reason of any\n    Secured Agreement, or any provision of applicable law or regulation\n    purporting to prohibit the payment of any Secured Obligation by the Company,\n    any other Guarantor or any other Person; or\n\n        (vii) any other act or omission to act or delay of any kind by the\n    Company, any other Guarantor, any other party to any Secured Agreement, any\n    Secured Party or any other Person, or any other circumstance whatsoever that\n    might, but for the provisions of this clause (vii), constitute a legal or\n    equitable discharge of or defense to any obligation of any Guarantor\n    hereunder.\n\n    (c) Release of Secured Guarantees.  (i) All the Secured Guarantees will\nbe released when all the Release Conditions are satisfied. If at any time any\npayment of a Secured Obligation is rescinded or must be otherwise restored or\nreturned upon the insolvency or receivership of the Company or otherwise, the\nSecured Guarantees shall be reinstated with respect thereto as though such\npayment had been due but not made at such time.\n\n        (ii)  The Collateral Representative may release any Secured\n     Guarantee with the prior written consent of the Required Holders.\n\n    (d) Waiver by Guarantors. Each Guarantor irrevocably waives acceptance\nhereof, presentment, demand, protest and any notice not provided for herein, as\nwell as any requirement that at any time any action be taken by any Person\nagainst the Company, any other Guarantor or any other Person.\n\n    (e) Subrogation.  A Guarantor that makes a payment with respect to a\nSecured Obligation hereunder shall be subrogated to the rights of the payee\n\n\n                                       7\n\n \nagainst the Company with respect to such payment; provided that no Guarantor\nshall enforce any payment by way of subrogation against the Company, or by\nreason of contribution against any other guarantor of such Secured Obligation,\nuntil all the Release Conditions have been satisfied.\n\n    (f) Stay of Acceleration.  If acceleration of the time for payment of any\nSecured Obligation by the Company is stayed by reason of the insolvency or\nreceivership of the Company or otherwise, all Secured Obligations otherwise\nsubject to acceleration under the terms of any Secured Agreement shall\nnonetheless be payable by the Guarantors hereunder forthwith on demand by the\nCollateral Representative.\n\n    (g) Continuing Guarantee.  Each Secured Guarantee is a continuing\nguarantee, shall be binding on the relevant Guarantor and its successors and\nassigns, and shall be enforceable by the Collateral Representative or the\nSecured Parties. If all or part of any Secured Party's interest in any Secured\nObligation is assigned or otherwise transferred, the transferor's rights under\neach Secured Guarantee, to the extent applicable to the obligation so\ntransferred, shall automatically be transferred with such obligation.\n\n    (h) Limitation on Obligations of Subsidiary Guarantor.  The obligations\nof each Subsidiary Guarantor under its Secured Guarantee shall be limited to an\naggregate amount equal to the largest amount that would not render such Secured\nGuarantee subject to avoidance under Section 548 of the United States Bankruptcy\nCode or any comparable provisions of applicable law.\n\n    SECTION 3.  Grant of Transaction Liens.\n\n    (a) The Company, in order to secure the Secured Obligations, and each\nGuarantor listed on the signature pages hereof, in order to secure its Secured\nGuarantee, grants to the Collateral Representative for the benefit of the\nSecured Parties a continuing security interest in all the following property of\nthe Company or such Guarantor, as the case may be, whether now owned or existing\nor hereafter acquired or arising and regardless of where located:\n\n        (i)   all Accounts;\n\n        (ii)  all Chattel Paper;\n\n        (iii) all Documents;\n\n        (iv)  all Equipment;\n\n\n\n                                       8\n                                       \n\n \n        (v)    all General Intangibles (including any Equity Interests in other\n    Persons that do not constitute Investment Property);\n\n        (vi)   all Instruments;\n\n        (vii)  all Inventory;\n\n        (viii) all Investment Property;\n\n        (ix)   all books and records (including customer lists, credit files,\n    computer programs, printouts and other computer materials and records) of\n    such Original Lien Grantor pertaining to any of its Collateral;\n\n        (x)    such Original Lien Grantor's ownership interest in (1) its\n    Collateral Accounts, (2) all Financial Assets credited to its Collateral\n    Accounts from time to time and all Security Entitlements in respect thereof,\n    (3) all cash held in its Collateral Accounts from time to time and (4) all\n    other money in the possession of the Collateral Representative; and\n\n        (xi)   all Proceeds of the Collateral described in the foregoing\n    clauses (i) through (x).\n\n    (b) With respect to each right to payment or performance included in the\nCollateral from time to time, the Transaction Lien granted therein includes a\ncontinuing security interest in (i) any Supporting Obligation that supports such\npayment or performance and (ii) any Lien that (x) secures such right to payment\nor performance or (y) secures any such Supporting Obligation.\n\n    (c) The Transaction Liens are granted as security only and shall not subject\nthe Collateral Representative or any other Secured Party to, or transfer or in\nany way affect or modify, any obligation or liability of any Lien Grantor with\nrespect to any of the Collateral or any transaction in connection therewith.\n\n    SECTION 4.  General Representations and Warranties.  Each Original Lien\nGrantor represents and warrants that:\n\n    (a) Such Lien Grantor is a corporation1 duly organized, validly existing\nand in good standing under the laws of the jurisdiction identified as its\njurisdiction of organization in its Perfection Certificate.\n\n-------------\n    1  Modify as needed if any Original Lien Grantor is not a corporation.\n\n\n                                       9\n\n \n    (b) Schedule 1 lists all Equity Interests in Subsidiaries and Affiliates\nowned by such Lien Grantor as of the Effective Date. Such Lien Grantor holds all\nsuch Equity Interests directly (i.e., not through a Subsidiary, a Securities\nIntermediary or any other Person).\n\n    (c) Except as set forth on the Perfection Certificate of such Lien Grantor,\nall Pledged Equity Interests owned by such Lien Grantor are owned by it free and\nclear of any Lien other than (i) the Transaction Liens and (ii) any tax liens,\njudgment liens and other Permitted Liens. All shares of capital stock included\nin such Pledged Equity Interests (including shares of capital stock in respect\nof which such Lien Grantor owns a Security Entitlement) have been duly\nauthorized and validly issued and are fully paid and non-assessable. None of\nsuch Pledged Equity Interests is subject to any option to purchase or similar\nright of any Person. Such Lien Grantor is not and will not become a party to or\notherwise bound by any agreement (except the Note Documents) which restricts in\nany manner the rights of any present or future holder of any Pledged Equity\nInterest with respect thereto.\n\n    (d) Except as set forth on the Perfection Certificate of such Lien Grantor,\nsuch Lien Grantor has good and marketable title to all its Collateral (subject\nto exceptions that are, in the aggregate, not material), free and clear of any\nLien other than Permitted Liens.\n\n    (e) Such Lien Grantor has not performed any acts that might prevent the\nCollateral Representative from enforcing any of the provisions of the Security\nDocuments or that would limit the Collateral Representative in any such\nenforcement. No financing statement, security agreement, mortgage or similar or\nequivalent document or instrument covering all or part of the Collateral owned\nby such Lien Grantor is on file or of record in any jurisdiction in which such\nfiling or recording would be effective to perfect or record a Lien on such\nCollateral, except financing statements, mortgages or other similar or\nequivalent documents with respect to Permitted Liens. After the Effective Date,\nno Collateral owned by such Lien Grantor will be in the possession or under the\nControl of any other Person having a claim thereto or security interest therein,\nother than a Permitted Lien.\n\n    (f) The Transaction Liens on all Collateral owned by such Lien Grantor\n(i) have been validly created, (ii) will attach to each item of such Collateral\non the Effective Date (or, if such Lien Grantor first obtains rights thereto on\na later date, on such later date) and (iii) when so attached, will secure all\nthe Secured Obligations or such Lien Grantor's Secured Guarantee, as the case\nmay be.\n\n    (g) Such Lien Grantor has delivered a Perfection Certificate to the\nCollateral Representative.  The information set forth therein is correct and\n\n\n                                      10\n\n \ncomplete as of the Effective Date. Within 60 days after the Effective Date, such\nLien Grantor will furnish to the Collateral Representative a file search report\nfrom each UCC filing office listed in its Perfection Certificate, showing the\nfiling made at such filing office to perfect the Transaction Liens on its\nCollateral.\n\n    (h) When UCC financing statements describing the Collateral as set forth in\nSchedule 1 to such Lien Grantor's Perfection Certificate have been filed in the\noffices specified in such Perfection Certificate, the Transaction Liens will\nconstitute perfected security interests in the Collateral owned by such Lien\nGrantor to the extent that a security interest therein may be perfected by\nfiling pursuant to the UCC, prior to all Liens and rights of others therein\nexcept Permitted Liens.\n\n    (i) Such Lien Grantor has taken, and will continue to take, all actions\nnecessary under the UCC to perfect its interest in (i) any Accounts or Chattel\nPaper purchased or otherwise acquired by it, as against its assignors and\ncreditors of its assignors and (ii) any Payment Intangibles or promissory notes\npurchased or otherwise acquired by it, as against its assignors and creditors of\nits assignors.\n\n    (j) Such Lien Grantor's Collateral is insured as required by the Note\nPurchase Agreement.\n\n    (k) All of such Lien Grantor's Inventory has or will have been produced\nin compliance, in all material respects, with the applicable requirements of the\nFair Labor Standards Act, as amended.\n\n    SECTION 5.  Further Assurances; General Covenants.  Each Lien Grantor\ncovenants as follows:\n\n    (a) Such Lien Grantor will, from time to time, at the Company's expense,\nexecute, deliver, file and record any statement, assignment, instrument,\ndocument, agreement or other paper and take any other action (including any\nintellectual property filing and any filing of financing or continuation\nstatements under the UCC) that from time to time may be necessary or desirable,\nor that the Collateral Representative may request, in order to:\n\n        (i)   create, preserve, perfect, confirm or validate the Transaction\n    Liens on such Lien Grantor's Collateral;\n\n        (ii)  enable the Collateral Representative and the other Secured\n    Parties to obtain the full benefits of the Security Documents; or\n\n\n                                      11\n\n \n        (iii) enable the Collateral Representative to exercise and enforce any\n    of its rights, powers and remedies with respect to any of such Lien\n    Grantor's Collateral.\n\nTo the extent permitted by applicable law, such Lien Grantor authorizes the\nCollateral Representative to execute and file such financing statements or\ncontinuation statements without such Lien Grantor's signature appearing thereon.\nSuch Lien Grantor agrees that a carbon, photographic, photostatic or other\nreproduction of this Agreement or of a financing statement is sufficient as a\nfinancing statement. Such Lien Grantor constitutes the Collateral Representative\nits attorney-in-fact to execute and file all intellectual property filings and\nother filings required or so requested for the foregoing purposes, all acts of\nsuch attorney being hereby ratified and confirmed; and such power, being coupled\nwith an interest, shall be irrevocable until all the Transaction Liens granted\nby such Lien Grantor terminate pursuant to Section 14. The Company will pay the\ncosts of, or incidental to, any intellectual property filings and any recording\nor filing of any financing or continuation statements or other documents\nrecorded or filed pursuant hereto in accordance with clause (ii) of the second\nsentence of Section 9.01 of the Note Purchase Agreement.\n\n    (b) Such Lien Grantor will not (i) change its name or corporate structure,\n(ii) change its location (determined as provided in UCC Section 9-307) or (iii)\nbecome bound, as provided in UCC Section 9-203(d) or otherwise, by a security\nagreement entered into by another Person, unless it shall have given the\nCollateral Representative prior notice thereof.\n\n    (c) At least 30 days before it takes any action contemplated by Section\n5(b), such Lien Grantor will, at the Company's expense and at the request of the\nPurchasers, cause to be delivered to the Collateral Representative an Opinion of\nCounsel, in form and substance satisfactory to the Collateral Representative, to\nthe effect that (i) all financing statements and amendments or supplements\nthereto, continuation statements and other documents required to be filed or\nrecorded in order to perfect and protect the Transaction Liens against all\ncreditors of and purchasers from such Lien Grantor after it takes such action\n(except any continuation statements specified in such Opinion of Counsel that\nare to be filed more than six months after the date thereof) have been filed or\nrecorded in each office necessary for such purpose, (ii) all fees and taxes, if\nany, payable in connection with such filings or recordations have been paid in\nfull and (iii) except as otherwise agreed by the Required Holders, such action\nwill not adversely affect the perfection or priority of the Transaction Lien on\nany Collateral to be owned by such Lien Grantor after it takes such action or\nthe accuracy of such Lien Grantor's representations and warranties herein\nrelating to such Collateral.\n\n\n                                      12\n\n \n    (d) If any Collateral is located on premises leased by a Lien Grantor as\nlessee, such Lien Grantor shall, within 60 days of the date hereof in the case\nof leases in existence on the date hereof, and substantially simultaneously with\nthe execution and delivery of such lease, in the case of leases hereafter\nentered into, use its reasonable efforts to secure from the landlord a waiver of\ncontractual and statutory landlord's liens, an agreement to permit access to and\nremoval of Collateral and other customary matters, all pursuant to an instrument\nin form and substance satisfactory to the Collateral Representative.\n\n    (e) Such Lien Grantor will not sell, lease, exchange, assign or otherwise\ndispose of, or grant any option with respect to, any of its Collateral; provided\nthat such Lien Grantor may do any of the foregoing unless (i) doing so would\nviolate a covenant in the Note Purchase Agreement or (ii) an Event of Default\nshall have occurred and be continuing and the Collateral Representative shall\nhave notified such Lien Grantor that its right to do so is terminated, suspended\nor otherwise limited. Concurrently with any sale, lease or other disposition\n(except a sale or disposition to another Lien Grantor or a lease) permitted by\nthe foregoing proviso, the Transaction Liens on the assets sold or disposed of\n(but not in any Proceeds arising from such sale or disposition) will cease\nimmediately without any action by the Collateral Representative or any other\nSecured Party. The Collateral Representative will, at the Company's expense,\nexecute and deliver to the relevant Lien Grantor such documents as such Lien\nGrantor shall reasonably request to evidence the fact that any asset so sold or\ndisposed of is no longer subject to a Transaction Lien.\n\n    (f) Such Lien Grantor will, promptly upon request, provide to the\nCollateral Representative all information and evidence concerning such Lien\nGrantor's Collateral that the Collateral Representative may reasonably request\nfrom time to time to enable it to enforce the provisions of the Security\nDocuments.\n\n    SECTION 6.  Investment Property.  Each Lien Grantor represents, warrants\nand covenants as follows:\n\n    (a) Certificated Securities.  On the Effective Date (in the case of an\nOriginal Lien Grantor) or the date on which it signs and delivers its first\nSecurity Agreement Supplement (in the case of any other Lien Grantor), such Lien\nGrantor will deliver to the Collateral Representative as Collateral hereunder\nall certificates representing Pledged Certificated Securities then owned by such\nLien Grantor. Thereafter, whenever such Lien Grantor acquires any other\ncertificate representing a Pledged Certificated Security, such Lien Grantor will\nimmediately deliver such certificate to the Collateral Representative as\nCollateral hereunder.\n\n\n                                      13\n\n \n    (b) Uncertificated Securities.  On the Effective Date (in the case of an\nOriginal Lien Grantor) or the date on which it signs and delivers its first\nSecurity Agreement Supplement (in the case of any other Lien Grantor), such Lien\nGrantor will enter into (and cause the relevant issuer to enter into) an Issuer\nControl Agreement in respect of each Pledged Uncertificated Security then owned\nby such Lien Grantor and deliver such Issuer Control Agreement to the Collateral\nRepresentative (which shall enter into the same). Thereafter, whenever such Lien\nGrantor acquires any other Pledged Uncertificated Security, such Lien Grantor\nwill enter into (and cause the relevant issuer to enter into) an Issuer Control\nAgreement in respect of such Pledged Uncertificated Security and deliver such\nIssuer Control Agreement to the Collateral Representative (which shall enter\ninto the same).\n\n    (c) Delivery of Pledged Certificates.  All Pledged Certificates, when\ndelivered to the Collateral Representative, will be in suitable form for\ntransfer by delivery, or accompanied by duly executed instruments of transfer or\nassignment in blank, with signatures appropriately guaranteed, all in form and\nsubstance satisfactory to the Collateral Representative.\n\n    SECTION 7. Collateral Accounts. (a) If and when required for purposes\nhereof, the Collateral Representative will establish with respect to each Lien\nGrantor an account (its \"COLLATERAL ACCOUNT\"), in the name and under the\nexclusive control of the Collateral Representative, into which all amounts owned\nby such Lien Grantor that are to be deposited therein pursuant to the Note\nDocuments shall be deposited from time to time. Each Cash Collateral Account\nwill be operated as provided in this Section.\n\n    (b) The Collateral Representative shall deposit the following amounts,\nas and when received by it, in the Collateral Account of the applicable Lien\nGrantor:\n\n        (i)   each amount required by the Note Documents to be deposited \n    therein, including, without limitation, all proceeds specified in Section \n    5.04(d) of the Note Purchase Agreement; and\n\n        (ii) each amount realized or otherwise received by the Collateral\n    Representative with respect to assets of such Lien Grantor upon any exercise\n    of remedies pursuant to any Security Document.\n\n    (c) Unless (x) an Event of Default shall have occurred and be continuing\nand the Required Holders shall have instructed the Collateral Representative \nto stop withdrawing amounts from the Collateral Account pursuant to this \nsubsection or (y) the maturity of the Notes shall have been accelerated \npursuant to Article 7\n\n\n                                      14\n\n \nof the Note Purchase Agreement, the Collateral Representative shall withdraw\namounts deposited in the Collateral Account in accordance with Section 5.04(d)\nof the Note Purchase Agreement and apply them to pay, or reimburse the Company\nand its Subsidiaries for paying, the cost of repairing, restoring or replacing\nthe affected property to the extent that the Company has certified, no less than\n5 Business Days prior to the date of such withdrawal, that (i) it and its\nSubsidiaries intend to apply all or any portion of such amounts to pay the cost\nof repairing, restoring or replacing the affected property and (ii) if such\nproperty is to be replaced, the property acquired to replace it will be included\nin the Collateral at least to the extent that the property to be replaced was\nincluded therein;\n\n    (d) Funds held in any Collateral Account may, until withdrawn, be\ninvested and reinvested in such Temporary Cash Investments as the relevant Lien\nGrantor shall request from time to time; provided that, if an Event of Default\nshall have occurred and be continuing, the Collateral Representative may select\nsuch Temporary Cash Investments.\n\n    (e) If an Event of Default shall have occurred and be continuing, the\nCollateral Representative may withdraw any amounts held therein and apply such\namounts as provided in Section 9.\n\n    SECTION 8. Remedies upon Event of Default. (a) If an Event of Default shall\nhave occurred and be continuing, the Collateral Representative may exercise (or\ncause its sub-agents to exercise) any or all of the remedies available to it (or\nto such sub-agents) under the Security Documents.\n\n    (b) Without limiting the generality of the foregoing, if an Event of\nDefault shall have occurred and be continuing, the Collateral Representative may\nexercise on behalf of the Secured Parties all the rights of a secured party\nunder the UCC (whether or not in effect in the jurisdiction where such rights\nare exercised) with respect to any Collateral and, in addition, the Collateral\nRepresentative may, without being required to give any notice, except as herein\nprovided or as may be required by mandatory provisions of law, withdraw all cash\nheld in the Collateral Accounts and apply such cash as provided in Section 9\nand, if there shall be no such cash or if such cash shall be insufficient to pay\nall the Secured Obligations in full, sell, lease, license or otherwise dispose\nof the Collateral or any part thereof. Notice of any such sale or other\ndisposition shall be given to the relevant Lien Grantor(s) as required by\nSection 11. The foregoing provisions of this subsection shall apply to Real\nProperty Collateral only to the extent permitted by applicable law and the\nprovisions of any applicable Mortgage or other document.\n\n    (c) Without limiting the generality of the foregoing, if an Event of\nDefault shall have occurred and be continuing:\n\n\n                                      15\n\n \n        (i) the Collateral Representative may license or sublicense, whether\n    general, special or otherwise, and whether on an exclusive or non-exclusive\n    basis, any Pledged intellectual property (including any Pledged Recordable\n    Intellectual Property) throughout the world for such term or terms, on such\n    conditions and in such manner as the Collateral Representative shall in its\n    sole discretion determine; provided that such licenses or sublicenses do not\n    conflict with any existing license made available to the Collateral\n    Representative;\n\n        (ii) the Collateral Representative may (without assuming any obligation\n    or liability thereunder), at any time and from time to time, in its sole and\n    reasonable discretion, enforce (and shall have the exclusive right to\n    enforce) against any licensee or sublicensee all rights and remedies of any\n    Lien Grantor in, to and under any of its Pledged intellectual property and\n    take or refrain from taking any action under any thereof, and each Lien\n    Grantor releases the Collateral Representative and each other Secured Party\n    from liability for, and agrees to hold the Collateral Representative and\n    each other Secured Party free and harmless from and against any claims and\n    expenses arising out of, any lawful action so taken or omitted to be taken\n    with respect thereto, except for claims and expenses arising from the\n    Collateral Representative's or such Secured Party's gross negligence or\n    willful misconduct; and\n\n        (iii) upon request by the Collateral Representative (which shall not be\n    construed as implying any limitation on its rights or powers), each Lien\n    Grantor will execute and deliver to the Collateral Representative a power of\n    attorney, in form and substance satisfactory to the Collateral\n    Representative, for the implementation of any sale, lease, license or other\n    disposition of any of such Lien Grantor's Pledged intellectual property or\n    any action related thereto. In connection with any such disposition, but\n    subject to any confidentiality restrictions imposed on such Lien Grantor in\n    any license or similar agreement, such Lien Grantor will supply to the\n    Collateral Representative its know-how and expertise relating to the\n    relevant intellectual property or the products or services made or rendered\n    in connection with such intellectual property, and its customer lists and\n    other records relating to such intellectual property and to the distribution\n    of said products or services.\n\n    SECTION 9. Application of Proceeds. (a) If an Event of Default shall have\noccurred and be continuing, the Collateral Representative may apply (i) any cash\nheld in the Collateral Accounts and (ii) the proceeds of any sale or other\ndisposition of all or any part of the Collateral, in the following order of\npriorities:\n\n\n                                      16\n\n \n        first, to pay the expenses of such sale or other disposition, including\n    reasonable compensation to agents of and counsel for the Collateral\n    Representative, and all expenses, liabilities and advances incurred or made\n    by the Collateral Representative in connection with the Security Documents;\n\n        second, to pay the unpaid principal of the Secured Obligations ratably\n    until payment in full of the principal of all Secured Obligations shall have\n    been made;\n\n        third, to pay ratably all interest (including Post-Petition Interest) on\n    the Secured Obligations until payment in full of all such interest shall\n    have been made;\n\n        fourth, to pay all other Secured Obligations ratably until payment in\n    full of all such other Secured Obligations shall have been made; and\n\n        finally, to pay to the relevant Lien Grantor, or as a court of competent\n    jurisdiction may direct, any surplus then remaining from the proceeds of\n    the Collateral owned by it;\n\nprovided that Collateral owned by a Guarantor and any proceeds thereof shall be\napplied pursuant to the foregoing clauses first, second, third and fourth only\nto the extent permitted by the limitation in Section 2(h). The Collateral\nRepresentative may make such distributions hereunder in cash or in kind or, on a\nratable basis, in any combination thereof.\n\n    (b) In making the payments and allocations required by this Section, the\nCollateral Representative may rely upon information supplied to it by the\nSecured Parties. All distributions made by the Collateral Representative\npursuant to this Section shall be final (except in the event of manifest error)\nand the Collateral Representative shall have no duty to inquire as to the\napplication by any Secured Party of any amount distributed to it.\n\n    SECTION 10.  Fees and Expenses; Indemnification.  (a) The Company will\nforthwith upon demand pay to the Collateral Representative:\n\n        (i) the amount of any taxes that the Collateral Representative may have\n    been required to pay by reason of the Transaction Liens or to free any\n    Collateral from any other Lien thereon;\n\n        (ii)  the amount of any and all reasonable out-of-pocket expenses,\n    including transfer taxes and reasonable fees and expenses of counsel and\n\n\n                                      17\n\n \n    other experts, that the Collateral Representative may incur in connection\n    with (x) the administration or enforcement of the Security Documents,\n    including such expenses as are incurred to preserve the value of the\n    Collateral or the validity, perfection, rank or value of any Transaction\n    Lien, (y) the collection, sale or other disposition of any Collateral or (z)\n    the exercise by the Collateral Representative of any of its rights or powers\n    under the Security Documents; and\n\n        (iii) the amount required to indemnify the Collateral Representative\n    for, or hold it harmless and defend it against, any loss, liability or\n    expense (including the reasonable fees and expenses of its counsel and any\n    experts or sub-agents appointed by it hereunder) incurred or suffered by the\n    Collateral Representative in connection with the Security Documents, except\n    to the extent that such loss, liability or expense arises from the\n    Collateral Representative's gross negligence or willful misconduct or a\n    breach of any duty that the Collateral Representative has under this\n    Agreement (after giving effect to Sections 12 and 13).\n\nAny such amount not paid to the Collateral Representative in accordance with the\nSecurity Documents will bear interest for each day thereafter until paid at a\nrate of 14% per annum.\n\n    (b) If any transfer tax, documentary stamp tax or other tax is payable in\nconnection with any transfer or other transaction provided for in the Security\nDocuments, the Company will pay such tax and provide any required tax stamps to\nthe Collateral Representative or as otherwise required by law.\n\n    SECTION 11. Authority to Administer Collateral. Each Lien Grantor\nirrevocably appoints the Collateral Representative its true and lawful attorney,\nwith full power of substitution, in the name of such Lien Grantor, any Secured\nParty or otherwise, for the sole use and benefit of the Secured Parties, but at\nthe Company's expense, to the extent permitted by law to exercise, at any time\nand from time to time while an Event of Default shall have occurred and be\ncontinuing, all or any of the following powers with respect to all or any of\nsuch Lien Grantor's Collateral:\n\n        (a) to demand, sue for, collect, receive and give acquittance for\n    any and all monies due or to become due upon or by virtue thereof,\n\n        (b) to settle, compromise, compound, prosecute or defend any\n    action or proceeding with respect thereto,\n\n\n                                      18\n\n \n        (c) to sell, lease, license or otherwise dispose of the same or the\n    proceeds or avails thereof, as fully and effectually as if the Collateral\n    Representative were the absolute owner thereof, and\n\n        (d) to extend the time of payment of any or all thereof and to\n    make any allowance or other adjustment with reference thereto;\n\nprovided that, except in the case of Collateral that is perishable or threatens\nto decline speedily in value or is of a type customarily sold on a recognized\nmarket, the Collateral Representative will give the relevant Lien Grantor at\nleast ten days' prior written notice of the time and place of any public sale\nthereof or the time after which any private sale or other intended disposition\nthereof will be made. Any such notice shall (i) contain the information\nspecified in UCC Section 9-613, (ii) be Authenticated and (iii) be sent to the\nparties required to be notified pursuant to UCC Section 9-611(c); provided that,\nif the Collateral Representative fails to comply with this sentence in any\nrespect, its liability for such failure shall be limited to the liability (if\nany) imposed on it as a matter of law under the UCC.\n\n    SECTION 12. Limitation on Duty in Respect of Collateral. Beyond the exercise\nof reasonable care in the custody and preservation thereof, the Collateral\nRepresentative will have no duty as to any Collateral in its possession or\ncontrol or in the possession or control of any sub-agent or bailee or any income\ntherefrom or as to the preservation of rights against prior parties or any other\nrights pertaining thereto. The Collateral Representative will be deemed to have\nexercised reasonable care in the custody and preservation of the Collateral in\nits possession or control if such Collateral is accorded treatment substantially\nequal to that which it accords its own property, and will not be liable or\nresponsible for any loss or damage to any Collateral, or for any diminution in\nthe value thereof, by reason of any act or omission of any sub-agent or bailee\nselected by the Collateral Representative in good faith, except to the extent\nthat such liability arises from the Collateral Representative's gross negligence\nor willful misconduct.\n\n    SECTION 13. General Provisions Concerning the Collateral Representative. (a)\nAuthority. The Collateral Representative is authorized to take such actions and\nto exercise such powers as are delegated to the Collateral Representative by the\nterms of the Security Documents, together with such actions and powers as are\nreasonably incidental thereto.\n\n    (b) Rights and Powers as a Secured Party. The Collateral Representative\nshall, in its capacity as a Secured Party, have the same rights and powers as\nany other Secured Party and may exercise the same as though it were not the\nCollateral Representative.\n\n\n                                      19\n\n \n    (c) Limited Duties and Responsibilities.  The Collateral Representative\nshall not have any duties or obligations under the Security Documents except\nthose expressly set forth therein. Without limiting the generality of the\nforegoing, (a) the Collateral Representative shall not be subject to any\nfiduciary or other implied duties, regardless of whether an Event of Default has\noccurred and is continuing and (b) the Collateral Representative shall not have\nany duty to take any discretionary action or exercise any discretionary powers,\nexcept discretionary rights and powers expressly contemplated by the Security\nDocuments that the Collateral Representative is required in writing to exercise\nby the Required Holders. The Collateral Representative shall not be liable for\nany action taken or not taken by it with the consent or at the request of the\nRequired Holders or in the absence of its own gross negligence or willful\nmisconduct. The Collateral Representative shall not be responsible for the\nexistence, genuineness or value of any Collateral or for the validity,\nperfection, priority or enforceability of any Transaction Lien, whether impaired\nby operation of law or by reason of any action or omission to act on its part\nunder the Security Documents. The Collateral Representative shall be deemed not\nto have knowledge of any Event of Default unless and until written notice\nthereof is given to the Collateral Representative by the Company or a Secured\nParty, and the Collateral Representative shall not be responsible for or have\nany duty to ascertain or inquire into (i) any statement, warranty or\nrepresentation made in or in connection with any Security Document, (ii) the\ncontents of any certificate, report or other document delivered thereunder or in\nconnection therewith, (iii) the performance or observance of any of the\ncovenants, agreements or other terms or conditions set forth in any Security\nDocument, (iv) the validity, enforceability, effectiveness or genuineness of any\nSecurity Document or any other agreement, instrument or document, or (v) the\nsatisfaction of any condition set forth in any Security Document.\n\n    (d) Authority to Rely on Certain Writings, Statements and Advice.  The\nCollateral Representative shall be entitled to rely on, and shall not incur any\nliability for relying on, any notice, request, certificate, consent, statement,\ninstrument, document or other writing believed by it to be genuine and to have\nbeen signed or sent by the proper Person. The Collateral Representative also may\nrely on any statement made to it orally or by telephone and believed by it to be\nmade by the proper Person, and shall not incur any liability for relying\nthereon. The Collateral Representative may consult with legal counsel (who may\nbe counsel for the Company), independent accountants and other experts selected\nby it, and shall not be liable for any action taken or not taken by it in\naccordance with the advice of any such counsel, accountant or expert.\n\n    (e) Sub-Agents and Related Parties.  The Collateral Representative may\nperform any of its duties and exercise any of its rights and powers through \none or\n\n\n                                      20\n\n \nmore sub-agents appointed by it. The Collateral Representative and any such sub-\nagent may perform any of its duties and exercise any of its rights and powers\nthrough its Related Parties. The exculpatory provisions of Section 12 and this\nSection shall apply to any such sub-agent and to the Related Parties of the\nCollateral Representative and any such sub-agent.\n\n    (f) The Collateral Representative may refuse to act on any notice, consent,\ndirection or instruction from any Secured Parties or any agent, trustee or\nsimilar representative thereof that, in the Collateral Representative's opinion,\n(i) is contrary to law or the provisions of any Security Document or (ii) may\nexpose the Collateral Representative to liability (unless the Collateral\nRepresentative shall have been indemnified, to its reasonable satisfaction, for\nsuch liability by the Secured Parties that gave such notice, consent, direction\nor instruction).\n\n    (g) Resignation; Successor Collateral Representative.  Subject to the\nappointment and acceptance of a successor Collateral Representative as provided\nin this subsection, the Collateral Representative may resign at any time by\nnotifying the Holders and the Company. Upon any such resignation, the Required\nHolders shall have the right, in consultation with the Company, to appoint a\nsuccessor Collateral Representative. If no successor shall have been so\nappointed by the Required Holders and shall have accepted such appointment\nwithin 30 days after the retiring Collateral Representative gives notice of its\nresignation, then the retiring Collateral Representative may, on behalf of the\nSecured Parties, appoint a successor Collateral Representative. Upon acceptance\nof its appointment as Collateral Representative hereunder by a successor, such\nsuccessor shall succeed to and become vested with all the rights, powers,\nprivileges and duties of the retiring Collateral Representative hereunder, and\nthe retiring Collateral Representative shall be discharged from its duties and\nobligations hereunder. After the Collateral Representative's resignation\nhereunder, the provisions of this Section and Section 12 shall continue in\neffect for the benefit of such retiring Collateral Representative, its\nsub-agents and their respective Related Parties in respect of any actions taken\nor omitted to be taken by any of them while the retiring Collateral\nRepresentative was acting as Collateral Representative.\n\n    SECTION 14.  Termination of Transaction Liens; Release of Collateral.  (a)\nThe Transaction Liens granted by each Guarantor shall terminate when its Secured\nGuarantee is released pursuant to Section 2(c).\n\n    (b) The Transaction Liens granted by the Company shall terminate when all\nthe Release Conditions are satisfied.\n\n    (c) At any time before the Transaction Liens granted by the Company\nterminate, the Collateral Representative may, at the written request of the\n\n\n                                      21\n\n \nCompany, release any or all of the Collateral with the prior written consent of\nthe Required Holders.\n\n    (d) Upon any termination of a Transaction Lien or release of Collateral,\nthe Collateral Representative will, at the expense of the relevant Lien Grantor,\nexecute and deliver to such Lien Grantor such documents as such Lien Grantor\nshall reasonably request to evidence the termination of such Transaction Lien or\nthe release of such Collateral, as the case may be.\n\n    SECTION 15. Additional Guarantors and Lien Grantors. Any Subsidiary may\nbecome a party hereto by signing and delivering to the Collateral Representative\na Security Agreement Supplement, whereupon such Subsidiary shall become a\n\"Guarantor\" and a \"Lien Grantor\" as defined herein.\n\n    SECTION 16. Notices. Each notice, request or other communication given to\nany party hereunder shall be in writing (which term includes facsimile or other\nelectronic transmission) and shall be effective (i) when delivered to such party\nat its address specified below, (ii) when sent to such party by facsimile,\naddressed to it at its facsimile number specified below, and such party sends\nback an electronic confirmation of receipt or (iii) ten days after being sent to\nsuch party by certified or registered United States mail, addressed to it at its\naddress specified below, with first class or airmail postage prepaid:\n\n        (a) in the case of any Lien Grantor listed on the signature pages \n    hereof:\n\n            [Address]\n            Attention:\n            Facsimile:\n\n\n        (b) in the case of any other Lien Grantor, its address or facsimile\n    number set forth in its first Security Agreement Supplement;\n\n        (c) in the case of the Collateral Representative:\n\n            Compaq Financial Services Corporation\n            420 Mountain Avenue\n            Murray Hill, NJ 07974\n            Attention: [o]\n            Facsimile:[o]\n\n\n                                      22\n\n \n        (d) in the case of any Holder, to such Holder at its address or\n    facsimile number specified in or pursuant to Section 10.04 of the Note\n    Purchase Agreement.\n\nAny party may change its address and\/or facsimile number for purposes of this\nSection by giving notice of such change to the Collateral Representative and the\nLien Grantors in the manner specified above.\n\n    SECTION 17. No Implied Waivers; Remedies Not Exclusive. No failure by the\nCollateral Representative or any Secured Party to exercise, and no delay in\nexercising and no course of dealing with respect to, any right or remedy under\nany Security Document shall operate as a waiver thereof; nor shall any single or\npartial exercise by the Collateral Representative or any Secured Party of any\nright or remedy under any Note Document preclude any other or further exercise\nthereof or the exercise of any other right or remedy. The rights and remedies\nspecified in the Note Documents are cumulative and are not exclusive of any\nother rights or remedies provided by law.\n\n    SECTION 18. Successors and Assigns. This Agreement is for the benefit of the\nCollateral Representative and the Secured Parties. If all or any part of any\nSecured Party's interest in any Secured Obligation is assigned or otherwise\ntransferred, the transferor's rights hereunder, to the extent applicable to the\nobligation so transferred, shall be automatically transferred with such\nobligation. This Agreement shall be binding on the Lien Grantors and their\nrespective successors and assigns.\n\n    SECTION 19. Amendments and Waivers. Neither this Agreement nor any provision\nhereof may be waived, amended, modified or terminated except pursuant to an\nagreement or agreements in writing enter into by the parties hereto, with the\nconsent of Required Holders.\n\n    SECTION 20. Choice of Law. This Agreement shall be construed in accordance\nwith and governed by the laws of the State of New York, except as otherwise\nrequired by mandatory provisions of law and except to the extent that remedies\nprovided by the laws of any jurisdiction other than the State of New York are\ngoverned by the laws of such jurisdiction.\n\n    SECTION 21. Waiver of Jury Trial. EACH PARTY HERETO WAIVES, TO THE FULLEST\nEXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN\nANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY\nSECURITY DOCUMENT OR ANY TRANSACTION CONTEMPLATED THEREBY (WHETHER BASED ON\nCONTRACT, TORT\n\n\n                                      23\n\n \nOR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,\nAGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,\nTHAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE\nFOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE\nBEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL\nWAIVERS AND CERTIFICATIONS IN THIS SECTION.\n\n    SECTION 22. Severability. If any provision of any Security Document is\ninvalid or unenforceable in any jurisdiction, then, to the fullest extent\npermitted by law, (i) the other provisions of the Security Documents shall\nremain in full force and effect in such jurisdiction and shall be liberally\nconstrued in favor of the Collateral Representative and the Secured Parties in\norder to carry out the intentions of the parties thereto as nearly as may be\npossible and (ii) the invalidity or unenforceability of such provision in such\njurisdiction shall not affect the validity or enforceability thereof in any\nother jurisdiction.\n\n\n                                      24\n\n \n    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly\nexecuted by their respective authorized officers as of the day and year first\nabove written.\n\n                                 NAVISITE, INC.\n\n\n                                 By:        \n                                    ---------------------------------\n                                 Name:\n                                 Title:\n\n\n                                 COMPAQ FINANCIAL SERVICES\n                                 CORPORATION, as Collateral\n                                 Representative\n\n\n                                 By:                \n                                     -----------------------------------\n                                 Name:\n                                 Title:\n\n\n                                 GUARANTORS:\n\n                                 [NAMES OF SUBSIDIARY GUARANTORS]\n\n\n\n                                 By:                   \n                                    ---------------------------------------\n                                 Name:\n                                 Title:\n\n\n                                                                25\n\n \n                                                                     SCHEDULE 1\n\n\n                 EQUITY INTERESTS IN SUBSIDIARIES AND AFFILIATES  \n                         OWNED BY ORIGINAL LIEN GRANTORS             \n                           (AS OF THE EFFECTIVE DATE)           \n\n                 Jurisdiction                                       Number of\n                      of             Owner of        Percentage     Shares or\n     Issuer      Organization    Equity Interest        Owned          Units\n   ----------    ------------    ---------------     ----------     ---------\n\n\n\n\n\n\n\n\n\n                                     S-1-1\n\n \n                                                          EXHIBIT A\n                                                          TO SECURITY AGREEMENT\n\n\n                         SECURITY AGREEMENT SUPPLEMENT\n\n    SECURITY AGREEMENT SUPPLEMENT dated as of _______, ____, between [NAME OF\nLIEN GRANTOR] (the \"LIEN GRANTOR\") and COMPAQ FINANCIAL SERVICES CORPORATION, as\nCollateral Representative.\n\n    WHEREAS, NAVISITE, INC. the Guarantors party thereto and COMPAQ FINANCIAL\nSERVICES CORPORATION, as Collateral Representative, are parties to a Guarantee\nand Security Agreement dated as of October , 2001 (as heretofore amended and\/or\nsupplemented, the \"SECURITY AGREEMENT\") under which NAVISITE, INC. secures\ncertain of its obligations (the \"SECURED OBLIGATIONS\") and the Guarantors\nguarantee the Secured Obligations and secure their respective guarantees\nthereof;\n\n    WHEREAS, [name of Lien Grantor] desires to become [is] a party to the\nSecurity Agreement as a Guarantor and Lien Grantor thereunder;2 and\n\n    WHEREAS, terms defined in the Security Agreement (or whose definitions are\nincorporated by reference in Section 1 of the Security Agreement) and not\notherwise defined herein have, as used herein, the respective meanings provided\nfor therein;\n\n    NOW, THEREFORE, in consideration of the foregoing and other good and\nvaluable consideration, the receipt and sufficiency of which are hereby\nacknowledged, the parties hereto agree as follows:\n\n    1. Secured Guarantee.3 The Lien Grantor unconditionally guarantees the full\nand punctual payment of each Secured Obligation when due (whether at stated\nmaturity, upon acceleration or otherwise). The Lien Grantor acknowledges that,\nby signing this Security Agreement Supplement and delivering it to the\nCollateral Representative, the Lien Grantor becomes a \"Guarantor\" and \"Lien\nGrantor\" for all purposes of the Security Agreement and that its obligations\nunder the foregoing Secured Guarantee are subject to all the provisions of the\nSecurity\n----------------------\n    2 If the Lien Grantor is the Company, delete this recital and Section 1\nhereof.\n    3 Delete this Section if the Lien Grantor is the Company or a Guarantor that\nis already a party to the Security Agreement.\n\n                                      A-1\n\n \nAgreement (including those set forth in Section 2 thereof) applicable to the\nobligations of a Guarantor thereunder.\n\n    2. Grant of Transaction Liens.  (a) In order to secure [its Secured\nGuarantee]4 [the Secured Obligations]5, the Lien Grantor grants to the\nCollateral Representative for the benefit of the Secured Parties a continuing\nsecurity interest in all the following property of the Lien Grantor, whether now\nowned or existing or hereafter acquired or arising and regardless of where\nlocated (the \"NEW COLLATERAL\"):\n\n       [describe property being added to the Collateral]6\n\n    (b) With respect to each right to payment or performance included in the\nCollateral from time to time, the Transaction Lien granted therein includes a\ncontinuing security interest in (i) any Supporting Obligation that supports such\npayment or performance and (ii) any Lien that (x) secures such right to payment\nor performance or (y) secures any such Supporting Obligation.\n\n    (c) The foregoing Transaction Liens are granted as security only and shall\nnot subject the Collateral Representative or any other Secured Party to, or\ntransfer or in any way affect or modify, any obligation or liability of the Lien\nGrantor with respect to any of the New Collateral or any transaction in\nconnection therewith.\n\n    3. Party to Security Agreement. Upon delivering this Security Agreement\nSupplement to the Collateral Representative, the Lien Grantor will become a\nparty to the Security Agreement and will thereafter have all the rights and\nobligations of a Guarantor and a Lien Grantor thereunder and be bound by all the\nprovisions thereof as fully as if the Lien Grantor were one of the original\nparties thereto.7\n---------------------------------\n    4 Delete bracketed words if the Lien Grantor is the Company.\n\n    5 Delete bracketed words if the Lien Grantor is a Guarantor.\n\n    6 If the Lien Grantor is not already a party to the Security Agreement, \nclauses (i) through (_) of, and the proviso to, Section 3(a) of the Security \nAgreement may be appropriate.\n\n     7 Delete Sections 4 and 5 if the Lien Grantor is already a party to the \nSecurity Agreement.\n\n                                      A-2\n\n \n    4. Address of Lien Grantor. The address and facsimile number of the Lien\nGrantor for purposes of Section 16(b) of the Security Agreement are:\n\n    [address and facsimile number of Lien Grantor]\n\n    5. Representations and Warranties.8 (a) The Lien Grantor is a corporation\nduly organized, validly existing and in good standing under the laws of\n[jurisdiction of organization].\n\n    (b) The Lien Grantor has delivered a Perfection Certificate to the\nCollateral Representative. The information set forth therein is correct and\ncomplete as of the date hereof. Within 60 days after the date hereof, the Lien\nGrantor will furnish to the Collateral Representative a file search report from\neach UCC filing office listed in such Perfection Certificate, showing the filing\nmade at such filing office to perfect the Transaction Liens on the New\nCollateral.\n\n    (c) The execution and delivery of this Security Agreement Supplement\nby the Lien Grantor and the performance by it of its obligations under the\nSecurity Agreement as supplemented hereby are within its corporate or other\npowers, have been duly authorized by all necessary corporate or other action,\nrequire no action by or in respect of, or filing with, any governmental body,\nagency or official and do not contravene, or constitute a default under, any\nprovision of applicable law or regulation or of its organizational documents, or\nof any agreement, judgment, injunction, order, decree or other instrument\nbinding upon it or result in the creation or imposition of any Lien (except a\nTransaction Lien) on any of its assets.\n\n    (d) The Security Agreement as supplemented hereby constitutes a valid\nand binding agreement of the Lien Grantor, enforceable in accordance with its\nterms, except as limited by (i) applicable bankruptcy, insolvency, fraudulent\nconveyance or other similar laws affecting creditors' rights generally and (ii)\ngeneral principles of equity.\n\n    (e) Each of the representations and warranties set forth in the Security\nAgreement is true as applied to the Lien Grantor and the New Collateral. For\npurposes of the foregoing sentence, references in said Sections to a \"Lien\nGrantor\" shall be deemed to refer to the Lien Grantor, references to Schedules\nto the Security Agreement shall be deemed to refer to the corresponding\nSchedules to this Security Agreement Supplement, references to \"Collateral\"\nshall be deemed to refer to the New Collateral, and references to the \"Effective\nDate\" shall be deemed to refer to the date on which the Lien Grantor signs and\ndelivers this Security Agreement Supplement.\n\n    6. Governing Law. This Security Agreement Supplement shall be construed in\naccordance with and governed by the laws of the State of New York.\n\n-------------\n    8  Modify as needed if the Lien Grantor is not a corporation.\n\n                                      A-3\n\n \n    IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement\nSupplement to be duly executed by their respective authorized officers as of the\nday and year first above written.\n\n               [             ], as Lien Grantor\n                -------------\n\n\n               By:       \n                  ------------------------------\n                  Name:\n                  Title:\n\n              COMPAQ FINANCIAL SERVICES\n                  CORPORATION, as Collateral\n                  Representative\n\n\n                  By:    \n                     ----------------------------\n                     Name:\n                     Title:\n\n                                      A-4\n\n \n                                                                      SCHEDULE 1\n                                                           TO SECURITY AGREEMENT\n                                                                      SUPPLEMENT\n\n\n                EQUITY INTERESTS IN SUBSIDIARIES AND AFFILIATES\n                             OWNED BY LIEN GRANTOR\n\n                            Jurisdiction\n                                 of           Percentage         Number of\n        Issuer              Organization         Owned        Shares of Units\n  ---------------------     ------------     -----------      ---------------\n\n\n\n\n\n\n\n\n\n                                      A-5\n\n \n                                                                       EXHIBIT B\n                                                           TO SECURITY AGREEMENT\n\n\n                            PERFECTION CERTIFICATE\n\n    The undersigned is a duly authorized officer of [NAME OF LIEN GRANTOR] (the\n\"LIEN GRANTOR\"). With reference to the Guarantee and Security Agreement dated as\nof October , 2001 among NAVISITE, INC., the Guarantors party thereto and\n[FINANCIAL SERVICES CORPORATION, as Collateral Representative (terms defined\ntherein being used herein as therein defined), the undersigned certifies to the\nCollateral Representative and each other Secured Party as follows:\n\n    A. INFORMATION REQUIRED FOR FILINGS AND SEARCHES FOR PRIOR FILINGS.\n\n    1. Jurisdiction of Organization.  The Lien Grantor is a corporation1\norganized under the laws of ___________.\n\n    2. Name.  The exact [corporate] name of the Lien Grantor as it appears\nin its [certificate of incorporation] is as follows:\n\n    3. Prior Names.  (a) Set forth below is each other [corporate] name that\nthe Lien Grantor has had since its organization, together with the date of the\nrelevant change:\n\n       (b) Except as set forth in Schedule __ hereto, the Lien Grantor has not\n    changed its corporate structure2 in any way within the past five years.\n\n       (c) None of the Lien Grantor's Collateral was acquired from another\n    Person within the past five years, except\n\n--------\n    1  Modify as needed if the Lien Grantor is not a corporation.\n    \n    2 Changes in corporate structure would include mergers and consolidations,\nas well as any change in the Lien Grantor's form of organization. If any such\nchange has occurred, include in Schedule __ the information required by Part A\nof this certificate as to each constituent party to a merger or consolidation\nand any other predecessor organization.\n\n                                      B-1\n\n \n        (i)   property sold to the Lien Grantor by another Person in the \n    ordinary course of such other Person's business;\n\n        (ii)  property with respect to which the Transaction Liens are to be\n    perfected by taking possession or control thereof;\n\n        (iii) property acquired in transactions described in Schedule __ hereto;\n    and\n\n        (iv) other property having an aggregate fair market value not exceeding\n    $_________.\n\n    4. Filing Office.  In order to perfect the Transaction Liens granted by\nthe Lien Grantor, a duly signed financing statement on Form UCC-1, with the\ncollateral described as set forth on Schedule __ hereto, should be on file in\nthe office of ____________ in _________3 [and a duly signed financing statement\non Form UCC-1 containing, with respect to any as-extracted collateral, the\ninformation required by UCC Section 9-502 should be on file in the relevant\nfiling office listed under the heading \"As-Extracted Collateral\" in Schedule ___\nhereto]4.\n\nB.  ADDITIONAL INFORMATION REQUIRED FOR SEARCHES FOR PRIOR FILINGS UNDER\n    OLD ARTICLE 9.\n\n    1. Current Locations. (a) The chief executive office of the Lien Grantor\nis located at the following address:\n\nMailing Address                       County              State\n------------------------------------- ------------------- -----------------\n\nThe Lien Grantor [does] [does not] have a place of business in another county of\nthe State listed above.\n\n        (b) The following are all places of business of the Lien Grantor not\n    identified above:\n\n-----------------------\n                       \n    3  Insert Lien Grantor's \"location\" determined as provided in UCC Section \n9-307.\n\n    4  Delete bracketed words unless a Lien Grantor owns or may own \n\"as-extracted collateral\" (as defined in UCC Section 9-102) at a known location.\n\n                                      B-2\n\n \nMailing Address                      County               State\n------------------------------------ -------------------- ------------------\n\n        (c) The following are all locations not identified above where the\n    Lien Grantor maintains any Inventory:\n\nMailing Address                      County               State\n------------------------------------ -------------------- ------------------\n\n        (d) The following are the names and addresses of all Persons (other than\n    the Lien Grantor) that have possession of any of the Lien Grantor's\n    Inventory:\n\nMailing Address                      County               State\n------------------------------------ -------------------- ------------------\n\n    2. Prior Locations.  (a)  Set forth below is the information required by\nparagraphs (a) and (b) of Part B-1 above with respect to each other location or\nplace of business maintained by the Lien Grantor at any time during the past\nfive years:\n\n       (b) Set forth below is the information required by paragraphs (c) and (d)\n    of Part B-1 above with respect to each other location or bailee where or\n    with whom any of the Lien Grantor's Inventory has been lodged at any time\n    during the past four months:\n\n\n    C. SEARCH REPORTS.\n\n    Attached hereto as Schedule __ is a true copy of a file search report from\nthe central UCC filing office in each jurisdiction identified in Part A-4 and\nPart B- 3 above with respect to each name set forth in Part A-2 and Part A-3\nabove (searches in local filing offices, if any, are not required). Attached\nhereto as Schedule __ is a true copy of each financing statement or other filing\nidentified in such file search reports.\n\n                                      B-3\n\n \n    D. UCC FILINGS.\n\n    Attached hereto as Schedule __ is a schedule setting forth filing\ninformation with respect to the filings referred to in Part A-4 and Part B-3\nabove. All filing fees and taxes payable in connection with such filings have\nbeen paid. Attached hereto as Schedule __ is a true copy of each such filing\nduly acknowledged by the filing officer.\n\n    IN WITNESS WHEREOF, I have hereunto set my hand this __ day of\n----------, ----\n\n\n                                     --------------------------------------\n                                     Name:\n                                     Title:\n\n                                      B-4\n\n \n                                                                     Schedule 1\n                                                      to Perfection Certificate \n\n                           DESCRIPTION OF COLLATERAL\n  \n\nAll personal property.\n\n\n\n                                      B-5\n\n \n                                                                   SCHEDULE 2 TO\n                                                          PERFECTION CERTIFICATE\n\n\n                              SCHEDULE OF FILINGS\n\n                          AGAINST _________________,\n                                  AS DEBTOR\n\n       Filing Office              File Number               Date of Filing5\n   ----------------------   ------------------------    --------------------\n\n\n\n\n\n\n\n\n--------\n\n     5 Also indicate lapse date, if other than fifth anniversary.\n\n                                      B-6\n\n \n                                                                       EXHIBIT C\n                                                           TO SECURITY AGREEMENT\n\n\n                           ISSUER CONTROL AGREEMENT\n\n\n    ISSUER CONTROL AGREEMENT dated as of ______, _____ among _____________ (the\n\"LIEN GRANTOR\"), COMPAQ FINANCIAL SERVICES CORPORATION, as Collateral\nRepresentative (the \"SECURED PARTY\"), and _________ (the \"ISSUER\"). All\nreferences herein to the \"UCC\" refer to the Uniform Commercial Code as in effect\nfrom time to time in [Issuer's jurisdiction of incorporation].\n\n                             W I T N E S S E T H :\n\n    WHEREAS, the Lien Grantor is the registered holder of [specify Pledged\nUncertificated Securities issued by the Issuer] issued by the Issuer (the\n\"SECURITIES\");\n\n    WHEREAS, pursuant to a Guarantee and Security Agreement dated as of October\n, 2001 (as such agreement may be amended and\/or supplemented from time to time,\nthe \"SECURITY AGREEMENT\"), the Lien Grantor has granted to the Secured Party a\ncontinuing security interest (the \"TRANSACTION LIEN\") in all right, title and\ninterest of the Lien Grantor in, to and under the Securities, whether now\nexisting or hereafter arising; and\n\n    WHEREAS, the parties hereto are entering into this Agreement in order to\nperfect the Transaction Lien on the Securities;\n\n    NOW, THEREFORE, the parties hereto agree as follows:\n\n    SECTION 1. Nature of Securities. The Issuer confirms that (i) the Securities\nare \"uncertificated securities\" (as defined in Section 8-102 of the UCC) and\n(ii) the Lien Grantor is registered on the books of the Issuer as the registered\nholder of the Securities.\n\n    SECTION 2. Instructions. The Issuer agrees to comply with any \"instruction\"\n(as defined in Section 8-102 of the UCC) originated by the Secured Party and\nrelating to the Securities without further consent by the Lien Grantor or\n\n                                      C-1\n\n \nany other person.  The Lien Grantor consents to the foregoing agreement by the\nIssuer.\n\n    SECTION 3. Waiver of Lien; Waiver of Set-off. The Issuer waives any security\ninterest, lien or right of setoff that it may now have or hereafter acquire in\nor with respect to the Securities. The Issuer's obligations in respect of the\nSecurities will not be subject to deduction, set-off or any other right in favor\nof any person other than the Secured Party.\n\n    SECTION 4. Choice of Law. This Agreement shall be governed by the laws of\n[Issuer's jurisdiction of incorporation].1\n\n    SECTION 5. Conflict with Other Agreements. There is no agreement (except\nthis Agreement) between the Issuer and the Lien Grantor with respect to the\nSecurities [except for [identify any existing other agreements] (the \"EXISTING\nOTHER AGREEMENTS\")]. In the event of any conflict between this Agreement (or any\nportion hereof) and any other agreement [(including any Existing Other\nAgreement)] between the Issuer and the Lien Grantor with respect to the\nSecurities, whether now existing or hereafter entered into, the terms of this\nAgreement shall prevail.\n\n    SECTION 6. Amendments. No amendment or modification of this Agreement or\nwaiver of any right hereunder shall be binding on any party hereto unless it is\nin writing and is signed by all the parties hereto.\n\n    SECTION 7. Notice of Adverse Claims. Except for the claims and interests of\nthe Secured Party and the Lien Grantor in the Securities, the Issuer does not\nknow of any claim to, or interest in, the Securities. If any person asserts any\nlien, encumbrance or adverse claim (including any writ, garnishment, judgment,\nattachment, execution or similar process) against the Securities, the Issuer\nwill promptly notify the Secured Party and the Lien Grantor thereof.\n\n    SECTION 8. Maintenance of Securities. In addition to, and not in lieu of,\nthe obligation of the Issuer to honor instructions as agreed in Section 2\nhereof, the Issuer agrees as follows:\n\n--------\n    1 If the Issuer's jurisdiction of incorporation is not a State in the United\nStates that has adopted the revisions to Articles 8 and 9 of the UCC promulgated\nin 1994, this form of Issuer Control Agreement will not be appropriate. It may\nbe necessary to transfer the relevant securities into the Collateral\nRepresentative's name to obtain comparable results under the laws of such\njurisdiction.\n\n                                      C-2\n\n \n        (i) Lien Grantor Instructions; Notice of Exclusive Control. So long as\n    the Issuer has not received a Notice of Exclusive Control (as defined\n    below), the Issuer may comply with instructions of the Lien Grantor or any\n    duly authorized agent of the Lien Grantor in respect of the Securities.\n    After the Issuer receives a written notice from the Secured Party that it is\n    exercising exclusive control over the Securities (a \"NOTICE OF EXCLUSIVE\n    CONTROL\"), the Issuer will cease complying with instructions of the Lien\n    Grantor or any of its agents.\n\n        (ii) Non-Cash Dividends and Distributions. The Issuer shall deliver to\n    the Secured Party all dividends, interest and other distributions paid or\n    made upon or with respect to the Securities.\n\n        (iii) Voting Rights. Until the Issuer receives a Notice of Exclusive\n    Control, the Lien Grantor shall be entitled to direct the Issuer with\n    respect to voting the Securities.\n\n        (iv) Statements and Confirmations. The Issuer will promptly send copies\n    of all statements and other correspondence concerning the Securities\n    simultaneously to each of the Lien Grantor and the Secured Party at their\n    respective addresses specified in Section 11 hereof.\n\n        (v) Tax Reporting. All items of income, gain, expense and loss\n    recognized in respect of the Securities shall be reported to the Internal\n    Revenue Service and all state and local taxing authorities under the name\n    and taxpayer identification number of the Lien Grantor.\n\n    SECTION 9. Representations, Warranties and Covenants of the Issuer. The\nIssuer makes the following representations, warranties and covenants:\n\n        (i)   This Agreement is a valid and binding agreement of the Issuer\n    enforceable in accordance with its terms.\n\n        (ii) The Issuer has not entered into, and until the termination of this\n    Agreement will not enter into, any agreement with any other person relating\n    to the Securities pursuant to which it has agreed, or will agree, to comply\n    with instructions (as defined in Section 8-102 of the UCC) of such person.\n    The Issuer has not entered into any other agreement with the Lien Grantor or\n    the Secured Party purporting to limit or condition the obligation of the\n    Issuer to comply with instructions as agreed in Section 2 hereof.\n\n                                      C-3\n\n \n    SECTION 10. Successors. This Agreement shall be binding upon, and shall\ninure to the benefit of, the parties hereto and their respective successors and\nassigns.\n\n    SECTION 11. Notices. Each notice, request or other communication given to\nany party hereunder shall be in writing (which term includes facsimile or other\nelectronic transmission) and shall be effective (i) when delivered to such party\nat its address specified below, (ii) when sent to such party by facsimile or\nother electronic transmission, addressed to it at its facsimile number or\nelectronic address specified below, and such party sends back an electronic\nconfirmation of receipt or (iii) ten days after being sent to such party by\ncertified or registered United States mail, addressed to it at its address\nspecified below, with first class or airmail postage prepaid:\n\n    Lien Grantor:\n\n    Secured Party:\n\n    Issuer:\n\nAny party may change its address and\/or facsimile number for purposes of this\nSection by giving notice of such change to the other parties in the manner\nspecified above.\n\n    SECTION 12. Termination. The rights and powers granted herein to the Secured\nParty (i) have been granted in order to perfect the Transaction Lien, (ii) are\npowers coupled with an interest and (iii) will not be affected by any bankruptcy\nof the Lien Grantor or any lapse of time. The obligations of the Issuer\nhereunder shall continue in effect until the Secured Party has notified the\nIssuer in writing that the Transaction Lien has been terminated pursuant to the\nSecurity Agreement.\n\n    SECTION 13. Counterparts. This Agreement may be executed in any number of\ncounterparts, all of which shall constitute one and the same instrument, and any\nparty hereto may execute this Agreement by signing and delivering one or more\ncounterparts.\n                                                                               \n                                [NAME OF LIEN GRANTOR]\n\n                                                                               \n                                 By:   \n                                    --------------------------------\n                                    Name:\n                                    Title:\n\n\n\n                                      C-4\n\n \n                                              COMPAQ FINANCIAL SERVICES\n                                              CORPORATION, as\n                                              Collateral Representative\n\n\n                                              By:     \n                                                 -------------------------------\n                                                 Name:\n                                                 Title:\n\n\n                                              [NAME OF ISSUER]\n\n\n                                               By:   \n                                                  ------------------------------\n                                                  Name:\n                                                  Title:\n\n\n                                      C-5\n\n \n                                                                       EXHIBIT A\n\n                                                                               \n                         [Letterhead of Secured Party]\n\n\n                                                                               \n                                    [Date]\n\n[Name and Address of Issuer]\n\nAttention: ________________________\n\n\n           Re:  Notice of Exclusive Control\n\nLadies and Gentlemen:\n\n    As referenced in the Issuer Control Agreement dated as of ______, ____ among\n[name of Lien Grantor], us and you (a copy of which is attached), we notify you\nthat we will hereafter exercise exclusive control over [specify Pledged\nUncertificated Securities] registered in the name of [name of Lien Grantor] (the\n\"SECURITIES\"). You are instructed not to accept any directions or instructions\nwith respect to the Securities from any person other than the undersigned unless\notherwise ordered by a court of competent jurisdiction.\n\n    You are instructed to deliver a copy of this notice by facsimile\ntransmission to [name of Lien Grantor].\n\n                              Very truly yours,\n\n                                  COMPAQ FINANCIAL SERVICES\n                                       CORPORATION, as Collateral\n                                       Representative\n\n\n                                  By:                                         \n                                     ----------------------------------\n                                     Title:\n\ncc: [name of Lien Grantor]\n\n\n                                      C-6\n\n \n                                                                       EXHIBIT C\n\n                                                  to the Note Purchase Agreement\n\n                                 NAVISITE, INC.\n\n                      AMENDMENT TO AND RESTATEMENT OF THE\n\n                           INVESTOR RIGHTS AGREEMENT\n\n     This Agreement dated as of October 29, 2001 is entered into by and among\nNaviSite, Inc., a Delaware corporation (the \"COMPANY\"), Compaq Financial\nServices Corporation, a Delaware corporation (\"CFS\"), and CMGI, Inc., a Delaware\ncorporation (\"CMGI,\" together with CFS, the \"PURCHASERS\").\n\n                                    RECITALS\n\n     WHEREAS, the Company and the Purchasers are entering into a Note Purchase\nAgreement dated the date hereof (the \"NOTE PURCHASE AGREEMENT\");\n\n     WHEREAS, in order to induce the Purchasers to enter into the Note Purchase\nAgreement, the Company has agreed to provide for certain arrangements with\nrespect to the registration of shares of capital stock of the Company under the\nSecurities Act of 1933, as amended;\n\n     WHEREAS, the Company and CMGI entered into the Investor Rights Agreement on\nOctober 27, 1999 (the \"INVESTOR RIGHTS AGREEMENT\"), as amended on June 8, 2000\nand December 12, 2000; and\n\n     WHEREAS, the Company and CMGI desire to amend and restate in its entirety\nthe Investor Rights Agreement;\n\n     NOW, THEREFORE, in consideration of the mutual promises and covenants\ncontained in this Agreement, the parties hereto agree as follows:\n\nI.  Certain Definitions.\n\n     As used in this Agreement, the following terms shall have the following\nrespective meanings:\n\n     \"COMMISSION\" means the Securities and Exchange Commission, or any other\nfederal agency at the time administering the Securities Act.\n\n     \"COMMON STOCK\" means the common stock, $.01 par value per share, of the\nCompany.\n\n     \"EXCHANGE ACT\" means the Securities Exchange Act of 1934, as amended, or\nany successor federal statute, and the rules and regulations of the Commission\nissued under such Act, as they each may, from time to time, be in effect.\n\n\n \n     \"INITIATING HOLDERS\" means the Stockholders initiating a request for\nregistration pursuant to Section 2.1(a).\n \n     \"INITIAL PUBLIC OFFERING\" means the initial underwritten public offering of\nshares of Common Stock pursuant to an effective Registration Statement.\n\n     \"PROSPECTUS\" means the prospectus included in any Registration Statement,\nas amended or supplemented by an amendment or prospectus supplement, including\npost-effective amendments, and all material incorporated by reference or deemed\nto be incorporated by reference in such Prospectus.\n\n     \"REGISTRATION STATEMENT\" means a registration statement filed by the\nCompany with the Commission for a public offering and sale of securities of the\nCompany (other than a registration statement on Form S-8 or Form S-4, or their\nsuccessors, or any other form for a similar limited purpose, or any registration\nstatement covering only securities proposed to be issued in exchange for\nsecurities or assets of another corporation).\n\n     \"REGISTRATION EXPENSES\" means the expenses described in Section 2.4.\n\n     \"REGISTRABLE SHARES\" means (i) the shares of Common Stock held by CMGI upon\nthe closing of the Initial Public Offering; (ii) the shares of Common Stock\nacquired by CMGI in connection with the Common Stock Purchase Agreement between\nthe Company and CMGI, dated as of June 8, 2000; (iii) the shares of Common Stock\nacquired by CMGI upon any conversion of the Notes issued pursuant to the Note\nand Warrant Purchase Agreement between the Company and CMGI, dated as of\nDecember 12, 2000, (the \"NOTE AND WARRANT PURCHASE AGREEMENT\"); (iv) the shares\nof Common Stock acquired by CMGI as payment for interest accrued on the Notes\nissued pursuant to the Note and Warrant Purchase Agreement; (v) the shares of\nCommon Stock acquired by CMGI upon exercise or conversion of the Warrants issued\npursuant to the Note and Warrant Purchase Agreement; (vi) the shares of Common\nStock acquired by CFS and CMGI upon any conversion of the Notes issued pursuant\nto the Note Purchase Agreement; (vii) the shares of Common Stock acquired by CFS\nand CMGI as payment for interest accrued on the Notes issued pursuant to the\nNote Purchase Agreement; and (viii) any other shares of Common Stock issued in\nrespect of such shares of Common Stock referred to in clause (i), (ii), (iii),\n(iv), (v), (vi), or (vii) (because of stock splits, stock dividends,\nreclassifications, recapitalizations or similar events); provided, however, that\nshares of Common Stock which are Registrable Shares shall cease to be\nRegistrable Shares upon (i) any sale pursuant to a Registration Statement or\nRule 144 under the Securities Act or (ii) any sale in any manner to a person or\nentity which, by virtue of Section 3.3 of this Agreement, is not entitled to the\nrights provided by this Agreement.\n\n     \"SECURITIES ACT\" means the Securities Act of 1933, as amended, or any\nsuccessor federal statute, and the rules and regulations of the Commission\nissued under such Act, as they each may, from time to time, be in effect.\n\n                                       2\n\n \n     \"SELLING STOCKHOLDER\" means any Stockholder owning Registrable Shares\nincluded in a Registration Statement.\n\n     \"STOCKHOLDERS\" means the Purchasers and any persons or entities to whom the\nrights granted under this Agreement are transferred by the Purchasers, its\nsuccessors or assigns, pursuant to Section 3.3 hereof.\n\nII.  Registration Rights.\n\n     2.1  Required Registrations.\n\n     (a)  At any time, a Stockholder or Stockholders may request, in writing,\nthat the Company effect the registration on Form S-1 or Form S-3 (or successor\nforms) of Registrable Shares owned by such Stockholder or Stockholders having an\naggregate value of at least $2,500,000 (based on the then current public market\nprice).\n\n     (b)  Upon receipt of any request for registration pursuant to this Section\n2.1, the Company shall promptly give written notice of such proposed\nregistration to all other Stockholders. Such Stockholders shall have the right,\nby giving written notice to the Company within 15 days after the Company\nprovides its notice, to elect to have included in such registration such of\ntheir Registrable Shares as such Stockholders may request in such notice of\nelection, subject in the case of an underwritten offering to the approval of the\nmanaging underwriter as provided in Section 2.1(c) below. Thereupon, the Company\nshall, as expeditiously as possible, use its best efforts to effect the\nregistration on an appropriate registration form of all Registrable Shares which\nthe Company has been requested to so register.\n\n     (c)  If the Initiating Holders intend to distribute the Registrable Shares\ncovered by their request by means of an underwriting, they shall so advise the\nCompany as a part of their request made pursuant to Section 2.1(a) and the\nCompany shall include such information in its written notice referred to in\nSection 2.1(b). The right of any other Stockholder to include its Registrable\nShares in such registration pursuant to Section 2.1(a) shall be conditioned upon\nsuch other Stockholder's participation in such underwriting on the terms set\nforth herein. If the managing underwriter determines that the marketing factors\nrequire a limitation of the number of shares to be underwritten, the number of\nRegistrable Shares to be included in a Registration Statement filed pursuant to\nthis Section 2.1 shall be reduced pro rata among the requesting Stockholders\nbased on the quotient of (i) the total Registrable Shares to be included in the\nRegistration Statement, divided by (ii) the total number of Registrable Shares\nthat requested registration.\n\n     (d)  The Initiating Holders shall have the right to select the managing\nunderwriter(s) for any underwritten offering requested pursuant to Section\n2.1(a), subject to the approval of the Company, which approval will not be\nunreasonably withheld.\n\n                                       3\n\n \n     (e)  The Company shall not be required to effect more than five\nregistrations initiated by CMGI pursuant to Section 2.1(a) or more than ten\nregistrations initiated by CFS pursuant to Section 2.1(a).  In addition, the\nCompany shall not be required to effect any registration within 90 days after\nthe effective date of any other Registration Statement of the Company relating\nto an underwritten offering. For purposes of this Section 2.1(e), a Registration\nStatement shall not be counted until such time as such Registration Statement\nhas been declared effective by the Commission, unless the Initiating Holders\nwithdraw their request for such registration (other than as a result of\ninformation concerning the business or financial condition of the Company which\nis made known to the Stockholders after the date on which such registration was\nrequested) and elect not to pay the Registration Expenses therefor pursuant to\nSection 2.4.\n\n     (f)  If at the time of any request to register Registrable Shares by the\nInitiating Holders pursuant to this Section 2.1, the Company is engaged or has\nplans to engage in a registered public offering or is engaged in any other\nactivity which, in the good faith determination of the Company's board of\ndirectors, would be adversely affected by the requested registration or if\nfinancial statements required for the requested registration are not then\navailable, then the Company may at its option direct that such request be\ndelayed for a period not in excess of 90 days from the date of such request,\nsuch right to delay a request to be exercised by the Company not more than once\nin any 12-month period.\n\n     2.2  Incidental Registration.\n\n     (a)  Whenever the Company proposes to file a Registration Statement (other\nthan a Registration Statement filed pursuant to Section 2.1) at any time and\nfrom time to time, it will, prior to such filing, give written notice to all\nStockholders of its intention to do so; provided, that no such notice need be\ngiven if no Registrable Shares are to be included therein as a result of a\ndetermination of the managing underwriter pursuant to Section 2.2(b). Upon the\nwritten request of a Stockholder or Stockholders given within 20 days after the\nCompany provides such notice (which request shall state the intended method of\ndisposition of such Registrable Shares), the Company shall use its best efforts\nto cause all Registrable Shares which the Company has been requested by such\nStockholder or Stockholders to register to be registered under the Securities\nAct to the extent necessary to permit their sale or other disposition in\naccordance with the intended methods of distribution specified in the request of\nsuch Stockholder or Stockholders; provided, that the Company shall have the\nright to postpone or withdraw any registration effected pursuant to this Section\n2.2 without obligation to any Stockholder.\n\n     (b)  If the registration for which the Company gives notice pursuant to\nSection 2.2(a) involves an underwriting, the Company shall so advise the\nStockholders as a part of the written notice given pursuant to Section 2.2(a).\nIn such event, the right of any Stockholder to include its Registrable Shares in\nsuch \n\n                                       4\n\n \nregistration pursuant to Section 2.2 shall be conditioned upon such\nStockholder's participation in such underwriting on the terms set forth herein.\nAll Stockholders proposing to distribute their securities through such\nunderwriting shall enter into an underwriting agreement in customary form with\nthe underwriter or underwriters selected for the underwriting by the Company.\nNotwithstanding any other provision of this Agreement, if the Company and the\nmanaging underwriter(s) determine in good faith that marketing factors require a\nlimitation of the number of shares to be underwritten, then the Company and the\nmanaging underwriter(s) may exclude shares from the registration and the\nunderwriting, and the number of shares that may be included in the registration\nand the underwriting shall be allocated, first to the Company or the Company\nstockholder(s) for which the registration was initiated, and second to each of\nthe Stockholders requesting inclusion of their Registrable Shares in such\nregistration and each of the other holders of piggyback registration rights on a\nparity with those Stockholders on a pro rata basis based on the total number of\nRegistrable Shares and other securities requested for inclusion in such\nregistration by each such Stockholder or other holder. If any holder of\nRegistrable Shares or any other Company stockholder requesting inclusions of\nsecurities in the registration disapproves of the terms of any such\nunderwriting, such person may elect to withdraw therefrom by written notice to\nthe Company, and any Registrable Shares or other securities excluded or\nwithdrawn from such underwriting shall be withdrawn from such registration.\n\n     (c)  Notwithstanding the foregoing, the Company shall not be required,\npursuant to this Section 2.2, to include any Registrable Shares in a\nRegistration Statement if such Registrable Shares can then be sold pursuant to\nRule 144(k) under the Securities Act and represent less than 1% of the then\noutstanding shares of Common Stock.\n\n     2.3  Registration Procedures.\n\n     (a)  If and whenever the Company is required by the provisions of this\nAgreement to use its best efforts to effect the registration of any Registrable\nShares under the Securities Act, the Company shall:\n\n          (i) file with the Commission a Registration Statement with respect to\n     such Registrable Shares and use its best efforts to cause that Registration\n     Statement to become effective as soon as possible;\n\n          (ii) as expeditiously as possible, prepare and file with the\n     Commission any amendments and supplements to the Registration Statement and\n     the prospectus included in the Registration Statement as may be necessary\n     to comply with the provisions of the Securities Act (including the anti-\n     fraud provisions thereof) and to keep the Registration Statement effective\n     for 12 months from the effective date or such lesser period until all such\n     Registrable Shares are sold;\n\n                                       5\n\n \n          (iii) as expeditiously as possible, furnish to each Selling\n     Stockholder such reasonable numbers of copies of the Prospectus, including\n     any preliminary Prospectus, in conformity with the requirements of the\n     Securities Act, and such other documents as such Selling Stockholder may\n     reasonably request in order to facilitate the public sale or other\n     disposition of the Registrable Shares owned by such Selling Stockholder;\n\n          (iv) as expeditiously as possible, use its best efforts to register or\n     qualify the Registrable Shares covered by the Registration Statement under\n     the securities or Blue Sky laws of such states as the Selling Stockholders\n     shall reasonably request and do any and all other acts and things that may\n     be necessary or desirable to enable the Selling Stockholders to consummate\n     the public sale or other disposition in such states of the Registrable\n     Shares owned by the Selling Stockholder; provided, however, that the\n     Company shall not be required in connection with this paragraph (iv) to\n     qualify as a foreign corporation or execute a general consent to service of\n     process in any jurisdiction;\n\n          (v) as expeditiously as possible, cause all such Registrable Shares to\n     be listed on each securities exchange or automated quotation system on\n     which similar securities issued by the Company are then listed; and\n\n          (vi) promptly make available for inspection by the Selling\n     Stockholders, any managing underwriter participating in any disposition\n     pursuant to such Registration Statement and any attorney or accountant or\n     other agent retained by any such underwriter or selected by the Selling\n     Stockholders, all financial and other records, pertinent corporate\n     documents and properties of the Company and cause the Company's officers,\n     directors, employees and independent accountants to supply all information\n     reasonably requested by any such Selling Stockholder, underwriter,\n     attorney, accountant or agent in connection with such Registration\n     Statement.\n\n     (b)  If the Company has delivered a Prospectus to the Selling Stockholders,\nand after having done so, the Prospectus is amended to comply with the\nrequirements of the Securities Act, the Company shall promptly notify the\nSelling Stockholders and, if requested, the Selling Stockholders shall\nimmediately cease making offers of Registrable Shares and return all\nProspectuses to the Company. The Company shall promptly provide the Selling\nStockholders with revised Prospectuses, and following receipt of the revised\nProspectuses, the Selling Stock holders shall be free to resume making offers of\nthe Registrable Shares.\n\n     (c)  In the event that, in the judgment of the Company, it is advisable to\nsuspend use of a Prospectus included in a Registration Statement due to pending\nmaterial developments or other events that have not yet been publicly disclosed\n\n                                       6\n\n \nand as to which the Company believes public disclosure would be detrimental to\nthe Company, the Company shall notify all Selling Stockholders to such effect,\nand upon receipt of such notice, each such Selling Stockholder shall immediately\ndiscontinue any sales of Registrable Shares pursuant to such Registration\nStatement until such Selling Stockholder has received copies of a supplemented\nor amended Prospectus or until such Selling Stockholder is advised in writing by\nthe Company that the then current Prospectus may be used and has received copies\nof any additional or supplemental filings that are incorporated or deemed\nincorporated by reference in such Prospectus. Notwithstanding anything to the\ncontrary herein, the Company shall not exercise its rights under this Section\n2.3(c) to suspend sales of Registrable Shares for a period in excess of 90 days\nin any 365-day period.\n\n     2.4  Allocation of Expenses.  The Company will pay all Registration\nExpenses for all registrations under this Agreement; provided, however, that if\na registration under Section 2.1 is withdrawn at the request of the Initiating\nHolders (other than as a result of information concerning the business or\nfinancial condition of the Company which is made known to the Stockholders after\nthe date on which such registration was requested) and if the Initiating Holders\nelect not to have such registration counted as a registration requested under\nSection 2.1, the requesting Stockholders shall pay the Registration Expenses of\nsuch registration pro rata in accordance with the number of their Registrable\nShares included in such registration. For purposes of this Section, the term\n\"REGISTRATION EXPENSES\" shall mean all expenses incurred by the Company in\ncomplying with this Agreement, including, without limitation, all registration\nand filing fees, exchange listing fees, printing expenses, fees and expenses of\ncounsel for the Company and the fees and expenses of one counsel selected by the\nSelling Stockholders to represent the Selling Stockholders, state Blue Sky fees\nand expenses and the expense of any special audits incident to or required by\nany such registration, but excluding underwriting discounts, selling commissions\nand the fees and expenses of Selling Stockholders' own counsel (other than the\ncounsel selected to represent all Selling Stockholders).\n\n     2.5  Indemnification and Contribution.\n\n     (a)  In the event of any registration of any of the Registrable Shares\nunder the Securities Act pursuant to this Agreement, the Company will indemnify\nand hold harmless the Selling Stockholder, each underwriter of such Registrable\nShares and each other person, if any, who controls such Selling Stockholder or\nunderwriter within the meaning of the Securities Act or the Exchange Act against\nany losses, claims, damages or liabilities, joint or several, to which such\nSelling Stockholder, underwriter or controlling person may become subject under\nthe Securities Act, the Exchange Act, state securities or Blue Sky laws or\notherwise, insofar as such losses, claims, damages or liabilities (or actions in\nrespect thereof) (i) arise out of or are based upon any untrue statement or\nalleged untrue statement of any material fact contained in any Registration\nStatement under which such Registrable Shares were registered under the\nSecurities Act, any preliminary \n\n\n                                       7\n\n \nprospectus or final prospectus contained in the Registration Statement or any\namendment or supplement to such Registration Statement or (ii) arise out of or\nare based upon the omission or alleged omission to state a material fact\nrequired to be stated therein or necessary to make the statements therein not\nmisleading; and the Company will reimburse such Selling Stockholder, underwriter\nand controlling person for any legal or any other expenses reasonably incurred\nby such Selling Stockholder, underwriter or controlling person in connection\nwith investigating or defending any such loss, claim, damage, liability or\naction; provided, however, that the Company will not be liable in any such case\nto the extent that any such loss, claim, damage or liability arises out of or is\nbased upon any untrue statement or omission made in such Registration Statement,\npreliminary prospectus or prospectus, or any such amendment or supplement, in\nreliance upon and in conformity with information furnished to the Company, in\nwriting, by or on behalf of such Selling Stockholder, underwriter or controlling\nperson specifically for use in the preparation thereof.\n\n     (b)  In the event of any registration of any of the Registrable Shares\nunder the Securities Act pursuant to this Agreement, each Selling Stockholder,\nseverally and not jointly, will indemnify and hold harmless the Company, each of\nits directors and officers and each underwriter (if any) and each person, if\nany, who controls the Company or any such underwriter within the meaning of the\nSecurities Act or the Exchange Act, against any losses, claims, damages or\nliabilities, joint or several, to which the Company, such directors and\nofficers, underwriter or controlling person may become subject under the\nSecurities Act, Exchange Act, state securities or Blue Sky laws or otherwise,\ninsofar as such losses, claims, damages or liabilities (or actions in respect\nthereof) (i) arise out of or are based upon any untrue statement or alleged\nuntrue statement of a material fact contained in any Registration Statement\nunder which such Registrable Shares were registered under the Securities Act,\nany preliminary prospectus or final prospectus contained in the Registration\nStatement or any amendment or supplement to the Registration Statement or (ii)\narise out of or are based upon any omission or alleged omission to state a\nmaterial fact required to be stated therein or necessary to make the statements\ntherein not misleading, if the statement or omission was made in reliance upon\nand in conformity with information relating to such Selling Stockholder\nfurnished in writing to the Company by or on behalf of such Selling Stockholder\nspecifically for use in connection with the preparation of such Registration\nStatement, prospectus, amendment or supplement; provided, however, that the\nobligations of a Selling Stockholder hereunder shall be limited to an amount\nequal to the net proceeds to such Selling Stockholder of Registrable Shares sold\nin connection with such registration.\n\n     (c)  Each party entitled to indemnification under this Section 2.5 (the\n\"INDEMNIFIED PARTY\") shall give notice to the party required to provide\nindemnification (the \"INDEMNIFYING PARTY\") promptly after such Indemnified Party\nhas actual knowledge of any claim as to which indemnity may be sought and shall\npermit the Indemnifying Party to assume the defense of any such claim \n\n                                       8\n\n \nor any litigation resulting therefrom; provided, that counsel for the\nIndemnifying Party, who shall conduct the defense of such claim or litigation,\nshall be approved by the Indemnified Party (whose approval shall not be\nunreasonably withheld); and, provided, further, that the failure of any\nIndemnified Party to give notice as provided herein shall not relieve the\nIndemnifying Party of its obligations under this Section 2.5 except to the\nextent that the Indemnifying Party is adversely affected by such failure. The\nIndemnified Party may participate in such defense at such Indemnified Party's\nexpense; provided, however, that the Indemnifying Party shall pay such expense\nif representation of such Indemnified Party by the counsel retained by the\nIndemnifying Party would be inappropriate due to actual or potential differing\ninterests between the Indemnified Party and any other party represented by such\ncounsel in such proceeding; provided further that in no event shall the\nIndemnifying Party be required to pay the expenses of more than one law firm per\njurisdiction as counsel for the Indemnified Party. The Indemnifying Party also\nshall be responsible for the expenses of such defense if the Indemnifying Party\ndoes not elect to assume such defense. No Indemnifying Party, in the defense of\nany such claim or litigation shall, except with the consent of each Indemnified\nParty, consent to entry of any judgment or enter into any settlement which does\nnot include as an unconditional term thereof the giving by the claimant or\nplaintiff to such Indemnified Party of a release from all liability in respect\nof such claim or litigation, and no Indemnified Party shall consent to entry of\nany judgment or settle such claim or litigation without the prior written\nconsent of the Indemnifying Party, which consent shall not be unreasonably\nwithheld.\n\n     (d)  In order to provide for just and equitable contribution in\ncircumstances in which the indemnification provided for in this Section 2.5 is\ndue in accordance with its terms but for any reason is held to be unavailable to\nan Indemnified Party in respect to any losses, claims, damages and liabilities\nreferred to herein, then the Indemnifying Party shall, in lieu of indemnifying\nsuch Indemnified Party, contribute to the amount paid or payable by such\nIndemnified Party as a result of such losses, claims, damages or liabilities to\nwhich such party may be subject in such proportion as is appropriate to reflect\nthe relative fault of the Company on the one hand and the Selling Stockholders\non the other in connection with the statements or omissions which resulted in\nsuch losses, claims, damages or liabilities, as well as any other relevant\nequitable considerations. The relative fault of the Company and the Selling\nStockholders shall be determined by reference to, among other things, whether\nthe untrue or alleged untrue statement of material fact related to information\nsupplied by the Company or the Selling Stockholders and the parties' relative\nintent, knowledge, access to information and opportunity to correct or prevent\nsuch statement or omission. The Company and the Stockholders agree that it would\nnot be just and equitable if contribution pursuant to this Section 2.5 were\ndetermined by pro rata allocation or by any other method of allocation which\ndoes not take account of the equitable considerations referred to above.\nNotwithstanding the provisions of this Section 2.5(d), (a) in no case shall any\none Selling Stockholder be liable or responsible for any amount in excess of the\nnet proceeds received by such Selling Stockholder from the offering \n\n\n                                       9\n\n \nof Registrable Shares and (b) the Company shall be liable and responsible for\nany amount in excess of such proceeds; provided, however, that no person guilty\nof fraudulent misrepresentation (within the meaning of Section 11(f) of the\nSecurities Act) shall be entitled to contribution from any person who was not\nguilty of such fraudulent misrepresentation. Any party entitled to contribution\nwill, promptly after receipt of notice of commencement of any action, suit or\nproceeding against such party in respect of which a claim for contribution may\nbe made against another party or parties under this Section 2.5(d), notify such\nparty or parties from whom contribution may be sought, but the omission so to\nnotify such party or parties from whom contribution may be sought shall not\nrelieve such party from any other obligation it may have thereunder or otherwise\nunder this Section 2.5(d). No party shall be liable for contribution with\nrespect to any action, suit, proceeding or claim settled without its prior\nwritten consent, which consent shall not be unreasonably withheld.\n\n     2.6  Other Matters with Respect to Underwritten Offerings.  In the event\nthat Registrable Shares are sold pursuant to a Registration Statement in an\nunderwritten offering pursuant to Section 2.1, the Company agrees to enter into\nan underwriting agreement containing customary representations and warranties\nwith respect to the business and operations of the Company and customary\ncovenants and agreements to be performed by the Company, including without\nlimitation customary provisions with respect to indemnification by the Company\nof the underwriters of such offering.\n\n     2.7  Information by Holder.  Each Selling Stockholder shall furnish to the\nCompany such information regarding such Selling Stockholder and the distribution\nproposed by such Selling Stockholder as the Company may reasonably request in\nwriting and as shall be required in connection with any registration,\nqualification or compliance referred to in this Agreement.\n\nIII.  General.\n\n     3.1  Severability.  The invalidity or unenforceability of any provision of\nthis Agreement shall not affect the validity or enforceability of any other\nprovision of this Agreement.\n\n     3.2  Specific Performance.  In addition to any and all other remedies that\nmay be available at law in the event of any breach of this Agreement, each\nPurchaser shall be entitled to specific performance of the agreements and\nobligations of the Company hereunder and to such other injunctive or other\nequitable relief as may be granted by a court of competent jurisdiction.\n\n     3.3  Transfers of Rights.  The rights and obligations of the Purchasers\nunder Section 2 may be assigned by either Purchaser to any person or entity that\nacquires shares of Common Stock having an aggregate value of at least $2,500,000\n(as adjusted in stock splits and similar events) from such Purchaser.  In the\nevent of any such assignment, the assignee must provide written notice of \n\n                                      10\n\n \nsuch assignment to the Company and agree in writing to be bound by the\napplicable provisions of this Agreement.\n \n     3.4  Governing Law.  This Agreement shall be governed by and construed in\naccordance with the laws of the state of New York.\n\n     3.5  Notices.  All notices, requests and other communications to any party\nhereunder shall be in writing (including prepaid overnight courier, facsimile\ntransmission or similar writing) and shall be given to such party at its address\nor facsimile number set forth below or at such other address or facsimile number\nas such party may hereafter specify for the purpose by notice to the Company.\n\nIf to the Company to:                   NaviSite, Inc.\n                                        400 Minuteman Road\n                                        Andover, MA 01810\n                                        Attention:  General Counsel\n                                        Facsimile:  (978) 682-8100\n\nIf to CFS to:                           Compaq Financial Services Corporation\n                                        420 Mountain Avenue\n                                        Murray Hill, NJ 07974\n                                        Attention :  General Counsel\n                                        Facsimile: (908) 898-4137\n\nWith a copy to:                         Davis Polk &amp; Wardwell\n                                        450 Lexington Avenue\n                                        New York, New York  10017\n                                        Attention:  Chris Mayer\n                                        Fax:  (212) 450-4800\n\nIf to CMGI to:                          CMGI, Inc.\n                                        100 Brickstone Square\n                                        Andover, MA 01810\n                                        Attention:  General Counsel\n                                        Facsimile:  (978) 684-3601\n\nWith a copy to:                         Hale and Dorr LLP\n                                        60 State Street\n                                        Boston, MA 02109\n                                        Attention:  Mark G. Borden, Esq.\n                                        Facsimile:  (617) 526-5000\n\n\n\n                                      11\n\n \nEach such notice, request or other communication shall be effective (i) when\ndelivered to such party at its address specified above, (ii) when sent to such\nparty by facsimile, addressed to it at its facsimile number specified above, and\nsuch party sends back an electronic confirmation of receipt, or (iii) ten days\nafter being sent to such party by certified or registered United States mail,\naddressed to it at its address specified below, with first class or airmail\npostage.\n\n     3.6  Complete Agreement.  This Agreement constitutes the entire agreement\nand understanding of the parties hereto with respect to the subject matter\nhereof and supersedes all prior agreements and understandings relating to such\nsubject matter.\n\n     3.7  Amendments and Waivers.  Any term of this Agreement may be amended or\nterminated and the observance of any term of this Agreement may be waived\n(either generally or in a particular instance and either retroactively or\nprospectively) with the written consent of the Company and the Purchasers.\n\n     3.8  Pronouns.  Whenever the context may require, any pronouns used in this\nAgreement shall include the corresponding masculine, feminine or neuter forms,\nand the singular form of nouns and pronouns shall include the plural, and vice\nversa.\n\n     3.9  Counterparts; Facsimile Signatures.  This Agreement may be executed in\ntwo counterparts, each of which shall be deemed to be an original, and both of\nwhich together shall constitute one and the same document. This Agreement may be\nexecuted by facsimile signatures.\n\n     3.10  Section Headings.  The section headings are for the convenience of\nthe parties and in no way alter, modify, amend, limit or restrict the\ncontractual obligations of the parties.\n\n                                      12\n\n \n     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of\nthe date first written above.\n\n                                        NAVISITE, INC.\n\n\n                                        By:\n                                            ----------------------------------\n                                            Name:\n                                            Title:\n\n\n                                        COMPAQ FINANCIAL SERVICES\n                                          CORPORATION\n\n\n                                        By:\n                                            ----------------------------------\n                                            Name:\n                                            Title:\n\n\n                                        CMGI, INC.\n\n\n                                        By:\n                                            ----------------------------------\n                                            Name:\n                                            Title:\n\n\n\n                                      13\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7128,7162,8309],"corporate_contracts_industries":[9508,9513,9417],"corporate_contracts_types":[9560,9567],"class_list":["post-41181","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-cmgi-inc","corporate_contracts_companies-compaq-computer-corp","corporate_contracts_companies-navisite-inc","corporate_contracts_industries-technology__hardware","corporate_contracts_industries-technology__software","corporate_contracts_industries-financial__holding","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41181","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41181"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41181"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41181"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41181"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}