Vice President-sales Employment Agreement

BREAKAWAY SOLUTIONS, INC.


February 17, 1999


Mr. Christopher Harding 901 Stonington Road Shavertown, PA 18708


Dear Christopher:


BreakAway Solutions, Inc. (the "Company") is pleased to offer you the position of Senior Vice President - Sales and Field Marketing of the Company (the "Position") subject to the terms and conditions set forth in this letter agreement ("Agreement"). In consideration of the mutual agreements set forth below, you and the Company agree to the following:


1. EFFECTIVE DATE; TERM; EFFECT OF TERMINATION OF THIS AGREEMENT,


(a) EFFECTIVE DATE. This Agreement shall be effective upon the Company's receipt of a copy of this Agreement originally executed by you (such date being referred to as the "Effective Date") until March 1, 2001 (the "Employment Period") unless sooner terminated by you or the Company in accordance with this Agreement. This Agreement shall automatically renew for a successive two year term expiring March 1, 2003. unless wither party provides written notice of noon-renewal to the other party on or prior to February 1, 2001. In connection with your execution of this Agreement, you agree that, upon request of the Company, you shall provide proof of your legal right to work in the United States as required by the U.S. Immigration and Naturalization Service. If you are not a U.S. citizen or U.S. permanent resident, you will be required either to sign an assurance regarding obligations not to export technical data or software to certain countries, or to comply with the requirements of subsection 6(a) below to the extent applicable to you.


(b) EFFECT OF TERMINATION OF THIS AGREEMENT. Termination of your employment with the Company shall terminate this Agreement. Following termination of this Agreement, this Agreement shall become null and void and no party hereto (or any of their respective directors, officers or employees) shall have any liability or further obligation to any other party under this Agreement, except as provided in this Section 1(b) and Sections 3, 4, 5 or 6 of this Agreement, or as provided in the Option Agreement referenced in Section 3. Nothing contained in this Section 1 shall relieve any party from liability for any breach of this Agreement occurring prior to any termination.


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2. POSITION, DUTIES AND DURATION OF ASSIGNMENT. You will serve in the Position with such duties and responsibilities that exist as of the Effective Date, and/or as may later be reasonably assigned by the President of the Company, provided the duties are commensurate with the duties and responsibilities of Senior Vice President-Sales and Field Marketing of companies that are of comparable size and in comparable industries to the Company. You will report directly to the President. You will devote all of your business time, skill, attention and best efforts to the Company's business and to discharge and fulfill the responsibilities assigned to you by the COmpany during your employment. You shall not render services to any other person or entity without the prior written consent of the Company, and you shall not engage in any activity which conflicts or interferes with the performance of the duties and responsibilities of the Position.


3. COMPENSATION AND BENEFITS


(a) SALARY. During your employment and commencing with your first day of work for the Company (which we agree shall be on or before March 1, 1999; the "Start Date"), you will receive a base salary of $9,1667.67 per pay period (which is equivalent to an annual base salary of $220,000 paid out over 24 pay periods per year) ("Base Salary"), in accordance with the semi-monthly payment schedule now being employed by the COmpany. During the Employment Period, the Base Salary shall be reviewed at least annually by the Company' Board of Directors after consultation with you and may from time to time be increased as determined by the Board of Directors. Effective as of the date of any such increase, the Base Salary as so increased shall be considered the new Base Salary for all purposes of this Agreement and may not thereafter be reduced. Any increase in Base Salary shall not limit or reduce any other obligation of the Company to you under this Agreement. The Company will make such deductions, withholdings, and other payments from sums payable pursuant to this Agreement which are required by law for taxes and other charges, or which you request pursuant to payroll deductions chose by you. In the even of your death, the Company will make all salary payments which are accrued and not yet paid as of the date of your death to your legal representative. All dollar amounts stated in this and all other Sections of this Agreement refer to United States currency.


(b) BONUSES. You will receive a bonus of $50,000 payable on the Start Date (the "Starting Bonus"). In addition, at the end of the first year of your employment, you will be eligible to receive a target bonus of 30% of your base salary based on Company profitability, as determined in accordance with the COmpany's Profit Sharing Plan.


(c) STOCK OPTION. Subject to approval by the Board of Directors, you will be granted, as of your Start Date, an incentive stock option under the COmpany's 1998 Stock Option Plan (the "Stock Option Plan") to purchase up to 757,813 shares of the Company's common stock, $.0001 par value per share (the "Common Stock") (or such greater amount, if any, which shall be equal to four percent (4%) of the common stock of the Company outstanding on the Start Date), at an exercise price equal to the then current


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fair market value per share of the Common Stock as determined by the Board of Directors, pursuant to a separate stock option agreement substantially in the form attached hereto as Exhibit A, with such changes as you and the Company mutually agree upon (provided, however, that to the extent any provision of such exhibit is inconsistent with an express provision contained in this Agreement, this Agreement shall prevail and the form of option agreement shall be appropriately revised). Notwithstanding the foregoing, if applicable tax laws or regulations limit the number of options which may be granted as incentive stock options, then the balance of such options shall be granted as "non-qualified stock options" and the company shall issue to you one or more separate non-qualified stock option agreements substantially in the form attached hereto as Exhibit B with respect to such options, with such changes as you and the company mutually agree upon (provided, however, that to the extent any provision of such exhibit is inconsistent with a express provision contained in this Agreement, this Agreement shall prevail and the form of option agreement shall be appropriately revised). Although the company and you intend that the stock options described above be in lieu of normal or other option grants through the end of March, 2001, the Board of Directors may at any time in its discretion consider you for possible future annual or other grants of options and commencing April, 2001, shall at least once during each year consider you for a grant of additional options.


(ii) the stock option agreement shall provide that, subject to Section 5(b) below, (A) 378,907 shares will be vested on the Start Date, (B) the remaining shares will vest in 36 equal monthly installments commencing on the first anniversary of the Start Date, over a period of three years after such first anniversary date, and (C) all unvested shares shall immediately become vested in full upon the occurrence of a Triggering Event (as defined below).


"Triggering Event" means immediately prior to the occurrence of any of the following events: (a) a public offering by the Company of shares of its common stock, (b) a sale of all or substantially all of the Company's assets or all or substantially all of the shares of its capital stock, (c) a consolidation or merger of the Company in which a majority of outstanding shares of the Company's capital stock are exchanged for securities, cash or other property of any other corporation or business entity, (d) a consolidation or merger involving the Company as a result of which the the stockholders of the Company immediately prior to such event do not own immediately following the occurrence of such event, at least a majority of the common stock and voting power of the entity resulting from such consolidation or surviving such merger, or (e) the liquidation or dissolution of the Company. In addition, if the Company or stockholders of the Company enter into an agreement with respect to an event described in (b) thorough (e) of the preceding sentence, then upon the consummation of such event a Triggering Event shall be deemed to have occurred upon the date of such agreement.


(iii) The stock option agreement shall also contain a right of first refusal and a repurchase obligation in favor of the company upon termination of your employment. Upon termination of your employment. Upon termination of your employment, the Company shall repurchase all your Company stock and vested options at the fair market value as of the date of


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termination. If the Company stock is not then publicly traded on a recognized stock exchange, the fair market value shall be determined in good faith by the Company's Board of Directors, and the Company shall notify you in writing of such valuation. If you dispute the fair market value so determined, you shall notify the Company in writing within 5 days after the Company's notice. You and the Company agree in good faith to choose, within 10 days after your notice, a mutually acceptable appraiser to determine the fair market value. If you and the Company cannot agree on such appraiser, the appraiser shall be appointed by the American Arbitration Association in Boston and shall have expertise in valuing technology companies. Within 30 days after the appointment, the appraiser shall determine the fair market value of the stock and deliver a written report to the parties as to such appraisal. The appraiser's determination of fair market value of the stock shall be final and binding upon all parties. The costs of the appraiser shall be borne equally by you and the Company. The consideration paid by the Company for the exercise of its right of first refusal or its repurchase upon termination of your employment may include an interest-bearing promissory note from the Company having a term of no greater than five years.


(d) BENEFITS. You will be entitled to participate in or receive all benefits under the Company's employee benefit plans and policies as in effect from time to time and as are provided to senior management of the Company. The Company may change, amend, modify or completely eliminate any benefit plan from time to time.


(e) BUSINESS EXPENSES. You will be entitled to reimbursement for necessary and reasonable business expenses incurred by you in your employment with the Company in accordance with accounting procedures as the Company shall adopt from time to time, including but not limited to business class or first class air travel.


(f) RELOCATION EXPENSES. The Company will pay reasonable expenses incurred by you in order to relocate from New Jersey/Pennsylvania to ...