COMPLAINT FOR DECLARATORY RELIEF PURSUANT TO 8 DEL. C. § 225

Plaintiffs Allen Shaheen, Ernest Blackwelder, General Atlantic Partners 64, L.P. ("General Atlantic"), Greylock X Limited Partnership ("Greylock") and ArsDigita Corporation, a Delaware corporation (the "Company"), by and through their attorneys, Richards, Layton & Finger, P.A., for their complaint against defendants allege:

1. This is an action which seeks a declaration of the rights of the parties pursuant to Section 225 of the General Corporation Law. The action arises in connection with certain written consents of shareholders of the Company dated April 5, 2001 (the "Contested Consents"), which, on their face, violate a shareholders agreement between the parties; are in conflict with certain provisions of the Restated Certificate of Incorporation of the Company; and also impermissibly shift to shareholders core and non-delegable duties of the Board of Directors of this Delaware corporation.

2. The Company is a privately held software concern in which plaintiffs General Atlantic and Greylock have made substantial investments. The Company creates and sells enterprise software. Its principal executive offices are located in Cambridge, Massachusetts. Until recently, defendant Philip Greenspun was the Chief Executive Officer of the Company.
3. In March 2000, General Atlantic and Greylock invested substantial sums in the Company through the purchase of shares of convertible preferred stock. In connection with that investment, certain stockholders of the Company, including defendant Greenspun and non-party Jin S. Choi, entered into a stockholders agreement with the Company, General Atlantic and Greylock (the "Stockholders Agreement"). A copy of the Stockholders Agreement is attached hereto as Exhibit A.
4. The Stockholders Agreement is a contract which governs various aspects of the parties' relationship, including, inter alia, the governance of the Company. The Stockholders Agreement imposes obligations and restrictions on stockholders who are signatories thereto. As set forth herein, the recent action of defendant Greenspun in purporting to act by written consent is in direct violation of the Stockholders Agreement.
5. In connection with their decision to invest in the Company, both General Atlantic and Greylock relied upon the protections, covenants and agreements set forth in the Stockholders Agreement. The breaches of that agreement alleged herein are material and continuing.

6. Plaintiff Allen Shaheen is a director, Chief Executive Officer and President of the Company. The Contested Consents purport to remove Shaheen as a director and Chief Executive Officer of the Company and to demote him to President.
7. Plaintiff Ernest Blackwelder is a director and employee of the Company and its Chief Operating Officer. The Contested Consents purport to remove Blackwelder as a director of the Company.
8. Plaintiff General Atlantic is a stockholder of the Company and a signatory to the Stockholders Agreement.
9. Plaintiff Greylock is a stockholder of the Company and a signatory to the Stockholders Agreement.
10. Plaintiff ArsDigita Corporation is a signatory to the Stockholders Agreement.
11. Defendant Philip Greenspun is a stockholder of the Company and a signatory to the Stockholders Agreement. The Contested Consents purport to appoint Greenspun as Chief Executive Officer of the Company.
12. Defendant Eve A. Andersson was purportedly appointed as a director and Executive Vice President of the Company by the Contested Consents.
13. Defendant Tracy E. Adams was purportedly appointed as a director and Executive Vice President of the Company by the Contested Consents.

14. The Contested Consents purport to amend the by-laws of the Company in several material respects. The Contested Consents purport to: vest exclusive authority in the stockholders of the Company, rather than the Board of Directors, to elect the Chief Executive Officer and President of the Company, and the non-exclusive authority to elect one or more Executive Vice Presidents; vest exclusive authority in the stockholders of the Company, rather than the Board of Directors, to remove all officers elected by the stockholders; and impose a unanimity requirement at the Board of Directors level to change or repeal by-laws adopted by stockholders (the "Director Unanimity By-Law"). A copy of one of the Contested Consents is attached hereto as Exhibit B.

15. The Stockholders Agreement, dated March 27, 2000, was signed by both Plaintiff Philip Greenspun and non-party Jin S. Choi, both of whom executed the Contested Consents in this matter.
16. The Stockholders Agreement contains certain "corporate governance" provisions at Article 6.
17. Specifically, Section 6.6 (h) of the Stockholders Agreement unequivocably states that the Board of Directors of the Company may not, without the consent of the directors appointed by each of General Atlantic and Greylock, make "any material modification or restatement of the Charter Documents."
18. The Stockholders Agreement defines the term "Charter Documents" to include the by-laws of the Cmopany "as in effect on the date" of the agreement — March 27, 2000.
19. Neither the director appointed by General Atlantic nor the director appointed by Greylock has consented to the by-law amendments purportedly made by the Contested Consents.
20. Moreover, Section 6.1 of the Stockholders Agreement explicitly states:

    ...each Stockholder shall vote his or its Shares at any Stockholders Meeting or act by Written Consent with respect to such Shares, upon any matter submitted for action by the Company's stockholders or with respect to which such Stockholder may vote or act by Written Consent, in conformity with the specific terms and provisions of this Agreement and the Charter Documents.

    (Emphasis supplied).
21. As noted above, the use of the defined term "Charter Documents" refers to the by-laws of the Company in effect at the date of the Stockholders Agreement March 27, 2000. Thus, each of the stockholders bound by the Stockholders Agreement have expressly agreed to vote or to act by written consent only "in confirmity with" the by-laws of the Company "as in effect" on March 27, 2000.
22. On March 27, 2000, the by-laws in effect required that only the Board of Directors, not the stockholders, was empowered to elect and remove officers of the Company. (A copy of the by-laws of the Company in effect on March 27, 2000 is attached hereto as Exhibit C). Defendant Greenspun was contractually obligated to act in conformity with such by-laws.
23. The Stockholders Agreement also gives General Atlantic and Greylock certain specific veto rights with respect to the composition of the Board of Directors of the Company. Specifically, Section 6.3 of the Stockholders Agreement specifically provides that the signatories to the Stockholders Agreement will vote to assure that the Chief Executive Officer and two senior officers of the Company shall be included as members of the Board of Directors of the Company, and that two outside directors shall likewise be appointed to the Board. The Stockholders Agreement also makes clear, whoever, that the outside directors shall be "acceptable to the General Atlantic Stockholders, the Greylock Stockholders and the Board of Directors."
24. Since the Contested Consents are ineffective to elect the three defendants as officers of the Company, the election of such individuals as directors also violates the Stockholders Agreement since such individuals are not "acceptable" to Greylock and General Atlantic, and the Board of Directors of the Company has never been asked to determine whether the individuals are acceptable to the Board.

25. In addition to violating the express terms of the Stockholders Agreement, the Contested Consents also violate the bedrock principle reflected in Section 141 (a) of the General Corporation Law that directors, not stockholders, manage the business and affairs of the Company.
26. In particular, the Contested Consents purport to shift the "exclusive authority" to elect a Chief Executive Officer and a President to the stockholders of the Company, and expressly provide that the Board of Directors shall not have such authority.
27. In addition, the Contested Consents also purport to vest in the stockholders the right to set the term of office of officers elected by the stockholders.
28. Likewise, the Contested Consents shift the power to remove officers elected by the stockholders exclusively to the stockholders and expressly provide that the Board of Directors shall not have authority to remove such officers.
29. Finally, the Contested Consents shift the power to fill vacancies in corporate officerships to the stockholders of the Company, if the vacant officership is one which was originally filled by stockholder action.

30. Moreover, the Contested Consents are also in express conflict with the Restated Certificate of Incorporation of the Company and void for that reason, as well.
31. Specifically, Article V of the Restated Certificate of Incorporation of the Company provides that the Board of Directors "is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of this corporation." (Emphasis supplied). The Company's Restated Certificate of Incorporation is attached hereto as Exhibit D.
32. In contrast to the certificate's express grant of authority to rescind "any or all" of the by-laws, the Contested Consents purport to amend Article XI of the By-Laws of the Company, related to amendments, such that Article XI itself may be "altered, amended, changed or repealed only by vote of the stockholders." Thus, the Contested Consents are in direct conflict with the Company's Restated Certificate of Incorporation and invalid as a matter of law.

33. The Contested Consents also purport to impose a unanimity requirement on Board action taken to amend by-laws. The Director Unanimity By-Law is not reasonable or equitable in the circumstances and improperly removes the power to amend by-laws from a majority of a quorum of the Board of Directors, thus effectively giving any one member of the Board the right to veto such action.

34. The allegations of paragraphs 1-33 of the Complaint are incorporated by reference as if fully set forth herein.
35. For the reasons set forth above, the Contested Consents constitute a material breach of the contractual rights of Plaintiffs General Atlantic, Greylock and the Company.
36. By reason of the foregoing facts and circumstances, Plaintiffs are entitled to a declaration that the action of the defendants in delivering the Contested Consents was invalid and a breach of the contractual rights of Plaintiffs.
37. Upon information and belief, Defendants contest Plaintiffs' right to the declaratory relief sought herein, and an actual controversy exists between the parties.

38. The allegations of paragraphs 1-37 of the Complaint are incorporated by reference as if fully set forth herein.
39. For the reasons set forth above, the Contested Consents, even if not otherwise in breach of the Stockholders Agreement, unlawfully arrogate non-delegable duties and powers of the Board of Directors of the Company to the stockholders of the Company, and therefore violate the General Corporation Law of the State of Delaware.
40. Upon information and belief, the Defendants contest Plaintiffs' right to the declaratory relief sought herein, and an actual controversy exists between the parties.

41. The allegations of paragraphs 1-40 of the Complaint are incorporated by reference as if fully set forth herein.
42. As set forth above, the Contested Consents purport to amend the by-laws of the Company in a manner which is facially inconsistent with and violative of the Restated Certificate of Incorporation of the Company. The Contested Consents are void on this basis, as well.
43. Upon information and belief, Defendants contest Plaintiffs' right to the declaratory relief sought herein, and an actual controversy exists between the parties.

44. The allegations of paragraphs 1-43 of the Complaint are incorporated by reference as if fully set forth herein.
45. As set forth above, the Director Unanimity By-law is unreasonable in the circumstances, and effectively transfers veto power over any and all actions required to be taken by the Board to defendants or any one of them. Accordingly, the Director Unanimity By-Law not only violates the governance scheme set forth in the General Corporation Law it is also invalid as unreasonable and inequitable in application.
46. Upon information and belief, Defendants contest Plaintiffs' right to the declaratory relief sought herein, and an actual controversy exists between the parties.

WHEREFORE, Plaintiffs hereby demand that the Court enter its Orders, Judgments and Decrees:

1. Declaring that the Contested Consents are in breach of contract and for that reason void or in the alternative ordering specific performance of the Stockholders Agreement;
2. Declaring that the Contested Consents are void as violative of the General Corporation Law of the State of Delaware;
3. Declaring that the Contested Consents are void in that they create a by-law which is in conflict with the Restated Certificate of Incorporation of the Company;
4. Declaring that the Director Unanimity By-Law is unreasonable, inequitable and void as a matter of law and equity;
5. Awarding Plaintiffs damages as may be proven at trial in respect of Defendants' breach of the Stockholders Agreement;
6. Awarding Plaintiffs their costs and fees in prosecuting this action, including the their attorneys' fees;
7. Awarding Plaintiffs pre and post judgment interest on any and all amounts awarded to them; and
8. Granting Plaintiffs such other and further relief as may be just or equitable in the circumstances.

	Gregory V. Varallo
OF COUNSEL:	Richard P. Rollo
	Richards, Layton & Finger, P.A.
Steven B. Rosenfeld	One Rodney Square
Paul, Weiss, Rifkind	Wilmington, DE 19899
Wharton & Garrison	Attorneys for Plaintiffs
1285 Avenue of the Americas
New York, New York  10019

Dated: April 11, 2001

1. Stockholders Agreement among ArsDigita Corporation, General Atlantic Partners 64, L.P., Gap Coinvestment Partners II, L.P., Greylock X Limited Partnership, Greylock X-A Limited Partnership and Certain Other Stockholders, dated March 27, 2000.
2. ArsDigita Corporation Action of Stockholders by Written Consent, dated April 5, 2001.
3. By-Laws of ArsDigita Corporation, dated March 24, 2000. ]