4 1 y57591ae4.txt FORM 4 FOR FEBRUARY, 2002 --------------------------- OMB APPROVAL --------------------------- ------ OMB Number: 3235-0287 FORM 4 Expires: December 31, 2001 ------ Estimated average burden hours per response .... 0.5 --------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP / / Check this box if no longer subject to Filed pursuant to Section 16(a) of the Securities Section 16. Form 4 Exchange Act of 1934, Section 17(a) of the or Form 5 obligations Public Utility Holding Company Act of 1935 may continue. See or Section 30(f) of the Investment Company Instruction 1(b). Act of 1940 (Print or Type Responses) ------------------------------------------------------------------------------------------------------------------------------------ 1. Name and Address of Reporting Person* 2. Issuer Name and Ticker or Trading Symbol 6. Relationship of Reporting Person(s) Insight Venture Capital Partners IV, L.P. Exchange Applications, Inc. (EXAP) to Issuer (Check all applicable) ------------------------------------------------------------------------------------------ Director X 10% Owner (Last) (First) (Middle) 3. I.R.S. Identification 4. Statement for ---- --- Number of Reporting Month/Year Officer (give Other (specify 680 Fifth Avenue Person, if any entity February 2002 ---- title --- below) --------------------------------------------- (Voluntary) ---------------- below) (Street) ---------------------------- ---------------------------------------------------------- 5. If Amendment, 7. Individual or Joint/Group Filing Date of Original (Check Applicable Line) (Month/Year) Form filed by One ---- Reporting Person X Form filed by More than New York, NY 10019 ---- One Reporting Person ------------------------------------------------------------------------------------------------------------------------------------ (City) (State) (Zip) TABLE I -- NON-DERIVATIVE SECURITIES ACQUIRED, DISPOSED OF, OR BENEFICIALLY OWNED ------------------------------------------------------------------------------------------------------------------------------------ 1. Title of Security 2. Trans- 3. Transac- 4. Securities Acquired (A) 5. Amount of Se- 6. Owner- 7. Nature (Instr. 3) action tion or Disposed of (D) curities Benefi- ship of In- date Code (Instr. 3, 4 and 5) cially Owned at Form: direct (Instr. 8) End of Month Direct Benefi- (Month/ (Instr. 3 and 4) (D) or cial Day/ --------------------------------------- Indirect Owner- Year) Code V Amount (A) or Price (I) ship (D) (Instr. 4) (Instr. 4) ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. (Over) * If the form is filed by more than one reporting person, see Instruction 4(b)(v). SEC 1474 (7-97)

6FORM 4 (CONTINUED) TABLE II -- DERIVATIVE SECURITIES ACQUIRED, DISPOSED OF, OR BENEFICIALLY OWNED (E.G., PUTS, CALLS, WARRANTS, OPTIONS, CONVERTIBLE SECURITIES) ------------------------------------------------------------------------------------------------------------------------------------ 1. Title of Derivative 2. Conver- 3. Trans- 4. Trans- 5. ~~Owner~~Number of 6. Date Exer- 7. Title and Amount 8. Price Security sion or action action Derivative cisable and of Underlying of (Instr. 3) Exercise Date Code Securities ~~Acquired~~Ac- Expiration Securities Deriv- Price of (Month/ (Instr. 8) quired (A) or ~~Amount~~Date of(Instr. ~~ship~~ 3. and 4) ative Deriv- Day/ Disposed of (D) ~~Securities~~(Month/Day/ ~~Form:~~Secur- 7.ative ~~Transaction~~Year) (Instr. 3, 4, Year) ity Security and 5) ~~Beneficially~~(Instr. ~~Direct~~5) ~~Nature~~----------------------------------- ofDate 2.Expira- ~~Code~~Amount or -------------------------- Exer-- ~~Owned~~tion atTitle ~~End~~Number of Code V (A) (D) orcisable ~~Indirect~~Date 1Shares ------------------------------------------------------------------------------------------------------------------------------------ Series A Convertible .32103(6) ~~Transaction~~12/31/01 J(~~Instr~~5) 593,151 Immed. 8N/A Common 593,151 (5)(6) Redeemable Preferred Stock Stock (1)(5) ------------------------------------------------------------------------------------------------------------------------------------ Series A Convertible .32103(6) of12/31/01 ~~Month~~J(5) ~~Indirect~~81,526 ~~Beneficial~~Immed. ~~Title~~N/A ofCommon ~~Security~~81,526 ~~date~~(5)(6) Redeemable Preferred Stock Stock (2)(5) ------------------------------------------------------------------------------------------------------------------------------------ ~~Amount~~Series orA ~~Price~~Convertible ~~(Instr~~.32103(6) 312/31/01 J(I5) ~~Ownership~~93,897 ~~(Instr~~Immed. N/A Common 93,897 (5)(6) Redeemable Preferred Stock Stock (3)(5) ------------------------------------------------------------------------------------------------------------------------------------ Series A Convertible .32103(~~Month~~6) 12/~~Day~~31/~~Year~~01 J(5) ~~Code~~5,107 VImmed. N/A Common 5,107 (D5)(6) ~~and~~Redeemable Preferred Stock Stock (4) (~~Instr~~5) ------------------------------------------------------------------------------------------------------------------------------------ Senior Secured .43183(8) 12/31/01 J(~~Instr~~7) 2,785,111 Immed. 41/10/05 Common 2,785,111 (7)(8) Convertible Debentures Stock (1)(7) ------------------------------------------------------------------------------------------------------------------------------------ Senior Secured .3183(8) 12/31/01 J(7) 382,802 Immed. 1/10/05 Common 382,802 (7)(8) Convertible Debentures Stock (2)(7) ------------------------------------------------------------------------------------------------------------------------------------ Senior Secured .3183(8) 12/31/01 J(7) 440,888 Immed. 1/10/05 Common 440,888 (7)(8) Convertible Debentures Stock (3)(7) ------------------------------------------------------------------------------------------------------------------------------------ Senior Secured .3183(8) 12/31/01 J(7) 23,978 Immed. 1/10/05 Common 23,978 (7)(8) Convertible Debentures Stock (4)(7) ------------------------------------------------------------------------------------------------------------------------------------ 1. Title of Derivative 9. Number of 10. Ownership 11. Nature of Security Derivative Form of Indirect (Instr. 3) Securities Derivative Beneficial Beneficially Security: Ownership Owned at End Direct (D) (Instr. 4) of Month or Indirect (I) (Instr. 4) (Instr. 4) ------------------------------------------------------------------------------------------------------------------------------------ Series A Convertible D Redeemable Preferred Stock (1)(5) ------------------------------------------------------------------------------------------------------------------------------------ Series A Convertible D Redeemable Preferred Stock (2)(5) ------------------------------------------------------------------------------------------------------------------------------------ Series A Convertible D Redeemable Preferred Stock (3)(5) ------------------------------------------------------------------------------------------------------------------------------------ Series A Convertible D Redeemable Preferred Stock (4)(5) ------------------------------------------------------------------------------------------------------------------------------------ Senior Secured D Convertible Debentures (1)(7) ------------------------------------------------------------------------------------------------------------------------------------ Senior Secured D Convertible Debentures (2)(7) ------------------------------------------------------------------------------------------------------------------------------------ Senior Secured D Convertible Debentures (3)(7) ------------------------------------------------------------------------------------------------------------------------------------ ~~====================================================================================================================================~~Senior Secured D Convertible Debentures (4)(7) ------------------------------------------------------------------------------------------------------------------------------------

2 INSIGHT VENTURE ASSOCIATES IV, LLC By: /s/ Deven Parekh --------------------------- Name: Deven Parekh Title: Managing Partner Explanation of Response **Signature of Reporting Person In accordance with Instruction 4(b)(v), this statement is being filed by Insight Venture Associates IV, LLC, ("Insight Venture") as the designated filer on behalf of each of the joint filers listed on the Joint Filer Information Schedule attached hereto (collectively, "Insight IV", William Doyle, Scott Maxwell, Jeffrey Horing, Peter Sobiloff, Jerry Murdock, Deven Parekh and Roel Pieper (collectively, the "Managing Directors" together with Insight Venture and Insight IV the "Reporting Persons")). Insight Venture is managed by the Managing Directors. Each of the Managing Directors disclaims beneficial ownership of any Securities owned by Insight IV, except to the extent of their pecuniary interest therein, if any. (1) The Securities reported herein as being acquired or disposed of are or were owned of record by Insight Venture Associates IV, L.P. (2) The Securities reported herein as being acquired or disposed of are or were owned of record by Insight Venture Partners (Cayman) IV, L.P. (3) The Securities reported herein as being acquired or disposed of are or were owned of record by Insight Venture Partners IV (Co-Investors) L.P. (4) The Securities reported herein as being acquired or disposed of are or were owned of record by Insight Venture Partners IV (Fund B) L.P. (5) On January 10, 2001, the Issuer issued to Insight IV 5,325,645 shares of its Series A Convertible Redeemable Preferred Stock, par value $.001 per share (the "Preferred Stock"), for an aggregate purchase price of $6,725,224.51, which aggregate purchase price represents a per share purchase price of $1.2628. Dividends on the Preferred Stock accrue daily and compound quarterly on the original purchase price of the Preferred Stock at an annual rate equal to 10%. Such dividends are added to the original purchase price of the Preferred Stock. Insight IV may at any time convert all or part of the Preferred Stock, and any accrued and unpaid dividends thereon, into the number of shares of Common Stock equal to the quotient obtained by dividing (i) the stated amount of the Preferred Stock, plus any accrued and unpaid dividends thereon, by (ii) a conversion price of $1.2628 per share, as such price shall be adjusted from time to time (the "Conversion Price"). The shares reported herein represent only those shares acquired by Insight IV as a result of accrued by unpaid dividends which can be converted into Common Stock at the option of Insight IV. (6) The conversion price of the Preferred Stock is $.32103 (7) On July 26, 2001, the Issuer and its wholly-owned subsidiary Exstatic Software, Inc., a Washington corporation ("Exstatic"), jointly issued to Insight IV (i) a $7,241,307.37 million principal amount 12% Senior Subordinated Convertible Debenture (the "Note Debenture") and (ii) a $5.0 million principal amount 12% Senior Subordinated Convertible Debenture (the "Wire Debenture" together with the Note Debenture the "Convertible Debenture"). In consideration for the Debenture, Insight IV surrendered the June Note, and all accrued and unpaid interest thereon, and as a result thereof, the June note has been cancelled. On January 10, 2005 the Convertible Debentures become due and are payable in full by the Issuer in cash. As a result thereof, the Reporting Persons will, after January 10, 2005, no longer have the option of converting the Convertible Debentures into Common Stock. On August 29, 2001 the Wire Debenture was amended and restated (the "Amended and Restated Wire Debenture") and the Note Debenture was restated (the "Amended and Restated Note Debenture") to have principal amounts of $5,055,890 and $7,322,251.30 respectively and to have identical terms to the August 29 Debenture (as defined below). On August 29, 2001, the Issuer and Exstatic, jointly issued to Insight IV $1,000,000.00 million principal amount 12% Senior Subordinated Convertible Debenture (the "August 29 Debenture" together with the Amended and Restated Note Debenture and the Amended and Restated Wire Debenture, the "Amended Convertible Debentures"). The shares reported herein represent only those shares acquired by Insight IV as a result of accrued but unpaid interest which can be converted into Common Stock at the option of Insight IV. (8) Interest accrues daily and compounds quarterly on each of the Amended Convertible Debentures at an annual rate equal to 20% (the 20% interest rate is due to a default under the Convertible Debentures, after the Issuer remedies the default, the interest rate will return to 12%) and is payable, at the Issuer's and Exstatic's option, in either cash or additional Amended Convertible Debentures. Insight IV may convert at any time each Amended Convertible Debenture, and any accrued and unpaid interest thereon, into the number of shares of Common Stock equal to the quotient obtained by dividing (x) the sum of (1) the product of (A) the principal amount of such Amended Convertible Debenture and (B) 103% plus (2) any accrued and unpaid interest thereon, by (y) .3183, as such price may be amended from time to time (the "Conversion Price"). ** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a). 3 Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure. 4 JOINT FILER INFORMATION Name: InSight Ventures Partners IV, L.P. (f/k/a InSight Capital Partners, IV, L.P.) Address: 680 Fifth Avenue New York, NY 10022 Designated Filer: InSight Ventures Associates IV, LLC Issuer & Ticker Symbol: Exchange Applications, Inc. (EXAP) Date of Event: February 14, 2002 Signature: /s/ Deven Parekh Name: InSight Venture Partners (Cayman) IV, L.P. (f/k/a InSight Capital Partners, (Cayman) IV, L.P.) Address: 680 Fifth Avenue New York, NY 10022 Designated Filer: InSight Ventures Associates IV, LLC Issuer & Ticker Symbol: Exchange Applications, Inc. (EXAP) Date of Event: February 14, 2002 Signature: /s/ Deven Parekh Name: InSight Venture Partners IV (Fund B), L.P. (f/k/a InSight Capital Partners IV (Fund B), L.P. Address: 680 Fifth Avenue New York, NY 10022 Designated Filer: InSight Ventures Associates IV, LLC Issuer & Ticker Symbol: Exchange Applications, Inc. (EXAP) Date of Event: February 14, 2002 Signature: /s/ Deven Parekh Name: InSight Venture Partners IV (Co-Investors), L.P. (f/k/a InSight Capital Partners IV (Co-Investors), L.P. Address: 680 Fifth Avenue New York, NY 10022 Designated Filer: InSight Ventures Associates IV, LLC Issuer & Ticker Symbol: Exchange Applications, Inc. (EXAP) Date of Event: February 14, 2002 Signature: /s/ Deven Parekh 5

10. 9. Owner- Number ship of Form 2. Deriv- of Conver- 5. 7. ative Deriv- 11. sion Number of Title and Amount Secur- ative Nature or Derivative 6. of Underlying 8. ities Secur- of Exer- 4. Securities Date Securities Price Benefi- ity: In- cise 3. Trans- Acquired (A) Exercisable and (Instr. 3 and 4) of cially Direct direct Price Trans- action or Disposed Expiration Date ----------------- Deriv- Owned (D) or Bene- 1. of action Code of(D) (Month/Day/Year) Amount ative at End In- ficial Title of Deriv- Date (Instr. (Instr. 3, ---------------- or Secur- of direct Owner- Derivative ative (Month/ 8) 4 and 5) Date Expira- Number ity Month (I) ship Security Secur- Day/ ------- -------------------- Exer- tion of (Instr. (Instr. (Instr. (Instr. (Instr. 3) ity Year) Code V (A) (D) cisable Date Title Shares 5) 4) 4) 4) ------------------------------------------------------------------------------------------------------------------------------------ Common (6) 4/16/01 A V 904,152 Immed. 4/16/11 Common 904,152 (5) D Stock Stock Warrants (right to buy) (1) (5) ------------------------------------------------------------------------------------------------------------------------------------ Common (6) 4/16/01 A V 124,272 Immed. 4/16/11 Common 124,272 (5) D Stock Stock Warrants (right to buy) (2) (5) ------------------------------------------------------------------------------------------------------------------------------------ Common (6) 4/16/01 A V 143,129 Immed. 4/16/11 Common 143,129 (5) D Stock Stock Warrants (right to buy) (3) (5) ------------------------------------------------------------------------------------------------------------------------------------ Common (6) 4/16/01 A V 7,784 Immed. 4/16/11 Common 7,784 (5) D Stock Stock Warrants (right to buy) (4) (5) ------------------------------------------------------------------------------------------------------------------------------------ Common N/A 6/01/01 H (7) 1,045,475 N/A 6/01/11 Common 1,045,475 (7) D Stock Stock Warrants (right to buy) (1) (7) ------------------------------------------------------------------------------------------------------------------------------------ Common N/A 6/01/01 H (7) 143,696 N/A 6/01/11 Common 143,696 (7) D Stock Stock Warrants (right to buy) (2) (7) ------------------------------------------------------------------------------------------------------------------------------------ Common N/A 6/01/01 H (7) 165,500 N/A 6/01/11 Common 165,500 (7) D Stock Stock Warrants (right to buy) (3) (7) ------------------------------------------------------------------------------------------------------------------------------------ Common N/A 6/01/01 H (7) 9,001 N/A 6/01/11 Common 9,001 (7) D Stock Stock Warrants (right to buy) (4) (7) ------------------------------------------------------------------------------------------------------------------------------------

Series A Ownership form Series A Preferred of Derivative Preferred (shares acquired Security Direct April 16 August 29 (original after anti-dilution Convertible (D) or Warrants Warrants shares) recalculation) Debentures Indirect (I) --------- ---------- --------- ---------- ---------- -------------- InSight Venture Partners IV, L.P. 904,152 15,655,980 4,082,966 12,298,349 33,838,619 (D) InSight Venture Partners (Cayman) IV, 124,272 2,151,852 561,187 1,690,360 4,650,984 (D) L.P. InSight Venture Partners IV (Fund B), 143,129 2,478,369 646,341 2,066,387 5,356,712 (D) L.P. InSight Venture Partners IV 7,784 134,785 35,151 105,879 291,323 (D) (Co-Investors), L.P. Insight Venture Associates IV, LLC 1 1,179,337 20,420,986 5,325,645 17,341,083 44,137,638 (I) William Doyle 2 1,179,337 20,420,986 5,325,645 17,341,083 44,137,638 (I) Scott Maxwell 2 1,179,337 20,420,986 5,325,645 17,341,083 44,137,638 (I) Jeffrey Horing 2 1,179,337 20,420,986 5,325,645 17,341,083 44,137,638 (I) Peter Sobiloff 2 1,179,337 20,420,986 5,325,645 17,341,083 44,137,638 (I) Jerry Murdock 2 1,179,337 20,420,986 5,325,645 17,341,083 44,137,638 (I) Deven Parekh 2 1,179,337 20,420,986 5,325,645 17,341,083 44,137,638 (I) Roel Pieper 2 1,179,337 20,420,986 5,325,645 17,341,083 44,137,638 (I)

Filing Compare · EXCHANGE APPLICATIONS INC