<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 17, 1999
REGISTRATION NO. 333-76049
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
VIANT CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
CALIFORNIA 7371 77-0427302
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Number) No.)
</TABLE>
VIANT CORPORATION
89 SOUTH STREET
BOSTON, MA 02111
(617) 531-3700
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
------------------------------
ROBERT L. GETT
PRESIDENT
VIANT CORPORATION
89 SOUTH STREET
BOSTON, MA 02111
(617) 531-3700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
<TABLE>
<S> <C>
HANK V. BARRY, ESQ. MARK G. BORDEN, ESQ.
ISSAC J. VAUGHN, ESQ. JEFFREY A. STEIN, ESQ.
Wilson Sonsini Goodrich & Rosati Hale and Dorr LLP
650 Page Mill Road 60 State Street
Palo Alto, California 94304 Boston, Massachusetts 02109
(650) 493-9300 (617) 526-6000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
------------------------
If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
SUBJECT TO COMPLETION. DATED MAY 17, 1999.
Shares
[VIANT LOGO]
Common Stock
-------------
This is an initial public offering of shares of the common stock of Viant
Corporation. All of the shares of common stock are being sold
by Viant.
At the request of Viant, the underwriters have reserved at the initial
public offering price up to $3,000,000 of common stock for sale to its Series D
Preferred Stockholders and up to additional shares of common stock for
sale to certain directors, employees and associates of Viant.
Prior to this offering, no public market existed for the common stock. Viant
estimates that the initial public offering price per share will be between
$ and $ . Viant has applied for quotation of the common stock on
the Nasdaq National Market under the symbol "VIAN".
SEE "RISK FACTORS" ON PAGE 5 TO READ ABOUT FACTORS YOU SHOULD CONSIDER
BEFORE BUYING SHARES OF THE COMMON STOCK.
------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS.ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------
<TABLE>
<CAPTION>
Per Share Total
------------- -------------
<S> <C> <C>
Initial public offering price.................................. $ $
Underwriting discount.......................................... $ $
Proceeds, before expenses, to Viant............................ $ $
</TABLE>
The underwriters may purchase up to an additional shares from
Viant at the initial public offering price less the underwriting discount.
------------------
The underwriters expect to deliver the shares against payment in New York,
New York on , 1999.
GOLDMAN, SACHS & CO.
CREDIT SUISSE FIRST BOSTON
BANCBOSTON ROBERTSON STEPHENS
-------------
WIT CAPITAL CORPORATION
FACILITATOR OF INTERNET DISTRIBUTION
------------------
Prospectus dated , 1999.
<PAGE>
Viant is a leading Internet professional services firm providing strategic
consulting, creative design and technology services to companies seeking to
capitalize on the Internet. Viant creates value by helping clients reevaluate
their strategies and transform their businesses. The Viant Service Model enables
the rapid development and deployment of Internet solutions.
Integrated Approach
Viant Integrated Work Approach.
This approach reduces costs, miscommunications and delays which can occur when
the strategic consulting, creative design and technology services are sequenced
one after the other or handled by different teams or firms.
[A graphic appears of a triangle surrounded by the words strategy, creativity
and technology]
Growth
Viant has built its business entirely through the training and assimilation of
new employees, rather than through mergers or acquisitions. When opening new
offices, Viant staffs new locations with experienced employees from existing
offices, and then with new employees from the local geographic area. This
process allows Viant to bring new offices on-line quickly, ready to service
local clients. Viant believes this process maintains consistent firm-wide
quality and culture, and an ongoing entrepreneurial environment.
[A graphic appears of a circle surrounded by the words Established Office,
Client/Project Team, Ad hoc Local Collaboration, Global Knowledge Sharing and
Reuse]
Service Model
[A graphic with one triangle and three boxes appears. The triangle is surrounded
by the words strategy, creativity, and technology. The first box to the right
contains the words Envision, Explore and Develop the Internet Strategy. Below
the box, the words ideas and options appear. The second box to the right
contains the words Experience, Design Prototypes to Test Approaches. Below the
box, the words blueprint and market tests appear. The third box contains the
words Launch, Build and Deploy the Internet Solution. Below the box, the words
build and refine appear.]
Local Offices
Viant's policy of servicing local clients through local offices reduces travel
time and allows Viant managers to allocate work efficiently.
Attract & Retain
Viant Culture.
In 1998, Viant's turnover rate was approximately 9%. Viant believes that this is
less than one-half the average rate for publicly traded technology consulting
firms in the United States.
[A photograph of Viant employee appears.]
Viant Culture
Learn & Train
A principal element of our employee training and assimilation is "QuickStart,"
an intensive three-week program of instruction attended by all new employees.
Viant provides ongoing educational opportunities for staff learning.
[A photograph of students and instructor in the Viant "QuickStart" program
appears.]
Research & Innovate
To enhance our expertise, Viant has established the Viant Institute, the
Design Studio, and the Technology Center. The combination of new intellectual
capital with project-based experience allows Viant to remain on the leading
edge of Internet consulting.
[A photograph of several Viant employees conducting a filming session appears.]
Reuse & Share
Viant emphasizes company-wide knowledge sharing. We developed the FOCUS system
to store and distribute experience gained during our client projects.
[A photograph of several Viant employees appears.]
THE VIANT LOGO IS A REGISTERED TRADEMARK OF VIANT. ALL OTHER BRAND NAMES AND
TRADEMARKS APPEARING IN THIS PROSPECTUS ARE THE PROPERTY OF THEIR RESPECTIVE
HOLDERS.
<PAGE>
PROSPECTUS SUMMARY
YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION REGARDING US AND OUR COMMON STOCK BEING SOLD IN THIS OFFERING AND
OUR FINANCIAL STATEMENTS AND THE NOTES TO THOSE STATEMENTS APPEARING ELSEWHERE
IN THIS PROSPECTUS.
OUR BUSINESS
We are a leading Internet professional services firm helping companies to
capitalize on the Internet. Our service approach combines strategic consulting,
creative design and technology services. Some of the services that we provide
for our clients include the design and development of:
- Internet strategies that help integrate a client's Internet projects and
investments with its broader corporate strategies and business practices;
- electronic commerce solutions that enable a company to attract new
customers, and sell goods and services over a website;
- business partner solutions, or extranets, that allow companies to share
information and communicate efficiently with one another;
- internal information solutions, or intranets, that improve a company's
ability to capture, store, and distribute helpful information to its
employees; and
- new business ventures exclusively for the Internet.
We focus on Internet initiatives that are critical to our clients' business.
We have provided services to Global 1000 companies including American Express
Company, BankBoston Corporation, Compaq Computer Corporation, Deutsche Bank AG,
Hewlett-Packard Company, Kinko's Corporation, Lucent Technologies Inc.,
Polo/Ralph Lauren Corporation and RadioShack.
OUR MARKET OPPORTUNITY
Explosive growth in the Internet has created numerous opportunities for
companies seeking revenue growth and increased operating efficiencies. Few
companies, however, possess the necessary skills to take advantage of these
opportunities. As a result, a growing number of companies are turning to
Internet professional service firms, to design and implement their Internet
solutions. According to Forrester Research, the market for Internet and
e-commerce services is projected to grow from $5.4 billion in 1998 to $32.7
billion in 2002, representing a compound annual growth rate of more than 56%.
OUR SERVICE MODEL
We deliver Internet services through the Viant Service Model, which
organizes and addresses the broad-ranging and complex needs of clients seeking
to transform their businesses through the Internet. This service model
integrates our three areas of expertise -- strategic consulting, creative design
and technology services -- and accelerates the design, development and launch of
an Internet initiative. We provide our services on a fixed-price, fixed-time
basis. This approach enables our clients to more accurately manage their project
costs and aligns our interests with theirs.
2
<PAGE>
OUR STRATEGY
Our goal is to strengthen our position as a leading provider of Internet
professional services. To achieve this goal, we plan to:
- expand existing client relationships and attract new clients;
- grow primarily through effective recruiting and new office openings,
rather than through mergers and acquisitions;
- attract and retain the highest quality employees;
- enhance our team-based employee culture;
- utilize our company-wide knowledge to improve operating margins;
- expand geographically to service clients locally;
- continue to refine our operating sytems and processes to support future
growth; and
- continue to invest in research and development to enhance our expertise.
OUR OFFICES
Our executive offices are located at Lincoln Plaza, 89 South Street, Boston,
MA 02111. Our telephone number is (617) 531-3700 and our Internet address is
WWW.VIANT.COM. This reference to our website does not constitute incorporation
by reference of the information contained at our site.
THE OFFERING
<TABLE>
<S> <C>
Shares offered by Viant...................... shares
Shares outstanding after this offering(1).... shares
Proposed Nasdaq National Market symbol....... "VIAN"
Use of proceeds.............................. General corporate purposes, including working
capital, capital expenditures, and the
reduction of outstanding debt.
</TABLE>
- ------------------------------
(1) Based on shares outstanding as of April 2, 1999. Excludes: 5,164,844 shares
of common stock issuable upon the exercise of outstanding options with a
weighted average exercise price of $2.56 per share, 4,220,545 shares
reserved for issuance under our benefit plans and 41,503 shares of common
stock issuable upon exercise of outstanding warrants at an exercise price of
$3.625 per share.
------------------------------
Except as otherwise indicated, we have presented information in this
prospectus based on the following assumptions:
- the underwriters do not exercise their over-allotment option;
- each outstanding share of preferred stock converts into one share of
common stock prior to the closing of this offering;
- adoption of our 1999 Employee Stock Purchase Plan;
- our reincorporation in Delaware prior to the closing of this offering; and
- we filed an amended and restated certificate of incorporation prior to the
closing of this offering.
3
<PAGE>
SUMMARY FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PERIOD FROM THREE MONTHS ENDED
APRIL 10, 1996 YEAR ENDED (1)
(INCEPTION) TO --------------------------- ----------------------
DECEMBER 31, DECEMBER 31, JANUARY 1, MARCH 31, APRIL 2,
1996 1997 1999 1998 1999
-------------- -------------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues....................................... $ 642 $ 8,808 $ 20,043 $ 4,093 $ 7,883
Loss from operations............................... (1,750) (4,178) (6,325) (707) (2,052)
Net loss........................................... (1,659) (4,080) (6,487) (680) (2,041)
Net loss per share:
Basic and diluted.............................. $ (0.42) $ (1.18) $ (1.76) $ (0.19) $ (0.53)
Weighted average shares, basic and diluted..... 3,981 3,468 3,681 3,627 3,847
Pro forma net loss per share (2):
Basic and diluted.............................. $ (0.46) $ (0.12)
Weighted average shares, basic and diluted..... 14,084 17,020
</TABLE>
<TABLE>
<CAPTION>
AT APRIL 2, 1999
----------------------------------
<S> <C> <C>
ACTUAL AS ADJUSTED (3)
--------- -----------------------
BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments.................................... $ 10,919
Working capital...................................................................... 15,492
Total assets......................................................................... 27,243
Long-term debt and capital lease obligations, net of current portion................. 2,228
Total stockholders' equity........................................................... 17,886
</TABLE>
- ------------------------------
(1) During 1998, we changed our fiscal year to the 52-week period ending on the
Friday closest to December 31. Prior to this, our fiscal year corresponded
to the calendar year.
(2) Unaudited pro forma net loss per share for the year ended January 1, 1999
and the three months ended April 2, 1999 is computed using the weighted
average number of common shares outstanding, adjusted to include the pro
forma effects of the conversion of preferred stock to common stock as if
such conversion had occurred on January 1, 1998 for the year ended January
1, 1999 and on January 2, 1999 for the three months ended April 2, 1999, or
at the date of original issuance, if later.
(3) As adjusted to reflect the sale of shares of our common stock at an
assumed offering price of $ per share, after deducting estimated
underwriting discounts and offering expenses payable by us. The net proceeds
from the offering have been reflected as being used to repay $3,349,000
principal amount of debt and related accrued interest at April 2, 1999, and
the remainder have been added to working capital pending their future use.
See "Use of Proceeds."
4
<PAGE>
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING AN
INVESTMENT DECISION. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS,
FINANCIAL CONDITION OR RESULTS OF OPERATIONS COULD BE MATERIALLY ADVERSELY
AFFECTED. IN SUCH CASE, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND
YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.
OUR LIMITED OPERATING HISTORY IN THE NEW AND EXPANDING INTERNET PROFESSIONAL
SERVICES MARKET INCREASES THE POSSIBILITY THAT THE VALUE OF YOUR INVESTMENT WILL
DECLINE
We were formed in 1996. Our limited operating history in the new and
expanding Internet professional services market makes it difficult to evaluate
our business. The uncertainty of our future performance and the uncertainties
regarding the Internet, such as taxation, technical limitations and competition,
increase the risk that the value of your investment will decline. Our failure to
accurately address the issues facing our business could cause our business
results to significantly decline.
TO SUCCEED IN OUR LABOR INTENSIVE BUSINESS, WE MUST RECRUIT AND RETAIN QUALIFIED
PROFESSIONALS, WHO ARE CURRENTLY IN HIGH DEMAND
The labor-intensive Internet professional services industry currently faces
a shortage of qualified personnel, which is expected to continue. We compete
intensely with other companies to recruit and hire from this limited pool. If we
cannot hire and retain qualified personnel or if a significant number of our
current employees leave, we may be unable to complete or retain existing
projects or bid for new projects of similar scope and revenue. Any inability to
hire and retain employees would cause our business results to suffer.
OUR BUSINESS MAY BE NEGATIVELY IMPACTED IF WE FAIL TO ACCURATELY ESTIMATE THE
TIME AND RESOURCES NECESSARY FOR THE PERFORMANCE OF OUR SERVICES
A key element of our strategy is to enter into fixed-price, fixed-time
contracts, rather than contracts in which the client pays us on a time and
materials basis. If we fail to accurately estimate the resources required for a
project or fail to satisfy our contractual obligations in a manner consistent
with the project plan, then our costs to complete the project could increase
substantially. We have occasionally had to commit unanticipated additional
resources to complete projects, and we may have to take similar action in the
future.
IF CLIENTS DO NOT REHIRE US FOR NEW PROJECTS, OR THEY TERMINATE OR REDUCE THE
SCOPE OF EXISTING PROJECTS OUR REVENUES MAY DECLINE
Substantially all of our revenues are derived from fixed-price, fixed-time
contracts for discrete client engagements. These engagements vary in size and
scope. If clients do not retain us for subsequent engagements, then our revenues
could decline. In addition, while our service model is designed as an integrated
approach, each sequential phase of that process represents a separate
contractual commitment. The client may elect not to proceed to the next phase of
a project. The decision of clients not to proceed to the next phase of a project
could impair our revenues.
Most of our contracts cannot be terminated by a client, unless we have
materially breached the contract. However, a client may nevertheless attempt to
cancel or reduce the scope of a project. It is possible that we may agree to the
cancellation or reduction in scope, or that in the event of a dispute over
whether it has the right to cancel or reduce the scope of a project, the client
may prevail. The cancellation, or reduction in scope, of a project could have a
negative impact on our revenues.
5
<PAGE>
OUR REVENUES COULD BE NEGATIVELY AFFECTED BY THE LOSS OF A MAJOR CLIENT
We derive a significant portion of our revenues from large projects for a
limited number of clients. The loss of any major client could dramatically
reduce our revenues. In 1998, our five largest clients accounted for
approximately 59% of our revenues. During such period Kinko's Corporation,
Lucent Technologies Inc. and Compaq Computer Corporation each accounted for more
than 10% of our revenues and four other clients each accounted for more than 5%
of our revenues. In the first three months of 1999, our five largest clients
accounted for approximately 65% of our revenues. During such period Compaq and
RadioShack each accounted for more than 10% of our revenues and three other
clients each accounted for more than 5% of our revenues.
FLUCTUATIONS IN OUR QUARTERLY REVENUES AND OPERATING RESULTS MAY LEAD TO REDUCED
PRICES FOR OUR STOCK
We believe that period-to-period comparisons of our operating results are
not necessarily meaningful. These comparisons cannot be relied upon as
indicators of future performance. However, if our operating results in any
future period fall below the expectations of securities analysts and investors,
the market price of our securities would likely decline.
Factors that have caused our results to fluctuate in the past and which are
likely to affect us in the future include the following:
- variability in market demand for the Internet and for Internet
professional services;
- length of the sales cycle associated with our service offerings;
- the number, size and scope of our projects; and
- the efficiency with which we utilize our employees, including our ability
to transition employees from completed engagements to new engagements.
In addition, other factors may also affect us, including:
- the introduction of new services by our competitors;
- changes in pricing policies by our competitors; and
- our ability to attract and retain clients.
Some of these factors are within our control and others are outside our control.
OUR INTERNAL SYSTEMS, PROCEDURES AND CONTROLS MAY BE INADEQUATE TO HANDLE OUR
GROWTH
To manage our growth, we must continue to improve our internal systems,
procedures and controls. We cannot assure you that we will successfully do so.
If our internal systems, procedures and controls are inadequate, our business
will be harmed.
IF WE ARE NOT SUCCESSFUL IN OPENING AND GROWING NEW OFFICES OUR FINANCIAL
RESULTS MAY SUFFER
A key component of our growth strategy is to open offices in new geographic
locations. Once we select a new location, we typically devote substantial
financial and management resources to launch and grow that office. We cannot
assure you that we will select appropriate markets to enter, open new offices
efficiently or manage new offices profitably. Our failure to accurately assess
these issues could negatively impact our business.
6
<PAGE>
WE MAY NEED ADDITIONAL CAPITAL IN THE FUTURE, WHICH MAY NOT BE AVAILABLE TO US.
THE RAISING OF ANY ADDITIONAL CAPITAL MAY DILUTE YOUR OWNERSHIP IN US
We may need to raise additional funds through public or private debt or
equity financings in order to:
- take advantage of opportunities, including more rapid expansion or
acquisitions of complementary businesses or technologies;
- develop new services; or
- respond to competitive pressures.
Any additional capital raised through the sale of equity may dilute your
ownership percentage in us. Furthermore, we cannot assure you that any
additional financing we may need will be available on terms favorable to us, or
at all. In such case, our business results would suffer.
THE INTERNET PROFESSIONAL SERVICES MARKET IS HIGHLY COMPETITIVE AND HAS LOW
BARRIERS TO ENTRY. IF WE CANNOT EFFECTIVELY COMPETE, OUR REVENUES MAY DECLINE
The Internet professional services market is relatively new and intensely
competitive. We expect competition to intensify even further as this market
evolves. Many of our competitors have longer operating histories, more clients,
longer relationships with their clients, greater brand or name recognition and
significantly greater financial, technical, marketing and public relations
resources than we do. As a result, our competitors may be in a stronger position
to respond quickly to new or emerging technologies and changes in client
requirements. They may also develop and promote their products and services more
effectively than we do.
There are relatively low barriers to entry into the Internet professional
services market. In addition, we do not own any patented technology that stops
competitors from entering the Internet professional services market or from
providing services similar to ours. As a result, new and unknown market entrants
pose a threat to our business. Current or future competitors may develop or
offer services that are comparable or superior to ours at a lower price, which
could significantly decrease our revenues and the value of your investment.
OUR BUSINESS WILL BE NEGATIVELY AFFECTED IF WE DO NOT KEEP UP WITH THE
INTERNET'S RAPID TECHNOLOGICAL CHANGE, EVOLVING INDUSTRY STANDARDS AND CHANGING
CLIENT REQUIREMENTS
The Internet professional services market is characterized by rapidly
changing technology, evolving industry standards and changing client needs.
Accordingly, our future success will depend, in part, on our ability to meet
these challenges. Among the most important challenges facing us are the need to:
- effectively use leading technologies;
- continue to develop our strategic and technical expertise;
- influence and respond to emerging industry standards and other
technological changes.
- enhance our current services;
- develop new services that meet changing customer needs; and
- advertise and market our services.
All of these challenges must be met in a timely and cost-effective manner.
We cannot assure you that we will succeed in effectively meeting these
challenges and our failure to do so could harm our business results.
7
<PAGE>
OUR REVENUES MAY DECREASE IF GROWTH IN THE USE OF THE INTERNET DECLINES
Our business is dependent upon continued growth in the use of the Internet
by our clients, prospective clients and their customers and suppliers. Published
reports indicate that capacity constraints caused by growth in Internet usage
may, unless resolved, impede further growth in Internet use. If the number of
users on the Internet does not increase and commerce over the Internet does not
become more accepted and widespread, demand for our services may decrease and,
as a result, our revenues would decline causing the value of your investment
also to decline. The factors that may affect Internet usage or electronic
commerce adoption include:
- actual or perceived lack of security of information;
- lack of access and ease of use;
- congestion of Internet traffic;
- inconsistent quality of service;
- increases in access costs to the Internet;
- excessive governmental regulation;
- uncertainty regarding intellectual property ownership;
- reluctance to adopt new business methods; and
- costs associated with the obsolescence of existing infrastructure.
CONCENTRATION OF OWNERSHIP MAY LIMIT YOUR ABILITY TO INFLUENCE CORPORATE MATTERS
Immediately following this offering, the officers, directors and significant
stockholders set forth below, and the funds for whom they act as general
partner, collectively will own approximately % of the outstanding shares of
our common stock and will own individually the percentage set forth opposite
their respective names:
<TABLE>
<CAPTION>
OFFICERS, DIRECTORS AND/OR SIGNIFICANT STOCKHOLDERS OWNERSHIP %
- --------------------------------------------------------------------------------------------------- -----------------
<S> <C>
William H. Davidow (Mohr, Davidow Ventures)
Kleiner Perkins Caufield & Byers
Trident Capital Management
Robert L. Gett
Technology Crossover Ventures
</TABLE>
If the stockholders listed above choose to act or vote together, they will
have the power to control the election of our directors, and the approval of any
other action requiring the approval of our stockholders, including any
amendments to our certificate of incorporation and mergers or sales of all or
substantially all of our assets. In addition, without the consent of these
stockholders, we could be prevented from entering into transactions that could
be beneficial to us. Also, third parties could be discouraged from making a
tender offer or bid to acquire our company at a price per share that is above
the then-current market price.
WE MAY FACE INTELLECTUAL PROPERTY CLAIMS THAT MAY BE COSTLY TO RESOLVE OR LIMIT
OUR ABILITY TO USE INTELLECTUAL PROPERTY IN THE FUTURE
We are obligated under some agreements to indemnify other parties as a
result of claims that we infringe on the proprietary rights of third parties.
Although we do not believe that the solutions that we develop for clients
infringe on any third-party proprietary rights, we cannot assure you that third
parties will not assert infringement claims against us in the future or that
these claims will not be successful. We could incur substantial costs and
diversion of management resources to defend any claims relating to proprietary
rights. These costs and diversions could cause our business results to suffer.
If any party asserts a claim against us relating to proprietary technology or
8
<PAGE>
information, we may need to obtain licenses to the disputed intellectual
property. We cannot assure you, however, that we will be able to obtain these
licenses on commercially reasonable terms or that we will be able to obtain any
licenses at all. The failure to obtain necessary licenses or other rights could
cause our business results to suffer.
Our business often involves the development of software applications for
specific client engagements. We generally retain the right to use any
intellectual property that is developed during a client engagement that is of
general applicability and is not specific to the client's project. We also
develop software applications for our own internal use and we retain ownership
of these applications. There can be no assurance that clients will not demand
assignment of ownership or restrictions on our use of the work that we produce
for clients in the future. Issues relating to the ownership of and rights to use
software can be complicated and there can be no assurance that disputes will not
arise that affect our ability to reuse this software which could harm our
business results.
MANAGEMENT MAY INVEST OR SPEND THE PROCEEDS OF THIS OFFERING IN WAYS WITH WHICH
YOU MAY NOT AGREE
Management intends to use a majority of the proceeds from this offering for
general corporate purposes. Because of the number and variability of factors
that determine our use of the net proceeds from this offering, we cannot assure
you that you will agree with our use of the proceeds. Pending their use, we
intend to invest the net proceeds from this offering in short-term interest
bearing investment grade and U.S. government securities.
OUR STOCK PRICE COULD BE EXTREMELY VOLATILE AND YOU MAY NOT BE ABLE TO RESELL
YOUR SHARES AT OR ABOVE THE INITIAL OFFERING PRICE
We cannot predict the extent to which investor interest in us will lead to
the development of a public trading market or how liquid that market might
become. The initial public offering price for the shares will be determined by
negotiations between us and representatives of the underwriters. This price may
not be indicative of prices that will prevail later in the market. The stock
market has experienced significant price and volume fluctuations, and the market
prices of technology companies, particularly Internet-related companies, have
been highly volatile. You may not be able to resell your shares at or above the
initial public offering price. See "Underwriting."
In the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted. A securities class action suit against us could result in
substantial costs and the diversion of management's attention and resources,
which could effect our business results.
FUTURE SALES OF OUR COMMON STOCK MAY DEPRESS OUR STOCK PRICE
The market price of our common stock could drop as a result of sales of
substantial amounts of common stock in the public market after the closing of
this offering, or the perception that such sales could occur. In addition, these
factors could make it more difficult for us to raise funds through future
offerings of common stock. There will be shares of common stock
outstanding immediately after this offering, or shares if the
representatives of the underwriters exercise their over-allotment option in
full. All of the shares sold in the offering will be freely transferable without
restriction or further registration under the Securities Act, except for any
shares purchased by our "affiliates," as defined in Rule 144 of the Securities
Act. The remaining shares of common stock outstanding, will be "restricted
securities" as defined in Rule 144. These shares may be sold in the future
without registration under the Securities Act to the extent permitted by Rule
144 or other exemptions under the Securities Act. See "Shares Eligible for
Future Sale."
9
<PAGE>
PROVISIONS OF OUR CHARTER AND BY-LAWS MAY DELAY OR PREVENT TRANSACTIONS THAT ARE
IN YOUR BEST INTERESTS
Our certificate of incorporation and bylaws state that any action that can
be taken by stockholders must be done at an annual or special meeting and may
not be done by written consent, and require reasonable advance notice of a
stockholder proposal or director nomination. The chairman of the board, the
chief executive officer, the president or the board of directors are the only
ones who may call a special meeting. The amended and restated certificate of
incorporation and amended and restated bylaws also provide for a classified
board of directors, and provide that members of the board of directors may be
removed by the vote of the holders of at least two-thirds of the shares entitled
to vote for that director. In addition, the board of directors has the
authority, without further action by the stockholders, to fix the rights and
preferences of and issue 5,000,000 shares of preferred stock. These provisions
may have the effect of deterring hostile takeovers or delaying or preventing
changes in control of management, including transactions in which you might
otherwise receive a premium for your shares. In addition, these provisions may
limit your ability to approve other transactions that you find to be in your
best interests. See "Description of Capital Stock -- Preferred Stock" and " --
Effect of the Certificate of Incorporation and Bylaws and the Delaware
Anti-Takeover Statute."
DIFFICULTIES PRESENTED BY INTERNATIONAL FACTORS COULD NEGATIVELY AFFECT OUR
BUSINESS
One component of our strategy is to expand into international markets, as
evidenced by the opening of our London office. We believe that we will face
certain risks in doing business abroad that we do not face domestically. Among
the international risks we believe are most likely to affect us are:
- difficulties in staffing and managing international operations;
- longer payment cycles;
- problems in collecting accounts receivable;
- international currency issues, including fluctuations in currency exchange
rates and the conversion to the euro by all countries of the European
Union by year end 2003; and
- restrictions on the import and export of sensitive U.S. technologies, such
as data security and encryption technologies that we may wish to use in
solutions we develop for customers.
Any of these factors or other factors not enumerated here could damage our
business results.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve risks and
uncertainties. Discussions containing forward-looking statements may be found in
the material set forth under "Business" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" as well as in the
prospectus generally. We used words such as "believes," "intends," "expects,"
"anticipates," "plans," and similar expressions to identify forward-looking
statements. This prospectus also contains third party estimates regarding the
size and growth of the Internet professional services market and Internet usage
in general. You should not place undue reliance on these forward-looking
statements. Our actual results could differ materially from those anticipated in
the forward-looking statements for many reasons, including the risks described
above and elsewhere in this prospectus.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of the forward-looking
statements. We are under no duty to update any of the forward-looking statements
after the date of this prospectus to conform these statements to actual results
or to changes in our expectations.
10
<PAGE>
USE OF PROCEEDS
The net proceeds to Viant from the sale of the shares of common
stock are estimated to be approximately $ at an assumed initial public
offering price of $ per share (approximately $ if the
underwriters' over-allotment option is exercised in full), after deducting the
estimated underwriting discounts and offering expenses payable by us.
Viant is conducting this offering primarily to increase its equity capital,
create a public market for its common stock and to facilitate future access by
Viant to public equity markets. Viant intends to use the net proceeds of the
offering for the repayment of approximately $3.3 million in principal debt
outstanding plus accrued interest under a revolving line of credit and an
equipment line of credit and the remainder for general corporate purposes,
including capital expenditures and working capital. Borrowings under the
revolving line of credit become due and payable on July 3, 1999 and bear
interest at the bank's prime rate plus 0.5% per annum. Borrowings under the
equipment line of credit are payable in 36 equal monthly installments and bear
interest at the bank's prime rate plus 1.0% per annum. Borrowings under these
bank lines of credit may be prepaid in whole or in part without penalty and are
secured by substantially all of Viant's assets. In addition, Viant may, if
appropriate opportunities arise, use an undetermined portion of the net proceeds
to acquire or invest in complementary companies, if the acquisition targets or
investment opportunities have cultures and other attributes consistent with
those of Viant. However, Viant is not currently discussing any such potential
acquisition or investment with any third party. Pending such uses, Viant will
invest the net proceeds in investment grade, interest-bearing securities.
DIVIDEND POLICY
Viant has never paid cash dividends on its common stock or any other
securities. Viant anticipates that it will retain all of its future earnings, if
any, for use in the expansion and operation of its business and does not
anticipate paying cash dividends in the foreseeable future. Under the terms of
its bank lines of credit, Viant may not declare or pay any dividends without the
prior consent of the bank.
11
<PAGE>
CAPITALIZATION
The following table sets forth our capitalization as of April 2, 1999:
- on an actual basis;
- on a pro forma basis as of such date to reflect the conversion prior to
the closing of this offering of all outstanding shares of preferred stock
into 13,173,524 shares of common stock and the filing of an amended and
restated certificate of incorporation to increase the number of common
shares authorized and to authorize Viant to issue preferred stock; and
- on a pro forma as adjusted basis to reflect the sale of the common stock
offered by this prospectus at an assumed initial public offering price of
$ per share, after deducting the estimated underwriting discounts and
offering expenses payable by us, and to reflect the use of the offering
proceeds to repay $3,349,000 principal amount of debt and related interest
at April 2, 1999.
This information should be read in conjunction with Viant's financial
statements and related notes thereto included elsewhere in this prospectus.
<TABLE>
<CAPTION>
APRIL 2, 1999
------------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
---------- ---------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Long-term debt and capital lease obligations, current portion.................... $ 3,352 $ 3,352 $ 509
---------- -------- ------------
---------- -------- ------------
Long-term debt and capital lease obligations, net of current portion............. $ 2,228 $ 2,228 $ 1,722
---------- -------- ------------
Stockholders' equity:
Convertible preferred stock, no par value:
Series D, 3,240,000 shares authorized: 3,167,100 shares issued and
outstanding, actual; none authorized, issued and outstanding, pro forma and
pro forma as adjusted...................................................... 20,170 -- --
Series A, 5,746,874 shares authorized, actual: 5,746,874 shares issued and
outstanding, actual; none authorized, issued and outstanding, pro forma and
pro forma as adjusted...................................................... 3,047 -- --
Series B, 1,499,925 shares authorized, actual: 1,499,925 shares issued and
outstanding, actual; none authorized, issued and outstanding, pro forma and
pro forma as adjusted...................................................... 987 -- --
Series C, 2,830,408 shares authorized, actual: 2,759,625 shares issued and
outstanding, actual; none authorized, issued and outstanding, pro forma and
pro forma as adjusted...................................................... 7,977 -- --
Preferred stock, $0.001 par value, no shares authorized, actual: 5,000,000
shares authorized, pro forma and pro forma as adjusted; no shares issued and
outstanding, actual, pro forma and pro forma as adjusted..................... -- -- --
Common Stock, $0.001 par value, 25,000,000 shares authorized, actual;
50,000,000 shares authorized, pro forma and pro forma as adjusted: 4,294,236
shares issued and outstanding, actual; 17,467,760 shares issued and
outstanding, pro forma; shares issued and outstanding, pro forma as
adjusted(1).................................................................. 4 17
Additional paid-in capital..................................................... 647 32,815
Accumulated deficit............................................................ (14,946) (14,946) (14,946)
---------- -------- ------------
Total stockholders' equity................................................. 17,886 17,886
---------- -------- ------------
Total capitalization..................................................... $ 20,114 $ 20,114 $
---------- -------- ------------
---------- -------- ------------
</TABLE>
- ------------------------------
(1) Based on shares outstanding as of April 2, 1999. Excludes: 5,164,844 shares
of common stock issuable upon the exercise of outstanding options with a
weighted average exercise price of $2.56 per share, 4,220,545 shares
reserved for issuance under our benefit plans and 41,503 shares of common
stock issuable upon exercise of outstanding warrants at an exercise price of
$3.625 per share. See "Management -- Employee Benefit Plans."
12
<PAGE>
DILUTION
On a pro forma basis after giving effect to the conversion of all
outstanding shares of preferred stock into shares of common stock in connection
with this offering, our pro forma net tangible book value as of April 2, 1999
was $17,886,000 or $1.02 per share of common stock. Pro forma net tangible book
value per share represents the amount of our total tangible assets reduced by
the amount of our total liabilities and divided by the total number of shares of
common stock outstanding (pro forma to reflect the conversion of all outstanding
shares of preferred stock into shares of common stock upon the closing of this
offering). Without taking into account any other change in our pro forma net
tangible book value after April 2, 1999, other than to give effect to the sale
of shares of common stock offered by this prospectus at an assumed initial
public offering price of $ per share and receipt of the estimated net
proceeds therefrom, our pro forma net tangible book value as of April 2, 1999
would have been approximately $ or $ per share. This represents
an immediate increase in such net tangible book value of $ per share to
existing stockholders and an immediate dilution of $ per share to the new
investors. If the initial public offering price is higher or lower, the dilution
to new investors will be, respectively, greater or less. The following table
illustrates this per share dilution.
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share......................
---------
Pro forma net tangible book value per share as of April 2, 1999,
before this offering............................................... $ 1.02
Increase per share attributable to new investors.....................
---------
Pro forma net tangible book value per share after this offering......
---------
Dilution per share to new investors.................................. $
---------
---------
</TABLE>
The following table summarizes, as of April 2, 1999, on a pro forma basis to
reflect the adjustments described above, the differences between the existing
stockholders and the new investors with respect to the number of shares of
common stock purchased from us, the total consideration paid (or to be paid) to
us, and the average price per share paid (or to be paid) by existing
stockholders and by new investors at the assumed initial public offering price
of $ per share, before deducting the estimated underwriting discounts and
offering expenses payable by us:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE PRICE
-------------------------- --------------------------- PER
NUMBER PERCENT AMOUNT PERCENT SHARE
------------- ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
Existing stockholders........................ 17,467,760 % $ 32,074,000 % $
New investors................................
------------- --- -------------- ---
Total........................................ 100% $ 100%
------------- --- -------------- ---
------------- --- -------------- ---
</TABLE>
This table also assumes that no options or warrants have been or are
exercised after April 2, 1999. As of April 2, 1999, there were outstanding
options to purchase an aggregate of 5,164,844 shares of common stock at a
weighted average exercise price of $2.56 per share (excluding warrants to
purchase 41,503 shares of common stock at $3.625 per share). If all such options
and warrants had been exercised on April 2, 1999, our pro forma net tangible
book value on such date would have been $31,439,000 or $1.38 per share, the
increase in net tangible book value attributable to new investors would have
been $ per share and the dilution in net tangible book value to new
investors would have been $ per share.
13
<PAGE>
SELECTED FINANCIAL DATA
The selected financial data set forth below should be read in conjunction
with Viant's financial statements and notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" appearing
elsewhere in this prospectus. Selected financial data as of and for each of the
three fiscal periods ended December 31, 1996, December 31, 1997 and January 1,
1999 have been derived from Viant's financial statements, which have been
audited by PricewaterhouseCoopers LLP, independent accountants. Financial data
as of April 2, 1999 and for the quarter ended March 31, 1998 and April 2, 1999
have been derived from unaudited financial statements appearing elsewhere in
this prospectus and, in the opinion of management, include all adjustments,
consisting only of normal recurring adjustments, that Viant considers necessary
for a fair presentation of its financial position and results of operations for
such periods. The historical results are not necessarily indicative of the
operating results to be expected in the future.
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 10, 1996 YEAR ENDED QUARTER ENDED
(INCEPTION) TO --------------------------- ----------------------
DECEMBER 31, DECEMBER 31, JANUARY 1, MARCH 31, APRIL 2,
1996 1997 1999 1998 1999
-------------- -------------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues..................................... $ 642 $ 8,808 $ 20,043 $ 4,093 $ 7,883
------- ------- ----------- ----------- ---------
Operating expenses:
Professional services.......................... 516 4,530 11,250 2,237 4,511
Sales and marketing............................ 461 1,577 3,324 586 1,216
General and administrative..................... 1,077 6,298 10,365 1,810 3,518
Research and development....................... 338 581 1,429 167 690
------- ------- ----------- ----------- ---------
Total operating expenses................... 2,392 12,986 26,368 4,800 9,935
------- ------- ----------- ----------- ---------
Loss from operations............................. (1,750) (4,178) (6,325) (707) (2,052)
Interest and other income (expense), net......... 91 98 (162) 27 11
------- ------- ----------- ----------- ---------
Net loss......................................... $ (1,659) $ (4,080) $ (6,487) $ (680) $ (2,041)
------- ------- ----------- ----------- ---------
------- ------- ----------- ----------- ---------
Basic and diluted net loss per share............. $ (0.42) $ (1.18) $ (1.76) $ (0.19) $ (0.53)
Weighted average shares used in computing basic
and diluted net loss per share............... 3,981 3,468 3,681 3,627 3,847
Unaudited pro forma basic and diluted net loss
per share(1)................................... $ (0.46) $ (0.12)
Weighted average shares used in computing pro
forma basic and diluted net loss per share... 14,084 17,020
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JANUARY 1, APRIL 2,
1996 1997 1999 1999
-------------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
(UNAUDITED)
<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments... $ 2,145 $ 6,174 $ 18,811 $ 10,919
Working capital..................................... 2,179 4,517 17,622 15,492
Total assets........................................ 2,806 10,318 29,753 27,243
Long-term debt and capital lease obligations, net of
current portion................................... -- 670 2,237 2,228
Total stockholders' equity.......................... 2,394 6,006 19,665 17,886
</TABLE>
- ------------------------------
(1) Unaudited pro forma net loss per share for the year ended January 1, 1999
and the quarter ended April 2, 1999 is computed using the weighted average
number of common shares outstanding, adjusted to include the pro forma
effects of the conversion of preferred stock to common stock as if such
conversion had occurred on January 1, 1998 for the year ended January 1,
1999 and on January 2, 1999 for the quarter ended April 2, 1999, or at the
date of original issuance, if later.
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF VIANT SHOULD BE READ IN CONJUNCTION WITH "SELECTED FINANCIAL DATA"
AND VIANT'S FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, INCLUDED
ELSEWHERE IN THIS PROSPECTUS. EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED
HEREIN, THE DISCUSSION IN THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS
THAT INVOLVE RISKS, UNCERTAINTIES AND ASSUMPTIONS SUCH AS STATEMENTS OF VIANT'S
PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS. THE CAUTIONARY STATEMENTS MADE
IN THIS PROSPECTUS SHOULD BE READ AS BEING APPLICABLE TO ALL RELATED
FORWARD-LOOKING STATEMENTS WHEREVER THEY APPEAR IN THIS PROSPECTUS. VIANT'S
ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE, ACHIEVEMENTS AND PROSPECTS
COULD DIFFER MATERIALLY FROM THOSE DISCUSSED BELOW. FACTORS THAT COULD CAUSE OR
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE THOSE DISCUSSED IN "RISK FACTORS," AS
WELL AS THOSE DISCUSSED ELSEWHERE HEREIN.
OVERVIEW
Viant is a leading Internet professional services firm providing strategic
consulting, creative design and technology services to companies seeking to
capitalize on the Internet. Viant creates value by helping clients rapidly
develop and deploy Internet solutions.
Viant derives substantially all of its revenues from services performed on a
fixed-price, fixed-time basis. To determine the proposed fixed price for an
engagement, Viant uses an estimation process which takes into account the type
and overall complexity of the project, the anticipated number of consultants
needed and their associated billing rates, and the estimated duration of and
risks associated with the engagement. All fixed-price proposals are approved by
a member of Viant's senior management team. Revenues from fixed-price
engagements are recognized using the percentage of completion method (based on
the ratio of costs incurred to the total estimated project costs). Provisions
for estimated losses on contracts are made during the period in which such
losses become probable and can be reasonably estimated. To date, such losses
have not been significant. Viant reports revenue net of reimbursable expenses.
Viant generally requires a client to pay 20% to 40% of the engagement fee in
advance. The remainder is billed to the client over the course of the
engagement.
Viant's revenues and earnings may fluctuate from quarter to quarter based on
such factors within and outside our control, including: the variability in
market demand for the Internet and for Internet professional services; the
length of the sales cycle associated with our service offerings, the number,
size and scope of our projects, and the efficiency with which we utilize our
employees. See "Risk Factors -- Fluctuations in our quarterly revenues and
operating results may lead to reduced prices for our stock."
The number of Viant employees increased from 119 at the end of 1997 to 246
as of April 2, 1999. Viant expects the total number of employees to increase
significantly during 1999. Personnel compensation and facilities costs represent
a high percentage of Viant's operating expenses and are relatively fixed in
advance of each quarter. Accordingly, if revenues do not increase at a rate
equal to expenses, Viant's business, financial condition or results of
operations could be materially and adversely affected. In addition, Viant's
liquidity may also be adversely affected if revenues do not increase at a rate
equal to these additional expenses, to the extent Viant is unable to reduce
operating expenses.
During 1998, Viant changed its fiscal year to the 52-week period ending on
the Friday nearest the last day of December of that year. Prior to this, the
fiscal year of Viant was the calendar year. All references below to the results
of operations for 1998 are the actual operating results for the fiscal year
ended January 1, 1999.
15
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth the percentage of net revenues of certain
items included in Viant's statement of operations for the periods indicated:
<TABLE>
<CAPTION>
PERCENTAGE OF NET REVENUES
-------------------------------------------------------------------------------------
PERIOD FROM APRIL 10, QUARTER ENDED
1996 (INCEPTION) TO YEAR ENDED YEAR ENDED --------------------------
DECEMBER 31, DECEMBER 31, JANUARY 1, MARCH 31, APRIL 2,
1996 1997 1999 1998 1999
----------------------- ----------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Net revenues........................... 100% 100% 100% 100% 100%
--- --- --- --- ---
--- --- --- --- ---
Operating expenses:
Professional services................ 80 51 56 55 57
Sales and marketing.................. 72 18 16 14 15
General and administrative........... 168 71 52 44 45
Research and development............. 52 7 7 4 9
--- --- --- --- ---
Total operating expenses........... 372 147 131 117 126
--- --- --- --- ---
Loss from operations................... (272) (47) (31) (17) (26)
Interest and other income (expense),
net.................................. 14 1 (1) -- --
--- --- --- --- ---
Net loss............................... (258)% (46)% (32)% (17)% (26)%
--- --- --- --- ---
--- --- --- --- ---
</TABLE>
COMPARISON OF THE QUARTERS ENDED MARCH 31, 1998 AND APRIL 2, 1999
NET REVENUES. Net revenues increased 93% from $4.1 million for the quarter
ended March 31, 1998 to $7.9 million for the quarter ended April 2, 1999. The
increase in net revenues reflected growing demand for Internet professional
services and increases in both the size and number of Viant's client
engagements. Revenues derived from Viant's three largest clients, as a
percentage of total net revenues, decreased from 60% for the quarter ended March
31, 1998 to 54% for quarter ended April 2, 1999, reflecting an increase in
business from other clients.
PROFESSIONAL SERVICES. Professional services expenses consist primarily of
compensation and benefits for employees engaged in the delivery of Internet
professional services and non-reimbursable expenses related to client projects.
Professional services expenses represented 55% of total net revenues for the
quarter ended March 31, 1998 and 57% for the quarter ended April 2, 1999.
Professional services expenses increased 102% from $2.2 million for the quarter
ended March 31, 1998 to $4.5 million for the quarter ended April 2, 1999. These
increases were primarily due to the hiring of additional professionals.
SALES AND MARKETING. Sales and marketing expenses consist primarily of
compensation, benefits and travel costs for employees in the sales and marketing
groups, marketing program costs and an allocation of facilities costs. Sales and
marketing expenses represented 14% of total net revenues for the quarter ended
March 31, 1998 and 15% for the quarter ended April 2, 1999. Sales and marketing
expenses increased by $630,000 from the 1998 quarter to the 1999 quarter and was
attributable to the increase in the number of sales personnel and an overall
increase in Viant's marketing and branding efforts. Viant expects that the
dollar amount of sales and marketing expenses will continue to increase due to
increases in advertising and promotional activities.
GENERAL AND ADMINISTRATIVE. General and administrative expenses consist
primarily of compensation, benefits and travel costs for employees in Viant's
management, human resources, finance and administration groups, and facilities
costs not allocated to sales and marketing or research and development. General
and administrative expenses represented 44% of total net
16
<PAGE>
revenues for the quarter ended March 31, 1998 and 45% for the quarter ended
April 2, 1999. General and administrative expenses increased 94% from $1.8
million for the quarter ended March 31, 1998 to $3.5 million for the quarter
ended April 2, 1999. These increases were due primarily to an increase in lease
expenditures in connection with the opening of additional offices and the hiring
of additional employees.
RESEARCH AND DEVELOPMENT. Research and development expenses consist
primarily of compensation, benefits and an allocation of facilities costs for
employees associated with Viant's innovation groups. The innovation groups
enhance the knowledge and expertise of the strategic consulting, creative design
and technology disciplines. Research and development expenses represented 4% of
total net revenues for the quarter ended March 31, 1998, and 9% for the quarter
ended April 2, 1999. Research and development expenses increased from the 1998
quarter to the 1999 quarter because of the addition of two innovation groups
after the first quarter of 1998.
COMPARISON OF FISCAL YEARS 1996, 1997 AND 1998
NET REVENUES. Net revenues were $20.0 million in 1998, representing an
increase of 128% over 1997 revenues of $8.8 million in 1997. The increase in net
revenues reflected growing demand for Internet professional services and
increases in both the size and number of Viant's client engagements. Net
revenues increased from $642,000 for the period from April 10, 1996 to December
31, 1996 to $8.8 million in the full year ended December 31, 1997. The $8.2
million increase reflected increases in both the size and number of client
engagements as well as a full year of operations in 1997. Revenues derived from
Viant's three largest clients, as a percentage of total net revenues, decreased
from 71% in 1996, to 68% in 1997 and to 42% in 1998, reflecting an increase in
business from other clients.
Billings in advance of services performed are recorded as deferred revenues.
Viant had $99,000 in deferred revenues at December 31, 1996, $931,000 at
December 31, 1997 and $1.1 million at January 1, 1999. The increase in deferred
revenues from year to year reflects new client engagements as well as
contractual terms that allow Viant to bill clients in advance of performing
services. During 1997 and 1998, substantially all of Viant's revenues were
derived from fixed-price, fixed-time contracts. In 1996, substantially all of
Viant's revenues were derived from time and materials based contracts.
PROFESSIONAL SERVICES. Professional services expenses represented 80% of
total net revenues in 1996, 51% in 1997 and 56% in 1998. The increase in
professional services expenses as a percentage of net revenues in 1998 compared
to 1997 was primarily due to Viant's strategy of increased hiring in
anticipation of future growth as well as higher salaries. The decrease in
professional services expenses as a percentage of net revenues in 1997 compared
to 1996 reflects the higher revenues generated in 1997 as compared to 1996.
Professional services expenses increased by $4.0 million from 1996 to 1997 and
$6.7 million from 1997 to 1998. These increases were primarily due to the hiring
of additional professionals.
SALES AND MARKETING. Sales and marketing expenses represented 72% of total
net revenues in 1996, 18% in 1997 and 16% in 1998. The decrease in sales and
marketing expenses as a percentage of revenues from 1997 to 1998 was primarily
due to higher revenues generated per sales employee and revenue growth. The
decrease in sales and marketing expenses as a percentage of revenues from 1996
to 1997 was primarily due to revenue growth. Sales and marketing expenses
increased by $1.1 million from 1996 to 1997 and $1.7 million from 1997 to 1998.
The increase in sales and marketing expenses from 1996 to 1997 was attributable
to the initiation of sales and marketing activities. The increase from 1997 to
1998 was attributable to the increase in the number of sales personnel and an
overall increase in Viant's marketing and branding efforts.
17
<PAGE>
GENERAL AND ADMINISTRATIVE. General and administrative expenses represented
168% of total net revenues in 1996, 71% in 1997 and 52% in 1998. General and
administrative expenses increased by $5.2 million from 1996 to 1997 and $4.1
million from 1997 to 1998. These increases were due primarily to an increase in
lease expenditures in connection with the opening of additional offices and the
hiring of additional employees. Also included in these increases are additions
of $294,000 in 1997 and $612,000 in 1998 to the allowance for doubtful accounts,
reflecting Viant's increasing revenues and receivables, including a provision of
$400,000 in 1998 related to one client. After adjustment to exclude
non-recurring 1997 severance expenses of $1.5 million related to an agreement
between Viant and a former employee, general and administrative expenses
represented 54% of total net revenues in 1997.
RESEARCH AND DEVELOPMENT. Research and development expenses represented 52%
of total net revenues in 1996, 7% in 1997 and 7% in 1998. Research and
development expenses increased $848,000 from 1997 to 1998 because of the
addition of two innovation groups. The decrease in research and development
expenses as a percentage of total net revenues from 1996 to 1997 was primarily
due to revenue growth.
QUARTERLY RESULTS OF OPERATIONS. The following table sets forth a summary
of Viant's unaudited quarterly operating results for each of the nine quarters
in the period ended April 2, 1999. This data has been derived from our unaudited
interim financial statements which, in our opinion, have been prepared on
substantially the same basis as the audited financial statements contained
elsewhere in this prospectus and include all normal recurring adjustments
necessary for a fair presentation of the financial information for the periods
presented. These unaudited quarterly results should be read in conjunction with
Viant's financial statements and notes thereto included elsewhere in this
prospectus. The operating results in any quarter are not necessarily indicative
of the results that may be expected for any future period. The increase in
general and administrative expenses in the second quarter of 1997 was
attributable primarily to severance costs related to the departure of an
employee.
<TABLE>
<CAPTION>
QUARTER ENDED
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30, JAN. 1, APR. 2,
1997 1997 1997 1997 1998 1998 1998 1999 1999
-------- -------- --------- -------- -------- -------- --------- ------- -------
<CAPTION>
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues.................. $ 1,749 $ 2,232 $ 2,405 $ 2,422 $ 4,093 $ 4,512 $ 5,302 $ 6,136 $ 7,883
-------- -------- --------- -------- -------- -------- --------- ------- -------
Operating expenses:
Professional services....... 762 1,143 1,314 1,311 2,237 2,362 2,999 3,652 4,511
Sales and marketing......... 168 446 415 548 586 631 805 1,302 1,216
General and
administrative............ 564 1,935 1,440 2,359 1,809 2,118 2,740 3,698 3,518
Research and development.... 97 97 116 271 168 295 389 577 690
-------- -------- --------- -------- -------- -------- --------- ------- -------
Total operating
expenses................ 1,591 3,621 3,285 4,489 4,800 5,406 6,933 9,229 9,935
-------- -------- --------- -------- -------- -------- --------- ------- -------
Income (loss) from
operations.................. 158 (1,389) (880) (2,067) (707) (894) (1,631) (3,093) (2,052)
Interest and other income
(expense), net.............. 13 32 20 33 27 (10) (79) (100) 11
-------- -------- --------- -------- -------- -------- --------- ------- -------
Net income (loss)............. $ 171 $(1,357) $ (860) $(2,034) $ (680) $ (904) $(1,710) $(3,193) $(2,041)
-------- -------- --------- -------- -------- -------- --------- ------- -------
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</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Since inception, Viant has funded its operations and investments in property
and equipment through equity financings, bank borrowings and capital lease
financing arrangements. Viant's cash and cash equivalents were $10.3 million at
April 2, 1999.
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Viant's cash and cash equivalents increased from $2.1 million at the end of
1996 to $5.6 million at the end of 1997 to $18.2 million at the end of 1998.
These increases were primarily from the net proceeds from the issuance of
convertible preferred stock in the amount of $3.5 million in 1996, $8.0 million
in 1997 and $20.1 million in 1998. These proceeds were offset primarily by cash
used for operating activities of $1.6 million in 1996, $2.5 million in 1997, and
$8.9 million in 1998 and capital expenditures of $264,000 in 1996, $2.0 million
in 1997 and $901,000 in 1998. Viant's cash and cash equivalents decreased $7.9
million in the first quarter of 1999. Operating activities resulted in a cash
outflow of $7.5 million which is primarily due to the net loss for the quarter,
an increase in accounts receivable and a decrease in accrued payroll.
Viant has a revolving line of credit with a bank which provides for
borrowings of up to $5.0 million. Borrowings under this line of credit, which
expires on July 3, 1999, bear interest at the bank's prime rate plus 0.5% (8.25%
at January 1, 1999). Under the same bank agreement, Viant also has an equipment
line of credit which provides for borrowings of up to $1,250,000, bears interest
at the bank's prime rate plus 1.0% (8.75% at January 1, 1999) and is repayable
in 36 equal monthly installments. Borrowings under the bank lines of credit may
be prepaid in whole or in part without penalty and are secured by substantially
all of Viant's assets. The lines of credit require compliance with financial
covenants including the maintenance of financial ratios, including a ratio of
total liabilities to tangible net worth of 1.0 and a limitation on maximum
quarterly net losses. Viant was in default on a financial covenant at January 1,
1999, for which Viant received a waiver from the bank. In April 1999, Viant
extended this credit facility to July 3, 1999 and renegotiated the financial
covenants. The financial covenant for which the Company was in default was
amended such that the Company may incur a loss not to exceed $2,500,000 for each
of the fiscal quarters ending April 2, 1999 and July 2, 1999. In addition, the
total liabilities to tangible net worth ratio covenant was amended such that the
Company shall maintain as of the last day of each fiscal month a ratio of total
liabilities to tangible net worth of not more than 1.25 to 1. Viant was in
compliance with all its financial covenants during the first quarter of 1999.
Viant also has a capital lease facility with a leasing company for total
availability of $3.2 million secured by the capital assets purchased with the
borrowings. Outstanding borrowings under the above credit facilities totaled
$5.6 million as of April 2, 1999. Upon the completion of this offering, Viant
intends to repay approximately $3.3 million outstanding under the bank lines of
credit.
Viant believes that its current cash, cash equivalents and short-term
investments, available borrowings under its credit facilities and the net
proceeds from this offering will be sufficient to meet Viant's working capital
and capital expenditure requirements for at least the next 12 to 24 months.
However, there can be no assurance that Viant will not require additional
financings within this time frame or that such additional financing, if needed,
will be available on terms acceptable to Viant, if at all.
YEAR 2000 COMPLIANCE
Many currently installed computer systems and software products worldwide
are coded to accept only two-digit entries to identify a year in the date code
field. Consequently, on January 1, 2000, many of these systems could fail or
malfunction because they may not be able to distinguish between the year 1900
and the year 2000. Accordingly, many companies, including Viant and Viant's
clients, potential clients, vendors and strategic partners, may need to upgrade
their systems to comply with applicable Year 2000 requirements.
Because Viant and its clients are dependent, to a very substantial degree,
upon the proper functioning of computer systems, a failure of these systems to
correctly recognize dates beyond January 1, 2000 would disrupt operations. We
may experience operational difficulties caused by undetected errors or defects
in our internal systems. Purchasing patterns of our clients and potential
clients may be affected by Year 2000 issues as companies expend significant
resources to
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correct their current systems for Year 2000 compliance and may therefore defer
new initiatives until they do so. We may become involved in disputes regarding
Year 2000 problems occurring in solutions we have developed or implemented or
arising from the interactions of our Internet solutions with other software
applications. Year 2000 problems could require us to incur delays in providing
our services to clients and unanticipated expenses.
To address these issues, Viant formed a Year 2000 assessment and contingency
planning committee, called the Y2K Committee, to review both its information
technology systems and its non-information technology systems, and where
necessary, to plan for and supervise the remediation of those systems. The Y2K
Committee is headed by Viant's Chief Technology Officer. Viant has performed a
preliminary assessment of the Year 2000 readiness of its critical hardware and
software systems. The providers of these systems have either confirmed to Viant
that these systems are Year 2000 compliant or provided the information necessary
for Viant to plan and implement upgrades to make them Year 2000 compliant. Viant
has begun to implement upgrades and test these systems as part of its Year 2000
efforts. Based on the information received to date from these vendors, Viant
believes this process should be completed by September 1999.
Viant has initiated communication with other significant vendors to
determine the extent to which they are vulnerable to Year 2000 issues. Viant
expects to complete discussions with these vendors regarding their Year 2000
remediation plans by July 1999. Viant has held and continues to hold discussions
with its clients regarding their Year 2000 remediation plans. Based on
discussions to date, Viant believes that the Year 2000 problem will not
materially impact the operations of our significant clients or their plans to
purchase our services.
Based on work done to date, Viant believes that the cost of work and
materials to complete its Year 2000 program will be approximately $120,000, of
which approximately $15,000 has been spent to date. This includes the cost of
material upgrades, software modifications and related consulting fees.
Viant is developing contingency plans for critical individual information
technology systems and non-information technology systems to address Year 2000
risks not fully resolved by Viant's Year 2000 program. These contingency plans
should be completed by the fourth quarter of 1999. To the extent that our
assessment is finalized without identifying any material noncompliant
information technology systems operated by us or by our vendors, Viant feels the
most reasonably likely worst case Year 2000 scenario is a temporary
telecommunications failure which would impair communications among our offices.
Viant currently has contingency plans in place to address such a disruption in
its telecommunications systems and believes that such a disruption would not
have a material effect on our operations. However, a prolonged
telecommunications failure beyond our control could have a material adverse
effect on our business, results of operations and financial condition.
Viant believes that the Year 2000 risk will not present significant
operational problems for Viant. However, there can be no assurance that our Year
2000 program will prevent any material adverse effect on our operations,
financial condition or customer relations.
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BUSINESS
Viant is a leading Internet professional services firm providing strategic
consulting, creative design and technology services to companies seeking to
capitalize on the Internet. Viant creates value by helping clients rapidly
develop and deploy Internet solutions. Viant accomplishes this value creation
through a business model that emphasizes multi-disciplinary teams, an integrated
service model, organic growth that reinforces the firm's culture and continuous
innovation.
Viant believes it has gained considerable experience and market presence
from completing significant engagements for Global 1000 companies such as
American Express, BankBoston, Compaq, Deutsche Bank, Hewlett-Packard, Kinko's,
Lucent Technologies, Polo/Ralph Lauren and RadioShack.
The Company was originally incorporated in April 1996, as a California
corporation. The Company changed its name from Genuine Internet to Silicon
Valley Internet Partners on June 14, 1996. On April 3, 1998, we changed our name
to Viant Corporation. Prior to the closing of this offering, we will
reincorporate in the state of Delaware.
INDUSTRY BACKGROUND -- INTERNET GROWTH AND OPPORTUNITIES
Over the past several years the number of Internet users worldwide has grown
rapidly. Increasing numbers of individuals and companies now use the Internet to
search for information, communicate with others, conduct business and seek
entertainment. According to International Data Corporation, the estimated number
of Internet users worldwide was 69 million at the end of 1997, and is projected
to grow to 320 million users by the end of 2002.
The broad acceptance of the Internet has created numerous opportunities for
companies that are seeking growth and are challenged by highly competitive and
rapidly changing markets, geographically dispersed operations and demands for
increased efficiencies. As a result, many senior executives now rank their
company's Internet strategy among their highest corporate priorities.
Internet solutions permit companies to acquire new customers, conduct
electronic commerce and consistently manage customer relationships. These
solutions can also dramatically improve a company's ability to access, analyze
and distribute important information to suppliers, business partners, employees
and customers. A manager can, for example, check suppliers' inventories for the
availability, pricing and estimated delivery time for important parts needed to
fulfill orders. A sales person can perform research on her company's corporate
database even though she is thousands of miles from corporate headquarters.
Employees worldwide can verify their retirement account balances simply by
checking their company's website. A consumer can comparison shop and purchase an
item from the comfort of her own home. These examples translate into revenue
growth and improved operating efficiencies.
While there are numerous benefits that may be gained by utilizing the
Internet, the analysis, design and implementation of an effective Internet
solution requires a range of skills and expertise which few businesses possess.
The successful design of Internet solutions requires careful analysis and
definition of the strategic implications of the Internet for a business, the
creative possibilities for brand, content and user experience and the technology
required to support the solution. The rapid development and launch of Internet
solutions further requires substantial expertise to develop and integrate new
business processes with existing capabilities, to design and execute Internet
marketing communications plans and to evaluate, select and implement the
appropriate technologies for the Internet solution.
The current supply of high quality, experienced Internet professionals is
relatively limited, making the market extremely competitive for these
individuals. Furthermore, it is costly and
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inefficient for companies seeking to implement their own Internet solutions to
hire, train and retain these professionals. As a result, an increasing number of
businesses, from start-ups to Global 1000 companies, engage Internet
professional services firms to help them design and implement Internet
solutions. The market for Internet and e-commerce services is projected to grow
dramatically. Forrester Research estimates that this market will grow from $5.4
billion in 1998 to $32.7 billion in 2002, representing a compound annual growth
rate of 56.9%.
The rapidly growing demand for Internet professional services has attracted
many firms to this market. Viant believes that many of these firms suffer from
one or more of the following limitations:
- Strength in only one or two of the core competencies of strategic
consulting, creative design and technology. Many of these firms have
expertise in only one or two of these critical disciplines and therefore
must partner with other firms to deliver a complete Internet solution. As
a result, separate teams or firms with differing approaches, skill sets
and cultures work on the same project. This separation often results in
project delays, increased costs and other inefficiencies.
- A time and materials business model. Service providers who utilize a time
and materials model typically bill their clients for the time spent on a
project. As a result, these service providers have a reduced incentive to
complete a project early or on time as they will continue to be paid even
if a project takes longer than planned. Clients, therefore, generally
perceive that the time and materials model fails to align the service
provider's goals with the client's, namely the rapid, efficient delivery
of a working Internet solution.
- Dependence on acquisitions to add competencies and geographic reach.
Certain Internet professional services firms grow through acquisitions of
other firms in order to gain expertise in core disciplines or to expand
geographically. The mere acquisition of these additional disciplines may
not necessarily result in the creation of an integrated service approach.
In addition, the integration of an acquired firm's employees and business
systems is often difficult and time-consuming, resulting in inconsistent
and inefficient delivery of services and solutions to the client.
Accordingly, Viant believes that companies seeking to effectively capitalize
on the Internet require and seek a firm with expertise in strategic consulting,
creative design and technology to provide an integrated, seamless delivery of
Internet solutions.
THE VIANT SOLUTION
Viant is a leading Internet professional services firm providing strategic
consulting, creative design and technology services to companies seeking to
capitalize on the opportunities presented by the Internet. Viant has experienced
increased demand for its services. Viant's revenues have grown from $640,000 in
1996 to $8.8 million in 1997 and $20.0 million in 1998. Key elements of the
Viant solution are:
INTEGRATED APPROACH
Viant combines three core disciplines -- strategic consulting, creative
design and technology -- to help clients reevaluate their strategies and
transform their businesses to take advantage of the Internet. Viant delivers its
services for each project through a multi-disciplinary team of strategists,
creative designers and information technologists who typically work with key
client representatives in a local Viant office. Viant believes that this
integrated approach enables it to deliver comprehensive Internet solutions which
can be implemented seamlessly and quickly. This approach also reduces costs,
miscommunications and delays which can occur when the strategic consulting,
creative design and technology disciplines are handled by different teams or
firms.
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VIANT SERVICE MODEL
We created the Viant Service Model to organize and address the broad-ranging
and complex needs of clients hoping to utilize the Internet effectively. The
service model divides each engagement into three well-defined phases --
Envision, Experience, and Launch -- which provide our consultants with a
consistent yet flexible service approach. The Viant Service Model takes a client
efficiently from strategy all the way through implementation. Our approach
identifies and prioritizes initiatives, rapidly delivers them to market,
captures valuable market experience and feedback, and immediately applies this
feedback to refine the solution. Viant executes this approach through an
iterative process, which results in Internet solutions that are better suited to
today's fast-changing market environment than solutions based on a traditional,
lengthy and non-iterative approach. The service model also allows us to
identify, capture, and reuse valuable Internet frameworks, designs, processes
and techniques which we develop in our client projects.
FIXED-PRICE AND FIXED-TIME
In substantially all of its engagements, Viant charges a fixed price for its
services and provides the client with a substantive deliverable within a short,
predetermined timeframe. Viant believes that clients favor fixed-price,
fixed-time contracts because they focus on clearly defined deliverables and
permit the client to more accurately manage project costs. These contracts also
create incentives for Viant to finish within budgeted timeframes, thereby more
closely aligning Viant's interests with the client's. Furthermore, this model
creates the opportunity for Viant to achieve higher margins by delivering its
solutions more efficiently.
STRATEGIC BUSINESS FOCUS
Viant works with clients to reevaluate and transform their strategic
business processes and operations to take advantage of the Internet. Viant's
focus on initiatives that are critical to a client's strategy, operations and
organization enables Viant to work with a client's most senior executives. Viant
believes that its participation in and development of these critical initiatives
results in the opportunity to provide premium value services.
ORGANIC GROWTH MODEL
Viant believes its organic growth model is essential to its ability to
maintain quality while increasing revenues. Viant has built its business
entirely through the training and assimilation of new employees, as opposed to
adding employees and disciplines through mergers or acquisitions. A principal
element of this training and assimilation is the QuickStart program, an
intensive three-week program of activities and instruction attended by all new
employees.
In order to open new offices effectively and quickly, Viant staffs new
locations with employees who have relocated from other offices. This process
allows Viant to bring new offices on-line quickly, ready to service local
clients. Additionally, Viant believes this process maintains consistent
firm-wide quality and culture, and an ongoing entrepreneurial environment.
VIANT CULTURE
Viant's culture is founded on professional growth, rapid learning and
enterprise-wide knowledge-sharing. Employees are evaluated not only on their
individual performance, but also on how well they teach other employees and
share knowledge. Viant's integrated team approach and policy of servicing its
clients from local offices has reduced travel time and allowed Viant managers to
allocate work efficiently. In 1998, Viant's turnover rate was approximately 9%.
Viant believes that this is less than one-half of the average rate for publicly
traded technology consulting firms in the United States.
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VIANT'S STRATEGY
Viant's goal is to build upon its position as a leading provider of Internet
professional services. To achieve this goal, Viant is pursuing the following
strategies:
EXPAND EXISTING CLIENT RELATIONSHIPS AND ATTRACT NEW CLIENTS
Viant continues to focus on delivering high quality solutions to help its
clients redefine and transform their businesses in order to capitalize on the
Internet. Viant believes this focus improves client satisfaction and results in
two distinct benefits: follow-on engagements with existing, satisfied clients
and referrals for engagements with new clients. Viant also plans to continue to
build its brand recognition, grow its sales efforts and expand its skill set to
acquire new clients seeking comprehensive Internet solutions.
CONTINUE ENHANCEMENT OF CORE DISCIPLINES
To enhance its knowledge and thought leadership in the core disciplines --
strategic consulting, creative design and technology -- Viant has established
the following research and innovation groups:
THE VIANT INSTITUTE, which is comprised of dedicated internal personnel
and outside advisors whose efforts are focused on thought-leading research
and writings on Internet-related issues. Viant uses this research
internally to enhance its knowledge and service offerings, and also
distributes this research to clients and prospective clients as a means of
increasing Viant's visibility in the marketplace.
THE DESIGN STUDIO, which has a dedicated staff that supports the creative
discipline. This group develops new ideas in creative design and user
experience, giving our clients innovative ways to attract and strengthen
relationships with customers over the Internet.
THE TECHNOLOGY CENTER, which is comprised of a dedicated team that
evaluates and tests new and emerging Internet technologies. This team
synthesizes new technologies in order to formulate innovative Internet
architectures. These activities benefit our clients by allowing them to
rapidly incorporate thoroughly-tested, leading edge technologies into
their Internet solutions.
Viant believes that the combination of new intellectual capital from its
innovation groups with its project-based experience will allow it to remain on
the leading edge of strategic consulting, creative design and Internet
technologies.
ATTRACT AND RETAIN THE HIGHEST QUALITY EMPLOYEES
Viant seeks to hire high quality employees with a broad range of experience
and knowledge. Consistent with its organic growth plan, Viant recruits a
majority of its new employees through an employee referral program. This program
rewards employees for new hires referred by them. The QuickStart training and
orientation program accelerates the dissemination of knowledge among new
employees and instills an understanding of Viant's culture and shared values.
Viant's culture provides long-term appeal for its employees by providing
extensive client contact and allowing them to pursue mastery of one discipline
or gain a broad exposure across two or more disciplines. Viant also encourages
its employees to pursue entrepreneurial opportunities by helping to launch new
offices. Viant believes that equity ownership is an important component of
employee compensation. As a result, all Viant employees are granted options to
purchase Viant stock upon commencement of employment.
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LEVERAGE COMPANY-WIDE KNOWLEDGE
Viant's multi-disciplinary teams gain valuable experience and knowledge
through client engagements. Viant's culture, systems and processes promote the
sharing of this knowledge throughout the company. Viant has developed a unique,
proprietary knowledge sharing and collaboration system, consisting of electronic
documents and shared workspaces, called FOCUS. During every client engagement,
Viant project teams seek to expand Viant's knowledge base by identifying
innovative processes, techniques and analyses that they believe will be valuable
to other project teams. The FOCUS system enables the:
- efficient distribution of company-wide knowledge and experience;
- reuse of processes and knowledge from past projects;
- acceleration and enhancement of professional development; and
- close collaboration and knowledge sharing with clients during projects.
The client benefits from Viant's FOCUS system which gives it access to a
broad array of proven assets, methods and project experience. Viant benefits
from this knowledge sharing strategy through the reuse of processes, components
and methodologies. This strategy accelerates the delivery of Internet solutions
and over time could result in improved operating margins.
CONTINUE TO REFINE OUR OPERATING SYSTEMS AND PROCESSES
Viant has built and continues to refine its management processes and
supporting systems in order to streamline and standardize operations. These
include systems and processes for:
- revenue forecasting;
- recruiting;
- project financial management;
- relationship management;
- career management;
- knowledge sharing;
- project staffing; and
- accounting.
Viant believes that the evolution of its infrastructure has allowed and will
continue to allow it to scale its operations and compete effectively.
EXPAND GEOGRAPHICALLY
Viant believes that significant revenue growth opportunities exist from
expansion into new geographic markets. To date, Viant has opened offices in six
cities in the United States and an office in London. Viant has plans to expand
to additional domestic and international markets. Through its organic growth
model, each office is initially staffed with experienced employees from other
Viant offices and then with new employees from the local geographic area. Viant
believes this expansion strategy provides ongoing entrepreneurial opportunities
for employees and closer relationships with clients.
PROVIDE SERVICES ACROSS A BROAD RANGE OF INDUSTRIES
Viant focuses on building knowledge of and skills relating to the design and
development of Internet solutions to help companies redefine and transform their
businesses. Viant believes the broad-based business knowledge and Internet
expertise it attains from its client engagements is
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scalable across a wide range of industries. Clients have effectively utilized
this expertise in a broad range of industries which, to date, have included:
- financial services;
- retail;
- music and entertainment;
- pharmaceutical;
- high technology;
- utilities;
- distribution; and
- telecommunications.
VIANT SERVICES
Viant has focused on developing substantial expertise in five major service
areas. These service areas include:
INTERNET STRATEGY SOLUTIONS
Companies often pursue multiple Internet initiatives in an isolated and
un-coordinated manner, ignoring the opportunities to integrate these initiatives
with broader corporate strategy and business practices. Viant works closely with
a client to better understand its existing business strategy, processes and
needs in order to design a comprehensive and complementary Internet strategy.
Viant also works with a client to redesign its organizational structure and
processes to fully capitalize on the new, Internet-inclusive business strategy.
Viant then helps the client to focus, define, and prioritize its Internet
investments to ensure that they represent a unified strategy closely tied to the
client's overall business objectives and operations.
ELECTRONIC COMMERCE SOLUTIONS
As increasing numbers of people research and purchase goods and services
directly over the Internet, many companies have rushed to create their own
Internet storefront in what they view simplistically as a new distribution
channel. Viant helps clients move beyond this approach by focusing them on
critically important issues such as customer segmentation, online customer
behavior, the design and creation of positive user experiences, customer
information capture and analyses, and effective online customer service. This
focus helps clients to create electronic commerce solutions that attract,
satisfy, and retain loyal customers through the Internet.
BUSINESS PARTNER SOLUTIONS
Historically, business partners have largely interacted via multiple and
sometimes inefficient methods including faxed correspondence, telephone sales
and support, paper-based orders, invoicing and payment. Business partners can
greatly improve the efficiency of this process by using secure Internet-based
transactions and correspondences systems, often called extranets. Viant has
gained substantial knowledge and expertise in rapidly analyzing complex business
operations and partner interaction systems, redesigning business partner
interactions around extranet solutions, designing effective user interfaces and
functionality, and integrating extranet solutions with disparate hardware and
software systems.
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INTERNAL INFORMATION SOLUTIONS
As companies grow in headcount and geographic breadth, managers often face
the difficult and costly question of how to share information with large numbers
of employees, often in numerous geographic locations. For example, an updated
brochure or handbook that needs to be sent to 850 locations worldwide requires a
significant amount of time and resources. Viant helps clients to develop
corporate Internet solutions, often called intranets, which allow the secure
capture, storage, and distribution of information by and to a client's
authorized employees. Viant designs and deploys intranet solutions, for example,
that enable a global company to post documents, audio or video clips on a
website for access by all employees worldwide. Viant's intranet solutions allow
clients to communicate important information to those who need it in a cost and
time efficient manner.
INTERNET-ONLY BUSINESS SOLUTIONS
The dramatic growth in Internet use has also given rise to a new class of
businesses which are designed specifically for the Internet. Viant works with
clients and managers to design and deploy the business strategy, operations, and
systems for these new Internet enterprises. Because market conditions shift
extremely quickly for Internet-based businesses -- for example with the entrance
of new competitors regulations or technologies -- clients value Viant's ability
to help them rapidly and effectively analyze conditions, anticipate and respond
to changes, and refine their business strategies and systems.
VIANT SERVICE MODEL
The Viant Service Model is comprised of three distinct, customizable and
iterative phases, which facilitate the rapid delivery of Internet solutions.
Viant works with the client to understand its specific business needs and
determine the most appropriate activities within each phase of the service
model. Each phase takes approximately 60-90 days, is provided on a fixed-price,
fixed-time basis and involves all three core disciplines. These three phases may
be repeated as required to
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refine and deliver an Internet solution. The Viant Service Model can be
illustrated graphically as follows:
(DIAGRAM DEPICTS VIANT SERVICE MODEL)
(A triangle with the words Strategy, Technology, and Creative, and three
boxes, labeled, "Envision: Explore and Develop the Internet Strategy";
"Experience: Design Prototypes to Test Approaches"; and "Launch: Build and
Deploy the Internet Solution". The words Ideas/Option, Blueprint/Market Tests
and Build/Refine will appear under the boxes)
ENVISION
During the first phase, ENVISION, project teams examine the client's
marketplace, including competitors, customer needs and brand identity. Viant
interprets the client's core value proposition and business practices for the
Internet environment based on Viant's integrated perspective of customer
behavior and needs, competitive dynamics and technology trends and issues. Viant
works with the client to establish a focused objective -- for example, increased
customer value, strengthened partner relationships or improved operating
efficiencies -- and a comprehensive set of business options to achieve this
objective.
Once this set of options is developed and articulated, Viant works with the
client to further analyze and prioritize the potential options by:
- defining the decision framework and criteria to select near-term and
long-term Internet investments;
- developing a profile of the client's capabilities and comparing those
capabilities against the requirements of the solution;
- performing a rigorous business case analysis to determine which option to
pursue; and
- creating a conceptual design to help visualize the options.
At the end of this phase, Viant delivers an action plan that is understood
and supported by key managers throughout the client organization and is grounded
in the client's business strategy. The action plan outlines specific Internet
solutions and their expected benefits. The plan also identifies the work needed
to determine the solution's requirements.
EXPERIENCE
In the second phase, Experience, the project team utilizes the action plan
from Envision and carefully investigates the Internet solutions through market
tests. The project team creates an initial layout and subsequent prototypes of
the Internet solution. These prototypes can then be tested with the client's
existing and potential customers. The testing process allows clients to
incorporate customer feedback into the Internet solution.
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Another important aspect of the Experience phase is the continued assessment
of prototypes against the client's broad business strategy, internal operations
and processes, marketing initiatives and technology systems. Viant helps the
client refine its initial strategy and action plan into a better defined
Internet solution and launch plan.
LAUNCH
In the third phase, Launch activities center on creating the capabilities
needed not only to implement an Internet solution, but also to establish that
Internet solution as an ongoing and integrated dimension of the client's
business operations. Project teams build and deploy Internet solutions through
incremental releases. Project teams perform rigorous testing on each release to
ensure proper functioning and reliability. Viant trains the client throughout
the Launch phase enabling the client to manage ongoing maintenance once the
Internet solution is complete. Activities in this phase include:
- development of Internet software applications;
- integration between the Internet solution and the client's existing
technology systems;
- refinement of the client's business and Internet strategy, based on
operational needs and ongoing customer feedback;
- management of changes in work processes;
- rigorous testing of an Internet solution to ensure reliability and proper
functionality;
- transitioning the Internet solution to client personnel for ongoing
maintenance and revision; and
- execution of the integrated marketing strategy.
The Viant Service Model's iterative build and release process provides a high
degree of flexibility to meet changing client needs and ensures a high-quality
solution.
BENEFITS OF THE VIANT SERVICE MODEL
The Viant Service Model provides us with considerable benefits and
advantages including:
- A consistent approach for the rapid, effective delivery of all of Viant's
services. This approach is taught to all Viant consultants through the
Quickstart program and subsequent training programs;
- Standard methods to identify and capture valuable reusable assets
developed in client projects. These reusable assets include proprietary
Internet frameworks, designs, tools, processes, techniques and software;
and
- A powerful means to facilitate sales forecasting and resource management.
Viant also believes that the service model provides benefits to clients,
which include:
- COMPLETENESS. The Viant Service Model incorporates all the elements needed
to design and implement an effective Internet solution, including the
creation of the business strategy, development of the marketing plan,
design of a business organization, layout of the technical architecture,
implementation of the Internet solution and the introduction of the
redesigned business. The Viant Service Model provides clients with an
integrated set of activities that effectively move them from analysis
through execution.
- SPEED. The Viant Service Model takes a client efficiently from strategy
all the way through implementation, avoiding costly hand-offs that
typically occur when a client uses one consulting team or firm for
strategy and operations, another for creative design and
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marketing, and a third for systems development and integration. Clients
utilizing the Viant Service Model gain a benefit by rapidly getting the
right Internet initiative to market.
- INNOVATION. The Viant Service Model draws on multi-disciplinary teams of
strategic consulting, creative design and technology experts. Clients
benefit by having innovative ideas formed from three, distinct
disciplinary perspectives, and from having these perspectives integrated
early and throughout all phases of the engagement.
- ALIGNMENT. The Viant Service Model draws on key representatives from
various functional areas within the client's organization, including
marketing, information technology, strategy and operations. As a result,
the Internet strategy and execution receives deep and broad support across
the client organization. This organizational support helps to ensure that
Internet initiatives and investments are aligned with the client's
business goals and operations.
- UNIQUENESS. The Viant Service Model is highly flexible and can incorporate
a client's prior Internet work and investments as well as its unique
brand, organization and technology requirements. As a result, each client
gets a unique work plan that is most efficient for its operations and
organization, as well as unique Internet initiatives to specifically
address that client's needs.
- RISK MITIGATION. The Viant Service Model relies on proven frameworks,
techniques and processes. As a result, clients benefit from reliable
mechanisms that can be used to identify and manage project risk and to
ensure the quality delivery of Internet initiatives, on time and within
budget.
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We seek to protect the software applications, methods and internal business
processes that comprise the Viant Service Model through a combination of
copyright and trade secret laws. We use all reasonable efforts to protect the
proprietary and confidential aspects of the service model by requiring any party
having access to them to execute a nondisclosure agreement or an employee
confidentiality agreement.
SALES AND MARKETING
Viant markets its Internet professional services through sales professionals
located in Boston, Chicago, Dallas, Los Angeles, New York, and San Francisco.
Viant believes that this regional sales focus combined with our local service
approach allows Viant to develop strong market presence and name recognition in
each of our local markets. Viant's sales professionals operate through a
coordinated and structured process to evaluate large numbers of prospective
clients, target qualified prospects and secure new engagements.
Viant primarily markets its services to Global 1000 corporations. In
addition, Viant markets its services to early stage companies whose businesses
are designed and built around the Internet. Viant believes that the
opportunities and issues created by the Internet, including new brand
enhancement possibilities and dramatic shifts in product distribution
strategies, span a broad range of industries.
Our sales efforts are supplemented by marketing and communications
activities which we pursue to further build Viant's brand name and recognition
in the marketplace. These activities include direct mail campaigns targeting
corporate executives, public speaking opportunities, attendance at industry
conferences and business events, a public relations program, sales and marketing
materials and our own focused Internet brand initiative.
SIGNIFICANT CLIENTS
Our clients include the following companies:
American Express Company
BankBoston Corporation
BlueTape, LLC
CMGI, Inc.
Compaq Computer Corporation
Della & James, Inc.
Deutsche Bank AG
Dreyfus Brokerage Services
Hewlett-Packard Company
Informix Software
J. Crew Group, Inc.
Kinko's Corporation
Lucent Technologies Inc.
Oncology Therapeutics Network, Corp., a subsidiary of Bristol-Myers
Squibb Co.
Polo/Ralph Lauren Corporation
RadioShack
Unum Corporation
We derive a significant portion of our revenues from large projects for a
limited number of clients. In 1998, our five largest clients accounted for
approximately 59% of our revenues. During this period, Kinko's Corporation,
Lucent Technologies Inc. and Compaq Computer Corporation each accounted for more
than 10% of our revenues. In the first three months of 1999, our five largest
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clients accounted for approximately 65% of our revenues. During this period,
Compaq and Radio Shack each accounted for more than 10% of our revenues.
CLIENT CASE STUDIES
KINKO'S
Kinko's is an international leader in the document copying and business
services industry, operating in 1,000 locations in eight countries with more
than 25,000 employees worldwide. When Kinko's combined its numerous regional
partnerships into one corporate entity, the company needed a simple, effective
way to distribute information to all of its locations and to facilitate
communications among its employees. Kinko's senior management recognized that
automating information distribution and facilitating company-wide communications
would not only save time and money, but also help create and sustain a
consistent corporate culture.
To date, Viant has helped Kinko's relaunch its complete website,
www.kinkos.com, and launch an intranet. Kinko's views its website as a key
component to its corporate repositioning effort. Viant worked with Kinko's to
establish the strategic direction for the new website; reinterpret Kinko's brand
for the internet; redesign the site's look and feel, navigation and content; and
enhance the site's functionality. The newly designed website centers on customer
needs and experience rather than the simple display of products and services.
The site was rapidly redesigned and relaunched in just three months, and is the
platform from which Kinko's will further develop its full Internet business
model.
In just six months Viant helped Kinko's design and build a corporate
intranet that delivers daily updated business information to each manager. The
Kinko's intranet speeds the flow of information and encourages discussion,
unifying widely dispersed operations into a single community. Furthermore,
Kinko's reported to Viant that by replacing its prior practice of weekly
mailings, the new intranet system has reduced printing and distribution costs by
80%.
THE TANDEM DIVISION OF COMPAQ
Compaq's Tandem Division provides software and hardware solutions to support
business critical electronic commerce, business information and transaction
processing functions for industries such as telecommunications and finance that
require absolute reliability. Intense competition in the marketplace drove
Tandem towards an increasingly complex and rapidly evolving product line.
To communicate with its worldwide sales force, Tandem implemented a
CD-ROM-based news and information system. This CD-ROM system required Tandem to
regularly compose, manufacture and ship hundreds of compact discs. This system
proved to be inefficient and costly as the system simply could not keep up with
the growing information demands of the business.
Viant helped Tandem replace this CD-ROM system with a highly flexible,
easy-to-administer intranet that instantly delivers the latest product
information and other sales tools to the Compaq sales force. The immediate
availability of current information has enabled sales people to devote more time
to selling the company's products.
Tandem's success with the intranet helped its executives realize that
up-to-date product information would also be valuable to its partners and
customers. The new business and information infrastructure became a platform for
a business partner extranet and a public website. Tandem now uses one common
Internet-based system to create a targeted, personalized view of product and
company information for each of its sales force, business partners and
customers.
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The use of Viant's proprietary service model allowed Tandem to move from the
intranet solution concept to actual launch in just four months. The partner
extranet and public website were launched shortly thereafter. In the first year
using Viant's new solution, Tandem realized the following benefits:
- a $1.7 million reduction in annual printing and distribution costs;
- a shortened publishing cycle from two to three weeks to just one to two
days;
- a streamlined site management process requiring fewer people;
- improved sales force productivity, with sales representatives reporting 2
hours saved per week; and
- an improved public Internet presence, with a greater than 100% increase in
the number of visitors and a greater than 300% increase in web page hits.
ONCOLOGY THERAPEUTICS NETWORK (OTN)
Oncology Therapeutics Network (OTN), a subsidiary of Bristol-Myers Squibb,
provides pharmaceutical delivery services to over 2,000 physician accounts. OTN
sought to accelerate revenue growth and reduce expenses by leveraging web
technologies.
Viant and OTN collaborated to create a customer extranet that provides
tailored, online access to over 1,000 products and related sales information in
an easy-to-use design for non-technical users. OTN Online enables customers to
research product information on their own, freeing OTN's sales representatives
and collection specialists to focus on building and maintaining customer
relationships.
Viant created a database-driven Website that presents personalized product
catalogs and customer-specific sales and invoice information. OTN customers are
able to access their information, while the OTN webmaster can update the
information in real-time. The site interfaces with OTN's existing financial
systems to enable field sales representatives to provide real-time account
management.
By keeping OTN's core business strategy at the forefront of web development
efforts, Viant enabled OTN to pursue an aggressive Internet initiative without
compromising their ability to provide high quality customer service and support.
Using Viant's Service Model to build a flexible web business, OTN was able to
integrate its existing system while creating an extendable platform for future
Internet initiatives.
BLUETAPE
BlueTape was founded in 1998 to deliver user-driven interactive
entertainment experiences combining music, videos, commerce and information.
BlueTape's founders sought a business partner that could help develop BlueTape's
core business strategy and capabilities as well as its first entertainment
offering.
BlueTape chose Viant because of its ability to analyze, design and build
multiple aspects of a new Internet based business. Viant worked closely with
BlueTape to transform BlueTape's business concept into a fully operational
venture. This engagement integrated Viant's multi-disciplinary team approach and
proprietary service model with BlueTape's internal capabilities to form a truly
joint effort.
As part of the collaboration process, BlueTape moved into Viant's New York
offices to create a focused work environment. The combined team conducted
extensive research on existing music and music video Internet sites and worked
to create a truly new user experience. This result was sputnik7.com, a unique
and innovative entertainment experience centering on high-quality music
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and video. Viant's service model also helped BlueTape to accelerate the design,
development and deployment of the sputnik7.com site.
sputnik7.com is a real-time, online music and video experience built to be
continually shaped by audience feedback. The site delivers synchronized
streaming media through a web browser, and operates 24-hours-a-day,
seven-days-a-week. sputnik7.com features a broad new music mix that includes
electronica, hip-hop and rock, and is focused on providing new music ranging
from unsigned and independent label artists to established acts on major labels.
While watching a video, a viewer can retrieve artist information, chat
online with other viewers, purchase items and make music video requests. The
site was specifically built so that audience ratings, requests, site navigation
decisions and other feedback can be gathered, aggregated and analyzed in a
structured format. This user data is then employed by BlueTape's music
programmers to shape the user experience. A digital library and an intuitive
scheduling console let sputnik7.com music programmers easily schedule and
program music, music videos and advertisements.
COMPETITION
Viant competes in the Internet professional services market, which is
relatively new and intensely competitive. Viant expects competition to intensify
as the market evolves. Viant believes that the competitors fall into several
categories, including the following:
- Internet service firms, such as AGENCY.COM, iXL, Organic Online, Proxicom,
Razorfish and USWeb/CKS;
- technology integrators, such as Andersen Consulting, Cambridge Technology
Partners, Cap Gemini, EDS, IBM, and Sapient; and
- strategic consulting firms, such as Bain, Booz-Allen & Hamilton, Boston
Consulting Group, Diamond Technology Partners, McKinsey and Metzler Group.
Many of Viant's competitors have longer operating histories, larger client
bases, longer relationships with clients, greater brand or name recognition and
significantly greater financial, technical, marketing and public relations
resources than Viant. Viant believes that only a few of these competitors offer
an integrated package of professional Internet services. Several competitors,
however, have announced their intention to offer a broader range of services
than they currently provide.
Viant believes that the principal competitive factors in the Internet
professional services market are: the provision of an integrated services,
breadth of service offerings, cost certainty and a referenceable customer base.
Viant believes that its service model allows it to compete favorably in all of
the above areas.
There are relatively low barriers to entry into the Internet professional
services market. As a result, new market entrants pose a threat to Viant's
business. Existing or future competitors may develop or offer services that are
comparable or superior to ours at a lower price, which could have a material
adverse effect on our business, financial condition and results of operations.
LEGAL PROCEEDINGS
From time to time, Viant may be involved in litigation incidental to the
conduct of its business. Viant is not currently party to any material legal
proceedings.
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PEOPLE AND CULTURE
Viant had 27 employees at the end of 1996, 119 at the end of 1997, and 246
employees as of April 2, 1999. None of Viant's employees is represented by a
labor union and Viant believes its employee relations are excellent. Although
Viant has experienced rapid growth, it continues to grow organically and to
introduce every new employee into the Viant culture via its intensive three-week
Quickstart training program. Viant believes that this shared introductory
experience is critical to its corporate culture and service quality.
Viant recognizes that its employees are key to its future success. This
future success is based on the following factors:
- an effective recruiting program that attracts bright, creative and
entrepreneurial candidates;
- a strong corporate culture reinforced through our organic growth model;
- ongoing training and development; and
- equity ownership for all employees.
PHILOSOPHY
Viant's personnel and culture philosophy is simple: to provide every
employee with an environment for professional growth and development. Viant
believes that intelligent and motivated individuals achieve their fullest
potential by collaborating with high-caliber professionals in a work environment
charged with creativity and innovation. Viant also believes that individual
learning is accelerated when the firm's collective knowledge and experience is
shared in a team environment that is stimulating, challenging and fun.
RECRUITING
Viant dedicates significant resources to its recruiting efforts. A majority
of Viant's new hires come from referrals by current employees. Viant believes
that its existing employees are an excellent recruiting resource and rewards
employees that bring new people into the organization. Viant believes that the
success of its employee referral program is a direct reflection of current
employee satisfaction. Viant also actively recruits from many of the country's
leading graduate and undergraduate programs and through professional search
firms.
TRAINING AND DEVELOPMENT
Viant's training and professional development programs advance the skills of
its employees and enable Viant to deliver high-quality services to its clients.
A principal element of this training is Viant's QuickStart program. QuickStart
is an intensive three-week program attended by all new employees. In the
program, new employees learn about the culture and values of the firm, meet
other new employees from across the firm and gain first-hand experience with
Viant's Service Model. Additionally, Viant continues to develop programs that
ensure each consulting professional has the opportunity to develop skills in
each of Viant's core disciplines.
COMPENSATION
Viant's compensation program has been structured to attract and retain
highly skilled professionals by offering competitive base salaries with annual
cash bonus opportunities. Each Viant employee receives stock options upon
commencement of employment and may receive additional options based upon
performance.
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FACILITIES
Viant's headquarters are located in 20,000 square feet of leased office
space in Boston, Massachusetts. This facility is used by Viant's senior
management, administrative, human resources and training personnel as well as
the Boston business unit consultants. The lease term extends to March 31, 2003
with a five-year renewal at the option of Viant. Additionally, Viant leases
25,000 square feet in New York, 23,466 square feet in San Francisco and 5,003
square feet in Dallas. The New York lease term extends to July 28, 2007 with a
ten-year renewal at the option of Viant. The San Francisco lease term extends to
August 30, 2003 with a five-year renewal at the option of Viant. The Dallas
lease term extends to November 30, 1999 with a five-year option as elected by
Viant to rent 11,834 additional square feet of space. Viant has also entered
into short term leases for professional office space in Chicago and Los Angeles.
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MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
Our directors and executive officers as of April 9, 1999 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH VIANT
- ------------------------------ --- ------------------------------------------------------
<S> <C> <C>
Robert L. Gett 48 President and Chief Executive Officer, and Director
M. Dwayne Nesmith 37 Vice President and Chief Financial Officer
Richard J. Chavez 34 Vice President and Chief Strategy Officer
Francis X. Dudley 37 Vice President and Chief Creative Officer
Timothy A. Andrews 42 Vice President and Chief Technology Officer
Christopher Newell 48 Vice President and Chief Knowledge Officer
Diane M. Hall 36 Vice President and Chief People Officer
Sherwin A. Uretsky 41 Vice President, Worldwide Sales
Michael J. Tubridy 43 Vice President of Finance and Treasurer
Robbie O. Vann-Adibe 37 Vice President and Co-General Manager, London
Edward J. Mello 41 Vice President and General Manager, Dallas
Chirag V. Patel 30 Vice President and General Manager, Boston
Lance L. Trebesch 33 Vice President and General Manager, Los Angeles
Paul R. Michaud 34 Vice President and General Manager, New York
Xavier Zang 34 Vice President and General Manager, San Francisco
Michael A. Keany 39 Vice President and Co-General Manager, London
William H. Davidow(1),(2) 64 Chairman of the Board of Directors
Kevin W. English 46 Director
Venetia Kontogouris(1),(2) 47 Director
</TABLE>
- ------------------------
(1) Member of the audit committee
(2) Member of the compensation committee
ROBERT L. GETT has served as President and Chief Executive Officer and
director of Viant since November 1996. From August 1990 to October 1996, Mr.
Gett was the President-North America and was on the board of directors for
Cambridge Technology Partners (Massachusetts), Inc., a technology consulting and
systems integration firm. From April 1988 to July 1990, Mr. Gett was President
of Fidelity Software Development Company, a subsidiary of Fidelity Investments,
a financial services company. From January 1982 to March 1988, Mr. Gett served
as Managing Director and Chief Information Officer of Smith Barney, Inc., a
financial services company. Mr. Gett currently serves on the board of directors
of Optika, Inc., an imaging and document management software company. Mr. Gett
holds a BS in Mathematics from Indiana University of Pennsylvania and an MS in
Technology Management from American University.
M. DWAYNE NESMITH has served as Vice President and Chief Financial Officer
of Viant since March 1999. From December 1996 to March 1999, Mr. Nesmith served
as Viant's Vice President of Operations and Planning, and from May 1996 to June
1998, Mr. Nesmith served as Viant's Vice President of Product Marketing. From
January 1992 to April 1996, Mr. Nesmith was a product manager for Compuware
Corporation, a technology consulting and software development company. From
August 1989 to December 1991, Mr. Nesmith was a product marketing manager for
Oracle Corporation, a database and technology company. From July 1984 to May
1987, Mr. Nesmith was a consultant for Arthur Andersen, an audit, tax and
consulting firm. Mr. Nesmith holds a BS in Computer Science from the University
of Mississippi and an MBA from the Harvard Business School.
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RICHARD J. CHAVEZ has served as Vice President and Chief Strategy Officer of
Viant since February 1997. From January 1995 to January 1997, Mr. Chavez was a
Principal for CSC Index, a management consulting firm. From August 1994 to
December 1994, Mr. Chavez was a Senior Client Partner and Manager for Cambridge
Technology Partners (Massachusetts), Inc., a technology consulting and systems
integration firm. From January 1989 to June 1994, Mr. Chavez was the Chief
Operating Officer and President of Marble Associates, Inc., a technology
consulting and systems integration firm. Mr. Chavez holds an AB degree in
Political Science from Harvard College.
FRANCIS X. DUDLEY has served as Vice President and Chief Creative Officer of
Viant since April 1998. The Chief Creative Officer is responsible for overseeing
the hiring of design personnel and supervising the design process in all client
engagements. From April 1994 to March 1998, Mr. Dudley has also served as
President of FX Dudley Communications, Inc., a creative consulting and media
production company. From November 1995 to December 1996, Mr. Dudley served as
Executive Director of Creative Affairs and New Media Development for MTI/The
Image Group, a television production company. From May 1992 to November 1993,
Mr. Dudley was an International Marketing Manager for Gannett/USA Today
International, a media company. Mr. Dudley holds a BA in English/Philosophy from
St. Joseph's University.
TIMOTHY A. ANDREWS has served as Chief Technical Officer of Viant since
August 1998. The Chief Technical Officer is responsible for overseeing all
aspects of engineering, software development and technical implementation
activities. From July 1996 to July 1998, Mr. Andrews was a partner at Diamond
Technology Partners, Inc., a strategic management consulting firm. From July
1994 to July 1996, Mr. Andrews was the Vice President of Technology for the
consulting and systems integration unit of Computer Sciences Corporation, a
consulting and systems integration firm. From January 1986 to February 1994, Mr.
Andrews was the Chief Technical Officer of ONTOS, Inc., a software company. Mr.
Andrews holds an AB in Engineering Science from Dartmouth College and an MS in
Computer Science and Electrical Engineering from Worcester Polytechnic
University.
CHRISTOPHER NEWELL has served as Vice President and Chief Knowledge Officer
of Viant since April 1999. The Chief Knowledge Officer is responsible for
overseeing the systems and processes that capture and distribute the experience
gained in client engagements. From January 1994 to March 1999, Mr. Newell
founded and served as Executive Director for, the Lotus Institute, the research
and executive education division of Lotus Development Corporation, a software
company. From October 1988 to January 1994, Mr. Newell served as Director of
Organizational Development and Training for Lotus Development Corporation. Since
October 1998, Mr. Newell has served as the Co-Director of the IBM Institute for
Knowledge Management. Mr. Newell holds a BA in Psychology from Wheeling Jesuit
College, an MS in Counseling Education from Suffolk University, and a PhD in
Psychology from Massachusetts School of Professional Psychology.
DIANE M. HALL has served as Vice President and Chief People Officer of Viant
since April 1999. From January 1998 to April 1999, she served as Viant's Vice
President and Chief People and Knowledge Officer, and from March 1997 to January
1998, she served as Viant's Vice President and Chief Knowledge Officer. From
March 1996 to March 1997, Ms. Hall was an independent business and technology
consultant. From August 1993 to March 1996, Ms. Hall was a Senior Director at
Cambridge Technology Partners (Massachusetts), Inc. Ms. Hall holds a BS in
Computer Science from the University of Massachusetts -- Lowell.
SHERWIN A. URETSKY has served as Vice President, Worldwide Sales of Viant
since August 1997. From February 1992 to August 1997, Mr. Uretsky was a Senior
Vice President for Technology Solutions Company, a systems consulting firm. Mr.
Uretsky holds a BS degree in Computer Science from the State University of New
York and an MBA from New York University.
MICHAEL J. TUBRIDY, CPA has served as Vice President of Finance and
Treasurer since March 1999. From December 1997 to March 1999, Mr. Tubridy served
as Viant's Chief Financial
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Officer and Vice President of Finance and Administration. Prior to that, he
served as a consultant to Physiometrix, Inc., a medical device company, from
September to December 1997, and as Physiometrix's Chief Financial Officer and
Vice President of Finance and Administration from November 1994 to September
1997. Mr. Tubridy served as Chief Financial Officer and Vice President of
Finance and Administration for Open Data Corp., a software company, from June
1993 to November 1994. Mr. Tubridy holds a BS in Engineering from the University
of Rhode Island and an MS in Accounting from Northeastern University.
ROBBIE O. VANN-ADIBE has served as Vice President and General Manager, San
Francisco of Viant since January 1997. From April 1996 to January 1997, Mr.
Vann-Adibe served as the Senior Vice President of Financial Services of Viant.
From June 1995 to March 1996, Mr. Vann-Adibe served as Vice President of Product
Marketing at Illustra Information Technologies, a software product company. From
September 1992 to June 1995, Mr. Vann-Adibe worked at Oracle Corporation where
he last served as a Director of Oracle Industries. Mr. Vann-Adibe holds a BSc in
Mathematical Economics and Econometrics from The London School of Economics and
an MSc in Management Science and Operational Research from The University of
Warwick.
EDWARD J. MELLO has served as Vice President and General Manager, Dallas of
Viant since January 1998. From August 1988 to November 1997, Mr. Mello was a
Vice President and Managing Partner of the consulting and systems integration
division of Computer Sciences Corporation, a management and information systems
consulting firm. Mr. Mello began his career at Electronic Data Systems after
serving as an officer in the United States Corps of Engineers. Mr. Mello holds a
BA in Classics from the University of Notre Dame.
CHIRAG V. PATEL has served as Vice President and General Manager, Boston of
Viant since March 1998. From October 1996 to March 1998, Mr. Patel was a
consultant for Viant. From January 1995 to October 1996, Mr. Patel was a
Principal at Oracle Corporation, a database and technology company. From January
1992 to January 1995, Mr. Patel was an Assistant Vice President at Merrill Lynch
& Co., Inc., a financial services firm. Mr. Patel holds a BS in Computer Science
from Fairleigh Dickinson University.
LANCE L. TREBESCH has served as Vice President and General Manager, Los
Angeles of Viant since September 1998. From November 1997 to September 1998, Mr.
Trebesch was an employee of Viant. From March 1996 to June 1997, Mr. Trebesch
was the Head of Strategic Alliances for Dimension X, Inc., a software company.
From June 1989 to February 1996, Mr. Trebesch was the Director of Information
Technology for APL Limited, a shipping company. Mr. Trebesch holds a joint BA in
History and Economics from the University of Washington.
PAUL R. MICHAUD has served as Vice President and General Manager, New York
of Viant since March 1999. From July 1996 to March 1999, Mr. Michaud was an
employee of Viant. From October 1994 to July 1996, Mr. Michaud was the Director
of Consulting for Seer Technologies, Inc., a software consulting firm, and from
June 1990 through October 1994, Mr. Michaud was a Senior Consultant at Seer
Technologies, Inc. Mr. Michaud is the brother-in-law of Michael A. Keany. Mr.
Michaud holds a BS in Computer Science from the Massachusetts Institute of
Technology.
XAVIER ZANG has served as Vice President and General Manager, San Francisco
of Viant since April 1999. From September 1996 to April 1999, Mr. Zang was an
employee of Viant. From September 1993 through July 1996, Mr. Zang was an
Associate with the general management consulting firm McKinsey & Company in San
Francisco. Mr. Zang holds an MBA from the University of California at Berkeley's
Walter A. Haas School of Business and a BA in Economics and German Literature
from the University of Notre Dame.
MICHAEL A. KEANY has served as a Vice-President and Co-General Manager,
London of Viant since April 1999. From July 1996 to March 1999, Mr. Keany was an
employee of Viant. From
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December 1994 to July 1996, Mr. Keany was an associate with the management
consulting firm of Booz, Allen & Hamilton. From December 1990 to December 1994,
Mr. Keany held a variety of roles at Seer Technologies, a software consulting
firm, including Senior Consultant, and General and Consulting Manager. Mr. Keany
is the brother-in-law of Paul R. Michaud, Vice President and General Manager,
New York. Mr. Keany holds a BSc. Hons. in Environmental Studies from the
University of Sunderland.
WILLIAM H. DAVIDOW has served as the Chairman of Viant's board of directors
since July 1997. From May 1985 to the present, he has served as a General
Partner of Mohr, Davidow Ventures, a venture capital firm. Mr. Davidow is
currently serving on the board of directors of Rambus, Inc., Power Integrations,
Inc., and The Vantive Corporation. Mr. Davidow holds a BS and MS in electrical
engineering from Dartmouth College and a PhD in electrical engineering from
Stanford University.
KEVIN W. ENGLISH has served on Viant's board of directors since April 1999.
Since October 1998, Mr. English has served as Chief Executive Officer and
President of TheStreet.com and was appointed chairman of the board in December
1998. Before joining TheStreet.com, Mr. English served as Vice President and
General Manager of the Nexis Enterprise Group, a division of Lexis-Nexis, from
February 1998 to October 1998. From September 1997 to February 1998, Mr. English
directed an advertiser remediation and recompense program for the Reed Travel
Group, a wholly-owned subsidiary of ReedElsevier, and reported to the chairman
of ReedElsevier, the parent company of Lexis-Nexis. Mr. English served as Vice
President of Sales and Marketing of Lexis-Nexis from May 1995 to September 1997
and as a Senior Director from 1994 to May 1995. Mr. English holds a BA in
history from Stonehill College.
VENETIA KONTOGOURIS has served on Viant's board of directors since June
1996. Since July 1997, Ms. Kontogouris has served as the President of Enterprise
Associates, LLC, the venture capital unit of IMS Health, an information
solutions provider to the pharmaceutical and healthcare industries. From July
1997 to present, Ms. Kontogouris has also served as a Senior Vice President of
Cognizant Corporation, a venture capital interest. From 1992 to July 1997, Ms.
Kontogouris was a Senior Vice President with The Dun & Bradstreet Corporation, a
business services company. Ms. Kontogouris serves on the board of directors of
Cognizant Technology Solutions Corporation, an information technology consulting
company and several private companies. Ms. Kontogouris holds a BA from
Northeastern University and an MBA from the University of Chicago.
BOARD COMPOSITION
Viant currently has authorized five directors. In accordance with the terms
of Viant's amended and restated certificate of incorporation, the terms of
office of the members of the board of directors are divided into three classes:
Class I, whose term will expire at the annual meeting of stockholders to be held
in 2000, Class II, whose term will expire at the annual meeting of stockholders
to be held in 2001, and Class III, whose term will expire at the annual meeting
of stockholders to be held in 2002. The Class I director is Venetia Kontogouris,
the Class II directors are William H. Davidow and Kevin W. English, and the
Class III director is Robert L. Gett. At each annual meeting of stockholders
after the initial classification, the successors to directors whose term will
then expire will be elected to serve from the time of election and qualification
until the third annual meeting following election. In addition, Viant's amended
and restated bylaws provide that the authorized number of directors may be
changed only by resolution of the board of directors. Any additional
directorships resulting from an increase in the number of directors may be
changed only by resolution of the board of directors. Any additional
directorships resulting from an increase in the number of directors will be
distributed among the three classes so that, as nearly as possible, each class
will consist of one-third of the total number of directors. This classification
of the board of directors may have the effect of delaying or preventing changes
in control or management of Viant.
39
<PAGE>
Each officer is elected by, and serves at the discretion of, the board of
directors. Each of Viant's officers and directors, other than non-employee
directors, devotes full time to the affairs of Viant. Viant's non-employee
directors devote such time to the affairs of Viant as is necessary to discharge
their duties. Except for the relationship between Messrs. Keany and Michaud,
there are no family relationships among any of the directors, officers or key
employees of Viant.
BOARD COMMITTEES
The audit committee reviews Viant's audited financial statements and
accounting practices, and considers and recommends the employment of, and
approves the fee arrangements with, independent accountants for both audit
functions and for advisory and other consulting services. The current members of
the audit committee are William H. Davidow and Venetia Kontogouris.
The compensation committee reviews and approves the compensation and
benefits for our key executive officers, administers our employee benefit plans
and makes recommendations to the board of directors regarding grants of stock
options and any other incentive compensation arrangements. The current members
of the compensation committee are William H. Davidow and Venetia Kontogouris.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION INTERLOCKS
None of the members of the compensation committee of the board of directors
has at any time since the formation of Viant been an officer or employee of
Viant. No executive officer of Viant serves as a member of the board of
directors or compensation committee of any entity that has one or more executive
officers serving on Viant's board of directors or compensation committee.
DIRECTOR COMPENSATION
The directors do not receive any compensation for their service as
directors, other than reimbursement of all reasonable out-of-pocket expenses for
attendance at board meetings.
CHANGE OF CONTROL ARRANGEMENTS
Shares subject to options granted under Viant's 1996 and 1999 Stock Option
Plans will generally vest over four years, with 25% of the shares vesting after
one year and the remaining shares vesting in installments based on full calendar
quarters over the next 36 months. Viant has granted an option to Robert L. Gett
that provides for accelerated vesting of option shares upon a "change of
control", which, in general terms, would occur upon the closing of either (i) an
acquisition in which the Company is not the continuing or surviving entity after
the acquisition or (ii) a transaction or series of transactions or issuance or
series of issuances in which ownership of more than 50% of the voting shares are
transferred, except for the issuance of shares in the Company's initial public
offering.
40
<PAGE>
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the compensation paid to
Viant's named executive officers, who are our Chief Executive Officer and each
of our four other most highly compensated executive officers, during the fiscal
year ended January 1, 1999:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ---------------
SECURITIES
-------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS OPTIONS COMPENSATION
- ---------------------------------------------------------- --------- --------- --------------- --------------
<S> <C> <C> <C> <C>
Robert L. Gett, President and Chief Executive Officer, and
Director................................................ $ 123,077 $ 100,000 --
Edward J. Mello, Vice President and General Manager,
Dallas.................................................. 195,408 55,576 95,000
Richard J. Chavez, Vice President and Chief Strategy
Officer................................................. 210,073 51,282 -- $ 35,000(1)
Sherwin A. Uretsky, Vice President, Worldwide Sales....... 158,538 49,683 10,000
Robbie O. Vann-Adibe, Vice President and General Manager,
San Francisco(2)........................................ 164,260 43,344 --
</TABLE>
(1) Represents a relocation bonus paid in March 1998.
(2) Currently co-manager of the London office.
On November 4, 1996, Viant and Robert L. Gett entered into a Key Employee
Agreement. Under the terms of Viant's Key Employee Agreement with Mr. Gett, if
Mr. Gett's employment is terminated by Viant without cause, Viant has agreed to
continue to pay Mr. Gett's salary for a period of one year from the date of such
termination. Mr. Gett will also continue to receive the same employee benefits
(deferred bonus eligibility, pension, group medical insurance, profit-sharing or
other employee benefits in place when Mr. Gett is terminated) which he had as an
employee until the earlier of: (1) one year from the date of such termination,
and (2) the date on which Mr. Gett is re-employed.
41
<PAGE>
The following table sets forth information with respect to stock options
granted during the fiscal year ended January 1, 1999 to each of the named
executive officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
---------------------------------------------------------------- ANNUAL RATES OF
% OF TOTAL STOCK PRICE
OPTIONS APPRECIATION
NUMBER OF GRANTED EXERCISE OR OPTION TERM(2)
OPTIONS TO EMPLOYEES PRICE EXPIRATION --------------------
NAME GRANTED (1) IN FISCAL YEAR PER SHARE DATE 5% 10%
- ------------------------------- ------------- --------------------- ------------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Gett, President and -- -- -- -- -- --
Chief Executive Officer, and
Director.....................
Edward J. Mello, Vice President 95,000 7.36% $ 1.50 2/12/08 $ 89,617 $ 227,108
and General Manager, Dallas..
Richard J. Chavez, Vice -- -- -- -- -- --
President and Chief Strategy
Officer......................
Sherwin A. Uretsky, Vice 10,000 0.77% 1.50 2/12/08 9,433 23,906
President, Worldwide Sales...
Robbie O. Vann-Adibe, Vice -- -- -- -- -- --
President and General
Manager, San Francisco(3)....
</TABLE>
- ------------------------
(1) All options were granted under Viant's 1996 Stock Option Plan. Options
granted under the Plan vest over a four-year period with 25% vesting at the
first anniversary date of the vest date and the remaining shares vesting in
installments based on full calendar quarters over the next 36 months. The
board retains discretion to modify the terms, including the price of
outstanding options.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The assumed
5% and 10% annual rates of stock price appreciation from the date of grant
to the end of the option term are provided in accordance with rules of the
SEC and do not represent our estimate or projection of the future common
stock price. Actual gains, if any, on stock option exercises are dependent
on the future performance of the common stock, overall market conditions and
the option holders' continued employment through the vesting period. This
table does not take into account any actual appreciation in the price of the
common stock from the date of grant to the present.
(3) Currently co-manager of the London office.
42
<PAGE>
The following table sets forth certain information regarding exercised stock
options during the fiscal year ended January 1, 1999 and unexercised options
held as of January 1, 1999 by each of the named executive officers:
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT FISCAL MONEY OPTIONS AT FISCAL
YEAR-END(1) YEAR-END(3)
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------------------------- ------------ --------------- ------------- --------------
<S> <C> <C> <C> <C>
Robert L. Gett, President and Chief Executive Officer,
and Director(2)....................................... 740,000 0 $ 2,960,000 $ 0
Edward J. Mello, Vice President and General Manager,
Dallas................................................ 0 95,000 0 261,250
Richard J. Chavez, Vice President and Chief Strategy
Officer............................................... 70,000 90,000 280,000 360,000
Sherwin A. Uretsky, Vice President, Worldwide Sales..... 31,625 71,875 101,031 228,594
Robbie O. Vann-Adibe, Vice President and General
Manager, San Francisco(4)............................. 390,625 234,375 1,640,625 984,375
</TABLE>
- ------------------------
(1) All options were granted under Viant's 1996 Stock Option Plan. Unless stated
otherwise, options granted under the Plan vest over a four-year period with
25% vesting at the first anniversary date of the vest date and the remaining
shares vesting in installments based on full calendar quarters over the next
36 months. The board of directors retains discretion to modify the terms,
including the price of outstanding options.
(2) These options are immediately exercisable in full at the date of grant, but
shares purchased on exercise of unvested options are subject to a repurchase
right in favor of Viant that entitles us to repurchase unvested shares at
their original exercise price on termination of the employee's services with
Viant. The repurchase right lapses as to 25% of the shares subject to the
option on November 4, 1996, 25% on November 4, 1997 and the balance, ratably
by calendar quarter, over the next three years. As of January 1, 1999,
options to purchase 506,667 shares of common stock, with an average original
issue price of $0.25 per share, were subject to repurchase.
(3) Calculated on the basis of the fair market value of the underlying
securities as of January 1, 1999 of $4.25 per share, minus the per share
exercise price, multiplied by the number of shares underlying the option.
(4) Currently co-manager of the London office.
EMPLOYEE BENEFIT PLANS
1996 STOCK OPTION PLAN
In June 1996 the board of directors adopted, and in July 1996 Viant's
stockholders approved, the 1996 Stock Option Plan. At that time, 2,771,876
shares of common stock were reserved for issuance under the 1996 Plan, which
number was increased to 4,291,876 in November 1996, and to 5,991,876 in November
1997. As of April 9, 1999, options to purchase 1,585,978 shares of common stock
had been exercised and options to purchase 3,493,409 shares of common stock were
outstanding under the 1996 Plan with an average exercise price of $1.13, and
912,489 shares were available for future grants. No further options will be
granted under the 1996 Plan after the effective date of the offering. Options
granted under the 1996 Plan prior to its termination will remain outstanding
according to their terms. In general, options vest over a four-year period.
Options under the 1996 Plan are subject to terms substantially similar to those
described below with respect to options to be granted under the 1999 Stock
Option Plan.
1999 STOCK OPTION PLAN
Viant's 1999 Stock Option Plan provides for the granting to employees of
incentive stock options within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, and for the granting to employees, directors
and consultants of nonstatutory stock options. The 1999 Plan was approved by the
board of directors in January 1999 and by the stockholders in
43
<PAGE>
April 1999. Unless terminated sooner, the 1999 Plan will terminate automatically
in 2009. A total of 4,868,929 shares of common stock is currently reserved for
issuance pursuant to the 1999 Plan, plus annual increases equal to the lesser
of: (1) shares, (2) 4% of the outstanding shares on such date, or (3) an
amount determined by the board of directors. As of April 9, 1999, options to
purchase 1,761,560 shares of common stock were outstanding under the 1999 Plan,
with an average exercise price of $5.83, and 3,107,369 shares were available for
future grants.
The board of directors or a committee of the board of directors may serve as
administrator of the 1999 Plan. In the case of options intended to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the 1999 Plan must be administered by at least two or more "outside
directors" within the meaning of Section 162(m) of the Code. The administrator
has the power to determine the terms of the options granted, including the
exercise price, the number of shares subject to each option, the exercisability
thereof, and the form of consideration payable upon such exercise. The board of
directors has the authority to amend, suspend or terminate the 1999 Plan,
provided that no such action may affect any share of common stock previously
issued and sold or any option previously granted under the 1999 Plan.
Options granted under the 1999 Plan are not generally transferable by the
optionee, and each option is exercisable during the lifetime of the optionee
only by such optionee. Options granted under the 1999 Plan must generally be
exercised within three months of the optionee's separation of service from
Viant, or within twelve months after such optionee's termination by death or
disability, but in no event later than the expiration of the option's ten year
term. The exercise price of all incentive stock options granted under the 1999
Plan must be at least equal to the fair market value of the common stock on the
date of grant. The exercise price of nonstatutory stock options granted under
the 1999 Plan must be at least 85% of the fair market value, but with respect to
nonstatutory stock options intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the exercise
price must at least be equal to the fair market value of the common stock on the
date of grant. With respect to any participant who owns stock possessing more
than 10% of the voting power of all classes of Viant's outstanding capital
stock, the exercise price of any incentive stock option granted must equal at
least 110% of the fair market value on the grant date and the term of such
incentive stock option must not exceed five years. The term of all other options
granted under the 1999 Plan may not exceed ten years.
The 1999 Plan provides that in the event of a merger of Viant with or into
another corporation or a sale of substantially all of Viant's assets, each
option shall be assumed or an equivalent option substituted by the successor
corporation. If the outstanding options are not assumed or substituted as
described in the preceding sentence, the administrator shall notify the optionee
that he or she will have the right to exercise the option as to all of the
optioned stock, including shares as to which he or she would not otherwise be
exercisable, for a period of 15 days from the date of such notice. The option
will terminate upon expiration of such period.
1999 EMPLOYEE STOCK PURCHASE PLAN
Viant's 1999 Employee Stock Purchase Plan was adopted by the board of
directors in and by the stockholders in . A total of
200,000 shares of common stock have been reserved for issuance under the 1999
Purchase Plan, plus annual increases equal to the lesser of: (1) 200,000 shares,
(2) 2% of the outstanding shares on such date, or (3) an amount determined by
the board of directors. As of the date of this prospectus, no shares have been
issued under the 1999 Purchase Plan.
The 1999 Purchase Plan, which is intended to qualify under Section 423 of
the Code contains successive six-month offering periods. The offering periods
generally start on the first trading day on or after May 15 and November 15 of
each year, except for the first such offering period which
44
<PAGE>
will commence within a reasonable time after the effective date of this offering
and ends on the last trading day on or before May 14, 2000.
Employees are eligible to participate if they are customarily employed by
Viant or any participating subsidiary for at least twenty hours per week and
more than five months in any calendar year. However, any employee who: (1)
immediately after grant owns stock possessing 5% or more of the total combined
voting power or value of all classes of the capital stock of Viant, or (2) whose
rights to purchase stock under all employee stock purchase plans of Viant
accrues at a rate which exceeds $25,000 worth of stock for each calendar year
may be not be granted an option to purchase stock under the 1999 Purchase Plan.
The 1999 Purchase Plan permits participants to purchase common stock through
payroll deductions of up to 15% of the participant's compensation. Compensation
is defined as the participant's base straight time gross earnings, commissions,
incentive compensation and bonuses, but exclusive of payments for overtime,
profit sharing payments, shift premium payments and incentive payments. The
maximum number of shares a participant may purchase during a single offering
period is 1,250 shares.
Amounts deducted and accumulated by the participant are used to purchase
shares of common stock at the end of each offering period. The price of stock
purchased under the 1999 Purchase Plan is 85% of the lower of the fair market
value of the common stock at the beginning or end of the offering period.
Participants may end their participation at any time during an offering period,
and they will be paid their payroll deductions to date. Participation ends
automatically upon termination of employment with Viant.
Rights granted under the 1999 Purchase Plan are not transferable by a
participant other than by will, the laws of descent and distribution, or as
otherwise provided under the 1999 Purchase Plan. The 1999 Purchase Plan provides
that, in the event of a merger of Viant with or into another corporation or a
sale of substantially all of Viant's assets, each outstanding option may be
assumed or substituted for by the successor corporation. If the successor
corporation refuses to assume or substitute for the outstanding options, the
offering period then in progress will be shortened and a new exercise date will
be set. The 1999 Purchase Plan will terminate in 2009. The board of directors
has the authority to amend or terminate the 1999 Purchase Plan, except that no
such action may adversely affect any outstanding rights to purchase stock under
the 1999 Purchase Plan.
401(K) RETIREMENT/SAVINGS PLAN
Viant's 401(k) plan covers its full-time employees located in the United
States. The 401(k) plan is intended to qualify under Section 401(k) of the Code.
Consequently, contributions to the 401(k) plan by employees or by Viant, and the
investment earnings thereon, are not taxable to employees until withdrawn from
the 401(k) plan. Further, contributions by Viant, if any, will be deductible by
Viant when made. Employees may elect to contribute up to 15% of their current
compensation to the 401(k), plan up to the statutorily prescribed annual limit,
which was $10,000 in 1998. The 401(k) plan permits, but does not require,
additional matching contributions to the 401(k) plan by Viant on behalf of all
participants in the 401(k) plan. To date, Viant has not made any contributions
to the 401(k) plan.
LIMITATION OF LIABILITY AND INDEMNIFICATION
Viant's amended and restated certificate of incorporation limits the
liability of directors to the maximum extent permitted by Delaware law. Delaware
law provides that directors of a corporation will not be personally liable for
monetary damages for breach of their fiduciary duties as directors, except
liability for: (1) breach of their duty of loyalty to the corporation or its
stockholders, (2) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) unlawful payments of
dividends or unlawful stock repurchases or redemptions, or (4) any
45
<PAGE>
transaction from which the director derived an improper personal benefit. Such
limitation of liability does not apply to liabilities arising under the federal
or state securities laws and does not affect the availability of equitable
remedies such as injunctive relief or rescission.
Viant's bylaws provide that Viant shall indemnify its directors, officers,
employees and other agents to the fullest extent permitted by law. Viant
believes that indemnification under its bylaws covers at least negligence and
gross negligence on the part of indemnified parties. Viant's bylaws also permit
it to secure insurance on behalf of any officer, director, employee or other
agent for any liability arising out of his or her actions in such capacity,
regardless of whether the bylaws permit such indemnification.
Viant intends to enter into agreements to indemnify its directors and
executive officers, in addition to the indemnification provided for in its
bylaws. These agreements, among other things, will indemnify Viant's directors
and executive officers for certain expenses (including attorneys' fees),
judgments, fines and settlement amounts incurred by any such person in any
action or proceeding, including any action by or in the right of Viant arising
out of such person's services as a director, officer, employee, agent or
fiduciary of Viant, any subsidiary of Viant or any other company or enterprise
to which the person provides services at the request of Viant. Viant believes
that these provisions and agreements are necessary to attract and retain
qualified persons as directors and executive officers.
At present, there is no pending litigation or proceeding involving a
director or officer of Viant in which indemnification is required or permitted,
and Viant is not aware of any threatened litigation or proceeding that may
result in a claim for such indemnification.
46
<PAGE>
CERTAIN TRANSACTIONS
In March 1998, at the request of Viant, Richard J. Chavez, Vice President
and Chief Strategy Officer, relocated to the Boston office. In connection with
Mr. Chavez's agreement to relocate, he was granted the following: (1) a
relocation bonus of $35,000, (2) reimbursement of all reasonable expenses
associated with the relocation of his family to the Boston area, (3) a housing
loan in the principal amount of $50,000, and (4) an employee loan in the amount
of $40,000. Interest on both of the loans accrues annually at the Prime Rate (as
of the loan execution date). Interest payments only are due on the housing loan
for the first four years; upon commencement of the fifth year, repayment of
principal and interest on the loan will be made in accordance with a monthly
repayment schedule in which principal and interest will be repaid and amortized
over a two year period. The housing loan becomes immediately due and payable if
Mr. Chavez: (1) ceases to be employed by Viant for any reason, (2) fails to
perform any of his obligations under the loan agreement, or (3) files for
bankruptcy or otherwise becomes insolvent, or upon the occurrence of the sixth
anniversary of the loan agreement. The housing loan is secured by Mr. Chavez's
option to purchase 30,000 shares of Viant common stock, or the stock itself if
the option is exercised. Viant will forgive 25% of Mr. Chavez's employee loan
annually commencing on the first anniversary of the loan and for the next three
anniversaries thereafter. The remaining principal balance of the employee loan
will become immediately due and payable if Mr. Chavez: (1) ceases to be employed
by Viant for any reason, (2) fails to perform any of his obligations under the
loan agreement, or (3) files for bankruptcy or otherwise becomes insolvent. The
employee loan is secured by Mr. Chavez's option to purchase 30,000 shares of
Viant common stock, or the stock itself if the option is exercised. This stock
collateral is separate from and in addition to the collateral for the housing
loan.
Under the terms of Viant's Key Employee Agreement with Robert L. Gett, if
Mr. Gett's employment is terminated by Viant without cause, Viant has agreed to
continue to pay Mr. Gett's salary for a period of one year from the date of such
termination. Mr. Gett will also continue to receive the same employee benefits
(deferred bonus eligibility, pension, group medical insurance, profit-sharing or
other employee benefits in place when Mr. Gett is terminated) which he had as an
employee until the earlier of: (1) one year from the date of such termination,
and (2) the date on which Mr. Gett is re-employed.
Upon the consummation of this offering, all outstanding shares of Series A
preferred stock, Series B preferred stock, Series C preferred stock and Series D
preferred stock will automatically convert into shares of common stock on a
one-for-one basis.
Viant intends to enter into indemnification agreements with each of its
directors and officers. Such indemnification agreements will require us to
indemnify such individuals to the fullest extent possible under Delaware law.
We believe that all transactions between Viant and its officers, directors,
principal stockholders and other affiliates have been and will be on terms no
less favorable to us than could be obtained from unaffiliated third parties.
In connection with Viant's sale of Series D Preferred Stock in November
1998, Viant entered into an Allocation Agreement, dated November 13, 1998, with
Technology Crossover Ventures and certain other purchasers of its Series D
Preferred Stock. The Allocation Agreement grants these Series D Preferred Stock
purchasers the right to subscribe for a number of shares in Viant's initial
public offering equal to $3,000,000 divided by the initial public offering
price, and subject to the managing underwriter's consent.
47
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth the beneficial ownership of our common stock
as of April 9, 1999 (assuming conversion of all outstanding shares of preferred
stock into common stock upon the closing of this offering and as adjusted to
reflect the sale of the shares offered by this prospectus) by:
- each person who is known by us to beneficially own more than 5% of our
common stock;
- each of the Named Executive Officers and each of Viant's Directors; and
- all of our officers and directors as a group.
Percentage of ownership is based on 17,494,205 shares outstanding as of
April 9, 1999, assuming conversion of the preferred stock, and
shares outstanding after this offering assuming no exercise of the
underwriters' over-allotment options. Beneficial ownership is calculated based
on SEC requirements. The columns entitled "Options" consist of shares of common
stock subject to options currently exercisable or exercisable within 60 days
after April 9, 1999, which are deemed to be outstanding for the purpose of
computing the percentage of ownership of the person holding such options, but
are not deemed to be outstanding for computing the percentage of ownership of
any other person. The percentage calculated for each beneficial owner is based
upon the sum of the "stock" and "options" column. Unless otherwise indicated
below, each stockholder named in the table has sole voting and investment power
with respect to all shares beneficially owned, subject to applicable community
property laws.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES TO BE BENEFICIALLY
OWNED PRIOR TO OFFERING OWNED AFTER OFFERING
--------------------------------- -----------------------------------
<S> <C> <C> <C> <C> <C> <C>
BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT
- ---------------------------------- -------------------- ----------- ---------------------- -----------
<CAPTION>
FIVE PERCENT STOCKHOLDERS STOCK OPTIONS STOCK OPTIONS
--------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mohr, Davidow Ventures(1)......... 4,753,697 -- 27.2%
Vinod Khosla(2)................... 3,123,319 -- 17.9%
Stephen M. Hall(3)................ 2,367,559 -- 13.5%
Robert L. Gett.................... 1,849,108 443,335 12.8%
Jay C. Hoag(4).................... 1,313,968 -- 7.5%
Eric Greenberg(5)................. 886,883 -- 5.1%
NAMED EXECUTIVE OFFICERS AND
DIRECTORS
William H. Davidow(6)............. 4,753,697 10,000 27.2%
Venetia Kontogouris(7)............ -- 10,000 *
Kevin W. English.................. -- 10,000 *
Robert L. Gett.................... 1,849,108 443,335 12.8%
Richard J. Chavez................. -- 80,000 *
Sherwin A. Uretsky................ 10,000 39,750 *
Robbie O. Vann-Adibe.............. 187,500 429,687 3.4%
Edward J. Mello................... 23,750 -- *
All directors and executive
officers as a group (19
persons)........................ 7,066,738 1,126,734 44.0%
</TABLE>
- ------------------------
* Less than 1% of Viant's outstanding common stock.
(1) Consists of 4,551,638 shares held of record by Mohr, Davidow Ventures IV,
L.P. and 202,059 shares held of records by MDV IV Entrepreneurs' Network
Fund, L.P. Mr. Davidow is a General Partner of
48
<PAGE>
Mohr, Davidow Ventures. The address of Mohr, Davidow Ventures is 2775 Sand
Hill Road, Suite 240, Menlo Park, California 94025.
(2) Consists of 2,288,628 shares held of record by Kleiner Perkins Caufield &
Byers VIII, 624,162 shares held of record by KPCB Java Fund, 123,650 shares
held of record by KPCB VIII Founders Fund, 78,081 shares held of record by
KPCB Information Sciences Zaibatsu Fund II and 8,798 shares held of record
by KPCB VII Founders Fund. Mr. Khosla is a General Partner of Kleiner
Perkins Caufield & Byers. Mr. Khosla discaims beneficial ownership of the
shares held by these funds. The address for Kleiner Perkins Caufield & Byers
is 2750 Sand Hill Road, Menlo Park, California 94025.
(3) Consists of 2,303,279 shares held of record by Information Associates, L.P.
and 64,280 shares held of record by Information Associates, C.V. Trident
Capital Management is a general partner of the Information Associates funds.
Mr. Hall is a Managing Director of Trident Capital Manaement. Mr. Hall
disclaims beneficial ownership of the shares held by these funds. The
address for Trident Capital Management is 2480 Sand Hill Road, Suite 100,
Menlo Park, California 94025.
(4) Consists of 828,567 shares held of record by Technology Crossover Ventures
II, L.P., 483,252 shares held of record by TCV II (Q), L.P., 95,968 shares
held of record by Technology Crossover Ventures II, C.V., 85,761 shares held
of record by TCV II Strategic Partners, L.P. and 20,420 shares held of
record by TCV II, V.O.F. Mr. Hoag is a Managing Member of TCM II, the
General Partner of the TCV II affilated funds. Mr. Hoag disclaims benefical
ownership of the shares held by these funds. The address for Technology
Crossover Ventures is 575 High Street, Suite 400, Palo Alto, California
94301.
(5) The address for Mr. Greenberg is c/o Scient Corporation, One Front Street,
28th Floor, San Francisco, California 94111.
(6) Mr. Davidow is a partner of Mohr, Davidow Ventures and disclaims beneficial
ownership of the 4,753,697 shares held by Mohr, Davidow Ventures except to
the extent of his proportionate partnership interest therein. The address
for Mr. Davidow is c/o Mohr, Davidow Ventures, 2775 Sand Hill Road, Suite
240, Menlo Park, California 94025.
(7) Ms. Kontogouris is President of Enterprise Associates, LLC a limited partner
of Trident Capital Management. Ms. Kontogouris possesses no investment or
voting power over the 2,367,559 shares held by the affiliated funds of
Trident Capital Management. The address for Ms. Kontogouris is c/o
Enterprise Associates, LLC, 200 Nyala Farms, Westport, Connecticut 06880.
49
<PAGE>
DESCRIPTION OF CAPITAL STOCK
GENERAL
Viant's amended and restated certificate of incorporation, the filing of
which will occur at the closing of this offering, authorizes the issuance of up
to 50 million shares of common stock, par value $0.001 per share, and 5 million
shares of preferred stock, par value $0.001 per share, the rights and
preferences of which may be established from time to time by Viant's board of
directors. As of April 9, 1999, giving effect to the conversion of all preferred
stock into common stock, 17,494,205 shares of common stock were outstanding. As
of April 9, 1999, Viant had 73 stockholders.
COMMON STOCK
Each holder of common stock is entitled to one vote for each share on all
matters to be voted upon by the stockholders and there are no cumulative voting
rights. Subject to preferences to which holders of preferred stock issued after
the sale of the common stock offered hereby may be entitled, holders of common
stock are entitled to receive ratably such dividends, if any, as may be declared
from time to time by the board of directors out of funds legally available
therefor. Please see "Dividend Policy." In the event of a liquidation,
dissolution or winding up of Viant, holders of common stock would be entitled to
share in Viant's assets remaining after the payment of liabilities and the
satisfaction of any liquidation preference granted to the holders of any
outstanding shares of preferred stock. Holders of common stock have no
preemptive or conversion rights or other subscription rights and there are no
redemption or sinking fund provisions applicable to the common stock. All
outstanding shares of common stock are, and the shares of common stock offered
by Viant in this offering, when issued and paid for, will be, fully paid and
nonassessable. The rights, preferences and privileges of the holders of common
stock are subject to, and may be adversely affected by the rights of the holders
of shares of any series of preferred stock, which Viant may designate in the
future.
PREFERRED STOCK
Upon the closing of this offering, the board of directors will be
authorized, subject to any limitations prescribed by law, without stockholder
approval, from time to time to issue up to an aggregate of 5 million shares of
preferred stock, $0.001 par value per share, in one or more series, each of such
series to have such rights and preferences, including voting rights, dividend
rights, conversion rights, redemption privileges and liquidation preferences, as
shall be determined by the board of directors. The rights of the holders of
common stock will be subject to, and may be adversely affected by, the rights of
holders of any preferred stock that may be issued in the future. Issuance of
preferred stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire, or of discouraging a
third party from attempting to acquire, a majority of the outstanding voting
stock of Viant. Viant has no present plans to issue any shares of preferred
stock.
WARRANTS
As of April 9, 1999, giving effect to the conversion of all preferred stock
into common stock, Viant had outstanding a warrant to purchase 5,517 shares of
common stock at an exercise price of $3.625 per share and a warrant to purchase
35,986 shares of common stock at an exercise price of $3.625 per share. Each
warrant has a net exercise provision under which the holder may, in lieu of
payment of the exercise price in cash, surrender the warrant and receive a net
amount of shares, based on the fair market value of Viant's stock at the time of
the exercise of the warrant, after deducting the aggregate exercise price. The
warrant for 5,517 shares will expire upon the closing of
50
<PAGE>
this offering. The warrant for 35,986 shares will expire five years from the
effective date of this offering.
REGISTRATION RIGHTS
Pursuant to the Amended and Restated Shareholders' Rights Agreement, dated
November 13, 1998, the holders of approximately 15,762,230 shares of common
stock have the right to register those shares under the Securities Act of 1933.
If Viant registers any of its common stock for its own account or for the
account of other security holders, the parties to the Rights Agreement are
entitled to include their shares of common stock in the registration, subject to
the ability of the underwriters to limit the number of shares included in the
offering. In addition, subject to limitations in the Rights Agreement, some of
the holders, whose shares total 14,510,347, may require, on one occasion at
least six months after this offering, that Viant use its best efforts to
register such shares for public resale, provided that the holders of at least
30% of those shares make the request. Furthermore, these holders of the
14,510,347 shares may require Viant to register all or a portion of their
registrable securities on Form S-3 when Viant is eligible to use such form,
provided, among other limitations, that the proposed aggregate price to the
public is at least $1,000,000. Viant will bear all fees, costs and expenses of
such registration, other than underwriting discounts and commissions. Upon the
effectiveness of any registration statement filed to register our common stock,
such shares would become freely tradable, without any restrictions imposed by
the Securities Act.
EFFECT OF THE CERTIFICATE OF INCORPORATION AND BYLAWS AND THE DELAWARE
ANTI-TAKEOVER STATUTE
Viant's amended and restated certificate of incorporation, its bylaws and
the Delaware General Corporation Law may have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
attempting to acquire, control of Viant.
Viant's amended and restated certificate of incorporation provides that,
upon the closing of this offering, the board of directors will be divided into
three classes of directors with each class serving a staggered three-year term.
The classification system of electing directors may tend to discourage a third
party from making a tender offer or otherwise attempting to obtain control of
Viant and may maintain the incumbency of the board of directors, as the
classification of the board of directors generally increases the difficulty of
replacing a majority of the directors.
Viant's amended and restated certificate of incorporation also eliminates
the right of stockholders to act by written consent without a meeting, and
Viant's bylaws eliminate the right of stockholders to call special meetings of
stockholders. The amended and restated certificate of incorporation and bylaws
do not provide for cumulative voting in the election of directors. Viant's
amended and restated certificate of incorporation also authorizes undesignated
preferred stock. The authorization of undesignated preferred stock makes it
possible for the board of directors to issue preferred stock with voting or
other rights or preferences that could impede the success of any attempt to
change control of Viant. The amendment of any of these provisions would require
approval by holders of at least 66 2/3% of the outstanding common stock.
In addition, Viant is subject to Section 203 of the Delaware General
Corporation Law which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder, unless: (1) prior to such date, the board of directors of the
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder, (2) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding those shares
51
<PAGE>
owned by persons who are directors and also officers and by employee stock plans
in which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer, or (3) on or subsequent to such date, the business combination is
approved by the board of directors and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of
at least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for our common stock is BankBoston, N.A.
The Transfer Agent's address is 150 Royall Street, Canton, MA and its telephone
number is (781) 575-2000.
52
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Immediately prior to this offering, there was no public market for our
common stock. Future sales of substantial amounts of common stock in the public
market could adversely affect the market price of our common stock.
Upon completion of this offering, we will have outstanding an aggregate of
shares of common stock, assuming the issuance of shares of
common stock offered hereby and no exercise of options after April 9, 1999. Of
these shares, the shares sold in this offering will be freely
tradable without restriction or further registration under the Securities Act,
except for any shares purchased by "Affiliates" of Viant as that term is defined
in Rule 144 under the Securities Act (whose sales would be subject to certain
limitations and restrictions described below).
The remaining 17,494,205 shares of common stock held by existing
stockholders were issued and sold by us in reliance on exemptions from the
registration requirements of the Securities Act. Of these shares, shares
will be subject to "lock-up" agreements described below on the effective date of
this offering. Upon expiration of the lock-up agreements 180 days after the
effective date of this offering, shares will become eligible for sale
pursuant to Rule 144(k), and the remaining shares will become eligible for sale
subject in most cases to the limitations of Rule 144. In addition, holders of
stock options could exercise such options and sell certain of the shares issued
upon exercise as described below.
<TABLE>
<CAPTION>
DAYS AFTER DATE OF SHARES ELIGIBLE
THIS PROSPECTUS FOR SALE COMMENT
- ------------------------------ --------------- ----------------------------------------------------------------
<S> <C> <C>
Upon Effectiveness............ Shares sold in the offering
Upon Effectiveness............ Freely tradable shares salable under Rule 144(k) that are not
subject to the Lock-up
90 days....................... Shares saleable under Rules 144 and 701
180 days...................... Lock-up released; shares salable under Rules 144 and 701
Thereafter.................... Restricted securities held for one year or less
</TABLE>
As of April 9, 1999 there were a total of 5,254,969 shares of common stock
subject to outstanding options under our 1996 Stock Option Plan and 1999 Stock
Option Plan, approximately 1,548,057 of which were vested and exercisable.
However, all of these shares are subject to lock-up agreements. All options held
by officers and directors of Viant are subject to 180 day lock-up agreements
described below. Immediately after the completion of this offering, we intend to
file registration statements on Form S-8 under the Securities Act to register
all of the shares of common stock issued or reserved for future issuance under
the 1996 Stock Option Plan, 1999 Stock Option Plan and 1999 Employee Stock
Purchase Plan. On the date 180 days after the effective date of this offering, a
total of approximately shares of common stock subject to outstanding
options will be vested and exercisable. After the effective dates of the
registration statements on Form S-8, shares purchased upon exercise of options
granted pursuant to the 1996 Stock Option Plan, 1999 Stock Option Plan and 1999
Employee Stock Purchase Plan generally would be available for resale in the
public market.
All officers and directors and substantially all of our existing
stockholders agreed not to sell or otherwise dispose of any of their shares for
a period of 180 days after the date of this offering. Goldman, Sachs & Co.,
however, may in its sole discretion, at any time without notice, release all or
any portion of the shares subject to lock-up agreements.
53
<PAGE>
RULE 144
In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this prospectus, a person who has beneficially owned shares of our
common stock for at least one year would be entitled to sell in "broker's
transactions" or to market makers, within any three-month period, a number of
shares that does not exceed the greater of:
- 1% of the number of shares of common stock then outstanding (which will
equal approximately shares immediately after this offering);
or
- the average weekly trading volume in the common stock on the Nasdaq
National Market during the four calendar weeks preceding the filing of a
notice on Form 144 with respect to such sale.
Sales under Rule 144 are generally subject to the availability of current
public information about Viant.
RULE 144(K)
Under Rule 144(k), a person who is not deemed to have been an affiliate of
Viant at any time during the 90 days preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years, is entitled to sell
such shares without having to comply with the manner of sale, public
information, volume limitation or notice filing provisions of Rule 144.
Therefore, unless otherwise restricted, "144(k) shares" may be sold immediately
upon the completion of this offering.
RULE 701
In general, under Rule 701, any of our employees, directors, officers,
consultants or advisors who purchase shares from us in connection with a
compensatory stock or option plan or other written agreement before the
effective date of this offering is entitled to sell such shares 90 days after
the effective date of this offering in reliance on Rule 144, without having to
comply with the holding period and notice filing requirements of Rule 144 and,
in the case of non-affiliates, without having to comply with the public
information, volume limitation or notice filing provisions of Rule 144.
The SEC has indicated that Rule 701 will apply to typical stock options
granted by an issuer before it becomes subject to the reporting requirements of
the Securities Exchange Act of 1934, along with the shares acquired upon
exercise of such options (including exercises after the date of this
prospectus). Securities issued in reliance on Rule 701 are restricted securities
and, subject to the contractual restrictions described above, beginning 90 days
after the date of this prospectus, may be sold by persons other than
"affiliates" (as defined in Rule 144) subject only to the manner of sale
provisions of Rule 144 and by "affiliates" under Rule 144 without compliance
with its one year minimum holding period requirements.
54
<PAGE>
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon for
Viant by Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto, California. Certain
legal matters will be passed upon for the underwriters by Hale and Dorr LLP,
Boston, Massachusetts. As of the date of this prospectus, WS Investment Company
97A, an investment partnership composed of certain current and former members of
and persons associated with Wilson Sonsini Goodrich & Rosati, P.C., and a
certain member of Wilson Sonsini Goodrich & Rosati, P.C., beneficially own an
aggregate of 51,717 shares of Viant stock.
EXPERTS
Viant's financial statements as of December 31, 1997 and January 1, 1999 and
for the period from April 10, 1996 (inception) through December 31, 1996 and for
the years ended December 31, 1997 and January 1, 1999 included in this
prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
Viant has filed with the Securities and Exchange Commission a registration
statement on Form S-1 (including exhibits and schedules) under the Securities
Act, with respect to the shares to be sold in this offering. This prospectus
does not contain all of the information set forth in the registration statement.
For further information with respect to Viant and the common stock offered in
this prospectus, reference is made to the registration statement, including the
exhibits thereto, and the financial statements and notes filed as a part
thereof. With respect to each such document filed with the SEC as an exhibit to
the registration statement, reference is made to the exhibit for a more complete
description of the matter involved.
We will be filing quarterly and annual reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at the
public reference facilities of the SEC in Washington, D.C. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from the SEC's website at
http:\\www.sec.gov.
55
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Report of Independent Accountants.......................................................................... F-2
Statement of Operations for the Period Ended December 31, 1996, the Years Ended December 31, 1997 and
January 1, 1999 and the Quarter Ended March 31, 1998 and April 2, 1999 (unaudited)....................... F-3
Balance Sheet as of December 31, 1997, January 1, 1999 and April 2, 1999 (unaudited)....................... F-4
Statement of Cash Flows for the Period Ended December 31, 1996, the Years Ended December 31, 1997 and
January 1, 1999 and the Quarter Ended March 31, 1998 and April 2, 1999 (unaudited)....................... F-5
Statement of Stockholders' Equity for the Period Ended December 31, 1996, the Years Ended December 31, 1997
and January 1, 1999 and the Quarter Ended April 2, 1999 (unaudited)...................................... F-6
Notes to Financial Statements.............................................................................. F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Viant Corporation
In our opinion, the accompanying balance sheet and the related statements of
operations, of stockholders' equity and of cash flows present fairly, in all
material respects, the financial position of Viant Corporation at January 1,
1999 and December 31, 1997, and the results of its operations and its cash flows
for each of the years ended January 1, 1999 and December 31, 1997 and the period
from April 10, 1996 (Inception) to December 31, 1996, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of Viant's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 16, 1999
F-2
<PAGE>
VIANT CORPORATION
STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 10, 1996 YEAR ENDED THREE MONTHS ENDED
(INCEPTION) TO --------------------------- ----------------------
DECEMBER 31, DECEMBER 31, JANUARY 1, MARCH 31, APRIL 2,
1996 1997 1999 1998 1999
------------------- -------------- ----------- ----------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net revenues............................ $ 642 $ 8,808 $ 20,043 $ 4,093 $ 7,883
------- ------- ----------- ----------- ---------
Operating expenses:
Professional services................. 516 4,530 11,250 2,237 4,511
Sales and marketing................... 461 1,577 3,324 586 1,216
General and administrative............ 1,077 6,298 10,365 1,810 3,518
Research and development.............. 338 581 1,429 167 690
------- ------- ----------- ----------- ---------
Total operating expenses............ 2,392 12,986 26,368 4,800 9,935
------- ------- ----------- ----------- ---------
Loss from operations................ (1,750) (4,178) (6,325) (707) (2,052)
Interest income......................... 91 160 234 48 168
Interest expense........................ -- (25) (371) (21) (157)
Other expense, net...................... -- (37) (25) -- --
------- ------- ----------- ----------- ---------
Net loss............................ $ (1,659) $ (4,080) $ (6,487) $ (680) $ (2,041)
------- ------- ----------- ----------- ---------
------- ------- ----------- ----------- ---------
Basic and diluted net loss per share.... $ (0.42) $ (1.18) $ (1.76) $ (0.19) $ (0.53)
Weighted average shares used in
computing basic and diluted net loss
per share............................. 3,981 3,468 3,681 3,627 3,847
Unaudited pro forma basic and diluted
net loss per share.................... $ (0.46) $ (0.12)
Weighted average shares used in
computing unaudited pro forma basic
and diluted net loss per share........ 14,084 17,020
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
VIANT CORPORATION
BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
DECEMBER 31, JANUARY 1, APRIL 2, APRIL 2,
1997 1999 1999 1999
-------------- ----------- ---------- -----------
(UNAUDITED)
(NOTE 1)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................... $ 5,559 $ 18,209 $ 10,317
Short-term investments.................................................. 615 602 602
Accounts receivable, net................................................ 1,820 5,472 9,769
Prepaid expenses and other current assets............................... 165 1,190 1,933
-------------- ----------- ----------
Total current assets.................................................. 8,159 25,473 22,621
Property and equipment, net............................................... 2,011 4,048 4,393
Other assets.............................................................. 148 232 229
-------------- ----------- ----------
Total assets.......................................................... $ 10,318 $ 29,753 $ 27,243
-------------- ----------- ----------
-------------- ----------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt....................................... $ 349 $ 2,850 $ 2,843
Current portion of capital lease obligation............................. -- 416 509
Accounts payable........................................................ 1,165 626 1,026
Accrued expenses........................................................ 1,197 2,907 1,379
Deferred revenues....................................................... 931 1,052 1,372
-------------- ----------- ----------
Total current liabilities............................................. 3,642 7,851 7,129
Long-term debt, less current portion...................................... 670 603 506
Capital lease obligations, less current portion........................... -- 1,634 1,722
-------------- ----------- ----------
Total liabilities..................................................... 4,312 10,088 9,357
-------------- ----------- ----------
Commitments (Note 6)...................................................... -- -- --
Stockholders' equity:
Convertible preferred stock:
Series D: no par value; 3,240,000, 3,240,000, 3,240,000 and 0 shares
authorized, respectively; 0, 3,160,043, 3,167,100 and 0 shares
issued and outstanding, respectively................................ -- 20,125 20,170 $ --
Series A: no par value; 5,746,874, 5,746,874, 5,746,874 and 0 shares
authorized, respectively; 5,746,874, 5,746,874, 5,746,874 and 0
shares issued and outstanding, respectively......................... 3,047 3,047 3,047 --
Series B: no par value; 1,499,925, 1,499,925, 1,499,925 and 0 shares
authorized, respectively; 1,499,925, 1,499,925, 1,499,925 and 0
shares issued and outstanding, respectively......................... 987 987 987 --
Series C: no par value; 2,830,408, 2,830,408, 2,830,408 and 0 shares
authorized, respectively; 2,759,625, 2,759,625, 2,759,625 and 0
shares issued and outstanding, respectively......................... 7,977 7,977 7,977 --
Preferred stock, $0.001 par value; 0, 0, 0 and 5,000,000 shares
authorized, respectively; no shares issued and outstanding............ -- -- -- --
Common stock; $0.001 par value; 25,000,000, 25,000,000, 25,000,000 and
50,000,000 shares authorized, respectively; 3,556,258, 3,762,290,
4,294,236 and 17,467,760 shares issued and outstanding,
respectively.......................................................... 4 4 4 17
Additional paid-in capital.............................................. 409 430 647 32,815
Accumulated deficit..................................................... (6,418) (12,905) (14,946) (14,946)
-------------- ----------- ---------- -----------
Total stockholders' equity............................................ 6,006 19,665 17,886 $ 17,886
-------------- ----------- ---------- -----------
Total liabilities and stockholders' equity............................ $ 10,318 $ 29,753 $ 27,243
-------------- ----------- ----------
-------------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
VIANT CORPORATION
STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
PERIOD FROM THREE MONTHS ENDED
APRIL 10, 1996 YEAR ENDED
(INCEPTION) TO --------------------------- ----------------------
DECEMBER 31, DECEMBER 31, JANUARY 1, MARCH 31, APRIL 2,
1996 1997 1999 1998 1999
-------------- -------------- ----------- ----------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................................. $ (1,659) $ (4,080) $ (6,487) $ (680) $ (2,041)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization...................... 49 205 1,065 175 384
Compensation expense on employee arrangement....... -- 200 -- -- --
Changes in operating assets and liabilities:
Accounts receivable, net......................... (384) (1,436) (3,652) (1,456) (4,297)
Prepaid expenses and other assets................ (62) (251) (1,109) (431) (740)
Accounts payable................................. 86 1,079 (539) (602) 400
Accrued expenses................................. 227 970 1,710 (158) (1,528)
Deferred revenues................................ 99 832 121 (473) 320
-------------- -------------- ----------- ----------- ---------
Net cash used in operating activities.......... (1,644) (2,481) (8,891) (3,625) (7,502)
-------------- -------------- ----------- ----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments.................. -- (615) (602) -- --
Maturity of short-term investments................... -- -- 615 -- --
Purchases of property and equipment.................. (264) (2,001) (901) (838) (387)
-------------- -------------- ----------- ----------- ---------
Net cash used in investing activities.......... (264) (2,616) (888) (838) (387)
-------------- -------------- ----------- ----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible notes
payable............................................ 500 -- -- -- --
Proceeds from issuance of convertible preferred
stock, net......................................... 3,534 7,977 20,125 -- 45
Proceeds from issuance of common stock, net.......... 19 195 21 -- 217
Proceeds from borrowings on lines of credit.......... -- 1,046 2,749 -- --
Principal payments on borrowings on lines of
credit............................................. -- (27) (315) -- (104)
Principal payments on capital lease obligations...... -- -- (151) (26) (161)
Repurchase of common stock........................... -- (680) -- -- --
-------------- -------------- ----------- ----------- ---------
Net cash provided by (used in) financing
activities................................... 4,053 8,511 22,429 (26) (3)
-------------- -------------- ----------- ----------- ---------
Net increase (decrease) in cash and cash equivalents... 2,145 3,414 12,650 (4,489) (7,892)
Cash and cash equivalents at beginning of period....... -- 2,145 5,559 5,559 18,209
-------------- -------------- ----------- ----------- ---------
Cash and cash equivalents at end of period............. $ 2,145 $ 5,559 $ 18,209 $ 1,070 $ 10,317
-------------- -------------- ----------- ----------- ---------
-------------- -------------- ----------- ----------- ---------
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid for interest............................... $ -- $ 22 $ 371 $ 21 $ 157
NONCASH INVESTING AND FINANCING ACTIVITIES:
Conversion of notes payable into preferred stock..... $ 500 $ -- $ -- $ -- $ --
Equipment acquired under capital lease obligations... $ -- $ -- $ 2,201 $ -- $ 342
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
VIANT CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
CONVERTIBLE
PREFERRED STOCK COMMON STOCK ADDITIONAL
----------------------- ------------------------- PAID-IN ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT
---------- ----------- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Issuance of common stock........... 3,981,250 $ 4 $ 15
Issuance of Series A preferred
stock, net of issuance costs of
$16.............................. 4,809,369 $ 2,547
Issuance of Series A preferred
stock upon conversion of notes
payable.......................... 937,505 500
Issuance of Series B preferred
stock, net of issuance costs of
$13.............................. 1,499,925 987
Net loss for the period from April
10, 1996 (Inception) to December
31, 1996......................... $ (1,659)
--
---------- ----------- ---------- ----- -------------
Balance at December 31, 1996....... 7,246,799 4,034 3,981,250 4 15 (1,659)
Issuance of common stock upon
exercise of stock options........ 823,125 1 194
Issuance of Series C preferred
stock, net of issuance costs of
$25.............................. 2,759,625 7,977
Common stock repurchased and
retired.......................... (1,248,117) (1) (679)
Compensation expense on employee
severance arrangement............ 200
Net loss........................... (4,080)
--
---------- ----------- ---------- ----- -------------
Balance at December 31, 1997....... 10,006,424 12,011 3,556,258 4 409 (6,418)
Issuance of common stock upon
exercise of stock options........ 206,032 21
Issuance of Series D preferred
stock, net of issuance costs of
$68.............................. 3,160,043 20,125
Net loss........................... (6,487)
--
---------- ----------- ---------- ----- -------------
Balance at January 1, 1999......... 13,166,467 32,136 3,762,290 4 430 (12,905)
Issuance of common stock upon
exercise of stock options
(unaudited)...................... 531,946 217
Issuance of Series D preferred
stock (unaudited)................ 7,057 45
Net loss (unaudited)............... (2,041)
--
---------- ----------- ---------- ----- -------------
Balance at April 2, 1999
(unaudited)...................... 13,173,524 $ 32,181 4,294,236 $ 4 $ 647 $ (14,946)
--
--
---------- ----------- ---------- ----- -------------
---------- ----------- ---------- ----- -------------
<CAPTION>
TOTAL
STOCKHOLDERS'
EQUITY
---------------
<S> <C>
Issuance of common stock........... $ 19
Issuance of Series A preferred
stock, net of issuance costs of
$16.............................. 2,547
Issuance of Series A preferred
stock upon conversion of notes
payable.......................... 500
Issuance of Series B preferred
stock, net of issuance costs of
$13.............................. 987
Net loss for the period from April
10, 1996 (Inception) to December
31, 1996......................... (1,659)
---------------
Balance at December 31, 1996....... 2,394
Issuance of common stock upon
exercise of stock options........ 195
Issuance of Series C preferred
stock, net of issuance costs of
$25.............................. 7,977
Common stock repurchased and
retired.......................... (680)
Compensation expense on employee
severance arrangement............ 200
Net loss........................... (4,080)
---------------
Balance at December 31, 1997....... 6,006
Issuance of common stock upon
exercise of stock options........ 21
Issuance of Series D preferred
stock, net of issuance costs of
$68.............................. 20,125
Net loss........................... (6,487)
---------------
Balance at January 1, 1999......... 19,665
Issuance of common stock upon
exercise of stock options
(unaudited)...................... 217
Issuance of Series D preferred
stock (unaudited)................ 45
Net loss (unaudited)............... (2,041)
---------------
Balance at April 2, 1999
(unaudited)...................... $ 17,886
---------------
---------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Viant Corporation ("Viant") is a leading Internet professional services firm
providing strategic consulting, creative design and technology services to
companies seeking to capitalize on the Internet. Viant's current customers are
based in the United States and Europe and include primarily Fortune 1000
companies.
FISCAL YEAR
During 1998, Viant changed its fiscal year to the 52-week period ending on
the Friday nearest to the last day of December of that year. Prior to this, the
fiscal year of Viant was the calendar year. Viant's fiscal year 1998 ended on
January 1, 1999.
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
Viant considers all highly liquid instruments with an original maturity of
three months or less to be cash equivalents. At December 31, 1997 and January 1,
1999, Viant's short-term investments consisted primarily of certificates of
deposit and money market funds secured by U.S. Government-backed securities and
commercial paper with maturities of 60 to 201 days.
CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subject Viant to concentrations of
credit risk consist primarily of cash equivalents, short-term investments and
accounts receivable. Substantially all of Viant's cash equivalents and
short-term investments are held at high credit quality financial institutions.
Accounts receivable are typically unsecured and are derived from revenue earned
from clients primarily located in the United States. Viant performs ongoing
credit evaluations of its clients' financial condition and maintains reserves
for potential credit losses based upon the expected collectibility of total
accounts receivable. To date, losses resulting from uncollected receivables have
not exceeded management's expectations.
At December 31, 1997 and January 1, 1999, three clients and two clients
accounted for 56% and 39% of total accounts receivable, respectively. Three
clients accounted for 43%, 16% and 12% of total net revenues in the period from
April 10, 1996 (Inception) to December 31, 1996. Three clients accounted for
30%, 27% and 11% of total net revenues in 1997. Three clients accounted for 15%,
14% and 13% of total net revenues in 1998.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial instruments that are subject to fair value disclosure requirements
are carried in the financial statements at amounts that approximate fair value
and include cash and cash equivalents, short-term investments, accounts
receivable, accounts payable, capital lease obligations and other credit
facilities. Fair values are based on quoted market prices and assumptions
concerning the amount and timing of estimated future cash flows and assumed
discount rates reflecting varying degrees of perceived risk.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation and amortization are
computed using the straight-line method over the estimated useful lives of the
assets, generally 3-5 years. Equipment under capital leases is amortized over
the shorter of the useful life of the equipment or
F-7
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the lease term. Leasehold improvements are amortized over the shorter of the
lease period or the useful life of the improvement.
UNAUDITED INTERIM FINANCIAL STATEMENTS
Financial information as of April 2, 1999 and for the three months ended
March 31, 1998 and April 2, 1999 is unaudited. In the opinion of Viant's
management, the March 31, 1998 and April 2, 1999 unaudited interim financial
statements include all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of the financial position and results of
operations for those periods. The results of operations for the quarter ended
April 2, 1999 are not necessarily indicative of the results of the operating to
be expected in the future.
UNAUDITED PRO FORMA PRESENTATIONS
Under the terms of Viant's agreement with the holders of the convertible
preferred stock (see Note 8), all of such preferred stock will be converted
automatically into shares of common stock prior to the closing of an
underwritten public offering of common stock with an offering price of at least
$10.00 per share and gross proceeds of at least $20,000,000, or upon the vote of
the holders of a majority of the outstanding shares of preferred stock. The
unaudited pro forma stockholders' equity included on the balance sheet reflects
the conversion of such preferred stock into 13,173,524 shares of common stock as
if the conversion had occurred on April 2, 1999. Upon the closing of its initial
public offering of common stock, Viant will file an amended and restated
certificate of incorporation to increase the number of common shares authorized
to 50,000,000 and to authorize Viant to issue 5,000,000 shares of preferred
stock, $0.001 par value. The unaudited pro forma stockholders' equity included
on the balance sheet also reflects these changes.
Unaudited pro forma net loss per share for the year ended January 1, 1999
and the quarter ended April 2, 1999 included in the statement of operations is
computed using the weighted average number of common shares outstanding,
adjusted to include the pro forma effects of the conversion of preferred stock
to common stock as if such conversion had occurred on January 1, 1998 for the
year ended January 1, 1999 and on January 2, 1999 for the three months ended
April 2, 1999, or at the date of original issuance, if later.
REVENUE RECOGNITION
Substantially all of Viant's revenues are derived from professional services
which are generally provided to clients on a fixed-price, fixed-time basis.
Revenues on fixed-price engagements are recognized using the percentage of
completion method (based on the ratio of costs incurred to the total estimated
project cost at completion). Unbilled receivables represent revenue recognized
in advance of amounts billed. Billings received in advance of services performed
are recorded as deferred revenues. Provisions for estimated losses on contracts
are made during the period in which such losses become probable and can be
reasonably estimated. To date, such losses have not been significant. Viant
reports revenues net of reimbursable expenses which are billed to and collected
from clients.
PROFESSIONAL SERVICES
Professional services expenses consist primarily of compensation and
benefits costs for employees engaged in the delivery of professional services
and non-reimbursable expenses related to client projects.
F-8
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of compensation,
benefits and travel costs for employees in Viant's management, human resources,
finance and administration groups and facilities costs not allocated to sales
and marketing or research and development.
RESEARCH AND DEVELOPMENT
Viant's research and development efforts focus on evaluating and testing
technologies to be deployed to clients. Accordingly, all research and
development costs are charged to expense as incurred.
STOCK-BASED COMPENSATION
Viant accounts for stock-based compensation in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees."
Accordingly, no compensation expense is recorded for options issued to employees
in fixed amounts and with fixed exercise prices at least equal to the fair
market value of Viant's common stock at date of grant. Viant follows the
disclosure requirements of Statement of Financial Accounting Standards ("SFAS")
No. 123, "Accounting for Stock-Based Compensation" (Note 10). All stock-based
awards to non-employees are accounted for at their fair value in accordance with
SFAS No. 123.
NET LOSS PER SHARE
Viant computes net loss per share in accordance with SFAS No. 128, "Earnings
Per Share." Basic net loss per share is based upon the weighted average number
of common shares outstanding. Diluted net loss per share is based upon the
weighted average number of common shares outstanding, including common stock
equivalents, if dilutive. Basic and diluted net loss per share were the same for
all periods since the potential dilutive common stock equivalents were
anti-dilutive due to the losses. For all periods presented, the assumed exercise
of stock options and the assumed conversion of convertible preferred stock is
anti-dilutive and has been excluded from the calculation.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reported
period. Actual results could differ from those estimates.
2. ACCOUNTS RECEIVABLE
Accounts receivable consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1997 1999
--------------- -----------
<S> <C> <C>
Billed.......................................... $ 1,788 $ 5,116
Unbilled........................................ 345 1,265
Allowance for doubtful accounts................. (313) (909)
------- -----------
$ 1,820 $ 5,472
------- -----------
------- -----------
</TABLE>
F-9
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. PROPERTY AND EQUIPMENT
Property and equipment consists of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1997 1999
--------------- -----------
<S> <C> <C>
Computer equipment and software................. $ 1,064 $ 2,319
Furniture and equipment......................... 366 936
Leasehold improvements.......................... 835 2,112
------- -----------
2,265 5,367
Less: accumulated depreciation and
amortization.................................. (254) (1,319)
------- -----------
$ 2,011 $ 4,048
------- -----------
------- -----------
</TABLE>
Depreciation expense for the period ended December 31, 1996 and for the
years ended December 31, 1997 and January 1, 1999 was $49,000, $205,000 and
$1,065,000, respectively.
Included in the above is equipment and leasehold improvements acquired under
capital leases of $0 and $2,201,000 at December 31, 1997 and January 1, 1999,
respectively. Accumulated amortization on equipment and leasehold improvements
acquired under capital lease was $0 and $456,000 at December 31, 1997 and
January 1, 1999, respectively.
4. ACCRUED EXPENSES
Accrued expenses consist of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1997 1999
--------------- -----------
<S> <C> <C>
Payroll and related............................. $ 473 $ 2,238
Professional services........................... 267 137
Other........................................... 457 532
------- -----------
$ 1,197 $ 2,907
------- -----------
------- -----------
</TABLE>
5. CREDIT FACILITIES
In September 1996, Viant secured a revolving line of credit with a bank
which provides for borrowings of up to $1,250,000. In July 1997, the revolving
line of credit was increased to $3,000,000. In March 1998, Viant amended the
revolving line of credit to provide for borrowings up to $5,000,000 including a
$2,000,000 letter of credit facility. Borrowings under the revolving line of
credit are limited to 80% of eligible accounts receivable plus $1,000,000.
Borrowings under the revolving line of credit bear interest at the bank's prime
rate plus 0.5% (8.25% at January 1, 1999). The revolving line of credit is
secured by substantially all of Viant's assets. The revolving line of credit
expires on July 3, 1999, at which time all outstanding amounts are due. Warrants
to purchase 5,517 shares of Series C preferred stock at $3.625 per share were
issued as part of the agreement. The warrants expire upon the conversion of the
Series C Preferred Stock. The value ascribed to these warrants was not material
to Viant's financial position or results of operations. The line of credit
agreement, as amended, requires Viant to comply with certain financial
covenants, including the maintenance of specified minimum ratios. Viant was in
default on a certain financial covenant at January 1, 1999, for which Viant has
received a waiver from the bank. The financial covenant for which the Company
was in default was amended such that the Company may incur a loss not to exceed
$2,500,000 for each of the fiscal quarters ending April 2, 1999 and July 2,
1999. In addition, the total liabilities to tangible net worth ratio covenant
was amended such that the Company shall
F-10
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
maintain, as of the last day of each fiscal month, a ratio of total liabilities
to tangible net worth of not more than 1.25 to 1. At January 1, 1999, $2,434,000
was outstanding under the revolving line of credit and letters of credit
totaling $1,500,000 were guaranteed under the revolving line of credit. The
letters of credit expire periodically through July 3, 1999. At January 1, 1999,
$1,066,000 remained available under the revolving line of credit.
In September 1996, under the same bank agreement, Viant also secured an
equipment line of credit which provides for borrowings of up to $750,000. In
July 1997, the equipment line of credit was amended to provide for borrowings up
to $1,250,000. Borrowings under the equipment line of credit are based on actual
capital expenditures, subject to a maximum of $250,000 in purchased software,
and bear interest at the bank's prime rate plus 1.0% (8.75% at January 1, 1999).
The equipment line of credit is also secured by substantially all of Viant's
assets. At January 1, 1999, $1,019,000 was outstanding under the equipment line
of credit. Borrowings are payable in 36 equal monthly installments of principal,
plus accrued interest. Principal amounts outstanding at January 1, 1999 are due
as follows: $416,000 in 1999; $389,000 in 2000; and $214,000 in 2001.
6. LEASE COMMITMENTS
Viant leases office facilities and certain equipment under operating and
capital leases, respectively. Viant entered into lease agreements for facilities
in Boston, San Francisco, New York and Dallas which expire in 2003, 2003, 2007
and 2004, respectively. Rent expense under operating leases for the period ended
December 31, 1996 and for the years ended December 31, 1997 and January 1, 1999
was $67,000, $535,000 and $1,718,000, respectively. Viant is party to letters of
credit in support of their minimum future lease payments under leases for
permanent office space amounting to $1,500,000 as of January 1, 1999, declining
annually.
In March 1998, Viant entered into an agreement with a leasing company which
provides for capital lease borrowings related to equipment purchases up to
$3,250,000, and which expires in March 2000. Pursuant to the agreement, Viant
issued warrants to purchase 35,986 shares of Series C preferred stock at $3.625
per share which expires five years from the effective date of an underwritten
initial public offering of common stock. The value ascribed to these warrants
was not material to Viant's financial position or results of operations.
Minimum future lease commitments under noncancelable capital and operating
leases at January 1, 1999 are as follows (in thousands):
<TABLE>
<CAPTION>
CAPITAL OPERATING
----------- -----------
<S> <C> <C>
1999................................................... $ 629 $ 1,916
2000................................................... 629 2,079
2001................................................... 629 2,124
2002................................................... 607 2,168
2003................................................... -- 1,534
Thereafter............................................. -- 3,600
----------- -----------
Total minimum lease payments........................... 2,494 $ 13,421
-----------
-----------
Less amount representing interest...................... 444
-----------
Present value of minimum capital lease payments........ $ 2,050
-----------
-----------
</TABLE>
F-11
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. RELATED PARTY TRANSACTIONS
In March 1998, Viant entered into two agreements with one of its executives
for a housing loan of $50,000 and a personal loan of $40,000. Interest on both
loans accrue annually at 8.5%. Interest payments only are due on the housing
loan for the first four years. Upon commencement of the fifth year, repayment of
principal and interest on the housing loan will be made in accordance with a
monthly repayment schedule in which principal and interest will be repaid and
amortized over a two-year period. Viant will forgive 25% of the personal loan
principal and accrued interest annually commencing on the first anniversary of
the loan and for the next three anniversaries thereafter. The housing loan
becomes immediately due and payable and the remaining principal balance of the
personal loan will become immediately due and payable if the employee ceases to
be employed by Viant for any reason, fails to perform any of their obligations
under the loan agreements, or files for bankruptcy or otherwise becomes
insolvent.
During 1996, Viant provided consulting services to a holder of approximately
19% of Viant's common stock at December 31, 1996. All services rendered were
billed on a nondiscounted basis and Viant recognized revenue on this project of
$23,000 during the period ended December 31, 1996.
8. CONVERTIBLE PREFERRED STOCK
Viant's Articles of Incorporation, as amended, authorize Viant to issue
13,317,207 shares of preferred stock, no par value, of which 5,746,874,
1,499,925, 2,830,408 and 3,240,000 shares are designated as Series A, B, C and D
preferred stock, respectively.
In May 1996, Viant issued 5,746,874 shares of Series A preferred stock
("Series A") for net cash proceeds of $2,547,000 and the conversion of a
$500,000 note payable to a third party investor. In June 1996, Viant issued
1,499,925 shares of Series B preferred stock ("Series B") for net cash proceeds
of $987,000. In May and September 1997, Viant issued a total of 2,759,625 shares
of Series C preferred stock ("Series C") for net cash proceeds of $7,977,000. In
November 1998, Viant issued a total of 3,160,043 shares of Series D preferred
stock ("Series D") for net cash proceeds of $20,125,000. The rights with respect
to the Series A, B, C and D preferred stock are as follows:
VOTING RIGHTS
Each share of Series A, B, C and D preferred stock has voting rights equal
to an equivalent number of shares of common stock into which it is convertible
and votes together as one class with common stock.
As long as 3,000,000 and 750,000 shares of Series A and Series B preferred
stock are outstanding, respectively, the holders of the shares of Series A and
Series B preferred stock are each entitled to elect one director. The holders of
shares of common stock, voting as one class, are also entitled to elect one
director and the remaining directors shall be elected by the holders of
preferred and common stock voting together as a single class. The rights of the
preferred stockholders to elect directors expire upon the closing of an
underwritten initial public offering of common stock ("IPO").
Additionally, as long as any preferred stock is outstanding, Viant must
obtain approval from the holders of a majority of the outstanding shares of
Series A, B, C and D preferred stock in order to
F-12
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
alter the Articles of Incorporation as related to preferred stock, change the
authorized number of shares of preferred stock, declare or pay any dividends on
common stock other than dividends payable in common stock, redeem or purchase
shares of common stock unless resulting from employment termination, or effect a
merger, consolidation or sale of assets where the existing stockholders retain
less than 50% of the voting stock of the surviving entity.
DIVIDENDS
Holders of Series A, B, C and D preferred stock are entitled to receive
noncumulative dividends at the per annum rate of $0.0533, $0.0667, $0.289958 and
$0.639 per share, respectively, when and if declared by the Board of Directors.
Viant shall make no distribution to holders of common stock until Series A, B, C
and D preferred stock dividends have been paid. No dividends were declared by
the Board of Directors through January 1, 1999.
LIQUIDATION
In the event of any liquidation, dissolution or winding up of Viant,
including a consolidation, reorganization or merger of Viant where the
beneficial owners of Viant's common stock and preferred stock own less than 51%
of the resulting voting power of the surviving entity, the Series A, B, C and D
preferred stockholders are entitled to receive $0.533333, $0.666667, $2.899499
and $6.39 per share, respectively, plus any declared but unpaid dividends prior
to and in preference to any distribution to the holders of common stock. The
remaining assets, if any, shall be distributed ratably among the holders of the
common stock.
CONVERSION
Each share of Series A, B, C and D preferred stock is convertible into
common stock, at the option of the holder, according to a conversion ratio,
subject to adjustment for dilution, and which is currently at one-for-one. Each
share of preferred stock automatically converts into common stock at the then
effective conversion ratio prior to the closing of an IPO with an offering price
of at least $10.00 per share and gross proceeds of at least $20,000,000, or upon
the vote of the holders of a majority of the outstanding shares of preferred
stock. At January 1, 1999, Viant reserved 5,746,874, 1,499,925, 2,830,408 and
3,240,000 shares of common stock for the conversion of Series A, B, C and D
preferred stock, respectively.
IPO ALLOCATION
In the event of an IPO, Viant shall require that the managing underwriters
of the IPO make an allocation of shares to be sold in the IPO to the Series D
preferred stockholders. The allocation shall consist of at least the number of
shares of common stock determined by dividing $3,000,000 by the IPO price (the
"IPO Shares"). Viant shall cause the managing underwriters (subject to the
consent of such underwriters, which consent shall not be unreasonably withheld)
to give priority to the Series D preferred stockholders with respect to the IPO
shares in allocating the shares available for purchase.
9. COMMON STOCK
During 1996, Viant sold 3,981,250 shares of common stock to an employee of
Viant and other nonrelated parties. The 2,500,000 shares sold to the employee
were subject to a right of repurchase by Viant subject to a specified vesting
schedule.
F-13
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
In June 1997, under a severance agreement, Viant paid to this employee
$1,766,000 in cash, which included $680,000 for the repurchase of 1,248,117
shares of vested and unvested shares of common stock. Viant also agreed to pay
one year's salary as severance, on a monthly basis, for a total amount of
$175,000. In addition, Viant extended the vesting of an additional 200,000
shares of common stock, ratably over four quarters, which would have otherwise
been subject to repurchase. Accordingly, Viant recognized compensation expense
of $200,000 as the estimated fair value of such shares. With respect to all of
these arrangements, Viant recognized total severance related expenses of
$1,461,000 in the year ended December 31, 1997.
10. STOCK OPTIONS
In June 1996, the Board of Directors and stockholders adopted the 1996 Stock
Option Plan (the "Plan") which provides for granting incentive stock options
("ISOs") and nonqualified stock options ("NSOs") for up to 4,291,876 shares of
common stock to employees and consultants of Viant. In November 1997, the Plan
was amended to authorize options for up to 5,991,876 shares. The amended Plan
also provides for early exercise of options for certain employees, the stock for
which is subject to the same vesting and repurchase terms under the Plan. In
accordance with the Plan, the stated exercise price shall not be less than 100%
of the fair market value of common stock on the date of grant for ISOs and shall
be at least 85% of the fair market value for NSOs. The Plan provides that the
options shall be exercisable over a period not to exceed ten years. Options
generally vest 25% after one year of service and quarterly for the three years
thereafter.
Activity under the Plan is summarized as follows:
<TABLE>
<CAPTION>
PERIOD FROM APRIL 10,
1996 (INCEPTION) TO YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1997 JANUARY 1, 1999
------------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
OPTION EXERCISE OPTION EXERCISE OPTION EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
---------- ------------- ---------- ------------- ---------- -------------
Outstanding at beginning
of period............... -- $ -- 2,931,000 $ 0.15 3,296,250 $ 0.37
Granted................... 2,931,000 0.15 1,292,250 0.74 1,290,350 2.48
Exercised................. -- -- (823,125) 0.24 (206,032) 0.10
Cancelled................. -- -- (103,875) 0.10 (149,713) 0.75
---------- ---------- ----------
Outstanding at end of
year.................... 2,931,000 $ 0.15 3,296,250 $ 0.37 4,230,855 $ 1.01
---------- ---------- ----------
---------- ---------- ----------
Options exercisable at end
of year................. 380,000 $ 0.25 415,563 $ 0.07 1,254,812 $ 0.33
Weighted-average fair
value of options granted
during the year......... $ 0.03 $ 0.16 $ 0.45
Options available for
future grant............ 1,360,876 1,872,501 731,864
</TABLE>
F-14
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The following summarizes information about Viant's stock options outstanding
at January 1, 1999:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------------ -------------------------
<S> <C> <C> <C> <C> <C>
WEIGHTED AVERAGE WEIGHTED WEIGHTED
RANGE OF REMAINING AVERAGE AVERAGE
EXERCISE NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
PRICE OUTSTANDING LIFE (IN YEARS) PRICE EXERCISABLE PRICE
- ---------- ------------ --------------------- ----------- ------------ -----------
$0.05-0.99 2,736,880 7.91 $ 0.28 1,175,837 $ 0.24
1.00-1.99 651,175 9.02 1.55 76,975 1.50
2.00-2.99 537,000 9.46 2.40 1,500 2.46
3.00-3.99 136,000 9.67 3.50 250 3.50
4.00-4.99 169,800 9.83 4.25 250 4.25
------------ ------------
4,230,855 8.41 $ 1.01 1,254,812 $ 0.33
------------ ------------
------------ ------------
</TABLE>
In accordance with the provisions of Accounting Principles Board Opinion No.
25, Viant has recognized no compensation expense for options granted under the
Plan as the exercise prices of all options granted were equal to the estimated
fair market value of the common stock at the date of grant. Viant's board of
directors, in assessing the fair market value of Viant's common stock, considers
factors relevant at the time, including recent issuances and sales of Viant's
securities, significant customer wins, composition of management team, recent
hiring results, Viant's financial condition and operating results and the lack
of a public market for Viant's common stock. Had compensation expense been
determined based on the fair value at the grant dates, consistent with the
methodology prescribed under SFAS No. 123, Viant's pro forma net loss would have
been as follows:
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 10,
1996 YEAR ENDED
(INCEPTION) TO ----------------------------
DECEMBER 31, DECEMBER 31, JANUARY 1,
1996 1997 1999
--------------- --------------- -----------
<S> <C> <C> <C>
Net loss (in thousands):
As reported................................... $ (1,659) $ (4,080) $ (6,487)
Pro forma..................................... (1,670) (4,128) (6,632)
Net loss per share:
As reported................................... (0.42) (1.18) (1.76)
Pro forma..................................... $ (0.42) $ (1.19) $ (1.80)
</TABLE>
The following assumptions were used by Viant to determine the fair value of
stock options granted under the Black-Scholes options-pricing model for all
periods presented: expected volatility of 0%, average expected option life of 4
years, and dividend yield of 0%; and risk free interest rate of 6.0%, 6.1% and
5.2% for the period ended December 31, 1996 and for the years ended December 31,
1997 and January 1, 1999, respectively.
Because additional stock options are expected to be granted each year and
the pro forma net loss only includes the effect of options granted in 1996, 1997
and 1998, the above pro forma
F-15
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
disclosures are not representative of the pro forma effects on reported
financial results for future years.
In January 1999, the Board of Directors authorized, subject to stockholder
approval, the 1999 Stock Option Plan which provides for the granting of ISOs to
employees, and for the granting of NSOs and stock purchase rights to employees,
directors and consultants of Viant. A total of 4,868,929 shares of common stock
are authorized for issuance pursuant to the 1999 Stock Option Plan.
In March 1999, the Board of Directors authorized, subject to stockholder
approval, the 1999 Employee Stock Purchase Plan, which provides for the issuance
of a maximum of 200,000 shares of common stock.
(Unaudited)
During the quarter ended April 2, 1999, 1,661,905 stock options were granted
with a weighted average exercise price of $5.60 per share. These exercise prices
were equal to the estimated fair market value of the common stock at the date of
grant.
11. EMPLOYEE SAVINGS PLAN
Viant's Retirement/Savings Plan (the "401(k) Plan") under Section 401(k) of
the Internal Revenue Code covers all full-time employees. The 401(k) Plan allows
eligible employees to make contributions up to a specified annual maximum
contribution, as defined. Under the 401(k) Plan, Viant may, but is not obligated
to, match a portion of the employee contributions up to a defined maximum. Viant
did not contribute to the 401(k) Plan in 1997 or 1998.
F-16
<PAGE>
VIANT CORPORATION
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
12. INCOME TAXES
Because Viant has incurred net operating losses since inception, no
provisions have been made for current or deferred income taxes through January
1, 1999. Deferred tax assets consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1997 1999
--------------- -----------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts............................... $ 125 $ 364
Accrued expenses.............................................. 224 52
Loss carryforwards............................................ 1,866 4,539
Other......................................................... 31 --
------- -----------
Gross deferred tax assets..................................... 2,246 4,955
Deferred tax asset valuation allowance........................ (2,246) (4,735)
------- -----------
Total deferred tax assets................................... -- 220
------- -----------
Deferred tax liabilities:
Property and equipment........................................ -- 220
------- -----------
Total deferred tax liabilities.............................. -- 220
------- -----------
Net deferred tax asset.......................................... $ -- $ --
------- -----------
------- -----------
</TABLE>
Realization of deferred tax assets is contingent upon the generation of
future taxable income. Due to the uncertainty of realization of these tax
benefits, Viant has provided a valuation allowance for the full amount of its
net deferred tax asset.
At January 1, 1999, Viant had net operating loss carryforwards of
approximately $11,348,000 available for federal purposes to reduce future
taxable income. If not utilized, these carryforwards will expire at various
dates ranging from 2011 to 2018. Under the provisions of the Internal Revenue
Code, certain substantial changes in Viant's ownership may have limited, or may
limit in the future, the amount of net operating loss carryforwards which could
be utilized annually to offset future taxable income. The amount of any annual
limitation is determined based upon Viant's value prior to an ownership change.
Income taxes computed using the federal statutory income tax rate differs
from Viant's effective tax rate as follows (in thousands):
<TABLE>
<CAPTION>
PERIOD FROM
APRIL 10, 1996 YEAR ENDED
(INCEPTION) TO ----------------------------
DECEMBER 31, DECEMBER 31, JANUARY 1,
1996 1997 1999
----------------- --------------- -----------
<S> <C> <C> <C>
U.S. federal statutory rate..................... $ (564) $ (1,387) $ (2,206)
State income tax, net of federal income tax
effect........................................ (96) (237) (373)
Change in valuation allowance................... 629 1,617 2,489
Other........................................... 31 7 90
------ ------- -----------
Provision for income taxes...................... $ -- $ -- $ --
------ ------- -----------
------ ------- -----------
</TABLE>
F-17
<PAGE>
UNDERWRITING
Viant and the underwriters named below have entered into an underwriting
agreement with respect to the shares being offered. Subject to certain
conditions, each underwriter has severally agreed to purchase the number of
shares indicated in the following table. Goldman, Sachs & Co., Credit Suisse
First Boston Corporation and BancBoston Robertson Stephens Inc. are the
representatives of the underwriters.
<TABLE>
<CAPTION>
Underwriters Number of Shares
- --------------------------------------------------------- -----------------
<S> <C>
Goldman, Sachs & Co......................................
Credit Suisse First Boston Corporation...................
BancBoston Robertson Stephens Inc........................
-----------------
Total..................................................
-----------------
-----------------
</TABLE>
------------------
If the underwriters sell more shares than the total number set forth in the
table above, the underwriters have an option to buy up to an additional
shares from Viant to cover such sales. They may exercise that
option for 30 days. If any shares are purchased pursuant to this option, the
underwriters will severally purchase shares in approximately the same proportion
as set forth in the table above.
The following tables show the per share and total underwriting discounts and
commissions to be paid to the underwriters by Viant. Such amounts are shown
assuming both no exercise and full exercise of the underwriters' option to
purchase additional shares.
<TABLE>
<CAPTION>
Paid by Viant
-------------------------
Full
No Exercise Exercise
----------- ------------
<S> <C> <C>
Per Share........................................ $ $
Total............................................ $ $
</TABLE>
Shares sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus. Any
shares sold by the underwriters to securities dealers may be sold at a discount
of up to $ per share from the initial public offering price. Any
such securities dealers may resell any shares purchased from the underwriters to
certain other brokers or dealers at a discount of up to $ per share from the
initial public offering price. If all the shares are not sold at the initial
offering price, the representatives may change the offering price and the other
selling terms.
Viant, its directors, executive officers and substantially all of its
stockholders have agreed with the underwriters not to dispose of or hedge any of
its common stock or securities convertible into or exchangeable for shares of
common stock during the period from the date of this prospectus continuing
through the date 180 days after the date of this prospectus, except with the
prior written consent of the representatives. This agreement does not apply to
any existing employee benefit plans. See "Shares Eligible for Future Sale" for a
discussion of certain transfer restrictions.
At the request of Viant, the underwriters have reserved at the initial
public offering price up to $3,000,000 of common stock for sale to its Series D
Preferred Stockholders, and up to additional shares of common stock for
sale to certain directors, employees and associates of Viant.
U-1
<PAGE>
There can be no assurance that any of the reserved shares will be so purchased.
The number of shares available for sale to the general public in the offering
will be reduced by the number of reserved shares sold. Any reserved shares not
so purchased will be offered to the general public on the same basis as the
other shares offered hereby.
Wit Capital, a member of the National Association of Securities Dealers,
Inc., will participate in this offering as one of the underwriters. The National
Association of Securities Dealers, Inc. approved the membership of Wit Capital
on September 4, 1997.
Prior to the offering, there has been no public market for the shares. The
initial public offering price will be negotiated among Viant and the
representatives. Among the factors to be considered in determining the initial
public offering price of the shares, in addition to prevailing market
conditions, will be Viant's historical performance, estimates of the business
potential and earnings prospects of Viant, an assessment of Viant's management
and the consideration of the above factors in relation to market valuation of
companies in related businesses.
Application has been made for quotation of the common stock on the Nasdaq
National Market under the symbol "VIAN."
In connection with the offering, the underwriters may purchase and sell
shares of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the common stock while
the offering is in progress.
The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares sold
by or for the account of such underwriter in stabilizing or short covering
transactions.
These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the common stock. As a result, the price of the
common stock may be higher than the price that otherwise might exist in the open
market. If these activities are commenced, they may be discontinued by the
underwriters at any time. These transactions may be effected on the Nasdaq
National Market, in the over-the-counter market or otherwise.
The underwriters do not expect sales to discretionary accounts to exceed
five percent of the total number of shares offered.
Viant estimates that its share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be approximately
$ .
Viant has agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities Act.
U-2
<PAGE>
The Solutions
Kinko's Corporation
[Graphic of Kinkos.com]
Kinko's chose Viant to build its worldwide intranet and to relaunch its
public website, Kinkos.com. Kinko's intranet delivers critical information
and facilitates communication across its 1,000+ stores, while Kinkos.com was
redesigned to meet the needs of an expanding customer base.
BlueTape, LLC
[Graphic of sputnik7.com]
BlueTape teamed up with Viant to build and launch a brand new digital
entertainment business. BlueTape's first offering is sputnik7.com, a
24-hour-a-day, seven-day-a-week, real-time, interactive music video Internet
experience.
Oncology Therapeutics Network
[Graphic of OTN Online]
Oncology Therapeutics Network worked with Viant to create OTN Online, an
extranet that lets customers research product information on their own,
freeing OTN's sales representatives to focus on building and maintaining
customer relationships.
Tandem division of Compaq
[Graphic of Tandem home page]
The Tandem division of Compaq chose Viant to find a way to keep its sales
force, business partners, customers and public audience up-to-date on its
products, services and applications. Viant delivered a sales force intranet,
business partner extranet, and a public facing website to satisfy this need.
Boston - Chicago - Dallas - London - Los Angeles - New York - San Francisco
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations. This prospectus is an offer to
sell only the shares offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Prospectus Summary.......................... 2
Risk Factors................................ 5
Cautionary Note Regarding Forward-Looking
Statements................................ 10
Use of Proceeds............................. 11
Dividend Policy............................. 11
Capitalization.............................. 12
Dilution.................................... 13
Selected Financial Data..................... 14
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................ 15
Business.................................... 21
Management.................................. 36
Certain Transactions........................ 47
Principal Stockholders...................... 48
Description of Capital Stock................ 50
Shares Eligible for Future Sale............. 53
Legal Matters............................... 55
Experts..................................... 55
Where You Can Find More Information......... 55
Index to Financial Statements............... F-1
Underwriting................................ U-1
</TABLE>
------------------
Through and including , 1999 (the 25(th) day after the date of this
prospectus), all dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to a dealer's obligation to deliver a prospectus when acting
as an underwriter and with respect to an unsold allotment or subscription.
Shares
VIANT CORPORATION
Common Stock
----------
[LOGO]
----------
GOLDMAN, SACHS & CO.
CREDIT SUISSE FIRST BOSTON
BANCBOSTON ROBERTSON STEPHENS
Representatives of the Underwriters
------------------
WIT CAPITAL CORPORATION
FACILITATOR OF INTERNET DISTRIBUTION
------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
The following table sets forth all expenses to be paid by the Registrant,
other than the underwriting discounts and commissions payable by the Registrant
in connection with the sale of the common stock being registered. All amounts
shown are estimates except for the registration fee and the NASD filing fee.
<TABLE>
<CAPTION>
AMOUNT TO BE
PAID
-------------
<S> <C>
Registration fee............................................................... $
NASD filing fee................................................................
Nasdaq National Market.........................................................
Blue sky qualification fees and expenses.......................................
Printing and engraving expenses................................................
Legal fees and expenses........................................................
Accounting fees and expenses...................................................
Director and Officer liability insurance.......................................
Transfer agent and registrar fees..............................................
Miscellaneous expenses.........................................................
Total...................................................................... $
-------------
-------------
</TABLE>
* To be filed by amendment.
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits indemnification
of officers, directors and other corporate agents under certain circumstances
and subject to certain limitations. The Registrant's Certificate of
Incorporation and Bylaws provide that the Registrant shall indemnify its
directors, officers, employees and agents to the full extent permitted by
Delaware General Corporation Law, including in circumstances in which
indemnification is otherwise discretionary under Delaware law. In addition, the
Registrant intends to enter into separate indemnification agreements with its
directors, officers and certain employees which would require the Registrant,
among other things, to indemnify them against certain liabilities which may
arise by reason of their status or service (other than liabilities arising from
willful misconduct of a culpable nature). The Registrant also intends to
maintain director and officer liability insurance, if available on reasonable
terms.
These indemnification provisions and the indemnification agreement to be
entered into between the Registrant and its officers and directors may be
sufficiently broad to permit indemnification of the Registrant's officers and
directors for liabilities (including reimbursement of expenses incurred) arising
under the Securities Act.
The Registrant intends to obtain in conjunction with the effectiveness of
the Registration Statement a policy of directors' and officers' liability
insurance that insures the Registrant's directors and officers against the cost
of defense, settlement or payment of a judgment under certain circumstances.
The underwriting agreement filed as Exhibit 1.1 to this Registration
Statement provides for indemnification by the underwriters of the Registrant and
its officers and directors for certain liabilities arising under the Securities
Act, or otherwise.
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Since our incorporation in April 1996, we have sold and issued the following
securities:
(1) On April 15, 1996 we issued 5,509,391 shares of common stock to one
founder for an aggregate consideration of $550.94. On May 16, 1996 we issued
1,293,750 shares of common stock to one investor for an aggregate consideration
of $129.38.
(2) On May 16, 1996 we issued 5,746,874 shares of Series A preferred stock
to ten investors for an aggregate consideration of $3,064,997.55.
(3) On June 19, 1996 we issued 1,499,925 shares of Series B preferred stock
to two investors for an aggregate consideration of $1,000,000.00.
(4) On June 4, 1997 we issued 2,080,103 shares of Series C preferred stock
to 32 investors for an aggregate consideration of $6,031,258.61. On October 10,
1997 we also issued 679,488 shares of Series C preferred stock to 32 investors
and employees for an aggregate consideration of $1,970,174.91.
(5) On December 11, 1997 we issued 187,500 shares of common stock to one
investor for an aggregate consideration of $18,750.00.
(6) On March 25, 1998 we issued a warrant for 35,986 shares of Series C
preferred stock to an equipment lessor in connection with an equipment lease
agreement, and on March 26, 1998 we issued a warrant for 5,517 shares of Series
C preferred stock to another equipment lessor in connection with an equipment
lease agreement. Such warrants have an exercise price of $3.625 per share.
(7) From November 4, 1998 to February 1, 1999 we issued 3,168,704 shares of
Series D preferred stock to 31 investors and employees for an aggregate
consideration of $20,248,018.56.
(8) Since our incorporation and as of April 9, 1999, we have issued options
to purchase an aggregate of 7,341,005 shares of common stock with exercise
prices ranging from $0.05 to $9.00 per share. Since our incorporation and as of
April 9, 1999, options to purchase 1,585,978 shares of common stock have been
exercised for an aggregate consideration of $456,561.45.
There were no underwriters employed in connection with any of the
transactions set forth in Item 15.
The issuances of securities described in Items 15(1) through 15(7) were
deemed to be exempt from registration under the Securities Act in reliance on
Section 4(2) of the Securities Act as transactions by an issuer not involving a
public offering. The issuances of securities described in Item 15(8) were deemed
to be exempt from registration under the Securities Act in reliance on Section
4(2) or Rule 701 promulgated thereunder as transactions pursuant to compensatory
benefit plans and contracts relating to compensation. The recipients of
securities in each such transaction represented their intention to acquire the
securities for investment only and not with a view to or for sale in connection
with any distribution thereof and appropriate legends were affixed to the share
certificates and other instruments issued in such transactions. All recipients
either received adequate information about the Registrant or had access, through
employment or other relationships, to such information.
II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(A) EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ---------- --------------------------------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement
3.1* Amended and Restated Articles of Incorporation as currently in effect
3.2* Certificate of Incorporation of Viant Delaware, including an amendment dated March 25, 1999
3.3 Form of Amended and Restated Certificate of Incorporation (to be filed with the Delaware Secretary of
State prior to the closing of the offering covered by this Registration Statement)
3.4* Bylaws as currently in effect
3.5* Bylaws of Viant Delaware
3.6 Form of Bylaws (to be adopted immediately prior to the closing of the offering covered by this
Registration Statement)
4.1* Form of Specimen Stock Certificate
4.2* Amended and Restated Shareholder Rights Agreement, dated as of November 13, 1998
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, regarding legality of the
securities being issued
10.1* Allocation Agreement, dated as of November 13, 1998
10.2* Form of Master Services Agreement
10.3+ Master Services Agreement with BlueTape LLC, dated as of June 21, 1998
10.4+ License Agreement, including attachments, with BlueTape LLC, dated as of February 15, 1999
10.5* Amended Key Employee Agreement with Robert Gett, dated as of March 31, 1999; Confidential Information
and Invention Assignment Agreement with Robert Gett, dated as of November 4, 1996
10.6 Relocation Agreement and Employee Loan Agreement with Richard Chavez, dated March 31, 1998 (This exhibit
supersedes the one previously filed.)
10.7* Form of Indemnification Agreement to be entered into between the Registrant and each of its directors
and officers, to become effective upon the closing of the offering made under this Registration
Statement
10.8* 1996 Stock Option Plan
10.9* 1999 Stock Option Plan
10.10* 1999 Employee Stock Purchase Plan
10.11* Sublandlord's Consent to Assignment of Sublease, for property located at 520 Madison Avenue, New York,
New York dated as of March 6, 1997
10.12* Lease Agreement with Chelsea Green Associates, L.P., for property located at 625 Avenue of the Americas,
New York, New York, dated July 28, 1997
10.13* Subordination, Nondisturbance and Attornment Agreement with Lehman Brothers Holdings, Inc., for property
located at 625 Avenue of the Americas, New York, New York dated August 26, 1997
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ---------- --------------------------------------------------------------------------------------------------------
<S> <C>
10.14* First Amendment of Lease with Chelsea Green Associates, L.P., for property located at 625 Avenue of the
Americas, New York, New York dated November 1997
10.15* Instruction Letter for Rental Payments, for 625 Avenue of the Americas, New York, New York dated
November 18, 1997
10.16* Standard Form Commercial Lease with Lincoln Plaza Limited Partnership, for property located at 89 South
Street, Boston, Massachusetts, dated May 2, 1997
10.17* Notice of Lease with Lincoln Plaza Limited Partnership, for property located at 89 South Street, Boston,
Massachusetts, dated May 2, 1997
10.18* Subordination, Nondisturbance and Attornment Agreement with Lincoln Plaza Limited Partnership and
BHF-BANK Aktiengesellschaft, for property located at 89 South Street, Boston, Massachusetts, dated
September 23, 1997
10.19* First Amendment to Lease with Lincoln Plaza Limited Partnership, for property located at 89 South
Street, Boston, Massachusetts, dated as of October 1, 1998
10.20 Lease Agreement with Williams Worldwide for property located at 3130 Wilshire Boulevard, Santa Monica,
California dated March 1, 1999 (This exhibit supersedes the one previously filed.)
10.21* Lease Agreement with CENTRUM G.S. LTD, for property located at 3102 Oak Lawn, Dallas, Texas, dated
August 15, 1998
10.22* Lease Agreement with Zoro, LLC for property located at 699 Eighth Street, San Francisco, California,
dated April 8, 1997
10.23* First Addendum to Lease with Zoro, LLC for property located at 699 Eighth Street, San Francisco,
California, dated April 1997
10.24* Month-to-Month Lease Agreement with Zoro, LLC for property located at 699 Eighth Street, San Francisco,
California, dated June 5, 1997
10.25* Office Lease with Zoro, LLC for property located at 699 Eighth Street, San Francisco, California, dated
June 26, 1997
10.26* First Amendment to Office Lease with Zoro, LLC for property located at 699 Eighth Street, San Francisco,
California, dated October 14, 1997
10.27* Amendment to Lease with Zoro, LLC for property located at 699 Eighth Street, San Francisco, California,
dated January 29, 1998
10.28* Subordination Agreement; Acknowledgment Of Lease Assignment, Estoppel, Attornment and Non-Disturbance
Agreement with Zoro, LLC and Wells Fargo Bank, National Association, for property located at 699 Eighth
Street, San Francisco, California, dated August 21, 1998
10.29* Summary Plan Description of Registrant's 401(k) Retirement/Savings Plan
10.30* Master Lease Agreement and Addendum with Comdisco, Inc., dated March 25, 1998
10.31* Amended and Restated Loan and Security Agreement with Venture Banking Group, dated as of March 25, 1998
10.32 First Amendment to Amended and Restated Loan and Security Agreement with Venture Banking Group, dated as
of April 7, 1999
10.33 Lease Agreement with Regus UK Ltd. for property located at upper ground floor (Room 29), Covent Garden,
London WC2E 9RA, dated March 24, 1999
10.34 Lease Agreement with Regus UK Ltd. for property located at upper ground floor (Room 31), Covent Garden,
London WC2E 9RA, dated March 24, 1999
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ---------- --------------------------------------------------------------------------------------------------------
<S> <C>
10.35 Revocable License with OmniOffices, Inc. (Chicago-Loop) for property located at 10 South Riverside Plaza
-18th Floor, Chicago, Illinois, dated March 18, 1999
11.1 Statement of Computation of Earnings per Share (This exhibit has been omitted because the information is
shown in the financial statements or notes thereto.)
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (contained in Exhibit 5.1)
24.1* Power of Attorney (contained in the signature page to this Registration Statement).
27.1 Financial Data Schedule
</TABLE>
- ------------------------
+ confidential treatment requested
* filed as part of the initial filing of the Registration Statement on April
9, 1999
(B) FINANCIAL STATEMENT SCHEDULE.
Report of Independent Accountants
Schedule II-Valuation and Qualifying Accounts
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the
financial statements or notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referenced in Item 14 of
this Registration Statement or otherwise, the Registrant has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered hereunder, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the Offering of such securities at the time shall be deemed to be the
initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 1 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in Boston,
Massachusetts, on the 17th day of May 1999.
<TABLE>
<S> <C> <C>
VIANT CORPORATION
By: /s/ ROBERT L. GETT*
-----------------------------------------
Robert L. Gett
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<S> <C> <C>
President and Chief
/s/ ROBERT L. GETT* Executive Officer, and
- ------------------------------ Director (PRINCIPAL May 17, 1999
Robert L. Gett EXECUTIVE OFFICER)
Vice President and Chief
/s/ M. DWAYNE NESMITH Financial Officer
- ------------------------------ (PRINCIPAL FINANCIAL AND May 17, 1999
M. Dwayne Nesmith ACCOUNTING OFFICER)
WILLIAM H. DAVIDOW*
- ------------------------------ Director May 17, 1999
William H. Davidow
/s/ KEVIN W. ENGLISH
- ------------------------------ Director May 17, 1999
Kevin W. English
VENETIA KONTOGOURIS*
- ------------------------------ Director May 17, 1999
Venetia Kontogouris
*By: /S/ DWAYNE
NESMITH
- ------------------------------
Dwayne Nesmith
ATTORNEY-IN-FACT
</TABLE>
II-6
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Viant Corporation
In connection with our audits of the financial statements of Viant
Corporation at January 1, 1999 and December 31, 1997, and for each of the years
ended January 1, 1999 and December 31, 1997 and the period from April 10, 1996
(Inception) to December 31, 1996, which financial statements are included in the
prospectus, we have also audited the financial statement schedule listed in Item
16(b) herein.
In our opinion, this financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly, in
all material respects, the information required to be included therein.
PricewaterhouseCoopers LLP
Boston, Massachusetts
March 16, 1999
S-1
<PAGE>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
VIANT CORPORATION
<TABLE>
<CAPTION>
BALANCE AT
BEGINNING OF CHARGED TO BALANCE AT
DESCRIPTION PERIOD OPERATIONS DEDUCTIONS(1) END OF PERIOD
- ----------------------------------------------------- ------------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
Period from April 10, 1996 (Inception) to December
31, 1996
Reserves and allowances deducted from asset
accounts
Allowance for doubtful accounts.................. $ -- 75,000 -- $ 75,000
Year ended December 31, 1997
Reserves and allowances deducted from asset
accounts
Allowance for doubtful accounts.................. $ 75,000 294,000 56,000 $ 313,000
Year ended January 1, 1999
Reserves and allowances deducted from asset
accounts
Allowance for doubtful accounts.................. $ 313,000 612,000 16,000 $ 909,000
</TABLE>
- ------------------------
(1) Doubtful accounts written off, net of recoveries
S-2
<PAGE>
EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C>
1.1 Form of Underwriting Agreement
3.1* Amended and Restated Articles of Incorporation as currently in effect
3.2* Certificate of Incorporation of Viant Delaware, including an amendment dated March 25, 1999
3.3 Form of Amended and Restated Certificate of Incorporation (to be filed with the Delaware Secretary of
State prior to the closing of the offering covered by this Registration Statement)
3.4* Bylaws as currently in effect
3.5* Bylaws of Viant Delaware
3.6 Form of Bylaws (to be adopted immediately prior to the closing of the offering covered by this
Registration Statement)
4.1* Form of Specimen Stock Certificate
4.2* Amended and Restated Shareholder Rights Agreement, dated as of November 13, 1998
5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, regarding legality of the
securities being issued
10.1* Allocation Agreement, dated as of November 13, 1998
10.2* Form of Master Services Agreement
10.3+ Master Services Agreement with BlueTape LLC, dated as of June 21, 1998
10.4+ License Agreement, including attachments, with BlueTape LLC, dated as of February 15, 1999
10.5* Key Employee Agreement with Robert Gett, dated as of November 4, 1996; Confidential Information and
Invention Assignment Agreement with Robert Gett, dated as of November 4, 1996
10.6 Relocation Agreement and Employee Loan Agreement with Richard Chavez, dated March 31, 1998 (This exhibit
supersedes the one previously filed.)
10.7* Form of Indemnification Agreement to be entered into between the Registrant and each of its directors
and officers, to become effective upon the closing of the offering made under this Registration
Statement
10.8* 1996 Stock Option Plan
10.9* 1999 Stock Option Plan
10.10* 1999 Employee Stock Purchase Plan
10.11* Sublandlord's Consent to Assignment of Sublease, for property located at 520 Madison Avenue, New York,
New York dated as of March 6, 1997
10.12* Lease Agreement with Chelsea Green Associates, L.P., for property located at 625 Avenue of the Americas,
New York, New York, dated July 28, 1997
10.13* Subordination, Nondisturbance and Attornment Agreement with Lehman Brothers Holdings, Inc., for property
located at 625 Avenue of the Americas, New York, New York dated August 26, 1997
10.14* First Amendment of Lease with Chelsea Green Associates, L.P., for property located at 625 Avenue of the
Americas, New York, New York dated November 1997
10.15* Instruction Letter for Rental Payments, for 625 Avenue of the Americas, New York, New York dated
November 18, 1997
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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<S> <C>
10.16* Standard Form Commercial Lease with Lincoln Plaza Limited Partnership, for property located at 89 South
Street, Boston, Massachusetts, dated May 2, 1997
10.17* Notice of Lease with Lincoln Plaza Limited Partnership, for property located at 89 South Street, Boston,
Massachusetts, dated May 2, 1997
10.18* Subordination, Nondisturbance and Attornment Agreement with Lincoln Plaza Limited Partnership and
BHF-BANK Aktiengesellschaft, for property located at 89 South Street, Boston, Massachusetts, dated
September 23, 1997
10.19* First Amendment to Lease with Lincoln Plaza Limited Partnership, for property located at 89 South
Street, Boston, Massachusetts, dated as of October 1, 1998
10.20 Lease Agreement with Williams Worldwide for property located at 3130 Wilshire Boulevard, Santa Monica,
California dated March 1, 1999 (This exhibit supersedes the one previously filed.)
10.21* Lease Agreement with CENTRUM G.S. LTD, for property located at 3102 Oak Lawn, Dallas, Texas, dated
August 15, 1998
10.22* Lease Agreement with Zoro, LLC for property located at 699 Eighth Street, San Francisco, California,
dated April 8, 1997
10.23* First Addendum to Lease with Zoro, LLC for property located at 699 Eighth Street, San Francisco,
California, dated April 1997
10.24* Month-to-Month Lease Agreement with Zoro, LLC for property located at 699 Eighth Street, San Francisco,
California, dated June 5, 1997
10.25* Office Lease with Zoro, LLC for property located at 699 Eighth Street, San Francisco, California, dated
June 26, 1997
10.26* First Amendment to Office Lease with Zoro, LLC for property located at 699 Eighth Street, San Francisco,
California, dated October 14, 1997
10.27* Amendment to Lease with Zoro, LLC for property located at 699 Eighth Street, San Francisco, California,
dated January 29, 1998
10.28* Subordination Agreement; Acknowledgment Of Lease Assignment, Estoppel, Attornment and Non-Disturbance
Agreement with Zoro, LLC and Wells Fargo Bank, National Association, for property located at 699 Eighth
Street, San Francisco, California, dated August 21, 1998
10.29* Summary Plan Description of Registrant's 401(k) Retirement/Savings Plan
10.30* Master Lease Agreement and Addendum with Comdisco, Inc., dated March 25, 1998
10.31* Amended and Restated Loan and Security Agreement with Venture Banking Group, dated as of March 25, 1998
10.32 First Amendment to Amended and Restated Loan and Security Agreement with Venture Banking Group, dated as
of April 7, 1999
10.33 Lease Agreement with Regus UK Ltd. for property located at upper ground floor (Room 29), Covent Garden,
London WC2E 9RA, dated March 24, 1999
10.34 Lease Agreement with Regus UK Ltd. for property located at upper ground floor (Room 31), Covent Garden,
London WC2E 9RA, dated March 24, 1999
10.35 Revocable License with OmniOffices, Inc. (Chicago-Loop) for property located at 10 South Riverside Plaza
-18th Floor, Chicago, Illinois, dated March 18, 1999
11.1 Statement of Computation of Earnings per Share (This exhibit has been omitted because the information is
shown in the financial statements or notes thereto.)
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (contained in Exhibit 5.1)
24.1* Power of Attorney (contained in the signature page to this Registration Statement).
27.1 Financial Data Schedule
</TABLE>
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+ confidential treatment requested
* filed as part of the initial filing of the Registration Statement on April
9, 1999
<PAGE>
Exhibit 1.1
VIANT CORPORATION
COMMON STOCK, PAR VALUE $.001 PER SHARE
UNDERWRITING AGREEMENT
, 1999
Goldman, Sachs & Co.,
Credit Suisse First Boston Corporation
BancBoston Robertson Stephens Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Viant Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
........ shares (the "Firm Shares") and, at the election of the Underwriters, up
to ........ additional shares (the "Optional Shares") of Common Stock, par value
$.001 per share ("Stock") of the Company (the Firm Shares and the Optional
Shares that the Underwriters elect to purchase pursuant to Section 2 hereof
being collectively called the "Shares").
As part of the offering contemplated by this Agreement, the
Underwriters have agreed to reserve out of the Shares up to _____ Shares, for
sale to certain of the Company's employees, officers and directors and other
parties associated with the Company as designated by the Company, including
without limitation, pursuant to that certain Allocation Agreement by and among
the Company and its Series D Preferred Stockholders dated November 13, 1998, as
may be amended (collectively, the "Directed Participants") as set forth in the
Prospectus under the heading "Underwriting" (the "Directed Share Program"). The
Shares to be sold pursuant to the Directed Share Program (the "Directed Shares")
will be sold pursuant to this Agreement at the public offering price in the
jurisdictions designated by the Company. Any Directed Shares not confirmed for
purchase by the Directed Participants by the end of the business day on which
this Agreement is executed will be offered to the public as set forth in the
Prospectus.
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-76049)
(the "Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in the
form heretofore delivered to you, and, excluding exhibits thereto, to you for
each of the other Underwriters, have been declared effective by the Commission
in such form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement has heretofore been filed with the Commission; and no
stop order suspending
<PAGE>
the effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or threatened by
the Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement and the
Rule 462(b) Registration Statement, if any, including all exhibits thereto and
including the information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared effective, each as
amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any, became
or hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; and such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, is hereinafter called the "Prospectus";
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(c) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto, and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through Goldman, Sachs & Co. expressly for use
therein;
(d) The Company has not sustained since the date of the latest
audited financial statements included in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any change in the capital stock or long-term debt of the Company or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company,
otherwise than as set forth or contemplated in the Prospectus;
(e) The Company has good and marketable title in fee simple to
all real property and good and marketable title to all personal property owned
by it, in each case free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as do not
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materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company; and any real
property and buildings held under lease by the Company are held by it under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such qualification,
or is subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction;
(g) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description of the Stock contained in the
Prospectus; the Company does not own, beneficially or otherwise, any equity
interest in any entity other than an interest in Interactive Factory Inc., as
described in that letter dated _______, 1999 from the Company to counsel to the
Underwriters;
(h) The unissued Shares to be issued and sold by the Company
to the Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be duly
and validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(i) The issue and sale of the Shares by the Company and the
compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a party or by
which the Company is bound or to which any of the property or assets of the
Company is subject, nor will such action result in any violation of the
provisions of the Amended and Restated Certificate of Incorporation or By-laws
of the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the Company
of the transactions contemplated by this Agreement, except the registration
under the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(j) The Company is not in violation of its Amended and
Restated Certificate of Incorporation or By-laws or currently in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound;
(k) The statements set forth in the Prospectus under the
caption, "Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock, and under
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the caption "Underwriting", insofar as they pertain to the Directed Share
Program and lock-up arrangements, and "Management - Employee Benefit Plans",
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(l) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company is a party or of
which any property of the Company is the subject which, if determined adversely
to the Company, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, stockholders'
equity or results of operations of the Company; and, to the Company's knowledge,
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(m) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(n) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(o) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company are independent public accountants as
required by the Act and the rules and regulations of the Commission thereunder;
(p) The Company has reviewed its operations and those of any
third parties with which the Company has a material relationship to evaluate the
extent to which the business or operations of the Company will be affected by
the Year 2000 Problem. As a result of such review, the Company has no reason to
believe, and does not believe, that the Year 2000 Problem will have a material
adverse effect on the general affairs, management, the current or future
consolidated financial position, business prospects, stockholders' equity or
results of operations of the Company or result in any material loss or
interference with the Company's business or operations. The "Year 2000 Problem"
as used herein means any significant risk that computer hardware or software
used in the receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of mechanical or
electrical systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as in the
case of dates or time periods occurring prior to January 1, 2000;
(q) The Company has sufficient interests in all patents,
trademarks, service marks, trade names, copyrights, trade secrets, information,
proprietary rights and processes (collectively, the "Intellectual Property")
necessary for its business as now conducted and has no reason to believe after
reasonable inquiry that the conduct of its business will conflict with or
infringe the interests of others, except as would not have a material adverse
effect on its business as now conducted, and has taken reasonable steps to
secure from third parties interests in such Intellectual Property as is
necessary for its business as described in the Prospectus; the Company is not
aware of outstanding options, licenses or agreements of any kind relating to the
Intellectual Property, except as set forth in the Prospectus or in the written
agreements pursuant to which the Company provides its services to its clients
and except such as would not have a material adverse effect on the financial
position, stockholders' equity or results of operations of the Company; none of
the technology employed by the Company has been obtained or is being used by the
Company in violation of any contractual or fiduciary obligation binding on the
Company, its directors or executive officers or any of its employees or
consultants or otherwise in violation of the rights of any person; neither the
Company nor any of its
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employees has received any written or, to the Company's knowledge, oral
communications alleging that the Company has violated or, by conducting its
business, would violate any of the Intellectual Property of any other person or
entity; the operation of the Company's business by the employees of the Company
will not result in a breach or violation of the terms, conditions or provisions
of, or constitute a default under, any material contract, covenant or instrument
under which any of such employees is now obligated; and the Company has taken
and will maintain reasonable measures to prevent the unauthorized dissemination
or publication of its confidential information or the confidential information
of third parties in its possession;
(r) The Registration Statement, any Preliminary Prospectus and
the Prospectus comply, and any further amendments or supplements thereto will
comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any Preliminary Prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program,
and no authorization, approval, consent, license, order, registration or
qualification of or with any government, governmental instrumentality or court,
other than such as have been obtained, is necessary under the securities laws
and regulations of foreign jurisdictions in which the Directed Shares are
offered outside the United States; and
(s) The Company has not offered, or caused the Underwriters to
offer, Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (a) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business with the
Company, or (b) a trade journalist or publication to write or publish favorable
information about the Company or its products.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $................, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the purchase price per share set
forth in clause (a) of this Section 2, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction, the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to ................... Optional Shares, at the purchase price
per share set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
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3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Company shall be delivered by or on behalf of the Company to
Goldman, Sachs & Co., through the facilities of the Depository Trust Company
("DTC") for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to Goldman, Sachs & Co.
at least forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Shares, 9:30 a.m., New York City time, on ............., 1999 or
such other time and date as Goldman, Sachs & Co. and the Company may agree upon
in writing, and, with respect to the Optional Shares, 9:30 a.m., New York City
time, on the date specified by Goldman, Sachs & Co. in the written notice given
by Goldman, Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Goldman, Sachs & Co. and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7 hereof, will be delivered at the offices of
Hale and Dorr LLP, 60 State Street, Boston, MA 02109 (the "Closing Location"),
and the Shares will be delivered at the Designated Office, all at such Time of
Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New York
City time, on the New York Business Day next preceding such Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus which
shall be disapproved by you promptly after reasonable notice thereof; to advise
you, promptly after it receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
Prospectus, of the suspension of the qualification of the Shares for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such
6
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purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with copies of the Prospectus in New York City in
such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months after
the time of issue of the Prospectus in connection with the offering or sale of
the Shares and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such period to amend or
supplement the Prospectus in order to comply with the Act, to notify you and
upon your request to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection with
sales of any of the Shares at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as you
may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Company (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations thereunder
(including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the Prospectus,
not to offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder any securities of the Company that are substantially similar to the
Shares, including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock option
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement), without
your prior written consent;
(f) To furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public
7
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accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), to make available to
its stockholders summary financial information of the Company for such quarter
in reasonable detail;
(g) During a period of five years from the effective date of
the Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the Company has
subsidiaries and the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission);
(h) To use the net proceeds received by it from the sale of
the Shares pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(i) To use its best efforts to list for quotation the Shares
on the National Association of Securities Dealers Automated Quotations National
Market System ("NASDAQ");
(j) To file with the Commission such information on Form 10-Q
or Form 10-K as may be required by Rule 463 under the Act;
(k) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act;
(l) In connection with the Directed Share Program, to ensure
that the Directed Shares will be restricted to the extent required by the
National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of the effectiveness of the Registration Statement.
Counsel to Goldman, Sachs & Co. will notify the Company as to which Directed
Participants will need to be so restricted. The Company will direct the transfer
agent to place stop transfer restrictions upon such securities for such period
of time; and
(m) To comply with all applicable securities and other
applicable laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the
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offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey, and all fees and
disbursements of counsel incurred by the Underwriters in connection with the
Directed Share Program and stamp duties, similar taxes or duties or other taxes,
if any, incurred by the Underwriters in connection with the Directed Share
Program; (iv) all fees and expenses in connection with listing the Shares on the
NASDAQ; (v) the filing fees incident to, and the fees and disbursements of
counsel for the Underwriters in connection with, securing any required review by
the National Association of Securities Dealers, Inc. of the terms of the sale of
the Shares; (vi) the cost of preparing stock certificates; (vii) the cost and
charges of any transfer agent or registrar; and (viii) all other costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Hale and Dorr LLP counsel for the Underwriters, shall have
furnished to you such written opinion or opinions (a draft of each such opinion
is attached as Annex II(a) hereto), dated such Time of Delivery, with respect to
the matters covered in paragraphs (i), (ii), (vi), (x) and (xii) of subsection
(c) below as well as such other related matters as you may reasonably request,
and such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Wilson Sonsini Goodrich & Rosati, counsel for the Company,
shall have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(b) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i)The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company
(including the Shares being delivered at
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such Time of Delivery) have been duly and validly authorized and issued and are
fully paid and non-assessable; and the Shares conform to the description of the
Stock contained in the Prospectus;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification or is subject to no
material liability or disability by reason of failure to be so qualified in any
such jurisdiction (such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company, provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such opinions and certificates;
(iv) Any real property and buildings held under lease by the
Company are held by it under valid and subsisting leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company;
(v)To such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings pending to which
the Company is a party or of which any property of the Company is the subject
which, if determined adversely to the Company, would individually or in the
aggregate have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company; and, to such
counsel's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The issue and sale of the Shares being delivered at such
Time of Delivery by the Company and the compliance by the Company with all of
the provisions of this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company is a party or by which the Company is bound
or to which any of the property or assets of the Company is subject, nor will
such action result in any violation of the provisions of the Amended and
Restated Certificate of Incorporation or By-laws of the Company or any statute
or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any of their
properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Shares or the consummation by
the Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Shares, and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters;
(ix) The Company is not in violation of its Amended and
Restated Certificate of Incorporation or By-laws or, to such counsel's
knowledge, in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound;
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<PAGE>
(x)The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock and under the captions "Underwriting" insofar
as they pertain to the Directed Share Program and lock-up arrangements and
"Management - Employee Benefits Plans", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate, complete
and fair;
(xi) The Company is not an "investment company", as such term
is defined in the Investment Company Act; and
(xii) (1) The Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related schedules and
financial data therein, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Act and the
rules and regulations thereunder; (2) although they do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (x) of this section 7(c), they have no
reason to believe that (a) the Registration Statement, as of its effective date,
or any further amendment thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules and
financial data therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (b) the Prospectus, as of its date, or any further amendment
or supplement thereto made by the Company prior to such Time of Delivery, (other
than the financial statements and related schedules and financial data therein,
as to which such counsel need express no opinion) contained an untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading or (3) that, as of such Time of Delivery, either the Registration
Statement or the Prospectus or any further amendment or supplement thereto made
by the Company prior to such Time of Delivery (other than the financial
statements and related schedules and financial data therein, as to which such
counsel need express no opinion) contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
(4) they do not know of any amendment to the Registration Statement required to
be filed or of any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be described in
the Registration Statement or the Prospectus which are not filed or described as
required;
(d) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
PricewaterhouseCoopers LLP shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto (the executed
copy of the letter delivered prior to the execution of this Agreement is
attached as Annex I(a) hereto and a draft of the form of letter to be delivered
on the effective date of any post-effective amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex I(b) hereto);
(e) (i) The Company shall not have sustained since the date of
the latest audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or
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court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and (ii) since the respective dates as of which
information is given in the Prospectus there shall not have been any change in
the capital stock or long-term debt of the Company or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is in the
judgment of the Representatives so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(f) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(g) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on the NASDAQ; (ii) a
suspension or material limitation in trading in the Company's securities on the
NASDAQ (iii) a general moratorium on commercial banking activities declared by
either Federal or New York or the Commonwealth of Massachusetts State
authorities or (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if the effect of any such event specified in this clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered at such
Time of Delivery on the terms and in the manner contemplated in the Prospectus;
(h) The Shares to be sold at such Time of Delivery shall have
been duly listed for quotation on NASDAQ;
(i) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from the stockholders and optionholders listed
on Annex III, substantially to the effect set forth in Subsection 5(e) hereof in
form and substance satisfactory to you;
(j) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement; and
(k) The Company shall have furnished or caused to be furnished
to you at such Time of Delivery certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsections (a) and (e) of
this Section and as to such other matters as you may reasonably request.
8. (a) (i) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus,
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or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state a material fact (x) in the case the
Registration Statement, that is required to be stated therein or necessary to
make the statements therein not misleading and (y) in the case of any
Preliminary Prospectus or the Prospectus, that is necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Goldman, Sachs & Co. expressly for use therein.
(ii) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) (a) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the prospectus wrapper
material prepared by or with the consent of the Company for distribution in
foreign jurisdictions in connection with the Directed Share Program attached to
the Prospectus or any Preliminary Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state a material fact (x) in the case the Registration Statement, that is
required to be stated therein or necessary to make the statements therein not
misleading and (y) in the case of any Preliminary Prospectus or the Prospectus,
that is necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; PROVIDED, HOWEVER, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any such prospectus wrapper material in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Goldman, Sachs & Co. expressly for use
therein; and (b) are caused by the failure of any Directed Participant to pay
for and accept delivery of the shares which, immediately following the
effectiveness of the Registration Statement, were subject to a properly
confirmed agreement to purchase.
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(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Goldman, Sachs
& Co. expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party. Notwithstanding anything contained herein to
the contrary, if indemnity may be sought pursuant to Section 8(a)(ii) hereof in
respect of such action or proceeding, then in addition to such separate firm for
the indemnified parties, the indemnifying party shall be liable for the
reasonable fees and expenses of not more than one separate firm (in addition to
any local counsel) for Goldman, Sachs & Co for the defense of any losses,
claims, damages and liabilities arising out of the Directed Share Program, and
all persons, if any, who control Goldman, Sachs & Co. within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
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Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (d) were determined by
PRO RATA allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall
be in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company (including any
person who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company) and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Shares, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the
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purchase of such Shares, or the Company notifies you that it has so arranged for
the purchase of such Shares, you or the Company shall have the right to postpone
such Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased exceeds one-eleventh of the aggregate number of
all the Shares to be purchased at such Time of Delivery, or if the Company shall
not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Company to
sell the Optional Shares) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any Shares
are not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Shares not so delivered, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 6
and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or
16
<PAGE>
agreement on behalf of any Underwriter made or given by you jointly or by
Goldman, Sachs & Co. on behalf of you as the representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., 32 Old Slip, 21st Floor, New York, New York 10005, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
17
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company and each of the Representatives plus one
for each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
Viant Corporation
By:
---------------------------------
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
BancBoston Robertson Stephens Inc.
By:
------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
18
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
- ----------- --------------- -------------------
<S> <C> <C>
Goldman, Sachs & Co..................................
Credit Suisse First Boston Corporation...............
BancBoston Robertson Stephens Inc....................
Total
</TABLE>
19
<PAGE>
ANNEX I
FORM OF COMFORT LETTER
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports
thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed statements of income, balance sheets and
statements of cash flows included in the Prospectus as indicated in
their reports thereon copies of which have been separately furnished to
the Representatives and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations, nothing came to their attention that cause them
to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus agrees with the corresponding amounts (after restatements
where applicable) in the audited consolidated financial statements for
such five fiscal years which were included or incorporated by reference
in the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of Items 301, 302,
402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim
20
<PAGE>
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company since the date of the latest audited
financial statements included in the Prospectus, inquiries of officials
of the Company and responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included in the Prospectus;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived any unaudited
condensed financial statements referred to in clause (A) and
any unaudited income statement data and balance sheet items
included in the Prospectus and referred to in clause (B) were
not determined on a basis substantially consistent with the
basis for the audited consolidated financial statements
included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Prospectus) or any increase in the consolidated long-term debt
of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases
in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date
referred to in clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or
per share amounts of consolidated net income or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
21
<PAGE>
Representatives, except in each case for decreases or
increases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records
of the Company, which appear in the Prospectus, or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company
and have found them to be in agreement.
22
<PAGE>
ANNEX II(A)
OPINION OF HALE AND DORR LLP
23
<PAGE>
ANNEX II (B)
OPINION OF WILSON SONSINI GOODRICH & ROSATI
24
<PAGE>
ANNEX III
PERSONS SUBJECT TO LOCK-UP AGREEMENTS
25
<PAGE>
Exhibit 3.3
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
VIANT CORPORATION
Viant Corporation, a corporation organized and existing under the laws
of the State of Delaware, hereby certifies as follows:
A. The name of the corporation is Viant Corporation. The corporation
was originally incorporated under the same name, and the original Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware on
March 12, 1999.
B. Pursuant to Sections 228, 242 and 245 of the General Corporation Law
of the State of Delaware, this Amended and Restated Certificate of Incorporation
restates and amends the provisions of the Certificate of Incorporation of the
corporation.
C. The text of the Certificate of Incorporation is hereby amended and
restated in its entirety to read as follows:
ARTICLE I
The name of this corporation is Viant Corporation.
ARTICLE II
The address of the corporation's registered office in the State of
Delaware is 1209 Orange Street, City of Wilmington, County of New Castle,
Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE III
The purpose of the corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of Delaware.
ARTICLE IV
The corporation is authorized to issue two classes of shares of stock
to be designated, respectively, Common Stock, $0.001 par value, and Preferred
Stock, $0.001 par value. The total number of shares that the corporation is
authorized to issue is 55,000,000 shares. The number of shares of Common Stock
authorized is 50,000. The number of shares of Preferred Stock authorized is
5,000,000.
<PAGE>
The Preferred Stock may be issued from time to time in one or more
series pursuant to a resolution or resolutions providing for such issue duly
adopted by the board of directors (authority to do so being hereby expressly
vested in the board). The board of directors is further authorized to determine
or alter the rights, preferences, privileges and restrictions granted to or
imposed upon any wholly unissued series of Preferred Stock and to fix the number
of shares of any series of Preferred Stock and the designation of any such
series of Preferred Stock. The board of directors, within the limits and
restrictions stated in any resolution or resolutions of the board of directors
originally fixing the number of shares constituting any series, may increase or
decrease (but not below the number of shares in any such series then
outstanding) the number of shares of any series subsequent to the issue of
shares of that series.
The authority of the board of directors with respect to each such class
or series shall include, without limitation of the foregoing, the right to
determine and fix:
(a) the distinctive designation of such class or series and the number
of shares to constitute such class or series;
(b) the rate at which dividends on the shares of such class or series
shall be declared and paid, or set aside for payment, whether dividends at the
rate so determined shall be cumulative or accruing, and whether the shares of
such class or series shall be entitled to any participating or other dividends
in addition to dividends at the rate so determined, and if so, on what terms;
(c) the right or obligation, if any, of the corporation to redeem
shares of the particular class or series of Preferred Stock and, if redeemable,
the price, terms and manner of such redemption;
(d) the special and relative rights and preferences, if any, and the
amount or amounts per share, which the shares of such class or series of
Preferred Stock shall be entitled to receive upon any voluntary or involuntary
liquidation, dissolution or winding up of the corporation;
(e) the terms and conditions, if any, upon which shares of such class
or series shall be convertible into, or exchangeable for, shares of capital
stock of any other class or series, including the price or prices or the rate or
rates of conversion or exchange and the terms of adjustment, if any;
(f) the obligation, if any, of the corporation to retire, redeem or
purchase shares of such class or series pursuant to a sinking fund or fund of a
similar nature or otherwise, and the terms and conditions of such obligation;
(g) voting rights, if any, on the issuance of additional shares of such
class or series or any shares of any other class or series of Preferred Stock;
(h) limitations, if any, on the issuance of additional shares of such
class or series or any shares of any other class or series of Preferred Stock;
and
-2-
<PAGE>
(i) such other preferences, powers, qualifications, special or relative
rights and privileges thereof as the board of directors of the corporation,
acting in accordance with this Amended and Restated Certificate of
Incorporation, may deem advisable and are not inconsistent with law and the
provisions of this Amended and Restated Certificate of Incorporation.
ARTICLE V
The corporation reserves the right to amend, alter, change, or repeal
any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon the stockholders herein are granted subject to this right.
ARTICLE VI
The corporation is to have perpetual existence.
ARTICLE VII
1. LIMITATION OF LIABILITY. To the fullest extent permitted by the
General Corporation Law of the State of Delaware as the same exists or as may
hereafter be amended, a director of the corporation shall not be personally
liable to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director.
2. INDEMNIFICATION. The corporation may indemnify to the fullest extent
permitted by law any person made or threatened to be made a party to an action
or proceeding, whether criminal, civil, administrative or investigative, by
reason of the fact that such person or his or her testator or intestate is or
was a director, officer or employee of the corporation, or any predecessor of
the corporation, or serves or served at any other enterprise as a director,
officer or employee at the request of the corporation or any predecessor to the
corporation.
3. AMENDMENTS. Neither any amendment nor repeal of this Article VII,
nor the adoption of any provision of the corporation's Amended and Restated
Certificate of Incorporation inconsistent with this Article VII, shall eliminate
or reduce the effect of this Article VII, in respect of any matter occurring, or
any action or proceeding accruing or arising or that, but for this Article VII,
would accrue or arise, prior to such amendment, repeal, or adoption of an
inconsistent provision.
ARTICLE VIII
In the event any shares of Preferred Stock shall be redeemed or
converted pursuant to the terms hereof, the shares so converted or redeemed
shall not revert to the status of authorized but unissued shares, but instead
shall be canceled and shall not be re-issuable by the corporation.
-3-
<PAGE>
ARTICLE IX
Holders of stock of any class or series of the corporation shall not be
entitled to cumulate their votes for the election of directors or any other
matter submitted to a vote of the stockholders, unless such cumulative voting is
required pursuant to Sections 2115 or 301.5 of the California General
Corporation Law, in which event each such holder shall be entitled to as many
votes as shall equal the number of votes which (except for this provision as to
cumulative voting) such holder would be entitled to cast for the election of
directors with respect to his shares of stock multiplied by the number of
directors to be elected by him, and the holder may cast all of such votes for a
single director or may distribute them among the number of directors to be voted
for, or for any two or more of them as such holder may see fit, so long as the
name of the candidate for director shall have been placed in nomination prior to
the voting and the stockholder, or any other holder of the same class or series
of stock, has given notice at the meeting prior to the voting of the intention
to cumulate votes.
1. NUMBER OF DIRECTORS. The number of directors which constitutes the
whole Board of Directors of the corporation shall be designated in the Amended
and Restated Bylaws of the corporation. The directors shall be divided into
three classes with the term of office of the first class (Class I) to expire at
the annual meeting of stockholders held in 2000; the term of office of the
second class (Class II) to expire at the annual meeting of stockholders held in
2001; the term of office of the third class (Class III) to expire at the annual
meeting of stockholders held in 2002; and thereafter for each such term to
expire at each third succeeding annual meeting of stockholders after such
election.
2. ELECTION OF DIRECTORS. Elections of directors need not be by written
ballot unless the Amended and Restated Bylaws of the corporation shall so
provide.
ARTICLE X
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Amended and Restated Bylaws of the corporation.
ARTICLE XI
No action shall be taken by the stockholders of the corporation except
at an annual or special meeting of the stockholders called in accordance with
the Amended and Restated Bylaws and no action shall be taken by the stockholders
by written consent. The affirmative vote of sixty-six and two-thirds percent
(66 2/3%) of the then outstanding voting securities of the corporation, voting
together as a single class, shall be required for the amendment, repeal or
modification of the provisions of Article IX, Article X, XI or Article XII of
this Amended and Restated Certificate of Incorporation or Sections 2.3 (Special
Meeting), 2.4 (Notice of Stockholders' Meetings), 2.5 (Advance Notice of
Stockholder Nominees and Stockholder Business), 2.10 (Voting), or 2.12
-4-
<PAGE>
(Stockholder Action by Written Consent Without a Meeting), or 3.2 (Number of
Directors) of the corporation's Amended and Restated Bylaws.
ARTICLE XII
Meetings of stockholders may be held within or without the State of
Delaware, as the Amended and Restated Bylaws may provide. The books of the
corporation may be kept (subject to any provision contained in the statutes)
outside of the State of Delaware at such place or places as may be designated
from time to time by the Board of Directors or in the Amended and Restated
Bylaws of the corporation.
-5-
<PAGE>
IN WITNESS WHEREOF, Viant Corporation has caused this certificate to be
signed by Robert L. Gett, its Chief Executive Officer, this day of May, 1999.
-------------------------------------------------------
Robert L. Gett, Chief Executive Officer
<PAGE>
Exhibit 3.6
AMENDED AND RESTATED BYLAWS
OF
VIANT CORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I CORPORATE OFFICES...........................................................................................1
1.1 REGISTERED OFFICE...................................................................................1
1.2 OTHER OFFICES.......................................................................................1
ARTICLE II MEETINGS OF STOCKHOLDERS...................................................................................1
2.1 PLACE OF MEETINGS...................................................................................1
2.2 ANNUAL MEETING......................................................................................1
2.3 SPECIAL MEETING.....................................................................................2
2.4 NOTICE OF STOCKHOLDERS' MEETINGS....................................................................2
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS.....................................2
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE........................................................3
2.7 QUORUM..............................................................................................4
2.8 ADJOURNED MEETING; NOTICE...........................................................................4
2.9 CONDUCT OF BUSINESS.................................................................................4
2.10 VOTING..............................................................................................4
2.11 WAIVER OF NOTICE....................................................................................5
2.12 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING.............................................5
2.13 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS.........................................6
2.14 PROXIES.............................................................................................6
2.15 LIST OF STOCKHOLDERS ENTITLED TO VOTE...............................................................7
ARTICLE III DIRECTORS.................................................................................................7
3.1 POWERS..............................................................................................7
3.2 NUMBER OF DIRECTORS.................................................................................7
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS.............................................8
3.4 RESIGNATION AND VACANCIES...........................................................................8
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE............................................................9
3.6 REGULAR MEETINGS....................................................................................9
3.7 SPECIAL MEETINGS; NOTICE............................................................................9
3.8 QUORUM..............................................................................................9
3.9 WAIVER OF NOTICE...................................................................................10
3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING..................................................10
3.11 FEES AND COMPENSATION OF DIRECTORS.................................................................10
3.12 APPROVAL OF LOANS TO OFFICERS......................................................................10
3.13 REMOVAL OF DIRECTORS...............................................................................11
-i-
<PAGE>
ARTICLE IV COMMITTEES................................................................................................12
4.1 COMMITTEES OF DIRECTORS............................................................................12
4.2 COMMITTEE MINUTES..................................................................................12
4.3 MEETINGS AND ACTION OF COMMITTEES..................................................................12
ARTICLE V OFFICERS...................................................................................................13
5.1 OFFICERS...........................................................................................13
5.2 APPOINTMENT OF OFFICERS............................................................................13
5.3 SUBORDINATE OFFICERS...............................................................................13
5.4 REMOVAL AND RESIGNATION OF OFFICERS; FILLING VACANCIES.............................................13
5.5 CHAIRMAN OF THE BOARD..............................................................................14
5.6 CHIEF EXECUTIVE OFFICER............................................................................14
5.7 PRESIDENT..........................................................................................14
5.8 VICE PRESIDENTS....................................................................................14
5.9 SECRETARY..........................................................................................14
5.10 CHIEF FINANCIAL OFFICER............................................................................15
5.11 ASSISTANT SECRETARY................................................................................15
5.12 ASSISTANT TREASURER................................................................................16
5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS.....................................................16
5.14 AUTHORITY AND DUTIES OF OFFICERS...................................................................16
ARTICLE VI INDEMNITY.................................................................................................16
6.1 THIRD PARTY ACTIONS................................................................................16
6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION......................................................17
6.3 SUCCESSFUL DEFENSE.................................................................................17
6.4 DETERMINATION OF CONDUCT...........................................................................17
6.5 PAYMENT OF EXPENSES IN ADVANCE.....................................................................18
6.6 INDEMNITY NOT EXCLUSIVE............................................................................18
6.7 INSURANCE INDEMNIFICATION..........................................................................18
6.8 THE CORPORATION....................................................................................18
6.9 EMPLOYEE BENEFIT PLANS.............................................................................19
6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES........................................19
ARTICLE VII RECORDS AND REPORTS......................................................................................19
7.1 MAINTENANCE AND INSPECTION OF RECORDS..............................................................19
7.2 INSPECTION BY DIRECTORS............................................................................20
7.3 ANNUAL STATEMENT TO STOCKHOLDERS...................................................................20
ARTICLE VIII GENERAL MATTERS.........................................................................................20
8.1 CHECKS.............................................................................................20
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS...................................................21
-ii-
<PAGE>
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES.............................................................21
8.4 SPECIAL DESIGNATION ON CERTIFICATES................................................................21
8.5 LOST CERTIFICATES..................................................................................22
8.6 CONSTRUCTION; DEFINITIONS..........................................................................22
8.7 DIVIDENDS..........................................................................................22
8.8 FISCAL YEAR........................................................................................22
8.9 SEAL...............................................................................................23
8.10 TRANSFER OF STOCK..................................................................................23
8.11 STOCK TRANSFER AGREEMENTS..........................................................................23
8.12 REGISTERED STOCKHOLDERS............................................................................23
ARTICLE IX AMENDMENTS................................................................................................23
</TABLE>
-iii-
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
VIANT CORPORATION
ARTICLE I
CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of the corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware. The name of the registered
agent of the corporation at such location is The Corporation Trust Company.
1.2 OTHER OFFICES
The board of directors may at any time establish other offices at any
place or places where the corporation is qualified to do business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1 PLACE OF MEETINGS
Meetings of stockholders shall be held at any place, either within or
without the State of Delaware, as may be designated by the board of directors or
in the manner provided in these amended and restated bylaws. In the absence of
any such designation, stockholders' meetings shall be held at the registered
office of the corporation in the State of Delaware.
2.2 ANNUAL MEETING
The annual meeting of stockholders shall be held each year on a date
and at a time designated by the board of directors. In the absence of such
designation, the annual meeting of stockholders shall be held on the 15th day of
April of each year at 10:00 a.m. However, if such day falls on a
<PAGE>
weekend or a legal holiday, then the meeting shall be held at the same time and
place on the next succeeding business day. At the meeting, directors shall be
elected and any other proper business may be transacted.
2.3 SPECIAL MEETING
A special meeting of the stockholders may be called at any time by the
board of directors, or by the chairman of the board, or by the chief executive
officer, or by the president.
If a special meeting is called by any person or persons other than the
board of directors, the request shall be in writing, specifying the time of such
meeting and the general nature of the business proposed to be transacted, and
shall be delivered personally or sent by registered mail or by telegraphic or
other facsimile transmission to the chairman of the board, the president or the
secretary of the corporation. No business may be transacted at such special
meeting otherwise than specified in such notice. The officer receiving the
request shall cause notice to be promptly given to the stockholders entitled to
vote, in accordance with the provisions of Sections 2.4 and 2.6 of this Article
II, that a meeting will be held at the time requested by the person or persons
calling the meeting, not less than ten (10) nor more than sixty (60) days after
the receipt of the request. Nothing contained in this paragraph of this Section
2.3 shall be construed as limiting, fixing, or affecting the time when a meeting
of stockholders called by action of the board of directors may be held.
2.4 NOTICE OF STOCKHOLDERS' MEETINGS
All notices of meetings with stockholders shall be in writing and shall
be sent or otherwise given in accordance with Section 2.6 of these amended and
restated bylaws not less than ten (10) nor more than sixty (60) days before the
date of the meeting to each stockholder entitled to vote at such meeting. The
notice shall specify the place, date, and hour of the meeting, and, in the case
of a special meeting, the purpose or purposes for which the meeting is called.
2.5 ADVANCE NOTICE OF STOCKHOLDER NOMINEES AND STOCKHOLDER BUSINESS
Subject to the rights of holders of any class or series of stock having
a preference over the Common Stock as to dividends or upon liquidation,
(i) nominations for the election of directors, and
(ii) business proposed to be brought before any stockholder
meeting
may be made by the board of directors or proxy committee appointed by the board
of directors or by any stockholder entitled to vote in the election of directors
generally if such nomination or business proposed is otherwise proper business
before such meeting. However, any such stockholder may nominate one or more
persons for election as directors at a meeting or propose business to be brought
before a meeting, or both, only if such stockholder has given timely notice in
proper written
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form of their intent to make such nomination or nominations or to propose such
business. To be timely, such stockholder's notice must be delivered to or mailed
and received at the principal executive offices of the corporation not less than
one hundred twenty (120) calendar days in advance of the first anniversary date
of mailing of the corporation's proxy statement released to stockholders in
connection with the previous year's annual meeting of stockholders; provided,
however, that in the event that no annual meeting was held in the previous year
or the date of the annual meeting has been changed by more than thirty (30) days
from the date contemplated at the time of the previous year's proxy statement,
notice by the stockholder to be timely must be so received a reasonable time
before the solicitation is made. To be in proper form, a stockholder's notice to
the secretary shall set forth:
(a) the name and address of the stockholder who intends to
make the nominations or propose the business and, as the case may be,
of the person or persons to be nominated or of the business to be
proposed;
(b) a representation that the stockholder is a holder of
record of stock of the corporation entitled to vote at such meeting
and, if applicable, intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice;
(c) if applicable, a description of all arrangements or
understandings between the stockholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder;
(d) such other information regarding each nominee or each
matter of business to be proposed by such stockholder as would be
required to be included in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission had the nominee
been nominated, or intended to be nominated, or the matter been
proposed, or intended to be proposed by the board of directors; and
(e) if applicable, the consent of each nominee to serve as
director of the corporation if so elected.
The chairman of the meeting shall refuse to acknowledge the nomination
of any person or the proposal of any business not made in compliance with the
foregoing procedure.
2.6 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE
Written notice of any meeting of stockholders, if mailed, is given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the corporation. An
affidavit of the secretary or an assistant secretary or of the transfer agent of
the corporation that the notice has been given shall, in the absence of fraud,
be prima facie evidence of the facts stated therein.
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2.7 QUORUM
The holders of a majority of the stock issued and outstanding and
entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum is not present or represented at any
meeting of the stockholders, then either (i) the Chairman of the meeting or (ii)
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum is present or
represented. At such adjourned meeting at which a quorum is present or
represented, any business may be transacted that might have been transacted at
the meeting as originally noticed.
2.8 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time or place, unless these
amended and restated bylaws otherwise require, notice need not be given of the
adjourned meeting if the time and place thereof are announced at the meeting at
which the adjournment is taken. At the adjourned meeting the corporation may
transact any business that might have been transacted at the original meeting.
If the adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
2.9 CONDUCT OF BUSINESS
The chairman of any meeting of stockholders shall determine the order
of business and the procedure at the meeting, including such regulation of the
manner of voting and the conduct of business.
2.10 VOTING
The stockholders entitled to vote at any meeting of stockholders shall
be determined in accordance with the provisions of Section 2.13 of these amended
and restated bylaws, subject to the provisions of Sections 217 and 218 of the
Delaware General Corporation Law (relating to voting rights of fiduciaries,
pledgors and joint owners of stock and to voting trusts and other voting
agreements).
Except as may be otherwise provided in the certificate of
incorporation, each stockholder shall be entitled to one vote for each share of
capital stock held by such stockholder.
Notwithstanding the foregoing, if the stockholders of the corporation
are entitled, pursuant to Sections 2115 and 301.5 of the California Corporations
Code, to cumulate their votes in the election of directors, each such
stockholder shall be entitled to cumulate votes (i.e., cast for any candidate a
number of votes greater than the number of votes that such stockholder normally
is entitled to cast) only if the candidates' names have been properly placed in
nomination (in accordance with these
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Amended and Restated Bylaws) prior to commencement of the voting, and the
stockholder requesting cumulative voting has given notice prior to commencement
of the voting of the stockholder's intention to cumulate votes. If cumulative
voting is properly requested, each holder of stock, or of any class or classes
or of a series or series thereof, who elects to cumulate votes shall be entitled
to as many votes as equals the number of votes that (absent this provision as to
cumulative voting) he or she would be entitled to cast for the election of
directors with respect to his or her shares of stock multiplied by the number of
directors to be elected by him, and he or she may cast all of such votes for
single director or may distribute them among the number to be voted for, or for
any two or more of them, as he or she may see fit.
2.11 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
Delaware General Corporation Law or of the certificate of incorporation or these
amended and restated bylaws, a written waiver, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders, directors, or members of a
committee of directors need be specified in any written waiver of notice unless
so required by the certificate of incorporation or these amended and restated
bylaws.
2.12 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise provided in the certificate of incorporation, any
action required to be taken at any annual or special meeting of stockholders of
a corporation, or any action that may be taken at any annual or special meeting
of such stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted.
Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing. If the action which is consented to is such as
would have required the filing of a certificate under any section of the
Delaware General Corporation Law if such action had been voted on by
stockholders at a meeting thereof, then the certificate filed under such section
shall state, in lieu of any statement required by such section concerning any
vote of stockholders, that written notice and written consent have been given as
provided in Section 228 of the Delaware General Corporation Law.
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2.13 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS
In order that the corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any other lawful
action, the board of directors may fix, in advance, a record date, which shall
not be more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action.
If the board of directors does not so fix a record date:
(i) The record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day
on which the meeting is held.
(ii) The record date for determining stockholders entitled
to express consent to corporate action in writing without a meeting, when no
prior action by the board of directors is necessary, shall be the first date
on which a signed written consent is delivered to the corporation.
(iii) The record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the board
of directors adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the board of directors may fix a new record date for the
adjourned meeting.
2.14 PROXIES
Each stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by a written
proxy, signed by such stockholder and filed with the secretary of the
corporation, but no such proxy shall be voted or acted upon after three (3)
years from its date, unless the proxy provides for a longer period. A proxy
shall be deemed signed if such stockholder's name is placed on the proxy by any
reasonable means including, but not limited to, by facsimile signature, manual
signature, typewriting, telegraphic transmission or otherwise, by such
stockholder or such stockholder's attorney-in-fact. The revocability of a proxy
that states on its face that it is irrevocable shall be governed by the
provisions of Section 212(e) of the Delaware General Corporation Law.
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2.15 LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of a corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present. Such list shall
presumptively determine the identity of the stockholders entitled to vote at the
meeting and the number of shares held by each of them.
ARTICLE III
DIRECTORS
3.1 POWERS
Subject to the provisions of the Delaware General Corporation Law and
any limitations in the certificate of incorporation or these amended and
restated bylaws relating to action required to be approved by the stockholders
or by the outstanding shares, the business and affairs of the corporation shall
be managed and all corporate powers shall be exercised by or under the direction
of the board of directors.
3.2 NUMBER OF DIRECTORS
The board of directors shall consist of five (5) members. The number of
directors may be changed by an amendment to this bylaw, duly adopted by the
board of directors or by the stockholders, or by a duly adopted amendment to the
certificate of incorporation. Upon the closing of the first sale of the
corporation's common stock pursuant to a firmly underwritten registered public
offering (the "IPO"), the directors shall be divided into three classes, with
the term of office of the first class, which class shall initially consist of
two directors, to expire at the first annual meeting of stockholders held after
the IPO; the term of office of the second class, which shall initially consist
of two directors, to expire at the second annual meeting of stockholders held
after the IPO; the term of office of the third class, which class shall
initially consist of two directors, to expire at the third annual meeting of
stockholders held after the IPO; and thereafter for each such term to expire at
each third succeeding annual meeting of stockholders held after such election.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office expires.
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3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these amended and restated bylaws,
directors shall be elected at each annual meeting of stockholders to hold office
until the next annual meeting. Directors need not be stockholders unless so
required by the certificate of incorporation or these amended and restated
bylaws, wherein other qualifications for directors may be prescribed. Each
director, including a director elected to fill a vacancy, shall hold office
until his successor is elected and qualified or until his earlier resignation or
removal.
Elections of directors need not be by written ballot.
3.4 RESIGNATION AND VACANCIES
Any director may resign at any time upon written notice to the
attention of the Secretary of the corporation. When one or more directors shall
resign from the board of directors, effective at a future date, a majority of
the directors then in office, including those who have so resigned, shall have
power to fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective, and each director so
chosen shall hold office as provided in this section in the filling of other
vacancies.
Unless otherwise provided in the certificate of incorporation or these
amended and restated bylaws:
(i) Vacancies and newly created directorships resulting from
any increase in the authorized number of directors elected by all of the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director.
(ii) Whenever the holders of any class or classes of stock or
series thereof are entitled to elect one or more directors by the certificate of
incorporation, vacancies and newly created directorships of such class or
classes or series may be filled by a majority of the directors elected by such
class or classes or series thereof then in office, or by a sole remaining
director so elected.
If at any time, by reason of death or resignation or other cause, the
corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder,
or other fiduciary entrusted with like responsibility for the person or estate
of a stockholder, may call a special meeting of stockholders in accordance with
the provisions of the certificate of incorporation or these amended and restated
bylaws, or may apply to the Court of Chancery for a decree summarily ordering an
election as provided in Section 211 of the Delaware General Corporation Law.
If, at the time of filling any vacancy or any newly created
directorship, the directors then in office constitute less than a majority of
the whole board (as constituted immediately prior to any such increase), then
the Court of Chancery may, upon application of any stockholder or stockholders
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holding at least ten (10) percent of the total number of the shares at the time
outstanding having the right to vote for such directors, summarily order an
election to be held to fill any such vacancies or newly created directorships,
or to replace the directors chosen by the directors then in office as aforesaid,
which election shall be governed by the provisions of Section 211 of the
Delaware General Corporation Law as far as applicable.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
The board of directors of the corporation may hold meetings, both
regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or
these amended and restated bylaws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
such board of directors, or committee by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting pursuant to
this section shall constitute presence in person at the meeting.
3.6 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice
at such time and at such place as shall from time to time be determined by the
board.
3.7 SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors for any purpose or purposes
may be called at any time by the chairman of the board, the chief executive
officer or the president.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first-class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the corporation. If the notice is mailed, it
shall be deposited in the United States mail at least four (4) days before the
time of the holding of the meeting. If the notice is delivered personally or by
telephone or by telegram, it shall be delivered personally or by telephone or to
the telegraph company at least forty-eight (48) hours before the time of the
holding of the meeting. Any oral notice given personally or by telephone may be
communicated either to the director or to a person at the office of the director
who the person giving the notice has reason to believe will promptly communicate
it to the director. The notice need not specify the purpose or the place of the
meeting, if the meeting is to be held at the principal executive office of the
corporation.
3.8 QUORUM
At all meetings of the board of directors, a majority of the authorized
number of directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors
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present at any meeting at which there is a quorum shall be the act of the board
of directors, except as may be otherwise specifically provided by statute, the
certificate of incorporation, or these amended and restated bylaws. If a quorum
is not present at any meeting of the board of directors, then the directors
present thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum is present.
A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for that
meeting.
3.9 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the
Delaware General Corporation Law, the certificate of incorporation, or these
amended and restated bylaws, a written waiver thereof, signed by the person
entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when such person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the directors, or members of a committee of
directors, need be specified in any written waiver of notice unless so required
by the certificate of incorporation or these amended and restated bylaws.
3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the certificate of incorporation or
these amended and restated bylaws, any action required or permitted to be taken
at any meeting of the board of directors, or of any committee thereof may be
taken without a meeting if all members of the board or committee, as the case
may be, consent thereto in writing and the writing or writings are filed with
the minutes of proceedings of the board or committee.
3.11 FEES AND COMPENSATION OF DIRECTORS
Unless otherwise restricted by the certificate of incorporation or
these amended and restated bylaws, the board of directors shall have the
authority to fix the compensation of directors.
3.12 APPROVAL OF LOANS TO OFFICERS
The corporation may lend money to, or guarantee any obligation of, or
otherwise assist any officer or other employee of the corporation or of its
subsidiary, including any officer or employee who is a director of the
corporation or its subsidiary, whenever, in the judgment of the directors, such
loan, guaranty or assistance may reasonably be expected to benefit the
corporation. The loan, guaranty or other assistance may be with or without
interest and may be unsecured, or secured in such manner as the board of
directors shall approve, including, without limitation, a pledge of shares
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of stock of the corporation. Nothing contained in this section shall be deemed
to deny, limit or restrict the powers of guaranty or warranty of the corporation
at common law or under any statute.
3.13 REMOVAL OF DIRECTORS
Unless otherwise restricted by statute, by the certificate of
incorporation or by these amended and restated bylaws, any director or the
entire board of directors may be removed, with or without cause, by the holders
of a majority of the shares then entitled to vote at an election of directors;
provided, however, that, so long as stockholders of the corporation are entitled
to cumulative voting, if less than the entire board is to be removed, no
director may be removed without cause if the votes cast against his removal
would be sufficient to elect such director if then cumulatively voted at an
election of the entire board of directors or, if there be classes of directors,
at an election of the class of directors of which such director is a part.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of such director's term
of office.
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ARTICLE IV
COMMITTEES
4.1 COMMITTEES OF DIRECTORS
The board of directors may, by resolution passed by a majority of the
whole board, designate one or more committees, with each committee to consist of
one or more of the directors of the corporation. The board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not such
member or members constitute a quorum, may unanimously appoint another member of
the board of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, or in the amended and restated bylaws of
the corporation, shall have and may exercise all the powers and authority of the
board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers that may require it; but no such committee shall have the power or
authority (i) approving or adopting or recommending to the stockholders, any
action or matter expressly required by the Delaware General Corporation Law to
be submitted to stockholders for approval or (ii) adopting, amending, or
repealing any amended and restated bylaws of the corporation; and, unless the
board resolution establishing the committee, the amended and restated bylaws or
the certificate of incorporation expressly so provide, no such committee shall
have the power or authority to declare a dividend, to authorize the issuance of
stock, or to adopt a certificate of ownership and merger pursuant to Section 253
of the Delaware General Corporation Law.
4.2 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings and report
the same to the board of directors when required.
4.3 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and
taken in accordance with, the provisions of Article III of these amended and
restated bylaws, Section 3.5 (place of meetings and meetings by telephone),
Section 3.6 (regular meetings), Section 3.7 (special meetings and notice),
Section 3.8 (quorum), Section 3.9 (waiver of notice), and Section 3.10 (action
without a meeting), with such changes in the context of those amended and
restated bylaws as are necessary to substitute the committee and its members for
the board of directors and its members; provided, however, that the time of
regular meetings of committees may be determined either by resolution of the
board of directors or by resolution of the committee, that special meetings of
committees may also be called by resolution of the board of directors and that
notice of special meetings of
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committees shall also be given to all alternate members, who shall have the
right to attend all meetings of the committee. The board of directors may adopt
rules for the government of any committee not inconsistent with the provisions
of these amended and restated bylaws.
ARTICLE V
OFFICERS
5.1 OFFICERS
The officers of the corporation shall be a president, a secretary, and
a chief financial officer. The corporation may also have, at the discretion of
the board of directors, a chairman of the board, one or more vice presidents,
one or more assistant vice presidents, one or more assistant secretaries, one or
more assistant treasurers, and any such other officers as may be appointed in
accordance with the provisions of Section 5.3 of these amended and restated
bylaws. Any number of offices may be held by the same person.
5.2 APPOINTMENT OF OFFICERS
The officers of the corporation, except such officers as may be
appointed in accordance with the provisions of Sections 5.3 or 5.5 of these
amended and restated bylaws, shall be appointed by the board of directors,
subject to the rights, if any, of an officer under any contract of employment.
5.3 SUBORDINATE OFFICERS
The board of directors may appoint, or empower the president to
appoint, such other officers and agents as the business of the corporation may
require, each of whom shall hold office for such period, have such authority,
and perform such duties as are provided in these amended and restated bylaws or
as the board of directors may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS; FILLING VACANCIES
Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by an
affirmative vote of the majority of the board of directors at any regular or
special meeting of the board or, except in the case of an officer chosen by the
board of directors, by any officer upon whom such power of removal may be
conferred by the board of directors.
Any officer may resign at any time by giving written notice to the
corporation. Any resignation shall take effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified in that notice, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the
rights, if any, of the corporation under any contract to which the officer is a
party.
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Any vacancy occurring in any office of the corporation shall be filled
by the board of directors.
5.5 CHAIRMAN OF THE BOARD
The chairman of the board, if such an officer be elected, shall, if
present, preside at meetings of the board of directors and exercise and perform
such other powers and duties as may from time to time be assigned to the
chairman of the board by the board of directors or as may be prescribed by these
amended and restated bylaws. If there is no president and no one has been
appointed chief executive officer, then the chairman of the board shall also be
the chief executive officer of the corporation and shall have the powers and
duties prescribed in Section 5.6 of these amended and restated bylaws.
5.6 CHIEF EXECUTIVE OFFICER
The board of directors shall select a chief executive officer of the
corporation who shall be subject to the control of the board of directors and
have general supervision, direction and control of the business and the officers
of the corporation. The chief executive officer shall preside at all meetings of
the stockholders and, in the absence or nonexistence of a chairman of the board,
at all meetings of the board of directors.
5.7 PRESIDENT
The president shall have the general powers and duties of management
usually vested in the office of president of a corporation and shall have such
other powers and duties as may be prescribed by the board of directors or these
amended and restated bylaws. In addition and subject to such supervisory powers,
if any, as may be given by the board of directors to the chairman of the board,
if no one has been appointed chief executive officer, the president shall be the
chief executive officer of the corporation and shall, subject to the control of
the board of directors, have the powers and duties described in Section 5.6.
5.8 VICE PRESIDENTS
In the absence or disability of the president, the vice presidents, if
any, in order of their rank as fixed by the board of directors or, if not
ranked, a vice president designated by the board of directors, shall perform all
the duties of the president and when so acting shall have all the powers of, and
be subject to all the restrictions upon, the president. The vice presidents
shall have such other powers and perform such other duties as from time to time
may be prescribed for them respectively by the board of directors, these amended
and restated bylaws, the president or the chairman of the board.
5.9 SECRETARY
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The secretary shall keep or cause to be kept, at the principal
executive office of the corporation or such other place as the board of
directors may direct, a book of minutes of all meetings and actions of
directors, committees of directors, and stockholders. The minutes shall show the
time and place of each meeting, whether regular or special (and, if special, how
authorized and the notice given), the names of those present at directors'
meetings or committee meetings, the number of shares present or represented at
stockholders' meetings, and the proceedings thereof.
The secretary shall keep, or cause to be kept, at the principal
executive office of the corporation or at the office of the corporation's
transfer agent or registrar, as determined by resolution of the board of
directors, a share register, or a duplicate share register, showing the names of
all stockholders and their addresses, the number and classes of shares held by
each, the number and date of certificates evidencing such shares, and the number
and date of cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the board of directors required to be given by law or
by these amended and restated bylaws. The secretary shall keep the seal of the
corporation, if one be adopted, in safe custody and shall have such other powers
and perform such other duties as may be prescribed by the board of directors or
by these amended and restated bylaws.
5.10 CHIEF FINANCIAL OFFICER
The chief financial officer shall keep and maintain, or cause to be
kept and maintained, adequate and correct books and records of accounts of the
properties and business transactions of the corporation, including accounts of
its assets, liabilities, receipts, disbursements, gains, losses, capital
retained earnings, and shares. The books of account shall at all reasonable
times be open to inspection by any director.
The chief financial officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositories as may be designated by the board of directors. The chief financial
officer shall disburse the funds of the corporation as may be ordered by the
board of directors, shall render to the president and directors, whenever they
request it, an account of all his transactions as chief financial officer and of
the financial condition of the corporation, and shall have other powers and
perform such other duties as may be prescribed by the board of directors or
these amended and restated bylaws.
The chief financial officer shall be the treasurer of the corporation.
5.11 ASSISTANT SECRETARY
The assistant secretary, or, if there is more than one, the assistant
secretaries in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the secretary or in the event of his or her inability
or
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refusal to act, perform the duties and exercise the powers of the secretary
and shall perform such other duties and have such other powers as may be
prescribed by the board of directors or these amended and restated bylaws.
5.12 ASSISTANT TREASURER
The assistant treasurer, or, if there is more than one, the assistant
treasurers, in the order determined by the stockholders or board of directors
(or if there be no such determination, then in the order of their election),
shall, in the absence of the chief financial officer or in the event of his or
her inability or refusal to act, perform the duties and exercise the powers of
the chief financial officer and shall perform such other duties and have such
other powers as may be prescribed by the board of directors or these amended and
restated bylaws.
5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairman of the board, the president, any vice president, the chief
financial officer, the secretary or assistant secretary of this corporation, or
any other person authorized by the board of directors or the president or a vice
president, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of this corporation. The authority granted
herein may be exercised either by such person directly or by any other person
authorized to do so by proxy or power of attorney duly executed by such person
having the authority.
5.14 AUTHORITY AND DUTIES OF OFFICERS
In addition to the foregoing authority and duties, all officers of the
corporation shall respectively have such authority and perform such duties in
the management of the business of the corporation as may be designated from time
to time by the board of directors or the stockholders.
ARTICLE VI
INDEMNITY
6.1 THIRD PARTY ACTIONS
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture trust or other enterprise, against expenses (including attorneys'
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fees), judgments, fines and amounts paid in settlement (if such settlement is
approved in advance by the corporation, which approval shall not be unreasonably
withheld) actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of NOLO CONTENDERE or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which the person reasonably believed to be in or not
opposed to the best interest of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that the person's
conduct was unlawful.
6.2 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person is or was a director, officer, employee or
agent of corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses (including attorneys'
fees) and amounts paid in settlement (if such settlement is approved in advance
by the corporation, which approval shall not be unreasonably withheld) actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted in good faith and in
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Delaware Court of
Chancery or such other court shall deem proper. Notwithstanding any other
provision of this Article VI, no person shall be indemnified hereunder for any
expenses or amounts paid in settlement with respect to any action to recover
short-swing profits under Section 16(b) of the Securities Exchange Act of 1934,
as amended.
6.3 SUCCESSFUL DEFENSE
To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections 6.1 and 6.2, or in defense of
any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith.
6.4 DETERMINATION OF CONDUCT
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Any indemnification under Sections 6.1 and 6.2 (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that the indemnification of the director, officer, employee
or agent is proper in the circumstances because such person has met the
applicable standard of conduct set forth in Sections 6.1 and 6.2. Such
determination shall be made (1) by the Board of Directors or the Executive
Committee by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding or (2) or if such quorum is not
obtainable or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders. Notwithstanding the foregoing, a director, officer, employee or
agent of the Corporation shall be entitled to contest any determination that the
director, officer, employee or agent has not met the applicable standard of
conduct set forth in Sections 6.1 and 6.2 by petitioning a court of competent
jurisdiction.
6.5 PAYMENT OF EXPENSES IN ADVANCE
Expenses incurred in defending a civil or criminal action, suit or
proceeding, by an individual who may be entitled to indemnification pursuant to
Section 6.1 or 6.2, shall be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the corporation as authorized in this Article VI.
6.6 INDEMNITY NOT EXCLUSIVE
The indemnification and advancement of expenses provided by or granted
pursuant to the other sections of this Article VI shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office.
6.7 INSURANCE INDEMNIFICATION
The corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against such
person and incurred by such person in any such capacity or arising out of such
person's status as such, whether or not the corporation would have the power to
indemnify such person against such liability under the provisions of this
Article VI.
6.8 THE CORPORATION
For purposes of this Article VI, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent)
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absorbed in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under and subject to the provisions
of this Article VI (including, without limitation the provisions of Section 6.4)
with respect to the resulting or surviving corporation as such person would have
with respect to such constituent corporation if its separate existence had
continued.
6.9 EMPLOYEE BENEFIT PLANS
For purposes of this Article VI, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this Article
VI.
6.10 CONTINUATION OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES
The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article VI shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
ARTICLE VII
RECORDS AND REPORTS
7.1 MAINTENANCE AND INSPECTION OF RECORDS
The corporation shall, either at its principal executive officer or at
such place or places as designated by the board of directors, keep a record of
its stockholders listing their names and addresses and the number and class of
shares held by each stockholder, a copy of these amended and restated bylaws as
amended to date, accounting books, and other records.
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Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours for business to inspect for any proper purpose the
corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent so to act on
behalf of the stockholder. The demand under oath shall be directed to the
corporation at its registered office in Delaware or at its principal place of
business.
The officer who has charge of the stock ledger of the corporation shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
7.2 INSPECTION BY DIRECTORS
Any director shall have the right to examine the corporation's stock
ledger, a list of its stockholders, and its other books and records for a
purpose reasonably related to his position as a director. The Court of Chancery
is hereby vested with the exclusive jurisdiction to determine whether a director
is entitled to the inspection sought. The Court may summarily order the
corporation to permit the director to inspect any and all books and records, the
stock ledger, and the stock list and to make copies or extracts therefrom. The
Court may, in its discretion, prescribe any limitations or conditions with
reference to the inspection, or award such other and further relief as the Court
may deem just and proper.
7.3 ANNUAL STATEMENT TO STOCKHOLDERS
The board of directors shall present at each annual meeting, and at any
special meeting of the stockholders when called for by vote of the stockholders,
a full and clear statement of the business and condition of the corporation.
ARTICLE VIII
GENERAL MATTERS
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8.1 CHECKS
From time to time, the board of directors shall determine by resolution
which person or persons may sign or endorse all checks, drafts, other orders for
payment of money, notes or other evidences of indebtedness that are issued in
the name of or payable to the corporation, and only the persons so authorized
shall sign or endorse those instruments.
8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
The board of directors, except as otherwise provided in these amended
and restated bylaws, may authorize any officer or officers, or agent or agents,
to enter into any contract or execute any instrument in the name of and on
behalf of the corporation; such authority may be general or confined to specific
instances. Unless so authorized or ratified by the board of directors or within
the agency power of an officer, no officer, agent or employee shall have any
power or authority to bind the corporation by any contract or engagement or to
pledge its credit or to render it liable for any purpose or for any amount.
8.3 STOCK CERTIFICATES; PARTLY PAID SHARES
The shares of the corporation shall be represented by certificates,
provided that the board of directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the board of
directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by the chairman or vice-chairman of
the board of directors, or the president or vice-president, and by the chief
financial officer or an assistant treasurer, or the secretary or an assistant
secretary of such corporation representing the number of shares registered in
certificate form. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate has ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if such person were
such officer, transfer agent or registrar at the date of issue.
The corporation may issue the whole or any part of its shares as partly
paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent
any such partly paid shares, upon the books and records of the corporation in
the case of uncertificated partly paid shares, the total amount of the
consideration to be paid therefor and the amount paid thereon shall be stated.
Upon the declaration of any dividend on fully paid shares, the corporation shall
declare a dividend upon partly paid shares of the same class, but only upon the
basis of the percentage of the consideration actually paid thereon.
8.4 SPECIAL DESIGNATION ON CERTIFICATES
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If the corporation is authorized to issue more than one class of stock
or more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights
of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate that the corporation shall
issue to represent such class or series of stock; provided, however, that,
except as otherwise provided in Section 202 of the General Corporation Law of
Delaware, in lieu of the foregoing requirements there may be set forth on the
face or back of the certificate that the corporation shall issue to represent
such class or series of stock a statement that the corporation will furnish
without charge to each stockholder who so requests the powers, the designations,
the preferences, and the relative, participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
8.5 LOST CERTIFICATES
Except as provided in this Section 8.5, no new certificates for shares
shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and canceled at the same time. The corporation
may issue a new certificate of stock or uncertificated shares in the place of
any certificate theretofore issued by it, alleged to have been lost, stolen or
destroyed, and the corporation may require the owner of the lost, stolen or
destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate or uncertificated shares.
8.6 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of
construction, and definitions in the Delaware General Corporation Law shall
govern the construction of these amended and restated bylaws. Without limiting
the generality of this provision, the singular number includes the plural, the
plural number includes the singular, and the term "person" includes both a
corporation and a natural person.
8.7 DIVIDENDS
The directors of the corporation, subject to any restrictions contained
in (i) the Delaware General Corporation Law or (ii) the certificate of
incorporation, may declare and pay dividends upon the shares of its capital
stock. Dividends may be paid in cash, in property, or in shares of the
corporation's capital stock.
The directors of the corporation may set apart out of any of the funds
of the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve. Such purposes shall include but not be
limited to equalizing dividends, repairing or maintaining any property of the
corporation, and meeting contingencies.
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8.8 FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the
board of directors and may be changed by the board of directors.
8.9 SEAL
The corporation may adopt a corporate seal, which shall be adopted and
which may be altered by the board of directors, and may use the same by causing
it or a facsimile thereof to be impressed or affixed or in any other manner
reproduced.
8.10 TRANSFER OF STOCK
Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate, and record the transaction in its books.
8.11 STOCK TRANSFER AGREEMENTS
The corporation shall have power to enter into and perform any
agreement with any number of stockholders of any one or more classes of stock of
the corporation to restrict the transfer of shares of stock of the corporation
of any one or more classes owned by such stockholders in any manner not
prohibited by the Delaware General Corporation Law.
8.12 REGISTERED STOCKHOLDERS
The corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends and
to vote as such owner, shall be entitled to hold liable for calls and
assessments the person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of another person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE IX
AMENDMENTS
The amended and restated bylaws of the corporation may be adopted,
amended or repealed by the stockholders entitled to vote; provided, however,
that the corporation may, in its certificate of incorporation, confer the power
to adopt, amend or repeal amended and restated bylaws upon the
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directors. The fact that such power has been so conferred upon the directors
shall not divest the stockholders of the power, nor limit their power to adopt,
amend or repeal amended and restated bylaws.
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CERTIFICATE OF ADOPTION OF
AMENDED AND RESTATED BYLAWS
OF
VIANT CORPORATION
CERTIFICATE BY SECRETARY
The undersigned hereby certifies that he is the duly elected,
qualified, and acting Secretary of Viant Corporation and that the foregoing
Amended and Restated Bylaws, comprising twenty-three (23) pages, were adopted as
the Amended and Restated Bylaws of the corporation on __________, 1999 by the
board of directors of the corporation.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and
affixed the corporate seal this ____ day of May 1999.
------------------------------
Hank V. Barry, Secretary
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Exhibit 10.3
MASTER SERVICES AGREEMENT
BETWEEN
VIANT CORPORATION
AND
BLUETAPE LLC
This MASTER SERVICES AGREEMENT ("Agreement") is made as of the
Effective Date set forth on the cover of this document by and between VIANT
CORPORATION, having its principal place of business at 89 South Street, Boston,
MA 02111 ("VIANT") and the party whose name and address is set forth on the
cover of this document as Customer ("Customer").
WHEREAS, Customer wishes to engage VIANT to provide it with certain
services as described in the applicable Work Order or Schedule of Deliverables
and Payment Details (each as defined below) and the Exhibits, if any, attached
thereto;
WHEREAS, VIANT is willing to provide such services on the terms and
conditions set forth in this agreement.
NOW, THEREFORE, for good and valuable consideration, the parties hereto
hereby agree as follows:
1. Definitions
(a) "Confidential Information" shall have the meaning set forth in
Section 5(a) below.
(b) "Course Materials" shall mean any and all reference manuals,
student guides, demonstration software and other training materials provided
by VIANT in connection with Training Services including, without limitation,
materials provided by third party vendors to VIANT specifically for VIANT
Training Services.
(c) "Deliverables" shall mean any and all materials produced pursuant
to this Agreement, including without limitation, those described in the Schedule
of Deliverables and Payment Details attached hereto and incorporated herein as
Exhibit A, and any and all inventions, creations, expressions, improvements,
information, designs, drawings, specifications, instructions, software, data,
Course Materials, computer programming code, reusable routines, computer
software applications, any documentation relating to and any improvements on any
of the foregoing, all on whatever media rendered and whether patentable or
unpatentable.
(d) "Framework Software" shall mean the software described in the
Framework Software License attached hereto, if any.
(e) "Services" shall mean the Consulting Services and/or Training
Services (as defined in Sections 2(a) and 2(b) below, respectively) performed by
VIANT for Customer under the terms of this Agreement, pursuant to and as
described in a Work Order.
(f) "Work Order" shall mean VIANT's standard form for ordering
Services, which sets forth and describes the obligations of Customer and VIANT,
including any Services to be performed by VIANT and all applicable fees. Unless
otherwise specified on a Work Order, each Work Order shall be governed by the
terms of this Agreement and shall be incorporated herein. VIANT shall, in its
sole discretion, use Work Orders on a per project basis where the Services that
VIANT is to perform and the Deliverables are specifically identifiable. Work
Orders shall be in substantially the form attached hereto as Exhibit B.
(g) "Work Product" means the results and proceeds of VIANT's Services
hereunder, including
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<PAGE>
without limitation, any and all Deliverables and all other materials provided to
Customer hereunder.
(h) "Agreement" shall mean this Agreement, the attached Schedule of
Deliverables and Payment Details, the attached Work Order and all other
documents and agreements incorporated in, or attached as Exhibits to, the
foregoing.
2. Services
(a) Consulting Services. VIANT will provide consulting services as
specified in the Work Order, according to the terms of this Agreement
("Consulting Services"). Customer shall have exclusive artistic and editorial
control over the Deliverables, including without limitation, the implementation
of content on any website and the design and look and feel of any website.
(b) Training Services. VIANT will provide Customer with training
courses if, and as, specified in the applicable Work Order ("Training
Services"). Training Services shall only be available to Customer's employees
and to contractors who have signed a non-disclosure agreement with VIANT that
is at least as equally protective of VIANT's interests as this Agreement and
which requires the contractor to use any information or training received
only in conjunction with Customer's business.
(c) Customer Obligations. Customer will provide VIANT with accurate
information regarding its business and needs in connection with the Services in
a timely fashion.
(d) Changes to Services. All changes to Work Orders requested by
Customer will be subject to VIANT's prior written approval. VIANT will notify
Customer in writing of its acceptance or rejection of Customer's request. If
VIANT accepts the requested change, the notification will be accompanied by an
estimate of the additional costs and delays resulting from the requested
changes. Customer will notify VIANT in writing of its acceptance or rejection of
such estimate. If accepted, the terms of such estimate shall replace the
relevant sections of the applicable Work Order.
(e) Delays. In the event of: (i) a delay by Customer in performing any
material obligation hereunder, (ii) any other material delay incurred as a
result of Customer's actions, (iii) a dispute in good faith between the parties
as to whether a particular Deliverable meets the relevant specifications, or
(iv) a delay due to any third party's act, failure to act or delay in performing
any material obligation (for the purposes of this Section 2(e)(iv), a third
party shall not include a subcontractor hired by Viant), the delivery of the
remaining Deliverables shall be deemed postponed for an equivalent period and
any time schedule set forth in the applicable Work Order shall be deemed amended
accordingly. No such delay shall relieve or suspend Customer's obligation to pay
VIANT under Section 3 below and, in addition to such payment obligations,
Customer shall pay for any and all reasonable expenses incurred by VIANT in
connection with any such delay provided that such expenses are pre-approved in
writing by Customer.
(f) Nonexclusive Services. VIANT's services under this Agreement shall
be nonexclusive.
(g) Employee and Subcontracting. VIANT may subcontract any and all of
its Services hereunder to qualified third parties that have skills similar to
those described in any VIANT proposal, subject to Customer's prior written
approval. VIANT shall be fully and solely responsible for the compensation and
performance of all of its employees and subcontractors hereunder and the filing
of any and all returns and reports and the withholding and payment of all
applicable state, federal and local wage tax, or employment related taxes
relating to such employees and subcontractors. In the event of the removal or
reassignment by VIANT of a VIANT employee assigned to perform Services
hereunder, the person so reassigned or removed shall be replaced with a
replacement employee who shall have substantially equivalent or better
qualifications. In the event VIANT replaces any employees, there will be no
charge to Customer for such replacement(s) while such replacement(s) acquire
the necessary orientation. Customer may request that VIANT dismiss from
performance of the Services under this Agreement any personnel of VIANT or its
subcontractors for any reason and such dismissal shall be effected upon the
consent of both parties, which consent shall not be unreasonably withheld. In
such an event, VIANT shall provide a suitable replacement for such dismissed
individual. In the event an employee or subcontractor of VIANT has completed his
or her specified task, as part of the fixed time-fixed cost terms of the
Services to be provided hereunder, said employee or subcontractor may be freely
assigned by VIANT to another project ("rolled off" the project) and VIANT will:
(i) inform Customer of such employee or subcontractor's reassignment no less
than one (1) week before the planned roll-off date; (ii) work with Customer to
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<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
develop and document a knowledge transfer process to be used to transfer any
relevant knowledge to an employee of Customer, as selected by Customer; and
(iii) transfer responsibility for the task, via the knowledge transfer process,
to the Customer employee if such employee has been identified at the time VIANT
employee or subcontractor is "rolled off" the project or provide the knowledge
transfer process documentation to Customer for training of the Customer employee
assigned to the task in the future. VIANT shall permit employees of Customer and
of any other entity controlled by, or under control with, Customer to be
present, when reasonable, as observers while various tasks are being conducted
and to consult with VIANT personnel regarding the Deliverables, provided,
however, that such individuals have entered into a Non-Disclosure Agreement
with VIANT and have committed to honor such Non-Disclosure requirements.
3. Fees
(a) Consulting Services. In consideration for VIANT's performance of
the Consulting Services, Customer shall pay to VIANT the fee(s) set forth in the
applicable Work Order. Any additional Consulting Services that Customer requests
and VIANT agrees to provide shall be provided on terms to be mutually agreed
upon by the parties. If Consulting Services are to be provided on a fixed fee
basis, the applicable Work Order must so indicate and must describe the scope
and charges for such Consulting Services.
(b) Training Services. If applicable and unless the applicable Work
Order specifies otherwise, VIANT will provide Training Services based on a per
student, per day charge plus materials basis. If Training Services are to be
provided on a fixed fee basis, the applicable Work Order or Engagement Letter
must so indicate and must describe the scope and charges for such Training
Services.
(c) Framework Software. Customer shall pay VIANT the license fees set
forth in the Framework Software License, if any such license is attached hereto.
(d) Expenses. Unless otherwise specified in the applicable Work Order,
Customer shall reimburse VIANT for all reasonable travel, communications and
out-of-pocket expenses (including, without limitation, transportation,
communication, lodging and meal expenses) incurred in connection with VIANT's
performance of the Services, provided that such expenses are consistent with
Customer's expense guidelines which are attached hereto as Exhibit B. Customer
shall also reimburse VIANT for all reasonable expenses incurred in connection
with VIANT's procurement of any facilities not provided to VIANT by Customer
provided that such expenses shall be subject to Customer's prior written
approval.
(e) Payment. Payment shall be made as indicated the applicable work
order form.
(f) Invoicing and Payment. VIANT will invoice Customer as indicated in
the applicable work order. Payment of all invoices are due and payable within
thirty (30) days of the invoice date, or as detailed in the attached SOW.
All payments made pursuant to this Agreement shall be made in U.S. dollars.
(g) Taxes. Fees do not include any present or future sales, use, value
added, excise or similar taxes applicable to the Services or associated
expenses. VIANT will separately itemize any applicable taxes on each invoice, or
in lieu thereof, Customer shall furnish VIANT a properly executed tax exemption
certificate, if applicable. Customer shall be responsible for paying any
applicable taxes later assessed by a government agency.
(h) Interest & Charges.
(i) If Customer does not pay invoices when due, VIANT may elect to
charge interest on the unpaid amounts up to the then effective short term
adjusted federal rate ("AFR") for annual compounding, as published in the
Cumulative Bulletin by the United States Department of the Treasury.
(ii) If Customer cancels or reschedules Training Services less than
five (5) days before its scheduled start date, there will be a cancellation
fee of fifty percent (50%) of the specified Training Services fee. Such
cancellation fee shall be due and payable at the same time as the fee for the
applicable Training Services.
4. Proprietary Rights
(a) [*]
Page 4 of 16
* Certain information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
<PAGE>
In addition, VIANT hereby grants to Customer an unrestricted, irrevocable,
nonexclusive, worldwide, fully paid up, perpetual license, with the right to
sublicense, in and to all Work Product that is not Custom Deliverables.
Customer hereby grants to VIANT an unrestricted, irrevocable, exclusive,
worldwide, fully paid up, perpetual license, with the right to sublicense in
and to any Deliverable created by VIANT during the performance of Services
hereunder, that is of general applicability and not unique to the business of
Customer provided that such sublicensees shall not have the right to
sublicense, and provided further that VIANT shall not sublicense any
aforementioned Deliverables to any individual or entity that competes in a
material way with Customer or any of its affiliates. VIANT shall cause its
sublicensees and subcontractors to enter into agreements consistent with this
subsection.
(b) [*] Subject to the restriction in the immediately preceeding
sentence and VIANT's obligations of confidentiality with respect to Customer
Confidential Information set forth below, Customer acknowledges and agrees that
VIANT is generally in the business of providing consulting and integration
services, and that VIANT may render such services for clients that are
competitive with Customer or its affiliates.
(c) VIANT shall cooperate fully in: (i) vesting in Customer the
ownership of the proprietary rights to the Deliverables; and (ii) assisting
Customer in obtaining patent, copyright, or any other intellectual property
rights in the Deliverables and in maintaining and protecting Customer's
proprietary rights, including, without limitation, executing any documents which
Customer reasonably deems necessary for such purpose.
(d) Title to all materials and documentation furnished by Customer to
VIANT, including, without limitation, system specifications, shall remain with
Customer. VIANT shall deliver to Customer any and all such materials, including
all copies thereof on whatever media rendered, and including all relevant codes
and documentation upon (i) Customer's request, (ii) completion of the Work
Order, and (iii) the termination of this Agreement for any reason.
(e) Nothing in this Agreement thereto shall, or is intended to, limit
VIANT's ability to develop or enhance its products and services in any manner
whatsoever, including the use of Residuals (as defined below), provided that
VIANT does not disclose Customer Confidential Information. As used herein
"Residuals" shall mean ideas, understandings and other information in
non-tangible form which may be retained in the memory of persons who have access
to Customer Confidential Information in connection with VIANT's performance
under this Agreement. VIANT shall have no obligation to limit or restrict the
assignment of such persons or to pay royalties for any work resulting from the
use of Residuals. However, the foregoing shall not be deemed to grant VIANT a
license under any Customer's copyrights or patents.
(f) Both VIANT and Customer acknowledge that any breach of the
provisions of this Agreement may cause irreparable harm and significant injury
to an extent that may be extremely difficult to ascertain. Accordingly, both
VIANT and Customer agree that the other party will have, in addition to any
other rights or remedies available to it at law or in equity, the right to seek
injunctive relief to enjoin any breach or violation of this Agreement.
5. Confidentiality
(a) Defined. "Confidential Information" shall mean all information
disclosed by either party to the other party in oral, written,
machine-readable or any other form, which (i) is designated by the disclosing
party as confidential, or (ii) has value because it is not generally known
and the owner uses reasonable efforts to protect it or identify it in writing
as confidential. Confidential Information also includes information that has
been disclosed by a third party that is required to be treated as
confidential. Confidential Information does not include any information
which: (i) is or becomes a part of the public domain through no act or
omission of the other party or the other party's employees, agents or
independent contractors (collectively, the "Receiving Party"); (ii) was in
the lawful possession prior to the
Page 5 of 16
Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>
disclosure and had not been obtained by the other Receiving Party either
directly or indirectly from the Disclosing Party; (iii) is lawfully disclosed
to the Receiving Party by a third party without restriction on disclosure;
(iv) is independently developed by the other party; or (v) is disclosed by
operation of law. ALL Confidential Information shall remain the exclusive
property of the discloser or its licensors. All Deliverables and Work Product
shall be considered Confidential Information of Customer.
(b) Preserving Confidentiality. Each party hereby agrees that it shall
not use or disclose any Confidential Information received from the other party
other than as expressly permitted under the terms of this Agreement or expressly
authorized in writing by the other party. Each party shall use the same degree
of care to protect the other party's Confidential Information as it uses to
protect its own Confidential Information of like nature, but in no circumstances
less than reasonable care. Neither party shall disclose the other party's
Confidential Information to any person or entity other than its officers,
employees and independent contractors who are directly involved in performing
the Services and have a specific need to know such information in order to
effect the intent of this Agreement and who have entered into written
confidentiality agreements with that party consistent with and no less
restrictive than this Section 5.
(c) Mutual Cooperation. Each party will notify and cooperate with the
other party in enforcing the disclosing party's rights if it becomes aware of a
threatened or actual violation of the disclosing party's confidentiality
requirements by a third party. Upon reasonable request by the disclosing party,
the Receiving Party will provide copies of the confidentiality agreements
entered into with its agents or independent-contractors.
6. Indemnity, Warranty and Liability
(a) Indemnity. VIANT will, at its expense, defend and indemnify
Customer and any entity controlling, controlled by or under common control with
Customer and the directors, officers, employees and agents of each of them from
and against any and all claims, losses, liabilities, damages, claims suits,
fees, judgments, costs and expenses (including, but not limited to, attorneys'
fees) arising out of or in connection with the Deliverables or the provision of
the Services hereunder, including, but not limited to, any claim that any
Deliverable, Work Product, VIANT property, or other material furnished to
Customer by VIANT infringes a copy-right or patent or violates another party's
trade secret rights or other intellectual property right (an "intellectual
Property Claim"). Notwithstanding the above, VIANT shall have no liability under
this Section 6(a) for any claim of infringement based solely on (i)
modifications, adaptations or changes to any Deliverable not made by VIANT, (ii)
the combination or use by Customer of any Deliverable with any materials not
furnished by VIANT, if such infringement would have been avoided by use of the
Deliverable alone, or (iii) the use or incorporation of any materials or content
supplied to VIANT by Customer. In the event any Deliverable or Work Product is
held to, or VIANT believes is likely to be held to, infringe the intellectual
property rights of a third party, VIANT shall have the right at its sole option
and expense to (x) substitute or modify the Deliverable so that it is
non-infringing, (y) obtain for Customer a license to continue using the
Deliverable without restriction and without cost to Customer, or (z) require
the return of the infringing Deliverable from Customer. If such return
materially effects Customer's ability to utilize any Deliverable, then Customer
may, at its option, and upon thirty (30) days prior written notice to VIANT,
terminate the applicable Work Order and shall be entitled to recover the fees
paid by Customer, if any, for such infringing Deliverable under the applicable
Work Order, as well as any other Deliverable whose usefulness is materially
affected by the inability to use such infringing Deliverable, prorated over a
one-year period from the effective date of the applicable Work Order. If such
return materially effects VIANT's ability to meet its obligations under the
relevant Work Order, then VIANT may, at its option and upon thirty (30) days
prior written notice to Customer, terminate the applicable Work Order and,
contemporaneously with such termination, shall refund to Customer all fees,
including but not limited to all reimbursement for costs and expenses, paid by
Customer with respect to such infringing Deliverables as well as any other
Deliverable whose usefulness is materially affected by the inability to use such
infringing Deliverable. Customer shall, at its expense, defend and indemnify
VIANT and any entity controlling, controlled by or under common control with
VIANT from and against any and all claims, losses, liabilities, damages, claims
suits, fees, judgments, costs and expenses (including, but not limited, to
attorneys' fees) arising solely out of or in connection with (i) the combination
or use by Customer of any Deliverable with any materials not furnished by VIANT,
if such claim would have been avoided by use of the Deliverable alone, (ii) the
use or incorporation of any materials supplied to VIANT by Customer, or (iii)
Page 6 of 16
<PAGE>
the content of any website created by VIANT and maintained by Customer.
(b) Indemnification Procedures. If either party becomes aware of a
claim which may require indemnification, the indemnified party will promptly
notify the other party in writing of the claim and will allow the other party to
assume control of the defense and settlement of the claim provided that the
indemnified party may assist in the defense at its own expense if it so chooses
and any settlement intended to bind the indemnified party shall not be final
without the indemnified party's written consent. The indemnified party will
provide the other party with the assistance and information necessary to defend
and settle the claim.
(c) Warranty. Each party represents and warrants to the other party
that it has the full power, right and authority to enter into and perform this
Agreement with the other party. VIANT further represents and warrants that:
(i) the Services will be performed in a professional manner, consistent
with generally accepted industry standards;
(ii) all Work Product produced under this Agreement shall be of
original development and all VIANT Property shall be of original development or
properly licensed to Customer, as the case may be, and all Work Product and
VIANT Property shall not infringe upon or violate any patent, copyright, trade
secret, trademark or other third party intellectual property right;
(iii) VIANT has enforceable written agreements with all of its
employees and subcontractors to be involved in any project under this Agreement
assigning to VIANT (and its assignees and successors) ownership of all patents,
copyrights, trade secrets and other proprietary rights created in the course of
their employment or engagement; and
(iv) the Deliverables will be designed and will operate in conformance
with the terms and conditions of this Agreement and the specifications jointly
agreed upon by Customer and VIANT, and will not violate any federal, state or
local law or regulation.
For any breach of the warranty provided in Section 6(c)(i) above,
Customer's exclusive remedy and VIANT's entire liability shall be the
re-performance of the Services. Customer must request such remedy from VIANT
in writing not more than ninety (90) business days following final acceptance
of the Deliverables. Customer warrants that it owns, or has the right to
provide to VIANT, Customer's Confidential Information. EXCEPT AS SET FORTH IN
THIS SUBSECTION 6(C), VIANT MAKES NO WARRANTY, EXPRESS OR IMPLIED, IN
CONNECTION WITH THE SERVICES AND DELIVERABLES, INCLUDING THE RESULTS AND
PERFORMANCE THEREOF, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.
(d) Limitation of Liability. THE MAXIMUM LIABILITY OF VIANT TO CUSTOMER
FOR DAMAGES RELATING TO VIANT'S FAILURE TO PERFORM THE (A) CONSULTING SERVICES
SHALL BE LIMITED TO REIMBURSEMENT OF THE TOTAL CONSULTING FEES PAID BY CUSTOMER
TO VIANT PURSUANT TO THE APPLICABLE WORK ORDER AND (B) TRAINING SERVICES SHALL
BE LIMITED TO REIMBURSEMENT OF THE TOTAL TRAINING FEES PAID BY CUSTOMER, IF ANY,
PURSUANT TO THE APPLICABLE WORK ORDER. NOTWITHSTANDING THE FOREGOING, THE
MAXIMUM LIABILITY OF VIANT TO CUSTOMER FOR DAMAGES FOR ANY AND ALL OTHER CAUSES
WHATSOEVER, AND CUSTOMERS MAXIMUM REMEDY, REGARDLESS OF THE FORM OF ACTION,
WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL BE LIMITED TO REIMBURSEMENT OF THE
TOTAL FEES PAID BY CUSTOMER TO VIANT PURSUANT TO THE APPLICABLE WORK ORDER. IN
NO EVENT SHALL VIANT BE LIABLE FOR (X) ANY LOST DATA OR CONTENT, LOST PROFITS,
BUSINESS INTERRUPTION OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL,
EXEMPLARY OR PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THE SOFTWARE OR THE
SERVICES PROVIDED HEREUNDER, EVEN IF VIANT HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES, OR OTHERWISE FOR ANY SUCH CLAIM, OR (Y)
Page 7 of 16
<PAGE>
FOR ANY DAMAGES OR COSTS ARISING FROM ANY THIRD PARTY'S ACTIONS, FAILURE TO
ACT, OR DELAY IN PERFORMING ANY OBLIGATION WHATSOEVER. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, VIANT SHALL NOT BE LIABLE FOR PERSONAL INJURY OR
PROPERTY DAMAGE. IN ADDITION TO ANY AMOUNTS PAID TO CUSTOMER BY VIANT
PURSUANT TO THE TERMS OF THIS SECTION 6(D), VIANT AGREES TO REIMBURSE
CUSTOMER FOR ITS REASONABLE COSTS AND ATTORNEY'S FEES INCURRED IN ENFORCEMENT
OF THEIR RIGHTS HEREIN.
7. Term and Termination
(a) Term. The term of this Agreement shall commence on the Effective
Date shown on page 1 of this Agreement and shall continue until terminated
pursuant to this Section 7.
(b) Termination.
(i) Either party may terminate this Agreement or any outstanding Work
Order if the other party is in material breach of the terms of this Agreement
or such Work Order and has not remedied the breach within thirty (30) days of
written notice specifying the breach.
(ii) If not earlier terminated pursuant to (i) above, this Agreement
shall automatically terminate on June 30, 2002.
(c) Effect of Termination. Upon termination of such Work Order, the
following shall apply:
(i) Services for such Work Order shall cease at that time.
(ii) VIANT shall forward to Customer all Deliverables for which payment
has been rendered.
(iii) If the parties have disagreed as to the satisfaction of the
specifications of any Deliverable, and that disagreement has not been resolved,
the matter will be submitted to arbitration pursuant to the provisions of
Section 8(i) below. The arbitrators shall determine the fair market value of the
Deliverable whereupon Customer shall remit that amount to VIANT and VIANT shall
forward the Deliverable to the Customer.
(iv) VIANT shall forward to Customer all Customer Confidential
Information and all copies thereof.
(v) Customer shall pay all amounts due and payable under this
Agreement. With respect to Services provided by VIANT on a fixed fee basis, if
any, Customer shall pay VIANT a portion of such fixed fee amount equal to the
portion of the Services completed as of the date of such termination.
(vi) All rights and obligations provided under Sections 3 (to the
extent any fees or taxes remain unpaid or expenses have not been reimbursed), 4,
5, 6 and 8 shall survive such termination for any reason; provided that Section
5(b) shall survive for a period of three (3) years following such termination
for any reason.
(vii) Neither party will be liable to the other for damages, losses,
costs or expenses whatsoever on account of such termination arising from or in
connection with the loss of prospective sales, expenses incurred or investments
made with the establishment, development or maintenance of either party's
business.
(viii) Termination will not affect any claim, demand, liability or
right of Customer or VIANT made prior to such termination, except as described
in Section (iv) above.
8. Miscellaneous
(a) No Hiring. Both parties agree not to hire, or directly or
indirectly solicit or employ, any employee of the other who is involved in the
development, use or provision of Services to Customer prior to the date set
forth on Exhibit B hereto for the initial delivery of the final Deliverable to
Customer, and for twelve (12) months thereafter, without the prior written
consent of the other party.
(b) Assignment. Neither party shall assign, transfer or pledge this
Agreement Without the prior written consent of the other party. For the
purposes of this Section 8(b), without limitation, an assignment or transfer
by VIANT requiring the prior written consent of Customer shall be deemed to
have occurred (i) upon a merger or consolidation involving VIANT or a
transfer of the capital stock of VIANT or (ii) if VIANT sells, assigns,
conveys, transfers, leases or otherwise disposes of, in one transaction or a
series of related transactions, all or substantially all of its property or
Page 8 of 16
<PAGE>
assets used in connection with the performance of the Services. A merger or
consolidation involving Customer shall not be deemed to require the prior
written consent of VIANT. The consent of each party to any assignment shall
apply only to the given instance, and shall not be deemed a consent to any
subsequent act. Subject to the foregoing, this Agreement inures to the benefit
of and is binding upon the successors and assignees of the parties hereto.
(c) Relationship between the Parties. Neither Customer nor VIANT is a
legal representative, agent, or a partner of the other. Each party will be
solely responsible for payment of all compensation owed to its employees, as
well as employment related taxes. Each party will maintain appropriate worker's
compensation for its employees as well as general liability insurance,
(d) Force Majeure. Except for obligations to pay money, neither party
shall be liable for any failure or delay in performance of its obligations
hereunder on account of strikes, riots, fires, explosions, acts of God, war,
governmental action, or any other cause which is beyond that party's reasonable
control.
(e) Entirety. This Agreement and all applicable Work Orders and
other documents incorporated herein constitute the complete agreement between
the parties and supersedes all previous and contemporaneous agreements,
proposals, or representations, written or oral, concerning the subject matter
of this Agreement. This Agreement may not be modified or amended except in a
writing signed by a duly authorized representative of each party. Subject to
this Section 8(e) and Section 2(d) above, no other act, document, or usage,
shall be deemed to amend or modify this Agreement or any Work Order, as
applicable. It is expressly agreed that any terms and conditions of any prior
communications between VIANT and Customer shall be superseded by the terms
and conditions of this Agreement and the applicable Work Order and all other
documents incorporated herein.
(f) Severability. In the event any provision of this Agreement is held
to be invalid or unenforceable, the remaining provisions of this Agreement will
remain in full force.
(g) Beneficiaries. VIANT and Customer shall be a third party
beneficiary of all confidentiality agreements contemplated by Section 5(b)
above.
(h) Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York, excluding conflict of laws provision,
applicable to agreements made and fully performed therein.
(i) Settlement Attempt-Arbitration. Any and all claims, disputes, or
controversies arising under, out of, or in connection with this Agreement or
the breach thereof, (herein "dispute") shall be submitted to the chief
operating officer of each party (or their designee) for a good faith attempt
to resolve the dispute. The position of each party shall be submitted, and
the individuals promptly thereafter shall meet at a neutral site. If the
parties are unable to reach agreement within thirty (30) days following such
meeting, then any dispute which has not been resolved within said thirty (30)
days by good faith negotiations between the parties shall be resolved at the
request of either party by final and binding arbitration, and neither party
may terminate the Agreement based upon any such dispute except in accordance
with the decision of the panel of arbitrators. Arbitration shall be conducted
in Suffolk County, Massachusetts, by three (3) arbitrators. The arbitrators
shall be knowledgeable in the commercial aspects of custom software
development, Internet applications technical consulting services and
copyright law and otherwise in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. The parties shall select the
arbitrators within fifteen (15) days after the receipt by the noticed party
of the demand for arbitration delivered in the manner set forth herein for
providing notice to the parties. If the arbitrators are not selected by the
parties within said fifteen (15) days, then the American Arbitration
Association shall select the arbitrators. The arbitrators shall make detailed
written findings to support their award. The arbitrators shall render their
decision no more than forty-five (45) days after the parties finally submit
the claim, dispute or controversy to the panel. Judgment upon the arbitration
award may be entered in any court having jurisdiction. As part of any award
rendered the arbitrators shall determine the prevailing party on any claim or
counterclaim and shall award to such prevailing party the costs and fees
(including filing fees and other costs, as well as attorney consulting,
accounting and expert witness fees) incurred by such party with respect to
the claim or counterclaim on which such party prevailed.
(j) Waiver. The failure by either party to enforce at any time any of
the provisions of this Agreement, or to exercise any election or option provided
herein, shall in no way be construed as a waiver of such provisions or options,
nor in any way to
Page 9 of 16
<PAGE>
affect the validity of this Agreement or any part thereof, or the right of
either party thereafter to enforce each and every such provision.
(k) Publicity. VIANT shall be allowed to use Customer's name on its
customer lists and disclose the same to its present and potential customers
after execution of this Agreement. Both parties may announce the execution of
this Agreement without disclosing the terms thereof upon prior written
approval of the other party. Any press release or other statement concerning
this Agreement issued by either party shall require prior approval in writing
of the copy by the other party.
(l) Notice: All notices, requests, consents and other communications
required or permitted under this Agreement shall be in writing and shall be
sent by registered or certified mail, postage prepaid or transmitted by
telegram, telefax or facsimile if confirmed by such mailing, to Customer and
VIANT at their respective addresses set forth on page 1 of this Agreement.
Either party may change its address or the individual designated to receive
notice by written notice to the other.
(m) Headings: The headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect this meaning or
interpretation of any provisions of this Agreement.
Page 10 of 16
<PAGE>
IN WITNESS WHEREOF, the parties hereto, by their duly authorized
representatives, have set forth their signatures as of the date first set forth
above.
VIANT CUSTOMER
By: /s/ [illegible] By: /s/ Morris Wheeler
--------------------------------- --------------------------
Name: [illegible] Name: Morris Wheeler
--------------------------------- --------------------------
Title: CFO Title: CEO Bluetape
--------------------------------- --------------------------
Date: 3/1/99 Date: [illegible]
--------------------------------- --------------------------
Page 11 of 16
<PAGE>
Exhibit A: Schedule of Deliverables and Payment Details
Page 12 of 16
<PAGE>
BlueTape/Viant
Deliverables and Payment Details
November 1, 1998
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Summary
This document provides details around specific deliverables and
milestones that BlueTape and Viant have agreed to tie to payments for
our project. It is meant to function as an attachment to the
Viant/BlueTape Master Services Agreement.
Deliverables have been bundled into Releases: we have defined five (5)
in total, variously: Sputnik; Earlybird; Mercury; Gemini; and Apollo.
Subsequent to defining the releases we have agreed that Gemini and
Apollo will be combined as one final release. A summary of the
functionality contained in each release is detailed below. The main
purpose of this document is to provide supporting detail to this
summary.
Figure 1: Release Summary, Major Functionality
[*]
* Certain information in this Exhibit has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.
<PAGE>
Deliverables and Payment Details -2-
CONFIDENTIAL TREATMENT REQUESTED
Deliverables and Payments
Each Release has been tied to a target delivery date (see diagram
below). Payments have been tied to successful delivery of these
Releases. Viant plans to deliver on schedule, quality Releases that
conform to the agreed upon specifications. Further, Viant, working
closely with BlueTape, plans to successfully complete the agreed
functional acceptance testing on or before these target delivery dates.
BlueTape has committed to pay Viant the amounts specified below once
user acceptance testing has been completed and final sign-off has been
performed.
We summarize the agreed upon target Release delivery dates and
associated payment amounts below.
Figure 2: Release Target Dates and Anticipated Payment Stream
[*]
Deliverable Format
Each deliverable within each Release may take one of more these forms:
- Documents (delivered in Microsoft Word 97 and/or Powerpoint)
- Knowledge transfer (combination of face-to-face discussion and
necessary supplementary documentation, as appropriate)
- System set-up for the initial Sputnik release configuration and
then set-up for incremental functionality in subsequent
releases (e.g., commerce and advertising linkages)
* Certain information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
<PAGE>
Deliverables and Payment Details -3-
Testing and the acceptance process
We have jointly defined a simple process that facilitates testing, user
acceptance and sign-off. We begin with definition of a number of terms.
Unit Testing
- Unit testing is designed to ensure that each code module is able
to deliver its respective functionality. During each unit test,
developers will self-test individual modules of code. For
instance, using a single class to add a video into the database
serves to isolate the code module in order to execute every
branch of logic, to investigate boundary conditions, and to
confirm exception handling.
- Unit testing is the sole responsibility of Viant
Content / Creative Review
- The content / creative review is designed to ensure that all
creative elements and content have been successfully completed
and added to the system. During these reviews, developers and
sponsors will view each creative element, e.g. streaming
director file, flash file, jpg, etc. to ensure that it meets
agreed upon specifications.
- Content/creative review is a joint exercise; creative leads from
the Viant team and the Bluetape creative point person have joint
responsibility and will manage the work effort to a successful
conclusion
Integration Testing
- Integration testing tests across applications. This set of tests
ensures that applications are inter-operating, exchanging
information accurately, and functioning as specified. This is
essentially end-to-end process testing for instance, if a new
video is added in the content manager, does the updated
information appear in the setlist maintenance console? Is it
possible to delete information by using one application that
would create errors in another application? Integration Tests
will be conducted by performing a series of operations outlined
in the test scripts. These test scripts will be created based on
the functionality outlined for each application in its approved
use case(s). Each test script will outline the step number, the
action, the expected result(s) and whether the system passed
the test step.
- Integration testing will identify defects with functionality
that differs from specifications as well as defects that deal
with minor aesthetic concerns. We will classify errors using a
simple defect scale and will record and manage defects in our
issue tracking system.
- Integration testing is principally a Viant responsibility, but
BlueTape will participate in defining test cases and overseeing
documentation of the testing process
Acceptance Testing
- The Acceptance Test validates that the Release functions as it
was, or will be, defined in the Functional Specification
Document approved by BlueTape. This testing will allow BlueTape
to confirm that the system performs as specified. Once
completed, formal-sign-off follows and indicates that the
release has been completed and that payment is now due.
- Acceptance testing is principally a BlueTape responsibility
- Releases will be considered accepted and signed-off if BlueTape
determines that the Release meets the test acceptance criteria.
In addition, BlueTape will be able to walk through/execute the
Integration Test scripts to confirm that the system reflects the
functionality described in the functional specification
document.
<PAGE>
Deliverables and Payment Details -4-
The focus of acceptance testing will be to identify those defects that indicate
that the system does not meet the predefined functional specification. Those
defects deemed moderate to high priority will be fixed and a new Release will be
created for further testing.
For process definition, acceptance testing and Sign-off Viant will nominate a
single point of contact (the testing manager) BlueTape will also nominate a
single point of contact who will work with the designated Viant testing manager
to jointly define and approve the testing and acceptance process. This testing
and acceptance process will be documented in writing by both parties in a
detailed manner acceptable to both parties. Bluetape will communicate defects
and perform sign-off through this single point of contact.
Below is an illustrative timeline that presents how the various testing and
integration activities typically work together. This generalized structure will
be customized for each specific Release.
<TABLE>
<CAPTION>
Testing M T W Th F Sa Su M T
Activity
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- - Unit Testing X
(Viant
Developers)
- - Content/ X X
Creative Review
(Viant,
BlueTape)
- - Integration X X X X
Testing Two Interim releases/day
(Viant) Test windows : 7am - 11am
and 1pm - 5pm
- - Acceptance X X X X X
Testing Acceptance Final
(BlueTape) Testing Changes
Final and
Freeze formal
Sign off
</TABLE>
Viant and BlueTape have mutually agreed that for major releases, five (5) days
of acceptance testing will be allowed; for minor release, three (3) days have
been agreed upon. Acceptance testing will commence when the Release is in large
measure functionally complete.
<PAGE>
Deliverables and Payment Details -5-
Joint Accountability
Both BlueTape and Viant are committed to success. However, circumstances may
occur where, despite best efforts, either party may be unable to deliver on
specific items as planned. We have detailed below a set of assumptions to help
clarify the involvement and responsibilities of each party.
<TABLE>
<CAPTION>
Activity Assumptions
- -------- -----------
<S> <C>
Project - BlueTape executive management and Viant leadership will
Management jointly steer and direct the entire project. Viant will
be responsible for Program Management for the whole
project and will also be responsible for managing all
work streams including partner work streams where Viant
has subcontracted with a Third party (such as with
Possible Worlds)
- Viant will utilize a Project Management process that
will introduce a structure and rigor to ensure the
project creates quality and adheres to declared
timelines and milestones
- Viant Program Management will be responsible for
coordinating and communicating among all different work
streams
Functional - BlueTape executive management will be available on a
Requirements regular basis to assist in fully defining and clarifying
business goals and functional requirements
- All team members are familiar with the impact that
function changes will have on delivery and cost
- Limited changes to Functional Requirements may be
necessary due to changing market conditions. To the
extent that they do not become an impediment to
progress, Viant will commit to estimating the size of
the work effort and impact before committing to execute
those changes
- A senior contact from BlueTape will be identified to
accept responsibility for each key decision (in scope,
out-of-scope, etc.) and for final Functional
Requirements sign-off
Technical - BlueTape executive management will be available on a
Requirements regular basis to assist in defining and clarifying
business goals and technical requirements
- The tradeoffs between and 'ideal' technical solution and
timely delivery are clearly understood by the team
- A senior contact from BlueTape will be identified to be
responsible, in conjunction with the appropriate Viant
person, for each key decision (in scope, out-of-scope,
etc.) and for final Technical Requirements sign-off
</TABLE>
<PAGE>
Deliverables and Payment Details -6-
<TABLE>
<CAPTION>
Activity Assumptions
- -------- -----------
<S> <C>
Sputnik Build - Since Sputnik is a market Pilot, it is understood that
time-to-market is the key driving factor
- Any substantial delays in procurement of hardware /
software products, connectivity and other technical
solutions from partners will affect project timelines
- The Technical Architecture document recommends various
third-party technologies and components. These
components have been suggested based on either prior
evaluation or Viant first-hand experience. However,
product functionality, bug fixes, new release dates and
general customer support from third-party vendors cannot
be guaranteed. Any major functionality delinquencies
associated with third-party products will impact the
overall project deadlines
Post Sputnik - Sputnik will undergo redesign and be extended and
Releases enhanced in later Releases.
- At launch, Bluetape will offer Sputnik and will have the
capability to launch additional channels leveraging
reusable components and automation support (e.g.,
"wizards")
- Sputnik will be implemented as the first of a series of
Releases. Major learnings from Sputnik will be applied
to later Releases. This may include changes to some of
the assumptions and potentially impact Sputnik
timelines. All scope changes will be discussed before
acceptance.
- Any delays in procurement of hardware / software
products, connectivity and other technical solutions
from partners are likely to affect project timelines
- The Technical Architecture document recommends various
third-party technologies and components. These
components have been suggested based on either prior
evaluation or first-hand Viant experience. However,
product functionality, bug fixes, new release dates and
general customer support from third-party vendors cannot
be guaranteed. Any major functionality delinquencies
associated with third-party products will impact the
overall project deadlines
- All content encoding will be performed by BlueTape staff
</TABLE>
<PAGE>
Deliverables and Payment Details -7-
<TABLE>
<CAPTION>
Activity Assumptions
- -------- -----------
<S> <C>
Music Choice Downstream (Music Choice to BlueTape)
Integration - Music Choice will provide documentation and
personnel for on-demand support for demodulating
their signal and acquiring real-time song
attribute data in ASCII or equivalent form
- Website co-creation for context pages (surrounding text,
graphics, and navigation)
Upstream (BlueTape to Music Choice)
- Music Choice will provide documentation and personnel
for on-demand support for encoding Sputnik music streams
in their digital format
- Only audio and attribute data will be encoded for
Sputnik on Music Choice that is, Sputnik on Music Choice
will not include ancillary data from Sputnik (e.g.,
lyrics) will only include attribute data (chyron)
- Music Choice will provide network transport resources
necessary to up-link our signal to their service
Strategic and - BlueTape executive management will be available to
Business assist in defining, clarifying and aligning business
Vision vision and assisting in key operating issues
Alignment
- Any major changes to the business vision during the
"Launch" phase are likely to impact project timelines
- Any delays in major Strategic deals with other players
in the industry may potentially impact project timelines
Financial - BlueTape will incur all costs associated with
partner consulting services except for the specific
services rendered by Possible Worlds as part of this
work effort
- BlueTape will incur all costs associated with
purchasing third-party products (hardware, software,
telecommunication costs, network connectivity) unless
discussed otherwise
- BlueTape will support reasonable expenses for both
in-town team members (typically, late night cab fares
and dinners) and out-of town team members (hotel,
air-fare, meals, etc.)
- Any specific item that needs to be purchased for the
project will need to be explicitly approved by the
BlueTape Project Leader. If the item value exceeds $1500
it will require explicit sign-off from the BlueTape CEO,
or equivalent BlueTape authority
Marketing and - Any delays in major Marketing and Sales deals may
Sales potentially impact project timelines.
Operations - Timely setup of Operations (Core Functions) as outlined
(Organization, in the Digital Operating Model are important to overall
etc.) BlueTape business rollout
</TABLE>
<PAGE>
Deliverables and Payment Details -8-
<TABLE>
<CAPTION>
Activity Assumptions
- -------- -----------
<S> <C>
Testing & QA - Business users will be available on a regular basis
to appropriately test the applications during the QA
stage
- A single point of contact will be identified from within
the BlueTape organization to review and sign-off all
testing QA cycles
- System "bugs" discovered during the testing & QA phase
will be classified into various severity levels. For
example:
- Severity 1: Highest Severity Bug; Application
is not functional; No work around exists
- Severity 2: High Severity; Significant
functionality not working;
- Severity 3: Medium Severity; Major functionality
not impacted, work around exists
- Severity 4: Low Severity
- Severity 5: Lowest Severity Bug; Mostly visual,
graphical, etc.
- Tradeoff between timely delivery and fixing "bugs" at a
certain severity level will be determined at the
appropriate point during the project
Roll-out - Initial roll-out for both initial and later Sputnik
Releases is assumed to be at a single physical location
(data center)
- Data Center support resources will be made available
during the roll-out and planning stages
- Appropriate levels of Customer Care support and Help
Desks will be established by BlueTape prior to any
roll-outs
Management - All MIS systems (general ledger, AR, etc.) will be
Information serviced through BlueTape's parent company
Systems
Legal - All issues pertaining to legal matters will be handled
by BlueTape staff
</TABLE>
As we had during earlier phases of the project, an overall steering committee
comprising Morris Wheeler, Aron Dutta and necessary members of their staff has
been defined. This committee will meet to resolve any issues that appear
intractable and will have final authority in resolving issues. Our current
working arrangement is such that formally scheduled meetings are not
anticipated, as tactical communication has been excellent. Should this situation
alter, we will institute more formality to the project steering process.
<PAGE>
Deliverables and Payments Details -9-
CONFIDENTIAL TREATMENT REQUESTED
Sputnik-Overview
[*]
Sputnik-Deliverable Details
Summary of Viant Deliverables
- - Sputnik production system with supporting documentation
- Successful execution of approved QA test suite on all
reference platforms
- Successful transfer of executables onto production environment
- Machine-readable source code for all original software,
artwork, and animations
- Documentation and training suitable for BlueTape to commence
production operations
- User manual
- Style guide
- Production workbench specification
- Production environment hardware and third party and custom
software setup(1)
- Very limited production support during "burn-in" period (one
week maximum) following acceptance of initial Sputnik release
Summary of BlueTape responsibilities
- - Timely availability of licensed and unlicensed content (videos and
copy)
- - Legal requirements, copy, and approval
- - ISP deal and premises secured
- - Production equipment and software acquired
- - Timely approval of all original and encoded content elements
- - Acquisition of sputnik URL (or acceptable alternative)
- - Production hardware and software verified by BlueTape personnel
- --------------------
(1) Note - Viant standard operating procedure in these matters is limited to
custom software installation.
* Certain information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Deliverables and Payment Details -10-
Presented below are deliverable details for various areas. We identify and then
describe each deliverable, noting sign-off timing and "drop dead" dates for each
deliverable, where appropriate. As can be see in the descriptive text, many of
these drop dead dates involve initial decisioning or deliverables from BlueTape,
which if not executed in a timely fashion will impact the final sign-off date.
Sputnik Application Deliverables
<TABLE>
<CAPTION>
Deliverable Description
- ----------- -----------
<S> <C>
[*] [*]
</TABLE>
* Certain information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Deliverables and Payment Details -11-
[*]
Sputnik Project Management Deliverables
<TABLE>
<CAPTION>
Deliverable Description
- ----------- -----------
<S> <C>
Program Management Manage and coordinate all development and
business activities for Sputnik release
Project Management Manage overall Sputnik development effort and
related activities
Technical Requirement Coordinate and create final definition of the
Definitions & Use Cases overall Sputnik technical requirements and
functional specifications
Integration Testing Define, manage and successfully deliver fully
tested applications
User Acceptance Testing Review and test the system. Client to ensure
that the system is operating according to
specifications. Clients sign-off on the
completed product
Develop User Documentation Create operating manuals, style guides, and
technical references that appropriately reflect
Sputnik's current system complexity
</TABLE>
Sputnik Creative Deliverables
<TABLE>
<CAPTION>
Deliverable Description
- ----------- -----------
<S> <C>
[*] [*]
</TABLE>
* Certain information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with
respect to the omitted portions.
<PAGE>
Deliverables and Payment Details -12-
- --------------------------------------------------------------------------------
User Experience Develop materials (animations, information
architecture, behaviors) required to provide the
desired Sputnik user experience.
Viant will oversee the production and testing of
required Sputnik launch collateral and will ensure
that the collateral conforms to the pre-defined
UE architecture. Viant will, through a process of
creative reviews, obtain client sign-off prior to
final implementation.
- --------------------------------------------------------------------------------
Documentation Develop and deliver Style Guide that captures the
rules for developing content for the site.
- --------------------------------------------------------------------------------
Sputnik Business Operations Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Guerilla Marketing Design, and assist in rollout of Marketing Plan
- --------------------------------------------------------------------------------
Web Hosting Identify and compare web hosting vendors and
provide support for BlueTape in selecting vendors
- --------------------------------------------------------------------------------
Advertising Investigate outsourcing options for advertising
sales and fulfillment
- --------------------------------------------------------------------------------
Financial Model Support Bluetape in revising the financial
model to include new advertising outsourcing
options, web-hosting options and revised revenue
information. Revise model to update cost information
(sourced by BlueTape)
- --------------------------------------------------------------------------------
Ecommerce Investigate and research partnering opportunities
with ecommerce partners. Also, help define
Bluetape, short and long term objectives for
ecommerce strategy.
- --------------------------------------------------------------------------------
Operational Ongoing support with regards to meetings,
confirming setups, and schedules, NDA's etc.
Assistance in equipment acquisition.
- --------------------------------------------------------------------------------
Privacy and copyright Jointly develop a Copyright and Privacy policy and
process for Sputnik. This task includes providing
support for both developing and implementing the
copy.
- --------------------------------------------------------------------------------
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Deliverables and Payment Details -13-
[*]
This release will add functionality to the Sputnik baseline. We describe below
additional deliverables that extend and enhance this baseline.
Summary of Viant Deliverables
o Enhanced Sputnik production system with supporting documentation including
the following new features:
[*]
Summary of BlueTape Responsibilities
o Arrangement with select eCommerce vendor in place by 9/11
o Licensing, acquisition, sourcing, data scrubbing, and data entry of
ancillary content provided by BlueTape with specific data formats
available by 9/14
o BlueTape adoption of encoding portion of production process
- --------------------------------------------------------------------------------
Earlybird Application
Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Sandbox Customer Support This functionality will provide the ability to
site test new functionality to a limited audience.
The sandbox will also provide the ability to
track user feedback through a simple reporting
mechanism. Viant and BlueTape will generate the
functional specifications and will design, build
and unit test the application.
- --------------------------------------------------------------------------------
Basic Content Targeting/DJ This enhanced functionality will provide the
Console design ability to create programming for more than one
channel. It will also provide the ability to
auto-generate setlists with slugs for ad spots. It
will be placed in the sandbox area for testing
during Earlybird. Initial scope will focus around
screen functionality and general design, but will
include other features such as preview. Viant and
BlueTape will generate the functional
specifications and will design the application.
- --------------------------------------------------------------------------------
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Deliverables and Payment Details -14-
[*] [*]
- --------------------------------------------------------------------------------
Earlybird Project Management Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Program Management Manage and coordinate all development and business
activities for Earlybird release
- --------------------------------------------------------------------------------
Project Management Manage overall Earlybird development effort and
related activities.
- --------------------------------------------------------------------------------
Technical Requirement Coordinate and create final definition of the
overall
- --------------------------------------------------------------------------------
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>
Deliverables and Payment Details -15-
- --------------------------------------------------------------------------------
Definitions & Use Cases Earlybird technical requirements and functional
specifications
- --------------------------------------------------------------------------------
Integration Testing Define, manage and successfully deliver testing of
updated and new applications and the completed
system
- --------------------------------------------------------------------------------
User Acceptance Testing Review and test the system. Client to ensure that
the system is operating according to
specifications. Client signs-off on the completed
product.
- --------------------------------------------------------------------------------
Develop User Update operating manuals, style guides, technical
Documentation references, as appropriate.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Earlybird Creative
Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Earlybird UE design The user experience will be revisited and enhanced
to account for Velvet Rope, Sandbox, Ancillary
Content, and include eCommerce treatments, as
appropriate. This process typically consists of
iterative creative reviews and design mock-ups,
and a final creative sign-off
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Earlybird Business Operations Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Ecommerce Provide eCommerce outsourcing analysis and assist
with closing deal with retail fulfillment company
- --------------------------------------------------------------------------------
Ancillary Content Provide ancillary content sourcing support and
assistance. Help with negotiations. Support
operational process and rollout.
- --------------------------------------------------------------------------------
Operational Support Ongoing support with regards to meetings,
confirming setups, and schedules, NDA's etc.
- --------------------------------------------------------------------------------
Advertising Continue to assist with outsourcing options for
advertising sales and fulfillment
- --------------------------------------------------------------------------------
Financial Model Continue to assist Bluetape model revisions
- --------------------------------------------------------------------------------
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Deliverables and Payment Details -16-
Mercury
This release will add functionality to the Earlybird baseline. We describe below
additional deliverables that extend and enhance this baseline.
Summary of Viant Deliverables
o Enhanced version of Sputnik production system with supporting
documentation including the following additions
[*]
Summary of BlueTape Responsibilities
o eCommerce fulfillment and settlement arranged by BlueTape
o Timely approval of Mercury design by BlueTape
o Timely acquisition, encoding, and data entry of required content by
BlueTape staff
o Responsibility for third party content validation source acquisition
rested solely with BlueTape and needs to be completed by 10/9.
o BlueTape operations autonomously executing music programming
o MusicChoice deal and requirements need to be finalized by mid-October
-- Technical requirements subject to evaluation and approval by Viant --
Special equipment to be provided by BlueTape or MusicChoice -- Content
feeds to be provided, to Viant premises demarcation point
- --------------------------------------------------------------------------------
Mercury Application
Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Sandbox functionality Migrate tested and approved Earlybird Sandbox
migration functionality, i.e., Ancillary content, Basic
Content Targeting, etc. into Mercury system
- --------------------------------------------------------------------------------
[*] [*]
- --------------------------------------------------------------------------------
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Deliverables and Payment Details -17-
- --------------------------------------------------------------------------------
Functional specifications and will design, build
and unit test the application.
- --------------------------------------------------------------------------------
[*] [*]
- --------------------------------------------------------------------------------
Advanced System This enhanced functionality will provide
Administration additional capabilities to administrate the system
remotely
- --------------------------------------------------------------------------------
Community (chat) and Community (chat). This additional functionality
Personalization - Sandbox will provide some component of community on the
site. Initial scope will be focused on chat. It
will be placed in the Sandbox area for testing
during Mercury. Initial scope will focus around
screen functionality and general design
Personalization. This additional functionality
will provide enhanced personalization services. It
will be placed in the Sandbox area for testing
during Mercury. Initial scope will focus around
screen functionality and general design. Exact
services have not yet been determined. Specific
functionality will be detailed in a separate
attachment once final decisioning has been
completed. Candidate functional areas may include
support for customization of "streams" or other
functionality.
- --------------------------------------------------------------------------------
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Deliverables and Payment Details -18-
- --------------------------------------------------------------------------------
[*] [*]
- --------------------------------------------------------------------------------
Mercury object model design The object model will be updated to reflect new
& changes functionality being added and/or tested. Viant and
BlueTape will generate the functional
specifications and will build the new model.
- --------------------------------------------------------------------------------
Mercury See Figure 2: Release Target Dates and Anticipated
Payment Stream
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mercury Project Management Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Program Management Manage and coordinate all development and business
activities for Mercury.
- --------------------------------------------------------------------------------
Project Management Manage overall Mercury development effort and
related activities
- --------------------------------------------------------------------------------
Technical Requirement Coordinate and create final definition of the
Definitions & Use Cases overall Mercury technical requirements and
functional specifications
- --------------------------------------------------------------------------------
Integration Testing Define, manage and successfully deliver testing of
applications and completed system
- --------------------------------------------------------------------------------
User Acceptance Testing Review and test the system. Client to ensure that
the system is operating according to
specifications. Client signs-off on the completed
product.
- --------------------------------------------------------------------------------
Update User Documentation Update operating manuals, style guides, technical
references, as appropriate
- --------------------------------------------------------------------------------
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>
Deliverables and Payment Details -19-
- --------------------------------------------------------------------------------
Mercury Creative Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Mercury UE Design The user experience will be revisited to account
for new functionality. Browse, search, chat, and
personalization will be the principal UE
extensions. This process typically consists of
iterative creative reviews and design mock-ups,
and a final creative sign-off
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mercury Business Operations Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Ancillary Content Support operational process and rollout, as
appropriate
- --------------------------------------------------------------------------------
eCommerce Support operational process and rollout, as
appropriate
- --------------------------------------------------------------------------------
Operational Support Ongoing support with regards to meetings,
confirming setups, and schedules, NDA's etc.
- --------------------------------------------------------------------------------
Knowledge Transfer Execute knowledge transfer sessions with
identified BlueTape operations personnel document
process as necessary to ensure smooth transition
- --------------------------------------------------------------------------------
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Deliverables and Payment Details -20-
Gemini
Note: From a delivery perspective, we have combined Gemini and Apollo into one
final release.
This release will add functionality to the Mercury baseline. We describe below
additional deliverables that extend and enhance this baseline.
Summary of Viant Deliverables
o Enhancement of Sputnik production system with supporting documentation
including the following additions
[*]
Summary of Bluetape Responsibilities
o Timely approval of design and requirements by BlueTape
- --------------------------------------------------------------------------------
Gemini Application
Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Additional Channels This functionality includes the ability to
Support - Sandbox program, design and operate additional channels
vis a vis Sputnik. It will be placed in the
sandbox area for testing throughout this stage.
Viant and BlueTape will generate the functional
specifications and will design, build and unit
test.
- --------------------------------------------------------------------------------
Additional Channels This functionality will ensure that additional
Integration with Sputnik channels are well integrated, enabling core
components such as the content manager and digital
library to be shared and reused.
Viant and BlueTape will generate the functional
specifications and will design, build and unit
test a Sandbox version
- --------------------------------------------------------------------------------
Sandbox functionality Migrate tested and approved Mercury Sandbox
migration functionality, i.e., All-Request, personalization,
content browsing and community (chat)
- --------------------------------------------------------------------------------
[*] [*]
- --------------------------------------------------------------------------------
Gemini object model design The object model will be updated to reflect the
& changes new functionality being added and/or tested. Viant
and BlueTape will generate the functional
specifications and will build the new model.
- --------------------------------------------------------------------------------
Launch See Figure 2: Release Target Dates and Anticipated
Payment Stream
- --------------------------------------------------------------------------------
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>
Deliverables and Payment Details -21-
Gemini Project Management Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Program Management Manage and coordinate all development and business
activities for Gemini release.
- --------------------------------------------------------------------------------
Project Management Manage overall Gemini development effort and
related activities
- --------------------------------------------------------------------------------
Technical Requirement Coordinate and create final definition of the
Definitions & Use Cases overall Gemini technical requirements and
functional specifications
- --------------------------------------------------------------------------------
Integration Testing Define, manage and successfully deliver testing of
applications and completed system
- --------------------------------------------------------------------------------
User Acceptance Testing Review and test the system. Client to ensure that
the system is operating according to
specifications. Client signs-off on the completed
product.
- --------------------------------------------------------------------------------
Update User Documentation Update operating manuals, style guides, technical
references, as appropriate
- --------------------------------------------------------------------------------
Gemini Creative Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Gemini UE Design The user experience will be revisited to account
for new functionality. This process typically
consists of two iterative creative reviews and
design mock-ups.
- --------------------------------------------------------------------------------
"Uberbrand" design The development and integration of a second
channel involves definition of an overall set of
"uberbrand" elements. The user experience will be
revisited to account for this
- --------------------------------------------------------------------------------
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
Deliverables and Payment Details -22-
Apollo
Note: From a delivery perspective, we have combined Gemini and Apollo into one
final release.
This final Release will add functionality to the Gemini baseline. We describe
below additional deliverables that extend and enhance this baseline.
Summary of Viant Deliverables
o A further enhanced version of Sputnik with supporting documentation
including the following new elements -- Additional channels support in
production -- Ad "banner" targeting service integration
[*]
Summary of BlueTape Responsibilities
o Arrangement and requirements for ad banners in place by 11/15/98
o BlueTape premises and staff in place to receive physical technology
environments
o Transportation and installation of environments arranged and paid for by
BlueTape
Apollo Application
Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
[*] [*]
- --------------------------------------------------------------------------------
[*]
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>
Deliverables and Payment Details -23-
Apollo Project Management Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Program Management Manage and coordinate all development and business
activities for Apollo in preparation for hand-off
to BlueTape
- --------------------------------------------------------------------------------
Project Management Manage overall Apollo development effort and
related activities in preparation for hand-off to
BlueTape
- --------------------------------------------------------------------------------
Technical Requirement Coordinate and create final definition of the
Definitions & Use Cases overall Apollo technical requirements and
functional specifications
- --------------------------------------------------------------------------------
Integration Testing Define, manage and successfully deliver testing of
applications and completed system
- --------------------------------------------------------------------------------
User Acceptance Testing Review and test the system. Client to ensure that
the system is operating according to
specifications. Client signs-off on the completed
product.
- --------------------------------------------------------------------------------
Update User Documentation Update and turn over operating manuals, style
guides, technical references to BlueTape, as
appropriate
- --------------------------------------------------------------------------------
Apollo Creative Deliverables
- --------------------------------------------------------------------------------
Deliverable Description
- --------------------------------------------------------------------------------
Apollo UE Design The user experience will be revisited to account
for final new functionality. This process
typically consists of iterative creative reviews
and design mock-ups, with final creative sign-off.
- --------------------------------------------------------------------------------
<PAGE>
Deliverables and Payment Details -24-
BlueTape Project Team
Anticipated Rolloffs* by Date (+/- 2 weeks)
- --------------------------------------------------------------------------------
August Smith, Steffens
- --------------------------------------------------------------------------------
September Haque, Haba, Jer, Tunnas
- --------------------------------------------------------------------------------
October Donigian, Haba
- --------------------------------------------------------------------------------
November Evans, Goldie, Grayson, Palmer, Rattner,
Adamjee, Smith
- --------------------------------------------------------------------------------
December Feldman, Keany, Forest
- --------------------------------------------------------------------------------
January Westlund, Frank, Maurer, Tamburro
- --------------------------------------------------------------------------------
Anticipated Rolloffs* by Individual (+/- 2 weeks)
- --------------------------------------------------------------------------------
Adamjee November
- --------------------------------------------------------------------------------
Donigian October
- --------------------------------------------------------------------------------
Evans November
- --------------------------------------------------------------------------------
Feldman December
- --------------------------------------------------------------------------------
Forest December
- --------------------------------------------------------------------------------
Frank January
- --------------------------------------------------------------------------------
Goldie November
- --------------------------------------------------------------------------------
Grayson November
- --------------------------------------------------------------------------------
Haba September, October
- --------------------------------------------------------------------------------
Haque September
- --------------------------------------------------------------------------------
Jer September
- --------------------------------------------------------------------------------
Keany December
- --------------------------------------------------------------------------------
Maurer January
- --------------------------------------------------------------------------------
Mikhaylov November
- --------------------------------------------------------------------------------
Palmer November
- --------------------------------------------------------------------------------
Possible Worlds November
- --------------------------------------------------------------------------------
Rattner November
- --------------------------------------------------------------------------------
Smith August, November
- --------------------------------------------------------------------------------
Steffens August
- --------------------------------------------------------------------------------
Tamburro January
- --------------------------------------------------------------------------------
Tunnas September
- --------------------------------------------------------------------------------
Westlund January
- --------------------------------------------------------------------------------
* These rolloff dates have been determined by evaluating each individual's
responsibilities, assigned tasks and related delivery dates. While every
effort has been made to ensure that these dates remain valid, unanticipated
events may require us to modify them.
We will ensure that these rolloffs will not put the project at risk; Both
Viant and BlueTape are committed to a successful project outcome.
<PAGE>
Exhibit B: Form of Work Order
VIANT
VIANT
89 South Street
Boston, MA 02111
http://www.VIANT.com
Work Order ISLO-31030
- --------------------------------------------------------------------------------
This Work Order is incorporated into and governed by the Master Services
Agreement number MSANumber dated June 21st, 1998 between VIANT, 89 South Street,
Boston, MA 02111 ("VIANT") and Bluetape ("Customer").
1. Consulting Services Description.
Viant will lead the implementation of a series of five releases of both
business operations and website functionality, (variously: "Sputnik",
"Earlybird", "Mercury", "Gemini", "Apollo") as part of Bluetape's market
pilot test. For each of these releases, Viant will act as "Lead
Consultant", application development provider, creative development
provider, offer business operations supplementation, and work closely with
Bluetape executive management to ensure a successful project. Full details
of these releases and Viant's specific deliverables can be found in the
accompanying Viant/Bluetape Schedule of Deliverables and Payment Details
document dated November 5th, 1998.
2. Location where service are rendered.
Primarily in Viant's New York Office
3. Principal Contacts.
The principal contact for Viant for this Work Order is Michael Keany. The
principal contact for Customer for this Work Order is Morris H.
Wheeler.
Page 1 of 16
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
4. Schedule.
This Work Order will expire 01/31/99.
Charges for the Services.
- --------------------------------------------------------------------------------
Consulting
Category Start Date End Date Duration Rate Total Cost
- --------------------------------------------------------------------------------
Category 6/21/98 01/11/99 Duration NA [*]
- --------------------------------------------------------------------------------
Payment for Deliverables shall be made upon final acceptance of such
Deliverables pursuant to the terms of the Schedule of Deliverables and Payment
Details attached hereto as Exhibit A.
Invoices will be dated 30 days in advance of the above dates and are payable
on a net 30 day basis. [*] in advertising on the Customer's site equal to
such value based on the Customer's standard advertising rates. The [*] in
advertising shall be allocated over three years in percentages per year to be
determined by VIANT. All other terms related to this provision for
advertising shall be agreed to by the mutual consent of the parties.
[*] cash royalty payments based on total net revenues by the Customer from all
sources for the Customers fiscal years ending 12/31/99, 12/31/2000, 12/31/2001.
The first payment shall be made 60 days after the end of the first 9 months and
60 days after the end of each quarter thereafter, in the aforementioned fiscal
years. Customer's accounting records are to be audited by an independent CPA no
more than once per annum, and, Viant reserves the right to inspect the
customer's accounting records upon giving reasonable notice to customer no more
than once per annum. Total royalty payments shall not exceed [*]
Additional Items:
Customer to provide active, ongoing references in the form of
introductions and qualifications with existing and prospective
clients
There will be an issuance of a joint press release announcing this
partnership, (when appropriate as agreed by both parties), and
future mentions of our joint partnership in press releases and press
reports
Customer commits to Viant that it shall be the "preferred partner" in its
future OEM program for implementing the "OEM services" for Bluetape
customers. Viant agrees to provide Customer with an additional 7.5%
of Viant revenues generated directly from the implementation of the
"OEM services" that were referred to Viant by Customer
Customer to provide free subscriptions to all Bluetape channels rolled out
within 1 year after final acceptance of the final Deliverable to
Viant for the purposes of referring customers and demonstrating
Viant's capabilities. These may take the form of "Hotlinks" to
Customer's sites from the Viant homepage, and/or be bounded by time,
passwords, or other appropriate controls
* Certain information in this Exhibit has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE>
Out of Pocket Expenses:
To be paid within 30 days of invoicing
Not to exceed 10% of total contract price without written permission from client
To be itemized and described in the relevant invoice
<PAGE>
Exhibit 10.4
CONFIDENTIAL TREATMENT REQUESTED
Execution Copy
LICENSE AGREEMENT
<TABLE>
<S> <C>
License This License Agreement is dated as of February 15, 1999. Subject
to the remaining terms hereof, BlueTape LLC ("BlueTape") hereby
grants Viant Corporation ("Viant") an exclusive, worldwide right
and license (the "License") to reproduce, display, adapt, use, and,
as further described below, sublicense such rights in the software
components of the "Custom Deliverables" as defined in the Master
Services Agreement by and between Viant, Inc. and Bluetape, LLC
(the "Licensed Materials") dated as of June 21, 1998.
Master Services BlueTape and Viant are parties to a Master Services Agreement
Agreement dated as of June 21, 1998. Such Master Services Agreement, as
modified solely to the extent required to reflect the
terms of this License, will be included in an Amended
and Restated Master Services Agreement (the
"Agreement"). In the event that such Amended and
Restated Master Services is not in fact executed, this
License shall amend the Master Services Agreement
(including but not limited to by deleting the second to
last sentence of Section 4(a) thereof) and this License,
together with the Master Services Agreement shall
together constitute the parties' full, complete and
exclusive agreement.
Term The term of the License (the "Term") will be from the
date hereof until [*] The License will terminate at the
end of the Term. Sublicenses granted during the Term
will continue after the Term.
Exclusivity [*]
Right to Sublicense [*]
</TABLE>
* Certain information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to the omitted portions.
1
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
<TABLE>
<S> <C>
[*]
Viant may not sublicense the Licensed Materials or
Derivatives (as defined herein) to clients or
prospective clients that BlueTape brings to Viant for
integration and consulting services. BlueTape shall
have the exclusive right to license the Licensed
Materials to those clients.
As used herein, the term "Derivative" shall be defined as in Section
101 of the U.S. Copyright Act. Viant may not productize the
Licensed Materials or Derivatives thereof.
Terms of Sublicenses All sublicenses will be substantially in the form of a Form of
Sublicense; such form shall be subject to the approval of BlueTape;
such approval not to be unreasonably withheld or delayed. The
Form of Sublicense will stipulate, in addition to standard
conditions, that sublicensees may use the Licensed Materials only
for their own internal business purposes and may not sublicense,
decompile, reverse engineer, modify, adapt or disassemble the
Licensed Materials or create Derivatives thereof. BlueTape
acknowledges that the term of Viant's sublicenses may extend
beyond the termination hereof.
Intellectual Property Subject to the license granted herein, all intellectual
Rights property and other ownership rights in the Custom Deliverables are
retained by BlueTape as per the Master Services Agreement.
Compensation 1. Viant will pay BlueTape [*] in cash upon execution of
this License Agreement [*]
2. Viant will grant to BlueTape the license in
Developments as described below.
Developments Viant will grant BlueTape a nonexclusive, perpetual,
nonterminable and fully paid-up license, with rights to
sublicense, in all corrections and "bug fixes" to the
Licensed Materials controlled by Viant at any time
during the Term, and all
</TABLE>
* Certain information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to the omitted portions.
2
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED
<TABLE>
<S> <C>
modifications to the Licensed Materials controlled by
Viant at any time during the Term, which modifications
enable the Licensed Materials to perform substantially
the same functions such Licensed Materials previously
performed but in a corrected or more efficient manner
(collectively, "Developments"), in each case subject to
Viant's right to do so in its contractual relations with
its clients. In negotiating with clients and potential
clients, Viant shall use commercially reasonable efforts
to obtain the rights necessary to grant to BlueTape the
license described above.
Termination Right BlueTape shall have the right to terminate the
License prior to the expiration of the Term if Viant
materially breaches or defaults on the Agreement, or
upon any bankruptcy or cessation of business of Viant.
Indemnity Viant shall indemnify BlueTape against any claims or
damages BlueTape suffers arising out of Viant's
exploitation of the License; provided that Viant is
given prompt notice of any claim and is given the right
to control the defense of the claim.
Non-Competition Except with respect to the licensing of the Licensed
Materials permitted hereunder [*] If client declines
such option, Viant shall have the right to provide
services to such client, subject to the other
provisions of this agreement. BlueTape acknowledges
and agrees that nothing herein shall prevent or
restrict Viant from providing services to entities
engaging in the BlueTape Business without
sublicensing the Licensed Materials or Derivatives.
Preferred Partnering Nothing in this licensing arrangement changes the
Arrangement Preferred Partner Arrangement set forth in Exhibit B
to the Master Services Agreement.
General This License Agreement and the Master Services Agreement (as
amended by this License Agreement if no other amendment is
executed) comprise the full, complete and exclusive agreement of
the parties relating to the subject matter hereof.
</TABLE>
* Certain information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to the omitted portions.
3
<PAGE>
AGREED AND ACCEPTED BY:
VIANT CORPORATION BLUETAPE, LLC
By: /s/illegible By:/s/illegible
---------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
4
<PAGE>
[svip LOGO]
Exhibit 10.6
March 31, 1998
Rick Chavez
Silicon Valley Internet Partners
Austin, TX
RE: RELOCATION PACKAGE
Dear Rick:
Subject to your agreement to relocate to the Boston area, Silicon Valley
Internet Partners (the "Company") agrees to provide you with the following
relocation package:
RELOCATION BONUS
- ----------------
The Company will provide you with a one time Relocation Bonus in the amount of
$35,000.00.
RELOCATION EXPENSES
- -------------------
You will be reimbursed for all reasonable expenses associated with the
relocation of you and your family to the Boston area in accordance with the
Company's expense reimbursement policy.
HOUSING LOAN
- ------------
To assist you in the purchase of a home in the Boston area, the Company will
extend to you a loan in the principal amount of $50,000.00. Interest on the loan
will accrue annually at the Prime Rate (as quoted in the Wall Street Journal on
the loan execution date), and shall be due and payable by you within thirty (30)
days following each anniversary of the loan. For the first four (4) years of the
loan, you will only be responsible for payment of interest due on the loan at
the rate set forth above. Upon commencement of the fifth (5th) year of the loan,
you will commence repayment of principal and interest on the loan in accordance
with a monthly repayment schedule in which the principal and interest will be
repaid and amortized over a two (2) year period. If any of the following events
occur while the loan remains outstanding, the loan will become immediately due
and payable: (i) you cease to be employed by the Company for any reason; (ii)
you fail to perform any of your obligations under any of the loan documents;
(iii) you file for bankruptcy or otherwise become insolvent; or (iv) upon the
occurrence of the sixth (6th) anniversary of the loan agreement. 30,000 shares
of stock and stock options in the Company held by you or granted to you will
serve as collateral for the loan until full repayment to the company has been
made by you of the loan principal and accrued interest. The terms of this loan
will be set forth in a loan agreement, which shall be executed by you, your
spouse and the Company. You and your
<PAGE>
spouse shall also be required to execute and acknowledge, as applicable, for the
benefit of the Company, the following additional documents as collateral for the
loan: (i) a promissory note; (ii) a pledge agreement pledging your interest in
30,000 shares of stock and stock options in the Company held by you or granted
to you as referred to above; and (iii) an employee certificate certifying that
the proceeds of the loan will be used to purchase a new principal residence in
the Boston area, due to your employment relocation to Boston, Massachusetts.
Very truly yours,
/s/ Michael Tubridy
-------------------------------
Michael Tubridy
Chief Financial Officer
Silicon Valley Internet Partners
/s/ Richard Chavez 31 Mar 98
- ----------------------------------------
Agreed and Accepted Date
<PAGE>
[LOGO]
March 31, 1998
Rick Chavez
Silicon Valley Internet Partners
Austin, TX
RE: EMPLOYEE LOAN
Dear Rick:
Subject to your agreement to relocate to the Boston area, Silicon Valley
Internet Partners (the "Company") agrees to provide you with the following
employee loan:
EMPLOYEE LOAN
In connection with your relocation, the Company will extend to you a loan in
the principal amount of $40,000.00. Interest on the loan will accrue annually
at the Prime Rate (as quoted in the Wall Street Journal on the loan execution
date), and shall be due and payable by you within thirty (30) days following
each anniversary of the loan. Commencing on the first (1st) anniversary of
the loan and continuing on each anniversary of the loan thereafter until and
including the fourth (4th) anniversary of the loan, the Company will forgive
twenty-five percent (25%) or $10,000 of the original principal amount of the
loan, provided you remain an employee of the Company. If any of the following
events occur while the loan remains outstanding, the remaining principal
balance of the loan and accrued interest will become immediately due and
payable: (i) you cease to be employed by the Company for any reason; (ii) you
fail to perform any of your obligations under any of the loan documents; or
(iii) you file for bankruptcy or otherwise become insolvent. 30,000 shares of
stock and stock options in the Company held by you or granted to you will
serve as collateral ("stock collateral") for the loan. The terms of this
loan will be set forth in a loan agreement, which shall be executed by you,
your spouse and the Company. As long as you abide by the terms as set forth
in the loan agreement and none of the events have occurred in items (i)
through (iv) above, the stock collateral will be amortized to zero over a
four year period. 1/48 of the 30,000 shares will be amortized down each month
until no collateral exists after the 48th month. You and your spouse shall
also be required to execute and acknowledge, as applicable, for the benefit
of the Company, the following additional documents as collateral for the
loan: (i) a promissory note, and (ii) a pledge agreement pledging your
interest in any shares of stock and stock options in the Company held by you
or granted to you.
<PAGE>
This Employee Loan and collateral referred to in this letter is separate from
the Relocation Bonus and related Housing Loan and collateral granted to the
employee as indicated in the Relocation Package memo dated March 31, 1998.
Very truly yours,
/s/ Michael Turbridy
--------------------------------
Michael Tubridy
Chief Financial Officer
Silicon Valley Internet Partners
/s/ Richard Chavez 31 Mar 98
- ----------------------------------
Agreed and Accepted Date
<PAGE>
SUBLEASE
THIS SUBLEASE (this "Sublease") is made and entered into this 1st day of
March, 1999 by and between WILLIAMS WORLDWIDE, Inc., A California corporation
("Sublessor"), and Viant Corporation, a CALIFORNIA corporation ("Sublessee").
RECITALS
A. Sublessor entered into that certain Lease dated September 15, 1997
(the "Master Lease"), with Lowe Properties I, L.L.C., a Delaware limited
liability company ("Master Lessor"), for the lease of approximately 30,634
square feet (the "Master Premises") in that certain building located at 3130
Wilshire Boulevard, Santa Monica, California (the "Building"). A copy of the
Master Lease is attached hereto as Exhibit "A".
B. Sublessor desires to sublease to Sublessee a portion of the Master
Premises consisting of approximately 3,155 rentable square feet (the
"Sublease Premesis"), as depicted on Composite Drawing, Floor 3 (suite 320)
attached hereto pursuant to the provisions hereof.
NOW, THEREFORE, the parties agree as follows:
1. SUBLEASE. Subject and pursuant to the provisions hereof, Sublessor
subleases to Sublessee, and Sublessee subleases from Sublessor, the Sublease
Premises.
2. TERM. The term of this Sublease shall be month to month with a three
(3) month minimum term, commencing on March 1, 1999. During the three (3)
month period beginning June 1, 1999 and ending August 31, 1999, sublessee
shall have the right to terminate with thirty (30) days prior written notice.
Thereafter, the lease shall continue on a month-to-month basis with both
parties having the right to terminate by giving (30) days prior written
notice.
3. RENT
3.01 SUBLEASE RENT. During the term of this Sublease and commencing
as of the Commencement Date, Sublessee shall pay to Sublessor as rent for
the Sublease Premises the sum of Two Dollars ($2.00) per rentable square foot
as "Base Rent" (as defined in Article 3 of the Master Lease) (the "Sublease
Rent") pursuant to the terms and provisions of Article 3 of the Master Lease;
provided, however, that Sublessee's obligation to pay Sublease Rent shall
commence as of the Commencement Date and shall not abate in any manner
whatsoever (specifically, the terms and conditions of Section 3.2 of the
Master Lease shall not apply to Sublessee's obligations to pay Sublease Rent)
and Sublessee shall pay Sublessee's Share of the sums that would otherwise be
payable by Sublessor under the Master Lease if the provisions of Section 3.2
of the Master Lease were not applicable. Sublease Rent shall be paid to
Sublessor without demand, deduction, set-off or counterclaim, in advance on the
first day of each calendar month during the term of this Sublease, and in the
event of a partial rental month, rent shall be
1
<PAGE>
prorated on the basis of a thirty (30) day month. Sublessee shall pay to
Sublessor upon the execution hereof the first full monthly installment of
Sublease Rent.
4. SECURITY DEPOSIT. Sublessee shall deposit with Sublessor upon
Sublessee's execution hereof a sum in the amount of Six Thousand Three Hundred
Ten Dollars ($6,310.00) ("Deposit") as security for Sublessee's faithful
performance of Sublessee's obligations hereunder. If Sublessee fails to pay
rent or other charges due hereunder, or otherwise defaults with respect to
any provision of this Sublease, Sublessor may use, apply or retain all or any
portion of the Deposit for the payment of any rent or other charge in default
or for the payment of any other sum to which Sublessor may become obligated
by reason of Sublessee's default, or to compensate Sublessor for any loss or
damage which Sublessor may suffer thereby. If Sublessor so uses or applies
all or any portion of the Deposit, Sublessee shall within ten (10) days after
written demand therefor deposit cash with Sublessor in an amount sufficient
to restore the Deposit to its full amount and Sublessee's failure to do so
shall be a material breach of this Sublease. Sublessor shall not be required
to keep the Deposit separate from its general accounts. If Sublessee
performs all of Sublessee's obligations hereunder, the Deposit, or so much
thereof as has not theretofore been applied by Sublessor, shall be returned,
without payment of interest or other incurment for its use to Sublessee (or
at Sublessor's option, to the last assignee, if any, of Sublessee's interest
hereunder) at the expiration of the term hereof, and after Sublessee has
vacated the Sublease Premises. No trust relationship is created herein
between Sublessor and Sublessee with respect to the Deposit.
5. USE. Sublessee shall use and occupy the Sublease Premises only for
general office use and for no other purpose.
6. MASTER LEASE.
6.01 COMPLIANCE WITH MASTER LEASE.
(a) DEFINITIONS. Except as otherwise expressly provided herein,
during the Term and for all subsequent periods with respect to obligations
arising prior to the termination of the Sublease, Sublessee shall comply with
and perform, for the benefit of Master Lessor and Sublessor, all of the
terms, covenants, conditions and obligations of the "tenant under the Master
Lease allocable or applicable to the Sublease Premises. Such terms,
covenants, conditions and obligations shall, unless the context of the Master
Lease indicates otherwise, be applied with the terms "Sublessor" and
"Sublessee" substituted respectively for "Landlord" and "Tenant" and with the
term "Premises" under the Master Lease meaning the Sublease Premises demised
hereunder. Sublessee acknowledges that it has read the attached copy of the
Master Lease and agrees that this Sublease shall be subject and subordinate
to the provisions thereof. Sublessee shall not do, permit or suffer any act,
occurrence or omission which if done, permitted or suffered by Sublessor would
2
<PAGE>
be (with notice, the passage of time or both) in violation of or a default by
the tenant under the Master Lease, or could lead in any respect to the
termination of the Master Lease.
(b) CONSENTS. Sublessor shall use reasonable efforts to
obtain from the Master Lessor any approvals or consents reasonably requested
by Sublessee for any work, services, repairs or other performance to be
performed, from the Master Lessor under the Master Lease; provided, however,
in the case of legal proceedings requested by Sublessee to be instituted,
Sublessee shall indemnify, defend, protect and hold Sublessor harmless from
and against any legal fees and disbursements and all other costs, expenses,
liabilities, claims and obligations incurred by or asserted against Sublessor
in connection with any such proceeding.
6.02 INCORPORATION BY REFERENCE
(a) INCORPORATION. Subject to the provisions of this Section
6.02, the provisions of the Master Lease are hereby incorporated by this
reference; provided, however, that in the event that any provision of the
Master Lease shall explicitly conflict with the provisions of this Sublease,
the provisions of this Sublease shall prevail.
(b) DELETIONS. Notwithstanding any provision of this Sublease
to the contrary, Sublessee shall not be responsible, and does not expressly
assume the following provisions of the Master Lease: Items C, H, M, N, P, Q,
R, W, X, Y, BB, CC, DD, EE, FF, GG, HH. II of Section I, Sections II and
III, Sections 3.1, 3.2, 3.3, 4, 22.1.C, 29, and the Work Letter (Exhibit "A").
7. MODIFICATIONS TO CERTAIN INCORPORATED PROVISIONS.
Notwithstanding the incorporation of the provisions of the Master Lease
provided in Paragraph 6, certain provisions of the Master Lease as the same
apply to this Sublease are modified as follows:
7.01 NOTICES. Notices which are required to be sent to
"Tenant" or "Landlord" under the Master Lease (if such notices are
applicable to the Sublease Premises) shall be sent to the following addresses:
Notices To Sublessor: 3130 Wilshire Boulevard
Suite 400
Santa Monica, California 90403
Attention: Kathleen Williams
Notices To Sublessee: 3130 Wilshire Boulevard
Suite 320
Santa Monica, California 90403
Attention: Lance Trebesch
7.02 CONDITION OF SUBLEASE PREMISES.
(a) Sublessee has inspected the Sublease Premises and all
improvements located thereon, and has agreed to accept the Sublease Premises
in an "AS-IS" condition, in its condition existing as of the date of this
Sublease subject to all applicable municipal, county, state and federal laws,
ordinances and regulations governing and regulating the use and occupancy of
the Sublease Premises, and accepts the Sublease subject thereto and to all
matters disclosed thereby, without warranty or representation concerning the
same. Sublessor
3
<PAGE>
hereby acknowledges that the Sublease Premises are to be delivered to
Sublessee at the commencement of the term of the Sublease, unoccupied, and in
a broom-swept condition, with standard lighting reinstalled.
7.03 ASSIGNMENT, SUBLETTING AND ENCUMBRANCE. Sublessee shall not
voluntarily or involuntarily assign, sublet, mortgage or otherwise encumber
all or any portion of its interest in this Sublease or in the Sublease
Premises, without obtaining the prior written consent of Sublessor thereto,
which Sublessor may grant or withhold in Sublessor's sole and absolute
discretion. Any assignment, subletting, mortgage or other encumbrance
attempted by Sublessee to which Sublessor has not consented in writing shall
be null and void and of no effect.
7.04 ALTERATIONS
(a) ALTERATIONS AND IMPROVEMENTS BY SUBLESSEE. Sublessee shall
not make any alterations, additions or improvements to the Sublease Premises
(collectively "Alterations") without obtaining the prior written consent of
Sublessor thereto, which Sublessor may grant or withhold, and to which
Sublessor may impose any conditions in Sublessor's sole discretion. All such
Alterations shall be constructed only after necessary permits, licenses and
approvals have been obtained from appropriate governmental agencies and all
improvements shall be constructed as to conform to all relevant codes,
regulations, and ordinances. All such Alterations shall be made at
Sublessee's sole cost and shall be diligently prosecuted to completion. Any
contractor or person making such Alterations shall first be approved in
writing by Sublessor. Upon the expiration or earlier termination of this
Sublease, Sublessor may elect to have Sublessee either (i) surrender with the
Sublease Premises any or all of such Alterations as Sublessor shall determine
(except personal property as provided in Subsection (b) below, in which case,
such Alterations shall become the property of Sublessor, or (ii) promptly
remove any or all of such Alterations designated by Sublessor to be removed,
in which case, Sublessee shall repair and restore the Sublease Premises to
its original condition as of the Commencement Date, reasonable wear and tear
excepted. Sublessee shall permit no mechanic's or other liens to be recorded
against the Sublease Premises. Should a lien be made or filed against the
Sublease Premises, Master Premises or real property on which the Sublease
Premises are situated, Sublessee at its sole cost, shall bond against or
discharge said lien within 10 days after Sublessor's or Master Lessor's
request to do so.
(b) REMOVAL OF PROPERTY. All articles of personal property,
and all business and trade fixtures, machinery and equipment, cabinet work,
furniture and movable partitions, if any, owned or installed by Sublessee at
its expense in the Sublease Premises shall be and remain the property of
Sublessee and may be removed by Sublessee at any time, provided that
Sublessee, at its expense, shall repair any damage to the Sublease Premises
caused by such removal or by the original installation. Sublessor may elect
to require Sublessee to remove all or any part of the aforementioned property
at the expiration or sooner termination of the Sublease, in which event such
removal shall be done at Sublessee's expense, and Sublessee shall at its own
expense repair any damage to the Sublease Premises caused by such removal
prior to the termination of this Sublease.
7.05 HOLDING OVER. If Sublessee holds over after the expiration
or earlier termination of this Sublease, with or without the express or
implied consent of Sublessor, then at the option of Sublessor, Sublessee
shall become and be only a month-to-month tenant at a rent equal to One
Hundred and Fifty percent (150%) of the Sublease Rent payable by Sublessee
4
<PAGE>
immediately prior to such expiration or termination, and otherwise upon the
terms, covenants and conditions herein specified. Notwithstanding any
provision to the contrary contained herein, (i) Sublessor expressly reserves
the right to require Sublessee to surrender possession of the Sublease
Premises upon the expiration of the Term or upon the earlier termination
hereof and the right to assert any remedy at law or in equity to evict
Sublessee and/or collect damages in connection with any such holding over,
and (ii) Sublessee shall indemnify, defend and hold Sublessor harmless from
and against any and all claims, demands, actions, losses, damages,
obligations, costs and expenses, including, without limitation, attorneys'
fees incurred or suffered by Sublessor by reason of Sublessee's failure to
surrender the Sublease Premises on the expiration or earlier termination of
this Sublease in accordance with the provisions of this Sublease.
7.06 PARKING. Sublessee and Sublessee's employees shall have the
right to lease up to Two (2) spaces ("Sublessee's Parking Spaces") in the
Building's Garage (as such term is defined in Item W of the Master Lease).
Sublessee shall pay Sublessor the sum of Eighty-Five Dollars ($85.00) per
space per month as the parking charge for the sublease of Sublessee's Parking
Spaces.
8. ENVIRONMENTAL MATTERS.
8.01 HAZARDOUS MATERIAL. As used herein, the term "Hazardous
Material" means any hazardous, toxic, explosive or radioactive substance,
material or waste which is or becomes regulated by any local governmental
authority, the State of California or the United States Government,
including, without limitation, any material or substance which is (i) defined
or listed as a "hazardous waste," "extremely hazardous waste," "restricted
hazardous waste," "hazardous substance," "hazardous material," "pollutant" or
"contaminant" under any applicable federal, state or local law or
administrative code promulgated thereunder, (ii) petroleum, (iii) asbestos,
(iv) flammable explosives, (v) radioactive materials or (vi) polychlorinated
biphenyls.
8.02 SUBLESSEE'S USE OF SUBLEASE PREMISES. Sublessee hereby agrees
that all operations or activities upon, or any use or occupancy of the
Sublease Premises, or any portion thereof, by Sublessee, its assignees,
sub-sublessees, and their respective agents, servants, employees,
representatives and contractors (collectively, herein "Sublessee
Affiliates"), throughout the term of this Sublease, shall be in all respects
in compliance with all federal, state and local laws then governing or in any
way relating to the generation, handling, manufacturing, treatment, storage,
use, transportation, release, spillage, leakage, dumping, discharge or
disposal of any Hazardous Material.
8.03 INDEMNIFICATION OF SUBLESSOR. Sublessee shall indemnify,
defend, protect and hold Sublessor and its partners, Shareholders, officers,
directors, employees, trustees, successors, assigns, agents, servants,
affiliates, representatives, and contractors (collectively, herein "Sublessor
Affiliates") harmless from any and all claims, actions, administrative
proceedings (including informal proceedings), judgments, damages, punitive
and consequential damages, penalties, fines, costs, liabilities, interest or
losses, including reasonable attorneys' fees and expenses, consultant fees,
and expert fees, together with all other costs and expenses of any kind of
nature that arise during or after the term of this Sublease directly or
indirectly from, attributable to or in connection with the presence,
suspected presence, release or suspected release of any Hazardous Material in
or into the air, soil, surface, surface water or groundwater at, on, about,
under or within the Sublease Premises or the Master Premises, or any portion
thereof, by Sublessee, Sublessee Affiliates, or any invitee of Sublessee.
5
<PAGE>
8.04 REMEDIAL WORK. In the event any investigation or monitoring of
site conditions or any clean-up, containment, restoration, removal or other
remedial work (collectively, the "Remedial Work") is required under any
applicable federal, state or local law, by any judicial order, or by any
governmental entity as the result of operations or activities upon, or any
use or occupancy of any portion of the Sublease Premises by Sublessee or
Sublessee Affiliates, Sublessee shall perform or cause to be performed (or at
Sublessor's election, permit Sublessor to perform or cause to be performed at
Sublessee's expense) the Remedial Work in compliance with such law or order.
All Remedial Work shall be conducted strictly in accordance with a written
remediation plan approved in advance in writing by both Sublessor and all
appropriate governmental agencies and shall be other wise satisfactory to
Sublessor and such agencies.
8.05 SURVIVABILITY. Each of the covenants and agreements of
Sublessee set forth in this Section 8 shall survive the expiration or earlier
termination of this Sublease.
9. INDEMNIFICATION; EXCULPATION
9.01 NON-LIABILITY OF SUBLESSOR. Sublessor shall not be liable to
Sublessee and Sublessee hereby waives and releases all claims against
Sublessor and Sublessor Affiliates (as defined in Section 8.03 above) for
injury or damage to any person or property occurring or incurred in
connection with or in any way relating to the Sublease Premises or the Master
Premises. Without limiting the foregoing, neither Sublessor nor any of the
Sublessor Affiliates shall be liable for and there shall be no abatement of
Rent for (i) any damage to Sublessee's property stored with or entrusted to
Sublessor or Sublessor Affiliates, (ii) loss of or damage to any property by
theft or any other wrongful or illegal act, or (iii) any injury or damage to
persons or property resulting from fire, explosion, falling plaster, steam,
gas electricity, water or rain which may leak from any part of the Sublease
Premises or the Master Premises or from the pipes, appliances, appurtenances
or plumbing works therein or from the roof, street or sub-surface or from any
other place or resulting from dampness or any other cause whatsoever or from
the acts or omissions of other sublessees, occupants or other visitors to the
Sublease Premises or the Master Premises or from any other cause whatsoever,
or (iv) any latent or other defect in the Sublease Premises or the Master
Premises.
9.02 INDEMNIFICATION OF SUBLESSOR. Sublessee shall indemnify,
defend, protect and hold Sublessor harmless from and against any and all
claims, suits, judgments, losses, costs, obligations, damages, expenses,
interest and liabilities, including, without limitation, actual attorneys'
fees and costs, incurred or asserted in connection with (j) injury or damage
to any person or property whatsoever arising out of or in connection with this
Sublease, the Sublease Premises or Sublessee's activities in or about the
Sublease Premises including, without limitation, when such injury or damage
has been caused in whole or in part by the act, negligence, fault or omission
of Sublessee, its agents, servants, contractors, employees, representatives,
licensees or invitees, or (ii) any breach or default by Sublessee of its
obligations under this Sublease. The provisions of this Section 9.02 shall
survive the expiration or earlier termination of this Sublease.
9.03 MASTER LESSOR DEFAULT; CONSENTS. Notwithstanding any provision
of this Sublease to the contrary, (a) Sublessor shall not be liable or
responsible in any way for any loss, damage, cost, expense, obligation or
liability suffered by Sublessee by reason or as the result of any breach,
default or failure to perform by the Master Lessor under the Master Lease and
(b) whenever the consent or approval of Sublessor and Master Lessor is required
for a
6
<PAGE>
particular act, event or transaction (i) any such consent or approval by
Sublessor shall be subject to the consent or approval of Master Lessor and
(ii) should Master Lessor refuse to grant such consent or approval, under all
circumstances, Sublessor shall be released from any obligation to grant its
consent or approval.
9.04 NON-RECOURSE LIABILITY. Sublessor shall in no event or at any
time be personally liable for the payment or performance of any obligation
required or permitted of the Sublessor under this Sublease or under any
document executed in connection herewith. In the event of any actual or
alleged failure, breach or default by Sublessor under this Sublease or any
such document, the sole recourse of Sublessee shall be against the interest
of Sublessor in the Master Premises.
10. MISCELLANEOUS
10.01 CONFIDENTIALITY. Sublessee agrees that (i) the terms and
provisions of this Sublease are confidential and constitute proprietary
information of Sublessor and (ii) Sublessee shall not disclose, and it shall
cause their respective partners, officers, directors, shareholders,
employees, brokers, attorneys to not disclose any term of provision of this
Lease to any person without first obtaining the prior written consent of
Sublessor.
10.02 COUNTERPARTS. This Sublease may be executed in one or more
counterparts by the parties hereto. All counterparts shall be construed
together and shall constitute one agreement.
10.03 SOLE AGREEMENT. This Sublease contains all of the
understandings of the parties and all representations made by either party to
the other are merged herein.
10.04 MODIFICATION. This Sublease may not be modified in any respect
except by a document in writing executed by both parties hereto or their
respective successors.
10.05 ATTORNEYS' FEES. If any party commences an action against the
other, the prevailing party shall be entitled to recover from the losing
party reasonable attorneys' fees and costs.
10.06 BINDING EFFECT. This Sublease shall be binding on and inure to
the benefit of the parties and their respective heirs, successors and assigns.
10.07 KITCHEN LUNCHROOM USE. An additional monthly fee of ONE
HUNDRED FIFTY Dollars ($150.00) for use of kitchen amenities and
refreshments. Fees shall be paid to Sublessor without demand, deduction,
set-off or counterclaim in advance on the first day of each calendar month
during the term of this sublease. In the event of a partial rental month,
fees shall be prorated on the basis of the thirty (30) day month. Sublessee
shall pay to Sublessor upon the execution hereof the first full month.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereunto set their hand on the date first
above written.
SUBLESSOR SUBLESSEE
WILLIAMS WORLDWIDE, INC. Viant Corporation
a California corporation a California corporation
By: By: /s/ M. Dwayne Nesmith
----------------------------- ---------------------------------
Name: Name: DWAYNE NESMITH
Its: Its: Vice-President
8
<PAGE>
FIRST AMENDMENT TO
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This First Amendment to Amended and Restated Loan and Security Agreement,
is entered into as of April 7, 1999, (the "Amendment"), by and between
Venture Banking Group, (f/k/a Venture Lending), a division of Cupertino
National Bank ("Bank") and Viant Corporation (f/k/a Silicon Valley Internet
Partners) ("Borrower"). Capitalized terms used herein without definition shall
have the same meanings as is given to them in the Agreement (defined below).
RECITALS
A. The Borrower and the Bank have entered into that certain Amended and
Restated Loan and Security Agreement dated as of March 25, 1998, (as amended
or modified from time to time, the "Agreement") pursuant to which the Bank
has agreed to extend and make available to the Borrower certain advances of
money.
B. The Revolving Facility Maturity Date having passed and Borrower has
informed Bank of a breach of Section 6.10, entitled Maximum Quarterly Losses
for the fiscal quarter ending December 31, 1998. Borrower desires that the
Bank amend the Agreement upon the terms and conditions more fully set forth
herein.
C. Subject to the representations and warranties of the Borrower herein
and upon the terms and conditions set forth in this Amendment, the Bank is
willing to amend the Agreement.
AGREEMENT
NOW, THEREFORE, In consideration of the foregoing Recitals and intending
to be legally bound, the parties hereto agree as follows:
SECTION 1. THE BORROWER'S REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants that:
(a) the execution, delivery, and performance of the Loan Documents
are within Borrower's powers, have been duly authorized, and are not in
conflict with nor constitute a breach of any provision contained in
Borrower's Amended and Restated Articles of Incorporation or Bylaws, nor will
they constitute an event of default under any material agreement to which
Borrower is a party or by which Borrower is bound. Borrower is not in default
under any agreement to which it is a party or by which it is bound, which
default could have a Material Adverse Effect; and
(b) immediately before and immediately after giving effect to this
Amendment, no event shall have occurred and be continuing which constitutes
an Event of Default that has not be disclosed to Bank.
SECTION 2. AMENDMENTS TO THE LOAN AND SECURITY AGREEMENT.
2.1 Section 1, entitled Definitions and Construction, is hereby
amended by deleting "Revolving Facility Maturity Date" and replacing it with
the following:
"Revolving Facility Maturity Date" means July 3, 1999.
2.2 Bank hereby waives Borrower's breach of Section 6.10,
entitled Maximum Quarterly Losses of the Agreement, for the fiscal quarter
ending December 31, 1998. Any further breach of this covenant is not waived.
1
<PAGE>
2.3 Section 6.9, entitled Debt-Net Worth Ratio, is hereby amended
to read as follows:
6.9 Debt-Net Worth Ratio. Borrower shall maintain, as of the last
day of each fiscal month, a ratio of Total Liabilities to Tangible Net Worth
of not more than 1.25 to 1.0.
2.4 Section 6.10, entitled Maximum Quarterly Losses, is hereby
amended to read as follows:
6.10 Maximum Quarterly Losses. Borrower may suffer a loss not to
exceed Two Million Five Hundred Thousand Dollars ($2,500,000) for the fiscal
quarters ending March 31, 1999 and June 30, 1999.
Except as waived hereby, the Agreement, as the same may have previously
been waived, shall remain unaltered and in full force and effect. This
Amendment shall not be a waiver of any existing default or breach of a
covenant unless specified herein.
Section 3. LIMITATION, The amendments and waivers set forth in this
Amendment shall be limited precisely as written and shall not be deemed (a)
to be a modification of any other term or condition of the Agreement or of
any other instrument or agreement referred to therein or to prejudice any
right or remedy which the Bank may now have or may have in the future under
or in connection with the Agreement or any instrument or agreement referred
to therein; or (b) to be a consent to any future amendment or waiver to any
instrument or agreement the execution and delivery of which is consented to
hereby, or to any waiver of any of the provisions thereof. Except as
expressly amended hereby, the Agreement shall continue in full force and
effect.
SECTION 4. EFFECTIVENESS. This Amendment shall become effective upon:
(1) The execution and delivery of a copy hereof by Borrower to the
Bank:
(2) The execution and delivery of a certificate of the Secretary
of Borrower with respect to incumbency and resolutions authorizing the
execution and delivery of this Amendment;
(3) Borrower shall pay to Bank an amendment fee in an amount equal
to Three Thousand One Hundred Twenty Five Dollars ($3,125) payable upon the
date hereof, plus all Bank Expenses incurred in connection with this
Amendment;
(4) Receipt by Bank of a completed Year 2000 Survey; and
(5) Bank shall have received, in form and substance satisfactory to
Bank, such other documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.
SECTION 5. RELEASE AND WAIVER. BORROWER HEREBY REPRESENTS AND WARRANTS TO
THE BANK THAT IT HAS NO KNOWLEDGE OF ANY FACTS THAT WOULD SUPPORT A CLAIM,
COUNTERCLAIM, DEFENSE OR RIGHT OF SET-OFF, AND HEREBY RELEASES BANK FROM ALL
LIABILITY ARISING UNDER OR WITH RESPECT TO AND WAIVES ANY AND ALL CLAIMS,
COUNTERCLAIMS, DEFENSES AND RIGHTS OF SET-OFF, AT LAW OR IN EQUITY, THAT
BORROWER MAY HAVE AGAINST BANK EXISTING AS OF THE DATE OF THIS AMENDMENT
ARISING UNDER OR RELATED TO THIS AMENDMENT, THE AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO THE LOANS CONTEMPLATED HEREBY OR THEREBY OR TO ANY ACT
OR OMISSION TO ACT BY THE BANK WITH RESPECT HERETO OR THERETO.
4
<PAGE>
SECTION 6. COUNTERPARTS. This Amendment may be signed in any number of
counterparts, and by different parties hereto in separate counterparts, with
the same effect as if the signatures to each such counterpart were upon a
single instrument. All counterparts shall be deemed an original of this
Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above.
BORROWER VIANT CORPORATION
By: [cad 157]ILLEGIBLE[cad 179]
-----------------------------------
Title [cad 157]ILLEGIBLE[cad 179]
-----------------------------------
BANK VENTURE BANKING GROUP, a division of
Cupertino National Bank
By: [cad 157]ILLEGIBLE[cad 179]
-----------------------------------
Title [cad 157]ILLEGIBLE[cad 179]
-----------------------------------
3
<PAGE>
Exhibit 10.33
<TABLE>
<CAPTION>
LICENCE AGREEMENT
----------------------------------------------------------
D D M M Y Y
---------------------------------------- ----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGREEMENT NR.: AGREEMENT DATE: 2 4 0 3 9 9
---------------------------------------- ----------------------------------------------------------
------------------------------------------------------------------ ---------------------------------------------------------
1a OPERATOR - REGISTERED ADDRESS 1b OPERATOR - LOCATION
------------------------------------------------------------------ ---------------------------------------------------------
REGUS (UK) LTD - LONDON TRAFALGAR SQUARE REGUS COVENT GARDEN
1 Northumberland Avenue BANK DETAILS: National Westminster Bank
Trafalgar Square West Byfleet Branch, PO Box 320
London WC2N 5BW 5 Station Approach, Surrey, KT14 6YJ - UK
Sort code: 60-23-40, Acct: 65707893
------------------------------------------------------------------ ---------------------------------------------------------
2a USER - REGISTERED ADDRESS 2b USER - INVOICING ADDRESS (IF DIFFERENT)
------------------------------------------------------------------ ---------------------------------------------------------
COMPANY NAME: Viant COMPANY NAME:
------------------------------------------------------------------ ---------------------------------------------------------
CONTACT/TITLE: Robbie Vann-Adibe CONTACT/TITLE:
------------------------------------------------------------------ ---------------------------------------------------------
ADDRESS: 650 Townsend Avenue, third floor ADDRESS:
------------------------------------------------------------------ ---------------------------------------------------------
San Francisco
------------------------------------------------------------------ ---------------------------------------------------------
POST CODE: CA 94103 CITY: POST CODE: CITY:
------------------------------------------------------------------ ---------------------------------------------------------
STATE: COUNTRY: USA STATE: COUNTRY:
------------------------------------------------------------------ ---------------------------------------------------------
TELEPHONE: 001 415 659 3200 TELEPHONE:
------------------------------------------------------------------ ---------------------------------------------------------
FACSIMILE: 001 415 659 3201 VAT
------------------------------------------------------------------ ---------------------------------------------------------
3 FOR COMPANY USE ONLY COMMENTS:
----------------------------------------------------------------- ---------------------------------------------------------
User's Suite Room No.(s) 29 Viant may give two months' notice of termination during
the initial term detailed in the agreement.
----------------------------------------------------------------- ---------------------------------------------------------
or such other room within the accommodation as allocated by At the end of the initial term, Viant will pay list price
less ten per cent and may give two months' notice.
---------------------------------------------------------
the Operator in substitution from time to time. At the end of the initial term, Viant may opt to pay list
price and then only be liable to give one month's notice.
----------------------------------------------------------------- ---------------------------------------------------------
Deposit Receipt L7650.00 If there is a delay or problem in payment of an invoice,
Viant may have ten days to cure. This is to allow For
delays that may
-----------------------------------------------------------------
In respect of the agreed accommodation on behalf of occur when wiring money between continents and is
specifically not to be construed as lengthening Regus
payment terms by ten days.
---------------------------------------------------------
Regus UK Ltd. IT conectivity & services are the subject of separate
negotiation
----------------------------------------------------------------- ---------------------------------------------------------
Standard Facility Fee L3825.00 per calendar month
----------------------------------------------------------------- ---------------------------------------------------------
VAT L669.38 D D M M Y Y
----------------------------------------------------------------- ---------------------------------------------------------
Term Commencement Date 1 2 0 4 9 9
----------------------------------------------------------------- ---------------------------------------------------------
D D M M Y Y
----------------------------------------------------------------- ---------------------------------------------------------
Termination Date 1 1 0 8 9 9
----------------------------------------------------------------------------------------------------------------------------------
This LICENCE AGREEMENT (hereafter LA) is made between the User whose name
appears in 2 above (hereafter "User") and the Operator whose
registered name and address appear in 1a (hereafter "Operator"). The
Accommodation is the upper ground floor, 90 Longacre, Covent Garden, London,
WC2E 9RA (hereafter "Accommodation").
----------------------------------------------------------------------------------------------------------------------------------
The User hereby confirms that The User has read and understood the terms and
conditions overleaf and agrees to be bound thereby and The Operator agrees to
provide the services and facilities as mentioned overleaf.
----------------------------------------------------------------------------------------------------------------------------------
FOR AND ON BEHALF OF THE OPERATOR FOR AND ON BEHALF OF THE USER
----------------------------------------------------------------------------------------------------------------------------------
Name (printed): Name (printed): Robbie Vann Adibe
----------------------------------------------------------------------------------------------------------------------------------
Title: Title:
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------------
Date: Date:
----------------------------------------------------------------------------------------------------------------------------------
Signature: Signature:
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 10.34
<TABLE>
<CAPTION>
LICENCE AGREEMENT
---------------------------------------------------------
D D M M Y Y
---------------------------------------- ---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGREEMENT NR.: AGREEMENT DATE: 2 4 0 3 9 9
---------------------------------------- ---------------------------------------------------------
------------------------------------------------------------------ --------------------------------------------------------
1a OPERATOR - REGISTERED ADDRESS 1b OPERATOR - LOCATION
------------------------------------------------------------------ --------------------------------------------------------
REGUS (UK) LTD - LONDON TRAFALGAR SQUARE REGUS COVENT GARDEN
1 Northumberland Avenue
Trafalgar Square BANK DETAILS: National Westminster Bank
London WC2N 5BW West Byfleet Branch, PO Box 320
5 Station Approach, Surrey, KT14 6YJ - UK
Sort code: 60-23-40, Acct: 65707893
------------------------------------------------------------------ --------------------------------------------------------
2a USER - REGISTERED ADDRESS 2b USER - INVOICING ADDRESS (IF DIFFERENT)
------------------------------------------------------------------ --------------------------------------------------------
COMPANY NAME: Viant COMPANY NAME:
------------------------------------------------------------------ --------------------------------------------------------
CONTACT/TITLE: Robbie Vann-Adibe CONTACT/TITLE:
------------------------------------------------------------------ --------------------------------------------------------
ADDRESS: 650 Townsend Avenue, third floor ADDRESS:
------------------------------------------------------------------ --------------------------------------------------------
San Francisco
------------------------------------------------------------------ --------------------------------------------------------
POST CODE: CA 94103 CITY: POST CODE: CITY:
------------------------------------------------------------------ --------------------------------------------------------
STATE: COUNTRY: USA STATE: COUNTRY:
------------------------------------------------------------------ --------------------------------------------------------
TELEPHONE: 001 415 659 3200 TELEPHONE:
------------------------------------------------------------------ --------------------------------------------------------
FACSIMILE: 001 415 659 3201 VAT
------------------------------------------------------------------ --------------------------------------------------------
3 FOR COMPANY USE ONLY COMMENTS:
------------------------------------------------------------------ --------------------------------------------------------
User's Suite Room No.(s) 31
------------------------------------------------------------------ --------------------------------------------------------
or such other room within the accommodation as allocated by
--------------------------------------------------------
the Operator in substitution from time to time.
------------------------------------------------------------------ --------------------------------------------------------
Deposit Receipt L2550.00
------------------------------------------------------------------ --------------------------------------------------------
In respect of the agreed accommodation on behalf of
--------------------------------------------------------
Regus UK Ltd.
------------------------------------------------------------------ --------------------------------------------------------
Standard Facility Fee L1275.00 per calendar month
------------------------------------------------------------------ --------------------------------------------------------
VAT L223.13 D D M M Y Y
------------------------------------------------------------------ --------------------------------------------------------
Term Commencement Date 1 2 0 5 9 9
------------------------------------------------------------------ --------------------------------------------------------
D D M M Y Y
------------------------------------------------------------------ --------------------------------------------------------
Termination Date 1 1 0 8 9 9
---------------------------------------------------------------------------------------------------------------------------------
This LICENCE AGREEMENT (hereafter LA) is made between the User whose name
appears in 2 above (hereafter "User") and the Operator whose
registered name and address appear in 1a (hereafter "Operator"). The
Accommodation is the upper ground floor, 90 Longacre, Covent Garden, London,
WC2E 9RA (hereafter "Accommodation").
---------------------------------------------------------------------------------------------------------------------------------
The User hereby confirms that The User has read and understood the terms and
conditions overleaf and agrees to be bound thereby and The Operator agrees to
provide the services and facilities as mentioned overleaf.
---------------------------------------------------------------------------------------------------------------------------------
FOR AND ON BEHALF OF THE OPERATOR FOR AND ON BEHALF OF THE USER
---------------------------------------------------------------------------------------------------------------------------------
Name (printed): Name (printed): Robbie Vann Adibe
---------------------------------------------------------------------------------------------------------------------------------
Title: Title:
---------------------------------------------------------------------------------------------------------------------------------
Date: Date:
---------------------------------------------------------------------------------------------------------------------------------
Signature: Signature:
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 10.35
[LOGO] OmniOffices
This Revocable License ("Revocable License") made March 18, 1999, in Chicago, IL
(City and State) by and between OmniOffices, Inc. (Chicago-Loop) ("Omni") and
Viant Corporation ("Client") a (n) corporation (corporation, partnership,
individual) whose address is 89 South Street, Boston, MA 02111
Omni and Client agree that Omni hereby grants to Client for and in consideration
of the agreements and fees set forth herein, a Revocable License to use the
office(s) in common with other Omni clients, as designated from time to time by
Omni and a revocable license for the use of certain Office amenities and
services located in the Omni Center ("Center") having an address at 10 South
Riverside Plaza - 18th Floor, Chicago, IL 60606 in accordance with the terms
hereof.
This Revocable License shall be for office number(s) 1841 located in the Center
and includes Two (2); furniture packages (one exec desk and credenza). Client
shall use the office(s) for the term and subject to the terms of the Lease of
the Center ("Center Lease") conditions and covenants hereinafter set forth and
all encumbrances, restrictions, zoning laws and governmental or other
regulations or statutes affecting the Center. In the event Omni is unable to
provide client with use of the office(s) at the start date below , Client may
either extend the start date until the office becomes available or as its sole
remedy for such failure, Client may cancel and terminate this Revocable License
if the use of the office is not available to Client within fifteen (15) days
after written notice by Client to Omni, in which case all monies will be
refunded to Client
1. TERM OF REVOCABLE LICENSE. The term of this Revocable License shall be for a
period of six (6) mos., beginning on the 1st day of April, 1999, and ending on
the 30th day of September, 1999 ("Term") unless sooner revoked and terminated by
Omni as hereafter provided or as extended as hereafter provided.
Upon any termination of this Revocable License, whether by lapse of time,
revocation of license herein granted or otherwise, Client shall immediately
cease use of the licensed office(s) and any Omni services. If Client continues
to use the office or Omni's services, without the express written permission of
Omni, then Client shall pay Omni a sum equal to one hundred fifty percent (150%)
of the Basic Fee for each month or portion thereof the Client fails to cease use
of the office(s) or services. Furthermore, Client shall continue to pay for any
services billed under the Additional Fee. In no way shall Omni's exercise of
this clause be interpreted as a grant of permission to Client to continue use of
the office(s) or to continue its use of Omni's services.
Client's property shall only be removed Monday - Friday 8:30 A.M.-5:00 P.M.
except on public holidays ("Normal Business Hours"), unless Client receives the
prior written approval of Omni and Client agrees to pay any expenses incurred by
Omni as a result of Omni consenting to Client's removal of property before or
after Normal Business Hours.
2. USE OF OFFICE AND SERVICES. The Client is in the business of Internet design,
systems development & consulting services; Client or any of its officers,
directors, employees, partners, shareholders shall use the office, common areas,
amenities, services and facilities of Omni solely for general office use in the
conduct of Client's business and shall all abide by the Center Lease and
applicable governmental rules, regulations, statutes, and ordinances. If Client
shall offer to third parties any of the services that Omni provides to its
Clients, including, but not limited to those amenities or services described in
Schedules "A" and "B" attached hereto then Client will be in default and since
exact damages would be difficult to determine, Client shall pay the sum of
$300.00 per week as liquidated damages for each such breach so long as such
breach shall continue.
3. BASIC SERVICES FEE. Client agrees to pay $1,350.00 (the "Basic Fee") per
month before the first day of each calendar month during the Term and all
extensions or renewals. Client shall pay the first month's Basic Fee
simultaneously with execution of this Revocable License. The Basic Fee entities
the Client to use of the above licensed office twenty-four (24) hours a day and
seven (7) days a week and to services listed in Schedule "A". Those services
listed in Schedule "A" which are not automated will only be provided during
Normal Business Hours. At an additional cost to Client and upon written request,
those services that are not automated, may be provided outside Omni's Normal
Business Hours.
4. ESCALATION. Omni shall have the right to increase Client's Basic Fee once
during a twelve-month period because of an increase in direct costs that Omni
incurs during the term. The term "direct costs" as used herein shall refer to
any and all expenses that Omni incurs as a result of operating its Center. Such
increase to Client shall be effective on the first day of the month following
such written notice, of such increase from Omni. Escalation as provided in
Section 4 of the Revocable License shall be waived for the first term of the
Revocable License, April 1, 1999 to Sep. 30, 1999.
5. ADDITIONAL SERVICES. Omni agrees to provide Client with certain additional
services as described on Schedule "B". during Normal Business Hours. Such
services shall be provided on a first come first serve basis. At an additional
cost to Client and upon written request, Omni may provide certain additional
services outside Omni's Normal Business Hours. Charges for these additional
services shall be billed in addition
Initials [MJT] [ ]
<PAGE>
to the Basic Fee ("Additional Fee"). Client shall pay all such charges by the
fifth of the month. Omni shall perform schedule "B" services at a rate, which is
then prevailing throughout Omni. Rates are subject to adjustment, upon fifteen
(15) days written notice to Client. Any time the charges incurred by Client for
services under schedule "B" exceed the Client Services Retainer below, Omni
shall not be obligated to provide any further services under schedule "A" or "B"
of this Agreement until the total charges due to Omni are reduced below the
Client Services Retainer or the Client Services Retainer is increased to an
amount satisfactory to Omni.
6. LIABILITY FOR SERVICES. Client acknowledges and agrees that the services
provided by Omni or Omni's landlord are without any warranty of any kind or
character and are subject to human, electrical and mechanical error or other
failure, which may result in the delay, omission or discontinuance of services.
Client further acknowledges that Omni shall only be responsible for such claims
or damages, that are a direct result of Omni's failure to repair items within
Omni's control if Omni is given five (5) day written notice of such repairs.
Client's sole remedy, and Omni's sole obligation for any failure to render any
services, any error or omission, or any delay or interruption with respect
thereto, is limited to an adjustment to Client's billing in an amount equal to
the charge for such services for the period during which the failure, delay or
interruption continues. Services shall include Client's licensed office, use of
the Omni Center and Omni's services. Notwithstanding anything in this Revocable
License to the contrary, there shall be no such billing adjustment if Client is
in default hereunder. WITH THE SOLE EXCEPTION OF THE REMEDY SET FORTH IN THIS
PARAGRAPH, CLIENT EXPRESSLY AND SPECIFICALLY AGREES TO WAIVE, AND AGREES NOT TO
MAKE, ANY CLAIM FOR DAMAGES, DIRECT OR CONSEQUENTIAL, INCLUDING WITH RESPECT TO
LOST BUSINESS OR PROFITS, ARISING OUT OF ANY FAILURE TO FURNISH ANY SERVICE, ANY
ERROR OR OMISSION WITH RESPECT THERETO, OR ANY DELAY OR INTERRUPTION OF THE
SAME.
7. CLIENT SERVICES RETAINER. Upon execution of this Revocable License, Client
shall pay Omni a Client Services Retainer of $2,700.00 which is two times
Client's Basic Fee ("Retainer"). The Retainer will not be kept separate and
apart from other funds. If Client defaults under this Revocable License, Omni
may, cumulative to all other remedies found at law or in equity, apply or retain
all or any part of the Retainer to cure such default or to reimburse Omni for
any damages, losses, claims or expenses Omni may have incurred by reason of the
default. Any outstanding Retainer after Omni cures or is reimbursed for Client's
default may be retained by Omni as an administrative fee. If the Retainer does
not completely cure or reimburse Omni, Client upon demand shall pay to Omni all
amounts incurred by Omni by reason of default by Client. If at the end of the
Term, Client shall not be in default under this Revocable License, the Retainer,
or any balance thereof, shall be returned to the entity that executed this
Revocable License without interest, within thirty (30) days of Client vacating
the Office(s), provided Client has left the Office(s) in an acceptable condition
(following a personal inspection by Omni), surrendered all keys and paid all
fees including a cleaning fee. The Retainer is not to be considered nor used as
the last payment of the Basic Fee or Additional Fee under this Revocable License
or any extension thereof.
8. DEFAULT. Client shall be deemed to be in default under this Revocable License
if Client fails to comply with any of the terms and provisions of this Revocable
License within five (5) days after notice from Omni.
If Client is in default as described herein above, Omni shall have the
option to pursue any of the following remedies, without any additional notice or
demand and without limitation to Omni in the exercise of any other remedy at
law, in equity or below:
(a) Omni may terminate or revoke this Revocable License for use of the
Omni office, and any other services provided by Omni. Client will either
immediately surrender possession or Omni may enter and take possession of the
Office(s) and remove all persons and property therefrom, as well as disconnect
any telephone lines, modem lines, or voice mails installed for the benefit of
Client and cease acceptance of client's mail, without being liable for
prosecution or any claim of damages and without being deemed to have committed
any manner of trespass or breach of this Revocable License. Omni shall not be
liable for and is hereby released from all liability with respect to the removal
of such persons, personal property or damage thereto or theft thereof.
(b) Omni may elect concurrently or alternately to accelerate all of
Client's obligations hereunder including the amounts owed under the Basic Fee
and Additional Fee for the remainder of the Term.
(c) Omni may re-license the office(s) or any part thereof, for all or any
part of the remainder of said Term, to a party satisfactory to Omni, at a Basic
Fee, as Omni may, with reasonable diligence, be able to secure. Should Omni be
unable to re-license after reasonable effort to do so, or should the Basic Fee
be less than the Basic Fee, Client was obligated to pay under this Revocable
License or any renewal thereof, plus the expenses of finding a replacement,
Client shall pay the amount of such deficiency immediately in one lump sum to
Omni upon demand.
(d) Omni may maintain Client's right to use in which case this Revocable
License shall continue in effect whether or not Client has abandoned the
Office(s). In such event Omni shall be entitled to enforce all of its rights and
remedies under this Revocable License, including the right to recover the Basic
Fee as it becomes due hereunder. Unpaid installments of the Basic Fee,
Additional Fee and other monetary obligations of Client under the terms of this
Agreement shall bear interest from the date due at the lesser of (1) 18% or (ii)
the maximum rate then allowable by law. Client agrees to pay reasonable
attorneys fees and other disbursements incurred by Omni because of a default by
Client under this Agreement or in enforcing any of Client's obligations under
this Revocable License.
Omni shall not be in default unless Omni fails to perform a required
obligation within thirty (30) days after written notice by Client to Omni.
However, if the nature of Omni's obligation is such that more than thirty (30)
days are required for performance then Omni shall not be in default if it
commences performance within such 30-day period and thereafter diligently
prosecutes the same to completion.
In the event Omni terminates this Revocable License by reason of default
by Client; Omni shall use its reasonable efforts to mitigate any and all
damages.
9. INDEMNITY. As part of the consideration hereunder, Client and Omni expressly
indemnify and hold each other harmless from any and all claims, demands, losses,
expenses, injury to either person or property, and any other damage or loss,
including reasonable attorney's fees, which either Client or Omni may incur as a
result of a breach or arising from any negligent act of the other party to this
Revocable License except to the extent that such claims or damages are the
direct result of either parties' gross negligence or willful misconduct. In no
event shall Client or Omni be liable for the conduct of any other client,
occupant, licensee or invitee of the Center, and such conduct shall not give
Client or Omni the right to terminate this Revocable License. All personal
property of Client located from time to time at the Facility or any off-site
Initials [MJT] [ ]
<PAGE>
storage facility shall be at the sole risk of Client. Omni shall not be
considered a bailor for any such personal property. Omni shall not be liable for
and is hereby released from all liability with respect to damage thereto or
theft thereof to the full extent allowed by law. The parties hereby agree that
the foregoing provisions of this section have been made in contemplation that
all such risk of loss shall be borne by Client's insurers pursuant to the
Insurance section below.
10. INSURANCE. Client and Omni acknowledge that they shall each be responsible
for maintaining such insurance as each deems necessary to protect against risk
of injury or damage to person or property, including Client's property. Any fire
and extended risk casualty insurance that Client maintains shall include a
waiver of subrogation in favor of Omni and the owner of the Center and any fire
and extended risk insurance carried on the Center by Omni shall likewise contain
a waiver of subrogation in favor of Client. In the event the Facility is
damaged, destroyed or taken by eminent domain or acquired by private purchase in
lieu of eminent domain so as to render the Center fully untenantable and
unrestorable in Omni's judgment, then within forty-five (45) days thereafter by
written notice to the other party, either party shall be able to terminate this
Agreement, but otherwise it shall remain in full force and effect.
11. RESTRICTION ON EMPLOYMENT OF OMNI EMPLOYEES. Client agrees that during the
term of this Agreement including an renewals and within one (1) year of
termination of this Agreement, neither Client nor any of its principals,
employees, or affiliates, will hire directly or as an independent contractor,
any person who is at that time, or was during the term of this Agreement, an
employee of Omni. In the event of a breach of any obligation of Client contained
in this paragraph, Client shall be liable to Omni for, and shall pay Omni upon
demand, liquidated damages of a sum equal to forty percent (40%) of the annual
salary last payable by Omni to such employee or eight thousand dollars
($8,000.00) for each employee with respect to whom such breach shall occur, it
being mutually agreed that the actual damage that would be sustained by Omni as
the result of any such breach would be, from the nature of the case, extremely
difficult to fix and that the aforesaid liquidated damage amount is fair and
reasonable.
12. ASSIGNMENT AND TRANSFER. Client shall not assign or transfer this Revocable
License or any part without Omni's prior written consent. Omni shall consent to
an assignment or transfer of this Revocable License by Client to any current
parent, subsidiary or affiliate of Client, provided that Client supplies Omni
with all relevant information concerning the transferee or assignee thirty (30)
days prior to such transfer or assignment occurring. Upon a transfer or
assignment, Client shall not be relieved of any of its obligations under this
Revocable License. Omni shall be allowed to assign or transfer this Revocable
License to any parent, subsidiary or affiliate of Omni.
13. NOTICES. All notices required by this Agreement shall be in writing and
shall be deemed to be duly given when hand-delivered to the Omni Manager or
Client and properly addressed to the other party at the addresses given below
and mailed by certified mail return receipt requested in a postage-paid
envelope, or by an expedited mail service that provides proof of delivery. If
such mail is delivered or properly addressed and mailed, it shall be deemed
notice for all purposes, even if undelivered.
OmniOffices, Inc.
Suite 500 East
1117 Perimeter Center West
Atlanta, GA 30338
Attn: Legal Department
Client:(other than facility address)
Viant Corporation
89 South Street
Boston, MA 02111
14. NO LEASE OR ANY OTHER INTEREST IN REAL PROPERTY. This revocable license
merely grants Client the use of office(s), as well as other Omni facilities and
services for the specific purposes set forth herein. Client acknowledges and
agrees that no easement, usufruct, lease or other estate or interest in real or
personal property is granted or otherwise created by this Revocable License and
that this Revocable License simply creates a Revocable License in accordance
with the terms and conditions stated herein. This Revocable License shall not be
deemed to create or give rise to a landlord and tenant relationship or
partnership relationship between Omni and Client.
15. SUBORDINATION. The parties acknowledge and agree that this Revocable License
is subject and subordinate to the Center Lease (available for review upon
Client's request) governing the Center under which Omni is bound as a tenant and
any and all future leases of the Center or mortgages, deeds to secure debt or
other instruments encumbering the Center. Omni covenants and warrants that
Client will not be in violation of the Center Lease, if Client does not violate
the terms and conditions of this Revocable License. Client shall not conduct its
business nor occupy the Omni facility in such a manner as shall cause Omni to be
in default under the terms and conditions of the Center Lease. Client shall
indemnify and hold Omni harmless from and against any claim or liability under
the Center Lease arising from Client's breach of the Center Lease or this
Revocable License. This Revocable License shall terminate and be of no further
force or effect upon termination or expiration of the Center Lease.
16. WAIVER OF BREACH. Omni's failure to insist upon the strict performance of
any term or condition of this Revocable License or to exercise any right or
remedy available on a breach thereof, and no acceptance of full or partial
payment during the continuance of any such breach shall constitute a waiver of
any such breach or any such term or condition. All waivers must be in writing
and signed by the waiving party. Furthermore, no waiver of any breach shall
affect or alter any term or condition in this Agreement, and each term or
condition shall continue in full force and effect with respect to any other then
existing or subsequent breach thereof.
17. AMERICAN WITH DISABILITIES ACT. Client shall, at its own cost and expense,
comply with the Americans with Disabilities Act of 1990, as now or hereafter
amended, and the rules and regulations from time to time promulgated thereunder
(hereinafter collectively referred to as the "Act") as such Act relates to the
design and placement of Clients furniture and personal property and the needs of
Client's employees. Client shall have no responsibility for the compliance of
the Facility, the improvements therein or the Building with the Act. Client
hereby agrees to defend, indemnify and hold Omni harmless from and against any
and all claims, demands, actions, damages, fines, judgments, penalties, costs
(including attorney's and consultant's fees), liabilities and losses resulting
from Client's failure to comply with the Act.
18. MISCELLANEOUS.
A. The rules and regulations attached to this instrument are made an integral
part of this Revocable License, Client, its employees and agents will
perform and abide by the rules and regulations and any reasonable and
non-discriminatory amendments or additions to said rules, which Omni may
make, so long as such rules and regulations are non-discriminatorily
enforced.
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<PAGE>
B. In the event any dispute arises between Omni and Client concerning this
Revocable License and the rights and obligations hereunder Omni shall have
the option, but not the obligation, of submitting the matter to
arbitration on an expedited basis, pursuant to the procedure established
by the American Arbitration Association in the metropolitan area in which
the Facility is located. The decision of the arbitrator shall be binding
on the parties. The non-prevailing party as determined by the arbitrator
shall pay the prevailing parties attorney's fees and costs of the
arbitration. Furthermore, if a court decision prevents or Omni elects not
to submit this matter to arbitration, then the non-prevailing party as
determined by the court shall pay the prevailing parties reasonable
attorney's fees and costs.
C. This Revocable License embodies the entire agreement between the parties
relative to its subject matter, and shall not be modified, changed or
altered in any respect except in writing signed by the parties.
D. Time is of the essence as to the performance of all covenants, terms and
provisions of this Revocable License by Omni and Client. This Revocable
License shall be construed and enforced in accordance with the law of the
state where the Facility is located.
F. Omni and Client warrant and represent that the party executing this
Revocable License has (have) complete and full authority to execute this
Agreement on behalf of Omni or Client.
G. In the event that any part of this Revocable License shall be held to be
unenforceable or invalid, the remaining parts of this Revocable License
shall nevertheless continue to be valid and enforceable as though the
invalid portions had not been a part hereof.
H. This Revocable License may be executed in two or more counter parts, each
of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
I. Omni hereby agrees that during the Term of this Revocable License and upon
the execution of a relocation addendum, Client may relocate their licensed
office to any other Omni Facility selected by Client based on availability
and if Client has never occupied space with Omni at that location.
Furthermore, Omni will have the right to relocate a Client to another
office within the same Omni facility provided that there is no increase in
Client's Basic Fee and such other office is substantially similar in area
and configuration.
J. Client will use only telecommunications systems and services as provided
by Omni. Client will pay Omni a monthly equipment rental fee for the use
of each telephone instrument and voice line. In the event Omni
discontinues the offering of long distance service, Client will provide
its own long distance service through a locally accessed long distance
carrier.
K. In the event Client desires the use of a Training room and/or catering;
Client shall execute a Reservation Addendum. Upon execution said Addendum
shall become a part of this Agreement.
L. All parties executing this Revocable License as a partnership, or
co-signing individuals shall be jointly and severally liable for all
obligations of Client.
IN WITNESS WHEREOF, Omni and Client have executed this Agreement as of the
date first written above.
OMNIOFFICES, Inc.
By:
-----------------------------------
Title: Corporate Counsel
If a corporation:
Client: Viant Corporation
By: /s/ Michael J. Tubridj
-----------------------------------
Type individuals name in here
Michael J. Tubridj
Title: Vice President
-----------------------------------
Date: 5/17/99
-----------------------------------
If an individual or partnership:
Client:
By:
-----------------------------------
Type individuals name in here
Date:
-----------------------------------
By:
-----------------------------------
Type individuals name in here
Date:
-----------------------------------
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<PAGE>
SCHEDULE "A"
Furnished Private Office
Furnished Reception Room
Professional Receptionist to Announce Client's Visitors & Maintain Client's
Itinerary
Prestigious Business Address
Mail and Package Receipt
Office Manager
Reasonable Conference Room Usage (for 3 or more people) with VCR and
Audio-Visual Equipment and, CD panel subject to prior scheduling and use by
other Lessees
Corporate Identity on Lobby Directory*
Reasonable Courtesy Use of Other OmniOffices Centers
Utilities and Maintenance
Janitorial Service
Limited Storage Facilities
Upon Request:
Calculator and Transcription Equipment
SCHEDULE "B"
Personal Administrative Support Service
Reproduction Center
OMNINET
Office Assistant
Messenger Service
Telephone Equipment and Set Up
Local and Long Distance Telephone
Facsimile Transmission and Report
Additional Voice Mail Boxes (one voice mailbox is included with each phone line)
Communication Software and Hardware Changes
Enhanced Communication Services
Video Conferencing*
Internet Access*
OMNINET
Outgoing Mail & Express Delivery Service
Package Handling/Boxing and Wrapping
Training Facilities*
Training/Conference Room Amenities*
Specialized Equipment
Additional Furniture
Purchasing Services-Printing & Office Supplies
Binding Services
Travel, Entertainment & Catering Arrangements
Coffee Service
Translation Service
*Available at Most OmniOffices Centers
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<PAGE>
ADDENDUM A
This Addendum dated this March 18, 1999 shall be attached to and become a part
of that certain Revocable License for Office Space dated March 18, 1999 by and
between Chicago-Loop ("Omni"), and Viant Corporation (the "Client").
In consideration of the execution of this Revocable License by Client and
provided that Client is not in default hereunder and under any other Revocable
License with Omni, or any parent, subsidiary or affiliate corporation of Omni,
Omni agrees to:
1. WAIVER OF A PORTION OF THE CLIENT SERVICES RETAINER. Omni agrees to waive
$1,350.00 of the Client Services Retainer; however, at any time during the
term or any renewal of the Revocable License, that any payment due under
this Revocable License is not received by Omni in its office within five
(5) of the due date as outlined in section 3 and 6 of the Revocable
License, $1,350.00 will become immediately due without any additional
notice or demand.
2. REBATE. Provided that client is not in Default hereunder or under any
other agreement with Omni, or any parent, subsidiary or affiliate
corporation of Omni, Omni will rebate a total of $810.00 to Client
otherwise due hereunder in monthly installments of $135.00 on office
number 1841 for the first term of this Revocable License April 1. 1999 to
September 30, 1999. If Client should breach this Revocable License then
the rebated amount shall be repaid to Omni without any additional notice
or demand.
3. RIGHT OF 1ST REFUSAL. Omni hereby grants Client a right of first refusal
on office numbers 1843, 1844, 1845, 1848 & 1849 during this term April 1,
1999 to September 30, 1999 of this Revocable License. Such right of first
refusal shall be subject to and following all previous rights of first
refusal to be determined by the dates of other contracts and/or letters of
Revocable License. Offices that become available through requests of
current tenants to sub-license their current office space shall not be
considered available for purposes of rights of first refusal.
4. It is agreed that during the term of this Agreement, April 1, 1999 through
September 30, 1999, this Agreement may be cancelled by Lessee or Lessor on
or after June 1, 1999, with sixty (60) days prior written notice if Lessee
is occupying two or less offices. Notice must be given in accordance with
Section 10 of the Agreement on the first day of any month of the term.
This termination option may be exercised on an individual office basis.
5. Lessee shall have the option to renew this Agreement for Office Space 1841
at the current discounted rate for one (1) additional consecutive term
April 1, 1999 to September 30, 1999 (Six (6) Months) upon providing Lessor
with written notice (60) days (or 90 days if they have three or more
offices) prior to the Termination Date, and delivered in accordance with
the all terms and conditions contained in Paragraph 10 of this Agreement..
All other terms and conditions of the above referenced Revocable License remain
in effect.
IN WITNESS WHEREOF, Omni and Client have caused these presents to be duly
executed as of the date first written above.
ACCEPTED BY OMNI: ACCEPTED BY CLIENT:
OmniOffices, Inc. (Chicago-Loop) Viant Corporation
By: By: /s/ Michael J. Tubridj
- ----------------------------------- -----------------------------------
Date: Date: 5/17/99
- ----------------------------------- -----------------------------------
Initials [MJT] [ ]
<PAGE>
RULES AND REGULATIONS
(1) Client will conduct themselves in a businesslike manner; proper attire
will be worn at all times; the noise level will be kept to a level so as not to
interfere with or annoy other Clients.
(2) Client will not affix anything to the walls of the Premises without
the prior written consent of Omni.
(3) Client will not prop open any corridor doors, exit doors or doors
connecting corridors during or after business hours.
(4) Clients using public areas may only do so with the consent of Omni,
and those areas must be kept neat and attractive at all times.
(5) All corridors, halls, elevators and stairways shall not be obstructed
by Client or used for any purpose other than egress and ingress.
(6) No advertisement or identifying signs or other notices shall be
inscribed, painted or affixed on any part of the corridors, doors or public
areas.
(7) Client shall not, without Omni's consent, store or operate any
computer (except a desk top computer) or any other large business machines,
reproduction equipment, heating equipment, stove, radios, stereo equipment or
other mechanical amplification equipment, refrigerator or coffee equipment, or
conduct a mechanical business, do any cooking, or use or allow to be used on the
Premises oil, burning fluids, gasoline, kerosene for heating, warming or
lighting. No article deemed extra hazardous on account of fire or any explosives
shall be brought into said Premises or Center. No offensive gases odors or
liquids will be permitted.
(8) If Client requires any special installation or wiring for electrical
use, telephone equipment, small business machines, or otherwise, such wiring
shall be done at Client's expense by personnel designated by Omni. The
electrical current shall be used for ordinary lighting purposes only, unless
written permission to do otherwise shall first have been obtained from Omni at
an agreed cost to Client. Omni reserves the right to limit the number and type
of lines Client can install in Client's premises.
(9) Omni and its agents shall have the right to enter the Premises at all
reasonable hours for the purpose of making any repairs, alterations or additions
which it shall deem necessary for the preservation, safety or improvements of
said Premises, without in any way being deemed or held to have committed an
eviction of or trespass against Client.
(10) Client shall give Omni immediate access to the Premises to show said
Premises on Client or Omni giving notice of intent to vacate in accordance with
the provisions of the Revocable License. The Client shall in no way hinder Omni
from showing said Premises. In addition, Omni may enter the Premises to show
same at any time within sixty (60) days prior to the end of the term.
(11) Client may not conduct business in the hallways or corridors or any
other areas except in its designated offices without written consent of Omni.
(12) Client will bring no animals other than seeing-eye dogs in the
company of blind persons into the Premises or Center.
(13) Client shall not remove furniture, fixtures or decorative material
from offices without written consent of Omni.
(14) Omni reserves the right to make such other reasonable rules and
regulations as in its judgment may from time to time be needed for the safety,
care and cleanliness of the Center.
(15) Client shall not smoke or drink alcohol in any area of the Center and
Client shall not use the premises for lodging, sleeping, or for any immoral or
illegal purpose.
(16) Client shall not allow more than three (3) visitors in the reception
lobby of the Premises at any one time, except in the event of meetings or
conferences previously scheduled in a conference and/or training room at the
Center.
(17) Client shall cooperate and be courteous with all other occupants of
the Center and Omni's staff and personnel.
(18) Omni shall have no responsibility to Client for the violation or
non-performance by any other Client of Rules and Regulations but shall use
reasonable efforts to uniformly enforce all Rules and Regulations.
Initials [MJT] [ ]
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-1
of our reports dated March 16, 1999, relating to the financial statements and
Financial Statement Schedule of Viant Corporation, which appear in such
Registration Statement. We also consent to the references to us under the
headings "Experts" and "Selected Financial Data" in such Registration
Statement. However, it should be noted that PricewaterhouseCoopers LLP has
not prepared or certified such "Selected Financial Data."
PRICEWATERHOUSECOOPERS LLP
Boston, Massachusetts
May 17, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> JAN-01-1999 DEC-31-1999
<PERIOD-START> JAN-01-1998 JAN-02-1999
<PERIOD-END> JAN-01-1999 APR-02-1999
<CASH> 18,811 10,919
<SECURITIES> 0 0
<RECEIVABLES> 6,381 10,678
<ALLOWANCES> (909) (909)
<INVENTORY> 0 0
<CURRENT-ASSETS> 25,473 22,621
<PP&E> 5,367 6,095
<DEPRECIATION> (1,319) (1,702)
<TOTAL-ASSETS> 29,753 27,243
<CURRENT-LIABILITIES> 7,851 7,129
<BONDS> 2,237 4,465
0 0
32,136 32,181
<COMMON> 4 4
<OTHER-SE> 430 647
<TOTAL-LIABILITY-AND-EQUITY> 29,753 27,243
<SALES> 0 0
<TOTAL-REVENUES> 20,043 7,883
<CGS> 0 0
<TOTAL-COSTS> 11,250 4,511
<OTHER-EXPENSES> 15,118 5,424
<LOSS-PROVISION> 612 0
<INTEREST-EXPENSE> 371 157
<INCOME-PRETAX> (6,487) (2,041)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (6,487) (2,041)
<EPS-PRIMARY> (1.76) (0.53)
<EPS-DILUTED> (1.76) (0.53)
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