<PAGE>
As filed with the Securities and Exchange Commission on January 26, 2000
Registration No. 333- 92943
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------
AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
Under
the Securities Act of 1933
----------------
INTERWOVEN, INC.
(Exact name of Registrant as specified in its charter)
Delaware 7372 77-0523543
(State or other jurisdiction (Primary standard industrial (I.R.S. employer
of incorporation or classification code number) identification no.)
organization)
Interwoven, Inc.
1195 West Fremont Avenue, Suite 2000
Sunnyvale, California 94087
(408) 774-2000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
----------------
David M. Allen
Chief Financial Officer
Interwoven, Inc.
1195 West Fremont Avenue, Suite 2000
Sunnyvale, California 94087
(408) 774-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copies to:
Matthew P. Quilter, Esq. Mark A. Bertelsen, Esq.
Horace L. Nash, Esq. Jose F. Macias, Esq.
Katherine Tallman Schuda, Esq. Jon C. Avina, Esq.
William L. Hughes, Esq. Brooke D. Coleman, Esq.
FENWICK & WEST LLP WILSON SONSINI GOODRICH & ROSATI
Two Palo Alto Square Professional Corporation
Palo Alto, California 94306 650 Page Mill Road
(650) 494-0600 Palo Alto, California 94304
(650) 493-9300
----------------
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 to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, 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, 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(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 of 1933, 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,
please 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 of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
EXPLANATORY NOTE
The purpose of this Amendment No. 2 to the Registration Statement is solely
to file certain exhibits to the Registration Statement, as set forth below in
item 16(a) of Part II.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses to be paid by the
Registrant in connection with the sale of the shares of common stock being
registered hereby. None of these expenses will be paid by the selling
stockholders. All amounts are estimates except for the Securities and Exchange
Commission registration fee, the NASD filing fee and the Nasdaq National
Market filing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $ 122,048
NASD filing fee.................................................. 30,500
Nasdaq National Market filing fee................................ 17,500
Accounting fees and expenses..................................... 100,000
Legal fees and expenses.......................................... 250,000
Road show expenses............................................... 20,000
Printing and engraving expenses.................................. 250,000
Blue sky fees and expenses....................................... 10,000
Transfer agent, custodial and registrar fees and expenses........ 15,000
Miscellaneous.................................................... 184,952
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Total.......................................................... $1,000,000
==========
</TABLE>
Item 14. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the
"Securities Act").
As permitted by the Delaware General Corporation Law, the Registrant's
Certificate of Incorporation includes a provision that eliminates the personal
liability of its directors for monetary damages for breach of fiduciary duty
as a director, except for liability:
. for any breach of the director's duty of loyalty to the Registrant or
its stockholders,
. for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law,
. under section 174 of the Delaware General Corporation Law (regarding
unlawful dividends and stock purchases), or
. for any transaction from which the director derived an improper personal
benefit.
As permitted by the Delaware General Corporation Law, the Registrant's
Bylaws provide that:
. the Registrant is required to indemnify its directors and officers to
the fullest extent permitted by the Delaware General Corporation Law,
subject to certain very limited exceptions,
. the Registrant may indemnify its other employees and agents as set forth
in the Delaware General Corporation Law,
. the Registrant is required to advance expenses, as incurred, to its
directors and officers in connection with a legal proceeding to the
fullest extent permitted by the Delaware General Corporation Law,
subject to certain very limited exceptions, and
. the rights conferred in the Bylaws are not exclusive.
II-1
<PAGE>
The Registrant has entered into Indemnity Agreements with each of its
current directors and officers to give such directors and officers additional
contractual assurances regarding the scope of the indemnification set forth in
the Registrant's Amended and Restated Certificate of Incorporation and to
provide additional procedural protections. At present, there is no pending
litigation or proceeding involving a director, officer or employee of the
Registrant regarding which indemnification is sought, nor is the Registrant
aware of any threatened litigation that may result in claims for
indemnification.
Reference is also made to Section 7 of the draft Underwriting Agreement to
be entered into between the Registrant and the underwriters, which will
provide for the indemnification of officers, directors and controlling persons
of the Registrant against certain liabilities. The indemnification provisions
in the Registrant's Amended and Restated Certificate of Incorporation, Bylaws
and the Indemnity Agreements to be entered into between the Registrant and
each of its directors and officers may be sufficiently broad to permit
indemnification of the Registrant's directors and officers for liabilities
arising under the Securities Act.
The Registrant maintains directors' and officers' liability insurance.
See also the undertakings set out in response to Item 17.
Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:
<TABLE>
<CAPTION>
Exhibit Document Number
---------------- ------
<S> <C>
Form of Underwriting Agreement...................................... 1.01
Registrant's Third Amended and Restated Certificate of
Incorporation...................................................... 3.03
Registrant's Restated Bylaws, as amended............................ 3.04
Third Amended and Restated Investors' Rights Agreement dated June
10, 1999........................................................... 4.02
Form of Indemnity Agreement......................................... 10.01
</TABLE>
Item 15. Recent Sales of Unregistered Securities.
Since inception we have issued and sold the following securities:
1. Through October 8, 1999, we issued and sold an aggregate of 2,620,787
shares of our common stock to employees, consultants, directors, and other
service providers at prices ranging from $0.03 to $10.01 per share under
direct issuances or exercises of options granted under our 1996 Stock Option
Plan and 1998 Stock Option Plan. All shares purchased under our 1996 Stock
Option Plan and 1998 Stock Option Plan are subject to our right to repurchase
such shares at their original exercise price. The repurchase feature generally
expires for 25% of the shares after the first year of service and then expires
ratably over the next 36 months.
2. In March and June 1996, we issued and sold an aggregate of 1,800,000
shares of our Series A Preferred Stock to private investors for an aggregate
purchase price of approximately $360,000. In March 1998, we repurchased
680,000 shares of our Series A Preferred Stock at $0.93 per share. The
remaining 1,120,000 shares of Series A Preferred Stock converted into 746,664
shares of common stock in October 1999.
3. In August 1996, we issued a warrant to a certain bank in connection with
a loan agreement. The warrant was exercised in October 1999 for 6,552 shares
of common stock.
4. In January 1997, in connection with a bridge loan that converted into
Series B Preferred Stock, we issued warrants to private investors to purchase
93,298 shares of Series B Preferred Stock at an exercise price of $1.2862 per
share. These shares of Series B Preferred Stock converted into 65,519 shares
of common stock in October 1999.
5. In May and June 1997, we issued and sold an aggregate of 3,039,505
shares of our Series B Preferred Stock to private investors for an aggregate
purchase price of approximately $3,890,566. These shares of Series B Preferred
Stock converted into 2,134,548 shares of common stock in October 1999.
II-2
<PAGE>
6. In March 1998, we issued and sold an aggregate of 6,241,619 shares of
our Series C Preferred Stock to private investors for an aggregate purchase
price of approximately $6,375,181, and warrants to purchase 918,124 shares of
Series C Preferred Stock at an exercise price of $1.2862 per share. In
connection with the Series D Preferred Stock financing, all warrants to
purchase Series C Preferred Stock were exercised for an aggregate purchase
price of approximately $1,180,891. These shares of Series C Preferred Stock
converted into 4,773,161 shares of common stock in October 1999.
7. In October, November and December 1998, we issued and sold an aggregate
of 3,741,217 shares of our Series D Preferred Stock to private investors for
an aggregate purchase price of approximately $6,996,075. These shares of
Series D Preferred Stock converted into 2,494,142 shares of common stock in
October 1999.
8. In June 1999, we issued and sold an aggregate of 3,394,719 shares of our
Series E Preferred Stock to private investors for an aggregate purchase price
of approximately $19,214,109. These shares of Series E Preferred Stock
converted into 2,263,136 shares of common stock in October 1999.
9. In July 1999, we issued 88,339 shares of Series E Preferred Stock and
warrants to purchase 17,668 shares of Series E Preferred Stock to certain
stockholders of Lexington Software Associates, Inc. in exchange for their
shares of that company. These shares of Series E Preferred Stock converted
into 58,888 shares of common stock in October 1999. These warrants are
exercisable for 11,770 shares of common stock.
10. In July 1999, we issued a warrant to purchase 40,989 of shares of
Series E Preferred Stock to General Electric Company in connection with a
commercial transaction. This warrant is exercisable for 27,326 shares of
common stock.
All sales of common stock made pursuant to the exercise of stock options
were made in reliance on Rule 701 under the Securities Act or on Section 4(2)
of the Securities Act.
All sales of preferred stock and warrants to purchase preferred stock were
made in reliance on Section 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act. These sales were made without general
solicitation or advertising. Each purchaser was a sophisticated investor with
access to all relevant information necessary to evaluate the investment and
represented to the Registrant that the shares were being acquired for
investment. The conversion of the preferred stock into common stock in October
1999 was effected in reliance on the exemption provided under Section 3 (a)
(9) of the Securities Act.
Item 16. Exhibits and Financial Statement Schedules.
(a) The following exhibits are filed herewith:
<TABLE>
<CAPTION>
Number Exhibit Title
------ -------------
<C> <S>
1.01 Form of Underwriting Agreement.
2.01** Agreement and Plan of Merger, dated October 1, 1999, between
Interwoven, Inc., a California corporation, and the Registrant.
3.03*** Registrant's Third Amended and Restated Certificate of
Incorporation.
3.04** Registrant's Restated Bylaws, as amended.
4.01** Form of Certificate for Registrant's common stock.
4.02** Third Amended and Restated Investors' Rights Agreement, dated
June 10, 1999.
4.03** Form of Consent concerning the Third Amended and Restated
Investors' Rights Agreement dated June 10, 1999.
4.04 Form of Amendment to Third Amended and Restated Investors' Rights
Agreement dated June 10, 1999
5.01 Opinion of Fenwick & West LLP regarding legality of the
securities being registered.
10.01** Form of Indemnity Agreement between Registrant and each of its
directors and executive officers.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Number Exhibit Title
------ -------------
<C> <S>
10.02** 1996 Stock Option Plan and related agreements.
10.03** 1998 Stock Option Plan and related agreements.
10.04** 1999 Equity Incentive Plan and related agreements.
10.05** 1999 Employee Stock Purchase Plan and related agreements.
10.06** Regional Prototype Profit Sharing Plan and Trust/Account Standard
Plan Adoption Agreement AA #001.
10.07** Employment Agreement between Interwoven, Inc. and Martin W.
Brauns dated February 27, 1998.
10.08** Offer Letter to David M. Allen from Interwoven, Inc. dated
February 12, 1999.
10.09** Offer Letter to Michael A. Backlund from Interwoven, Inc. dated
May 1, 1998.
10.10** Offer Letter to John Chang from Interwoven, Inc. dated January
20, 1997.
10.11** Offer Letter to Jeffrey E. Engelmann from Interwoven, Inc. dated
December 11, 1998.
10.12** Offer Letter to Steven Farber from Interwoven, Inc. dated June
14, 1997.
10.13** Offer Letter to Jack S. Jia from Interwoven, Inc. dated January
3, 1997.
10.14** Offer Letter to Peng T. Ong from Interwoven, Inc. dated February
29, 1996.
10.15** Offer Letter to Jozef Ruck from Interwoven, Inc. dated February
18, 1999.
10.16** Confidential Separation Agreement and Release, between
Interwoven, Inc. and John Chang dated November 25, 1998.
10.17** Confidential Separation Agreement and Release, between
Interwoven, Inc. and Steven Farber dated February 12, 1998.
10.18** Secured Promissory Notes between Interwoven, Inc. and Jeffrey E.
Engelmann, dated as of April 19, 1999.
10.19** Secured Promissory Notes between Interwoven, Inc. and Jozef Ruck,
dated as of April 21, 1999.
10.20** Build-To-Suit Lease Agreement dated March 18, 1997 between
Sunnyvale Partners Limited Partnership and First Data Merchant
Services Corporation.
10.21** Sublease dated April 24, 1998 between First Data Merchant
Services Corporation and Interwoven, Inc.
10.22** Loan and Security Agreement, dated October 1997, as amended,
between Interwoven, Inc. and Silicon Valley Bank.
10.23** Agreement and Plan of Reorganization, dated June 30, 1999, by and
among Interwoven, Inc., Lexington Software Associates, Inc. and
certain stockholders of Lexington Software Associates, Inc.
10.24+** Standard Sales Agreement effective as of July 28, 1999 between
Registrant and General Electric Company.
10.25+** Preferred Stock Warrant to Purchase Shares of Series E Preferred
Stock of Registrant.
10.26+** Amended and Restated Loan and Security Agreement dated June 24,
1999, between Silicon Valley Bank and Registrant.
10.27** Intellectual Property Security Agreement dated June 24, 1999,
between Silicon Valley Bank and Registrant.
10.28** Amendment to Secured Promissory Note between Interwoven, Inc. and
Jeffrey E. Engelmann, dated as of October 5, 1999.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Number Exhibit Title
------ -------------
<C> <S>
10.29** Amendment to Secured Promissory Note between Interwoven, Inc. and
Jozef Ruck, dated as of October 5, 1999.
10.30*** Offer Letter to John Van Siclen from Interwoven, Inc. dated
December 17, 1999.
10.31*** Assignment of Lease between beyond.com and Interwoven, Inc.
21.01 Subsidiaries of the Registrant
23.01*** Consent of Fenwick & West LLP (included in Exhibit 5.01).
23.02*** Consent of PricewaterhouseCoopers LLP, independent accountants.
24.01*** Power of Attorney.
27.01*** Financial Data Schedule
</TABLE>
- ---------------------
** Incorporated by reference to the exhibit of the same number to the
Registration Statement on Form S-1 (file No. 333-83779) filed July 27,
1999, and all amendments thereto.
*** Previously filed.
+ Portions of this exhibit have been omitted pursuant to an order granting
confidential treatment
(b) The financial statement schedules are omitted because the information
called for is not required or is shown either in the financial statements or
the notes thereto.
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange 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, 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.
(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 that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment to Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Sunnyvale, State of
California, on this 26th day of January, 2000.
INTERWOVEN, INC.
/s/ David M. Allen
By: _________________________________
David M. Allen
Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act, this Amendment to
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
* President, Chief Executive January 26, 2000
______________________________________ Officer (principal
Martin W. Brauns executive officer) and a
director
/s/ David M. Allen Vice President and Chief January 26, 2000
______________________________________ Financial Officer
David M. Allen (principal financial
officer and principal
accounting officer)
Additional Directors:
Chairman of the Board January , 2000
______________________________________
Peng T. Ong
* Director January 26, 2000
______________________________________
Kathryn C. Gould
* Director January 26, 2000
______________________________________
Mark W. Saul
* Director January 26, 2000
______________________________________
Mark C. Thompson
* Director January 26, 2000
______________________________________
Ronald E.F. Codd
</TABLE>
/s/ David M. Allen
*By:_____________________________
David M. Allen,
Attorney-in-fact
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Exhibit Title
------ -------------
<C> <S>
1.01 Form of Underwriting Agreement.
4.04 Form of Amendment to Third Amended and Restated Investors' Rights
Agreement dated June 10, 1999.
5.01 Opinion of Fenwick & West LLP regarding legality of the securities
being registered.
21.01 Subsidiaries of the Registrant.
</TABLE>
<PAGE>
EXHIBIT 1.01
______________ Shares
INTERWOVEN, INC.
Common Stock, par value $0.001 per share
UNDERWRITING AGREEMENT
----------------------
January ___, 2000
Credit Suisse First Boston Corporation
BancBoston Robertson Stephens Inc.
Dain Rauscher Wessels,
A Division of Dain Rauscher Incorporated,
SoundView Technology Group, Inc.
Adams, Harkness & Hill, Inc.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Interwoven, Inc., a Delaware corporation ("Company"),
proposes to issue and sell ____________________ shares of its common stock
("Securities") and the stockholders listed in Schedule A hereto ("Selling
Stockholders") propose severally to sell an aggregate of ________ outstanding
shares of the Securities (such __________ shares of Securities being hereinafter
referred to as the "Firm Securities"). The Selling Stockholders also propose to
sell to the Underwriters, at the option of the Underwriters, an aggregate of not
more than _____________ additional outstanding shares of the Company's
Securities, as set forth below (the "Optional Securities"). The Firm Securities
and the Optional Securities are herein collectively called the "Offered
Securities". The Company and the Selling Stockholders hereby agree with the
several Underwriters named in Schedule B hereto ("Underwriters") as follows:
2. Representations and Warranties of the Company and the Selling
Stockholders. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-92943) relating to the
Offered Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (A) has been
declared effective under the Securities Act of 1933, as amended ("Act"), and is
not proposed to be amended or (B) is proposed to be amended by amendment or
post-effective amendment. If such registration statement ("initial registration
statement") has been declared effective, either (A) an additional registration
statement ("additional registration statement") relating to the Offered
Securities may have been filed with the Commission pursuant to Rule 462(b)
("Rule 462(b)") under the Act and, if so filed, has become effective upon filing
pursuant to such Rule and the Offered Securities all have been duly registered
under the Act pursuant to the initial registration statement and, if applicable,
the additional registration statement or (B) such an additional registration
statement is proposed to be filed with the Commission pursuant to Rule 462(b)
and will become effective upon filing pursuant to such Rule and upon such filing
the Offered Securities will all have been duly registered under the Act pursuant
to the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial registration
statement or if an additional registration statement has been filed and the
Company does not propose to amend it, and if any post-effective amendment to
either such registration statement has been filed with the Commission prior to
the execution and delivery of this
<PAGE>
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become effective
upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the
case of the additional registration statement, Rule 462(b). For purposes of this
Agreement, "Effective Time" with respect to the initial registration statement
or, if filed prior to the execution and delivery of this Agreement, the
additional registration statement means (A) if the Company has advised the
Representatives that it does not propose to amend such registration statement,
the date and time as of which such registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the execution and
delivery of this Agreement, was declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c), or (B) if the Company has
advised the Representatives that it proposes to file an amendment or post-
effective amendment to such registration statement, the date and time as of
which such registration statement, as amended by such amendment or post-
effective amendment, as the case may be, is declared effective by the
Commission. If an additional registration statement has not been filed prior to
the execution and delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "Effective Time" with respect to
such additional registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule 462(b).
"Effective Date" with respect to the initial registration statement or the
additional registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its Effective Time,
including all information contained in the additional registration statement (if
any) and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all information (if
any) deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is
hereinafter referred to as the "Initial Registration Statement". The additional
registration statement, as amended at its Effective Time, including the contents
of the initial registration statement incorporated by reference therein and
including all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule 430A(b), is
hereinafter referred to as the "Additional Registration Statement". The Initial
Registration Statement and the Additional Registration Statement are herein
referred to collectively as the "Registration Statements" and individually as a
"Registration Statement". The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter referred to as
the "Prospectus". No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and the rules and
regulations of the Commission ("Rules and Regulations") and did not include any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
(B) on the Effective Date of the Additional Registration Statement (if any),
each Registration Statement conformed, or will conform, in all respects to the
requirements of the Act and the Rules and Regulations and did not include, or
will not include, any untrue statement of a material fact and did not omit, or
will not omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (C) on the date of
this Agreement, the Initial Registration Statement and, if the Effective Time of
the Additional Registration Statement is prior to the execution and delivery of
this Agreement, the Additional Registration Statement each conforms, and at the
time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing
is required) at the Effective Date of the Additional Registration Statement in
which the Prospectus is included, each Registration Statement and the Prospectus
will conform, in all respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading. If the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement: on the Effective
Date of the Initial Registration Statement, the Initial Registration Statement
and the Prospectus will conform in all respects to the requirements of the Act
and the Rules and Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact required to
be stated therein or necessary to make the statements therein not misleading,
and no Additional Registration Statement has been or will be filed. The two
preceding sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus based upon written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only such
information is that described as such in Section 7(c) hereof.
-2-
<PAGE>
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not individually or in the aggregate have a material adverse
effect on the condition (financial or otherwise), business, properties or
results of operations of the Company and its subsidiaries taken as a whole
(hereinafter, a "Material Adverse Effect").
(iv) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority (corporate
and other) to own its properties and conduct its business as described in the
Prospectus; and each subsidiary of the Company is duly qualified to do business
as a foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not
individually or in the aggregate have a Material Adverse Effect; all of the
issued and outstanding capital stock of each subsidiary of the Company has been
duly authorized and validly issued and is fully paid and nonassessable; and the
capital stock of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects. The Company
has no significant subsidiaries (as such term is defined in Rule 1-02 of
Regulation S-X).
(v) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding shares
of capital stock of the Company are, and, when the Offered Securities have been
delivered and paid for in accordance with this Agreement on each Closing Date
(as defined below), such Offered Securities will have been, validly issued,
fully paid and nonassessable and will conform in all material respects to the
description thereof contained in the Prospectus; and the stockholders of the
Company have no preemptive rights with respect to the Securities.
(vi) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with this
offering.
(vii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such securities
in the securities registered pursuant to a registration statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Act, except for contracts, agreements or
understandings, the requirements of which have been validly satisfied or waived.
(viii) The Offered Securities have been approved for listing on
The Nasdaq Stock Market's National Market, subject to notice of issuance.
(ix) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in connection
with the issuance and sale of the Offered Securities by the Company, except such
as have been obtained and made under the Act and such as may be required under
state securities laws.
(x) The execution, delivery and performance of this Agreement,
and the issuance and sale of the Offered Securities will not result in a breach
or violation of any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any governmental agency or
body or any court, domestic or foreign, having jurisdiction over the Company or
any subsidiary of the Company or any of their properties, or any material
agreement or instrument to which the Company or any such subsidiary is a party
or by which the Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the charter or
by-laws of the Company or any such subsidiary (the "Organizational Documents"),
and the Company has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by this Agreement.
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(xi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xii) Except as disclosed in the Prospectus, the Company and
its subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and except
as disclosed in the Prospectus, the Company and its subsidiaries hold any leased
real or personal property under valid and enforceable leases with no exceptions
that would materially interfere with the use made or to be made thereof by them.
(xiii) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate have
a Material Adverse Effect.
(xiv) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that might
have a Material Adverse Effect.
(xv) The Company and its subsidiaries own, possess, license or
can acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential information
and other intellectual property, including applications licensed directly from
third parties (collectively, "intellectual property rights") necessary to
conduct the business now operated by them, or presently employed by them, and
have not received any notice of infringement of or conflict with asserted rights
of others with respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect. The intellectual property rights
of the Company referred to in the Prospectus do not, to the Company's knowledge,
infringe or conflict with any intellectual property right of any third party.
(xvi) Except as disclosed in the Prospectus, neither the
Company nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, "environmental
laws"), owns or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any claim
relating to any environmental laws, which violation, contamination, liability or
claim would individually or in the aggregate have a Material Adverse Effect; and
the Company is not aware of any pending investigation which might lead to such a
claim.
(xvii) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the Company, or any
of its subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect, or would materially and adversely
affect the ability of the Company to perform its obligations under this
Agreement, or which are otherwise material in the context of the sale of the
Offered Securities; and no such actions, suits or proceedings are threatened or,
to the Company's knowledge, contemplated.
(xviii) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of the
Company as of the dates shown and its results of operations and cash flows for
the periods shown, and such financial statements have been prepared in
conformity with the generally accepted accounting principles in the United
States applied on a consistent basis and the schedules included in each
Registration Statement present fairly the information required to be stated
therein; and the assumptions used in preparing the pro forma financial
statements included in each Registration Statement and the Prospectus provide a
reasonable basis for presenting the significant effects directly attributable to
the transactions or events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma columns therein
reflect the proper application of those adjustments to the corresponding
historical financial statement amounts.
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(xix) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole, and, except as disclosed in or contemplated by
the Prospectus, there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(xx) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(b) Each Selling Stockholder severally and not jointly represents and
warrants to, and agrees with, the several Underwriters and the Company that:
(i) Such Selling Stockholder has and on each Closing Date
hereinafter mentioned will have valid and unencumbered title to the Offered
Securities to be delivered by such Selling Stockholder on such Closing Date and
full right, power and authority to enter into this Agreement, the Power of
Attorney and the Custody Agreement and to sell, assign, transfer and deliver the
Offered Securities to be delivered by such Selling Stockholder on such Closing
Date hereunder; and upon the delivery of and payment for the Offered Securities
on each Closing Date hereunder the several Underwriters will acquire valid and
unencumbered title to the Offered Securities to be delivered by such Selling
Stockholder on such Closing Date.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all respects to the requirements of the Act and the Rules
and Regulations and did not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of the Act and
the Rules and Regulations and did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not omit, to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and (C) on the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the Additional Registration
Statement is prior to the execution and delivery of this Agreement, the
Additional Registration Statement, and at the time of filing of the Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the Effective Date
of the Additional Registration Statement in which the Prospectus is included,
each Registration Statement and the Prospectus will conform, in all respects to
the requirements of the Act and the rules and Regulations, and neither of such
documents includes, or will include, any untrue statement of a material fact or
omits, or will omit, to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. If the Effective Time
of the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will conform in
all respects to the requirements of the Act and the Rules and Regulations,
neither of such documents will include any untrue statement of a material fact
or will omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. With respect to (A)
Martin W. Brauns (the "Senior Management"), the two preceding sentences do not
apply to statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information is that described as such
in Section 7(c); and (B) all Selling Stockholders other than the Senior
Management, the preceding two sentences apply only to the extent that any
statements in or omissions from a Registration Statement or the Prospectus are
based on written information furnished to the Company by such Selling
Stockholder specifically for use therein in the Section entitled "Principal and
Selling Stockholders."
(iii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between such Selling Stockholder and any
person that would give rise to a valid claim against such Selling Stockholder or
any Underwriter for a brokerage commission, finder's fee or other like payment
in connection with this offering.
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3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and each Selling Stockholder
agree, severally and not jointly, to sell to each Underwriter, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
each Selling Stockholder, at a purchase price of $_______ per share, that number
of Firm Securities (rounded up or down, as determined by Credit Suisse First
Boston Corporation ("CSFBC") in its discretion, in order to avoid fractions)
obtained by multiplying (i) _________________ Firm Securities in the case of the
Company and (ii) the number of Firm Securities set forth opposite the name of
such Selling Stockholder in Schedule A hereto in the case of a Selling
Stockholder by a fraction, the numerator of which is the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule B hereto
and the denominator of which is the total number of Firm Securities.
Certificates in negotiable form for the Offered Securities to be sold by
the Selling Stockholders hereunder have been placed in custody, for delivery
under this Agreement, under Custody Agreements made with Chase Manhattan Bank
and Trust Company, National Association, as custodian ("Custodian"). Each
Selling Stockholder agrees that the shares represented by the certificates held
in custody for the Selling Stockholders under such Custody Agreements are
subject to the interests of the Underwriters hereunder, that the arrangements
made by the Selling Stockholders for such custody are to that extent
irrevocable, and that the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death of any
individual Selling Stockholder or the occurrence of any other event, or in the
case of a trust, by the death of any trustee or trustees or the termination of
such trust. If any individual Selling Stockholder or any such trustee or
trustees should die, or if any other such event should occur, or if any of such
trusts should terminate, before the delivery of the Offered Securities
hereunder, certificates for such Offered Securities shall be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death or other event or termination had not occurred, regardless of whether
or not the Custodian shall have received notice of such death or other event or
termination.
The Company and the Custodian will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, at the office of CSFBC,
Eleven Madison Avenue, New York, New York 10010-3629, against payment of the
purchase price in Federal (same day) funds by official bank check or checks or
wire transfer to an account at a bank acceptable to CSFBC drawn to the order of
the Company in the case of ______________ shares of Firm Securities and to the
order of the Custodian in the case of ________________ shares of Firm
Securities, at the office of Fenwick & West LLP ("Fenwick & West"), Two Palo
Alto Square, Palo Alto, California 94025 at 10:00 A.M., New York time, on
________________, 2000, or at such other time not later than seven full business
days thereafter as CSFBC and the Company determine, such time being herein
referred to as the "First Closing Date". The certificates for the Firm
Securities so to be delivered will be in definitive form, in such denominations
and registered in such names as CSFBC requests and will be made available for
checking and packaging at the above office of CSFBC in New York at least 24
hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company and the
Selling Stockholders from time to time not more than 30 days subsequent to the
date of the Prospectus, the Underwriters may purchase all or less than all of
the Optional Securities at the purchase price per Security to be paid for the
Firm Securities. The Selling Stockholders agree, severally and not jointly, to
sell to the Underwriters the number of Optional Securities set forth opposite
the name of such Selling Stockholder in Schedule A hereto multiplied by a
fraction, the numerator of which is the number of shares set forth opposite the
names of such Selling Stockholders in Schedule A hereto under the caption
"Number of Optional Securities to be Sold" and the denominator of which is the
total number of Optional Securities specified in such notice (subject to
adjustment by CSFBC to eliminate fractions). Such Optional Securities shall be
purchased from each Selling Stockholder for the account of each Underwriter in
the same proportion as the number of Firm Securities set forth opposite such
Underwriter's name bears to the total number of Firm Securities (subject to
adjustment by CSFBC to eliminate fractions) and may be purchased by the
Underwriters only for the purpose of covering over-allotments made in connection
with the sale of the Firm Securities. No Optional Securities shall be sold or
delivered unless the Firm Securities previously have been, or simultaneously
are, sold and delivered. The right to purchase the Optional Securities or any
portion thereof may be exercised from time to time and to the extent not
previously exercised may be surrendered and terminated at any time upon notice
by CSFBC to the Company and the Selling Stockholders.
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<PAGE>
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Custodian will deliver
the Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, at the above
office of CSFBC in New York, against payment of the purchase price therefor in
Federal (same day) funds by official bank check or checks or wire transfer to an
account at a bank acceptable to CSFBC drawn to the order of the Custodian, at
the above office of Fenwick & West. The certificates for the Optional
Securities being purchased on each Optional Closing Date will be in definitive
form, in such denominations and registered in such names as CSFBC requests upon
reasonable notice prior to such Optional Closing Date and will be made available
for checking and packaging at the above office of CSFBC in New York at a
reasonable time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company and the Selling Stockholders. The
Company agrees with the several Underwriters and the Selling Stockholders that:
(a) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement, the Company will file
the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC, subparagraph
(4)) of Rule 424(b) not later than the earlier of (A) the second business day
following the execution and delivery of this Agreement or (B) the fifteenth
business day after the Effective Date of the Initial Registration Statement. The
Company will advise CSFBC promptly of any such filing pursuant to Rule 424(b).
If the Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement and an additional registration
statement is necessary to register a portion of the Offered Securities under the
Act but the Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement or, if
filed, will file a post-effective amendment thereto with the Commission pursuant
to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to any Underwriter, or will make such
filing at such later date as shall have been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to
amend or supplement the initial or any additional registration statement as
filed or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not effect
such amendment or supplementation without CSFBC's consent; and the Company will
also advise CSFBC promptly of the effectiveness of each Registration Statement
(if its Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration Statement
or the Prospectus and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its best efforts
to prevent the issuance of any such stop order and to obtain as soon as possible
its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with sales by
any Underwriter or dealer, any event occurs 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 to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CSFBC of such event and will
promptly prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither CSFBC's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12 months
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<PAGE>
beginning after the Effective Date of the Initial Registration Statement (or, if
later, the Effective Date of the Additional Registration Statement) which will
satisfy the provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter.
(e) The Company will furnish to the Representatives copies of
each Registration Statement (six of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
CSFBC requests. The Prospectus shall be so furnished on or prior to 3:00 P.M.,
New York time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial Registration
Statement. All other documents shall be so furnished as soon as available. The
Company and the Selling Stockholders will pay the expenses of printing and
distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such jurisdictions as CSFBC
designates and will continue such qualifications in effect so long as required
for the distribution.
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a copy
of its annual report to stockholders for such year; and the Company will furnish
to the Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Securities Exchange Act of 1934 or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as CSFBC may reasonably
request.
(h) The Company agrees with the several Underwriters that the
Company will pay all expenses incident to the performance of the obligations of
the Company and the Selling Stockholders, under this Agreement, for any filing
fees and other expenses (including fees and disbursements of counsel) incurred
in connection with qualification of the Offered Securities for sale under the
laws of such jurisdictions as CSFBC designates and the printing of memoranda
relating thereto, for the filing fee incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the National Association of Securities Dealers, Inc. of the Offered Securities,
for any travel expenses of the Company's officers and employees and any other
expenses of the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities, for any transfer taxes on the
sale by the Selling Stockholders of the Offered Securities to the Underwriters
and for expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
(i) Each Selling Stockholder agrees to deliver to CSFBC,
attention: Transactions Advisory Group on or prior to the First Closing Date a
properly completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department regulations
in lieu thereof).
(j) For a period of 90 days after the date of the initial public
offering of the Offered Securities, the Company will not offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, or file with
the Commission a registration statement under the Act relating to, any
additional shares of its Securities or securities convertible into or
exchangeable or exercisable for any shares of its Securities, or publicly
disclose the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of CSFBC, except issuances of
Securities pursuant to the conversion of convertible securities or the exercise
of warrants, in each case outstanding on the date hereof, issuances of
Securities pursuant to an employee stock purchase plan which is in effect on the
date hereof, grants of employee stock options pursuant to the terms of a plan in
effect on the date hereof, issuances of Securities pursuant to the exercise of
such options or the exercise of any other employee stock options outstanding on
the date hereof.
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<PAGE>
(k) Each Selling Stockholder agrees, for a period of 90 days
after the date of the initial public offering of the Offered Securities, not to
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any additional shares of the Securities of the Company or securities
convertible into or exchangeable or exercisable for any shares of Securities, or
publicly disclose the intention to make any such offer, sale, pledge or
disposition, without the prior written consent of CSFBC.
(l) The Company will (i) enforce the terms of each Lock-up
Agreement, and (ii) issue stop-transfer instructions to the transfer agent for
the Securities with respect to any transaction or contemplated transaction that
would constitute a breach of or default under the applicable Lock-up Agreement.
In addition, except with the prior written consent of CSFBC, the Company agrees
(i) not to amend or terminate, or waive any right under, any Lock-up Agreement,
or take any other action that would directly or indirectly have the same effect
as an amendment or termination, or waiver of any right under any Lock-up
Agreement, that would permit any holder of Securities, or any securities
convertible into, or exercisable or exchangeable for, Securities, to make any
short sale of, grant any option for the purchase of, or otherwise transfer or
dispose of, any such Securities or other securities, prior to the expiration of
the 90 days after the date of the Prospectus and (ii) not to consent to any
sale, short sale, grant of an option for the purchase of, or other disposition
or transfer of shares of Securities, or securities convertible into or
exercisable or exchangeable for Securities, subject to a Lock-up Agreement.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Stockholders herein, to
the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of their obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this Agreement,
shall be on or prior to the date of this Agreement or, if the Effective Time of
the Initial Registration Statement is subsequent to the execution and delivery
of this Agreement, shall be prior to the filing of the amendment or post-
effective amendment to the registration statement to be filed shortly prior to
such Effective Time), of PricewaterhouseCoopers LLP confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements audited by
them and included in the Registration Statements comply as to form in all
material respects with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards No. 71,
Interim Financial Information, on the unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements of the
Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited financial statements included in the
Registration 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 or any material modifications should be made to such
unaudited financial statements for them to be in conformity with generally
accepted accounting principles;
(B) the unaudited consolidated total revenues, net
loss, net loss per share and net loss before the effect of non-cash charges
related to stock-based compensation and acquisition expenses for the three-month
periods ended December 31, 1998 and December 31, 1999 included in the Prospectus
do not agree with the amounts set
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forth in the unaudited consolidated financial statements for those same periods
or were not determined on a basis substantially consistent with that of the
corresponding amounts in the audited statements of income;
(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date not more than three
business days prior to the date of such letter, there was any change in the
capital stock or any increase in long-term debt or any decreases in net current
assets (working capital) or total assets or stockholders' equity of the Company
and its consolidated subsidiaries, as compared with amounts shown on the latest
balance sheet included in the Prospectus; or
(D) for the period from the closing date of the latest
statement of operations included in the Prospectus to a specified date not more
than three business days prior to the date of such letter, there were any
decreases, as compared with the corresponding period of the previous year and
with the period of corresponding length in the previous quarter, in net
revenues, or in the total or per share amounts of net income (loss);
except in all cases set forth in clauses (B), (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained in
the Registration Statements (in each case to the extent that such dollar
amounts, percentages and other financial and statistical information are derived
from the general accounting records of the Company and its subsidiaries subject
to the internal controls of the Company's accounting system or are derived
directly from such records by analysis or computation) with the results obtained
from inquiries, a reading of such general accounting records and other
procedures specified in such letter and have found such dollar amounts,
percentages and other financial and statistical information to be in agreement
with such results, except as otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration Statement
is subsequent to such execution and delivery, "Registration Statements" shall
mean the Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the post-
effective amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration Statements.
(b) If the Effective Time of the Initial Registration Statement
is not prior to the execution and delivery of this Agreement, such Effective
Time shall have occurred not later than 10:00 P.M., New York time, on the date
of this Agreement or such later date as shall have been consented to by CSFBC.
If the Effective Time of the Additional Registration Statement (if any) is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or, if earlier, the time the Prospectus is printed and distributed to
any Underwriter, or shall have occurred at such later date as shall have been
consented to by CSFBC. If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of any Selling Stockholder, the Company or the
Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries taken as
one enterprise which, in the judgment of a majority in interest of the
Underwriters including the Representatives, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Offered Securities;
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(ii) any downgrading in the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities
of the Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any material suspension or material limitation of trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter market;
(iv) any banking moratorium declared by U.S. Federal or New York authorities; or
(v) any outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of a
majority in interest of the Underwriters including the Representatives, the
effect of any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Fenwick & West, counsel for the Company, to the effect
that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own or lease its properties and conduct
its business as described in the Prospectus; and the Company is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification (except where the failure to so qualify
would not have a Material Adverse Effect);
(ii) The Offered Securities delivered on such Closing Date
and all other outstanding shares of the capital stock of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and conform
to the description thereof contained in "Description of Capital Stock," insofar
as such descriptions purport to summarize certain provisions of the outstanding
shares of the capital stock of the Company; and the stockholders of the Company
have no (A) statutory preemptive rights, (B) preemptive rights pursuant to the
Organizational Documents or (C) to such counsel's knowledge, any similar rights
with respect to the Offered Securities;
(iii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings known to such counsel between the
Company and any person granting such person the right, which has not been
satisfied or effectively waived, to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Act;
(iv) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended;
(v) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in connection
with the issuance or sale of the Offered Securities by the Company or any
Selling Stockholder (other than as may be required by the securities and Blue
Sky laws of the various states and other jurisdictions as to which such counsel
need not express any opinion), except such as have been obtained and made under
the Act;
(vi) The execution, delivery and performance of this
Agreement and the issuance and sale of the Offered Securities will not result in
a breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any governmental
agency or body or any court having jurisdiction over the Company or any
subsidiary of the Company or any of their properties (except that such counsel
need not express any opinion with regard to foreign or state securities or Blue
Sky laws or regulations), or any agreement or instrument that is filed as an
exhibit to the Registration Statement to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary is bound or
to which any of the properties of the Company or any such subsidiary is
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subject, or the charter or by-laws of the Company, and the Company has full
corporate power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement;
(vii) The Initial Registration Statement was declared
effective under the Act as of the date and time specified in such opinion, the
Additional Registration Statement (if any) was filed and became effective under
the Act as of the date and time (if determinable) specified in such opinion, the
Prospectus either was filed with the Commission pursuant to the subparagraph of
Rule 424(b) specified in such opinion on the date specified therein or was
included in the Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of a Registration Statement
or any part thereof has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated under the Act, and each
Registration Statement and the Prospectus, and each amendment or supplement
thereto, as of their respective effective or issue dates, complied as to form in
all material respects with the requirements of the Act and the Rules and
Regulations (except that such counsel need not express any opinion as to the
financial statements and schedules, related notes and other financial and
statistical information included therein); such counsel have no reason to
believe that any part of a Registration Statement or any amendment thereto, as
of its effective date or as of such Closing Date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto, as of its issue date or as of
such Closing Date, contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading (except
that such counsel need not express any opinion as to the financial statements
and schedules, related notes and other financial and statistical information
included therein); and such counsel do not know of any legal or governmental
proceedings required to be described in a Registration Statement or the
Prospectus which are not described as required or of any contracts or documents
of a character required to be described in a Registration Statement or the
Prospectus or to be filed as exhibits to a Registration Statement which are not
described and filed as required;
(viii) The statements set forth under the heading
"Description of Capital Stock" in the Prospectus, insofar as such statements
purport to summarize certain provisions of the capital stock of the Company,
provide a fair summary of such provisions; and the statements set forth under
the headings "Risk Factors-We Have Various Mechanisms in Place to Discourage
Takeover Attempts," "Management-Director Compensation," "Management--Employment
Agreements," "Management-Indemnification of Directors and Executive Officers and
Limitation of Liability," "Related Party Transactions," "Principal and Selling
Stockholders," and "Shares Eligible For Future Sale" in the Prospectus, insofar
as such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, have been reviewed by such counsel and fairly
present the information called for with respect to such legal matters, documents
and proceedings in all material respects as required by the Act and the rules
and regulations thereunder; and
(ix) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Representatives shall have received the opinion dated
the date hereof and such Closing Date of Fenwick & West LLP, counsel to the
Selling Stockholders, to the effect that:
(i) Each Selling Stockholder is the registered owner of
the Securities to be sold by such Selling Stockholder pursuant to the
Underwriting Agreement, and, to such counsel's knowledge, has full right, power
and authority to sell, assign, transfer and deliver the Offered Securities
delivered by such Selling Stockholder on such Closing Date hereunder; and the
several Underwriters have acquired valid and unencumbered title to the Offered
Securities purchased by them from the Selling Stockholders on such Closing Date
hereunder, provided the several Underwriters purchased the Securities in good
faith and without notice of any adverse claims or defect in title of the Selling
Stockholder;
(ii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required to be
obtained or made by any Selling Stockholder for the consummation of the
transactions contemplated by the Custody Agreement or this Agreement in
connection with the sale of the Offered
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Securities sold by the Selling Stockholders, except such as have been obtained
and made under the Act and such as may be required under state securities or
blue sky laws or the Bylaws, rules and regulations of the NASD (as to which such
counsel need render no opinion);
(iii) The execution, delivery and performance of the
Custody Agreement and this Agreement and the consummation of the transactions
therein and herein contemplated will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any statute, any
rule, regulation or order known to us of any governmental agency or body or any
court having jurisdiction over any Selling Stockholder or any of its properties
or any agreement or instrument known to us to which any Selling Stockholder is a
party or by which any Selling Stockholder is bound or to which any of the
properties of any Selling Stockholder is subject, or the charter or by-laws of
any Selling Stockholder which is a corporation;
(iv) The Power of Attorney and related Custody Agreement
with respect to each Selling Stockholder has been duly authorized, executed and
delivered by such Selling Stockholder and constitutes valid and legally binding
obligations of each such Selling Stockholder enforceable in accordance with its
terms; and
(v) This Agreement has been duly authorized, executed and
delivered by or on behalf of each Selling Stockholder.
(f) The Representatives shall have received from Wilson Sonsini
Goodrich & Rosati, Professional Corporation, counsel for the Underwriters, such
opinion or opinions, dated such Closing Date, with respect to the incorporation
of the Company, the validity of the Offered Securities delivered on such Closing
Date, the Registration Statements, the Prospectus and other related matters as
the Representatives may require, and the Selling Stockholders and the Company
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate, dated
such Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to the
best of their knowledge after reasonable investigation, shall state that: the
representations and warranties of the Company in this Agreement are true and
correct; the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date; no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of subparagraphs (1)
and (3) of Rule 462(b) was filed pursuant to Rule 462(b), including payment of
the applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the time the Prospectus was printed and distributed to any Underwriter;
and, subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated such
Closing Date, of PricewaterhouseCoopers LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to in
such subsection will be a date not more than three days prior to such Closing
Date for the purposes of this subsection.
The Selling Stockholders and the Company will furnish the
Representatives with such conformed copies of such opinions, certificates,
letters and documents as the Representatives reasonably request. CSFBC may in
its sole discretion waive on behalf of the Underwriters compliance with any
conditions to the obligations of the Underwriters hereunder, whether in respect
of an Optional Closing Date or otherwise.
7. Indemnification and Contribution.
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(a) The Company and the Senior Management, jointly and
severally, will indemnify and hold harmless each Underwriter, its partners,
directors and officers and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Act, 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 any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, 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,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will 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 in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (c) below; provided, that the
liability of the Senior Management pursuant to this subsection (a) shall be
limited to an amount equal to the aggregate gross proceeds (before deducting
expenses) to such Senior Management from the sale of Securities by such Senior
Management.
In addition, the Company and each of the Underwriters agree with the Senior
Management that any claim of such Underwriter against the Senior Management for
indemnification, reimbursement or advancement of expenses pursuant to this
Section 7 (except for any breach of any representation or warranty in Section
2(b) hereof) shall first be sought by such Underwriter to be satisfied in full
by the Company and shall be satisfied by the Senior Management only to the
extent that such claim has not been satisfied in full by the Company for any
reason within the 30-day period following the date requested for payment. The
Company and the Senior Management may agree, as among themselves and without
limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible,
including, without limitation, allocating between the Company and the Senior
Management the liability resulting from a breach of the representations and
warranties of the Company and the Senior Management hereunder. The indemnity
provided for in this Section 7 shall be in addition to any liability which the
Senior Management may otherwise have. Senior Management will not, without the
prior written consent of the Representatives, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Representatives or any person who controls any such
Representatives is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of all
of the Underwriters and such controlling persons from all liability arising out
of such claim, action, suit or proceeding.
(b) Each of the Selling Stockholders (other than Senior
Management), jointly and severally, will indemnify and hold harmless each
Underwriter, its partners, directors and officers and each person who controls
such Underwriter within the meaning of Section 15 of the Act, 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 any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, 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 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 Selling Stockholder (other than
Senior Management) expressly for use therein; and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that such Selling Stockholder will 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 in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by an Underwriter through the
Representatives
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specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in subsection (c) below; and provided, further, that the liability of a
Selling Stockholder pursuant to this subsection (b) shall be limited to an
amount equal to the aggregate gross proceeds (before deducting expenses) to such
Selling Stockholder from the sale of Securities by such Selling Stockholder.
(c) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company, its directors and officers and each person, if
any who controls the Company within the meaning of Section 15 of the Act, and
each Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or such Selling Stockholder 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 any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or the 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 reliance upon and
in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company and the
Selling Stockholder in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus furnished on
behalf of each Underwriter: the concession and reallowance figures appearing in
the fourth paragraph under the caption "Underwriting" and the information
regarding stabilizing transactions contained in the tenth paragraph under the
caption "Underwriting."
(d) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a), (b) or (c) above. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may 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 will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action and does not include a statement as
to, or an admission of, fault, culpability or a failure to act by or on behalf
of an indemnified party.
(e) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a), (b) or (c)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company, the Senior Management and the Selling Stockholders on
the one hand and the Underwriters on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, the Senior Management and the Selling Stockholders 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 as well
as any other relevant equitable considerations. The relative benefits received
by the Company, the Senior Management and the Selling Stockholders on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total gross proceeds from the offering (before deducting
expenses) received by the Company, the Senior Management and the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the Underwriters. The
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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, the Senior Management, the Selling Stockholders or the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (e) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (e). Notwithstanding the provisions of this
subsection (e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
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 (e) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders
under this Section shall be in addition to any liability which the Company and
the Selling Stockholders 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 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 director of the Company, to each officer of the Company who
has signed a Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company and the Selling Stockholders for
the purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC, the Company and the Selling Stockholders for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default,
this Agreement will terminate without liability on the part of any non-
defaulting Underwriter, the Company or the Selling Stockholders, except as
provided in Section 9 (provided that if such default occurs with respect to
Optional Securities after the First Closing Date, this Agreement will not
terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term "Underwriter" includes
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Selling Stockholders, of the Company or its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, any Selling
Stockholder, the Company or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company and the Selling Stockholders shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Company, the Selling
Stockholders, and the Underwriters pursuant to Section 7 shall remain in effect,
and if any Offered Securities have been purchased hereunder the representations
and warranties in Section 2 and all obligations under Section 5 shall also
remain in effect. If the purchase of the Offered Securities by the Underwriters
is
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not consummated for any reason other than solely because of the termination of
this Agreement pursuant to Section 8 or the occurrence of any event specified in
clause (iii), (iv) or (v) of Section 6(c), the Company will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking Department--
Transactions Advisory Group, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at 800 Chesapeake Drive, Redwood
City, California 94063, Attention: Alain Rossmann, or, if sent to the Selling
Stockholders or any of them, will be mailed delivered or telegraphed and
confirmed to the Attorney-in-Fact at 1195 West Fremont Avenue, Suite 2000,
Sunnyvale, California 94087, Attention: Martin W. Brauns/David M. Allen;
provided, however, that any notice to an Underwriter pursuant to Section 7 will
be mailed, delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective personal representatives
and successors and the officers and directors and controlling persons referred
to in Section 7, and no other person will have any right or obligation
hereunder.
12. Representation of Underwriters. The Representatives will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CSFBC on behalf of the
Representatives will be binding upon all the Underwriters. Martin W. Brauns
and/or David M. Allen will act as attorneys-in-fact for the Selling Stockholders
in connection with such transactions, and any action under or in respect of this
Agreement taken by Martin W. Brauns and/or David M. Allen in such capacity will
be binding upon all the Selling Stockholders.
13. Counterparts. This Agreement may be executed 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 Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
[Remainder of page intentionally left blank]
-17-
<PAGE>
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
INTERWOVEN, INC.
By:______________________________________
David M. Allen
Chief Financial Officer
By:______________________________________
David M. Allen
As Attorney-in-Fact acting on behalf
of each of the Selling Stockholders
named in Schedule A to this Agreement.
The foregoing Underwriting Agreement
is hereby Confirmed and accepted as
of the date first above written.
Credit Suisse First Boston Corporation
BancBoston Robertson Stephens Inc.
Dain Rauscher Wessels,
A Division of Dain Rauscher Incorporated,
SoundView Technology Group, Inc.
Adams, Harkness & Hill, Inc.
Acting on behalf of themselves and as the
Representatives of the several Underwriters
By Credit Suisse First Boston Corporation
By:____________________________________
William J.B. Brady III
Managing Director
<PAGE>
SCHEDULE A
Number of Number of
Selling Stockholder Firm Securities Optional Securities
To be Sold To be Sold
________________________________________________________________________________
Total
A-1
<PAGE>
SCHEDULE B
<TABLE>
<CAPTION>
Number of
Underwriter Firm Securities
- ----------- ---------------
<S> <C>
Credit Suisse First Boston Corporation.................
BancBoston Robertson Stephens Inc......................
Dain Rauscher Wessels..................................
SoundView Technology Group, Inc........................
Adams, Harkness & Hill, Inc............................
______________
Total...................................
</TABLE>
A-2
<PAGE>
EXHIBIT 4.04
AMENDMENT TO THIRD AMENDED AND RESTATED
INVESTORS RIGHTS AGREEMENT
This Amendment (the "Amendment") to Third Amended and Restated Investors'
Rights Agreement dated as of June 10, 1999 (the "Agreement"), by and among
Interwoven, Inc., a Delaware corporation (the "Company"), and the persons listed
on Schedule A thereto (the "Investors"), as amended. Capitalized terms used
herein without definition have the meanings assigned to them in the Agreement.
The Company has filed a Registration Statement on Form S-1 in connection
with an underwritten public offering of 1,000,000 shares of its common stock and
up to 2,450,000 shares of its common stock held by certain of its stockholders.
As is set forth in Sections 5 of the Agreement, the Investors are entitled
to be given notice of the Company's decision to file the Registration Statement,
and to participate in the offering covered by such Registration Statement to the
extent that Investors have furnished the Company with a written request to
participate within 20 days of receiving such notice.
Now, therefore, in consideration of the foregoing and the mutual promises
contained herein, pursuant to Section 17.6 of the Agreement, the undersigned
Investor hereby agrees as follows:
1. The Agreement shall be amended to include the following Section 5.4:
"5.4 Limitation on Piggyback Registration. Notwithstanding anything in
------------------------------------
this Section 5 to the contrary, Section 5 of this Agreement shall not apply
to offer and sale of the Company's securities contemplated by the Company's
registration statement on Form S-1 filed with the Securities and Exchange
Commission on December 17, 1999."
2. Except as specifically amended hereby, the Agreement shall remain in
full force and effect.
3. This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall
constitute one and the same instrument.
<PAGE>
SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT AMENDMENT
In witness whereof, the parties hereto have executed this Amendment to Third
Amended and Restated Investor Rights Agreement.
Dated: ___________, ______
Company:
Interwoven, Inc., a Delaware corporation
By:__________________________
Name:
Title:
Investor:
_____________________________________________
Signature
_____________________________________________
Name
_____________________________________________
Title, if signatory is an entity
<PAGE>
[FENWICK & WEST LLP LETTERHEAD]
EXHIBIT 5.01
January 10, 2000
Interwoven, Inc.
1195 West Fremont Avenue, Suite 2000
Sunnyvale, CA 94087
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-1
(Registration Number 333-92943) (the "Registration Statement") filed by you with
the Securities and Exchange Commission (the "Commission") on December 17, 1999,
as subsequently amended, in connection with the registration under the
Securities Act of 1933, as amended, of an aggregate of up to 3,450,000 shares of
your Common Stock (the "Shares"), 2,450,000 outstanding and will be sold by
certain selling stockholders (the "Selling Stockholders") and the balance of
which will be issued and sold by you.
In rendering this opinion, we have examined the following:
(1) the Registration Statement, together with the Exhibits filed as a part
thereof;
(2) the prospectus that constitutes a part of the Registration Statement;
(3) your registration statement on Form S-1 (Registration No. 333-83779),
originally filed with the Commission on July 27, 1999, as amended,
together with the Exhibits as a part thereof;
(4) the prospectus prepared in connection with the registration statement
on Form S-1 (Registration No. 333-83779);
(5) your registration statement on Form 8-A (File Number 000-27389) filed
with the Commission on September 20, 1999;
(6) the minutes of meetings and actions by written consent of the
stockholders and boards of directors that are contained in your minute
books and the minute books of your predecessor, Interwoven, Inc., a
California corporation ("Interwoven California"), that are in our
possession;
(7) the stock records for you and Interwoven California that you have
provided to us (consisting of a certificate from your transfer agent
of even date herewith verifying the number of your issued and
outstanding shares of capital stock as of
<PAGE>
January 10, 2000
Page 2
the date hereof, and a list prepared by you of holders of options and
warrants for your capital stock and of any rights to purchase your
capital stock;
(8) a Management Certificate addressed to us and dated of even date
herewith executed by the Company containing certain factual and other
representations;
(9) The agreements under which the Selling Stockholders acquired the Stock
to be sold by them as described in the Registration Statement; and
(10) The Custody Agreement, Transmittal Letter and Powers of Attorney
signed by the Selling Stockholders in connection with the sale of
Stock described in the Registration Statement.
In our examination of documents for purposes of this opinion, we have
assumed, and express no opinion as to, the genuineness of all signatures on
original documents, the authenticity and completeness of all documents submitted
to us as originals, the conformity to originals and completeness of all
documents submitted to us as copies, the legal capacity of all natural persons
executing the same, the lack of any undisclosed termination, modification,
waiver or amendment to any document reviewed by us and the due authorization,
execution and delivery of all documents where due authorization, execution and
delivery are prerequisites to the effectiveness thereof.
For the purposes of this opinion, we have relied as to matters of fact
solely upon our examination of the documents referred to above and have assumed
their current accuracy and completeness.
We are admitted to practice law in the State of California, and we express
no opinion herein with respect to the effect of the laws of any jurisdiction
other than the existing laws of the United States of America, the State of
California and the State of Delaware.
In connection with our opinion expressed below, we have assumed that, at or
prior to the time of the delivery of any shares of Stock, the Registration
Statement will have been declared effective under the Securities Act of 1933, as
amended, and will not have been modified or rescinded, that the offer and sale
of the Shares will be registered under the Registration Statement and that there
will not have occurred any change in law affecting the validity or
enforceability of the Shares.
Based upon the foregoing, it is our opinion that the Shares to be sold by
the Selling Stockholders pursuant to the Registration Statement are validly
issued, fully paid and nonassessable and that the Shares to be issued and sold
by you, when issued and sold in accordance in the manner referred to in the
prospectus constituting a part of the Registration Statement, will be validly
issued, fully paid and nonassessable.
<PAGE>
January 10, 2000
Page 3
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to all references to us, if any, in the
Registration Statement, the prospectus constituting a part thereof and any
amendments thereto.
This opinion speaks only as of its date and we assume no obligation to
update this opinion should circumstances change after the date hereof.
Very truly yours,
/s/ Fenwick & West LLP
<PAGE>
Exhibit 21.01
Interwoven, Inc. has the following subsidiaries:
Interwoven UK Limited
Interwoven Australia Pty Limited
