<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 9, 1999
REGISTRATION NO. 333-83777
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
VERITAS SOFTWARE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 7372 77-0507675
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
1600 PLYMOUTH STREET
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 335-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MARK LESLIE
CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD
1600 PLYMOUTH STREET
MOUNTAIN VIEW, CALIFORNIA 94043
(650) 335-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO
<TABLE>
<S> <C> <C>
GORDON K. DAVIDSON, ESQ. DANIEL G. KELLY, JR., ESQ. LARRY W. SONSINI, ESQ.
HORACE L. NASH, ESQ. DAVIS POLK & WARDWELL JULIA REIGEL, ESQ.
DAVID MICHAELS, ESQ. 450 LEXINGTON AVENUE WILSON SONSINI GOODRICH & ROSATI
FENWICK & WEST LLP NEW YORK, NEW YORK 10017 650 PAGE MILL ROAD
TWO PALO ALTO SQUARE (212) 450-4000 PALO ALTO, CA 94306
PALO ALTO, CALIFORNIA 94306 (650) 493-9300
(650) 494-0600
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are 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 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 this Form is a post-effective amendment filed pursuant to Rule 462(c)
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 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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SHARES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED SHARE PRICE(3) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------
Common stock, $0.001 par value per
share(1)............................. 13,800,000(2) $57.50(3) $793,500,000 $220,593(4)
- ---------------------------------------------------------------------------------------------------------------------------
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</TABLE>
(1) Each share of common stock includes associated preferred share purchase
rights.
(2) Includes an over-allotment option of 1,800,000.
(3) Estimated pursuant to Rule 457(c) solely for the purpose of calculating the
amount of the registration fee. The proposed maximum offering price per
share is based on the average of the high and low prices for a share
reported on the Nasdaq National Market on July 21, 1999.
(4) A fee of $220,593 was previously paid by the Registrant in connection with
the filing of this Registration Statement on July 27, 1999.
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> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses to be paid by the Registrant in connection with this offering
are as follows. All amounts other than the Securities and Exchange Commission
registration fee and the NASD filing fee application fee are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $220,593
NASD filing fee............................................. 30,500
Printing and engraving expenses............................. 400,000*
Legal fees and expenses..................................... 200,000*
Blue Sky.................................................... 10,000*
Accounting fees and expenses................................ 50,000*
Transfer agent and registrar fees and expenses.............. 66,000*
Miscellaneous............................................... 2,907*
--------
Total..................................................... $980,000*
========
</TABLE>
- -------------------------
* Estimated
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
restated 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 (i) for any breach of the director's
duty of loyalty to the Registrant or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) under section 174 of the Delaware General Corporation
Law (regarding unlawful dividends and stock purchases) or (iv) for any
transaction from which the director derived an improper personal benefit.
As permitted by the Delaware General Corporation Law, the bylaws of the
Registrant provide that (i) 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, (ii) the Registrant
may indemnify its other employees and agents as set forth in the Delaware
General Corporation Law, (iii) 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 (iv) the rights conferred in the bylaws
are not exclusive.
The indemnification provisions in the bylaws and the indemnification
agreements to be entered into between the Registrant and its officers and
directors, may be sufficiently broad to permit indemnification of the
Registrant's officers and directors for liabilities arising under the Securities
Act. The Registrant intends to enter into indemnification agreements with each
of its current directors and executive officers to give such directors and
officers additional contractual assurances regarding the scope of the
indemnification set forth in the Registrant's restated certificate of
incorporation and to provide additional procedural protections. At present,
there is no pending litigation or proceeding involving a director, officer
II-1
<PAGE> 3
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.
The NSMG combination agreement and the TeleBackup combination agreement
contain covenants on the part of the Registrant to maintain indemnification
provisions in the charter documents of the surviving corporation of the NSMG
combination and the TeleBackup combination which are identical to such
provisions contained in the charter documents of VERITAS prior to the
combinations. Registrant shall also honor, in all respects, all of the indemnity
agreements entered into prior to the combinations, with VERITAS officers and
directors, whether or not such persons continue in their positions with
Registrant following the effective time. In addition, pursuant to the NSMG
combination agreement, Registrant must use its commercially reasonable efforts
to maintain director and officer liability insurance with coverages, which are
similar to the coverages VERITAS maintained prior to the combinations for a
period from and after the effective time until at least six years after the
effective time. These covenants are contained in the NSMG combination agreement
attached as Appendix A to the Registration Statement on Form S-4, as amended,
filed with the Commission on April 21, 1999 under the heading "Indemnification
and Insurance -- VERITAS" and in the TeleBackup combination agreement attached
as Appendix G to the Registration Statement on Form S-4 (Reg. No. 333-76531), as
amended, filed with the Commission on April 21, 1999 under the heading
"Indemnification."
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Not Applicable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
The following exhibits are filed herewith or incorporated by reference
herein:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
1.01 Form of Underwriting Agreement
2.01 Amended and Restated Agreement and Plan of Reorganization
among Registrant, VERITAS Software Corporation ("Old
VERITAS"), Seagate Technology, Inc., Seagate Software, Inc.
("Seagate Software") and Seagate Software NSMG (incorporated
by reference to Exhibit 2.01 of the Registrant's
Registration Statement on Form S-4, as amended, filed with
the SEC on April 19, 1999 (the "April 1999 Form S-4"))
2.02 Amended and Restated Combination Agreement by and among Old
VERITAS and TeleBackup Systems Inc. ("TeleBackup")
incorporated by reference to the April 21, 1999 Form S-4
3.01 Amended and Restated Certificate of Incorporation of
Registrant (incorporated by reference to Exhibit 3.01 of the
Registrant's Registration Statement on Form 8-A as amended,
filed with the SEC on June 2, 1999) (the "June 1999 Form
8-A")
3.02 Amendment to the Amended and Restated Certification of
Registrant (incorporated by reference to Exhibit 3.02 of the
June 1999 Form 8-A)
3.03 Amended and Restated Bylaws of Registrant (incorporated by
reference to Exhibit 3.03 of the June 1999 Form 8-A)
4.01 Registration Rights Agreement between Old VERITAS and
Warburg, Pincus Investors, L.P. dated April 25, 1997
(incorporated by reference to Exhibit 4.01 of Old VERITAS'
Quarterly Report on Form 10-Q for the quarter ended June 30,
1997 (the "June 1997 Form 10-Q"))
4.02 Nomination Agreement between Old VERITAS and Warburg, Pincus
Investors, L.P. dated April 25, 1997 (incorporated by
reference to Exhibit 4.02 to the June 1997 Form 10-Q).
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
4.03 Indenture dated as of October 1, 1997 between Old VERITAS
and State Street Bank and Trust Company of California, N.A.
(incorporated by reference to Exhibit 4.06 of Old VERITAS'
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 (the "September 1997 Form 10-Q"))
4.04++ Amended and Restated First Supplemental Indenture dated July
30, 1999 by and among VERITAS, Old VERITAS and State Street
Bank and Trust of California, N.A.
4.05 Registration Rights Agreement dated as of October 1, 1997
between Old VERITAS and UBS Securities LLC (incorporated by
reference to Exhibit 4.07 to the September 1997 Form 10-Q)
4.06 Form of Rights Agreement between Registrant and the Right
Agent, which includes as Exhibit A the form of Certificate
of Designations of Series A Junior Participating Preferred
Stock, as Exhibit B the Form of Right Certificate and as
Exhibit C the Summary of Rights to Purchase Preferred Shares
(incorporated by reference to Exhibit 4.06 of the April 1999
Form S-4
4.07 Form of Registration Rights Agreement between Registrant and
Seagate Software (incorporated by reference to Exhibit 4.07
of the April 1999 Form S-4
4.08 Form of Stockholder Agreement between Registrant, VERITAS,
Seagate Software and Seagate Technology (incorporated by
reference to Exhibit 4.08 of the April 1999 Form S-4
4.09 Form of Specimen Stock Certificate (incorporated by
reference to Exhibit 4.01 of Old VERITAS' Registration
Statement on Form S-1 (File No. 33-70726) dated October 22,
1993, as amended)
5.01 Opinion of Fenwick & West LLP
9.01 Form of Voting, Support and Exchange Trust Agreement by and
among the Registrant, Old VERITAS, TeleBackup and Montreal
Trust Company of Canada (incorporated by reference to
Exhibit 9.01 of the Registrant's April 1999 Form S-4)
10.01* Development and License Agreement between Seagate
Technology, Inc. and the Registrant (incorporated by
reference to Exhibit 10.01 of the April 1999 Form S-4
10.02* Cross License Agreement and OEM Agreement between Seagate
Software Information Management Group, Inc. and the
Registrant (incorporated by reference to Exhibit 10.02 of
the April 1999 Form S-4
10.03 VERITAS 1993 Equity Incentive Plan, as amended (incorporated
by reference to Exhibit 10.03 of the April 1999 Form S-4).
10.04 VERITAS 1993 Employee Stock Purchase Plan, as amended
(incorporated by reference to Exhibit 10.04 of the April
1999 Form S-4)
10.05 VERITAS 1993 Directors Stock Option Plan, as amended
(incorporated by reference to Exhibit 10.04 to VERITAS'
Registration Statement on Form S-4 filed with the SEC on
March 24, 1997 (the "March 1997 Form S-4"))
10.06 OpenVision Technologies, Inc. 1996 Employee Stock Purchase
Plan, as amended (incorporated by reference to Exhibit 10.19
to the March 1997 Form S-4)
10.07 Office building sublease dated February 27, 1998, by and
between VERITAS and Space Systems/Loral, Inc. (incorporated
by reference to Exhibit 10.14 of VERITAS' Quarterly Report
on Form 10-Q for the quarter ended September 30, 1998 (the
"September 1998 Form 10-Q"))
10.08 Office building lease dated April 30, 1998, by and between
VERITAS and Ryan Companies US, Inc. (incorporated by
reference to Exhibit 10.15 of the September 1998 Form 10-Q)
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
10.09 VERITAS' 1997 Chief Executive Officer Compensation Plan
(incorporated by reference to Exhibit 10.05 of VERITAS'
Annual Report on Form 10-K for the year ended December 31,
1997 filed with the SEC on March 2, 1998 (the "1997 Form
10-K"))
10.10 VERITAS' 1997 Executive Officer Compensation Plan
(incorporated by reference to Exhibit 10.06 of the 1997 Form
10-K)
10.11 Form of Key Employee Agreement (incorporated by reference to
Exhibit 10.11 of the April 1999 Form S-4)
10.12 Office Building Lease, dated September 2, 1994, as amended,
by and between VERITAS and John Arriliaga and Richard T.
Peery regarding property located in Mountain View,
California (incorporated by reference to Exhibit 10.09 of
the VERITAS' Annual Report on Form 10-K for the year ended
December 31, 1994 filed with the SEC on March 29, 1995)
10.13 Amendment No 1. to Office Building Lease dated May 28, 1997
by and between VERITAS and John Arriliaga and Richard T.
Perry (incorporated by reference to Exhibit 10.12 of the
1997 Form 10-K)
10.14 Agreement dated November 7, 1996 between VERITAS Software
India Pvt. Ltd. and Talwalkar & Talwalkar and Mr. Rajendra
Dattatraya Pathak, Mrs. Kamal Trimbak Nighojkar, Mrs. Bakul
Prabhakar Pathak, Mrs. Nalini Manohar Saraf, Mr. Narhar
Vaman Pandit, Mr. Madhav Narhar Pandit, Ms. Madhavi Damodar
Thite, and Ms. Medha Narhar Pandit relating to the
development of certain premises in Pune, India (incorporated
by reference to Exhibit 10.12 to the March 1997 Form S-4)
10.16 Amendment No. 1 to Cross-License and OEM Agreement between
Seagate Software Information Management Group, Inc. and the
Registrant (incorporated by reference to Exhibit 10.16 of
the April 1999 Form S-4)
10.17 Participation Agreement dated April 23, 1999 by and between
OLD VERITAS, First Security Bank, National Association as
"Owner Trustee", various banks and other lending
institutions which are parties thereto from time to time as
"Holders", various banks and other lending institutions
which are parties thereto from time to time as "Lenders",
NationsBank, N.A. as "Agent" for the Lenders and the
Holders, and various parties thereto from time to time as
"Guarantors".
10.18 Reserved
10.19 Reserved
10.20++ Grant Deed dated April 23, 1999 recording grant of real
property to First Security Bank, National Association as
"Owner Trustee" by Fairchild Semiconductor Corporation of
California.
10.21++ Memorandum of Lease Agreement and Lease Supplement No. 1 and
Deed of Trust dated April 23, 1999 among OLD VERITAS, First
Security Bank, National Association and Chicago Title
Company.
10.22++ Memorandum of Lease Agreement and Lease Supplement No. 2 and
Deed of Trust dated April 23, 1999 among OLD VERITAS, First
Security Bank, National Association and Chicago Title
Company.
10.23++ Collateral Assignment of Sublease dated April 23, 1999 made
by OLD VERITAS to First Security Bank, National Association.
10.24++ Sublease Agreement dated April 23, 1999 by and between OLD
VERITAS and Fairchild Semiconductor Corporation of
California.
10.25++ Certificate re: Representations and Warranties dated April
20, 199 by Fairchild Semiconductor Corporation of California
and addressed to OLD VERITAS.
10.26++ Security Agreement dated April 23, 1999 between First
Security Bank, National Bank as "Owner Trustee" and
NationsBank, N.A. as Agent for the "Lenders" and the
"Holders".
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
10.27++ Form of Agreement of Purchase and Sale by and between
Fairchild Semiconductor Corporation of California and OLD
VERITAS.
10.28++ First Amendment dated April 14, 1999 and Agreement of
Purchase and Sale dated March 29, 1999 by and between
Fairchild Semiconductor Corporation of California and OLD
VERITAS.
10.29++ Agency Agreement between OLD VERITAS and First Security
Bank, National Association as "Owner Trustee".
10.30++ Master Lease Agreement dated April 23, 1999 between First
Security Bank, National Association and OLD VERITAS.
21.01 Subsidiaries of Registrant (incorporated by reference to
Exhibit 21.01 of the April 1999 Form S-4)
23.01++ Consent of Ernst & Young LLP, Independent Auditors
23.02++ Consent of Ernst & Young LLP, Independent Auditors
23.03++ Consent of Independent Accountants
23.04++ Consent of Fenwick & West LLP (included in Exhibit 5.01)
24.01++ Power of Attorney
</TABLE>
- -------------------------
* Confidential treatment has been granted with respect to certain portions of
this document.
+ To be filed by amendment.
++ Previously filed.
(b) Financial Statement Schedules.
The following financial statement schedule for the years ended December 31,
1998, 1997 and 1996 should be read in conjunction with the consolidated
financial statements of VERITAS Software Corporation filed as part of this
Registration Statement:
- Schedule II -- Valuation and Qualifying Accounts
Schedules other than that listed above have been omitted since they are
either not required, not applicable, or because the information required is
included in the financial statements or the notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
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.
II-5
<PAGE> 7
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-6
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act, VERITAS Software
Corporation has duly caused this Amendment to Registration Statement on Form S-1
to be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Mountain View, County of Santa Clara, State of California, on the 9th
day of August, 1999.
VERITAS SOFTWARE CORPORATION
By: /s/ MARK LESLIE
------------------------------------
Mark Leslie
Chief Executive Officer and
Chairman of the Board
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
PRINCIPAL EXECUTIVE OFFICER:
/s/ MARK LESLIE Chief Executive Officer and August 9, 1999
- ----------------------------------------------------- Chairman of the Board
Mark Leslie
PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER:
/s/ KENNETH LONCHAR* Senior Vice President, August 9, 1999
- ----------------------------------------------------- Finance
Kenneth Lonchar and Chief Financial Officer
</TABLE>
II-7
<PAGE> 9
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
ADDITIONAL DIRECTORS:
/s/ FRED VAN DEN BOSCH* Director August 9, 1999
- -----------------------------------------------------
Fred van den Bosch
/s/ STEVEN BROOKS* Director August 9, 1999
- -----------------------------------------------------
Steven Brooks
/s/ TERRENCE R. CUNNINGHAM* Director August 9, 1999
- -----------------------------------------------------
Terrence R. Cunningham
/s/ WILLIAM H. JANEWAY* Director August 9, 1999
- -----------------------------------------------------
William H. Janeway
/s/ GREGORY B. KERFOOT* Director August 9, 1999
- -----------------------------------------------------
Gregory B. Kerfoot
/s/ STEPHEN J. LUCZO* Director August 9, 1999
- -----------------------------------------------------
Stephen J. Luczo
/s/ JOSEPH D. RIZZI* Director August 9, 1999
- -----------------------------------------------------
Joseph D. Rizzi
/s/ GEOFFREY W. SQUIRE* Director August 9, 1999
- -----------------------------------------------------
Geoffrey W. Squire
*By: /s/ MARK LESLIE
------------------------------------------------
Mark Leslie
Attorney-In-Fact
</TABLE>
II-8
<PAGE> 10
VERITAS SOFTWARE CORPORATION
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
BEGINNING OPERATING END
OF YEAR EXPENSES DEDUCTIONS(1) OF YEAR
---------- ---------- ------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Allowance for doubtful accounts:
Year ended December 31, 1998......... $1,597 $1,032 $57 $2,572
Year ended December 31, 1997......... $ 697 $ 900 $-- $1,597
Year ended December 31, 1996......... $ 807 $ (75) $35 $ 697
</TABLE>
- ---------------
(1) Deductions related to the allowance for doubtful accounts represent amounts
written off against the allowance.
S-1
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C>
1.01 Form of Underwriting Agreement
</TABLE>
- ------------------------
<PAGE> 1
EXHIBIT 1.01
12,000,000 SHARES
VERITAS SOFTWARE CORPORATION
COMMON STOCK, U.S.$0.001 PAR VALUE PER SHARE
UNDERWRITING AGREEMENT
August 9, 1999
<PAGE> 2
August 9, 1999
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Donaldson, Lufkin & Jenrette Securities Corporation
SG Cowen Securities Corporation, as representatives
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
Seagate Software, Inc. ("SEAGATE") and Warburg, Pincus Investors, L.P.
("WARBURG", and collectively with Seagate, the "SELLING SHAREHOLDERS"),
shareholders of VERITAS Software Corporation, a Delaware corporation (the
"COMPANY"), severally propose to sell to the several underwriters named in
Schedule II hereto (the "UNDERWRITERS"), an aggregate of 12,000,000 shares of
the common stock, par value U.S.$0.001 per share, of the Company (the "FIRM
SHARES"), each Selling Shareholder selling the number of shares set forth
opposite such Selling Shareholder's name in Schedule I hereto.
Morgan Stanley & Co. Incorporated, Credit Suisse First Boston
Corporation, Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette Securities
Corporation and SG Cowen Securities Corporation shall act as representatives
(the "REPRESENTATIVES") of the several Underwriters.
[Certain of the][The] Selling Shareholders also propose to sell to the
several Underwriters not more than an additional 1,800,000 shares of the common
stock, par value U.S.$0.001 per share, of the Company (the "ADDITIONAL
SHARES")[, each such Selling Shareholder offering to sell the number of
Additional Shares set forth opposite such Selling Shareholder's name in Schedule
I hereto] if and to the extent that the Representatives shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such shares of
common stock granted to the Underwriters in Section hereof. The Firm Shares and
the Additional Shares are hereinafter collectively referred to as the "SHARES."
The shares of the common stock, par value U.S.$0.001 per share, of the Company
to
1
<PAGE> 3
be outstanding after giving effect to the sales contemplated hereby are
hereinafter referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including the information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "PROSPECTUS".
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the
term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement.
The Underwriters acknowledge that concurrently with the offering of the
Firm Shares, the Company and VERITAS Operating Corporation ("OPERATING") are
offering $662,000,000 aggregate principal amount at maturity of their ___%
Convertible Subordinated Notes due 2006 (the "NOTES") pursuant to an
underwriting agreement dated the date hereof among the Company, Operating and
the underwriters named therein ($99,300,000 aggregate principal amount at
maturity of additional Notes is also offered in such underwriting agreement to
be purchased at the underwriters' option) (the "DEBT OFFERING"). The
consummation of the offering of the Shares is not contingent upon the
consummation of the Debt Offering or vice versa.
1. Representations and Warranties of the Company. The Company represents
and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective under the
Securities Act; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose
are pending before or, to the knowledge of the Company, threatened by
the Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the requirements of the
Securities Act and the
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<PAGE> 4
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each subsidiary of the Company listed on Schedule III hereto
(which schedule identifies all of the material subsidiaries of the
Company) has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
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<PAGE> 5
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus
under the caption "Description of Capital Stock".
(g) The shares of Common Stock (including the Shares to be sold by
the Selling Shareholders) outstanding have been duly authorized and are
validly issued, fully paid and non-assessable.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as have
been already obtained or made under the Securities Act and the rules and
regulations of the Commission thereunder or as may be required by the
securities or Blue Sky laws of the various states or the securities or
similar laws of any foreign jurisdiction in connection with the offer
and sale of the Shares.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(j) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required.
(k) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed
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<PAGE> 6
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder.
(l) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(m) The Company and its subsidiaries (i) are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(n) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company
and its subsidiaries have not incurred any material liability or
obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (ii) the Company has
not purchased any of its outstanding capital stock (other than pursuant
to the share repurchase program described in the Prospectus), nor
declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock other than ordinary and customary dividends;
and (iii) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company and its consolidated
subsidiaries, except in each case as described in or contemplated by the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement).
(o) Except as described 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 Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
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<PAGE> 7
(p) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate rights to use all material
patents, patent rights, licenses, inventions, copyrights, software,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names necessary for the
conduct of the business now operated by them as described in the
Prospectus, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights
of others with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in any material adverse change in the condition, financial
or otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole.
(q) The Company and its subsidiaries possess all material
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, and neither the Company nor any such
subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries,
taken as a whole, except as described in or contemplated by the
Prospectus.
(r) The Company has reviewed and is continuing to review its
operations and that of its subsidiaries to evaluate the extent to which
the business or operations of the Company or any of its subsidiaries
will be affected by the Year 2000 Problem (that is, any significant risk
that computer hardware or software applications used by the Company and
its subsidiaries will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1,
2000); as a result of such review, (i) the Company has no reason to
believe, and does not believe, that (A) there are any issues related to
the Company's preparedness to address the Year 2000 Problem that are of
a character required to be described or referred to in the Prospectus
which have not been accurately described in the Prospectus and (B) the
Year 2000 Problem will have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, or result in any
material loss or interference with the business or operations of the
Company and its subsidiaries, taken as a whole; and (ii) the Company
reasonably believes, after due inquiry, that the critical
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<PAGE> 8
suppliers, vendors, customers or other material third parties used or
served by the Company and such subsidiaries are addressing or will
address the Year 2000 Problem in a timely manner (or that the Company
has a reasonable belief that its contingency plans for such third
parties' failure to address the Year 2000 Problem will be in place)
except to the extent that a failure to address the Year 2000 Problem by
any such critical supplier, vendor, customer or other material third
party would not have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business or operations of
the Company and its subsidiaries, taken as a whole.
(s) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government
of Cuba or with any person or affiliate located in Cuba.
2. Representations and Warranties of Seagate Software, Inc. Seagate
Software, Inc. ("SEAGATE") represents and warrants to and agrees with each of
the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of Seagate.
(b) The Custody Agreement signed by Seagate and _______, as
Custodian, relating to the deposit of the Shares to be sold by Seagate
(the "CUSTODY AGREEMENT") has been duly authorized, executed and
delivered by Seagate and is a valid and binding agreement of Seagate.
(c) The execution and delivery by Seagate of, and the performance
by Seagate of its obligations under, this Agreement and the Seagate
Custody Agreement will not result in a breach of any of the terms and
provisions of, or constitute a default under, (i) the certificate of
incorporation or by-laws of Seagate, (ii) any agreement or other
instrument to which Seagate is a party (or by which any of Seagate's
property or assets is bound or to which any property or assets of
Seagate is subject), or (iii) any judgment, order or decree of any
governmental body, agency or court having jurisdiction over Seagate,
which judgment, order or decree names Seagate. No consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by Seagate of its obligations
under this Agreement or the Seagate Custody Agreement, except such as
have been already obtained or made under the Securities Act and the
rules and regulations of the Commission thereunder or as may be required
by the securities or Blue Sky
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<PAGE> 9
laws of the various states or the securities or similar laws of any
foreign jurisdiction in connection with the offer and sale of the
Shares.
(d) Seagate has, and on the Closing Date will have, good and
marketable title to the Shares to be sold by it and the legal right and
power, and full right, power (including corporate power) and authority
to enter into this Agreement and the Seagate Custody Agreement and to
sell, transfer and deliver the Shares to be sold by it.
(e) Upon the delivery of and against payment for the Shares to be
sold by Seagate pursuant to this Agreement, the Underwriters will obtain
good and marketable title to such Shares, free and clear of any security
interests, claims, liens, equities and other encumbrances, assuming the
Underwriters are bona fide purchasers within the meaning of the Uniform
Commercial Code.
(f) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, at the time
of such amendment or supplement, will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and (ii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided that the representations and
warranties set forth in this paragraph 2(f) apply only to information
relating to the Network Storage & Management Group ("NSMG") set forth in
"Management's Discussion and Analysis of Financial Condition and Results
of Operations C NSMG" and "Network & Storage Management Group Combined
Financial Statements" (collectively, the "NSMG INFORMATION"), and the
information relating to Seagate set forth under the captions "Principal
Stockholders" and "Selling Stockholders" in the Registration Statement
or the Prospectus; and provided further, that the NSMG Information
contains only historical information relating to periods on or before
May 28, 1999 and Seagate does not represent or warrant that any
provisions, additions or deletions have been made that are necessary to
make the NSMG Information not misleading, not contain any untrue
statement of a material fact or about to state a material fact or not
omit to state a material fact required to be stated therein with respect
to the business, financial condition or results of operations or any
other matter with respect to NSMG after May 28, 1999.
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<PAGE> 10
(g) Seagate has not taken, and will not take, directly or
indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares pursuant to this Agreement, and other than as permitted by
the Securities Act, Seagate has not distributed and will not distribute
any prospectus or other offering material in connection with the
offering and sale of the Shares.
3. Representations and Warranties of Warburg, Pincus Investors, L.P.
Warburg, Pincus Investors, L.P. ("WARBURG") represents and warrants to and
agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of Warburg.
(b) The Custody Agreement signed by Warburg and ________, as the
Custodian, relating to the deposit of the Shares to be sold by Warburg
(the "WARBURG CUSTODY AGREEMENT" has been duly authorized, executed and
delivered by Warburg and is a valid and binding agreement of Warburg.
(c) The execution and delivery by Warburg of, and the performance
by Warburg of its obligations under, this Agreement and the Warburg
Custody Agreement will not contravene any provision of (i) the
partnership agreement or other constitutive documents of Warburg, (ii)
any applicable law or any agreement or other instrument binding upon
Warburg, or (iii) any judgment, order or decree of any governmental
body, agency or court having jurisdiction over Warburg. No consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by Warburg
of its obligations under this Agreement or the Warburg Custody
Agreement, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares.
(d) Warburg has, and on the Closing Date will have, valid title to
the Shares to be sold by it and the legal right and power, and all
authorization and approval required by law, to enter into this Agreement
and the Warburg Custody Agreement and to sell, transfer and deliver the
Shares to be sold by it.
(e) The Shares to be sold by Warburg pursuant to this Agreement
have been duly authorized and are validly issued, fully paid and
non-assessable.
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<PAGE> 11
(f) Delivery of the Shares to be sold by Warburg pursuant to this
Agreement will pass title to such Shares free and clear of any security
interests, claims, liens, equities and other encumbrances.
(g) With respect to the information relating to Warburg set forth
under the captions "Principal Stockholders" and "Selling Stockholders,"
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(h) Warburg has not taken, and will not take, directly or
indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Shares pursuant to this Agreement, and other than as permitted by
the Securities Act, Seagate has not distributed and will not distribute
any prospectus or other offering material in connection with the
offering and sale of the Shares.
4. Agreements to Sell and Purchase. (a) On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, each Selling Shareholder, severally and not jointly,
hereby agrees to sell to the several Underwriters, and each Underwriter, upon
the basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees, severally and not jointly, to
purchase from such Selling Shareholder at U.S.$______ a share (the "PURCHASE
PRICE") the number of Firm Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
number of Firm Shares to be sold by such Selling Shareholder as the number of
Firm Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
(b) On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, [each
Selling Shareholder] agrees, severally and not jointly, to sell to the
Underwriters [such Selling Shareholder's pro rata share (determined by
dividing the number of Firm Shares sold by such Selling Shareholder by
the total number of Firm Shares sold by all the Selling Shareholders
pursuant to this Agreement)] [______ Shares by Seagate and ________
Shares by Warburg] of the Additional Shares, and the Underwriters shall
have the right to purchase, from time to time during the 30 days after
the date of
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<PAGE> 12
this Agreement, severally and not jointly, up to an aggregate of
1,800,000 Additional Shares at the Purchase Price. If the
Representatives, on behalf of the Underwriters, elect to exercise such
option, the Representatives shall so notify [the Selling Shareholders]
in writing not later than 30 days after this date of this Agreement,
which notice shall specify the number of Additional Shares to be
purchased by the Underwriters and the date on which such shares are to
be purchased. Such date may be the same as the Closing Date (as defined
below) but not earlier than the Closing Date nor later than ten business
days after the date of such notice. Additional Shares may be purchased
as provided in Section 6 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares.
If any Additional Shares are to be purchased, each Underwriter agrees,
severally and not jointly, to purchase the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as the
Representatives may determine) that bears the same proportion to the
total number of Additional Shares to be purchased as the number of Firm
Shares set forth in Schedule II hereto opposite the name of such
Underwriter bears to the total number of Firm Shares.
(c) The Company hereby confirms its engagement of Morgan Stanley &
Co. Incorporated ("MORGAN STANLEY") as, and Morgan Stanley hereby
confirms its agreement with the Company to render services as, a
"qualified independent underwriter", within the meaning of Section (b)
(15) of Rule 2720 of the National Association of Securities Dealers,
Inc. (the "NASD") with respect to the offering and sale of the Shares.
Morgan Stanley, solely in its capacity as the qualified independent
underwriter and not otherwise, is referred to herein as the "QIU". The
price at which the Shares will be sold to the public shall not be higher
than the maximum price recommended by the QIU.
(d) Each of Seagate and Warburg agrees to execute a "lock-up"
agreement substantially in the forms set forth in Exhibits A and B
respectively.
5. Terms of Public Offering. The Company and the Selling Shareholders
are advised by you that the Underwriters propose to make a public offering of
their respective portions of the Shares as soon after the Registration Statement
and this Agreement have become effective as in your judgment is advisable. The
Company and the Selling Shareholders are further advised by you that the Shares
are to be offered to the public initially at U.S.$___ a share (the "PUBLIC
OFFERING PRICE") and to certain dealers selected by you at a price that
represents a concession not in excess of U.S.$____ a share under the Public
Offering Price, and that any
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Underwriter may allow, and such dealers may reallow, a concession, not in excess
of U.S.$___ a share, to any Underwriter or to certain other dealers.
6. Payment and Delivery. Payment for the Firm Shares to be sold by each
Selling Shareholder shall be made to such Selling Shareholder in Federal or
other funds immediately available in New York City against delivery of such Firm
Shares for the respective accounts of the several Underwriters at 9:00 a.m., New
York City time, on August 12, 1999, or at such other time on the same or such
other date, not later than August 19, 1999, as shall be designated in writing by
you. The time and date of such payment are hereinafter referred to as the
"CLOSING DATE."
Payment for any Additional Shares shall be made to the Selling
Shareholders in Federal or other funds immediately available in New York City
against delivery of such Additional Shares for the respective accounts of the
several Underwriters at 9:00 a.m., New York City time, on the date specified in
the notice described in Section 4 or at such other time on the same or on such
other date, in any event not later than September 23, 1999, as shall be
designated in writing by the Representatives. The time and date of such payment
are hereinafter referred to as the "OPTION CLOSING DATE."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
7. Conditions to the Underwriters' Obligations. The obligations of the
Selling Shareholders to sell the Shares to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Shares on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than __________ (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
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(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the
Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date:
(i) a certificate of the Company, dated the Closing Date
and signed by an executive officer of the Company, to the effect
set forth in Section 7(a)(i) above and to the effect that the
representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that
the Company has complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date (the officer signing and
delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened); and
(ii) a certificate of each Selling Shareholder, dated the
Closing Date and signed by an officer of such Selling
Shareholder, to the effect the representations and warranties of
such Selling Shareholder contained in this Agreement are true and
correct as of the Closing Date and that such Selling Shareholder
has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on
or before the Closing Date.
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(c) The Underwriters shall have received on the Closing Date an
opinion of Fenwick & West LLP, outside counsel for the Company, dated
the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ii) each subsidiary listed on Schedule III hereto of the
Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(iii) the authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the
Prospectus;
(iv) the shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding at the Closing Date
have been duly authorized and are validly issued, fully paid and
non-assessable;
(v) all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and, to the best of
such counsel's knowledge, are owned directly by the Company, free
and clear of all liens, encumbrances, equities or claims;
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(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required
for the performance by the Company of its obligations under this
Agreement, except such as have been already obtained or made
under the Securities Act and the rules and regulations of the
Commission thereunder or as may be required by the securities or
Blue Sky laws of the various states in connection with the offer
and sale of the Shares;
(viii) the statements (A) in the Prospectus under the caption
"Description of Capital Stock" and (B) in Part II of the
Registration Statement in Items 14 and 15, in each case insofar
as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(ix) such counsel does not know of any legal or
governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of
the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(x) the Company is not an "investment company" or an
entity "controlled" by an "investment company as such terms are
defined in the Investment Company Act of 1940, as amended; and
(xi) such counsel is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial and statistical data included
therein as to which such counsel need not express any opinion)
comply as to form in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
hereunder.
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In addition, nothing has come to the attention of such counsel
that causes such counsel to believe that (except for financial
statements and schedules and other financial and statistical data as to
which such counsel need not express any belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and that (except for financial statements and schedules and
other financial and statistical data as to which such counsel need not
express any belief) the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
With respect to Section 7(c)(xi) and statements in the above
paragraph, Fenwick & West LLP may state that its opinion and belief are
based upon its participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
(d) The Underwriters shall have received on the Closing Date an
opinion of Jay Jones, internal counsel for the Company, dated the
Closing Date, to the effect that the execution and delivery by the
Company of, and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or, to the
best of such counsel's knowledge, any agreement or other instrument
binding upon the Company or any of its subsidiaries that is material to
the Company and its subsidiaries, taken as a whole, or, to the best of
such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the company
or any subsidiary.
(e) The Underwriters shall have received on the Closing Date an
opinion of Wilson Sonsini Goodrich & Rosati ("WSGR"), counsel for
Seagate, dated the Closing Date, to the effect that:
(i) Seagate has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation;
(ii) this Agreement has been duly authorized, executed and
delivered by or on behalf of Seagate;
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<PAGE> 18
(iii) the Seagate Custody Agreement has been duly
authorized, executed and delivered by Seagate and is a valid and
binding agreement of Seagate.
(iv) the execution and delivery by Seagate of, and the
performance by Seagate of its obligations under, this Agreement
and the Seagate Custody Agreement will not result in a breach of
any of the terms and provisions of, or constitute a default under
(x) the certificate of incorporation or by-laws of Seagate, (y)
to such counsel's knowledge, any agreement or other instrument
binding upon Seagate to which Seagate is a party and which has
been filed as an exhibit by Seagate with the Securities and
Exchange Commission pursuant to Item 601 of Regulation S-K, or
(z) to such counsel's knowledge, any material judgment, order or
decree of any governmental body, agency or court having
jurisdiction over Seagate, which judgment order or decree names
Seagate, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required
for the performance by Seagate of its obligations under this
Agreement or the Seagate Custody Agreement, except such as have
been already obtained or made under the Securities Act and the
rules and regulations of the Commission thereunder or as may be
required by securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares;
(v) Seagate has the legal right and power, and full right,
power (including corporate power) and authority, to sell,
transfer and deliver the Shares to be sold by it; and
(vi) Upon the delivery of and against payment for the
Shares to be sold by Seagate pursuant to this Agreement, the
Underwriters will obtain good and marketable title to such
Shares, free and clear of any security interests, claims, liens,
equities and other encumbrances, assuming the Underwriters are
bona fide purchasers within the meaning of the Uniform Commercial
Code.
(f) The Underwriters shall have received on the Closing Date an
opinion of counsel for Warburg, dated the Closing Date, to the effect
that:
(i) Warburg is validly existing as a limited partnership
in good standing under the laws of the jurisdiction of the State
of
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<PAGE> 19
Delaware, has the all requisite partnership power and authority
to own its property and to conduct its business and is duly
qualified to transact business and is in good standing as a
foreign limited partnership in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have
a material adverse effect on Warburg;
(ii) this Agreement has been duly authorized, executed and
delivered by or on behalf of Warburg;
(iii) the Warburg Custody Agreement has been duly
authorized, executed and delivered by Warburg and is a valid and
binding agreement of Warburg.
(iv) the execution and delivery by Warburg of, and the
performance by Warburg of its obligations under, this Agreement
and the Warburg Custody Agreement will not contravene any
provision of (x) the limited partnership agreement or other
constitutive documents of Warburg, (y) any applicable New York or
federal law or, to the best of our knowledge, any agreement or
other instrument binding upon Warburg, or (z) to the best of our
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over Warburg, and no
consent, approval, authorization or order of, or qualification
with, any New York or federal governmental body or agency is
required for the performance by Warburg of its obligations under
this Agreement or the Warburg Custody Agreement, except such as
may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares;
(v) assuming that the Underwriters purchase the Shares
sold by Warburg pursuant to the Underwriting Agreement for value,
in good faith and without any notice of an adverse claim (as
defined in the New York Uniform Commercial Code), the delivery of
such Shares pursuant to the Underwriting Agreement will pass good
and valid title to such Shares, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or other claim.
(g) The Underwriters shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, counsel for the Underwriters, dated
the Closing Date, covering the matters referred to in Sections 7(c)(vi),
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<PAGE> 20
7(c)(viii) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters") and 7(c)(xi) above.
In addition, nothing has come to the attention of such counsel
that causes such counsel to believe that (except for financial
statements and schedules and other financial and statistical data as to
which such counsel need not express any belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and that (except for financial statements and schedules and
other financial and statistical data as to which such counsel need not
express any belief) the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
With respect to Section 7(c)(xi) above and the statements
in the above paragraph, Davis Polk & Wardwell may state that its opinion
and belief are based upon its participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are
without independent check or verification, except as specified. With
respect to Sections 7(e) and 7(f) above respectively, WSGR and counsel
to Warburg may rely upon an opinion or opinions of any other counsel for
Seagate or Warburg respectively, and, with respect to factual matters
and to the extent such counsel deems appropriate, upon the
representations of each of Seagate and Warburg respectively contained
herein and in the Seagate Custody Agreement and the Warburg Custody
Agreement, respectively and in other documents and instruments; provided
that (A) each such other counsel for Seagate or Warburg is satisfactory
to your counsel, (B) a copy of each opinion so relied upon is delivered
to you and is in form and substance satisfactory to your counsel, (C)
copies of any such other documents and instruments shall be delivered to
you and shall be in form and substance satisfactory to your counsel and
(D) such counsel shall state in their opinion that they are justified in
relying on each such other opinion.
The opinions of Fenwick & West LLP and counsel to the
Selling Shareholders described in Sections 7(c), 7(d), 7(e) and 7(f)
above (and any opinions of counsel for any Selling Shareholder referred
to in the immediately preceding paragraph) shall be rendered to the
Underwriters at the request of Seagate or Warburg, as the case may be,
and shall so state therein.
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<PAGE> 21
(h) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from each of Ernst & Young LLP and KPMG LLP,
independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and the
Prospectus; provided that the letter delivered on the Closing Date shall
use a "cut-off date" not earlier than the date hereof.
(i) The "lock-up" agreements, each substantially in the form of
Exhibits A through E hereto, between you and the Company and certain
shareholders, officers and directors of the Company relating to sales
and certain other dispositions of shares of Common Stock or certain
other securities, delivered to you on or before the date hereof, shall
be in full force and effect on the Closing Date.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to the delivery to the Representatives on the
Option Closing Date of such documents as they may reasonably request with
respect to the good standing of the Company, the due authorization and issuance
of the Additional Shares and other matters related to the issuance of the
Additional Shares.
8. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City,
without charge, prior to 10:00 a.m. New York City time on the business
day next succeeding the date of this Agreement and during the period
mentioned in Section 8(c) below, as many copies of the Prospectus and
any supplements and amendments thereto or to the Registration Statement
as you may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement
to which you reasonably object, and to file with the
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<PAGE> 22
Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such
Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the reasonable opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur
or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the reasonable opinion of counsel
for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file
with the Commission and furnish, at its own expense, to the Underwriters
and to the dealers (whose names and addresses you will furnish to the
Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus
as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending September 30, 2000 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
9. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of the
obligations of the Company and the Selling Shareholders under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the registration and delivery of
the Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities
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<PAGE> 23
hereinabove specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or
Legal Investment memorandum in connection with the offer and sale of the Shares
under state securities laws and all expenses in connection with the
qualification of the Shares for offer and sale under state laws and all expenses
in connection with the qualification of the Shares for offer and sale under
state laws as provided in Section 8(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of
counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) all fees and expenses in connection with the
preparation and filing of any registration statement on Form 8-A relating to the
Common Stock and all costs and expenses incident to listing the Shares on the
Nasdaq National Market and foreign stock exchanges, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (viii) the costs and expenses of the
Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show, (ix) all taxes, if any, on the transfer and sale of the Shares being sold
by each Selling Shareholder, and (x) all other costs and expenses incident to
the performance of the obligations of the Company and the Selling Shareholders
hereunder for which provision is not otherwise made in this Section. Whether or
not the transactions contemplated in this Agreement are consummated or this
Agreement is terminated, each of Seagate and Warburg agrees, severally and not
jointly, to pay or cause to be paid the fees, disbursements and expenses of its
counsel in connection with the registration and delivery of the Shares under the
Securities Act. It is understood, however, that except as provided in this
Section, Section 10 entitled "Indemnity and Contribution", and the last
paragraph of Section 12 below, the Underwriters will pay all of their costs and
expenses, including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
The provisions of this Section shall not supersede or otherwise affect
any agreement that the Company and the Selling Shareholders may otherwise have
for the allocation of such expenses among themselves.
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<PAGE> 24
10. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter or Selling Shareholder furnished to the
Company in writing by such Underwriter or such Selling Shareholder through you
expressly for use therein.
(b) The Company agrees to indemnify and hold harmless the QIU and each
person, if any, who controls the QIU within the meaning of either such section
from and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any amendment thereof, any preliminary prospectus
or the Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the QIU furnished to the Company in writing by the QIU
through you expressly for use therein
(c) Seagate agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
such section, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged
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<PAGE> 25
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with reference
to (i) information relating to Seagate furnished in writing by or on behalf of
Seagate expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto, and (ii)
the NSMG Information and provided that, with respect to any amount due an
indemnified person under this paragraph (c), Seagate shall be liable only to the
extent of the net proceeds received by Seagate from the sale of Seagate's Shares
pursuant to this Agreement.
(d) Warburg agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of either
such section, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to Warburg set forth in the
statements in the Prospectus under "Selling Shareholder," and provided that,
that with respect to any amount due an indemnified person under this paragraph
(c), Warburg shall be liable only to the extent of the net proceeds received by
Warburg from the sale of Warburg's Shares pursuant to this Agreement.
(e) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Shareholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by
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<PAGE> 26
such Underwriter through you expressly for use in the Registration Statement,
any preliminary prospectus, the Prospectus or any amendments or supplements
thereto.
(f) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 10(a), 10(b), 10(c), 10(d) or 10(e) or such person
(the "INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel, (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable period
of time after notice of such proceeding or (iii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for (i) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (ii) the fees and expenses of more than one separate firm (in addition to
any local counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section and (iii) the fees and expenses of more than
two separate firms (in addition to any local counsel) for all Selling
Shareholders and all persons, if any, who control any Selling Shareholder within
the meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Underwriters and such control persons of any Underwriters, such firm shall be
designated in writing by Morgan Stanley. In the case of any such separate firm
for the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. In the case of
any such separate firms for the Selling Shareholders and such control persons of
any Selling Shareholders, such firms shall be designated in writing by each of
the Selling Shareholders. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or
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<PAGE> 27
if there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding 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 claims that are the subject matter of such proceeding.
(g) To the extent the indemnification provided for in Section 10(a),
10(b), 10(c), 10(d) or 10(e) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause 10(g)(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 10(g)(i) above but also the
relative fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Selling Shareholders on the one hand and the Underwriters on the
other hand in connection with the offering of the Shares shall be deemed to be
in the same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by each Selling Shareholder and the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the Selling
Shareholders on the one hand and the Underwriters on the other hand 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 Selling Shareholders or
by the
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<PAGE> 28
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section 10
are several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
(h) The Company, the Selling Shareholders, the Underwriters and the QIU
agree that it would not be just or equitable if contribution pursuant to this
Section 10 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 10(g). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that 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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 10 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(i) The indemnity and contribution provisions contained in this Section
10 and the representations, warranties and other statements of the Company and
the Selling Shareholders contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, any Selling Shareholder or any person controlling
any Selling Shareholder, or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
11. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange or the National Association of
Securities Dealers, Inc., (ii) trading of any securities of the Company shall
have
27
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been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is material
and adverse and (b) in the case of any of the events specified in clauses
11(a)(i) through 11(a)(iv), such event, singly or together with any other such
event, makes it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
12. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule II and III bears to the aggregate
number of Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase the
Shares which such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase on such date; provided that in no event shall the number of
Shares that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 12 by an amount in excess of one-ninth of
such number of Shares without the written consent of such Underwriter. If, on
the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased, and arrangements satisfactory to you, the Company and
the Selling Shareholders for the purchase of such Firm Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Shareholders. In any such case either you or the relevant Selling
Shareholders shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate
28
<PAGE> 30
their obligation hereunder to purchase Additional Shares or (ii) purchase not
less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Selling Shareholder
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason any Selling Shareholder shall be unable to perform its
obligations under this Agreement, the Selling Shareholders will reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
13. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
29
<PAGE> 31
Very truly yours,
VERITAS SOFTWARE CORPORATION
By:_____________________________________
Name:
Title:
SEAGATE SOFTWARE, INC.
By:_____________________________________
Name:
Title:
WARBURG, PINCUS INVESTORS L.P.
Warburg, Pincus & Co., its general
partner
By:_____________________________________
Name:
Title:
30
<PAGE> 32
Accepted as of the date hereof
MORGAN STANLEY & CO.
INCORPORATED
CREDIT SUISSE FIRST BOSTON
CORPORATION
GOLDMAN, SACHS & CO.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SG COWEN SECURITIES
CORPORATION
Acting severally on behalf of
themselves and the several U.S.
Underwriters named in Schedule II hereto.
By: MORGAN STANLEY & CO.
INCORPORATED
By:_____________________________________
Name:
Title:
31
<PAGE> 33
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF FIRM SHARES TO
SELLING SHAREHOLDER BE SOLD
------------------- ------------------------
<S> <C>
Seagate Software, Inc.
Warburg, Pincus Investors, L.P.
----------
Total: 12,000,000
==========
</TABLE>
32
<PAGE> 34
SCHEDULE II
<TABLE>
<CAPTION>
NUMBER OF FIRM SHARES TO
UNDERWRITER BE PURCHASED
----------- -------------------------
<S> <C>
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Donaldson, Lufkin & Jenrette Securities
Corporation
SG Cowen Securities Corporation
----------
Total: 12,000,000
==========
</TABLE>
33
<PAGE> 35
SCHEDULE III
MATERIAL SUBSIDIARIES OF
VERITAS SOFTWARE CORPORATION
VERITAS Operating Corporation
Seagate Software Network & Storage Management Group
2
<PAGE> 36
EXHIBIT A
FORM OF LOCK-UP LETTER FOR SEAGATE SOFTWARE, INC.
August 9, 1999
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Donaldson, Lufkin & Jenrette Securities Corporation
SG Cowen Securities Corporation, as representatives
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY") propose to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with VERITAS Software Corporation, a Delaware
corporation (the "COMPANY"), and certain stockholders of the Company (the
"SELLING STOCKHOLDERS") in connection with the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Morgan Stanley (the
"UNDERWRITERS"), of up to 12,000,000 shares (the "SHARES") of common stock of
the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or (2) enter into any swap or other arrangement that transfers to
another person, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (a)
the sale of any Shares to the Underwriters pursuant
A-2
<PAGE> 37
to the Underwriting Agreement, (b) transactions relating to shares of Common
Stock or other securities acquired in open market transactions after the
completion of the Public Offerings or (c) transfers of any equity securities to
affiliates of the undersigned so long as such transferees, prior to or
simultaneous with such transfer, agree to be bound by the foregoing restrictions
for the remainder of the period for which the undersigned is bound. In addition,
the undersigned agrees that, without the prior written consent of Morgan Stanley
on behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 90 days after the date of the Prospectus, make any demand
for or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable for
Common Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
SEAGATE SOFTWARE, INC.
By:_____________________________
Name:
Title:
A-3
<PAGE> 38
EXHIBIT B
FORM OF LOCK-UP LETTER FOR WARBURG, PINCUS INVESTORS, L.P.
August 9, 1999
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Donaldson, Lufkin & Jenrette Securities Corporation
SG Cowen Securities Corporation, as representatives
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY") propose to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with VERITAS Software Corporation, a Delaware
corporation (the "COMPANY"), and certain stockholders of the Company (the
"SELLING STOCKHOLDERS") in connection with the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Morgan Stanley (the
"UNDERWRITERS"), of up to 12,000,000 shares (the "SHARES") of common stock of
the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or (2) enter into any swap or other arrangement that transfers to
another person, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (a)
the sale of any Shares to the Underwriters pursuant
B-2
<PAGE> 39
to the Underwriting Agreement or (b) transactions relating to shares of Common
Stock or other securities acquired in open market transactions after the
completion of the Public Offerings. In addition, the undersigned agrees that,
without the prior written consent of Morgan Stanley on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 90 days after the date of the Prospectus, make any demand for or exercise
any right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
The undersigned agrees to be bound by this agreement whether or not the
undersigned participates in the Public Offering as one of the Selling
Stockholders.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
WARBURG, PINCUS INVESTORS, L.P.
Warburg, Pincus & Co., its general
partner
By:_________________________________
Name:
Title:
B-3
<PAGE> 40
EXHIBIT C
FORM OF LOCK-UP LETTER FOR THE COMPANY
August 9, 1999
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Donaldson, Lufkin & Jenrette Securities Corporation
SG Cowen Securities Corporation, as representatives
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated
("MORGAN STANLEY") propose to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with the undersigned, a Delaware corporation (the
"COMPANY"), and certain stockholders of the Company, in connection with the
public offering (the "PUBLIC OFFERING") by the several Underwriters, including
Morgan Stanley (the "UNDERWRITERS"), of up to 12,000,000 shares (the "SHARES")
of common stock of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 90 days after the date of the final prospectus
relating to the Public Offering (each, a "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or (2) enter into any swap or other arrangement that transfers to
another person, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (a)
the issuance by the Company of the Common Stock, (b) the grant by the Company of
options or issuance by it of stock upon the exercise of outstanding stock
options pursuant to the Company's stock option plans, or (c) actions taken by
the Company in connection with acquisitions of
C-2
<PAGE> 41
technologies, businesses or portions thereof. In addition, the undersigned
agrees that, without the prior written consent of Morgan Stanley on behalf of
the Underwriters, it will not, during the period commencing on the date hereof
and ending 90 days after the date of the Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
VERITAS SOFTWARE CORPORATION
By:_________________________________
Name:
Title:
C-3
<PAGE> 42
EXHIBIT D
FORM OF LOCK-UP LETTER FOR MANAGEMENT
August 9, 1999
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Donaldson, Lufkin & Jenrette Securities Corporation
SG Cowen Securities Corporation, as representatives
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
The undersigned (collectively, the "MANAGEMENT") understand that Morgan
Stanley & Co. Incorporated ("MORGAN STANLEY") propose to enter into an
Underwriting Agreement (the "UNDERWRITING AGREEMENT") with VERITAS Software
Corporation, a Delaware corporation (the "COMPANY"), and certain stockholders of
the Company, in connection with the public offering (the "PUBLIC OFFERING") by
the several Underwriters, including Morgan Stanley (the "UNDERWRITERS"), of up
to 12,000,000 shares (the "SHARES") of common stock of the Company (the "COMMON
STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agree that, except as to 600,000 shares of common stock held
in the aggregate by Management, as further described in Annex A attached hereto,
without the prior written consent of Morgan Stanley on behalf of the
Underwriters, they will not, during the period commencing on the date hereof and
ending 90 days after the date of the final prospectus relating to the Public
Offering (each, a "PROSPECTUS"), (1) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or (2) enter
into any swap or other arrangement that transfers to another person, in whole or
in part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to transactions relating to
shares of Common Stock or
D-2
<PAGE> 43
other securities acquired in open market transactions after the completion of
the Public Offerings. In addition, the undersigned agree that, without the prior
written consent of Morgan Stanley on behalf of the Underwriters, they will not,
during the period commencing on the date hereof and ending 90 days after the
date of the Prospectus, make any demand for or exercise any right with respect
to, the registration of any shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock.
Whether or not the Public Offerings actually occur depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
This agreement may be executed in counterparts, each of which will be
deemed an original and all of which together will constitute one and the same
instrument.
Very truly yours,
_________________________________________
Mark Leslie
Chief Executive Officer
_________________________________________
Terence R. Cunningham
President and Chief Operating Officer
_________________________________________
Geoffrey W. Squire
Executive Vice-President
_________________________________________
Fred van den Bosch
Executive Vice-President
_________________________________________
Peter J. Levine
Senior Vice-President
D-3
<PAGE> 44
_________________________________________
Kenneth Lonchar
Senior Vice-President
_________________________________________
Paul A. Sallaberry
Senior Vice President
_________________________________________
Jay A. Jones
Senior Vice-President
_________________________________________
Michael Colemere
Vice-President
_________________________________________
Michael Wentz
Vice-President
_________________________________________
David Hallmen
Vice-President
D-4
<PAGE> 45
ANNEX A
<TABLE>
<CAPTION>
OFFICER NUMBER OF SHARES(1)
- ------- -----------------
<S> <C>
Mark Leslie
Terence R. Cunnigham
Geoffrey W. Squire
Fred van den Bosch
Peter J. Levine
Kenneth Lonchar
Paul Sallaberry
Jay A. Jones
Michael Colmere
Michael Wentz
David Hallmen
--------
TOTAL 600,000
</TABLE>
- --------------
(1) Subject to revision. If any listed officer decides to dispose of
less than the number of shares of common stock of the Company listed opposite
his name, he will advise Jay A. Jones, Senior Vice President and General Counsel
of the Company, who will be responsible for consulting with the other listed
officers and taking all appropriate action to the reallocation of such shares
among the other listed officers.
D-5
<PAGE> 46
EXHIBIT E
FORM OF LOCK-UP LETTER FOR THE DIRECTORS
Morgan Stanley & Co. Incorporated
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Donaldson, Lufkin & Jenrette Securities Corporation
SG Cowen Securities Corporation, as representatives
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
The undersigned (collectively, the "DIRECTORS") understand that Morgan
Stanley & Co. Incorporated ("MORGAN STANLEY") propose to enter into Underwriting
Agreement (the "UNDERWRITING AGREEMENT") with VERITAS Software Corporation, a
Delaware corporation (the "COMPANY"), and certain stockholders of the Company,
in connection with the public offering (the "PUBLIC OFFERING") by the several
Underwriters, including Morgan Stanley (the "UNDERWRITERS"), of up to 12,000,000
shares (the "SHARES") of common stock of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agree that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, they will not, during the period
commencing on the date hereof and ending 90 days after the date of the final
prospectus relating to the Public Offering (each, a "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or (2) enter into any swap or other arrangement
that transfers to another person, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
Public Offerings. In addition, the undersigned agree that, without the prior
written
E-2
<PAGE> 47
consent of Morgan Stanley on behalf of the Underwriters, they will not, during
the period commencing on the date hereof and ending 90 days after the date of
the Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occur depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
This agreement may be executed in counterparts, each of which will be
deemed an original and all of which together will constitute one and the same
instrument.
Very truly yours,
_________________________________________
Steven Brooks
Director
_________________________________________
William H. Janeway
Director
_________________________________________
Gregory B. Kerfoot
Director
_________________________________________
Stephen J. Luczo
Director
_________________________________________
Joseph D. Rizzi
Director
E-3
