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Exhibit 1.1
2,000,000 SHARES
SILVERSTREAM SOFTWARE, INC.
COMMON STOCK, $.001 PAR VALUE
UNDERWRITING AGREEMENT
JANUARY 2000
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January , 2000
Xxxxxx Xxxxxxx & Co. Incorporated
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
XX Xxxxx Securities Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
SilverStream Software, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters named in Schedule II
hereto (the "UNDERWRITERS") an aggregate of 1,245,851 shares of Common Stock,
$.001 par value per share, of the Company (the "COMPANY FIRM SHARES"). Certain
founding shareholders of the Company (the "SELLING FOUNDER SHAREHOLDERS") named
in Schedule I hereto, certain non-founding management shareholders of the
Company (the "SELLING MANAGEMENT SHAREHOLDERS") named in Schedule I hereto and
certain other shareholders of the Company (the "SELLING NON-AFFILIATE
SHAREHOLDERS," and collectively with the Selling Founder Shareholders and the
Selling Management Shareholders, the "SELLING SHAREHOLDERS") named in Schedule I
hereto severally propose to sell to the several Underwriters an aggregate of
754,149 shares of Common Stock, $.001 par value per share, of the Company (the
"SELLING SHAREHOLDER FIRM SHARES," and collectively with the Company Firm
Shares, the "FIRM SHARES"), each Selling Shareholder selling the amount set
forth opposite such Selling Shareholder's name in Schedule I hereto.
The Company also proposes to issue and sell to the several Underwriters
not more than an additional 300,000 shares of its Common Stock, $.001 par value
per share (the "ADDITIONAL SHARES"), if and to the extent that you, as Managers
of the offering, 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 3 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES." The shares of Common
Stock, $.001 par value per share, of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"COMMON STOCK." The Company and the Selling Shareholders are hereinafter
sometimes collectively referred to as the "SELLERS."
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
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the term "REGISTRATION STATEMENT" shall be deemed to include such Rule 462
Registration Statement.
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; 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 Company's knowledge, 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 Securities Act and the
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 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 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; all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are
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fully paid and non-assessable and, except for director qualifying
shares, 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.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding prior to the issuance of
the Shares to be sold by the Company have been duly authorized and are
validly issued, fully paid and non-assessable.
(h) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to
any preemptive or similar rights.
(i) 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 may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(j) 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).
(k) There are no (i) legal or governmental proceedings pending
or, to the Company's knowledge, 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 (ii) 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.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under
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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.
(m) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(n) 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.
(o) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(p) 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, 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 subsidiaries, except in
each case as described in the Prospectus.
(q) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the
business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with
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such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the
Prospectus.
(r) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business
now operated by them, 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, would be reasonably likely to have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(s) No material labor dispute with the employees of the
Company or any of its subsidiaries exists, except as described in the
Prospectus, or, to the knowledge of the Company, is imminent; and the
Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(t) The Company and its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as, in the Company's reasonable judgment, are
prudent and customary in the businesses in which they are engaged;
neither the Company nor any of its subsidiaries has been refused any
insurance coverage sought or applied for; and neither the Company nor
any of its subsidiaries has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, except as described in the Prospectus.
(u) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses other than those which, if not so possessed, would not have
a material adverse effect on the Company and its subsidiaries, taken as
a whole, and neither the Company nor any of its subsidiaries 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 have a material adverse effect on the Company
and its subsidiaries, taken as a whole, except as described the
Prospectus.
(v) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii)
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transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(w) The accountants who have certified or shall certify the
financial statements filed or to be filed with the Commission as part
of the Registration Statement and the Prospectus are independent
accountants as required by the Securities Act. The consolidated
financial statements of the Company and its subsidiaries (together with
the related notes thereto) included in the Registration Statement
present fairly the financial position and results of operations of the
Company and its subsidiaries at the respective dates and for the
respective periods to which they apply, subject to normal year-end
adjustments. Such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved except as otherwise stated therein.
(x) The Shares have been approved for listing on the Nasdaq
National Market, subject to official notice of issuance.
(y) 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, other than the Third
Amended and Restated Investor Rights Agreement dated March 1, 1999, as
amended, for which an appropriate waiver has been obtained.
(z) 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.
(aa) The Company has reviewed 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 Registration Statement or Prospectus
which have not been accurately described in the Registration Statement
or 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
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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
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, except to the
extent that a failure to address the Year 2000 Problem by any
supplier, vendor, customer or 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.
2. Representations and Warranties of the Selling Shareholders.
(a) Each of the Selling Shareholders, severally and not
jointly, represents and warrants to and agrees with each of the
Underwriters that:
(i) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(ii) The execution and delivery by such Selling
Shareholder of, and the performance by such Selling
Shareholder of its obligations under, this Agreement, the
Custody Agreement signed by such Selling Shareholder and the
Company, as Custodian, relating to the deposit of the Shares
to be sold by such Selling Shareholder (the "CUSTODY
AGREEMENT") and the Power of Attorney appointing certain
individuals as such Selling Shareholder's attorneys-in-fact to
the extent set forth therein, relating to the transactions
contemplated hereby and by the Registration Statement (the
"POWER OF ATTORNEY"), will not contravene any provision of
applicable law, or the certificate of incorporation (or
similar charter) or by-laws of such Selling Shareholder (if
such Selling Shareholder is a corporation), or any agreement
or other instrument binding upon such Selling Shareholder or
any judgment, order or decree of any governmental body, agency
or court having jurisdiction over such Selling Shareholder,
and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is
required for the performance by such Selling Shareholder of
its obligations under this Agreement or the Custody Agreement
or Power of Attorney of such Selling Shareholder, 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.
(iii) Such Selling Shareholder has, and on the Closing
Date will have, valid title to the Shares to be sold by such
Selling Shareholder and the legal right and power, and all
authorization and approval required by law, to enter into this
Agreement, the Custody Agreement and the Power of Attorney and
to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder.
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(iv) The Custody Agreement and the Power of Attorney
have been duly authorized, executed and delivered by such
Selling Shareholder and are valid and binding agreements of
such Selling Shareholder.
(v) Delivery of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement will pass title to such
Shares free and clear of any security interests, claims,
liens, equities and other encumbrances.
(b) Each of the Selling Founder Shareholders, severally and
not jointly, represents and warrants to and agrees with each of the
Underwriters that: (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 Securities Act and the 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 2(b) 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) Each of the Selling Management Shareholders, severally and
not jointly, represents and warrants to and agrees with each of the
Underwriters that such Selling Management Shareholder has reviewed and
is familiar with the Registration Statement and the Prospectus (or, if
the Prospectus is not in existence, the most recent preliminary
prospectus) and, to the knowledge of such Selling Management
Shareholder without independent investigation or verification: (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 Securities Act and the 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
2(c) 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.
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(d) Each of the Selling Non-Affiliate Shareholders, severally
and not jointly, represents and warrants to and agrees with each of the
Underwriters that: (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 Securities Act and the 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 2(d) shall apply only to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to such Selling Non-Affiliate
Shareholder furnished to the Company in writing by or on behalf of such
Selling Non-Affiliate Shareholder expressly for use therein.
3. Agreements to Sell and Purchase. The Company and each Selling
Shareholder hereby agree, severally and not jointly, to sell to the several
Underwriters the Firm Shares in the respective amounts set forth in Schedule I
hereto, 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 the Company and the Selling
Shareholders the respective numbers of Firm Shares set forth in Schedule II
hereto opposite its name at $_____ a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell to the Underwriters the Additional Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 300,000
Additional Shares at the Purchase Price. If you, on behalf of the Underwriters,
elect to exercise such option, you shall so notify the Company in writing not
later than 30 days after the 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 5 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 you 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.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not, during the period
ending 90 days after the date of the
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Prospectus, (i) 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 (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) 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 Shares to be sold hereunder, (B) the
issuance by the Company of shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security outstanding on the date hereof that
is described in the Prospectus or of which the Underwriters have been advised in
writing or (C) the issuance by the Company of shares of Common Stock or options
to purchase shares of Common Stock issued pursuant to the Company's stock plans
as described in the Prospectus. The Company agrees that, without the prior
written consent of Xxxxxx Xxxxxxx, it will not, during the period ending 90 days
after the date of the Prospectus, file or cause to become effective any
registration statement relating to any securities of the Company, including a
registration statement registering shares under any of the Company's stock plans
or other employee benefit plans.
Each Selling Shareholder hereby agrees to execute and deliver on or
before the Closing Date a "lock-up" agreement substantially in the form of
Exhibit A hereto. In addition, each Selling Shareholder agrees that, without the
prior written consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will
not, during the period 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.
4. Terms of Public Offering. The Sellers 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 Sellers are further
advised by you that the Shares are to be offered to the public initially at
$______ a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by
you at a price that represents a concession not in excess of $_____ a share
under the Public Offering Price, and that any Underwriter may allow, and such
dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
5. Payment and Delivery. Payment for the Firm Shares shall be made to
the Sellers 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 10:00 a.m., New York City time, on ________ __, 2000 or at such
other time on the same or such other date, not later than _________ __, 2000 as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE." The closing of the offering and
sale of the Firm Shares will be held at the offices of Xxxx and Xxxx LLP, 00
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx.
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Payment for any Additional Shares shall be made to the Company 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 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3 or at such other time on the same or on such other
date, in any event not later than ___________ __, 2000 as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "OPTION CLOSING DATE". The closing of the offering and sale of the
Additional Shares will be held at the offices of Xxxx and Xxxx LLP, 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx.
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.
6. Conditions to the Underwriters' Obligations. The obligations of the
Sellers 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 4:30 p.m. (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:
(i) if any of the Company's securities are rated by
any "nationally recognized statistical rating organization,"
as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act, 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 such securities;
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.
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13
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 6(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.
(c) The Underwriters shall have received on the Closing Date
an opinion of Xxxx and Xxxx 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 the Commonwealth of Massachusetts, the State of California,
the State of Georgia, the State of Illinois, the State of Kentucky, the
State of Maryland, the State of Michigan, the State of Minnesota, the
State of New Jersey, the State of New York, the State of Ohio, the
Commonwealth of Pennsylvania, the State of Texas and the State of
Virginia, which to such counsel's knowledge are the only jurisdictions
in which the Company owns or leases real property in the United States;
(ii) to such counsel's knowledge, the Company has no
subsidiaries except as set forth on Exhibit 21.1 of the Registration
Statement, and each domestic subsidiary of the Company listed on Exhibit
21.1 of the Registration Statement has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, and has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus;
(iii) the authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the
Prospectus and the Shares have been duly authorized for quotation on the
Nasdaq National Market;
(iv) the shares of Common Stock (including the Shares to
be sold by the Selling Shareholders) outstanding prior to the issuance
of the Shares to be sold by the Company have been duly authorized and
are validly issued, fully paid and non-assessable;
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14
(v) all of the issued shares of capital stock of each
domestic subsidiary of the Company listed on Exhibit 21.1 of the
Registration Statement have been duly authorized and validly issued, are
fully paid and non-assessable and are owned of record directly by the
Company, and none of the documents filed as an exhibit to the
Registration Statement or that are listed on a schedule to be provided
by or on behalf of the Underwriters create any liens, encumbrances,
equities or claims on any such shares;
(vi) the Shares to be sold by the Company have been duly
authorized and, when issued and delivered and paid for by the
Underwriters in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive rights under the Delaware
General Corporation Law, statute, the certificate of incorporation or
by-laws of the Company or, to such counsel's knowledge, similar rights
granted by contract;
(vii) this Agreement has been duly authorized, executed
and delivered by the Company;
(viii) 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 such counsel's
knowledge, any agreement or other instrument binding upon the Company or
any of its subsidiaries that has been filed as an exhibit to the
Registration Statement, or, to such counsel's knowledge, 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 may have
been obtained or made under the Securities Act and 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;
(ix) to such counsel's knowledge, (i) no shares of Common
Stock are required pursuant to any agreement or other right to be
registered under the Registration Statement, and (ii) no person has the
right to require such registration, except such rights that have either
been satisfied or validly waived;
(x) the statements (1) in the Prospectus under the
captions "Description of Capital Stock," "Shares Eligible For Future
Sale," and the first, second, fourth, fifth, seventh, ninth, and tenth
paragraphs under "Underwriters" and (2) in 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 required with
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respect to such legal matters, documents and proceedings and
fairly summarize in all material respects the matters required
to be disclosed therein;
(xi) 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 by the Securities Act or by the rules and regulations
thereunder 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;
(xii) the Company is not and, after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be
an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(xiii) such counsel (1) 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 thereunder; (2) shall state that
nothing has come to the attention of such counsel that would
cause 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 (3) shall
state that nothing has come to the attention of such counsel
that would cause 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 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.
(d) The Underwriters shall have received on the Closing Date
an opinion of Peeters & Partners, Belgium counsel for the Company,
dated the Closing Date, to the effect that:
(i) SilverStream Software BVBA/SPRL (the "Belgium
Subsidiary") has been duly incorporated, is validly existing
as a corporation under the laws of Belgium, has the corporate
power and authority to own its property and to conduct its
business as now conducted and is duly qualified to transact
business and is in
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16
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) all of the issued shares of capital stock of the
Belgium Subsidiary 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, and there are no options,
warrants or rights to purchase, or other agreements or
obligations to issue, or rights to convert any obligation into
any shares of capital stock or ownership interest in the
Belgium Subsidiary; and
(iii) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Belgium Subsidiary is a party or to which any of the
properties of the Belgium Subsidiary is subject.
(e) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxx Xxxx and Xxxx, United Kingdom counsel for the
Company, dated the Closing Date, to the effect that:
(i) SilverStream Software Limited (the "United Kingdom
Subsidiary") has been duly incorporated, is validly existing
as a corporation under the laws of United Kingdom, has the
corporate power and authority to own its property and to
conduct its business as now conducted 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) all of the issued shares of capital stock of the
United Kingdom Subsidiary 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, and there are no
options, warrants or rights to purchase, or other agreements
or obligations to issue, or rights to convert any obligation
into any shares of capital stock or ownership interest in the
United Kingdom Subsidiary; and
(iii) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the United Kingdom Subsidiary is a party or to which any
of the properties of the United Kingdom Subsidiary is subject.
(f) The Underwriters shall have received on the Closing Date
an opinion of Xxxx and Xxxx LLP, counsel for each of the Selling
Shareholders who are natural persons, dated the Closing Date, and an
opinion of counsel (satisfactory to your counsel) for each
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17
of the Selling Shareholders who are not natural persons, each dated the
Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by or on behalf of each of the Selling
Shareholders;
(ii) the execution and delivery by each Selling
Shareholder of, and the performance by such Selling
Shareholder of its obligations under, this Agreement and the
Custody Agreement and Powers of Attorney of such Selling
Shareholder will not contravene any provision of applicable
law, or the certificate of incorporation or by-laws of such
Selling Shareholder (if such Selling Shareholder is a
corporation), or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon such Selling
Shareholder or, to the best of such counsel's knowledge, any
judgment, order or decree of any governmental body, agency or
court having jurisdiction over such Selling Shareholder, and
no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is
required for the performance by such Selling Shareholder of
its obligations under this Agreement or the Custody Agreement
or Power of Attorney of such Selling Shareholder, except such
as have been obtained or made under the Securities Act and
such as may be required by the securities or Blue Sky laws of
the various states in connection with offer and sale of the
Shares;
(iii) each of the Selling Shareholders has sole and
exclusive rights and interests in and to the Shares to be sold
by such Selling Shareholder and the legal right and power, and
all authorization and approval required by law, to enter into
this Agreement and the Custody Agreement and Power of Attorney
of such Selling Shareholder and to sell, transfer and deliver
the Shares to be sold by such Selling Shareholder;
(iv) the Custody Agreement and the Power of Attorney of
each Selling Shareholder have been duly authorized, executed
and delivered by such Selling Shareholder and are valid and
binding agreements of such Selling Shareholder; and
(v) upon the Underwriters obtaining control of the
Shares to be sold by the Selling Shareholders, and assuming
the Underwriters acquired such Shares for value and without
notice of any adverse claim to such Shares within the meaning
of Section 8-102 of the Uniform Commercial Code as in effect
in The Commonwealth of Massachusetts, the Underwriters will
have acquired all rights of the Selling Shareholders in such
Shares free of any adverse claim, any lien in favor of the
Company and any restrictions on transfer imposed by the
Company.
(g) The Underwriters shall have received on the Closing Date
an opinion of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for the
Underwriters, dated the Closing Date, covering the matters referred to
in Sections 6(c)(vi), 6(c)(vii), 6(c)(x) (but only as to the
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18
statements in the Prospectus under "Description of Capital Stock" and
"Underwriters") and 6(c)(xiii) above.
With respect to Section 6(c)(xiii) above, Xxxx and Xxxx LLP
and Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP may state that their opinion and
belief are based upon their 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 Section 6(f) above, Xxxx and Xxxx LLP may rely upon an
opinion or opinions of counsel for any Selling Shareholders and, with
respect to factual matters and to the extent such counsel deems
appropriate, upon the representations of each Selling Shareholder
contained herein and in the Custody Agreement and Power of Attorney of
such Selling Shareholder and in other documents and instruments;
provided that (i) each such counsel for the Selling Shareholders is
satisfactory to your counsel, (ii) a copy of each opinion so relied
upon is delivered to you and is in form and substance satisfactory to
your counsel, (iii) copies of such Custody Agreements and Powers of
Attorney and of any such other documents and instruments shall be
delivered to you and shall be in form and substance satisfactory to
your counsel and (iv) Xxxx and Xxxx LLP shall state in their opinion
that they are justified in relying on each such other opinion.
The opinions of Xxxx and Xxxx LLP, Xxxxxxx & Partners, Xxxxxxx
Xxxx and Xxxx and such other counsel described in Sections 6(c), 6(d),
6(e) and 6(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 the Company or one or
more of the Selling Shareholders, as the case may be, and shall so
state therein.
(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 Ernst & Young 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 Exhibit A hereto, between you 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 Underwriters to purchase Additional
Shares hereunder are subject to the delivery to you on the Option Closing Date
of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and
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19
issuance of the Additional Shares and other matters related to the issuance of
the Additional Shares.
7. 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, four 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 7(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 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 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 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 earnings statement
covering the twelve-month period ending March 31, 2000 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
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20
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Sellers agree to
pay or cause to be paid all expenses incident to the performance of their
obligations under this Agreement, and that (a) the Company shall pay: (1) 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 hereinabove specified; (2) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any transfer
or other taxes payable thereon; (3) 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 securities laws as
provided in Section 6(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; (4) 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.; (5) all costs and expenses incident to listing the
Shares on the Nasdaq National Market; (6) the cost of printing certificates
representing the Shares; (7) the costs and charges of any transfer agent,
registrar or depositary; (8) 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; and (9) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made
in this Section; and (b) each Selling Shareholder shall pay or cause to be paid
all costs and expenses incident to the performance of such Selling Shareholder's
obligations under this Agreement which are not otherwise specifically provided
for in this Section 8, including (i) any fees and expenses of counsel for such
Selling Shareholder, (ii) such Selling Shareholder's pro rata share of the fees
and expenses of the Attorneys-in-Fact and the Custodian; and (iii) all costs and
expenses related to the transfer, sale and delivery of the Shares to be sold by
such Selling Shareholder to the Underwriters, including any transfer or other
taxes payable thereon. It is understood, however, that except as provided in
this Section, Section 9 entitled "Indemnity and Contribution," and the last
paragraph of Section 11 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 Sellers may otherwise have for the allocation of such
expenses among themselves.
9. Indemnity and Contribution.
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(a) The Company, the Selling Founder Shareholders and the
Selling Management Shareholders, jointly and severally, agree 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 furnished to the Company
in writing by such Underwriter through you expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 7(a) hereof. Notwithstanding
anything contained herein to the contrary, the aggregate liability of
any Selling Shareholder under this Section 9(a) shall be limited to the
aggregate net proceeds actually received from the sale of Shares by
such Selling Shareholder hereunder.
(b) The Selling Non-Affiliate Shareholders, severally and not
jointly, agree 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 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 respect to information relating to such Selling Non-Affiliate
Shareholder furnished in writing by or on behalf of such Selling
Non-Affiliate Shareholder expressly for use in the Registration
Statement, any
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22
preliminary prospectus, the Prospectus or any amendments or supplements
thereto; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 7(a) hereof. Notwithstanding
anything contained herein to the contrary, the aggregate liability of
each Selling Non-Affiliate Shareholder under this Section 9(b) shall be
limited to the aggregate net proceeds actually received from the sale
of Shares by such Selling Non-Affiliate Shareholder hereunder.
(c) Each Selling Shareholder agrees, severally and not
jointly, to indemnify and hold harmless 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 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 Selling Shareholder furnished
in writing by or on behalf of such Selling Shareholder expressly for
use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom
the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy
of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or
given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such
failure is the result of noncompliance by the Company with Section 7(a)
hereof. Notwithstanding anything contained herein to the contrary, the
aggregate liability of each Selling Shareholder under this Section 9(b)
shall be limited to the aggregate net proceeds actually received from
the sale of Shares by such Selling Shareholder hereunder.
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(d) 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 to the same
extent as the foregoing indemnities from the Company and each Selling
Shareholder to such Underwriter, but only with reference to information
relating to such Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendments
or supplements thereto.
(e) 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 9(a), 9(b), 9(c) or
9(d), 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 or (ii) 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 (1) 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, (2) 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 (3) the fees and expenses of more
than one separate firm (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 Xxxxxx Xxxxxxx. 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 firm for the Selling Shareholders and
such control persons of any Selling Shareholders, such firm shall be
designated in writing by the Selling Shareholders. The indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written
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24
consent, but if settled with such consent or 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. 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.
(f) To the extent the indemnification provided for in Section
9(a), 9(b), 9(c) or 9(d) 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 9(f)(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 9(f)(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 Sellers 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 Seller 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 Sellers 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 Sellers or by the
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 9 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(g) The Sellers and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 9 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 9(f). 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
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25
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, 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
9 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.
(h) The indemnity and contribution provisions contained in
this Section 9 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.
10. 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, the National Association
of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have 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 10(a)(i) through 10(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.
11. 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
- 24 -
26
respective names in Schedule II 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 11 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 Sellers 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 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 Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers 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.
11. 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.
12. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
13. 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.
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27
Very truly yours,
SILVERSTREAM SOFTWARE, INC.
By:____________________________
Name:
Title:
The Selling Shareholders named in Schedule I
hereto, acting severally
By:_____________________________
Name:
Attorney-in-Fact
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
XX Xxxxx Securities Corporation
Acting severally on behalf
of themselves and the
several Underwriters named
in Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:__________________________
Name:
Title:
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28
SCHEDULE I
NUMBER OF FIRM
SHARES TO BE SOLD
-----------------
Company .................................................. 1,245,851
SELLING FOUNDER SHAREHOLDERS:
Xxxxx X. Xxxx ............................................. 122,206
Xxxxxx Trust .............................................. 100,000
Concord Trust ............................................. 10,000
Xxxxx X. Xxxxxxx .......................................... 119,420
Xxxxxxx Irrevocable Trust ................................. 112,786
SELLING MANAGEMENT SHAREHOLDERS:
Xxxxx X. Xxxxxx ........................................... 57,611
Xxxx X. Xxxxxx ............................................ 35,698
Xxx X. Xxxxxxxxx .......................................... 35,698
Xxxxxx X. Xxxxxxx ......................................... 45,376
Xxxxx X. Xxxxx ............................................ 7,938
SELLING NON-AFFILIATE SHAREHOLDERS:
Ardent Research Partners, L.P. ............................ 27,611
Xxxxx Xxxxxxx ............................................. 10,000
Wenonah Development Company ............................... 10,000
Xxxxxx Xxxxxxx ............................................ 7,500
Xxxxxx Xxxxxxxxxx ......................................... 4,500
Iona Technologies Finance ................................. 7,500
Xxxxxxxxxxx X. Xxxxxx ..................................... 11,000
Xxxxxxxxx X. Xxxxxxx, Xx. ................................. 13,000
Xxxxxx X. Xxxxxx .......................................... 8,305
Weslyeh Mohriak ........................................... 8,000
Total ........................................... 2,000,000
=========
29
SCHEDULE II
UNDERWRITER NUMBER OF FIRM SHARES TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
XX Xxxxx Securities Corporation
Total 2,000,000
30
EXHIBIT A
________________, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
XX Xxxxx Securities Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with SilverStream Software, Inc., a Delaware
corporation (the "COMPANY"), and certain persons and entities (the "Selling
Stockholders") providing for the public offering (the "PUBLIC OFFERING") by the
several Underwriters, including Xxxxxx Xxxxxxx (the "Underwriters"), of shares
(the "SHARES") of Common Stock , par value $.001 per share, of the Company (the
"COMMON STOCK") by the Company and the Selling Stockholders.
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 Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date of the execution of the Underwriting Agreement 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, in whole or in part, any of the
economic consequences of ownership of 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 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 Offering or (c) the sale or transfer of Shares in connection with the
sale of the Company pursuant to a merger, sale of stock or otherwise. In
addition, the undersigned agrees that, without the prior written consent of
Xxxxxx Xxxxxxx 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
31
any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock.
Notwithstanding the foregoing, (i) gifts or (ii) transfers to (A) the
undersigned's immediate family or (B) a trust, the beneficiaries of which are
the undersigned and/or members of the undersigned's immediate family, shall not
be prohibited by this agreement; provided, that (x) if the donee or transferee
agrees in writing to be bound by the foregoing in the same manner as it applies
to the undersigned and (y) if the donor or transferor is a reporting person
subject to Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") any gifts or transfers made in accordance with this paragraph shall not
require such person to, and such person shall not voluntarily, file a report of
such transaction on Form 4 under the Exchange Act. "Immediate family" shall mean
spouse, lineal descendants, father, mother, brother or sister of the transferor
and the father, mother, brother or sister of the transferor's spouse.
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.
This agreement shall automatically terminate on the date that the
Underwriting Agreement is terminated, in the event that the Underwriters do not
purchase Common Stock and the Underwriting Agreement is terminated pursuant to
its terms.
Very truly yours,
-----------------------
(Name)
-----------------------
(Address)
