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Sample Business Contracts

Preferred Stock Warrant - Interwoven Inc. and General Electric Co.

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                     PREFERRED STOCK WARRANT TO PURCHASE
                  40,989 SHARES OF SERIES E PREFERRED STOCK
                                     OF
                              INTERWOVEN, INC.

                         (Void after July 22, 2006)
                      Preferred Stock Warrant:  PEW-___

              THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
              SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE
              OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS
              WARRANT AND THE SHARES PURCHASABLE HEREUNDER ARE
              SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH
              HEREIN.

     This certifies that General Electric Company ("GE") each of GE and any
successor or assign being a "Holder"), for consideration the sufficiency and
receipt of which is hereby acknowledged, is entitled to purchase from
Interwoven, Inc., a California corporation (the "Company"), subject to the
terms set forth below, a maximum of Forty Thousand Nine Hundred Eighty Nine
(40,989), newly issued, fully paid and nonassessable shares (subject to
adjustment as provided herein) of the Company's Series E Preferred Stock, no
par value per share (the "Warrant Shares") for cash at a price of $5.66 per
share (as adjusted as provided herein, the "Exercise Price") or pursuant to the
cashless exercise terms in Section 1.2 at any time or from time to time up to
and including 5:00 p.m. (Pacific Time) July 22, 2006, or if such day is not a
Business Day, then on the next succeeding Business Day, such day being referred
to herein as the "Expiration Date," upon surrender to the Company at its
principal office (or at such other location as the Company may advise the Holder
in writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto duly filled in and signed and upon payment in cash or by check
of the aggregate Exercise Price for the number of shares for which this Warrant
is being exercised determined in accordance with the provisions hereof. [*]. The
Exercise Price is subject to adjustment as provided in Section 3 of this Warrant
and the right to purchase the Warrant Shares and the number of Warrant Shares
that may be purchased hereunder are subject to the contingencies set forth in
this Warrant.

     This Warrant is subject to the following terms and conditions:

     1.   Exercise, Issuance of Certificates, Reduction in Number of Warrant
          ------------------------------------------------------------------
          Shares.
          ------

          1.1  General.  Except as provided in Section 1.2, this Warrant is
               -------
exercisable at the option of the Holder of record hereof on or prior to the
Expiration Date, at any time or from time to time, for all or any part of the
Warrant Shares (but not for a fraction of a share) which may be purchased
hereunder, as that number may be adjusted pursuant to Sections 1.2 or 3 of
this Warrant. The Company agrees that the Warrant Shares purchased under this
Warrant shall be and are deemed to be issued to the Holder hereof as the
record owner of such Warrant Shares as

[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
    WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
    TO THE OMITTED PORTIONS.

<PAGE>

of the close of business on the date on which this Warrant shall have been
surrendered, the completed and executed Form of Subscription delivered, and
payment of the Exercise Price in cash or by certified check, or if applicable,
submission of the cashless exercise calculation pursuant to Section 1.2 for
such Warrant Shares. In addition, with respect to the Warrant Shares, Holder
will make the representations and warranties set forth in Section 6.1 and
Company will make representations and warranties with respect to due
authorization, valid issuance and otherwise as set forth in Section 9.4
(excluding Section 9.4(c)), including the absence of pre-emptive rights and
the absence of conflict with the Company's constituent documents. Certificates
for the Warrant Shares so acquired, together with any other securities or
property (including any money) to which the Holder hereof is entitled upon
such exercise, shall be delivered to the Holder or its transferee designated
in writing to the Company by the Company at the Company's expense not later
than ten (10) days after the rights represented by this Warrant have been so
exercised. In case of a purchase of less than all the Warrant Shares which may
be purchased under this Warrant, the Company shall cancel this Warrant and
promptly execute and deliver to the Holder or its transferee designated in
writing to the Company a new Warrant or Warrants of like tenor for the balance
of the Warrant Shares purchasable under the Warrant surrendered upon such
purchase. Each stock certificate so delivered shall be registered in the name
of such Holder. The Company shall pay all documentary, stamp or similar issue
or transfer taxes payable in respect of the issue or delivery of the Warrant
Shares.

          1.2  Net Issue Exercise of Warrant.  Notwithstanding any provisions
               -----------------------------
herein to the contrary, if the fair market value of one share of Series E
Preferred Stock is greater than the Exercise Price (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash, Holder may
elect to receive shares of Series E Preferred Stock equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the principal office of the Company together with
the properly endorsed Form of Subscription in which event the Company shall
issue to the Holder a number of shares of Series E Preferred Stock computed
using the following formula:

                                X  =  Y (A-B)
                                     ---------
                                         A

          Where                 X  =  the number of shares of Series E
                                      Preferred Stock to be issued to Holder

                                Y  =  the number of shares of Series E
                                      Preferred Stock purchasable under the
                                      Warrant or, if only a portion of the
                                      Warrant is being exercised, the portion
                                      of the Warrant being canceled (at the
                                      date of such calculation)

                                A  =  the fair market value of one share of
                                      the Company's Series E Preferred Stock
                                      (at the date of such calculation)

                                B  =  Exercise Price (as adjusted to the date
                                      of such calculation)

                                       2
<PAGE>

     2.   Reservation of Shares.  The Company hereby agrees that at all times
          ---------------------
there shall be reserved for issuance and delivery upon exercise of this
Warrant such number of authorized but unissued Warrant Shares (and Common
Stock into which such Warrant Shares are convertible) as will be sufficient to
permit the full exercise of this Warrant. The Company covenants and agrees
that all Warrant Shares, and all shares of Common Stock issuable upon
conversion of such Warrant Shares, shall be duly authorized and, upon issuance
in accordance herewith, shall be validly issued, fully paid and nonassessable,
and free of all liens, security interests, charges and other encumbrances or
restrictions upon sale and free and clear of preemptive or similar rights,
except for restrictions on transfer provided for herein, under the Rights
Agreement or under applicable federal and state securities laws.

     3.   Adjustment of Exercise Price and Number of Shares for Equity Events.
          -------------------------------------------------------------------
The Exercise Price and the total number of Warrant Shares shall be subject to
adjustment from time to time upon the occurrence of certain events described
in this Section 3. Upon each adjustment of the Exercise Price, the Holder of
this Warrant shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares obtained by multiplying
the Exercise Price in effect immediately prior to such adjustment by the
number of shares purchasable pursuant hereto immediately prior to such
adjustment, and dividing the product thereof by the Exercise Price resulting
from such adjustment.

          3.1  Dividends; Subdivision or Combination of Stock.
               ----------------------------------------------

               (a)  In the case the Company shall at any time after the date
hereof (i) declare a dividend or make a distribution on Series E Preferred
Stock payable in Series E Preferred Stock, (ii) subdivide or split the
outstanding Series E Preferred Stock, (iii) combine or reclassify the
outstanding Series E Preferred Stock into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of Series E
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing corporation),
the Exercise Price in effect at the time of the record date for such dividend
or distribution or of the effective date of such subdivision, split,
combination or reclassification shall be proportionately adjusted so that the
exercise of this Warrant after such time shall entitle the holder to receive
the aggregate number of shares of Series E Preferred Stock or other securities
of the Company (or shares of any security into which such shares of Series E
Preferred Stock have been reclassified pursuant to clause 3.1(a)(iii) or
3.1(a)(iv) above) which, if this Warrant had been exercised immediately prior
to such time, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, distribution, subdivision,
split, combination or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur.

               (b)  In case the Company shall fix a record date for the
issuance of rights, options or warrants to the holders of its Series E
Preferred Stock or other securities entitling such holders to subscribe for or
purchase for a period expiring within 60 days of such record date shares of
Series E Preferred Stock (or securities convertible into share of Series E
Preferred Stock) at a price per share of Series E Preferred Stock (or having a
conversion price per share of Series E Preferred Stock, if a security
convertible into shares of Series E Preferred Stock) less than the Current
Market Price Per Series E Preferred Share on such record date, the maximum
number of shares of Series E Preferred Stock issuable upon exercise of such
rights,

                                       3
<PAGE>

options or warrants (or conversion of such convertible securities) shall be
deemed to have been issued and outstanding as of such record date and the
Exercise Price shall be adjusted in the manner set forth in the following
sentence, as through such maximum number of shares of Series E Preferred Stock
had been so issued for an aggregate consideration payable by the holders of
such rights, options, warrants or convertible securities prior to their
receipt of such shares of Series E Preferred Stock. The adjusted Exercise
Price shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the sum of (x) the number of shares of Series E Preferred Stock
outstanding immediately prior to the time of such issuance or sale multiplied
by the Current Market Price Per Series E Preferred Shares immediately prior to
such record date and (y) the aggregate consideration, if any, to be received
by the Company upon such issuance or sale, and the denominator of which shall
be the product of the aggregate number of shares of Series E Preferred Stock
outstanding immediately after such record date and the Current Market Price
Per Series E Preferred Share immediately prior to such issuance. In case any
portion of the consideration to be received by the Company shall be in a form
other than cash, the fair market value of such noncash consideration shall be
utilized in the foregoing computation. Such fair market value shall be
determined by the Board of Directors of the Company; provided that if the
Holder shall object to any such determination, the Board of Directors shall
retain an independent appraiser reasonably satisfactory to the Holder to
determine such fair market value. The Holder shall be notified promptly of any
consideration other than cash to be received by the Company and furnished with
a description of the consideration and the fair market value thereof, as
determined by the Board of Directors. Such adjustment shall be made
successively whenever such record date is fixed; and in the event that such
rights, options or warrants are not so issued or expire unexercised, or in the
event of a change in the number of shares of Series E Preferred Stock to which
the holders of such rights, options or warrants are entitled (other then
pursuant to adjustment provisions therein comparable to those contained in
this paragraph 3.1), the Exercise Price shall again be adjusted to be the
Exercise Price which would then be in effect if such record date had not been
fixed, in the former event, or the Exercise Price which would then be in
effect if such holder had initially been entitled to such changed number of
shares of Common Stock, in the latter event.

               (c)  In the case the Company shall fix a record date for the
making of a distribution to holders of Series E Preferred Stock (including any
such distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of indebtedness,
assets or other property (other than dividends payable in Series E Preferred
Stock or rights, options or warrants referred to in, and for which an
adjustment is made pursuant to, paragraph 3(b) hereof), the Exercise Price to
be in effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the Current Market Price Per Series E
Preferred Share on such record date, less the fair market value (determined as
set forth in paragraph 3.1(d) hereof) of the portion of the assets, other
property or evidence of indebtedness so to be distributed which is applicable
to one share of Series E Preferred Stock, and the denominator of which shall
be such Current Market Price Per Series E Preferred Share. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Exercise Price shall again be
adjusted to be the Exercise Price which would then be in effect if such record
date had not been fixed.

                                       4
<PAGE>

               (d)  For the purchase of any computation under paragraph 1.2 or
paragraph 3.1(b), or 3.1(c) hereof, on any determination date (i) on or prior
to the Company's initial public offering, the Current Market Price Per Series
E Preferred Share shall, subject to the penultimate sentence of this paragraph
3.1(d), be the fair market value per share of the applicable class of Series E
Preferred Stock as reasonably determined by the Board of Directors of the
Company, and (ii) after the Company's initial public offering, the Current
Market Price Per Series E Preferred Share shall be deemed to be the product of
(i) the average (weighted by daily trading volume) of the Daily Prices (as
defined below) per share of the applicable class of Common Stock for the 20
consecutive trading days immediately prior to such date and (ii) the number of
shares of Common Stock into which each share of Series E Preferred Stock is
then convertible into. "Daily Price" means (A) if the shares of such class of
Common Stock then are listed and traded on the New York Stock Exchange, Inc.
("NYSE"), the closing price on such day as reported on the NYSE Composite
Transactions Tape; (B) if the shares of such class of Common Stock then are
not listed and traded on the NYSE, the closing price on such day as reported
by the principal national securities exchange on which the shares are listed
and traded; (C) if the shares of such class of Common Stock then are not
listed and traded on any such securities exchange, the last reported sale
price on such day on the National Market of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ"); or (D) if the
shares of such class of Common Stock then are not traded on the NASDAQ
National Market, the average of the highest reported bid and lowest reported
asked price on such day as reported by NASDAQ. If on any determination date
the shares of such class of Stock are not quoted by any such organization, the
Current Market Price Per Share shall be the fair market value of such shares
on such determination date as determined by the Board of Directors. If the
Holder shall object to any determination by the Board of Directors on or prior
to the Company's initial public offering of the Current Market Price Per
Series E Preferred Share, the Current Market Price Per Series E Preferred
Share shall be the fair market value per share of the applicable class of
Series E Preferred Stock as determined by an independent appraiser retained by
the Company at its expense and reasonably acceptable to the Holder. For
purposes of any computation under this paragraph 3.1, the number of shares of
Series E Preferred Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company.

               (e)  In the event that, at any time as a result of the
provisions of this paragraph 3.1 the Holder of this Warrant upon subsequent
exercise shall become entitled to receive any shares of capital stock of the
Company other than Series E Preferred Stock, the number of such other shares
so receivable upon exercise of this Warrant shall, as more fully provided in
Section 9.3, thereafter be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions contained
herein.

               (f)  Upon each adjustment of the Exercise Price as a result of
the calculations made in paragraphs 3.1(a), 3.1(b), or 3.1(c) hereof, the
number of shares for which this Warrant is exercisable immediately prior to
the making of such adjustment shall thereafter evidence the right to purchase,
at the adjusted Exercise Price, that number of shares of Series E Preferred
Stock obtained by (i) multiplying the number of shares covered by this Warrant
immediately prior to this adjustment of the number of shares by the Exercise
Price in effect immediately prior to such adjustment of the Exercise Price and
(ii) dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.

                                       5
<PAGE>

          3.2  [Intentionally Omitted]
                ---------------------

          3.3  Notice of Adjustment.  Upon any adjustment of the Exercise Price
               --------------------
or any increase or decrease in the number of Warrant Shares, the Company shall
give written notice thereof, by first class mail postage prepaid, addressed to
the registered Holder of this Warrant at the address of such Holder as shown
on the books of the Company. The notice shall be prepared by the independent
public accountants then auditing the books of the Company and signed by the
Company's Chief Financial Officer and the Company's Secretary and shall state
the Exercise Price resulting from such adjustment and the adjusted number of
shares if applicable, purchasable at such price upon the exercise of this
Warrant, setting forth in reasonable detail the method of calculation and the
facts requiring such adjustment upon which such calculation is based. A copy
of such notice shall be kept in the custody of the Company's Secretary or
Assistant Secretary at its principal office and with its stock transfer agent.

     4.   Consolidation, Merger, or Sale of Assets.  In case of any
          ----------------------------------------
consolidation of the Company with, or merger of the Company into, any other
Person, any merger of another Person into the Company (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Series E Preferred Stock) or any sale or
transfer of all or substantially all of the assets of the Company or of the
Person formed by such consolidation or resulting from such merger or which
acquires such assets, as the case may be, the Holder shall have the right
thereafter to exercise this Warrant for the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Series E Preferred Stock for
which this Warrant may have been exercised immediately prior to such
consolidation, merger, sale or transfer, assuming (i) such holder of Series E
Preferred Stock is not a person with which the Company consolidated or into
which the Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be ("constituent person"), or an
Affiliate of a constituent person and (ii) in the case of a consolidation,
merger, sale or transfer which includes an election as to the consideration to
be received by the holders, such holder of Series E Preferred Stock failed to
exercise its rights of election, as to the kind or amount of securities, cash
and other property receivable upon such consolidation, merger, sale or
transfer (provided that if the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer is not
the same for each share of Series E Preferred Stock held immediately prior to
such consolidation, merger, sale or transfer by other than a constituent
person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this paragraph 4 the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by each non-
electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). Adjustments for events
subsequent to the effective date of such a consolidation, merger and sale of
assets shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Warrant. In any such event, effective provisions shall be
made in the certificate or articles of incorporation of the resulting or
surviving corporation, in any contract of sale, conveyance, lease or transfer,
or otherwise so that the provisions set forth herein for the protection of the
rights of the Holder shall thereafter continue to be applicable; and any such
resulting or surviving corporation shall expressly assume the obligation to
deliver, upon exercise, such shares of stock, other securities, cash and
property. The provisions of this paragraph 4 shall similarly apply to
successive consolidations, mergers, sales, leases or transfers.

                                       6
<PAGE>

     5.   No Voting or Dividend Rights.  Nothing contained in this Warrant
          ----------------------------
shall be construed as conferring upon the Holder hereof the right, prior to
the exercise of the Warrant, to vote or to consent to receive notice as a
shareholder of the Company on any other matters or any rights whatsoever as a
shareholder of the Company. No dividends or interest shall be payable or
accrued in respect of this Warrant or the interest represented hereby or the
shares purchasable hereunder until, and only to the extent that, this Warrant
shall have been exercised.

     6.   Compliance with Securities Act; Transferability of Warrant;
          -----------------------------------------------------------
Disposition of Warrant Shares or Common Stock.
---------------------------------------------

          6.1  Compliance with Securities Act.  The Holder of this Warrant, by
               ------------------------------
acceptance hereof, agrees that this Warrant is being acquired for investment
and that it will not offer, sell, or otherwise dispose of this Warrant, any
Warrant Shares, or any shares of Common Stock to be issued upon conversion of
the Warrant Shares except under circumstances which will not result in a
violation of the Securities Act of 1933, as amended (the "Act"), or any
applicable state securities laws. All Warrant Shares and all shares of Common
Stock issued upon conversion of the Warrant Shares (unless registered under
the Act) shall, subject to Section 6.3 be stamped or imprinted with a legend
in substantially the following form:

            THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
            SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE
            SECURITIES OR BLUE SKY LAWS OF ANY STATE. THEY MAY
            NOT BE OFFERED OR SOLD IN THE ABSENCE OF A
            REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
            SECURITIES UNDER SUCH ACT OR AN EXEMPTION FROM THE
            REGISTRATION REQUIREMENTS OF SUCH ACT.

          6.2  Warrant Transferable.  Subject to compliance with applicable
               --------------------
federal and state securities laws under which this Warrant was purchased, this
Warrant and all rights hereunder are transferable, in whole or in part,
without charge to the Holder (except for transfer taxes), upon surrender of
this Warrant properly endorsed; provided, however, that the Holder shall
notify the Company in writing in advance of any proposed transfer and shall
not transfer this Warrant or any rights hereunder to any person or entity
which is then known to the Holder to be principally engaged in a business in
direct and substantial competition with the Company.

          6.3  Disposition of Warrant Shares and Common Stock.  With respect to
               ----------------------------------------------
any offer, sale, or other disposition of the Warrant, any Warrant Shares, or
of any shares of Common Stock issued upon conversion of the Warrant Shares
prior to registration of such shares, the Holder hereof and each subsequent
Holder of this Warrant agrees to give written notice to the Company prior
thereto, describing briefly the manner thereof, together with a written
opinion of such Holder's counsel, if reasonably requested by the Company, to
the effect that such offer, sale or other disposition may be effected without
registration under the Act or any applicable state law then in effect of such
Warrant, Warrant Shares or Common Stock, as the case may be, or that such
Warrant, Warrant Shares or Common Stock are no longer subject to the
restrictive legends referred to herein. Promptly upon receiving such written
notice and opinion, the Company, as promptly as practicable, shall notify such
Holder that such Holder may sell or otherwise dispose of such Warrant, Warrant
Shares or Common Stock, all in accordance with the terms of the

                                       7
<PAGE>

notice delivered to the Company. If a determination has been made pursuant to
this subparagraph 6.3 that the opinion of the counsel for the Holder is not
reasonably satisfactory to the Company, the Company shall so notify the Holder
promptly after such determination has been made and provide a written legal
opinion of the Company's outside counsel explaining the reasons for such
determination. Notwithstanding the foregoing, such Warrant, Warrant Shares or
Common Stock may be offered, sold or otherwise disposed of in accordance with
Rule 144 under the Act, provided that the Company shall have been furnished
with such information as the Company may request to provide reasonable
assurance that the provisions of Rule 144 have been satisfied. Each
certificate representing the Warrant, Warrant Shares or Common Stock thus
transferred (except a transfer pursuant to Rule 144) shall bear a legend as to
the applicable restrictions on transferability in order to insure compliance
with the Act, unless in the aforesaid opinion of counsel for the Holder, such
legend is not required in order to insure compliance with the Act. If
appropriate in the circumstances, the Company may issue stop transfer
instructions to its transfer agent in connection with such restrictions.

     7.   Modification and Waiver.  This Warrant and any provision hereof may
          -----------------------
be amended, changed, waived, discharged, or terminated only by an instrument
in writing signed by the party against which enforcement of the same is
sought. Except as expressly provided herein, no failure or delay by either
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

     8.   Notices.  Any notice, request, or other document required or
          -------
required or permitted to be given or delivered to the Holder hereof or the
Company shall be in writing and shall be given to the Holder or the Company at
its address or telecopier number set forth below or such other address or
telecopier number as either may from time to time provide to the other.

     Address/Telecopier (Company):

     Interwoven, Inc.
     1195 West Fremont Ave., Suite 2000
     Sunnyvale, CA 94087
     Fax:  (408) 774-2002
     Attn:  David Allen


     Address/Telecopier (Holder):

     General Electric Company
     3135 Easton Turnpike
     Fairfield, CT 06431
     Fax:  (203) 373-3707
     Attn:  Gary Reiner

                                       8
<PAGE>

     With a copy to:


     Pamela Daley
     VP - Senior Counsel for Transactions
     Fax:  (203) 373-3008

     Each such notice, request or other document shall be effective (i) if given
by telecopy, when such telecopy is properly transmitted and the intended
recipient confirms receipt of such telecopy or (ii) if given by any other means,
when received at the address specified herein or, subsequently notified to the
other party in writing.

     9.   Representations and Warranties and Covenants of the Company.
          -----------------------------------------------------------

          9.1  Notice of Certain Events.  If at any time:
               ------------------------

               (i)   the Company shall declare any cash dividend upon its
Series E Preferred Stock;

               (ii)  the Company shall declare any dividend upon its Series E
Preferred Stock payable in stock or make any special dividend or other
distribution to the holders of its Series E Preferred Stock;

               (iii) the Company shall offer for subscription pro rata to the
holders of its Series E Preferred Stock any additional shares of stock of any
class or other rights;

               (iv)  there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or
merger of the Company with, or sale of all or substantially all of its assets
to, another corporation;

               (v)   there shall be a voluntary or involuntary dissolution,
liquidation, or winding-up of the Company; or

               (vi)  there shall be an initial public offering of Company
securities;

then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown on the books of the Company, (a) at least ten (10) days'
prior written notice of the date on which the books of the Company shall close
or a record shall be taken for such dividend, distribution, or subscription
rights or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, winding-up, or public
offering, at least ten (10) days' prior written notice of the date when the same
shall take place.  Any notice given in accordance with the foregoing clause (a)
shall also specify, in the case of any such dividend, distribution, or
subscription rights, the date on which the holders of Series E Preferred Stock
shall be entitled thereto.  Any notice given in accordance with the foregoing
clause (b) shall also specify the proposed date of such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding-up, conversion, or public offering, as the case may be.

                                       9
<PAGE>

          9.2  Registrable Securities.  Upon exercise of this Warrant, the
               ----------------------
Warrant Shares shall be Registrable Securities under that Third Amended and
Restated Investor Rights Agreement dated as of June 10, 1999, to which the
Company and holders of its Preferred Stock are parties ("Rights Agreement") and
the Holder of this Warrant shall be a Holder under the Rights Agreement.  By its
receipt of this Warrant, Holder agrees to be bound by the terms of Sections 4
through 13 and Section 15 of the Rights Agreement.

          9.3  Replacement Warrant Upon IPO.  In the event of conversion of all
               ----------------------------
of the Company's Series E Preferred Stock into Common Stock in connection with
an initial public offering, (i) this Warrant shall be exercisable for Common
Stock, not for Series E Preferred Stock, and (ii) Holder shall, following
receipt of proper notice from the Company of such conversion, surrender this
Warrant to the Company and the Company shall cancel this Warrant and execute
and promptly deliver to Holder a replacement Warrant, dated the date of the
conversion and having substantially the same terms as those contained herein,
with such modifications as are appropriate to give effect to the changes in
the Company's capital structure. Holder and the Company shall cooperate to
agree on such terms and such replacement Warrant shall be exercisable for such
number of shares of Common Stock as would be issuable had the Warrant Shares
been outstanding on the date of conversion.

          9.4  Representations and Warranties of the Company to Investors.
               ----------------------------------------------------------
Except as set forth in the Schedule of Exceptions attached as Exhibit B to the
                                                              ---------
Series E Preferred Stock Purchase Agreement dated as of June 10, 1999, the
Company hereby represents and warrants to Holder that:

               (a)  Corporate Organization and Authority.  The Company:
                    ------------------------------------

                    (i)   is a corporation duly organized, validly existing,
authorized to exercise all its corporate powers, rights and privileges, and in
good standing in the State of California;

                    (ii)  has the corporate power and corporate authority to
own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted;

                    (iii) is qualified as a foreign corporation in all
jurisdictions in which such qualification is required and where its failure to
qualify would have a material adverse effect on the business, properties,
prospects or financial condition of the Company.

               (b)  Capitalization.  As of June 30, 1999, the authorized
                    --------------
capital of the Company consisted of: 40,000,000 shares of Common Stock, of
which 9,642,834 were issued and outstanding, and 25,000,000 shares of
Preferred Stock (the "Preferred") of which (a) 1,120,000 shares have been
designated Series A Preferred, 1,120,000 of which are issued and outstanding,
(b) 3,142,133 shares have been designated Series B Preferred, 3,039,505 of
which are issued and outstanding, (c) 7,159,743 shares have been designated
Series C Preferred, all of which are issued and outstanding, (d) 3,741,217
shares have been designated Series D Preferred Stock, all of which are issued
and outstanding, and (e) 3,600,000 shares have been designated Series E
Preferred, 3,394,719 of which are issued or outstanding. The Preferred shall
have the

                                       10
<PAGE>

rights, preferences, privileges, and restrictions set forth in the Articles.
The outstanding shares have been duly authorized and validly issued
(including, without limitation, issued in compliance with applicable federal
and state securities laws), and are fully-paid and non-assessable. The Company
has reserved 1,120,000 shares of Common Stock for issuance upon conversion of
the Series A Preferred, an additional 3,309,940 shares of Common Stock for
issuance upon conversion of the Series B Preferred, of which 3,201,832 are
reserved for issuance upon conversion of the Series B Preferred and 108,108
are reserved for issuance upon the conversion of the Series B Preferred
issuable upon exercise of outstanding warrants to purchase Series B Preferred,
an additional 7,159,743 shares of Common Stock for issuance upon conversion of
the Series C Preferred, an additional 3,741,217 shares of Common Stock for
issuance upon conversion of the Series D Preferred, and an additional
3,400,000 are reserved for issuance upon conversion of the Series E Preferred.
Except as set forth herein, and in the Rights Agreement, there are no
outstanding warrants, options, conversion privileges, preemptive rights, or
other rights or agreements to purchase or otherwise acquire or issue any
equity securities of the Company other than rights pursuant to the Company's
Stock Option Plan and other Board approved equity compensation arrangements
and the Warrants listed in the Schedule of Exceptions to the Series E
Preferred Stock Purchase Agreement, nor has the issuance of any of the
aforesaid rights to acquire securities of the Company been authorized. Since
June 30, 1999, there have been no share issuances other than in connection
with (i) the Company's acquisition of Lexington Software Associates, Inc. and
(ii) option exercises under the Company's Stock Option Plans.

               (c)  Subsidiaries.  The Company does not presently own, have any
                    ------------
investment in, or control, directly or indirectly, any Subsidiaries,
associations, or other business entities. The Company is not a participant in
any joint venture, limited liability company ("L.L.C."), or partnership.

               (d)  Authorization.  All corporate action on the part of the
                    -------------
Company, its officers, directors, and shareholders necessary for the
authorization, execution, delivery, and performance of all obligations under
this Warrant and under the Rights Agreement and for the authorization,
issuance, and delivery of the Warrant, the Warrant Shares and the Common Stock
issuable upon conversion of the Warrant Shares has been taken, and this
Warrant and the Rights Agreement (collectively, the "Transactional
Agreements"), constitute legally binding and valid obligations of the Company
enforceable in accordance with their terms.

               (e)  Corporate Power.  The Company has all requisite legal and
                    ---------------
corporate power and authority to execute, issue and deliver the Warrant, to
issue the Warrant Shares and the Common Stock issuable upon conversion of the
Warrant Shares, and to carry out and perform its obligations under the terms of
the Transactional Agreements.

               (f)  Validity of Shares.  The Warrant is duly and validly issued
                    ------------------
(including, without limitation, issued in compliance with applicable federal and
state securities laws), fully paid and non-assessable.  The Warrant Shares and
the Common Stock issuable upon conversion of the Warrant Shares have been duly
and validly reserved and, assuming such Warrant Shares and Common Stock are
issued as contemplated by this Warrant, upon issuance in accordance with the
Restated Articles will be duly and validly issued (including, without
limitation, issued in compliance with all applicable federal and state
securities laws) and

                                       11
<PAGE>

non-assessable and will be free of any liens or encumbrances other than any
liens or encumbrances created by or imposed thereon by the holders; provided,
however, that the Warrant, the Warrant Shares (and the Common Stock issuable
upon conversion thereof) shall be subject to restrictions on transfer under
state and/or federal securities laws. The Warrant, the Warrant Shares and the
Common Stock issuable upon conversion of the Warrant Shares are not subject to
any preemptive rights or rights of first refusal, except as otherwise so
agreed to by the holders thereof.

               (g)  No Conflict with Other Instruments.  The execution,
                    ----------------------------------
delivery, and performance of the Transactional Agreements will not result in
any violation of, be in conflict with, or constitute a default under, with or
without the passage of time or the giving of notice: (i) any provision of the
Company's Restated Articles or Bylaws; (ii) any provision of any judgment,
decree, or order to which the Company is a party or by which it is bound or an
event which results in the creation of any material lien, charge or
encumbrance upon any material assets of the Company; (iii) any material
contract, obligation, or commitment to which the Company is a party or by
which it is bound; or (iv) any statute, rule, or governmental regulation
applicable to the Company.

     10.  Governing Law.  This Warrant shall be construed and enforced in
          -------------
accordance with, and the rights of the parties shall be governed by, the laws
of the State of California.

     11.  Lost Warrants.  The Company represents and warrants to the Holder
          -------------
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case
of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation
upon surrender and cancellation of such Warrant, the Company, at its expense,
will make and deliver a new Warrant, of like tenor and date, in lieu of the
lost, stolen, destroyed or mutilated Warrant.

     12.  Fractional Shares.  No fractional shares or scrip representing
          -----------------
fractional shares shall be issued upon exercise of this Warrant and in lieu
thereof the Company shall pay the Holder an amount in cash equal to such
fraction multiplied by the fair market value of a Warrant Share on the date of
exercise of this Warrant.

     13.  No Impairment.  The Company represents and warrants that the terms of
          -------------
this Warrant (other than exercise price and expiration date), taken as a whole
or in any material respect, are not less favorable to Holder than the terms of
the other warrants issued by the Company. The Company will not, by charter
amendment or by reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or appropriate
in order to protect the rights of the Holder against impairment. Upon the
request of the Holder, the Company will at any time during the period this
Warrant is outstanding acknowledge in writing, in form satisfactory to Holder,
the continued validity of this Warrant and the Company's obligations
hereunder.

     14.  Successors and Assigns.  This Warrant and the rights evidenced hereby
          ----------------------
shall inure to the benefit of and be binding upon the successors of the
Company and the successors and

                                       12
<PAGE>

assigns of Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant, and shall be
enforceable by any such Holder.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
by its officer, thereunto duly authorized as of this 28 day of July 1999.


                              INTERWOVEN, INC.
                              a California corporation

                              /s/ MARTIN BRAUNS
                              -------------------------------
                              Martin Brauns
                              President and Chief Executive
                              Officer

                                       13
<PAGE>

                            FORM OF SUBSCRIPTION
                            --------------------

(To be signed only upon exercise of Warrant)

To:

[_]  Check this box and fill out Item (B) if the undersigned is electing to
     ----------------------------------------------------------------------
     utilize the Net Issue Exercise provisions of Section 1.2 of the attached
     ------------------------------------------------------------------------
     Preferred Stock Warrant.
     -----------------------

          (A) The undersigned, the holder of the attached Preferred Stock
Warrant, hereby irrevocably elects to exercise the purchase right represented
by such Warrant for, and to purchase thereunder,         (1)       ( ) shares of
                                                 ---------------------
Series E Preferred Stock of Interwoven, Inc. (the "Company") and herewith makes
payment of _____________________ Dollars ($_________) therefor, and requests
certificates for such shares be issued in the name of, and delivered to,
___________________________ whose address is __________________________________.

          (B) The undersigned, the holder of the attached Preferred Stock
Warrant, hereby irrevocably elects, in accordance with Section 1.2 of such
Warrant, to exercise the purchase right represented by such Warrant for, and
to purchase thereunder,        (2)       (    ) shares of Series E Preferred
                        ----------------------
Stock of Interwoven, Inc. (the "Company") and herewith makes payment in the
form of the surrender of the Warrant and the cancellation of the portion of
the Warrant representing       (3)       (    ) shares of Series E Preferred
                         ---------------------
Stock, and requests certificates for such shares be issued in the name of, and
delivered to, __________________ whose address is _____________________________.

     In exercising its right to exercise the Warrant, the undersigned hereby
confirms and acknowledges the investment representations and covenants made in
Section 6.1 of the Warrant.

     DATED:  _______________

                              ________________________________
                              (Signature must conform in all respects
                              to name of Holder as specified on the
                              face of the Warrant)

                              _________________________________

                              _________________________________

(1)  Insert here the number of shares called for on the face of the Warrant
(or, in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised), in either case without making any adjustment for
additional Preferred Stock or any other stock or other securities or property
or cash which, pursuant to the adjustment provisions of the Warrant, may be
deliverable upon exercise.

(2)  Insert here the number of shares to be issued to the undersigned as
determined in accordance with Section 1.2 of the attached Preferred Stock
Warrant (such number of shares shall be equal to X as determined in such
Section 1.2).

(3)  Insert here the number of shares called for on the face of the Warrant
(or, in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised), in either case without making any adjustment for
additional Preferred Stock or any other stock or other securities or property
or cash which, pursuant to the adjustment provisions of the Warrant, may be
deliverable upon exercise (such number being representing Y as set forth in
Section 1.2 of the attached Preferred Stock Warrant).

                                       14