EXHIBIT 4.07
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND NEITHER THIS WARRANT NOR SUCH SHARES MAY BE TRANSFERRED
EXCEPT IN COMPLIANCE WITH STATE AND FEDERAL SECURITIES LAWS
Warrant to Purchase [see Schedule 1]
Dated: January 2, 2003 Shares of Common Stock
WARRANT FOR COMMON STOCK
OF
INTERLAND, INC.
This WARRANT FOR COMMON STOCK is made and entered into as of the 2nd day of
January, 2003 by and between Interland, Inc., a Minnesota corporation
("Interland"), and [each of the other parties identified on Schedule 1 hereto]
(the "Holder").
WITNESSETH:
1. Issuance of Warrant. Subject to adjustments as set forth in Section 8
below, for good and valuable consideration received Interland hereby grants to
Holder the right to purchase [see Schedule 1] shares of Interland's common stock
(the "Common Stock"). The shares of Common Stock issuable upon exercise of this
Warrant are hereinafter referred to as the "Shares."
2. Term of Warrant. This Warrant shall be exercisable in whole or in part
at any time and from time to time from the date hereof through the fifth
anniversary of the date set forth above (the "Exercise Period").
3. Exercise Price. The exercise price per share for which Shares may be
purchased pursuant to the terms of this Warrant shall be $5.00, subject to
adjustment as provided in Section 8 below.
4. Exercise and Payment. This Warrant may be exercised during the Exercise
Period by the Holder hereof as to all of the Shares or in any increment or
increments of 1,000 Shares (or the balance of the Shares if less than such
number), upon delivery of written notice of intent to exercise to Interland at
the following address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇;
attention: Chief Financial Officer, or such other address as Interland shall
designate in a written notice to the Holder, together with this Warrant
accompanied by full payment of the purchase price therefor either:
(a) in United States dollars in cash or by certified check; or
(b) at Holder's election, through delivery of shares of Common Stock
having a Fair Market Value equal as of the Date of the Exercise to the cash
exercise price. The "Date of Exercise" shall be the date immediately preceding
the date that Holder delivers the notice of exercise to Interland. The "Fair
Market Value" shall be the average closing price of the publicly traded shares
of Common Stock of Interland over the 20 trading days immediately preceding the
date of exercise.
(c) In lieu of payment of the purchase price in cash or by surrender
of shares of Common Stock as provided above, the Holder may elect to receive
upon exercise of this Warrant, by the surrender of this Warrant, at the office
of Interland, a number of fully paid and nonassessable shares of Interland
Common Stock as is computed using the following formula:
X=Y (A-B)
-------
A
where X = the number of shares to be issued to such Holder pursuant to this
paragraph.
Y = the number of shares covered by this Warrant in respect of which
the net issue election is made pursuant to this paragraph.
A = the Fair Market Value of one share of Interland Common Stock, as
of the time the net issue election is made pursuant to this paragraph.
B = the purchase price in effect under this Warrant at the time the
net issue election is made pursuant to this paragraph.
In connection with any partial exercise of this Warrant pursuant to this
paragraph (c), the Holder shall surrender to Interland this Warrant and
Interland will issue to the Holder a replacement Warrant, exerciseable for a
number of shares of Interland Common Stock equal to (x) the number of shares of
Common Stock issuable upon exercise of this Warrant, less (y) the number of
shares covered by this Warrant in respect of which the net issue election is
made pursuant to this paragraph. The parties intend that the exercise of this
Warrant pursuant to this paragraph (c) be treated as a "reorganization" within
the meaning of Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as
amended and, except as otherwise required by law, Interland agrees not to take
any position inconsistent with such treatment for federal income tax purposes
including, but not limited to, in any filing, return or information statement.
Upon exercise of this Warrant as aforesaid, Interland shall as promptly as
practicable, and in any event within 15 days thereafter, execute and deliver to
the Holder a certificate or certificates for the total number of whole Shares
for which this Warrant is being exercised in such names and denominations as are
requested by the Holder. If this Warrant shall be exercised with respect to less
than all of the Shares, the Holder shall be entitled to receive a new Warrant
covering the number of Shares in respect of which this Warrant shall not have
been exercised, which new Warrant shall in all other respects be identical to
this Warrant. Holder covenants and agrees that it will pay when due any and all
state and federal issue taxes, if any, which may be payable in respect of the
issuance of this Warrant or the issuance of any Shares upon exercise of this
Warrant.
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5. Covenants and Conditions. The above provisions are subject to the
following:
(a) Neither this Warrant nor the Shares have been registered under the
Securities Act of 1933, as amended ("Securities Act") or any state securities
laws ("Blue Sky Laws"). This Warrant has been acquired for investment purposes
and not with a view to distribution or resale and may not be pledged,
hypothecated, sold, made subject to a security interest, or otherwise
transferred without (i) an effective registration statement for such Warrant
under the Securities Act and such applicable Blue Sky Laws, or (ii) an opinion
of counsel, which opinion of counsel shall be reasonably satisfactory to
Interland and its counsel, that registration is not required under the
Securities Act or under any applicable Blue Sky Laws. Transfer of the shares
issued upon the exercise of this Warrant shall be restricted in the same manner
and to the same extent as the Warrant. The certificates representing such Shares
shall bear a legend to such effect. The Holder and Interland agree to execute
such other documents and instruments as counsel for Interland reasonably deems
necessary to effect the compliance of the issuance of this Warrant and any
shares of Common Stock issued upon exercise hereof with applicable federal and
state securities laws.
(b) Interland covenants and agrees that all Shares which may be issued
upon exercise of this Warrant will, upon issuance and payment therefor, as
provided herein, be legally and validly issued and outstanding, fully paid and
nonassessable, free from all liens, charges and preemptive rights, if any, with
respect thereto or to the issuance thereof. Interland shall at all times reserve
and keep available for issuance upon the exercise of this Warrant such number of
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of this Warrant.
6. Transfer of Warrant. Subject to the provisions of Section 5 hereof, this
Warrant may be transferred, in whole or in part, to any person or business
entity, by presentation of the Warrant to Interland with written instructions
for such transfer. Upon such presentation for transfer, Interland shall promptly
execute and deliver a new Warrant or Warrants in the form hereof in the name of
the assignee or assignees and in the denominations specified in such
instructions.
7. Warrant Holder Not Shareholder. This Warrant does not confer upon the
Holder, as such, any right whatsoever as a shareholder of Interland.
8. Adjustment upon Changes in Stock.
(a) If all or any portion of this Warrant shall be exercised
subsequent to any stock split, stock dividend, recapitalization, combination of
shares of Interland, or other similar event, then the Holder exercising this
Warrant shall receive, for the aggregate price paid upon such exercise, the
aggregate number and class of shares which such Holder would have received if
this Warrant had been exercised immediately prior to such stock split, stock
dividend, recapitalization, combination of shares, or other similar event. If
any adjustment under this Section 8(a) would create a fractional share of Common
Stock or a right to acquire a fractional share of Common Stock, such fractional
share shall be disregarded and the number of shares subject to this Warrant
shall be the next lower number of shares, rounding all fractions downward. In
such event, Interland shall pay to Holder an amount equal to the average closing
price of the publicly traded shares of Common Stock of Interland over the 20
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trading days immediately preceding the exercise of this Warrant multiplied by
the fractional share to be disregarded pursuant to the foregoing sentence.
Whenever there shall be an adjustment pursuant to this Section 8(a), Interland
shall forthwith notify the Holder or Holders of this Warrant of such adjustment,
setting forth in reasonable detail the event requiring the adjustment and the
method by which such adjustment was calculated.
(b) If all or any portion of this Warrant shall be exercised
subsequent to any merger, consolidation, exchange of securities, reorganization
or liquidation of Interland or other similar event, as a result of which (i) the
shares of Common Stock shall be changed into the same or a different number of
securities of the same or another class or classes of securities of Interland or
another entity, or (ii) the shares of Common Stock shall be entitled to the
distribution of property of Interland as a result of liquidation of Interland,
then the Holder exercising this Warrant shall receive, for the aggregate price
paid upon such exercise, the aggregate number and class of securities, or the
property, as the case may be, which such Holder would have received if this
Warrant had been exercised immediately prior to such merger, consolidation,
exchange of securities, reorganization or liquidation, or other similar event.
If any adjustment under this Section 8(b) would create a fractional share of
Common Stock or a right to acquire a fractional share of Common Stock, such
fractional share shall be disregarded and the number of shares subject to this
Warrant shall be the next lower number of shares, rounding all fractions
downward. In such event, Interland shall pay to Holder an amount equal to the
average closing price of the publicly traded shares of Common Stock of Interland
over the 20 trading days immediately preceding the exercise of this Warrant
multiplied by the fractional share to be disregarded pursuant to the foregoing
sentence. Whenever there shall be an adjustment pursuant to this Section 8(b),
Interland shall forthwith notify the Holder or Holders of this Warrant of such
adjustment, setting forth in reasonable detail the event requiring the
adjustment and the method by which such adjustment was calculated.
9. Certain Notices. If at any time Interland shall propose to:
(a) declare any cash dividend upon its Common Stock;
(b) declare any dividend upon its Common Stock payable in stock or
make any special dividend or other distribution to the holders of its Common
Stock;
(c) offer for subscription to the holders of any of its Common Stock
any additional shares of stock in any class or other rights;
(d) reorganize, or reclassify the capital stock of Interland, or
consolidate, merge or otherwise combine with, or sell all or substantially all
of its assets to, another corporation; or
(e) voluntarily or involuntarily dissolve, liquidate or wind up of the
affairs of Interland;
then, in any one or more of said cases, Interland shall give to the Holder, by
hand delivery or by certified or registered mail sent to Holder at the address
set forth next to the Holder's signature below (or such other address as Holder
shall provide to Interland in writing), (i) at least 20 days' prior written
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notice of the date on which the books of Interland shall close or a record shall
be taken for such dividend, distribution or subscription rights for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, and (ii) in
the case of such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, at least 20 days' prior written notice
of the date when the same shall take place. Any notice required by clause (i)
shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and any notice required by clause (ii) shall specify the date
on which the holders of Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution or winding up, as the
case may be. Such notice shall be deemed given when actually delivered.
10. Successors, Assigns. All the terms and provisions of this Warrant shall
be binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto and the heirs, beneficiaries and
legal representatives of Holder.
11. Amendment. The terms of this Warrant may be amended, modified or waived
only with the written consent of Interland and the Holder.
12. Governing Law. The provisions and terms of this Warrant shall be
governed by and construed in accordance with the laws of the State of Minnesota.
(The remainder of this page is intentionally left blank.)
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IN WITNESS WHEREOF, the undersigned hereto has executed this Warrant as of
the date first above written.
"INTERLAND"
INTERLAND, INC.
By:
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice-President,
Chief Financial Officer,
General Counsel and Secretary
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SCHEDULE 1
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WARRANT TO PURCHASE SHARES OF WARRANT TO PURCHASE
COMMON STOCK ISSUED TO SHARES OF COMMON STOCK
HOLDERS SELLING SHAREHOLDERS AS OF CURRENTLY HELD IN
CLOSING DATE ESCROW
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Accel Internet/Strategic Technology Fund L.P. 55,624 6,181
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Accel Investors 96 L.P. 24,722 2,747
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Accel Keiretsu V L.P. 8,241 916
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Accel V L.P. 415,126 46,125
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 873 97
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Bessec Ventures IV L.P. 160,321 17,813
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Bessemer Venture Investors L.P. 23,992 2,666
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Bessemer Venture Partners IV L.P. 160,320 17,813
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▇▇▇▇▇▇▇ ▇▇▇▇ 3,634 404
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▇▇▇▇▇ ▇. ▇▇▇▇▇ 2,447 ▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇ Special Opportunities Fund 2000, L.P. 47,984 5,332
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Brimstone Island Company L.P. 5,457 606
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BVP IV Special Situations L.P. 13,017 1,446
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▇▇▇▇▇▇▇ River Friends X-B, LLC 22,679 2,520
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▇▇▇▇▇▇▇ River Friends X-C, LLC 3,973 441
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▇▇▇▇▇▇▇ River Partnership VII, A Limited Partnership 471,439 52,382
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▇▇▇▇▇▇▇ River Partnership X, A Limited Partnership 343,968 38,219
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▇▇▇▇▇▇▇ River Partnership X-A, A Limited Partnership 9,437 1,049
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▇▇▇▇▇▇▇▇▇▇▇ F.O. Gabrieli 17,119 1,902
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▇▇▇▇▇ ▇. ▇▇▇▇▇ 3,424 380
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 24,580 2,731
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Dell U.S.A. L.P. 959,699 106,633
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 9,597 1,066
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▇▇▇▇▇▇ ▇▇▇▇ 873 97
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▇▇▇▇▇ ▇▇▇▇ 5,950 661
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Partners 11,331 1,259
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FSC Corp. (Fleet) 47,985 5,332
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 2,567 285
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GS PEP Technology Fund 2000 Offshore Holdings, L.P. 44,807 4,979
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GS PEP Technology Fund 2000, L.P. 113,533 12,615
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GS Private Equity Partners 1999-Direct 5,006 556
Investment Fund, L.P.
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Harbourvest Partners V - Direct Fund L.P. 567,260 63,029
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▇▇▇▇▇▇▇▇ Family Limited Partnership 8,559 951
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High Street Investors ▇▇▇▇ (▇▇▇▇▇ ▇▇▇▇▇▇▇ & 9,598 1,066
▇▇▇▇▇▇▇▇▇, LLP)
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 514 57
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Hybrid Venture Partners, L.P. (Comdisco) 47,985 5,332
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,004 111
---------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 698 78
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Lindsay 1994 Family Partnership, L.P. 3,424 381
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ 490 54
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Lycos, Inc. 137,237 15,249
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Matrix IV Entrepreneurs Fund, A Limited 41,688 4,632
Partnership
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Matrix Partners IV, L.P. 792,070 88,008
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 69,322 7,702
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,885 1,209
---------------------------------------------------------------------------------------------------------
Neill ▇. ▇▇▇▇▇▇▇▇▇▇ 2,182 243
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 3,274 364
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 1,713 190
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ 873 97
---------------------------------------------------------------------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇ 595 66
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 873 97
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 53,263 5,918
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 1,310 145
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▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇.▇. 47,984 5,332
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Stone Street PEP Technology Fund 2000, L.P. 40,590 4,510
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The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. 515,839 57,315
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 3,839 427
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▇▇▇▇▇▇▇ ▇▇▇▇▇ 5,758 640
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,457 606
---------------------------------------------------------------------------------------------------------
▇▇▇▇▇ 1994 Family Partnership, L.P. 5,991 666
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5,400,000 600,000
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1580743