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5,000,000 Shares of Common Stock
INTERLAND, INC.
UNDERWRITING AGREEMENT
July __, 2000
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS LLC
PAINEWEBBER INCORPORATED
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Dear Sirs:
Interland, Inc., a corporation organized and existing under the laws of
the state of Georgia (the "Company"), proposes, subject to the terms and
conditions stated herein, to issue and sell to the several underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 5,000,000 shares (the
"Firm Shares") of its common stock, no par value (the "Common Stock"), and, for
the sole purpose of covering over-allotments in connection with the sale of the
Firm Shares, at the option of the Underwriters, up to an additional 750,000
shares (the "Additional Shares") of Common Stock. The Firm Shares and any
Additional Shares purchased by the Underwriters are referred to herein as the
"Shares." The Shares are more fully described in the Registration Statement
referred to below.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriters that:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement, and may have
filed an amendment or amendments thereto, on Form S-1 (No. 333-32556), for the
registration of the Shares under the Securities Act of 1933, as amended (the
"Act"). Such registration statement, including the prospectus, financial
statements and schedules, exhibits and all other documents filed as a part
thereof, as amended at the time of effectiveness of the registration statement,
including any information deemed to be a part thereof as of the time of
effectiveness pursuant to paragraph (b) of Rule 430A or Rule 434 of the Rules
and Regulations of the Commission under the Act (the "Regulations"), is herein
called the "Registration Statement," and the prospectus, in the form first filed
with the Commission
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pursuant to Rule 424(b) of the Regulations or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) or Rule 434 filing is
required, is herein called the "Prospectus." The term "preliminary prospectus"
as used herein means a preliminary prospectus as described in Rule 430 of the
Regulations.
(b) At the time of the effectiveness of the Registration
Statement or the effectiveness of any post-effective amendment to the
Registration Statement, when the Prospectus is first filed with the Commission
pursuant to Rule 424(b) or Rule 434 of the Regulations, when any supplement to
or amendment of the Prospectus is filed with the Commission and at the Closing
Date and the Additional Closing Date, if any, (as hereinafter respectively
defined), the Registration Statement and the Prospectus and any amendments
thereof and supplements thereto complied or will comply in all material respects
with the applicable provisions of the Act and the Regulations and does not or
will not contain an untrue statement of a material fact and does not or will not
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein (i) in the case of the Registration
Statement, not misleading and (ii) in the case of the Prospectus, in light of
the circumstances under which they were made, not misleading. When the related
preliminary prospectus included as part of Amendment No. 1 to the registration
statement was first filed with the Commission on May 18, 2000 and when any
amendment thereof or supplement thereto was first filed with the Commission
after May 18, 2000, such preliminary prospectus and any amendments thereof and
supplements thereto complied in all material respects with the applicable
provisions of the Act and the Regulations and did not contain an untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein in light of the circumstances under which they were made not misleading.
No representation and warranty is made in this subsection (b), however, with
respect to any information contained in or omitted from the Registration
Statement or the Prospectus or any related preliminary prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through you as herein stated expressly for use in connection with
the preparation thereof. If Rule 434 of the Regulations is used, the Company
will comply with the requirements of Rule 434.
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified the financial
statements and supporting schedules included in the Registration Statement, are
independent public accountants as required by the Act and the Regulations.
(d) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, except as
set forth in the Registration Statement and the Prospectus, there has been no
material adverse change or any development involving a prospective material
adverse change in the business, prospects, properties, operations, condition
(financial or other) or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising from transactions in the
ordinary course of business, and since the date of the latest balance sheet
presented in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries has incurred or undertaken any liabilities or
obligations, direct or contingent, which are material to the Company and its
subsidiaries taken as a whole,
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except for liabilities or obligations which are reflected in the Registration
Statement and the Prospectus.
(e) This Agreement and the transactions contemplated
herein have been duly and validly authorized by the Company and this Agreement
has been duly and validly executed and delivered by the Company.
(f) The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, any material agreement,
instrument, franchise, license or permit to which the Company or any of its
subsidiaries is a party or by which any of such corporations or their respective
properties or assets may be bound or (ii) violate or conflict with any provision
of the certificate of incorporation or by-laws of the Company or any of its
subsidiaries or any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets. No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any court or
any public, governmental or regulatory agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their respective properties or
assets is required for the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby, including the
issuance, sale and delivery of the Shares to be issued, sold and delivered by
the Company hereunder, except the registration under the Act of the Shares and
such consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters.
(g) The stock purchase agreements between the Company and
each of Network Solutions, Inc., ▇▇▇▇ Atlantic Investments, Inc. and Microsoft
Corporation (collectively, the "Strategic Partners") relating to, among other
things, the purchase of Common Stock of the Company (the "Strategic Partner
Shares") as described in the Registration Statement and Prospectus under the
caption "Certain Transactions" (collectively, the "Stock Purchase Agreements")
have been duly authorized by the Company and constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms. As of the date hereof, the Company is not in default under any of
the terms of the Stock Purchase Agreements. To the best knowledge of the
Company, as of the date hereof none of the Strategic Partners is in breach of
any of the terms of the Stock Purchase Agreement to which it is a party, and the
Stock Purchase Agreements are in full force and effect. The Strategic Partner
Shares, when issued, delivered and sold in accordance with the Stock Purchase
Agreements, will be duly and validly issued and outstanding, fully paid and
nonassessable, and will not have been issued in violation of or be subject to
any preemptive rights.
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(h) The offer and sale of the Strategic Partner Shares by
the Company does not require registration under the Act.
(i) All of the outstanding shares of the Company's
capital stock are duly and validly authorized and are issued, fully paid and
nonassessable and were not issued and are not now in violation of or subject to
any preemptive rights. The Shares, when issued, delivered and sold in accordance
with this Agreement, will be duly and validly issued and outstanding, fully paid
and nonassessable, and will not have been issued in violation of or be subject
to any preemptive rights. At March 31, 2000, the Company had an actual
authorized and outstanding capitalization as set forth in the Registration
Statement and the Prospectus under the caption "Capitalization." As of the date
hereof, after giving effect to the issuance and sale of the Shares pursuant
hereto and the application of the net proceeds from the sale thereof, the
issuance and sale of the Strategic Partner Shares, the conversion of all
convertible preferred stock into Common Stock and the other adjustments
described in the Prospectus, the Company has the pro forma as adjusted
consolidated capitalization as set forth in the Prospectus under the caption
"Capitalization." The capital stock of the Company, including the Common Stock,
the Firm Shares and the Additional Shares, conforms to the descriptions thereof
contained in the Registration Statement and the Prospectus.
(j) Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation. Each of the Company and its
subsidiaries is duly qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its properties (owned,
leased or licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified or in good
standing which will not in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole. Each of the Company and its
subsidiaries has all requisite power and authority, and all necessary consents,
approvals, authorizations, orders, registrations, qualifications, licenses and
permits of and from all public, regulatory or governmental agencies and bodies,
to own, lease and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and the Prospectus, and
no such consent, approval, authorization, order, registration, qualification,
license or permit contains a materially burdensome restriction not adequately
disclosed in the Registration Statement and the Prospectus.
(k) The Company has no subsidiaries other than as set
forth on Exhibit 21 to the Registration Statement. All of the shares of
outstanding capital stock of each of the subsidiaries have been duly and validly
authorized and are issued, fully paid and nonassessable and were not issued and
are not now in violation of or subject to any preemptive rights and are owned,
beneficially and of record, by the Company, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or other claim.
(l) Except as described in the Prospectus, there is no
litigation or governmental proceeding to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is subject or which is pending or, to the knowledge of the Company,
contemplated against the Company or any of its subsidiaries which
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might result in any material adverse change or any development involving a
material adverse change in the business, prospects, properties, operations,
condition (financial or other) or, results of operations of the Company and its
subsidiaries taken as a whole or which is required to be disclosed in the
Registration Statement and the Prospectus.
(m) The Company has not taken and will not take, directly
or indirectly, any action designed to cause or result in, or which constitutes
or which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate the sale
or resale of the Shares in violation of any securities laws.
(n) The financial statements, including the notes
thereto, and supporting schedules included in the Registration Statement and the
Prospectus present fairly the financial position of the Company as of the dates
indicated and the results of its operations for the periods specified; except as
otherwise stated in the Registration Statement, said financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis; and the supporting schedules included in the
Registration Statement present fairly the information required to be stated
therein. For all financial reporting periods ended on or before March 31, 2000,
the Company had no subsidiaries whose results of operations were required under
generally accepted accounting principles to be consolidated with the results of
operations of the Company.
(o) Each of the Company and its subsidiaries owns,
possesses or has the right to employ all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, software, systems
and procedures), trademarks, service marks and trade names, inventions, computer
programs, technical data and technical information (collectively, the
"Intellectual Property") presently employed by it in connection with the
businesses now operated by it or which are proposed to be operated by it or its
subsidiaries free and clear of, and without violating any right, claimed right,
charge, encumbrance, pledge, security interest, restriction or lien of any kind
of any other person, and none of the Company or 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, except as could not reasonably be
expected to have a material adverse effect on the business, prospects,
properties, operations, condition (financial or otherwise) of the Company and
its subsidiaries taken as a whole (a "Material Adverse Effect"). The use of the
Intellectual Property in connection with the business and operations of the
Company and its subsidiaries does not infringe on the rights of any person,
except as could not reasonably be expected to result in a Material Averse
Effect.
(p) Except as described in the Prospectus, no holder of
securities of the Company has any rights to the registration of securities of
the Company because of the filing of the Registration Statement or otherwise
in connection with the sale of the Shares contemplated hereby.
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(q) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration as an
"investment company" under the Investment Company Act of 1940.
2. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to sell to the Underwriters and
the Underwriters, severally and not jointly, agree to purchase from the Company,
at a purchase price per share of $_______, the number of Firm Shares set forth
opposite the respective names of the Underwriters in Schedule I hereto plus any
additional number of Shares which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 9 hereof.
(b) Payment of the purchase price for, and delivery of
certificates for, the Shares shall be made at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
1001 Pennsylvania Avenue, N.W., Washington, D.C., or at such other place as
shall be agreed upon by you and the Company, at 10:00 A.M. on the third or
fourth business day (as permitted under Rule 15c6-1 under the Exchange Act)
(unless postponed in accordance with the provisions of Section 9 hereof)
following the date of the effectiveness of the Registration Statement (or, if
the Company has elected to rely upon Rule 430A of the Regulations, the third or
fourth business day (as permitted under Rule 15c6-1 under the Exchange Act)
after the determination of the initial public offering price of the Shares), or
such other time not later than ten business days after such date as shall be
agreed upon by you and the Company (such time and date of payment and delivery
being herein called the "Closing Date"). Payment shall be made to the Company by
wire transfer in same day funds, against delivery to you for the respective
accounts of the Underwriters of certificates for the Shares to be purchased by
them. Certificates for the Shares shall be registered in such name or names and
in such authorized denominations as you may request in writing at least two full
business days prior to the Closing Date. The Company will permit you to examine
and package such certificates for delivery at least one full business day prior
to the Closing Date.
(c) In addition, the Company hereby grants to the
Underwriters the option to purchase up to 750,000 Additional Shares at the same
purchase price per share to be paid by the Underwriters to the Company for the
Firm Shares as set forth in this Section 2, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option may
be exercised at any time, in whole or in part, on or before the thirtieth day
following the date of the Prospectus, by written notice by you to the Company.
Such notice shall set forth the aggregate number of Additional Shares as to
which the option is being exercised and the date and time, as reasonably
determined by you, when the Additional Shares are to be delivered (such date and
time being herein sometimes referred to as the "Additional Closing Date");
provided, however, that the Additional Closing Date shall not be earlier than
the Closing Date or earlier than the second full business day after the date on
which the option shall have been exercised nor later than the eighth full
business day after the date on which the option shall have been exercised
(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Certificates for the Additional Shares shall be registered in
such name or names and in
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such authorized denominations as you may request in writing at least two full
business days prior to the Additional Closing Date. The Company will permit you
to examine and package such certificates for delivery at least one full business
day prior to the Additional Closing Date.
The number of Additional Shares to be sold to each Underwriter shall be
the number which bears the same ratio to the aggregate number of Additional
Shares being purchased as the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto (or such number increased as set forth
in Section 9 hereof) bears to 5,000,000, subject, however, to such adjustments
to eliminate any fractional shares as you in your sole discretion shall make.
Payment for the Additional Shares shall be by wire transfer in same day
funds at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, or such other location as may be
mutually acceptable, upon delivery of the certificates for the Additional Shares
to you for the respective accounts of the Underwriters.
3. Offering.
(a) Upon your authorization of the release of the Firm
Shares, the Underwriters propose to offer the Shares for sale to the public upon
the terms set forth in the Prospectus.
(b) The Company and the Underwriters hereby agree that up
to 7.5% of the Firm Shares to be purchased by the Underwriters (the "Directed
Shares") shall be reserved for sale by the Underwriters to certain eligible
employees, directors and certain persons designated by the Company (the
"Directed Shares Purchasers"), as part of the distribution of the Shares by the
Underwriters subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc., and all other applicable laws, rules and regulations, provided,
however, that under no circumstances will Bear, ▇▇▇▇▇▇▇ & Co. Inc. or any other
Underwriter be liable to the Company or to any of the Directed Shares Purchasers
for any action taken or omitted to be taken other than any such action or
inaction resulting from the bad faith or willful misconduct of any Underwriter
in connection with the transactions effected with regard to the Directed Shares
Purchasers. To the extent that such Directed Shares are not orally confirmed for
purchase by such persons by the end of the first day after the date of this
Agreement, such Directed Shares will be offered to the public as part of the
offering contemplated hereby.
4. Covenants of the Company. The Company covenants and agrees
with the Underwriters that:
(a) If the Registration Statement has not yet been
declared effective the Company will use its best efforts to cause the
Registration Statement and any amendments thereto to become effective as
promptly as possible, and if Rule 430A is used or the filing of the Prospectus
is otherwise required under Rule 424(b) or Rule 434, the Company will file the
Prospectus (properly completed if Rule 430A has been used) pursuant to Rule
424(b) or Rule 434 within the prescribed time period and will provide evidence
reasonably satisfactory to you of
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such timely filing. If the Company elects to rely on Rule 434, the Company will
prepare and file a term sheet that complies with the requirements of Rule 434.
The Company will notify you promptly (and, if requested by you, will
confirm such notice in writing) (i) when the Registration Statement and any
amendments thereto become effective, (ii) of any request by the Commission for
any amendment of or supplement to the Registration Statement or the Prospectus
or for any additional information, (iii) of the mailing or the delivery to the
Commission for filing of any amendment of or supplement to the Registration
Statement or the Prospectus, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or of the initiation, or the threatening, of
any proceedings therefor, (v) of the receipt of any comments from the
Commission, and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for that
purpose. If the Commission shall propose or enter a stop order at any time, the
Company will make every reasonable effort to prevent the issuance of any such
stop order and, if issued, to obtain the lifting of such order as soon as
possible. The Company will not file any amendment to the Registration Statement
or any amendment of or supplement to the Prospectus (including the prospectus
required to be filed pursuant to Rule 424(b)or Rule 434) that differs from the
prospectus on file at the time of the effectiveness of the Registration
Statement before or after the effective date of the Registration Statement to
which you shall reasonably object in writing after being timely furnished in
advance a copy thereof.
(b) If at any time when a prospectus relating to the
Shares is required to be delivered under the Act any event shall have occurred
as a result of which the Prospectus as then amended or supplemented would, in
the reasonable judgment of the Underwriters or the Company include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall be
necessary at any time to amend or supplement the Prospectus or Registration
Statement to comply with the Act or the Regulations, the Company will notify you
promptly and prepare and file with the Commission an appropriate amendment or
supplement (in form and substance reasonably satisfactory to you) which will
correct such statement or omission and will use its best efforts to have any
amendment to the Registration Statement declared effective as soon as possible.
(c) The Company will promptly deliver to you three signed
copies of the Registration Statement, including any and all amendments thereto,
and the Company will promptly deliver to each of the Underwriters such number of
copies of any preliminary prospectus, the Prospectus, the Registration
Statement, and all amendments of and supplements to such documents, if any, as
you may reasonably request.
(d) The Company will endeavor in good faith, in
cooperation with you, at or prior to the time of effectiveness of the
Registration Statement, to qualify the Shares for offering and sale under the
securities laws relating to the offering or sale of the Shares of such
jurisdictions as you may designate and to maintain such qualification in effect
for so long as
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required for the distribution thereof; except that in no event shall the Company
be obligated in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process.
(e) The Company will make generally available (within the
meaning of Section 11(a) of the Act) to its security holders and to you as soon
as practicable, but not later than 45 days after the end of its fiscal quarter
in which the first anniversary date of the effective date of the Registration
Statement occurs, an earning statement (in form complying with the provisions of
Rule 158 of the Regulations) covering a period of at least twelve consecutive
months beginning after the effective date of the Registration Statement.
(f) During the period of 180 days from the date of the
Prospectus, the Company will not, directly or indirectly, without your prior
written consent, issue, sell, offer or agree to sell, grant any option for the
sale of, pledge, make any short sale or maintain any short position, establish
or maintain a "put equivalent position" (within the meaning of Rule 16-a-1(h)
under the Securities Exchange Act of 1934, as amended), enter into any swap,
derivative transaction 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 is to be settled by delivery of Common Stock,
other securities, cash or other consideration) or otherwise dispose of, any
Common Stock (or any securities convertible into, exercisable for or
exchangeable for Common Stock) or interest therein of the Company or of any of
its subsidiaries, and the Company will obtain the undertaking of each of its
officers and directors and such of its shareholders as have been heretofore
designated by you and listed on Schedule II attached hereto not to engage in any
of the aforementioned transactions on their own behalf, other than the Company's
sale of Shares hereunder and the Company's issuance of Common Stock upon (i) the
conversion of all of the Company's outstanding convertible preferred stock; (ii)
the exercise of presently outstanding options; (iii) the exercise of currently
outstanding warrants; (iv) the sale of the Strategic Common Stock in connection
with the offering; and (v) the grant and exercise of options under, or the
issuance and sale of shares pursuant to, the Company's stock option plan and
employee stock purchase plan as in effect on the date hereof.
(g) During a period of three years from the effective
date of the Registration Statement, the Company will furnish to you copies of
(i) all reports to its shareholders; and (ii) all reports, financial statements
and proxy or information statements filed by the Company with the Commission or
any national securities exchange.
(h) The Company will apply the proceeds from the sale of
the Shares as set forth under "Use of Proceeds" in the Prospectus and shall
report the use of proceeds in its periodic reports as required by Rule 463 under
the Act.
(i) The Company will use its best reasonable efforts to
cause the Shares to be listed for inclusion in the National Association of
Securities Dealers Automated Quotation National Market System ("Nasdaq").
5. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated
and except as may otherwise be
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agreed upon, in writing, between you and the Company, the Company hereby agrees
to pay all costs and expenses incident to the performance of the obligations of
the Company hereunder, including those in connection with (i) preparing,
printing, duplicating, filing and distributing the Registration Statement, as
originally filed and all amendments thereof (including all exhibits thereto),
any preliminary prospectus, the Prospectus and any amendments or supplements
thereto (including, without limitation, fees and expenses of the Company's
accountants and counsel), the underwriting documents (including this Agreement
and the Agreement Among Underwriters) and all other documents related to the
public offering of the Shares (including those supplied to the Underwriters in
quantities as hereinabove stated), (ii) the issuance, transfer and delivery of
the Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) the qualification of the Shares under state or foreign securities
or Blue Sky laws, including the costs of printing and mailing a preliminary and
final "Blue Sky Memorandum" and the fees of counsel for the Underwriters and
such counsel's disbursements in relation thereto, (iv) the fees of counsel for
the Underwriters in connection with the matters relating to the Directed Shares
which are designated by the Company for sale to certain employees and directors
and certain persons designated by the Company, (v) quotation of the Shares on
Nasdaq, (vi) filing fees of the Commission and the National Association of
Securities Dealers, Inc.; (vii) the cost of printing certificates representing
the Shares and (viii) the cost and charges of any transfer agent or registrar.
6. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Firm Shares and the Additional
Shares, as provided herein, shall be subject to the accuracy of the
representations and warranties of the Company herein contained, as of the date
hereof and as of the Closing Date (for purposes of this Section 6 "Closing Date"
shall refer to the Closing Date for the Firm Shares and any Additional Closing
Date, if different, for the Additional Shares), to the absence from any
certificates, opinions, written statements or letters furnished to you or to
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ("Underwriters' Counsel") pursuant to this Section 6 of any
material misstatement or omission, to the performance by the Company of its
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become
effective not later than, if pricing pursuant to Rule 430A, 5:30 P.M., New York
time, on the date of this Agreement, or at such later time and date as shall
have been consented to in writing by you; if the Company shall have elected to
rely upon Rule 430A or Rule 434 of the Regulations, the Prospectus shall have
been filed with the Commission in a timely fashion in accordance with Section
4(a) hereof; and, at or prior to the Closing Date no stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereof shall have been issued and no proceedings therefor shall have been
initiated or threatened by the Commission.
(b) At the Closing Date you shall have received the
opinion of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, dated the Closing
Date addressed to the Underwriters and in the form attached hereto.
(c) At the Closing Date, the Underwriters shall have
received the opinion of Trenite Van Doorne, Dutch counsel for the Company, dated
as of such Closing Date,
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addressed to the Underwriters, in the form previously approved by Underwriters'
Counsel, to the effect that:
(i) Interland B.V. has been duly organized and
is validly existing as a corporation under the laws of the Kingdom of
the Netherlands. Interland B.V. is duly qualified and in good standing
as a foreign corporation in each jurisdiction in which the character or
location of its properties owned, leased or licensed or the nature or
conduct of its business makes such qualification necessary, except
where the failure to be so qualified or in good standing would not in
the aggregate have a Material Adverse Effect. Interland B.V. has all
requisite corporate power and authority to conduct its business as now
being conducted and to own, lease and operate its properties; and
(ii) All of the outstanding shares of capital
stock of Interland B.V. have been duly and validly authorized and are
issued, fully paid and nonassessable and were not issued and, to the
best knowledge of such counsel, are not now in violation of or subject
to any preemptive rights and are owned, beneficially and of record, by
the Company, free and clear of any security interest, mortgage, pledge,
lien encumbrance or other claim.
(d) All proceedings taken in connection with the sale of
the Firm Shares and the Additional Shares as herein contemplated shall be
reasonably satisfactory in form and substance to you and to Underwriters'
Counsel, and the Underwriters shall have received from said Underwriters'
Counsel a favorable opinion, dated as of the Closing Date with respect to the
issuance and sale of the Shares, the Registration Statement and the Prospectus
and such other related matters as you may reasonably require, and the Company
shall have furnished to Underwriters' Counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(e) At the Closing Date you shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of the
Company, dated the Closing Date to the effect that (i) the condition set forth
in subsection (a) of this Section 6 has been satisfied, (ii) as of the date
hereof and as of the Closing Date the representations and warranties of the
Company set forth in Section 1 hereof are accurate, (iii) as of the Closing Date
the obligations of the Company to be performed hereunder on or prior thereto
have been duly performed and (iv) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, the
Company and its subsidiaries have not sustained any material loss or
interference with their respective businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, and there has
not been any material adverse change, or any development involving a material
adverse change, in the business prospects, properties, operations, condition
(financial or otherwise), or results of operations of the Company and its
subsidiaries taken as a whole, except in each case as described in or
contemplated by the Prospectus.
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(f) At the time this Agreement is executed and at the
Closing Date, you shall have received a letter, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
independent public accountants for the Company, dated, respectively, as of the
date of this Agreement and as of the Closing Date addressed to the Underwriters
and in form and substance reasonably satisfactory to you, to the effect that:
(i) they are independent certified public accountants with respect to the
Company within the meaning of the Act and the Regulations and stating that the
disclosure with respect to Item 10 of the Registration Statement is correct
insofar as it relates to them; (ii) stating that, in their opinion, the
financial statements of the Company included in the Registration Statement and
the Prospectus and covered by their opinion therein comply as to form in all
material respects with the applicable accounting requirements of the Act and the
applicable published rules and regulations of the Commission thereunder; (iii)
on the basis of procedures consisting of a reading of the latest available
unaudited interim financial statements of the Company, and its subsidiaries, a
reading of the minutes of meetings and consents of the shareholders and boards
of directors of the Company and its subsidiaries and the committees of such
boards subsequent to December 31, 1999, inquiries of officers and other
employees of the Company and its subsidiaries who have responsibility for
financial and accounting matters of the Company and its subsidiaries with
respect to transactions and events subsequent to December 31, 1999 and other
specified procedures and inquiries to a date not more than five days prior to
the date of such letter, nothing has come to their attention that would cause
them to believe that: (A) the unaudited financial statements of the Company
presented in the Registration Statement and the Prospectus do not comply as to
form in all material respects with the applicable accounting requirements of the
Act and, if applicable, the Exchange Act and the applicable published rules and
regulations of the Commission thereunder or that such unaudited financial
statements are not fairly presented in conformity with generally accepted
accounting applied on a basis substantially consistent with that of the audited
financial statements included in the Registration Statement and the Prospectus;
(B) with respect to the period subsequent to December 31, 1999 there were, as of
the date of the most recent available monthly financial statements of the
Company and its subsidiaries, if any, and as of a specified date not more than
five days prior to the date of such letter, any changes in the capital stock or
long-term indebtedness of the Company or any decrease in the net current assets
or stockholders' equity (deficit) of the Company, in each case as compared with
the amounts shown in the most recent balance sheet presented in the Registration
Statement and the Prospectus, except for changes or decreases which the
Registration Statement and the Prospectus disclose have occurred or may occur or
which are set forth in such letter or that during the period from December 31,
1999 to the date of the most recent available monthly financial statements of
the Company and its subsidiaries, if any, and to a specified date not more than
five days prior to the date of such letter, there was any decrease, as compared
with the corresponding period in the prior fiscal year, in total revenues, or
total or per share net loss/income, except for decreases which the Registration
Statement and the Prospectus disclose have occurred or may occur or which are
set forth in such letter; and (iv) stating that they have compared specific
dollar amounts, numbers of shares, percentages of revenues and earnings, and
other financial information pertaining to the Company and its subsidiaries set
forth in the Registration Statement and the Prospectus, which have been
specified by you prior to the date of this Agreement, to the extent that such
amounts, numbers, percentages, and information may be derived from the general
accounting and financial records of the Company and its subsidiaries or from
schedules furnished by the Company, and excluding any questions requiring
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an interpretation by legal counsel, with the results obtained from the
application of specified readings, inquiries, and other appropriate procedures
specified by you set forth in such letter, and found them to be in agreement.
(g) Each of the Stock Purchase Agreements shall be in
full force and effect and no party thereto shall have given any notice of
termination or amendment of any material provision thereof, or of any intention
to terminate or amend any material provision thereof, to any other party, and no
event shall have occurred which would prevent either party from substantially
performing its obligations under the Stock Purchase Agreements. The Strategic
Partner Shares shall have been issued to, and full payment therefor shall have
been received from, each of the Strategic Partners.
(h) Prior to the Closing Date and the Additional Closing
Date, if any, as the case may be, the Company shall have furnished to you such
further information, certificates and documents as you may reasonably request.
(i) You shall have received from each person who is a
director or officer of the Company or such shareholders as have been heretofore
designated by you and listed on Schedule II hereto a lock-up agreement
substantially in the form attached hereto as Exhibit A.
(j) At the Closing Date, the Shares shall have been
approved for quotation on the Nasdaq National Market.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you or to
Underwriters' Counsel pursuant to this Section 6 shall not be in all material
respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the Underwriters hereunder may be
canceled by you at, or at any time prior to, the Closing Date and the
obligations of the Underwriters to purchase the Additional Shares may be
canceled by you at, or at any time prior to, the Additional Closing Date. Notice
of such cancellation shall be given to the Company in writing.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), against any and all losses,
liabilities, claims, damages and expenses whatsoever as incurred (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Shares, as originally filed or any amendment thereof, or any
related preliminary prospectus or
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the Prospectus, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; or (ii) any untrue statement or alleged untrue statement
of a material fact included in the supplement or prospectus wrapper material
distributed in connection with the reservation and sale of the Directed Shares
to eligible employees and certain persons designated by the Company or the
omission or alleged omission therefrom of a material fact necessary to make the
statements therein, when considered in conjunction with the Prospectus or
preliminary prospectus, not misleading; provided, however, that the Company will
not be liable in any such case to the extent but only to the extent that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
you expressly for use therein. The Company acknowledges that the statements set
forth in the last statement of the cover page, beginning "The underwriters
expect," and in the first, fourth, ninth, and tenth paragraphs under the caption
"Underwriting" in the Prospectus constitute the only information furnished in
writing by or on behalf of any Underwriter expressly for use in the registration
statement relating to the Shares as originally filed or in any amendment thereof
of supplement thereto, as the case may be. The foregoing indemnity agreement
with respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter who failed to deliver a Prospectus (as then amended or supplemented,
provided by the Company to the several Underwriters in the requisite quantity
and on a timely basis to permit proper delivery on or prior to the Closing Date)
to the person asserting any losses, claims, damages and liabilities and
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, 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, if such
material misstatement or omission or alleged material misstatement or omission
was cured in such Prospectus and such Prospectus was required by law to be
delivered at or prior to the written confirmation of sale to such person. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have including under this Agreement.
(b) Each Underwriter severally, and not jointly, agrees
to indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement, and each other person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act, against any losses, liabilities, claims, damages and expenses whatsoever as
incurred (including but not limited to attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), jointly or several, to
which they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the registration
statement for the registration of the Shares, as originally filed or any
amendment thereof, or any related preliminary prospectus or the Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
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upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through you
expressly for use therein. This indemnity will be in addition to any liability
which any Underwriter may otherwise have including under this Agreement.
(c) In connection with the offer and sale of Directed
Shares the Company agrees, promptly upon written notice, to indemnify and hold
harmless the Underwriters from and against any and all losses, liabilities,
claims, damages and expenses incurred by them as a result of the failure of any
Directed Shares Purchaser, who makes an oral agreement, properly confirmed by
the Underwriters, to purchase Directed Shares within twenty-four hours of
establishing the public offer price, to pay for and accept delivery of the
Directed Shares.
(d) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 7). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by the indemnifying parties. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or reasonably could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes and
unconditional release of the indemnified party from all liability on claims that
are or reasonably could have been the subject matter of such action and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of the indemnified party.
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8. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 7 hereof is
for any reason held to be unavailable from any indemnifying party or is
insufficient to hold harmless a party indemnified thereunder, the Company and
the Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company any
contribution received by the Company from persons, other than the Underwriters,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, officers of the Company who signed the Registration Statement and
directors of the Company) as incurred to which the Company and one or more of
the Underwriters may be subject, in such proportions as is appropriate to
reflect the relative benefits received by the Company and the Underwriters from
the offering of the Shares or, if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Underwriters in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Underwriters shall be deemed to be in the same proportion as (x) the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company and (y) the underwriting
discount received by the Underwriters, respectively, in each case as set forth
in the table on the cover page of the Prospectus. The relative fault of the
Company and of the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 8 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 which does not take account
of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the shares are
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within in
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the same
rights to contribution as the Company, subject in each case to clauses (i) and
(ii) of this Section 8. Any party entitled to contribution will, promptly after
receipt of notice of
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commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties,
notify each party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 8 or otherwise. The obligations of the Underwriters to
contribute pursuant to this Section 8 are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint.
9. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in
its or their obligation to purchase Firm Shares or Additional Shares hereunder,
and if the Firm Shares or Additional Shares with respect to which such default
relates do not (after giving effect to arrangements, if any, made by you
pursuant to subsection (b) below) exceed in the aggregate 10% of the number of
Firm Shares or Additional Shares to which the default relates, such shares shall
be purchased by the non-defaulting Underwriters in proportion to the respective
proportions which the numbers of Firm Shares set forth opposite their respective
names in Schedule I hereto bear to the aggregate number of Firm Shares set forth
opposite the names of the non-defaulting Underwriters.
(b) In the event that such default relates to more than
10% of the Firm Shares or Additional Shares, as the case may be, you may in your
discretion arrange for yourself or for another party or parties (including any
non-defaulting Underwriter or Underwriters who so agree) to purchase such Firm
Shares or Additional Shares, as the case may be, to which such default relates
on the terms contained herein. In the event that within 5 calendar days after
such a default you do not arrange for the purchase of the Firm Shares or
Additional Shares, as the case may be, to which such default relates as provided
in this Section 9, this Agreement or, in the case of a default with respect to
the Additional Shares, the obligations of the Underwriters to purchase and of
the Company to sell the Additional Shares shall thereupon terminate, without
liability on the part of the Company with respect thereto (except in each case
as provided in Section 5, 7(a) and 8 hereof) or the Underwriters (except in each
case as provided in Section 7(b) and 8 hereof), but nothing in this Agreement
shall relieve a defaulting Underwriter or Underwriters of its or their
liability, if any, to the other Underwriters and the Company for damages
occasioned by its or their default hereunder.
(c) In the event that the Firm Shares or Additional
Shares to which the default relates are to be purchased by the non-defaulting
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be for a period, not exceeding five
business days, in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus or in any other documents and
arrangements, and the Company agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus which, in the
reasonable opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include any
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party substituted under this Section 9 with like effect as if it had originally
been a party to this Agreement with respect to such Firm Shares and Additional
Shares.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Underwriters and
the Company contained in this Agreement, including the agreements contained in
Section 5, the indemnity agreements contained in Section 7 and the contribution
agreements contained in Section 8, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof, and shall survive
delivery of and payment for the Shares to and by the Underwriters. The
representations contained in Section 1 and the agreements contained in Sections
5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement,
including termination pursuant to Section 9 or 11 hereof.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective, upon the later
of when (i) you and the Company shall have received notification of the
effectiveness of the Registration Statement or (ii) the execution of this
Agreement. If either the initial public offering price or the purchase price per
Share has not been agreed upon prior to 5:00 P.M., New York time, on the fifth
full business day after the Registration Statement shall have become effective,
this Agreement shall thereupon terminate without liability to the Company or the
Underwriters except as herein expressly provided. Until this Agreement becomes
effective as aforesaid, it may be terminated by the Company by notifying you or
by you notifying the Company, in each case in writing. Notwithstanding the
foregoing, the provisions of this Section 11 and of Sections 1, 5, 7 and 8
hereof shall at all times be in full force and effect.
(b) You shall have the right to terminate this Agreement
at any time prior to the Closing Date or the obligations of the Underwriters to
purchase the Additional Shares at any time prior to the Additional Closing Date,
as the case may be, if (A) any domestic or international event or act or
occurrence has materially disrupted, or in your reasonable opinion will in the
immediate future materially disrupt, the market for the Company's securities or
securities in general; or (B) if trading on the New York or American Stock
Exchanges or Nasdaq shall have been suspended, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for securities shall
have been required, on the New York or American Stock Exchanges by the New York
or American Stock Exchanges or on Nasdaq by Nasdaq or by order of the Commission
or any other governmental authority having jurisdiction; or (C) if a banking
moratorium has been declared by a state or federal authority or if any new
restriction materially adversely affecting the distribution of the Firm Shares
or the Additional Shares, as the case may be, shall have become effective; if
applicable; or (D) (i) if the United States becomes engaged in hostilities or
there is an escalation of hostilities involving the United States or there is a
declaration of a national emergency or war by the United States or (ii) if there
shall have been such change in political, financial or economic conditions if
the effect of any such event in (i) or (ii) as in your judgment makes it
impracticable or inadvisable to proceed with
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the offering, sale and delivery of the Firm Shares or the Additional Shares, as
the case may be, on the terms contemplated by the Prospectus.
(c) Any notice of termination pursuant to this Section 11
shall be made in writing.
(d) If this Agreement shall be terminated pursuant to any
of the provisions hereof (otherwise than pursuant to (i) notification by you as
provided in Section 11(a) hereof or (ii) Section 9(b) or 11(b) hereof), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by you, reimburse the Underwriters for all
reasonable out-of-pocket expenses (including the reasonable fees and expenses of
their counsel), incurred by the Underwriters in connection herewith.
12. Notices. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to any
Underwriter, shall be mailed, delivered, or telexed or telegraphed and confirmed
in writing, to such Underwriter c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director with a copy to
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.; if sent to the Company, shall
be mailed, delivered, or telegraphed and confirmed in writing to the Company ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: H. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Senior Vice President and General Counsel with a copy to ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇.
13. Parties. This Agreement shall insure solely to the benefit of,
and shall be binding upon, the Underwriters and the Company and the controlling
persons, directors, officers, employees and agents referred to in Section 7 and
8, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Shares from any of the Underwriters.
14. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, but without
regard to principles of conflicts of law.
15. Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original and all of which together shall constitute
one and the same instrument.
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If the foregoing correctly sets forth the understanding between you and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
INTERLAND, INC.
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Accepted as of the date first above written.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS LLC
PAINEWEBBER INCORPORATED
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
BY: BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
------------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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SCHEDULE I
Number of Firm
Name of Underwriter Shares to be Purchased
------------------- ----------------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc
▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC
PaineWebber Incorporated
Total.................................. 5,000,000
22
SCHEDULE II
[Names of shareholders subject to the lock-up provision]
23
EXHIBIT A
LOCK-UP AGREEMENT
__________ _____, 2000
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇ PARTNERS LLC
PAINEWEBBER INCORPORATED
as Representatives of the several Underwriters
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
RE: INTERLAND, INC.
Ladies and Gentlemen:
In consideration of the proposed agreement of the several Underwriters,
for which Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇ Partners LLC and PaineWebber
Incorporated intend to act as Representatives, to underwrite a proposed public
offering (the "Offering") of shares of common stock (the "Common Stock") of
Interland, Inc., a corporation organized under the laws of the State of Georgia
(the "Company"), as contemplated by a registration statement filed with the
Securities and Exchange Commission on Form S-1 (Registration No. 333-32556), the
undersigned hereby (i) agrees that the undersigned will not, directly or
indirectly, during a period of one hundred eighty (180) days from the date of
the final prospectus for the Offering (the "Lock-Up Period"), without the prior
written consent of Bear, ▇▇▇▇▇▇▇ & Co. Inc., issue, sell, offer or agree to
sell, grant any option for the sale of, pledge, make any short sale or maintain
any short position, establish or maintain a "put equivalent position" (within
the meaning of Rule 16-a-1(h) under the Securities Exchange Act of 1934, as
amended), enter into any swap, derivative transaction 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 is to be settled by
delivery of Common Stock, other securities, cash or other consideration) or
otherwise dispose of, any Common Stock (or any securities convertible into,
exercisable for or exchangeable for Common Stock) or interest therein of the
Company or of any of its subsidiaries, and (ii) authorizes the Company during
the Lock-Up Period to cause the transfer agent to decline to transfer and/or to
note stop transfer restrictions on the transfer books and records of the Company
with respect to any shares of Common Stock and any securities convertible into
exercisable or exchangeable for Common Stock for which the undersigned is the
record holder and, in the case of any such share or securities for which the
undersigned is the beneficial but not the record holder, agrees to cause the
record holder to cause the transfer agent to decline to
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transfer and/or to note stop transfer restrictions on such books and records
with respect to such shares or securities.
The undersigned further agrees, from the date hereof until the end of
the Lock-up Period, that the undersigned will not exercise and will waive his,
her or its rights, if any, to require the Company to register its Common Stock
and to receive notice thereof.
Notwithstanding the foregoing, (i) if the undersigned is an individual,
he or she may transfer any Common Stock (or options exercisable for Common Stock
granted under the Company's stock incentive plan which are otherwise
transferable in accordance with the provisions of such plan) either during his
or her lifetime or on death by will or by intestacy to his or her "immediate
family" (as such term is defined below) or to a trust or other entity, the
beneficiaries or equity holders of which are exclusively the undersigned and /
or a member of his or her immediate family, provided, however, that in any such
case the transferee executes an agreement stating that the transferee is
receiving or holding the Common Stock (or options exercisable for Common Stock)
transferred subject to this Lock-Up Agreement, and that there shall be no
further transfer of such Common Stock (or options exercisable for Common Stock)
except in accordance with this Lock-Up Agreement, and (ii) no provision of this
Lock-Up Agreement shall in any way affect a pledge of Common Stock made by the
undersigned prior to the date of this Lock-Up Agreement, provided, however, that
this exemption from the foregoing Lock-Up restrictions apply only to the extent
that any previously executed pledge is identified with information as to the
name and address of the pledgee, the date of the pledge, and the amount of
shares pledged set forth as attached Exhibit A to this Lock-Up Agreement. For
purposes of this Lock-Up Agreement, the term "immediate family" shall mean
spouse, lineal descendant, father, mother, brother or sister of the undersigned.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into the agreements set forth herein, and
that, upon request, the undersigned will execute any additional documents
necessary in connection with enforcement hereof. Any obligations of the
undersigned shall be binding upon the successors and assigns of the undersigned.
Very truly yours,
By:
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(Print Name)
Dated: , 2000
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EXHIBIT A
NAME AND ADDRESS OF PLEDGEE DATE OF PLEDGE NUMBER OF SHARES PLEDGED
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