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EXHIBIT 1.1
5,000,000 Shares of Common Stock
INTERLAND, INC.
UNDERWRITING AGREEMENT
July __, 2000
BEAR, STEARNS & CO. INC.
THOMAS WEISEL PARTNERS LLC
PAINEWEBBER INCORPORATED
as Representatives of the
several Underwriters named in
Schedule I attached hereto
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, N.Y. 10167
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
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filed with the Commission 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 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 dated May 18, 2000 was first filed with the
Commission (whether filed as part of the registration statement for the
registration of the Shares or any amendment thereto or pursuant to Rule 424(a)
of the Regulations) 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 is used, the Company will comply with
the requirements of Rule 434.
(c) Arthur Andersen 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 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.; Bell Atlantic Investments, Inc. and
Microsoft Corporation relating to the purchase of stock of the Company (the
"Financing Shares") as described in the Registration Statement and Prospectus
under the caption "Certain Transactions," (collectively the "Stock Purchase
Agreements") are duly authorized, valid, binding and enforceable obligations of
the Company. As of the date hereof, the Company is not in default under the
terms of the Stock Purchase Agreements, to the best knowledge of the Company,
neither Network Solutions, Bell Atlantic, nor Microsoft is in breach of the
terms of the Stock Purchase Agreements and the Stock Purchase Agreements are in
full force and effect. The Financing 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.
(h) All of the outstanding shares of the
Company's capital stock are duly and validly authorized and 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
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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 June 15, 2000, the
Company had an actual authorized and outstanding capitalization as set forth in
the Registration Statement and the Prospectus under the caption
"Capitalization." At June 15, 2000, 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 consummation of the Stock Purchase Agreements and the
conversion of all convertible preferred stock into Common Stock, the Company had
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.
(i) 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.
(j) 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 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.
(k) 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.
(l) 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
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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.
(m) 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
or procedures), trademarks, service marks and trade names, inventions, computer
programs, technical data and 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. 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 adverse effect.
(n) 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.
(o) 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 Latham &
Watkins, 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
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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 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 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 Latham & Watkins, 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.
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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, Stearns & 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 in good faith 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
satisfactory to you of 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 immediately (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
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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 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 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 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
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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; and (iv) the sale to Microsoft, Network Solutions and Bell Atlantic of
common stock in connection with the offering.
(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.
(i) The Company will use its best 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,
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
<PAGE> 10
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
Latham & Watkins ("Underwriters' Counsel") pursuant to this Section 6 of any
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, the Underwriters shall
have received the opinion of Trenite Van Doorne, Dutch counsel for the Company,
dated as of such Closing Date, addressed to the Underwriters, in the form
previously approved by Underwriters' Counsel, to the effect that:
(i) Interland B.V., a Dutch
corporation, has been duly organized and is validly existing as a
corporation under the laws of its jurisdiction of incorporation.
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) Interland B.V. owns or possesses or
has obtained all governmental and regulatory licenses, certificates,
permits, consents, franchises, orders, trademarks, approvals,
concessions, and other authorizations necessary to own their respective
properties and to carry on their respective businesses as presently
conducted; and, Interland B.V. has not received any notice relating to
the revocation, modification or termination of any such license,
certificate, permit, consent, franchise, order, trademark, approval,
concession or other authority; which, individually or in the aggregate,
if the
<PAGE> 11
subject of any unfavorable decision, ruling, result or holding; would
result in a material adverse change in the condition (financial or
other), earnings, business prospects, results of operations or business
affairs of Interland B.V.
(c) At the Closing Date you shall have received
the opinion of Kilpatrick Stockton LLP, counsel for the Company, dated the
Closing Date addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, to the effect that:
(i) 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
corporate authority to own, lease and license its respective properties
and conduct its business as now being conducted and as described in the
Registration Statement and the Prospectus. All of the issued and
outstanding capital stock of each subsidiary of the Company has been
duly and validly issued and is fully paid and nonassessable and were
not issued in violation of preemptive rights and, is owned directly or
indirectly by the Company, free and clear of any lien, encumbrance,
claim, security interest, restriction on transfer, shareholders'
agreement, voting trust or other defect of title whatsoever.
(ii) The Company, as of June 15, 2000,
had an actual authorized and outstanding capitalization and a pro forma
as adjusted consolidated capitalization, giving effect to the issuance
and sale of the Shares pursuant hereto, and the application of the net
proceeds from the sale thereof, the consummation of the Stock Purchase
Agreements and the conversion of all convertible preferred stock into
Common Stock, as set forth in the Registration Statement and the
Prospectus under the caption "Capitalization." All of the outstanding
shares of Common Stock are duly and validly authorized and issued, are
fully paid and nonassessable and were not issued in violation of or
subject to any preemptive rights. The Shares to be delivered on the
Closing Date have been duly and validly authorized and, when delivered
by the Company in accordance with this Agreement, will be duly and
validly issued, fully paid and nonassessable and will not have been
issued in violation of or subject to any preemptive rights. The Common
Stock, the Firm Shares and the Additional Shares conform to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(iii) The Shares to be sold under this
Agreement to the Underwriters are duly authorized for quotation, on the
Nasdaq National Market.
(iv) This Agreement has been duly and
validly authorized, executed and delivered by the Company.
<PAGE> 12
(v) The Company is not, and upon
consummation of the transactions contemplated hereby will not be,
required to register as an "investment company" under the Investment
Company Act of 1940.
(vi) There is no litigation or
governmental or other action, suit, proceeding or investigation before
any court or before or by any public, regulatory or governmental agency
or body pending or to the best of such counsel's knowledge, threatened
against, or involving the properties or business of, the Company or any
of its subsidiaries, which is of a character required to be disclosed
in the Registration Statement and the Prospectus which has not been
properly disclosed therein.
(vii) The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Company do not and will not (A) 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
agreement, instrument, franchise, license or permit known to such
counsel 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 (B) violate or conflict with any provision of
the certificate of incorporation or by-laws of the Company or any of
its subsidiaries, or, to the best knowledge of such counsel, 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, except for
(1) such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters (as to which such counsel need express no opinion) and (2)
such as have been made or obtained under the Act.
(viii) The Registration Statement and the
Prospectus and any amendments thereof or supplements thereto (other
than the financial statements and schedules and other financial data
included or incorporated by reference therein, as to which no opinion
need be rendered) comply as to form in all material respects with the
requirements of the Act and the Regulations.
(ix) The Registration Statement is
effective under the Act, and, to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment thereof has been issued and no
proceedings therefor have been initiated or threatened by the
Commission and all filings required by Rule 424(b) of the Regulations
have been made.
<PAGE> 13
(x) In addition, such opinion shall
also contain a statement that such counsel has participated in
conferences with officers and representatives of the Company,
representatives of the independent public accountants for the Company
and the Underwriters at which the contents and the Prospectus and
related matters were discussed and, no facts have come to the attention
of such counsel which would lead such counsel to believe that either
the Registration Statement at the time it became effective (including
the information deemed to be part of the Registration Statement at the
time of effectiveness pursuant to Rule 430A(b) or Rule 434, if
applicable), or any amendment thereof made prior to the Closing Date as
of the date of such amendment, contained an untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of its date (or any amendment
thereof or supplement thereto made prior to the Closing Date as of the
date of such amendment or supplement) and as of the Closing Date
contained or contains an untrue statement of a material fact or omitted
or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that
such counsel need express no belief or opinion with respect to the
financial statements and schedules and other financial data included
therein).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the United
States and jurisdictions in which they are admitted, to the extent such counsel
deems proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to
Underwriters' Counsel) of other counsel reasonably acceptable to Underwriters'
Counsel, familiar with the applicable laws; (B) as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and certificates or other written statements of officers of departments of
various jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company and its subsidiaries, provided that
copies of any such statements or certificates shall be delivered to
Underwriters' Counsel. The opinion of such counsel for the Company shall state
that the opinion of any such other counsel is in form satisfactory to such
counsel and, in their opinion, you and they are justified in relying thereon.
(d) All proceedings taken in connection with the
sale of the Firm Shares and the Additional Shares as herein contemplated shall
be 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 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
<PAGE> 14
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.
(f) At the time this Agreement is executed and at the
Closing Date, you shall have received a letter, from Arthur Andersen 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 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 answer to Item 10 of
the Registration Statement is correct insofar as it relates to them; (ii)
stating that, in their opinion, the financial statements and schedules 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 consolidated
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
consolidated financial statements and schedules 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 consolidated financial
statements are not fairly presented in conformity with generally accepted
accounting applied on a basis substantially consistent with that of the audited
consolidated 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 consolidated 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 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
<PAGE> 15
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 consolidated 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 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 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.
(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 shareholder as have been heretofore
designated by you and listed on Schedule II hereto a lock-up agreement 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, or by telephone,
telex or telegraph, confirmed in writing.
<PAGE> 16
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 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 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. 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
upon the omission or alleged omission to state therein a material fact required
to be stated therein
<PAGE> 17
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; provided,
however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discount applicable to the Shares purchased
by such Underwriter hereunder. 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. Anything in
this subsection to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement of any claim or action effected without its written
consent, provided, however, that such consent was not unreasonably withheld.
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
<PAGE> 18
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 or indemnification is not available as a result of
the indemnifying party not having received notice as provided in Section 7
hereof, 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
discounts and commissions 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, (i) in no case shall any
Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such Underwriter
hereunder, and (ii) no person guilty of fraudulent misrepresentation (within 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. Notwithstanding
the provisions of this Section 8 and the preceding sentence, no Underwriter
shall be required to contribute any amount in excess of the difference between
of the underwriting discount applicable to the Shares purchased by the
Underwriter hereunder less the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. 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
<PAGE> 19
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 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. No party shall be liable for contribution with respect
to any action or claim settled without its consent; provided, however, that such
consent was not unreasonably withheld.
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 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, 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 opinion of Underwriters' Counsel, may thereby be made necessary or
advisable. The term "Underwriter" as used in this Agreement shall include any
party substituted
<PAGE> 20
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. 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
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) if any downgrading in the
rating of the Company's debt securities by any "nationally recognized
statistical rating-organization" (as defined for purposes of Rule 436(g) under
the Act; or E (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
<PAGE> 21
(ii) as in your judgment makes it impracticable or inadvisable to proceed with
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 by telephone, telex, or telegraph, confirmed in writing by letter.
(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
out-of-pocket expenses (including the 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, Stearns & Co. Inc., 245 Park Avenue,
New York, N.Y. 10167, Attention: James Crystal, Managing Director with a copy to
Latham & Watkins, Attention: John D. Watson, Jr.; if sent to the Company, shall
be mailed, delivered, or telegraphed and confirmed in writing to the Company 101
Marietta Street, Suite 200, Atlanta, Georgia 30303, Attention: H. Christopher
Covington, Senior Vice President and General Counsel with a copy to Kilpatrick
Stockton LLP, Attention: David A. Stockton.
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.
<PAGE> 22
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, STEARNS & CO. INC.
THOMAS WEISEL PARTNERS LLC
PAINEWEBBER INCORPORATED
On behalf of themselves and the other
Underwriters named in Schedule I hereto.
BY: BEAR, STEARNS & CO. INC.
By:
------------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
<PAGE> 23
SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm
Name of Underwriter Shares to be Purchased
------------------- ----------------------
<S> <C> <C>
Bear, Stearns & Co. Inc
Thomas Weisel Partners LLC
PaineWebber Incorporated
Total......................... 5,000,000
</TABLE>
<PAGE> 24
SCHEDULE II
[Names of shareholders subject to the lock-up provision]
<PAGE> 25
EXHIBIT A
LOCK-UP AGREEMENT
, 2000
---------- -----
BEAR, STEARNS & CO. INC.
THOMAS WEISEL PARTNERS LLC
PAINEWEBBER INCORPORATED
as Representatives of the several Underwriters
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
RE: INTERLAND, INC.
Ladies and Gentlemen:
In consideration of the proposed agreement of the several Underwriters,
for which Bear, Stearns & Co. Inc., Thomas Weisel 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, Stearns & 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
<PAGE> 26
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:
------------------------------
------------------------------
(Print Name)
Dated: , 2000
-------------------
<PAGE> 27
EXHIBIT A
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
NAME AND ADDRESS OF PLEDGEE DATE OF PLEDGE NUMBER OF SHARES PLEDGED
--------------------------------------------------------------------------------
<S> <C> <C>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
