EXHIBIT 4.07
EXECUTION COPY
INTERLAND, INC.
December 31, 2002
Xx. Xxxxx Xxxxxxx
0000 X. Xxxxxx Xxxxxx, Xxx. 0
Xxxxxx Xxxx, XX 00000
Xx. Xxxxxxx Xxxxxx
000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Re: Amendment No. 3 to Stock Rights Agreement
Gentlemen:
I am writing to confirm our agreement amending the Stock Rights Agreement
by and among Interland, Inc., Xxxxx Xxxxxxx and Xxxxxxx Xxxxxx dated as of
February 8, 2002, as amended March 28, 2002, and as further amended July 11,
2002 (the "Stock Rights Agreement"). Our agreement is to amend Section 3(d) of
the Stock Rights Agreement as follows:
1. The parties have agreed to eliminate the contractual lock-up period set
forth in the Stock Rights Agreement. Accordingly, Section 3 of the Stock Rights
Agreement is deleted in its entirety and the following is substituted in lieu
thereof, effective immediately:
3. Use of Proceeds. Xx. Xxxxxx covenants and agrees to use 50% of
the proceeds (net of reasonable provisions for federal, state and
local taxes and of brokers' fees) of the sale of his Registrable
Securities to reduce his obligations under the Promissory Notes
(described in Section 3(c)), except that no payment shall be made
in respect of the 468,750 shares sold by Xx. Xxxxxx to Interland
as of July 11, 2002.
2. In addition, other references to "Section 3" contained elsewhere in the
Stock Rights Agreement shall be deemed to be deleted in their entirety.
Xx. Xxxxx Xxxxxxx
Xx. Xxxxxxx Xxxxxx
December 31, 2002
Page 2
3. For purposes of "notice" under the Stock Rights Agreement, the address
of Xxxxxxx Xxxxxx set forth above shall be used.
4. Interland, Inc. shall continue to use its best efforts to cause the
Registration Statement to be declared effective by the SEC. It is understood and
agreed that the remedies heretofore provided to Xx. Xxxxxxx and Xx. Xxxxxx shall
not in any way reduce or impair Interland's obligation to continue to diligently
pursue effective registration of the shares of Common Stock held by Xx. Xxxxxxx
and Xx. Xxxxxx.
5. Except as expressly amended hereby, the Stock Rights Agreement and all
of its provisions shall remain in full force and effect. The Stock Rights
Agreement (together with this Amendment No. 3) contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof.
6. This Amendment No. 3 is effective on and as of the date first above
written (the date upon which the parties reached agreement), even though the
individual parties may have signed this Agreement No. 3 after such date when
their agreement was documented.
7. Pursuant to the Merger Agreement, two restrictive legends were placed on
shares of Common Stock.
Form One: "The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under the
securities laws of any other jurisdiction, in reliance upon exemptions
from the registration requirements of such laws. The shares
represented by this certificate may not be sold or otherwise
transferred, nor will an assignee or endorsee hereof be recognized as
an owner of the shares by the issuer unless (i) a registration
statement under the Securities Act of 1933 and other applicable
securities laws with respect to the shares and the transfer shall then
be in effect, or (ii) permitted by the Stock Rights Agreement (as
identified in Sections 7.2(e) and 7.3(e)), and in the opinion of
counsel reasonably satisfactory to the issuer, the shares are
transferred in a transaction which is exempt from the registration
requirements of such laws."
Form Two: "The shares represented by this certificate are subject to a
Stock Rights Agreement dated February 2002, which restricts the
transfer of the shares. A copy of such Agreement may be inspected at
the principal office of Interland, Inc, 000 Xxxxxxxxx Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, XX 00000.
Xx. Xxxxx Xxxxxxx
Xx. Xxxxxxx Xxxxxx
December 31, 2002
Page 3
Interland. Inc. shall (i) immediately instruct its transfer agent to remove
Form Two of the restrictive legends from such shares of Common Stock, and (ii)
upon the SEC declaring the Registration Statement on Form S-3 (as covering the
Common Stock) to be effective, immediately instruct its transfer agent to remove
Form One of such restrictive legends and undertake any other action necessary to
effectuate the removal or insertion of such restrictive legends.
The parties hereto agree that Sections 4.1(h) and 4.1(i) of the Merger
Agreement shall be deemed to be amended to the extent necessary to conform to
this Section 7.
[Balance of page intentionally left blank]
Xx. Xxxxx Xxxxxxx
Xx. Xxxxxxx Xxxxxx
December 31, 2002
Page 4
If this accurately sets forth our agreement, please execute a copy of this
letter and return it to me by facsimile (1 copy) and overnight courier (3
copies), I will then send each of you a signed original.
Very truly yours,
INTERLAND, INC.
By: /s/ Xxx Xxxxxxxx
-------------------------------------
Name: Xxx Xxxxxxxx
-------------------------------------
Title: SVP HR
-------------------------------------
Read and Agreed to as of December 31, 2002:
/s/ Xxxxx Xxxxxxx
--------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxx
--------------------------------
Xxxxxxx Xxxxxx
cc: P. Xxxxxxxx Xxxxxx, Esq.
T. Xxxxx Xxxxxxxxxx, III, Esq.
[Signature Page to Amendment No. 3 to Stock Rights Agreement]
1598240
