ESCROW AGREEMENT
This ESCROW AGREEMENT, dated as of June 13, 2003
("Agreement"), is made and entered into by and among INTERLAND, INC., a
Minnesota corporation ("Interland"), Xxxxxxx X. Xxxxxxx, Xxxxx Xxxxxx, and
Xxxxxxxxx Xxxxxxxxx, who have executed this Agreement in their capacities as
the initial Stockholders' Representatives (the "Stockholders'
Representatives"), and SunTrust Bank, a Georgia banking corporation (the
"Escrow Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, on December 19, 2002, the Stockholders'
Representatives, Interland, Bobcatcub Acquisition Corporation, a Delaware
corporation and wholly-owned subsidiary of Interland ("Interland Sub"), and
Hostcentric, Inc., a Delaware corporation ("Hostcentric"), entered into an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which
Interland Sub will be merged with and into Hostcentric (the "Merger");
WHEREAS, pursuant to the terms of the Merger Agreement, the
consideration to be paid to the stockholders of Hostcentric ("Hostcentric
Stockholders") consists of both cash and shares of Interland's common stock,
par value $.01 per share ("Interland Stock");
WHEREAS, pursuant to Section 2.2 of the Merger Agreement,
Interland, Interland Sub and the Hostcentric Stockholders have agreed that a
portion of the Interland Stock and cash in the amount of $2,100,000 otherwise
payable by Interland to the Hostcentric Stockholders pursuant to the terms of
the Merger Agreement shall be deposited in escrow with the Escrow Agent by
Interland in order to secure the payment of any claims giving rise to
indemnification by the Hostcentric Stockholders under the Merger Agreement; and
WHEREAS, capitalized terms used herein and not otherwise
defined shall have the meaning ascribed thereto in the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the
promises contained herein, the parties, intending legally to be bound, agree as
follows:
SECTION 1
ESCROWED FUNDS
--------------
1.1 Delivery; Shares.
There will be delivered to and deposited with the Escrow
Agent (the "Deposit") concurrently with the execution hereof: (1) cash in the
amount of $2,100,000 (the "Escrowed Cash") and (2) 9,494,335 shares of
Interland Stock by delivery of a certificate representing such shares of
Interland Stock registered in the name of SunTrust Bank, as escrow agent, for
the benefit of the former preferred stockholders of Hostcentric, Inc., (the
"Escrowed Shares"). The Escrow Agent shall hold the Escrowed Cash and the
Escrowed Shares pursuant to
the terms of this Agreement. The Escrowed Cash and the Escrowed Shares are
sometimes referred to in this Agreement collectively as the "Escrowed Funds."
1.2 Receipt. The Escrow Agent hereby: (i) accepts delivery of
the Escrowed Cash and Escrowed Shares and holds, and agrees to hold, the
Escrowed Funds in escrow as a fund available to secure the indemnification
obligations owed by the Hostcentric Stockholders to Interland pursuant to
Section 8.2 of the Merger Agreement, and (ii) agrees to hold and disburse the
Escrowed Funds in accordance with the terms and conditions of this Agreement.
1.3 Voting; Investment; Income. The right to vote the
Escrowed Shares shall be exercised by or as directed by the Stockholders'
Representatives, and the Escrow Agent shall have no rights or responsibilities
with respect to voting the Escrowed Shares nor any ownership interest therein.
The Escrowed Shares shall be held by the Escrow Agent for the benefit of the
Hostcentric Stockholders subject to the terms and conditions of this Agreement
and none of the Escrowed Shares shall be sold during the term of this
Agreement. Any dividends or other distributions declared and paid upon the
Escrowed Shares (collectively, "Earnings") shall be paid to the Escrow Agent
and shall be held by the Escrow Agent for the benefit of the Hostcentric
Stockholders as provided in Schedule 1 but shall not constitute Escrowed Funds
and shall not be used to satisfy any indemnification claims. The Escrowed Cash
and any cash amounts received by the Escrow Agent pursuant to this Section 1.3
shall be deposited in a non-interest bearing account. All Earnings shall be
released on the Release Date (as defined in Section 2.2 hereof) to the
Stockholders' Representatives for the benefit of the Hostcentric Stockholders
as provided in Schedule 1 and shall not be subject to satisfaction of a Buyer
Claim. Any federal, state or local income taxes imposed upon or asserted
against the Earnings shall be the responsibility of and shall be paid by the
Hostcentric Stockholders.
SECTION 2
PROCEDURES FOR DISBURSEMENT OF ESCROWED FUNDS
---------------------------------------------
2.1 Claims Procedure For Escrowed Funds. The following
procedures shall govern the application of the Escrowed Funds to satisfy any
claims by Interland which may be brought pursuant to Section 8.2 of the Merger
Agreement:
(a) Interland shall give written notice to the Stockholders'
Representatives and the Escrow Agent of any claim for indemnity pursuant to the
Merger Agreement that could constitute a claim against the Escrowed Funds (a
"Buyer Claim"). The written notice shall specify (i) the factual basis for such
claim, (ii) the amount of claim and the number of Escrowed Shares and amount of
Escrowed Cash to be released, based on the valuation set forth below, and (iii)
that Interland has given a copy of such notice to the Stockholders'
Representatives. No notice may be given under this Section 2.1(a) after the
Release Date (as defined in Section 2.2). The value of each Escrowed Share to
be used to satisfy any claim shall be deemed to be equal to the greater of (x)
the average closing price of Interland Stock as reported by NASDAQ for the five
(5) trading days ending two (2) business days prior to the date of the Buyer
Claim and (y) $1.681 per share. The Escrow Agent shall have no duty with
respect to establishing or confirming any valuation set forth in any such
notice.
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(b) Following receipt of a Buyer Claim in accordance with
Section 2.1(a), the Stockholders' Representatives shall have 30 days from the
date the Escrow Agent receives the Buyer Claim to make such investigation of
the claim as the Stockholders' Representatives deem necessary or desirable. For
purposes of such investigation, Interland shall, upon request, make available
to the Stockholders' Representatives all the material information relied upon
by Interland to substantiate the Buyer Claim. If the Stockholders'
Representatives disagree with the validity or amount of all or a portion of a
Buyer Claim, the Stockholders' Representatives shall deliver to Interland and
the Escrow Agent a written notice thereof (the "Dispute Notice"), at or prior
to the expiration of the 30-day period. If Interland and the Stockholders'
Representatives agree not later than 30 days following the date of Escrow
Agent's receipt of such Dispute Notice (or any mutually agreed upon extension
thereof) to the validity and amount of such disputed claim, they shall promptly
give the Escrow Agent joint instructions in writing of the amount of the
Escrowed Funds agreed upon by Interland and the Stockholders' Representatives
as shall be necessary to satisfy such Buyer Claim, valued in accordance with
Section 2.1(a) above, and the instructions for payment of such Escrowed Funds.
If Interland and the Stockholders' Representatives do not agree prior to the
expiration of said 30-day period (or any mutually agreed upon extension
thereof), the matter shall be resolved as provided for in Section 3.1 hereof,
and, except as provided in Section 3.1 regarding release of any undisputed
amounts, the Escrow Agent shall continue to hold the Escrowed Funds until it
receives a final and nonappealable order of a court of competent jurisdiction
or joint written instructions from the Stockholders' Representatives and
Interland in accordance with Section 3.1. If no Dispute Notice is received by
Escrow Agent within the 30-day period described above, the Buyer Claim shall be
deemed approved by the Stockholders' Representatives, and the Escrow Agent
shall disburse the Escrowed Funds in accordance with subsection (c) below.
(c) Upon resolution of any Buyer Claim hereunder requiring
the delivery of Escrowed Cash and Escrowed Shares to Interland, the Escrow
Agent shall deliver: (1) Escrowed Cash and Escrowed Shares (based upon the
valuation described in Section 2.1(a) hereof) (the "Tendered Escrow Shares")
equal to the amount of the Buyer Claim, together with corresponding stock
powers duly executed in blank, to Interland. The Escrow Agent shall
concurrently distribute to the Stockholders' Representatives for the benefit of
the Hostcentric Stockholders as provided in Schedule 1 any Earnings held by the
Escrow Agent with respect to such Tendered Escrow Shares, it being acknowledged
that such Earnings shall not be applied towards the satisfaction of a Buyer
Claim.
2.2 Final Release of Escrowed Funds. On the date that is six
(6) months after the date of this Agreement (the "Release Date"), if no Buyer
Claim for indemnification has been asserted and is unresolved, the Escrow Agent
shall deliver to the Stockholders' Representatives for distribution to the
Hostcentric Stockholders: (i) the remaining Escrowed Cash, and (ii) all
Earnings held by the Escrow Agent related to the Escrowed Shares, by wire
transfer of immediately available funds, bank check or certified check or by
other means mutually acceptable to the Stockholders' Representatives and the
Escrow Agent. On the Release Date, if no Buyer Claim for indemnification has
been asserted and is unresolved, the Escrow Agent shall deliver the certificate
representing the remaining Escrowed Shares to Interland for cancellation and
subsequent reissuance of stock certificates by Interland's transfer agent to
the Hostcentric Stockholders pro rata in accordance with their interests. If on
the Release Date, a Buyer Claim
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for which written notice was previously delivered remains unresolved, the
Escrow Agent shall retain from the Escrowed Funds the amount of Escrowed Cash
and a number of Escrowed Shares (based upon the valuation provided by Interland
in Section 2.1(a) hereof) equal to the amount of the Buyer Claim, and shall
remit the remaining balance of the Escrowed Cash and all Earnings to the
Stockholders' Representatives and shall remit the Escrowed Shares to Interland
for cancellation and reissuance as provided above. Upon resolution of all
outstanding Buyer Claims after the Release Date, the Escrow Agent shall
promptly deliver, upon the instructions of the Stockholders' Representatives,
the remaining balance of the Escrowed Funds. If necessary in order to effect
the foregoing transfer, the Escrow Agent shall deliver to Interland the
certificate representing the Escrowed Shares in exchange for a new certificate
representing the number of Escrowed Shares to be retained in escrow and stock
certificates to be issued by Interland's transfer agent to the Hostcentric
Stockholders for the number of Escrowed Shares to be released from escrow.
2.3 Allocation of Escrowed Funds to Satisfy Buyer Claims. For
purposes of this Section 2, each Buyer Claim shall be satisfied from the
Escrowed Funds by taking Escrowed Cash and Escrowed Shares in a proportion set
forth on Schedule 1 based on the relative percentages of the Merger
Consideration to which Hostcentric's common stockholders and Series A and
Series B preferred stockholders are entitled. The parties hereto acknowledge
and agree that the obligation to allocate Escrowed Funds (as between Escrowed
Cash and the Escrowed Shares) to satisfy Buyer Claims shall be borne solely by
Interland and the Stockholders' Representatives and that the Escrow Agent shall
have no duty to determine such allocation.
SECTION 3
PROCEDURES FOR DISBURSEMENT OF ESCROWED FUNDS
---------------------------------------------
3.1 Dispute. In the event of any disagreement between
Interland and the Stockholders' Representatives with respect to disbursement of
any portion of the Escrowed Funds which arises out of any Buyer Claim, the
Escrow Agent shall not comply with any claims or demands of Interland or the
Stockholders' Representatives pertaining to such disagreement as long as such
disagreement shall continue, and the Escrow Agent shall not deliver or
otherwise dispose of any portion of the Escrowed Funds until it has received
either (i) a certified copy of an order of a court of competent jurisdiction
resolving such dispute and directing disposition of such property or (ii) joint
written instructions signed by the Stockholders' Representatives and Interland.
Notwithstanding the foregoing, if the Stockholders' Representatives do not
dispute all or portion of a Buyer Claim pursuant to Section 2.1(b), that
portion of the Escrowed Funds equal to the undisputed portion of such Buyer
Claim shall be released to Interland.
3.2 Joint Instructions. The Escrow Agent shall disburse all
or any portion of the Escrowed Funds in accordance with joint written
instructions from Interland and the Stockholders' Representatives.
3.3 Interpleader. Notwithstanding anything to the contrary in
this Agreement:
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(a) The Escrow Agent may at any time deposit the Escrowed
Funds then held by it, with the clerk of any court of competent jurisdiction
upon commencement of an action in the nature of interpleader or in the course
of court proceedings relating to the Escrowed Funds.
(b) If at any time the Escrow Agent receives a final
nonappealable order of a court of competent jurisdiction, or joint written
instructions signed by the Stockholders' Representatives and Interland,
directing delivery of the Escrowed Funds, the Escrow Agent shall comply with
such order or instructions.
3.4 Liability of Stockholders' Representatives. Solely as
between the parties hereto other than the Escrow Agent, Section 10.6 of the
Merger Agreement shall be controlling for all purposes of determining any
indemnification liability of the Hostcentric Stockholders to Interland. Solely
as between the parties hereto other than the Escrow Agent, the provisions of
the Merger Agreement relating to the Merger Consideration in respect thereof
shall be controlling for all purposes of determining the Merger Consideration.
If any such provision of the Merger Agreement is inconsistent with any
provision hereof, the Merger Agreement shall be controlling as between the
Stockholders' Representatives and Interland.
3.5 Escrow Agent Call Back. In the event fund transfer
instructions are given (other than in writing at the time of the execution of
this Agreement), whether in writing, by telecopier or otherwise, the Escrow
Agent is authorized to seek confirmation of such instructions by telephone
call-back to the person or persons designated on Schedule 2. The persons and
telephone numbers for call-backs may be changed only in writing actually
received and acknowledged by the Escrow Agent.
SECTION 4
ESCROW AGENT
------------
4.1 Appointment. Interland and the Stockholders'
Representatives hereby appoint the Escrow Agent to serve hereunder, and the
Escrow Agent hereby accepts such appointment and agrees to perform all duties
expressly set forth in this Agreement.
4.2 Compensation. The Escrow Agent shall be paid the
compensation set forth on Schedule 3 attached hereto in connection with the
performance of its services hereunder. The Escrow Agent shall be entitled to
reimbursement for any costs and expenses it incurs in performing its services
hereunder, and one-half of such compensation shall be paid by Interland and
one-half of such compensation shall be paid by the Stockholders'
Representatives out of the Escrowed Funds. If the amount of the Escrowed Funds
is insufficient to pay the Escrow Agent's compensation hereunder, Interland
shall pay any shortfall owed to the Escrow Agent.
4.3 Indemnification. Interland shall indemnify and save
harmless the Escrow Agent and each of its officers, directors, agents and
employees from and against any and all losses and liabilities, including all
expenses reasonably incurred in its defense and all costs and
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expenses reasonably incurred in enforcing its right to indemnification
hereunder, to which the Escrow Agent or such persons shall be subject directly
or indirectly by reason of this Agreement or any action taken or omitted to be
taken or any investment or disbursement of any part of the Escrowed Funds,
except as may result from the Escrow Agent's fraud, gross negligence, bad faith
or willful misconduct. This Section 4.3 shall survive the removal or
resignation of the Escrow Agent. As between Interland and the Hostcentric
Stockholders, the cost and expenses incurred in satisfying this right of
indemnification shall be paid one-half by Interland and one-half by the
Stockholders' Representatives on behalf of the Hostcentric Stockholders,
provided, however, that the Hostcentric Stockholders' maximum liability shall
be the Escrowed Funds. The parties hereto acknowledge that the foregoing
indemnities shall survive the resignation or removal of the Escrow Agent and
shall survive the termination of this Agreement.
4.4 Resignation. The Escrow Agent may resign at any time upon
giving Interland and the Stockholders' Representatives thirty (30) days' prior
written notice; provided, however, that no such resignation shall be effective
until a successor escrow agent shall have been appointed by Interland and the
Stockholders' Representatives and shall have accepted such appointment in
writing. If the Escrow Agent shall not have received such a written instrument
of acceptance from a successor Escrow Agent within thirty (30) days of the
giving of its notice of resignation, the Escrow Agent shall be entitled, at
Interland's and Stockholders' expense shared equally, to petition a court of
competent jurisdiction for the appointment of a successor escrow agent or
deposit the Escrowed Cash and the Escrowed Shares into the registry of a court
of competent jurisdiction and thereupon be discharged from all further duties
as Escrow Agent hereunder.
SECTION 5
LIABILITIES OF ESCROW AGENT
---------------------------
5.1 Limitations. The Escrow Agent undertakes to perform only
such duties as are expressly set forth in this Agreement. The Escrow Agent
shall have no liability except as expressly set forth herein or in connection
with the performance of such duties as are expressly set forth herein. The
Escrow Agent may consult with legal counsel (of its choice) regarding any of
its duties or obligations hereunder. The Escrow Agent shall have no liability
with respect to actions taken pursuant to the advice of legal counsel provided
in good faith or in accordance with any written instructions received by it in
accordance with the terms of this Agreement. The Escrow Agent's duties
hereunder shall be determined only by reference to this Agreement and
applicable laws, and the Escrow Agent shall not be charged with any duties or
responsibilities pursuant to any other document or agreement and shall have no
duty under, or be required to take notice of, another agreement between the
parties hereto, including but not limited to the Merger Agreement.
5.2 Compliance With Court Orders. Subject to Section 3.1
hereof, if any property held by the Escrow Agent hereunder is at any time
attached, garnished or levied upon pursuant to any court order, or if the
payment, assignment, transfer, conveyance or delivery of any such property
shall be stayed or enjoined by any court or if any court of competent
jurisdiction shall enter any judgment or decree affecting such property or any
part thereof, the
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Escrow Agent is hereby authorized, in its sole discretion, to rely upon and
comply with any such order, writ, judgment or decree which the Escrow Agent is
advised by legal counsel (of its choice) is binding upon it. If the Escrow
Agent complies with any such order, writ, judgment or decree in accordance with
the terms hereof, the Escrow Agent shall have no liability to Interland or the
Hostcentric Stockholders or to any other person, firm or corporation by reason
of such compliance, even if such order, writ, judgment or decree is
subsequently reversed, modified, annulled, set aside or vacated.
5.3 Authorized Signatories. Attached hereto as Schedule 2 are
the names, titles and specimen signatures of each of the persons authorized, on
behalf of Interland and the Stockholders' Representatives, to execute and
deliver written notices and directions to the Escrow Agent hereunder. Any party
may amend Schedule 2 by delivering written notice thereof to the other party
and the Escrow Agent.
SECTION 6
TERMINATION
-----------
6.1 Termination. This Agreement shall be terminated upon the
earliest to occur of (a) disbursement or release of the entire amount of the
Escrowed Funds by the Escrow Agent in accordance with the terms hereof, (b)
written consent signed by Interland and the Stockholders' Representatives, or
(c) payment of the entire amount of the Escrowed Funds held hereunder into a
court of competent jurisdiction in accordance with Section 3.2(a).
SECTION 7
OTHER PROVISIONS
----------------
7.1 Notices. Any notice, demand or request required or
permitted to be given under the provisions of this Agreement shall be in
writing and shall be deemed to have been duly delivered on (i) the date of
personal delivery, (ii) the date of the receipt of the appropriate printed
confirmation, if sent by facsimile transmission or (iii) upon receipt, if
mailed by registered or certified mail, postage prepaid and return receipt
requested. Any such notices shall be sent to the following addresses, or to
such other address as any party may request in a notice delivered in accordance
with this Section 7.1 to the other parties hereto:
(a) If to the Stockholders' Representatives:
Xxxxxxx X. Xxxxxxx
Xxx Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
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Xxxxxxxxx Xxxxxxxxx
BNP Private Equity
32 Blvd Haussmann
00000 Xxxxx Xxxxxx
Telephone No.: 00 0 00 00 00 00
Fax No.: 00 0 00 00 00 00
Xxxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
(b) If to Interland:
Interland, Inc.
000 Xxxxxxxxx Xxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Attn: General Counsel
(c) If to the Escrow Agent:
SunTrust Bank
00 Xxxx Xxxxx
00xx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
7.2 Benefit and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties; except that if a
successor Escrow Agent is appointed pursuant to Section 4.4 hereof, the Escrow
Agent shall assign its rights, interests and obligations hereunder to such
successor. Any corporation into which the Escrow Agent in its individual
capacity may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Escrow Agent in its individual capacity shall be a party, or any
corporation to which substantially all the corporate trust business of the
Escrow Agent in its individual capacity may be transferred, shall be the Escrow
Agent under this Escrow Agreement without further act.
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7.3 Entire Agreement; Amendment. This Agreement contains the
entire agreement of the parties with respect to the subject matter hereof. This
Agreement may be amended only by a written instrument signed by the
Stockholders Representatives, Interland and the Escrow Agent.
7.4 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be determined by a
court of competent jurisdiction to be invalid or unenforceable, the remaining
provisions hereof, or the application thereof to persons or circumstances other
than those to which it is held invalid or unenforceable, shall not be affected
thereby and shall be valid and enforceable to the fullest extent permitted by
applicable law.
7.5 Headings. The headings of the sections and subsections of
this Agreement are for ease of reference only and do not evidence the
intentions of the parties.
7.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia, without giving
effect to its internal conflict of law provisions. EACH PARTY TO THIS AGREEMENT
HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE TRANSACTION DOCUMENTS, THE ESCROWED SHARES OR
ANY OTHER AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY MAY BE BROUGHT IN THE
COURTS OF THE STATE OF GEORGIA OR OF APPLICABLE FEDERAL COURTS IN THE STATE OF
GEORGIA AND HEREBY EXPRESSLY SUBMITS TO THE EXCLUSIVE PERSONAL JURISDICTION AND
VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF
IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM. EACH
PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS
SET FORTH IN SECTION 7.1, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH
MAILING.
7.7 Status of Stockholders' Representatives. Each of the
parties hereto other than the Escrow Agent acknowledges that the Stockholders'
Representatives have the rights and obligations provided in Article X of the
Merger Agreement as well as those provided herein, and that any Stockholders'
Representative may be removed and replaced as provided in Section 10.1 of the
Merger Agreement.
7.8 Counterparts. This Agreement may be executed in any
number of counterparts with the same effect as if the signatures on all
counterparts were on the same instrument.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.)
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IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first above written.
INTERLAND, INC.
By:
-------------------------------------------
Xxxxx X. Xxxxxxx, Senior Vice President
Chief Financial Officer, and
General Counsel
STOCKHOLDERS' REPRESENTATIVES:
------------------------------
----------------------------------------------
Xxxxxxx X. Xxxxxxx
----------------------------------------------
Xxxxx Xxxxxx
----------------------------------------------
Xxxxxxxxx Xxxxxxxxx
ESCROW AGENT:
-------------
SUNTRUST BANK
By:
-------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title:
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SCHEDULE 1
ALLOCATION OF EARNINGS; ALLOCATION OF ESCROWED FUNDS
TO SATISFY BUYER CLAIMS
Total Merger Consideration to be paid at Closing:
To former Hostcentric common stockholders: $1,935,000
To former Hostcentric preferred stockholders: $1,065,000 + 13,563,335
shares of Interland
common stock
Total Merger Consideration to be deposited into escrow:
Former Hostcentric common stockholders: $1,354,500
Former Hostcentric preferred stockholders: $745,500 + 9,494,335 shares
of Interland common stock
Value of Escrow at Closing:
Former Hostcentric common stockholders: $1,354,500
Former Hostcentric preferred stockholders: $745,500 + (9,494,335 x
$1.681) = $16,705,447
Total Value of Escrow at Closing = $18,059,977
FORMER HOSTCENTRIC COMMON STOCKHOLDERS' PERCENTAGE = 7.5%
FORMER HOSTCENTRIC PREFERRED STOCKHOLDERS' PERCENTAGE = 92.5%
Any dividends or distributions on the Escrowed Shares shall be paid to
the Stockholders' Representatives for distribution to the former Hostcentric
preferred stockholders pro rata in accordance with their prior ownership of
Hostcentric preferred stock as of the date of the Merger.
All payments of Escrowed Cash and Escrowed Shares to satisfy a Buyer
Claim shall be made so that 7.5% of the amount of the Buyer Claim shall be paid
in cash (which will reduce the amount of Escrowed Cash allocable to the former
Hostcentric common stockholders) and 92.5% of the amount of the Buyer Claim
shall be paid in a combination of Escrowed Cash and Escrowed Shares (which will
reduce the amount of Escrowed Cash and the number of Escrowed Shares allocable
to the former Hostcentric preferred stockholders). The number of Escrowed
Shares to be paid on behalf of a Buyer Claim shall be equal to 92.5% of the
amount of the Buyer
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Claim multiplied by the ratio of (x) the value of the
Escrowed Shares remaining in escrow as calculated pursuant to the last sentence
of Section 2.1(a) and (y) the sum of such value and $745,000 (less any Escrowed
Cash allocable to the former holders of Hostcentric preferred stock previously
paid pursuant to a Buyer Claim).
EXAMPLE OF BUYER CLAIM CALCULATION: ASSUME VALUE OF INTERLAND COMMON
STOCK UNDER SECTION 2.1(A) = $2.00 PER SHARE AND ALSO ASSUME NO PREVIOUS BUYER
CLAIMS
AMOUNT OF BUYER'S CLAIM = $200,000
(1) $15,000 IN CASH (7.5% OF $200,000) IS PAID FROM THE ESCROWED CASH,
ALLOCABLE TO THE FORMER HOSTCENTRIC COMMON STOCKHOLDERS
(2) $185,000 IN ESCROWED CASH AND ESCROWED SHARES (92.5% OF $200,000)
IS ALLOCABLE TO THE FORMER HOSTCENTRIC PREFERRED STOCKHOLDERS, AND THE AMOUNT
OF ESCROWED CASH AND NUMBER OF ESCROWED SHARES IS DETERMINED AS FOLLOWS:
MARKET VALUE OF ESCROWED FUNDS ALLOCABLE TO THE FORMER PREFERRED
STOCKHOLDERS AS OF THE DATE OF THE BUYER CLAIM = ($2.00) X (9,494,335) +
$745,500 = $19,734,170
STOCK RATIO = 18,988,670/19,734,170 = 0.9622
CASH RATIO = 745,500/19,734,170 = 0.0378
CASH = (0.0378) X ($185,000) = $6,993
STOCK = (0.9622) X (185,000) = $178,007
$178,007/$2.00 PER SHARE = 89,003.5 SHARES
(WITH FRACTIONAL SHARES, ROUND DOWN 1 SHARE AND ADD CASH AMOUNT TO
REACH THE TOTAL AMOUNT OF THE BUYER CLAIM.)
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SCHEDULE 2
AUTHORIZED SIGNATORIES
For the Stockholders' Representatives, the following persons, with the titles
and specimen signatures shown below:
Name Title Specimen Signature Telephone Number
---- ----- ------------------ ----------------
Authorized Signatory
-------------------- -------------------- --------------------------------- ---------------------
Authorized Signatory
-------------------- -------------------- --------------------------------- ---------------------
Authorized Signatory
-------------------- -------------------- --------------------------------- ---------------------
For INTERLAND, INC. ("Interland"), the following persons with the titles and
specimen signatures shown below:
Name Title Specimen Signature Telephone Number
---- ----- ------------------ ----------------
Xxxxx X. Xxxxxxx Senior Vice President, Chief Financial
Officer and General Counsel ______________________ 000-000-0000
Xxxxxx X. Xxxxxx Corporate Controller and Senior Vice
President ______________________ 000-000-0000
Xxxx Xxxxxxx Director of Financial Accounting and
Reportinig ______________________ 000-000-0000
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SCHEDULE 3
SCHEDULE OF FEES
The annual fee of $2,500 for administering this Escrow Agreement is
payable in advance at the time of closing and if applicable, will be invoiced
each year to the appropriate party(ies) on the anniversary date of the closing
of the Escrow Agreement. A one-time $500.00 legal review fee is also payable in
advance at the time of closing.
Out of pocket expenses such as, but not limited to postage, courier,
overnight mail, insurance, money wire transfer, long distance telephone
charges, facsimile, stationerty, travel, legal or accounting, etc., will be
billed at cost.
These fees do not include extraordinary services, which will be priced
according to time and scope of duties. The fees shall be deemed earned in full
upon receipt by the Escrow Agent, and no protion shall be refundable for any
reason, including without limitation, termination of the Escrow Agreement.
It is acknowledged that the schedule of fees shown above are
acceptable for the services mutually agreed upon and the undersigned authorizes
SunTrust Bank to perform said services.
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