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Ex. - 10.6
[HSA LOGO]
THIS WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF HAVE BEEN ACQUIRED IN A TRANSACTION NOT INVOLVING ANY
PUBLIC OFFERING AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR THE LAWS OF ANY STATE. NEITHER THIS
WARRANT NOR SUCH SECURITIES MAY BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT, THE LAWS OF ANY
APPLICABLE STATE, THE PROVISIONS OF THIS WARRANT, OR THE RECEIPT BY THE
ISSUER OF AN OPINION OF COUNSEL, WHICH SHALL BE REASONABLY SATISFACTORY TO
THE ISSUER, TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION
UNDER THE ACT AND SUCH STATE SECURITIES LAWS.
NOVEMBER 25, 1998
CLASS B
SECURITIES PURCHASE WARRANT
to Subscribe for and Purchase Common Stock
of
HIGH SPEED ACCESS CORP.
Void If Not Exercised During The Exercise Period Described Herein
Warrant No. R-001
1. Grant of Warrant; Conditional Exercise. THIS CERTIFIES that, for
value received, VULCAN VENTURES, INCORPORATED, a Washington corporation, or its
permitted assigns (the "Holder"), is entitled, subject to the terms and
conditions hereinafter set forth, to earn on or prior to the Effective Date, and
purchase from High Speed Access Corp., a Delaware corporation(hereinafter called
the "Company"), during the Exercise Period, up to Two Million Five Hundred
Thousand (2,500,000), fully paid, nonassessable shares of Common Stock, $0.01
par value, of the Company (the "Maximum Number of Warrant Shares") at the price
of $5.00 per share. THE AGGREGATE EXERCISE PRICE OF THIS WARRANT SHALL BE AN
AGGREGATE AMOUNT NOT TO EXCEED TWELVE MILLION FIVE HUNDRED THOUSAND DOLLARS
($12,500,000). This Class B Securities Purchase Warrant ("Warrant") is issued
pursuant to the terms and conditions of, and is qualified by and subject to,
Section 6 of the Systems Access Agreement (defined below), which is incorporated
herein by reference. The number of shares of Common Stock to be received upon
exercise of this Warrant and the price to be paid for each such share of Common
Stock may be adjusted from time to time as hereinafter set forth. The exercise
price of a share of Common Stock in effect at any time and as adjusted from time
to time, is hereinafter referred to as the "Warrant
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Price." This Warrant may not be exercised unless accompanied by a signed
Subscription Form in the form attached hereto as Exhibit A.
2. Definitions. Unless otherwise defined herein, as used in this
Securities Purchase Warrant, the following terms shall have the meanings
ascribed to them as follows:
(a) "Affiliate" means, with respect to the Holder, any entity or person
controlled, directly or indirectly, by Paul G. Allen, or in which Paul G. Allen
either individually or through an entity which he controls or holds an equity
investment of at least $100,000,000 in value. As used in the foregoing sentence,
"controlled" means (i) with respect to any entity, the ability to exercise
voting power with respect to at least 50% of the outstanding voting securities
of such entity, and (ii) with respect to any person, such person's lineal
descendants or ancestors or spouses of any of them, or a trust or family limited
partnership established for their benefit.
(b) "Cable System" shall have the meaning given it in Section 1.2 of
the Systems Access Agreement.
(c) "Class A Warrant" means, as the context requires, a certain Class A
Securities Purchase Warrant dated November 25, 1998, between the Company and the
Holder (the form of which is attached as Annex C to the Systems Access
Agreement), or the number of Subscribed/Warrant Shares issued or issuable under
such warrant agreement.
(d) "Common Stock" means the shares of common stock of $.01 par value
that the Company is authorized to issue in accordance with its Amended
Certificate (as defined in the Series B Convertible Preferred Stock Purchase
Agreement dated November 25, 1998, by and between the Company and Holder (the
"Series B Purchase Agreement") and all securities into which such Common Stock
is exchanged or converted.
(e) "Company" means High Speed Access Corp., a Delaware corporation, or
such successor company as may result from any merger or other business
combination or reorganization of High Speed Access Corp.
(f) "Committed System" shall have the meaning given it in Section 1.8
of the Systems Access Agreement.
(g) "Effective Date" means the date any Warrant Share becomes
automatically issuable in accordance with the provisions hereof and the Systems
Access Agreement and which shall in no event be later than July 31, 2003, unless
extended pursuant to Section 6.4 of the Systems Access Agreement.
(h) "Exercise Period" means, with respect to any Warrant Share, subject
to any extension or extensions of the period pursuant to Section 7(c), the
period beginning on the Effective Date
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of this Warrant and ending on the earlier of (i) the first anniversary of the
date upon which a Qualified Public Offering becomes effective, or (ii) December
31, 2013.
(i) "Exercise Price" means $5.00 per Warrant Share (adjusted if
appropriate pursuant to Sections 6 or 7).
(j) "Holder" means Vulcan Ventures, Incorporated, a Washington
corporation, or any other Person to whom this Warrant is transferred in
accordance with Section 5 hereof.
(k) "Homes Passed" shall have the meaning given it in Section 1.16 of
the Systems Access Agreement.
(l) "Network Services Agreement" means the Network Services Agreement
dated November 25, 1998, among the Company, Charter Communications, Inc., and
Marcus Cable, Inc.
(m) "Office" means the Company's office at 1000 W. Ormsby Ave, Suite
210, Louisville, KY 40210, or such other office as the Company may designate by
written notice to the Holder.
(n) "Operators" shall have the meaning given it in Section 1.24 of the
Systems Access Agreement.
(o) "Person" means any person, firm, Company, or other entity.
(p) "Receipt" means a written receipt, deliverable by the Company to
the Holder pursuant to Section 4, (a) acknowledging the Company's receipt of the
Exercise Price and the Holder's timely and proper exercise of this Warrant, and
(b) obligating the Company to issue a Stock Certificate to the Holder within 30
working days after this Warrant's surrender to the Company.
(q) "Qualified Public Offering" means an underwritten public offering,
initiated by resolution of the Company's Board of Directors, of the Company's
Common Shares at a minimum per share offering price of at least $7.50 (as
proportionately and appropriately adjusted to reflect any subdivision, reverse
stock split or recapitalization of the Company's Common Shares after the date
hereof) and aggregate gross proceeds of not less than $50 million to the Company
which has been made pursuant to a registration statement filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended.
(r) "Secretary" means W. Kent Oyler III or his duly elected and
qualified successor as the Company's Secretary, or any duly elected and
qualified Assistant Secretary of the Company.
(s) "Securities Laws" means the Securities Act of 1933, as amended, or
the securities laws of any state, or any similar successor federal or state
statutes and rules and regulations thereunder, all as the same shall be in
effect from time to time.
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(t) "Stock Certificate" means an appropriate certificate issued in the
Holder's name representing the Subscribed Shares.
(u) "Subscribed Shares" means, collectively, the number of whole
Warrant Shares that the Holder designates on the Subscription Form as Warrant
Shares that the Holder wishes to purchase upon this Warrant's surrender to the
Company, which shall not exceed 2,500,000 shares of Common Stock (adjusted, if
appropriate, pursuant to Sections 6).
(v) "Subscription Form" means the subscription form attached as Exhibit
A to this Warrant.
(w) "Systems Access Agreement" means a certain Systems Access and
Investment Agreement dated November 25, 1998, among the Company, the Holder,
Charter Communications, Inc., and Marcus Cable, Inc.
(x) "Warrant" means this Securities Purchase Warrant.
(y) "Warrant Period" means the period beginning on the date hereof and
ending on the last date of the Exercise Period.
(z) "Warrant Shares" means, collectively, the maximum number of shares
of Common Stock that this Warrant entitles the Holder to subscribe for and
receive upon the Holder's exercise of this Warrant in accordance with Section 3,
or, as appropriate if the context requires, these same shares of Common Stock as
they may be issued and outstanding in the hands of the Holder after exercise of
this Warrant.
3. Exercise of Warrant.
(a) This Warrant entitles the Holder to earn, from time-to-time and
upon the terms and conditions set forth in this Warrant but in no event later
than the Effective Date, and purchase during the Exercise Period, for Subscribed
Shares in any amount equal to the number of Homes Passed (in excess of 750,000
plus those Homes Passed counted for purposes of earning Class A Warrants
pursuant to Section 6.1.1 of the Systems Access Agreement) in Cable Systems
which the Operator has designated as additional Committed Systems (on a one (1)
Warrant Share per each Home Passed basis), in accordance with Section 2.2 of the
Network Services Agreement; provided that:
(1) the number of Subscribed Shares issuable under
this Warrant, to the extent of the number of Homes Passed in an
additional Committed System designated under Section 2.2 of the Network
Agreement (on a one (1) Warrant Share per Home Passed basis), will be
cancelled and deemed forfeited by Holder (or its permitted transferee)
in the event any Operator withdraws Committed Systems under the Network
Agreement for any reason other than pursuant to Sections 18.1, 18.2,
18.3 and/or 18.6 of such Network Agreement, except to the
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extent Holder or such Operator replaces the Homes Passed in such
withdrawn Committed System with Homes Passed in another Committed
System(s)or additional Committed Systems, provided, that Subscribed
Shares issuable under this Warrant will not be cancelled or deemed
forfeited if Operator terminates any of HSAC's exclusive rights to
provision HSAC Services in any Committed Systems as provided for or
permitted under the Systems Access Agreement or the Network Services
Agreement; and provided further, that as of July 31, 2003, the parties
shall effect a reconciliation of the total number of Homes Passed in
all Committed Systems (in excess of 750,000) under the Network
Agreement, the number of outstanding Class A Warrants and Class B
Warrants, and the number of shares theretofore issued upon exercise of
this Warrant and the Class A Warrant. If such reconciliation reveals
that the total number of Homes Passed in all Committed Systems (in
excess of 750,000) under the Network Agreement (after adding back in
Homes Passed in Committed Systems and additional Committed Systems
withdrawn from the Network Agreement pursuant to Sections 18.1, 18.2,
18.3 and/or 18.6 thereof) is different than the total number of all
outstanding Class A Warrants and Class B Warrants and Warrant Shares,
then the number of Class A Warrants and/or Class B Warrants will be
adjusted upward or downward, as the case may be. If the number of
unexercised Class A Warrants and/or Class B Warrants then held by
Vulcan is insufficient to cover any shortfall, then Vulcan (or its
permitted transferee) shall return to HSAC a number of Warrant Shares
necessary to meet such shortfall, and HSAC shall refund to Vulcan the
exercise price paid by Vulcan for such returned Warrant Shares;
(2) the inspection and commissioning procedures set
forth in Section 2.3 of the Network Agreement have been satisfied, and
(3) at no time may the number of such Subscribed
Shares/Warrant Shares exceed, in the aggregate, the Maximum Number of
Warrant Shares.
(b) To exercise this Warrant an authorized officer of Holder
(or its permitted transferee) shall, during the Exercise Period, on the day the
Holder wishes to exercise this Warrant (the "Exercise Date"):
(1) Complete and certify the Subscription Form by
designating the number of Subscribed Shares to which the Holder (or
such permitted transferee) is entitled to exercise and wishes to
exercise pursuant to such Subscription Form and Section 1 hereof (which
may be less than or equal to the Maximum Number of Warrant Shares);
(2) Surrender this Warrant to the Secretary at the
Company's Office, and
(3) Upon the surrender of this Warrant to the
Secretary, deliver to the Secretary at the Company's Office a certified
or cashier's check payable to the Company's order in an amount equal to
(i) the number of Subscribed Shares, times (ii) the Exercise Price.
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In the event the Company has completed a Qualified Public Offering, the Holder
may at its option, in lieu of tendering a certified or cashier's check as
provided in subparagraph (3) above, exercise this Warrant by submitting, during
normal business hours, a duly executed exercise notice marked to reflect "Net
Issue Exercise," and specifying the number of shares of Warrant Shares to be
exercised. Upon a Net Issue Exercise, Holder shall be entitled to receive
Warrant Shares equal to the value of this Warrant (or the portion thereof being
exercised by Net Issue Exercise) by surrender of this Warrant to the Company
together with notice of such election, in which event the Company shall issue to
Holder a number of shares of the Company's Common Stock computed as of the date
of surrender of this Warrant to the Company using the following formula:
X = Y x (A-B)
_________
A
Where X = the number of Warrant Shares to be issued to Holder;
Y = the number of Warrant Shares purchasable under this
Warrant (at the date of such calculation).
A = the Current Market Price of one share of the Company's
Common Stock (at the date of such calculation);
B = the Exercise Price (as adjusted to the date of such
calculation).
As used above, "Current Market Price" means, if the Company's Common Stock is
traded on a national securities exchange, the NASDAQ National Market System or
the over-the-counter market, the average of the last reported price over the
five (5) trading days immediately preceding the date of valuation at which the
Common Stock has traded on such national securities exchange, the NASDAQ
National Market System or the average of the bid and asked prices on the
over-the-counter market on the date of valuation.
(c) Notwithstanding any delay in the actual issuance of a
Stock Certificate or Receipt pursuant to Section 4 hereof, the Warrant Shares
shall be deemed issued for all purposes as of the opening of business on the
Exercise Date subject to the provisions of Section 6.1.3 of the Systems Access
Agreement, and the Holder shall for all purposes be deemed to be the holder of
record of the Subscribed Shares to which the Receipt or the Stock Certificate
pertains.
4. Issuance of Certificate for Subscribed Shares. Upon the Holder's
exercise of this Warrant in accordance with Section 3, the Company shall deliver
to the Holder:
(a) If the Subscribed Shares constitutes the Maximum Number of
Warrant Shares (and as the Company chooses), either (1) a Stock Certificate, or
(2) a Receipt.
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(b) If the Subscribed Shares constitute less than the Maximum
Number of Warrant Shares (and as the Company chooses), either
(1) (i) a Stock Certificate, together with (ii) a new
Securities Purchase Warrant, containing the same terms and conditions
as this Warrant, evidencing the Holder's continued right to subscribe
(during the Exercise Period) for the remainder of the Maximum Number of
Warrant Shares; or
(2) (i) a Receipt, together with (ii) a new
Securities Purchase Warrant, containing the same terms and conditions
as this Warrant, evidencing the Holder's continued right to subscribe
(during the Exercise Period) for the remainder of the Maximum Number of
Warrant Shares.
5. Transfer of Warrant.
(a) This Warrant shall be registered on the books of the
Company, which shall be kept at its Office for that purpose, and shall be
transferable in whole or in part but only on such books, by the Holder (or
Holder's duly authorized representative) in person or by duly authorized
attorney substantially in the form of Exhibit B hereof, and only in compliance
with paragraph (b) below. The Company may issue appropriate stop orders to its
Secretary or transfer agent to prevent a transfer in violation of this Section 5
and Section 7.
(b) The Holder may transfer this Warrant to any Person or
Persons at any time during the Warrant Period by completing and signing the
transfer form (the "Transfer Form") in the form of transfer form attached as
Exhibit B to this Warrant; provided, however, that without the prior written
consent of the Company, this Warrant and all rights hereunder may be transferred
only (i) to an Affiliate, or (ii) in accordance with the requirements of Section
8 hereof and pursuant to the registration of this Warrant or the Warrant Shares
under the Securities Laws (except as otherwise limited by any applicable
shareholders buy-sell, registration rights, or voting agreements binding upon
the Holder) or subsequent to eighteen (18) months from the Effective Date hereof
an exemption under Rule 144 or other exemption from such registration. If at
least fifteen (15) working days before the end of the Exercise Period the Holder
completes and signs the Transfer Form and surrenders this Warrant to the
Secretary at the Company's Office, the Company shall, within ten (10) working
days after this Warrant's surrender, issue to the transferee or transferees
identified on the completed Transfer Form one or more new Securities Purchase
Warrants (containing the same terms and conditions as this Warrant) evidencing
the transferee's or transferees' right or rights to subscribe (during the
Exercise Period) for all or part of the Warrant Shares.
6. Anti-Dilution. The maximum number of Warrant Shares and the Exercise
Price for any Subscribed Shares shall be adjusted if during the Exercise Period,
but before the Holder's exercise of this Warrant:
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(a) Issues of Shares. The Company shall issue any of its Common Shares
for a consideration per share which is less than the Exercise Price in effect
immediately prior to such issuance (other than shares issued to employees,
officers, directors or consultants of the Company pursuant to option plans
approved by the Board of Directors of the Company), the Exercise Price shall be
reduced to such lower price. For purposes of this subparagraph [a], the
following clauses shall also be applicable:
[1] Convertible Securities, Options and Rights. If,
at any time the Company shall issue or sell any rights, options,
warrants or other securities entitling the holders thereof to purchase
Common Shares or convert such securities into Common Shares at a price
per share (determined by dividing (i) the total amount, if any,
received or receivable by the Company in consideration of the issuance
or sale of such rights, options, warrants or other securities plus the
total amount if any, payable to the Company upon exercise or conversion
thereof (the "Total Consideration") by (ii) the number of additional
Common Shares issuable upon exercise or conversion of such securities)
which is less than the Exercise Price in effect on the date of such
issuance or sale, the Exercise Price price shall be adjusted as of the
date of such issuance or sale so that the same shall equal the price
determined by dividing (i) the sum of (A) the number of Common Shares
outstanding on the date of such issuance or sale multiplied by the
Exercise Price in effect immediately prior thereto plus (B) the Total
Consideration by (ii) the number of Common Shares outstanding on the
date of such issuance or sale plus the maximum number of additional
Common Shares issuable upon exercise or conversion of such securities.
Simultaneously with all adjustments to the number and/or kind of
securities, property and cash to be issued in connection with any such
issuance, sale or conversion, the Exercise Price will also be
appropriately adjusted so that at all times the holder hereof will not
pay more than the aggregate purchase price to exercise this Warrant in
full immediately after such adjustment as such holder had to pay
immediately prior to such adjustment.
[2] Distributions, Share Dividends and Splits.
(i) In case the Company declares a dividend
or other distribution payable in Common Shares or subdivides
its Common Shares into a greater number of Common Shares, the
Exercise Price in effect immediately prior to such declaration
or subdivision shall be proportionately decreased and the
number and kind of shares purchasable upon exercise of this
Warrant shall be adjusted so that the holders thereof shall be
entitled to receive the kind and number of shares or the other
securities of the Company (such other securities thereafter
enjoying the rights of shares) that the Holder would have
owned or have been entitled to receive after the happening of
any of the events described in this paragraph [2] had the
Warrant Shares been issued immediately prior to the happening
of such event or any record date with respect thereto.
(ii) In case the Company shall distribute to
the holders of Common Shares (i) securities, (ii) property,
other than cash, or (iii) cash, without fair payment therefor,
then, and in each such case, the Holder upon exercise hereof
shall be entitled to receive such securities, property and
cash which such Holder would have received had
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such Holder been the holder of record of the Common Shares,
subject, however, to such Holder agreeing to any conditions to
such distribution as were required of all other holders of
Common Shares in connection with such distribution.
(iii) If the securities to be distributed by
the Company to persons other than holders of this Warrant
involve rights, warrants, options, or any other form of
convertible securities and the right to exercise or convert
such securities would expire in accordance with its terms
prior to the exercise of this Warrant, and without the
exchange of any such rights, warrants or options, then the
terms of such securities shall provide that such exercise or
convertibility shall remain in effect until thirty (30) days
after the date the holder of this Warrant becomes a holder of
Common Shares pursuant to the conversion thereof.
An adjustment made pursuant to this paragraph [2]
shall become effective immediately after the record date in
the case of a dividend or distribution and shall become
immediately effective after the effective date in the case of
a subdivision, combination or issuance. If, as a result of an
adjustment made pursuant to this paragraph B, the Holder after
exercise shall become entitled to receive shares of two or
more classes of capital or Common Shares and any other class
of capital stock of the Company, the Board of Directors of the
Company (whose determination shall be conclusive and shall be
described in a written notice to the Holder promptly after
such adjustment) shall determine the allocation of the
adjusted Exercise Price between or among shares of such
classes of capital stock or Common Shares and such other
classes of capital stock.
[3] Consideration. In case the Company shall issue
its Common Shares for a consideration wholly or partly other
than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the lesser of
(i) the fair market value on the issue date of the Common
Shares so issued by the Company, as determined in good faith
by the Board of Directors of the Company, less any cash
consideration, or (ii) the fair market value of such
consideration as determined in good faith by the Board of
Directors of the Company.
[4] Record Dates. In case the Company shall take a
record of the holders of its Common Shares for the purpose of
determining Holders entitled (i) to receive a dividend or
other distribution payable in Common Shares, or (ii) to
subscribe for or purchase Common Shares, then such record date
shall be deemed to be the date of the issue or sale of the
Common Shares issued upon the declaration of such dividend or
the making of such distribution or deemed to have been issued
upon the granting of such right of subscription or purchase,
as the case may be.
[5] Treasury Shares. The number of Common Shares
outstanding at any given time shall not include shares owned
or held by or for the account of the Company
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in its treasury, and the disposition of any such shares so
owned or held shall be considered an issue of Common Shares.
[6] Minimum Exercise Price. In no case shall the
Exercise Price be less than $.01 per share.
(b) Stock Combinations. In case the Company shall combine all
of the outstanding Common Shares into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination shall be proportionately
increased.
(c) Reorganizations. If any capital reorganization or
reclassification of the capital stock of the Company other than a combination or
merger or sale of assets transaction provided for herein (but including any
consolidation or merger of the Company with or sale of all or substantially all
of its assets to a Continuing Entity) shall be effected, then, as a condition of
such reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby each Holder shall thereafter have the
right to receive upon exercise of this Warrant such shares of stock, securities
or assets as may be issued or payable with respect to or in exchange for a
number of outstanding Common Shares equal to the number of Common Shares
immediately theretofore issuable upon exercise of this Warrant had such
reclassification, consolidation, merger or sale not taken place; and in any such
case appropriate provisions shall be made with respect to the rights and
interests of each Holder to the end that the provisions hereof (including
without limitation provisions for adjustment of the Exercise Price and of the
number of shares issuable upon exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof. The Company shall not
effect any such consolidation, merger or sale, unless prior to or simultaneously
with the consummation thereof the successor Company (if other than the Company)
resulting from such consolidation or merger or the Company purchasing such
assets shall assume by a written instrument executed and mailed by registered
mail, postage prepaid, or delivered to each registered Holder at the last
address of such Holder appearing on the Certificate Register (defined in Section
16 hereof), the obligation of the Company to deliver to such Holder such shares
of stock, securities or assets as, in accordance with the foregoing provisions,
such Holder may be entitled to upon exercise of this Warrant. The provisions of
this paragraph (c) shall similarly apply to successive consolidations, mergers
or sale of assets.
(d) Notice of Adjustment. Upon each adjustment of the Exercise
Price, the Company shall give prompt written notice thereof addressed to each
registered Holder at the address of such Holder as shown on the Certificate
Register, which notice shall state the Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of Warrant Shares
issuable upon exercise hereof, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
(e) Fractional Shares. No fractional shares or scrip
representing fractional Common Shares shall be issued upon the exercise hereof.
Upon exercise by any Holder, such Holder shall be entitled to receive the
aggregate full number of Common Shares in which all the Warrant Shares being
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subscribed for by such Holder may exercise and in lieu of any fractional share
to which such Holder would otherwise be entitled, an amount equal to such
fractional share multiplied by the then fair market value (as hereafter defined)
of Common Shares shall be paid by the Company in cash to such holder.
(f) Validity of Shares. All Common Shares which may be issued
upon exercise of this Warrant will, upon issuance, be legally and validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
with respect to the issue thereof.
(g) Fair Market Value. For the purposes of this Section 6, if
the Company's Common Shares shall be regularly traded in any market, its "fair
market value" shall be based on (i) if the Common Shares are listed on a
national stock exchange, the closing price on the principal stock exchange where
the Common Shares are listed and traded, or if there is no trading on a given
day, the mean between the closing bid and asked prices on such day on said
exchange, or (ii) if the Common Shares are not so listed, the mean between the
closing bid and asked prices on the over-the-counter market as furnished by a
national quotation service or the principal broker making a market; and in each
case the daily values so obtained shall be averaged over a period of ten (10)
consecutive trading days immediately prior to the date of the determination and
the average so obtained shall be deemed to be the "fair market value" of the
Common Shares hereunder. If the Common Shares are not regularly traded in any
market, its "fair market value" may be currently determined by the Board of
Directors of the Company for the purpose of any transaction hereunder, and such
determination shall be final and binding upon the Holders if it is made in good
faith and with due care.
(h) No Impairment. The Company will not, by amendment of this
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company under this
Section 6, but will at all times in good faith assist in the carrying out of all
the provisions of this Section 6 and in the taking of all such action as may be
necessary or appropriate in order to protect the conversion rights of the
Holders against impairment.
(i) Notice of Capital Changes. If at any time:
[1] The Company shall declare any dividend or
distribution (other than a cash dividend) payable to
the holders of its Common Shares;
[2] The Company shall offer for subscription pro rata to
the holders of Common Shares any additional shares of
stock of any class or other rights;
[3] There shall be any capital reorganization or
reclassification of the capital stock of the Company,
or consolidation or merger of the Company with, or
sale of all or substantially all of its assets to,
another Company or business organization;
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[4] There shall be any issuance of securities convertible
into, or rights or warrants to purchase, securities
of the Company; or
[5] There shall be a voluntary or involuntary
dissolution, liquidation or winding up of the
Company.
Then, in any one or more of such cases, the Company shall give
the Holders written notice by registered mail, postage
prepaid, of the date on which a record shall be taken for such
dividend, distribution or subscription rights or for
determining shareholders entitled to vote upon such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up and of the date when
any such transaction shall take place, as the case may be.
Such notice shall also specify the date as of which the
Holders may exercise this Warrant such that the Warrant Shares
of record shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange the
Warrant Shares for securities or other property deliverable
upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up, as the
case may be. Such written notice shall be given at least 30
days prior to the transaction in question and not less than 20
days prior to the record date in respect thereto.
The adjustment to the number of Common Shares issuable upon
the exercise hereof and the adjustments to the Exercise Price
described in this Section 6 shall be made each time any event
listed in this Section 6 occurs.
If the Company takes any action affecting its Common Shares
after the date hereof, that would be covered by this Section 6
but for the manner in which such action is taken or
structured, other than an action described in this Section 6,
which would in any way diminish the value of this Warrant or
the Warrant Shares, then there shall be an adjustment as to
the Common Shares purchasable therefor and the Exercise Price
payable thereunder in such manner as the Board of Directors of
the Company shall in good faith determine to be equitable
under the circumstances.
7. Sale of Warrant or Warrant Shares. Neither this Warrant nor the
Warrant Shares have been registered under the Securities Act of 1933, as
amended, or under the securities laws of any state. Neither this Warrant nor the
Warrant Shares may be sold, transferred, pledged, or hypothecated, in the
absence of (i) an effective registration statement for this Warrant or the
Warrant Shares, as the case may be, under the Act and such registration or
qualification as may be necessary under the securities laws of any state, or
(ii) an opinion of counsel reasonably satisfactory to the Company that such
registration or qualification is not required. The Company shall cause a
Certificate or Certificates evidencing all or any part of the Warrant Shares
prior to any such registration or qualification of Warrant Shares to bear the
following legend:
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The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities laws of
any state (the "Securities Laws"). These securities may not be offered,
sold, transferred, pledged, or hypothecated in the absence of
registration under applicable Securities Laws, or the availability of
an exemption therefrom. This Certificate will not be transferred on the
books of the Company or any transfer agent acting on behalf of the
Company except upon the receipt of an opinion of counsel, satisfactory
to the Company, that the proposed transfer is exempt from the
registration requirements of all applicable Securities Laws, or the
receipt of evidence, satisfactory to the Company, that the proposed
transfer is the subject of an effective registration statement under
all applicable Securities Laws.
The shares represented by this certificate are subject to and may be
transferred only in compliance with the terms of a certain Amended and
Restated Shareholders Agreement dated November 25, 1998, as amended,
made by and among certain holders of securities of the Company. Copies
of that Agreement are available for inspection at the principal or
registered office of the Company.
8. Replacement of Warrant. At the request of the Holder and on
production of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, the Company at its expense
will issue in lieu thereof a new Warrant of like tenor.
9. No Voting Rights. Except as otherwise provided herein or in the
Shareholders Agreement (referenced in Section 16 hereof) or the Voting Agreement
(referenced in Section 16 hereof) or the Amended Certificate, this Warrant shall
not be deemed to confer upon the Holder any right to vote or to consent to or
receive notice as a stockholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a stockholder, prior
to the exercise hereof.
10. Expenses. The Company will pay all expenses and charges payable in
connection with the preparation, issuance and delivery of this Warrant and all
substitute Warrants. The Holder shall pay all taxes (other than issuance taxes,
including documentary stamp taxes, transfer taxes and other governmental
charges, which shall be paid by the Company) in connection with such issuance
and delivery of the Warrants and the Subscribed Shares.
11. Reservation of Shares. The Company will at all times reserve and
keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Common Stock or its authorized and issued Common Stock
held in its treasury, solely for the purpose of enabling it to satisfy any
obligation to issue shares of Common Stock upon exercise of this Warrant, for
the maximum number of shares of Common Stock which may then be deliverable upon
the exercise of this Warrant. The Company covenants that all shares of Common
Stock which may be issued upon exercise of this Warrant will, upon issue, be
fully paid, nonassessable, free of preemptive rights and free from all taxes,
liens, charges and security interests with respect to the issue thereof.
12. Investment Covenant. The Holder by its acceptance of this Warrant
covenants that this Warrant is, and the Warrant Shares issued hereunder will be,
acquired for investment purposes, and that the Holder will not distribute this
Warrant or the Warrant Shares in violation of any state or federal law or
regulations.
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13. Fractional Shares of the Holder. No fractional shares of Common
Stock will be issued in connection with any purchase hereunder but in lieu of
such fractional shares, the Company shall make a cash refund therefore equal in
amount to the product of the applicable fraction multiplied by the Exercise
Price then in effect.
14. Computations. The certificate of any firm of independent public
accountants of nationally recognized standing selected by the Company shall be
conclusive evidence of the correctness of any computation under this Warrant.
15. Investor Exit; Other Shareholder Rights. The Holder's rights with
respect to voting rights, the transfer of this Warrant and the registration and
sale of the Common Stock issuable hereunder are also governed by a certain (i)
Amended and Restated Registration Rights Agreement dated November 25, 1998,
between the Company and the holders of the Company's common and preferred
securities identified as "Investors" in such agreement, and (ii) Amended and
Restated Shareholders Agreement dated November 25, 1998, among the Company, and
the holders of the Company's common and preferred securities identified as
"Investors" in such agreement among the "Shareholders" and "Investors" as
identified therein, and (iii) Voting Agreement dated November 25, 1998, among
the Company, Broadband Solutions, LLC, Broadband Solutions II, LLC, and Vulcan
Ventures, Incorporated, the terms and conditions of which are incorporated
herein by reference. The Holder agrees that all Warrant Shares shall be subject
to these agreements.
16. Owner of Warrant. The Company shall keep a register (the
"Certificate Register") of the Warrant Certificates and of their transfer and
exchange in accordance with the provisions of Sections 5 and 7 hereof. The
Certificate Register shall show the names and addresses of the respective
Holder(s) and the date and number of Warrants represented on the face of each
Warrant Certificate. The Company shall be entitled to treat the Person in whose
name a Warrant Certificate is registered as the absolute owner of such Warrant
Certificate for all purposes. The Company shall have no duty to inquire into
adverse claims to, or the authenticity of any signature of any purported holder
of, this Warrant.
17. Miscellaneous.
(a) This Warrant shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to the
conflict of law principles thereof.
(b) This Warrant shall bind the Company, its successors and
assigns (including any Successor Company), and shall benefit and bind the
Holder, the Holder's successors and permitted assigns.
(c) The Section headings in this Warrant have been included
solely for ease of reference and shall not be considered in the interpretation
or construction of this Warrant. All references in this Warrant to "Sections"
shall be construed as references to numbered Sections of this Warrant.
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(d) Any notice or delivery required or permitted by this
Warrant shall be deemed given or made for all purposes of this Warrant when (1)
the notice is in writing, and (2) the notice or the delivery is delivered by
hand or is mailed by registered mail, return receipt requested, addressed to the
intended recipient at (A) in the Company's case, the Company's Office, or (B) in
the Holder's case, the Holder's address as set forth in the Company's records or
at such other address as the Holder may designate by written notice to the
Company.
IN WITNESS WHEREOF, this Warrant has been executed as of the 25th day
of November, 1998.
HIGH SPEED ACCESS CORP.
By /s/ Robert S. Saunders
______________________________
Name: Robert S. Saunders
______________________________
Date: November 25, 1998
____________________________
VULCAN VENTURES, INCORPORATED
By /s/ William D. Savoy
______________________________
Name: William D. Savoy
______________________________
Title: Vice President
___________________________
Date:____________________________
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ASSIGNMENT
WHEREAS, Vulcan Ventures, Incorporated ("Vulcan") holds, for the
benefit of and as nominee of Charter Communications, Inc. ("Charter"), that
certain Class B Securities Purchase Warrant dated November 25, 1998, entitling
the Holder to subscribe for two million five hundred thousand (2,500,000) shares
of the common stock with $.01 par value of High Speed Access Corp. to Charter
(the "Warrant"); and
WHEREAS, Vulcan and Charter desire Vulcan to assign this Warrant to
Charter;
Now, therefore, Vulcan hereby assigns and transfers all right, title
and interest in and to the Warrant to Charter.
Vulcan Ventures, Incorporated
By: /s/ William D. Savoy
-----------------------------
Name: William D. Savoy
Title: Vice President
Dated: April 23, 1999
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AMENDMENT TO
CLASS B SECURITIES PURCHASE
WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK
OF
HIGH SPEED ACCESS CORP.
This AMENDMENT TO CLASS B SECURITIES PURCHASE WARRANT ("Amendment") is
dated as of this 29th day of April, 1999, by and between:
HIGH SPEED ACCESS CORP.
1000 West Ormsby Ave., Suite 210
Louisville, Kentucky 40210 ("HSAC")
and
CHARTER COMMUNICATIONS, INC.
12444 Powerscourt Drive, Suite 400
St. Louis, MO 63131 ("Charter")
RECITALS
A. HSAC, pursuant to WARRANT NO. R-001 dated November 25, 1998 (the
"Warrant"), granted Vulcan Ventures, Incorporated ("Vulcan") the right to
purchase up to Two Million Five Hundred Thousand (2,500,000) fully paid,
nonassessable shares of Common Stock of HSAC, under terms and conditions as more
fully explained therein. Vulcan transferred its right, title and interest in and
to the Warrant to Charter by Assignment dated April 23, 1999.
B. The parties desire to amend certain provisions of the Warrant as set
out herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and intending to
be legally bound hereby, the parties agree as follows:
1. Subject to Section 2 hereof, Section 2.(h) of the Warrant is hereby
amended to read in its entirety as follows:
"Exercise Period" means, with respect to any Warrant Share, subject to
any extension or extensions of the period pursuant to Section 6 of the
Systems Access Agreement, the period beginning on the Effective Date
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of this Warrant and ending on July 31, 2004.
2. This Amendment shall be effective upon the completion by HSAC of an
underwritten public offering of common stock of HSAC of not less than $50
million in aggregate gross proceeds to HSAC at a minimum initial price per share
of $7.50 (as proportionately and appropriately adjusted to reflect any
subdivision, reverse split or recapitalization of HSAC's common stock after the
date hereof) which has been made pursuant to a registration statement filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended.
IN WITNESS WHEREOF, this Amendment to Class B Securities Purchase
Warrant has been executed as of the day and year first set forth above
HIGH SPEED ACCESS CORP.
By: /s/ John G. Hundley
--------------------------------
Name: John G. Hundley, VP, Asst.
------------------------------
Secretary/General Counsel
------------------------------
Date: April 30, 1999
------------------------------
CHARTER COMMUNICATIONS, INC.
By: /s/ Curtis Shaw
--------------------------------
Name: Curtis S. Shaw
------------------------------
Title: Senior Vice President
-----------------------------
Date: April 30, 1999
------------------------------
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