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EXHIBIT 10.22
WARRANT TO PURCHASE COMMON STOCK
OF
HIGH SPEED ACCESS CORP.
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED OR QUALIFIED UNDER APPLICABLE STATE LAW AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH
REGISTRATION AND QUALIFICATION, WITHOUT AN OPINION OF LEGAL COUNSEL REASONABLY
ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT
REQUIRED.
This certifies that, for value received, Atlanta On-Line InterNet, Inc. or
its registered assigns ("Holder") is entitled, subject to the terms and
conditions set forth below, to purchase from High Speed Access Corp. (the
"Company"), in whole or in part 13,000 fully paid and nonassessable shares (the
"Warrant Shares") of Common Stock of the Company (the "Common Stock") at a
purchase price of $10.00 per share (the "Exercise Price") payable by delivery of
shares of Common Stock in accordance with Section 2. The term "Warrant" as used
herein shall mean this Warrant, and any warrants delivered in substitution or
exchange therefor as provided herein.
1. Term of Warrant.
Subject to the terms and conditions set forth herein, this
Warrant shall be exercisable, in whole or in part, during the term commencing on
the earlier of (a) the closing of a firmly underwritten public offering of the
Company's Common Stock pursuant to a registration statement filed under the
Securities Act of 1933, as amended (the "Act"), or (b) September 1, 1999, and
ending one year from the date hereof, and shall be void thereafter (the
"Exercise Period").
2. Exercise of Warrant.
(a) Cash Exercise. This Warrant may be exercised by the Holder
by (i) the surrender of this Warrant to the Company, with the Notice of Exercise
annexed hereto duly completed and executed on behalf of the Holder, at the
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company) during the Exercise Period and (ii) the
delivery of payment to the Company, for the account of the Company, by cash,
wire transfer of immediately available funds to a bank account specified by the
Company, or by certified or bank cashier's check, of the Exercise Price for the
number of Warrant Shares specified in the Exercise Form in lawful money of the
United States of America. A stock certificate or certificates
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for the Warrant Shares specified in the Exercise Form shall be delivered to the
Holder as promptly as practicable, and in any event within ten (10) days,
thereafter. If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of the stock certificate or certificates, deliver
to the Holder a new Warrant evidencing the rights to purchase the remaining
Warrant Shares, which new Warrant shall in all other respects be identical with
this Warrant. No adjustments shall be made on Warrant Shares issuable on the
exercise of this Warrant for any cash dividends paid or payable to holders of
record of Common Stock prior to the date as of which the Holder shall be deemed
to be the record holder of such Warrant Shares.
(b) Net Issue Exercise. This Warrant may be exercised by the
Holder by the surrender of this Warrant to the Company, with a duly executed
Exercise Form marked to reflect Net Issue Exercise and specifying the number of
shares of Common Stock to be purchased, during normal business hours on any
Business Day during the Exercise Period. The Company agrees that such shares of
Common Stock shall be deemed to be issued to the Holder as the record holder of
such shares of Common Stock as of the close of business on the date on which
this Warrant shall have been surrendered as aforesaid. Upon such exercise, the
Holder shall be entitled to receive shares equal to the value of this Warrant
(or the portion thereof being canceled) 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 Common Stock computed as of the date of
surrender of this Warrant to the Company using the following formula:
X = Y(A-B)
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A
Where X = the number of shares of Common Stock to be issued to
Holder under this Section 2(b); Y = the number of shares of Common Stock
otherwise purchasable under this Warrant (as adjusted to the date of such
calculation); A = the fair market value of one share of the Common Stock at the
date of such calculation; B = the Exercise Price (as adjusted to the date of
such calculation).
(c) Fair Market Value. For purposes of Section 2(b), the fair
market value of one share of the Company's Common Stock shall mean, as of any
date: (i) the fair market value of the shares of Common Stock, as determined
from the last closing price per share of the Company's Common Stock on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading, or (ii) the fair market value of the shares of Common
Stock, as determined from the last reported sales price per share of the
Company's Common Stock on the Nasdaq National Market or the Nasdaq Small-Cap
Market (collectively, "Nasdaq") if the Company's Common Stock is not listed or
traded on any such exchange, or (iii) the fair market value of the shares of
Common Stock, as determined from the average of the bid and asked price per
share as reported in the "pink sheets" published by the National Quotation
Bureau, Inc. (the "pink sheets") if the Company's Common Stock is not listed or
traded on any exchange or Nasdaq, or (iv) if such quotations are not available,
the fair market value per share of the
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Company's Common Stock on the date such notice was received by the Company as
reasonably determined in good faith by the Board of Directors of the Company.
(d) This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
promptly as practicable on or after such date and in any event within ten (10)
days thereafter, the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of shares issuable upon such exercise. In the event that this Warrant
is exercised in part, the Company at its expense will execute and deliver a new
Warrant of like tenor exercisable for the number of shares for which this
Warrant may then be exercised.
3. Lock-Up Agreement.
The Holder hereby agrees that for a period of six (6) months
after the effective date of the closing of a public offering of the Company's
Common Stock pursuant to a registration statement filed under the Act, the
Holder will not, without the prior written consent of the Company, offer,
pledge, sell, contract to sell, grant any option for the sale of, or otherwise
dispose of, directly or indirectly, any of the Warrant Shares, or the Warrant.
4. No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares
shall be issued upon the exercise of this Warrant. In lieu of any fractional
share to which the Holder would otherwise be entitled, the Company shall make a
cash payment equal to the Exercise Price multiplied by such fraction.
5. Replacement of Warrant.
On receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant and, in the case
of loss, theft or destruction, on delivery of an indemnity agreement reasonably
satisfactory in form and substance to the Company or, in the case of mutilation,
on surrender and cancellation of this Warrant, the Company at its expense shall
execute and deliver, in lieu of this Warrant, a new warrant of like tenor and
amount.
6. Rights of Stockholders.
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Subject to the provisions of Sections 10 and 11 of this
Warrant, the Holder shall not be entitled to vote or receive dividends or be
deemed the holder of Common Stock or any other securities of the Company that
may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the Holder, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value, or change of stock to no par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have been
exercised as provided herein.
7. Transfer of Warrant.
(a) Warrant Register. The Company will maintain a register
(the "Warrant Register") containing the names and addresses of the Holder or
Holders. Any Holder of this Warrant or any portion thereof may change his
address as shown on the Warrant Register by written notice to the Company
requesting such change. Any notice or written communication required or
permitted to be given to the Holder may be delivered or given by mail to such
Holder as shown on the Warrant Register and at the address shown on the Warrant
Register. Until this Warrant is transferred on the Warrant Register of the
Company, the Company may treat the Holder as shown on the Warrant Register as
the absolute owner of this Warrant for all purposes, notwithstanding any notice
to the contrary.
(b) Warrant Agent. The Company may, by written notice to the
Holder, appoint an agent for the purpose of maintaining the Warrant Register
referred to in Section 7(a) above, issuing the Warrant Shares or other
securities then issuable upon the exercise of this Warrant, exchanging this
Warrant, replacing this Warrant, or any or all of the foregoing. Thereafter, any
such registration, issuance, exchange, or replacement, as the case may be, shall
be made at the office of such agent.
(c) Transferability and Nonnegotiability of Warrant. This
Warrant may not be transferred or assigned in whole or in part without the
consent of the Company and without compliance with all applicable federal and
state securities laws by the transferor and the transferee (including the
delivery of investment representation letters and legal opinions reasonably
satisfactory to the Company, if such are requested by the Company).
Notwithstanding the foregoing, no investment representation letter or opinion of
counsel shall be required for any transfer of this Warrant (or any portion
thereof) or any shares of Common Stock issued upon exercise hereof or conversion
thereof, by gift, will or intestate succession by the Holder to his or her
spouse or lineal descendants or ancestors or any trust for any of the foregoing;
provided that in each of the foregoing cases the transferee agrees in writing to
be subject to the terms of this Section 7(c). The Company hereby agrees to
consent to the transfer of this Warrant to Marvin and Ellen Anglin, the sole
Shareholders of Holder, upon the dissolution of Holder. Subject to the
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provisions of this Warrant with respect to compliance with the Act and the
consent of the Company, title to this Warrant may be transferred by endorsement
(by the Holder executing the Assignment Form annexed hereto) and delivery in the
same manner as a negotiable instrument transferable by endorsement and delivery.
(d) Exchange of Warrant Upon a Transfer. On surrender of
this Warrant for exchange, properly endorsed on the Assignment Form and subject
to the provisions of this Warrant with respect to compliance with the Act and
with the limitations on assignments and transfers and contained in this Section
7, the Company at its expense shall issue to or on the order of the Holder a new
warrant or warrants of like tenor, in the name of the Holder or as the Holder
(on payment by the Holder of any applicable transfer taxes) may direct, for the
number of shares issuable upon exercise hereof.
(e) Legend.
(i) All shares of Common Stock issued upon exercise
hereof or conversion thereof shall be stamped or imprinted with a legend in
substantially the following form (in addition to any legend required by state
securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR QUALIFIED
UNDER APPLICABLE STATE LAW AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH
REGISTRATION AND QUALIFICATION, WITHOUT AN OPINION OF LEGAL
COUNSEL REASONABLY ACCEPTABLE TO THE CORPORATION THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
(ii) The Company agrees, upon the request of the
holder of this Warrant and Securities issuable upon exercise of the Warrant, to
promptly remove the legend set forth in Section 7(e)(i) above from the Warrant
or any stock certificates representing shares issuable upon its exercise upon
full compliance with all applicable registration requirements of the Act or the
terms of Rule 144(k) of the Act.
8. Reservation of Stock.
The Company covenants that during the term this Warrant is
exercisable, the Company will reserve from its authorized and unissued Common
Stock or other shares issuable upon exercise of the Warrant a sufficient number
of shares to provide for the issuance of Common Stock upon the exercise of this
Warrant and, from time to time, will take all steps necessary to amend its
Restated Certificate of Incorporation (the "Restated Certificate") to provide
sufficient reserves of shares of Common Stock issuable upon exercise of the
Warrant. The Company
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further covenants that all shares that may be issued upon the exercise of rights
represented by this Warrant, upon exercise of the rights represented by this
Warrant and payment of the Exercise Price, all as set forth herein, will be free
from all taxes, liens and charges in respect of the issue thereof (other than
taxes in respect of any transfer occurring contemporaneously or otherwise
specified herein).
9. Amendments.
This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
10. Notices.
(a) Whenever the Exercise Price or number of shares
purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the
Company shall issue a certificate signed by its Chief Financial Officer setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, and the
Exercise Price and number of shares purchasable hereunder after giving effect to
such adjustment, and shall cause a copy of such certificate to be mailed (by
first-class mail, postage prepaid) to the Holder of this Warrant.
(b) In case:
(i) the Company shall take a record of the
holders of its Common Stock (or other stock
or securities at the time receivable upon
the exercise of this Warrant) for the
purpose of entitling them to receive any
dividend or other distribution, or any right
to subscribe for or purchase any shares of
stock of any class or any other securities,
or to receive any other right;
(ii) of any capital reorganization of the
Company, any reclassification of the capital
stock of the Company, any consolidation or
merger of the Company with or into another
corporation, or any conveyance of all or
substantially all of the assets of the
Company to another corporation;
(iii) of any voluntary dissolution, liquidation or
winding-up of the Company;
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(iv) of any redemption or conversion of all
outstanding Common Stock; or
(v) of the filing of the Company's first
registration statement with the U.S.
Securities and Exchange Commission (the
"SEC");
then, and in each such case, the Company will mail or cause to be mailed to the
Holder or Holders a notice specifying, as the case may be, (A) the date on which
a record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right,
(B) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation, winding-up, redemption or
conversion is to take place, and the time, if any is to be fixed, as of which
the holders of record of Common Stock (or such stock or securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities
or other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up, or
(C) the anticipated date on which the Company expects its first registration
statement with the SEC to become effective. Such notice shall be mailed at least
fifteen (15) days prior to the date therein specified.
(c) All such notices, advices and communications shall be
deemed to have been received (i) in the case of personal delivery, on the date
of such delivery and (ii) in the case of mailing, on the third business day
following the date of such mailing if sent to a U.S. address and on the tenth
(10th) business day following the date of such mailing if sent to an address
outside the U.S.
11. Adjustments.
The Exercise Price and the number of shares purchasable
hereunder are subject to adjustment from time to time as follows:
(a) Reclassification, etc. If the Company, at any time while
this Warrant, or any portion thereof, remains outstanding and unexpired by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 11.
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(b) Split, Subdivision or Combination of Shares. If the
Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, then (i) in the case of a split or subdivision,
the Exercise Price for such securities shall be proportionately decreased and
the securities issuable upon exercise of this Warrant shall be proportionately
increased, and (ii) in the case of a combination, the Exercise Price for such
securities shall be proportionately increased and the securities issuable upon
exercise of this Warrant shall be proportionately decreased.
(c) Adjustments for Dividends in Stock or Other Securities or
Property. If while this Warrant, or any portion hereof, remains outstanding and
unexpired the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible Stockholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend, then
and in each case, this Warrant shall represent the right to acquire, in addition
to the number of shares of the security receivable upon exercise of this
Warrant, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other securities or property (other
than cash) of the Company that such holder would hold on the date of such
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by the provisions of this Section 11.
(d) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 11, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each Holder of this Warrant a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the
written request, at any time, of any such Holder, furnish or cause to be
furnished to such Holder a like certificate setting forth: (i) such adjustments
and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the
number of shares and the amount, if any, of other property that at the time
would be received upon the exercise of the Warrant.
(e) No Impairment. The Company will not, by any 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, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 11
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holders of this Warrant against impairment.
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12. Miscellaneous.
(a) This Warrant shall be governed by the laws of the
Commonwealth of Kentucky, without regard to its conflict of laws principles.
(b) In the event of a dispute with regard to the
interpretation of this Warrant, the prevailing party may collect the cost of
attorney's fees, litigation expenses or such other expenses as may be incurred
in the enforcement of the prevailing party's rights hereunder.
(c) This Warrant shall be exercisable as provided for herein,
except that in the event that the expiration date of this Warrant shall fall on
a Saturday, Sunday and or United States federally recognized Holiday, this
expiration date for this Warrant shall be extended to 5:00 p.m. Eastern standard
time on the business day following such Saturday, Sunday or recognized Holiday.
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IN WITNESS WHEREOF, High Speed Access Corp. has caused this Warrant to be
executed by its officers thereunto duly authorized.
Dated: March 24, 1999
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HIGH SPEED ACCESS CORP.
By /s/ Ron Pitcock
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Title President
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ATLANTA ON-LINE INTERNET, INC.
By /s/ Marvin Anglin
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Title President
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NOTICE OF EXERCISE
To: HIGH SPEED ACCESS CORP.
(1) The undersigned hereby elects to purchase __________ shares of
Common Stock of High Speed Access Corp., pursuant to the terms
of the attached Warrant, and tenders herewith this Warrant for
Net Issue Exercise pursuant to Section 2 of this Warrant.
(2) In exercising this Warrant, the undesigned hereby confirms and
acknowledges that the shares of Common Stock are being
acquired solely for the account of the undersigned and not as
a nominee for any other party, or for investment, and that the
undersigned will not offer, sell or otherwise dispose of any
such shares of Common Stock except under circumstances that
will not result in a violation of the Securities Act of 1933,
as amended, or any applicable state securities laws.
(3) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in
such other name as is specified below:
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(Name)
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(Name)
(4) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such
other name as is specified below:
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(Name)
- -------------------- --------------------------------------
(Date) (Signature)
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ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Stock set forth below:
No. of
Name of Assignee Address Shares
and does hereby irrevocably constitute and appoint Attorney ____________________
to make such transfer on the books of HIGH SPEED ACCESS CORP., maintained for
the purpose, with full power of substitution in the premises.
The undersigned also represents that, by assignment hereof, the
Assignee acknowledges that this Warrant and the shares of stock to be issued
upon exercise hereof or conversion thereof are being acquired for investment and
that the Assignee will not offer, sell or otherwise dispose of this Warrant or
any shares of stock to be issued upon exercise hereof or conversion thereof
except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended, or any applicable state securities laws.
Further, the Assignee has acknowledged that upon exercise of this Warrant, the
Assignee shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the shares of stock so purchased are being
acquired for investment and not with a view toward distribution or resale.
Dated: , 19 .
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Signature of Holder
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