EXHIBIT 10.01
NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE
THEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY JURISDICTION,
AND MUST BE HELD INDEFINITELY UNLESS THEY ARE TRANSFERRED PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND IN COMPLIANCE
WITH ALL APPLICABLE SECURITIES LAWS, OR AFTER RECEIPT OF AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO HIWAY TECHNOLOGIES,
INC.,, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED AND THE
TRANSFER DOES NOT VIOLATE ANY APPLICABLE SECURITIES LAW.
VOID AFTER DECEMBER 31, 2002
WARRANT TO PURCHASE COMMON STOCK OF
HIWAY TECHNOLOGIES, INC.
REGISTERED HOLDER: XXXXXX X. XXXXXX
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NO. OF SHARES FOR WHICH EXERCISABLE: 280,409
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WARRANT PRICE: $11.50 PER SHARE,
SUBJECT TO ADJUSTMENT AS PROVIDE HEREIN
HIWAY TECHNOLOGIES, INC., a Florida corporation (hereinafter called the
"Company"), in connection with the transactions contemplated by separate
agreements among the Company and various purchasers with respect to the purchase
of certain warrants, for value received hereby certifies that the registered
holder named above or registered assigns (the "Holder") has the right at any
time after the date hereof and prior to the close of business on December 31,
2002, at which date this Warrant expires, to purchase the number of fully paid
and non-assessable share of Common Stock, par value $.01 per share. of the
Company (hereinafter called "Common Stock") at the price set forth herein, all
as provided herein and upon compliance with and subject to the conditions set
forth herein.
ARTICLE 1
Transfer
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Section 1.01. Transfer Books. The Company shall maintain books for the
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transfer and registration of this Warrant.
Section 1.02. Transfer. The Company, from time to time, shall register the
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transfer of this Warrant in the books to be maintained by the Company for that
purpose upon surrender at the principal office of the Company of this Warrant
properly endorsed or accompanied by appropriate instruments of transfer and
written instructions for transfer. Upon any such transfer, a new Warrant shall
be issued to the transferee and the surrendered Warrant shall be canceled by the
Company. The Company may require the payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any such
transfer.
Section 1.05. Transfer Restrictions. This Warrant, and except as set forth
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in Article V hereof, the Common Stock underlying this Warrant, will not be
registered under the Securities Act of 1933, as amended (the "1933 Act"), or any
securities act of any state or other jurisdiction, in reliance on registration
exemptions under such statutes for private offerings. This Warrant or any of the
underlying shares of Common Stock may not be sold or otherwise transferred
except in accordance with the 1933 Act and all other applicable securities laws,
and prior to any transfer (other than pursuant to an effective registration
statement under the 1933 Act and otherwise in compliance with applicable law)
the holder must furnish to the Company a written opinion of counsel, in form and
substance satisfactory to the Company, to the effect that registration under the
1933 Act is not required and that all requisite action has been taken under all
applicable securities laws in connection with the proposed transfer.
ARTICLE II
Number of Shares; Warrant Price; Duration;
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and Exercise of Warrant
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Section 2.01. Number of Shares; Warrant Price; and Duration. This Warrant
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entitles the registered holder thereof, subject to the provisions hereof, to
purchase from the Company at any time after the date hereof and before the close
of business on December 31, 2002, the number of shares of Common Stock shown
above, at a price of $11.50 per share, subject to adjustment as provided in
Article III hereof, payable in full at the time of purchase. the term "Warrant
Price" as used herein refers to the foregoing price per share in effect at any
time.
Section 2.02. Exercise. (a) This Warrant may be exercised, in whole or in
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part, by surrendering this Warrant, at the principal office of the Company, with
the Election to Exercise form set forth at the end hereof duly executed, and by
paying in full, the Warrant Price for each share of Common Stock as to which
this Warrant is exercised and any applicable taxes, other than taxes that the
Company is required to pay hereunder. Such payment may be (i) in cash or
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by bank check or (ii) by transfer of all or a portion of a Note or Notes duly
endorsed by, or accompanied by appropriate instruments of transfer duly executed
by, the registered holder or by his duly authorized attorney, valued at the
principal amount thereof and accrued and unpaid interest thereon (other than
unpaid interest not payable until the Due Date (as defined in the Notes), with
any excess of the Warrant Price over such value paid in cash or by bank check.
(b) As soon as practicable after the exercise of this Warrant, the Company
shall cause to be issued to or upon the order of the holder of this Warrant a
certificate or certificates for the number of full shares of Common Stock to
which he is entitled, registered in such name or names as may be directed by
him.
(c) Anything contained herein to the contrary notwithstanding, the Company
shall not be required to issue any fraction of a share in connection with the
exercise of this Warrant, but in any case where the holder hereof would, except
for the provisions of this Section 2.03, be entitled under the terms of this
Warrant to receive a fraction of a share upon the exercise of hereof, the
Company shall, upon the exercise of this Warrant and receipt of the Warrant
Price, issue a certificate for the largest number of full shares of Common Stock
then called for hereby and pay a sum in cash equal to the market value of such
fraction of a share (based upon the closing market price of the Common Stock on
the principal stock exchange on which it is listed (or, if not listed on any
stock exchange, the last sale price on the NASDAQ National Market System, or if
not listed or admitted to trading on such system, the closing bid price in the
over-the-counter market) on the day preceding such exercise). The Warrantholder
by his acceptance of this Warrant expressly waives his right to receive any
fraction of a share.
(d) All shares of Common Stock issued upon the exercise of this Warrant
shall be validly issued, fully paid and non-assessable, and the Company shall
pay all taxes in respect of the issue thereof. The Company shall not be
required, however, to pay any tax imposed in connection with any transfer
involved in the issuance of a certificate for shares of Common Stock or any
other securities in any name other than that of the holder of this Warrant; and
in such case the Company shall not be required to issue or deliver any such
certificate until such tax shall have been paid.
(e) Each person in whose name any such certificate for shares of Common
Stock is issued shall for all purposes be deemed to have become the holder of
record of such shares on the date on which this Warrant was surrendered and
payment of the purchase price and any applicable taxes was made, irrespective of
the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are
closed, such person shall be deemed to have become the holder of such shares at
the close of business on the next succeeding date on which the stock transfer
books are open.
ARTICLE III
Adjustment of Shares of Common Stock Purchasable
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and Warrant Price
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Section 3.01. Adjustment of Warrant Price. The Warrant Price specified in
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Section 2.01 hereof shall be subject to adjustment from time to time as follows:
(a) In case the Company shall (i) pay a dividend on Common Stock in
Common Stock, (ii) subdivide its outstanding shares of Common Stock or
(iii) combine its outstanding shares of Common Stock into a smaller number
of shares, the Warrant Price in effect immediately prior thereto shall be
adjusted proportionately so that the adjusted Warrant Price will bear the
same relation to the Warrant Price in effect immediately prior to any such
event as the total number of shares of Common Stock outstanding immediately
prior to any such event shall bear to the total number of shares of Common
Stock outstanding immediately after any such event. An adjustment made
pursuant to this Section 3.01(a) shall become effective retroactively
immediately after the record date in the case of a dividend and shall
become effective immediately after the effective date in the case of a
subdivision or combination.
(b) In case the Company shall issue rights or warrants to all holders
of its Common Stock entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the current Warrant Price at
the record date mentioned below, the Warrant Price shall be adjusted so
that the same shall equal the price determined by multiplying the Warrant
Price in effect immediately prior thereto by a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding on the
record date mentioned below plus the number of additional shares of Common
Stock which the aggregate offering price of the total number of shares of
Common Stock so offered would purchase at such current Warrant Price, and
of which the denominator shall be the number of shares of Common Stock
offered for subscription or purchase. Such adjustment shall become
effective retroactively immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants.
(c) In case the Company shall distribute to all holders of its Common
Stock shares of its capital stock (other than Common Stock), evidences of
its indebtedness or assets (excluding cash dividends or distributions) or
rights or warrants to subscribe or purchase such shares, evidences of
indebtedness or assets (excluding those referred to in Subdivision (b)
above), then in each such case the Warrant Price in effect thereafter shall
be determined by multiplying the Warrant Price in effect immediately prior
thereto by a fraction, of which the numerator shall be the total number of
outstanding shares of Common Stock multiplied by the Warrant Price on the
record date mentioned below, less the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive, and
described in a statement filed with the Company), of the capital stock,
assets or evidences of indebtedness so distributed or of such rights or
warrants, and of which the denominator shall be the total number of
outstanding shares of Common Stock multiplied by such current Warrant
Price. Such adjustment shall be made whenever any such distribution is
made, and shall become effective retroactively
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immediately after the record date for the determination of stockholders entitled
to receive such distribution.
(d) In case the Company shall issue or sell any Additional Shares of Common
Stock (as defined below in this Subdivision (d)), Convertible Securities (as
defined below in this Subdivision (d)), warrants or other rights to subscribe
for or purchase any Additional Shares of Common Stock or Convertible Securities,
whether or not the right to exercise, exchange or convert thereunder is
immediately exercisable, and the consideration per share for which Additional
Shares of Common Stock is issued or may at any time thereafter be issuable
pursuant to such warrants or other rights or pursuant to the terms of such
Convertible Securities is less than the current Warrant Price at the time of the
issuance or sale, the Warrant Price shall be adjusted so that the same shall
equal the price determined by multiplying the Warrant Price in effect
immediately prior thereto by a fraction, of which the numerator shall be the
number of shares of Common Stock outstanding immediately prior thereto plus the
quotient obtained by dividing the aggregate minimum amount of consideration
received or receivable for such Additional Shares of Common Stock by the then
current Warrant Price and of which the denominator shall be the number of shares
of Common Stock outstanding immediately prior thereto plus the number of
Additional Shares of Common Stock issued or issuable.
For the purposes of this Subdivision (d), the date of which the current
Warrant Price shall be computed shall be the earliest of the date on which the
Company shall actually issue, or the date the Company shall enter into a firm
contract for the issuance of, such Additional shares of Common Stock,
Convertible Securities or warrants or other rights to subscribe for or purchase
any Additional Shares of Common Stock or Convertible Securities. No adjustment
of the Warrant Price shall be made pursuant to this Subdivision (d) upon the
issuance of any Convertible Securities that are issued pursuant to the exercise
of any warrants or other rights therefor if any such adjustment shall previously
have been made upon the issuance of any such warrants or rights.
The term "Convertible Securities" as used herein shall mean evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable, with or with payment of additional consideration in cash or
property, for Additional Shares of Common Stock, either immediately or upon
arrival of a specified date or the happening of a specified event, other than
Excluded Securities. The term "Additional Shares of Common Stock" as used herein
shall mean all shares of Common Stock issued by the Company after the Closing
Date other than Excluded Securities. The term "Excluded Securities" shall mean
option and warrant agreements outstanding on December 10, 1997 to purchase
430,409 shares of common stock of the Company, up to 200,000 option and warrant
agreements which may be issued by the Company after December 10, 1997 to
employees, consultants and other service providers of the Company, option or
warrant agreements or common stock which may be issued by the Company after
December 10,1997 in connection with any merger of another
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corporation and the Company permitted hereunder and common stock of the Company
issued by the Company upon exercise of the foregoing option and warrant
agreements.
(e) If at any time after any adjustment shall have made pursuant to
Subdivision (d) hereof,
(l) any of such warrants or rights or the right of conversion or exchange
in such Convertible Securities shall expire unexercised, and/or
(2) the consideration per share for which Additional Shares of Common
Stock or Convertible Securities are issuable pursuant to such warrants
or rights or the terms of such Convertible Securities shall increase
solely by virtue of provisions contained therein for an automatic
increase in such consideration upon the arrival of a specified date
or the happening of a specified event,
the Warrant Price shall immediately be readjusted pursuant to the terms of
Subdivision (d) hereof.
(f) No adjustment of the Warrant Price shall be made if the amount of such
adjustment shall be less than $.01 per share, but in such case any adjustment
that would otherwise be required then to be made shall be carried forward and
shall be made at the time of and together with the next subsequent adjustment,
which, together with any adjustment so carried, forward, shall amount to not
less than $.01 per share. In case the Company shall at any time issue Common
Stock by way of dividend on any stock of any Company or subdivide or combine the
outstanding shares of the Common Stock, said amount of $.01 per share (as
theretofore increased or decreased, if the said amount shall have been adjusted
in accordance with the provisions of this subparagraph) shall forthwith be
proportionately increased in the case of a combination or decreased in the case
of such a subdivision or stock dividend so as appropriately to reflect the same.
As used in this Section, "Common Stock" shall include any class of the Company's
capital stock, now or hereafter authorized, having the right to participate in
the distribution of either earnings or assets of the Company without limitation
as to amount or percentage.
Section 3.02. Adjustment of Number of Shares. Upon each adjustment of
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the Warrant Price pursuant to Section 3.01 hereof, the number of shares of
Common Stock purchasable upon exercise of this Warrant shall be adjusted to the
number of shares of Common Stock, calculated to the nearest one hundredth of a
share, obtained by multiplying the number of shares of Common Stock purchasable
immediately prior to such adjustment upon the exercise of this Warrant by the
Warrant Price in effect prior to such adjustment and dividing the product so
obtained by the new Warrant Price.
Section 3.03 Reorganization. In case of any capital reorganization of
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the Company, or of any reclassification of the Common Stock, or in case of the
consolidation of the Company
6
with or the merger of the Company into any other corporation or entity (other
than a consolidation or merger in which the Company is the continuing entity) or
of the sale of the properties and assets of the Company as, or substantially as,
and entirety to any other entity, this Warrant shall after such capital
reorganization, reclassification, consolidation, merger or sale be exercisable,
upon the terms and conditions specified in this Agreement, for the number of
shares of stock or other securities or property of the entity resulting from
such consolidation or surviving such merger or to which such sale shall be made,
or any other entity, as the case may be, which the holders of Common Stock
issuable (at the time of such capital reorganization, reclassification,
consolidation, merger or sale) upon exercise of this Warrant would have been
entitled to receive upon such capital reorganization, reclassification,
consolidation, merger or sale if such exercise had taken place. The Company
shall not effect any such consolidation, merger or sale unless prior to or
simultaneously with the consummation thereof the successor entity (if other than
the Company) resulting from such consolidation or merger, or the entity
purchasing such assets and any other entity the shares of stock or other
securities or property of which are receivable thereupon by the holder of this
Warrant, shall expressly assume, by written instrument executed, delivered and
satisfactory in form to the Company, (i) the obligation to deliver to the
holders of this Warrant such shares of stock, securities or assets, as, in
accordance with the foregoing provisions, such holder may be entitled to
purchase and (ii) all other obligations under this Warrant.
Section 3.04. Certificate. Whenever the Warrant Price is adjusted as
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herein provided:
(a) The Company shall compute the adjusted Warrant Price in
accordance with Section 3.01 hereof and shall prepare a certificate signed
by its President or a Vice President and its principal accounting officer
setting forth the adjusted Warrant Price and showing in reasonable detail
the method of calculation of such adjustment and the facts requiring the
adjustment and upon which such calculation is based; and
(b) Such certificate shall be sent to the holder of this
Warrant.
Section 3.05. Notice of Certain Events. In case at any time after the date
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of this Agreement:
(a) the Company shall declare a dividend (or any other
distribution) on its shares of Common Stock payable otherwise than in cash
out of its earned surplus; or
(b) the Company shall authorize the granting to the holders of
its shares of Common Stock rights to subscribe for or purchase any shares
of capital stock of any class or of any other rights: or
(c) the Company shall authorize any reclassification of the
shares of its Common Stock (other than a subdivision or combination of its
outstanding shares of Common Stock); or any consolidation or merger to
which it is a party and for which
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approval of any shareholders of the Company is required, or the sale or
transfer of all or substantially all of its assets; or
(d) events shall have occurred resulting in the voluntary or
involuntary dissolution, liquidation or winding up of the Company,
then the Company shall send to the holder of this Warrant at least 20 days (or
10 days in any case specified in clause (a) or (b) above) prior to the
applicable record date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution or
rights, or, if a record is not to be taken, the date as of which the holders of
shares of Common Stock or record to be entitled to such dividend, distribution
or rights are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of shares of Common Stock of record shall be entitled to exchange their
shares for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Failure to give any such notice or any defect therein shall not affect the
validity of the proceeding referred to in clauses (a), (b), (c) and (d) above.
Section 3.06. Changes to Certificates. The form of this Warrant need not be
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changed because of any change in the Warrant Price pursuant to this Article, and
any replacement Warrant issued after such change may state the same Warrant
Price and the same number of shares of Common Stock as are stated in this
Warrant.
Section 3.07. No Entitlement to Dividends. No registered holder of this
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Warrant shall, upon the exercise thereof, be entitled to any dividends that may
have accrued with respect to shares of Common Stock specified in this Warrant
prior to the date of the purchase thereof.
Section 3.08. Certain Rules of Computation. For the purposes of any
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computation under Section 3.01 hereof respecting consideration received, the
following rules shall apply:
(a) in the case of the issuance of shares of Additional Shares of
Common Stock or Convertible Securities for cash, the consideration shall be
the amount of such cash, excluding the amount of any accrued interest or
dividends, provided that in no case shall any deduction be made for any
commission, discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection therewith;
(b) in the case of the issuance of Additional Shares of Common
Stock or Convertible Securities for a consideration in whole or in part
other than cash, the consideration other than cash shall be deemed to be
the Current Appraised Value thereof as of the date of issuance, provided
that in no case shall any deduction be made for any commissions, discounts
or other expenses incurred by
8
the Company for any underwriting of the issue or otherwise in connection
therewith;
(c) in the case of the issuance of any rights to acquire Additional Shares
of Common Stock, including without limitation, options or warrants, or of any
Convertible Securities, the consideration received therefor shall be deemed to
be the consideration, if any, received by the Company for the issuance of such
rights or Convertible Securities plus the consideration, if any, to be received
by the Company upon each exercise, conversion or exchange thereof (the
consideration in each case to be determined in the same manner as provided in
subdivisions (a) and (b) of this Section 3.08;
(d) in the case of Additional Shares of Common Stock or Convertible
Securities or any warrants or other rights to subscribe for or purchase
Additional Shares of Common Stock or Convertible Securities for property other
than cash or in connection with any merger in which the Company issues any
securities, the amount of consideration therefor shall be deemed to be the fair
market value of such property or portion of the assets and business of the
nonsurviving corporation, in either case as the Board of Directors in good faith
shall determine to be attributable to such Additional Shares of Common Stock,
Convertible Securities, warrants or other rights, as the case may be; and
(e) in case of the issuance at any time of any Additional Shares of
Common Stock or Convertible Securities in payment or satisfaction of any
dividends upon any class of stock other than Common Stock, the Company shall be
deemed to have received for such Additional Shares of Company Stock or
Convertible Securities a consideration equal to the amount of such dividend so
paid or satisfied.
ARTICLE IV
Other Provisions Relating to Rights of Holders of this Warrant
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Section 4.01. No Rights as Shareholder. This Warrant does not entitle the
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holder hereof to any rights of a shareholder of the Company.
Section 4.02. Lost Warrant, etc. If this Warrant is lost, stolen,
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mutilated or destroyed, the Company may, upon receipt of a proper affidavit (and
surrender of any mutilated Warrant Certificate) and bond of indemnity in form
and amount and with corporate surety satisfactory to the Company in each
instance protecting the Company, issue a new Warrant of like tenor and date. Any
such new Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant Certificate shall be at any time enforceable by anyone.
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Section 4.03. Authorized Shares. (1) The Company shall at all times have
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authorized the issuance of a number of shares of Common Stock sufficient to
permit the exercise in full of this Warrant and shall have available a
sufficient number of certificates therefor.
(2) Upon the issuance of any shares of Common Stock in connection with any
exercise of this Warrant, the Company shall secure the listing of such shares of
Common Stock upon any securities exchange where shares of Common Stock are then
listed.
(3) If the taking of any action would cause an adjustment in the Warrant
Price so that the exercise of this Warrant while such Warrant Price is in effect
would cause shares to be issued at a price below their then par value, the
Company will take such action as may, in the opinion of its counsel, be
necessary in order that it may validly and legally issue fully paid and non-
assessable shares of Common Stock upon the exercise of this Warrant.
ARTICLE V
Registration Rights
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Section 5.01. Definitions. As used in this Article V, the following
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capitalized terms shall have the meanings herein ascribed to them below:
Exchange Act: The Securities Exchange Act of 1934, as amended.
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Stockholders: The persons or entities, their affiliates and
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associates (as such terms are defined in the rules and regulations under
the Exchange Act) and each of their successors, assigns and transferees
that, in each case, are holders of record of Common Stock issued pursuant
to Warrants issued under the Subscription Agreements ("Subscription
Warrants").
Registrable Common Shares. Any Common Stock issued to Stockholders
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pursuant to Subscription Warrants. As to any particular Registrable Common
Shares, such securities shall cease to be Registrable Common Shares when:
(i) a registration statement with respect to the sale of such securities
shall have become effective under the 1933 Act and such securities shall
have been disposed of in accordance with such registration statement, (ii)
the full number of such shares shall be eligible to be sold pursuant to
Rule 144 (or any successor provision) under the 1933 Act in a three-month
period or (iii) they shall have ceased to be outstanding.
Registration Expenses: Any and all expenses incident to the
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registration of any Registrable Common Shares pursuant to this Agreement,
including without limitation, (i) all Commission and stock exchange or
National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses of complying with state securities or blue
sky laws (including reasonable fees and
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disbursements of counsel for the underwriters, if any, in connection with
blue sky qualifications of any Registrable Common Shares), (iii) all
printing, messenger and delivery expenses, (iv) the reasonable fees and
disbursements of counsel for Hiway and of Hiway's independent public
accountants, including the expenses of any special audits and/or "cold
comfort" letters required by or incident to such registration (but not the
expenses of counsel and accountants, if any, retained by the Stockholders),
and (v) any fees and disbursements of underwriters customarily paid by
issuers or sellers of securities and the reasonable fees and expenses of
any special experts retained in connection with the registration, but
excluding underwriting discounts and commissions and transfer taxes, if
any.
Section 5.02 Registration.
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(a) Incidental Registration. If Hiway at any time proposes to register any
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of its securities under the 1993 Act (other than on Form S-8 or Form S-4 or any
successor or similar forms), whether or not for sale for its own account, it
will each such time promptly given written notice to all Stockholders who hold
of record any Registrable Common Shares of its intention to do so. Upon the
written request of any such Stockholder made within 15 days after the receipt of
such notice (which request shall specify the Registrable Common Shares intended
to be disposed of by such Stockholder and the intended method of distribution
thereof) Hiway will use its best efforts to effect the registration under the
1933 Act of all Registrable Common Shares that Hiway has been so requested to
register by the Stockholders thereof to the extent requisite to permit the
disposition of the Registrable Common Shares so to be registered in accordance
with the intended methods of distribution thereof specified in such requests;
provided, that (i) if, at any time after giving written notice of its intention
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to register any securities and prior to the effective date of the registration
statement filed in connection with such registration, Hiway shall determine for
any reason not to register such securities, Hiway may, at its election, be
relieved of its obligation to register any Registrable Common Shares in
connection with such registration, and (ii) in case of a determination by Hiway
to delay registration of its equity securities, Hiway shall be permitted to
delay the registration of such Registrable Common Shares for the same period as
the delay in registering such other equity securities.
(b) Shelf Registration. At any time after the first anniversary of the
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date of effectiveness of the registration of Common Stock under the Exchange
Act, upon the written request of one or more Stockholders, requesting that the
Company effect the registration under the Securities Act of all or part of such
Stockholders' Registrable Common Shares and specifying the intended method of
disposition thereof, the Company will promptly give written notice of such
requested registration to all registered holders of Registrable Common Share,
and thereupon the Company will use its best efforts to effect the registration
under the Securities Act of the Registrable Common Shares which the Company has
been requested to register by Stockholders; provided that the Company shall not
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be required to effect more than one registration pursuant to this Section
5.02(b) and shall not be required to effect a registration pursuant to this
Section 5.02(b) other than in accordance with Rule 415 on Form S-3 (or any
successor form).
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(c) Expenses. Hiway shall pay all Registration Expenses in connection
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with the registrations of Registrable Common Shares requested pursuant to this
Section 5.02; provided that each Stockholder shall pay all underwriting
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discounts and commissions and transfer taxes, if any, relating to, and fees and
expenses of such Stockholder's counsel and accountants in connection with, the
sale or disposition of such Stockholder's Registrable Common Shares pursuant to
a registration statement effected pursuant to this Section 5.02.
(d) Priority in Incidental Registrations. If the managing underwriter for
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a registration pursuant to this Section 5.02 that involves an underwritten
offering shall advise Hiway in writing that, in its opinion, the inclusion in
such registration of the securities proposed to be included in such registration
by Hiway for its own account, plus the number of Registrable Common Shares
----
requested to be included in such registration by the Stockholders, plus the
----
securities requested to be included by securityholders (other than the
Stockholders) would materially adversely effect the ability of Hiway with
respect to securities to be disposed of for its own account to dispose of their
securities in an orderly manner in such offering within a price range acceptable
to Hiway. Hiway shall include (i) first, all the securities which Hiway proposes
to register for its own account or which are proposed to be registered pursuant
to demand registration rights, (ii) second, to the extent that their inclusion
would not have a material adverse effect in the manner described above, the
number of Registrable Common Shares and other equity securities and the
principal amount of debt securities requested to be included by the Stockholders
and other securityholders allocated pro rata among all requesting Stockholders
and such other securityholders on the basis of the relative number of
Registrable Common Shares and equity securities and the principal amount of such
debt securities requested to be included in such registration.
Section 5.03 Registration Procedures. If and whenever Hiway is required
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to use its best efforts to effect or cause the registration of any Registrable
Common Shares under the 1933 Act under this Agreement, Hiway will, as soon as
practicable:
(a) promptly prepare and file with the Commission the requisite
registration statement with respect to such Registrable Common Shares and use
its best efforts to cause such registration statement to become and remain
effective, furnish to Stockholders of the Registrable Common Shares covered by
such registration statement and the underwriters, if, any, copies of all such
documents filed; provided that Hiway may discontinue any registration of its
--------
securities which is being effected pursuant to Section 5.02 hereof at any time
prior to the effective date of the registration statement relating thereto;
(b) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for such
period (which in the case of an incidental registration under Section 5.02(b)
hereof shall not exceed 120 days) as any seller of such Registrable Common
Shares shall request and to comply with the provisions of the 1933 Act
12
with respect to the sale or other disposition of all securities covered by such
registration statement during such period;
(c) furnish without charge to each seller of such Registrable Common
Shares and each underwriter, if any, of the securities being sold by such seller
such number of copies of such registration statement and of each amendment and
supplement thereto (in each case including all exhibits), such number of copies
of the prospectus included in such registration statement (including each
preliminary prospectus and summary prospectus), in conformity with the
requirements of the 1933 Act, and such other documents as such seller and
underwriter may request in order to facilitate the public sale of the
Registrable Common Shares owned by such Seller;
(d) use its best efforts to register or qualify such Registrable Common
Shares covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as any seller of the securities being sold
by such seller and each underwriter, if any, shall reasonably request, and do
any and all other acts and things which may be necessary or advisable to enable
such seller and each underwriter, if any, to consummate the disposition in such
jurisdictions of such Registrable Common Shares owned by such seller; provided,
--------
that Hiway shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would not but
for the requirements for this clause (d) be obligated to be qualified, to
subject itself to taxation in any such jurisdiction, to consent itself to
taxation in any such jurisdiction or to consent to general service of process in
any such jurisdiction;
(e) notify each seller of any such Registrable Common Shares covered by
such registration statement, at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act, of Hiway becoming aware that the
prospectus, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and at the request of any such seller
promptly prepare and furnish to such seller a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such Registrable Common Shares, such prospectus shall not include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(f) otherwise comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months, but no more than eighteen months, beginning with the first day of
Hiway's first calendar quarter after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the 1933 Act and Rule 158 thereunder;
13
(g) make available for inspection by any seller of such Registrable Common
Shares covered by such registration statement and by any attorney, accountant or
other agent retained by any such seller all pertinent financial and other
records, pertinent corporate documents and properties of Hiway and its
subsidiaries, and cause all of Hiway's officers, directors and employees to
supply all information reasonably requested by any such seller, attorney,
accountant or agent in connection with such registration statement;
(h) notify the selling Stockholders and the managing underwriter, if any,
promptly, and (if requested by any such person) confirm such advice in writing
(1) of the filing of a prospectus or any prospectus supplement or post-effective
amendment, and, with respect to a registration statement or amendment thereto of
the effectiveness thereof, (2) of any request by the Commission for amendments
or supplements to a registration statement or related prospectus or for
additional information, (3) of the issuance by the Commission of any stop order
suspending the effectiveness of a registration statement or the initiation of
any proceeding for that purpose, (4) of the receipt by Hiway of any notification
with respect to the suspension of the qualification of any of the Registrable
Common Shares for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose and (5) of the happening of any event that makes
any statement made in the registration statement, the prospectus or any document
incorporated therein by reference untrue or which that the making of any changes
in the registration statement or prospectus so that they will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading;
(i) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a registration statement at the earliest
possible moment;
(j) if reasonably requested by any Stockholder or the managing
underwriter, immediately incorporate in a prospectus supplement or amendment
such information as the managing underwriter or such Stockholder reasonbly
request to be included therein in order to comply with applicable law relating
to such sale of Registrabl e Common Shares, including without limitation,
information with respect to the amount of Registrable Common Shares being sold
to underwriters, the purchase price being paid therefor by underwriters and with
respect to any other terms of the underwritten (or best efforts underwritten)
offering of the Registrable Common Shares to be sold in such offering; and make
all required filings of such prospectus supplement or amendment as soon as
notified of the matters to be incorporated in such prospectus supplement or
amendment;
(k) use its best efforts to cause all Registrable Common Shares covered by
the registration statements to be listed on each securities exchange, if any, on
which similar securities issued by Hiway are then listed; and
(l) provide a CUSIP number for all Registrable Common Shares, not later
than the effective date of the applicable registration statement.
14
Hiway may require each seller of Registrable Common Shares as to which any
registration is being effected to furnish Hiway such information regarding such
seller and the distribution of such securities as Hiway may from time to time
reasonably request.
In the event Hiway shall give any notice pursuant to subsection (e) of this
Section 5.03, the period set forth in subsection (b) of this Section 5.03 shall
be extended by the number of days during the period from and including the date
of the giving of such notice pursuant to subsection (e) of this Section 5.03 to
and including the date when each seller of Registrable common shares covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by subsection (e) of this 5.03.
Section 5.04 Indemnification
---------------
(a) Indemnification by Hiway. In the event of any registration of any
------------------------
securities of Hiway under the 1933 Act pursuant to Section 5.02 hereof, Hiway
will indemnify and hold harmless, to the extent permitted by law, the seller of
any Registrable Common Shares covered by such registration statement and its
directors and officers, each other person, if any, who participates as an
underwriter in the offering or sale of such securities and each other person, if
any, who controls such seller or any such underwriter within the meaning of the
1933 Act, against any and all losses, claims, damages or liabilities, joint or
several, and expenses (including any amounts paid in any settlement effected
with Hiway's consent) to which such seller, any such director or officer or any
such underwriter or controlling person may become subject under the 1933 Act,
the Exchange Act, common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof arise out
of or are based upon (a) any untrue statement or alleged untrue statement of a
material fact contained in any registration statement under which such
securities were registered under the 1933 Act or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (b) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, together with the documents incorporated by reference
therein (as amended or supplemented if Hiway shall have filed with the
Commission any amendment thereof or supplement thereto), if used prior to the
effective date of such registration statement, or contained in the prospectus,
together with the documents incorporated by reference therein (as amended or
supplemented if Hiway shall have filed with the Commission any amendment thereof
or supplement thereto), or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or (c) any violation by Hiway of any federal, state or
common law rule or regulation applicable to Hiway and relating to action
required of or inaction by Hiway in connection with any such registration, and
Hiway will reimburse such seller and each such director, officer, underwriter
and controlling person for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, that Hiway shall not be liable
--------
to any such seller or any such director, officer underwriter or controlling
person in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof or expense
15
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement or amendment
thereof or supplement thereto or in any such preliminary or final prospectus in
reliance upon and in conformity with information furnished in writing to Hiway
by or on behalf of such seller or any director or officer of such seller,
underwriter or controlling person of such seller, for use specifically in the
preparation thereof; and provided further, that Hiway will not be liable to any
-------- -------
person who participates as an underwriter in the offering or sale of Registrable
Common Shares or any other person, if any, who controls such underwriter within
the meaning of the 1933 Act, under the indemnity agreement in this Section
5.04(a) with respect to any preliminary prospectus or the final prospectus or
the final prospectus as amended or supplemented as the case may be, to the
extent that any such loss, claim, damage or liability of such underwriter or
controlling Person results from the fact that such underwriter sold Registrable
Common Shares to a person to whom there was not sent or given at or prior to the
written confirmation of such sale, a copy of the final prospectus as then
amended or supplemented, whichever is most recent, if Hiway has previously
furnished copies thereof to such underwriter and such final prospectus, as then
amended or supplemented, has corrected such misstatement or omission. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such seller or any director, officer, underwriter or
controlling person and shall survive the transfer of such securities by such
seller.
(b) Indemnification by the Stockholders. Hiway may require, as a condition
-----------------------------------
to including any Registrable Common Shares in any registration statement filed
in accordance with Section 5.02 hereof, that Hiway shall have received an
undertaking reasonably satisfactory to it from the prospective seller of such
Registrable Common Shares and any underwriter to indemnify and hold harmless (in
the same manner and to the same extent as set forth in subsection (a) of this
Section 5.04) Hiway and its directors and officers and each person controlling
Hiway within the meaning of the 1933 Act and all other prospective sellers of
securities of Hiway and their directors, officers and respective controlling
persons with respect to (i) any statement or alleged statement in or omission or
alleged omission from such registration statement, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to Hiway or
its representatives by or on behalf of such seller or any underwriter
specifically for use in the preparation of such registration statement,
preliminary, final or summary prospectus or amendment or supplement, or a
document incorporated by reference into any of the foregoing and (ii) the sale
by the prospective seller of such Registrable Common Shares to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the final prospectus as then amended or supplemented, whichever
is most recent, if Hiway has previously furnished copies thereof to such seller
and such final prospectus, as amended or supplemented, has corrected any
misstatement or omission. Such indemnity shall in full force and effect
regardless of any investigation made by or on behalf of Hiway or any of the
prospective sellers or any of their respective directors, officers or
controlling persons and shall survive the transfer of such securities of such
seller.
16
(c) Notices of Claims, Etc. As soon as possible after the receipt by an
----------------------
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 5.04, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give notice to the
latter of the commencement of such action; provided, that the failure of any
--------
indemnified party to give such notice shall not relieve the indemnifying party
of its obligations under this Section 5.04, except to the extent that the
indemnifying party is actually prejudiced by such failure. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and jointly with any other similarly notified indemnifying
party to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party; provided, that the indemnifying party shall not be entitled
--------
to so participate or so assume the defense if, in the indemnified party's
reasonable judgment, a conflict of interest between the indemnified party and
the indemnifying party exists with respect to such claim. After notice from the
indemnifying party to such indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 5.04 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof; provided, that the Stockholders and their respective officers,
--------
directors and controlling persons or Hiway and its officers, directors and
controlling persons, as the case may be, shall have the right to employ one
counsel to represent such indemnified parties if, in such indemnified parties'
reasonable judgment, a conflict of interest between the indemnified parties and
the indemnifying parties exists in respect to such claim, and in that event the
reasonable fees and expenses of such separate counsel shall be paid by the
indemnifying party. In the event that the indemnifying party fails to elect to
assume the defense of such claim or action, the Stockholders and their
respective officers, directors and controlling persons or Hiway and its
officers, directors and controlling person, as the case may be, shall have the
right to employ one counsel (together with appropriate local counsel) to
represent such indemnified parties and, in that event, the reasonable fees and
expenses of such separate counsel shall be paid by the indemnifying party. No
indemnifying party will consent to entry of any judgment or enter into any
settlement that does not include as term thereof the giving by the claimant or
plaintiff to such indemnified party of an unconditional release from all
liability in respect of such claim or litigation.
(d) Other Indemnification. Indemnification similar to that specified in
----------------------
the preceding subsections of this Section 5.04 (with appropriate modifications)
shall be given by Hiway and each Stockholder with respect to any required
registration or other qualifications of securities under any state securities or
blue sky laws.
Section 5.05 Contribution. If the indemnification provided for in
------------
Section 5.04 hereof is unavailable or insufficient to hold harmless a party
indemnified under Section 5.04(a) or 5.04(b) hereof, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in Section
5.04(a) or 5.04(b) hereof in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other in connection
17
with statements or omissions or actions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable considerations.
The relative fault shall be determined by reference, among other things, to
whether any untrue or alleged untrue statement of a material fact or the
omission or alleged omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties
hereto agree that it would not be just and equitable if contributions pursuant
to this Section 5.05 were to be determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in the first two sentences of this Section 5.05. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first two sentences of this Section 5.05 shall
be deemed to include legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim (which shall be limited as provided in Section 5.04(c) hereof if the
indemnifying party has assumed the defense of any such action in accordance with
the provisions thereof that is the subject to this Section 5.05. No person
guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of
the 0000 Xxx) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Promptly after receipt by an
indemnified party under this Section 5.05 of notice of the commencement of any
action against such party in respect of which a claim for contribution may be
made against an indemnifying party under this Section 5.05, such indemnified
party shall notify the indemnifying party in writing of the commencement thereof
if the notice specified in Section 5.04(c) hereof has not been given with
respect to such action; provided, that the omission so to notify the
--------
indemnifying party shall not relieve the indemnifying party otherwise under this
Section 5.05, except to the extent that the indemnifying party is actually
prejudiced by such failure. Notwithstanding anything in this Section 5.05 to the
contrary, no indemnifying party (other than Hiway) shall be required pursuant to
this Section 5.05 to contribute any amount in excess of the proceeds received by
such indemnifying party from the sale of Registrable Common Shares in the
offering to which the losses, claims, damages or liabilities of the indemnified
parties relate.
Section 5.06 Miscellaneous.
-------------
(a) Amendments and Waivers. This Article V may be amended, and Hiway may
----------------------
take any action herein prohibited or omit to perform any act herein required to
be performed by it, if Hiway shall have obtained the written consent to such
amendment, action or omission to act of Stockholders holding at least a majority
of the then outstanding Registrable Common Shares. Stockholders shall be bound
from and after the date of any such consent, whether or not the certificates
representing such Registrable Common Shares shall have been marked to indicate
such consent or whether notice of such consent was given to all stockholders.
(b) Successors, Assigns and Transferees. This Article V shall be binding
-----------------------------------
upon and shall inure to the benefit of the parties hereto and their respective
successors, assigns and transferees.
18
(c) Recapitalization, Exchanges, Etc. Affecting Registrable Common Shares.
---------------------------------------------------------------------
The provisions of this Article V shall apply to the full extent set forth herein
with respect to the Registrable Common Shares and to any and all shares of
capital stock of Hiway or any successor or assign of Hiway (whether by merger,
consolidation, sale of assets or otherwise) that may be issued in respect of, in
exchange for, or in substitution of the Registrable Common Shares, by reason of
any stock dividend, stock split, reverse stock split, combination,
recapitalization, reclassification, merger or consolidation.
ARTICLE VI
Miscellaneous
-------------
Section 6.01. Taxes and Charges. The Company will from time to time
-----------------
promptly pay all taxes and charges that may be imposed upon the Company in
respect of the issuance or delivery of shares of Common Stock upon the exercise
of this Warrant, but the Company shall not be obligated to pay any transfer
taxes in respect of this Warrant or such shares.
Section 6.02. Assigns. All the covenants and provisions of this Warrant
-------
by or for the benefit of the Company or the holder of this Warrant shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 6.03. Notices. All notices, consents and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given, when
delivered personally or three days after having been sent by certified mail
return receipt requested, postage prepaid, or upon transmission by telex,
telecopy, facsimile or similar electronic medium to the parties at the addresses
set forth in the Investment Agreement (or at such other address for a party as
shall be specified by like notice).
Section 6.04. Governing Law. The validity, interpretation and performance
-------------
of this Warrant shall be governed by the laws of the State of Florida.
Section 6.05. Third Parties. Nothing in this Warrant expressed and nothing
-------------
that may be implied from any of the provisions hereof is intended, or shall be
construed, to confer upon, or give to, any person or corporation other than the
parties hereto and the holders of this Warrant any right, remedy or claim
hereunder or by reason of any covenant, condition, stipulation, promise or
agreement hereof, and all covenants, conditions, stipulations, promises and
agreements in this Warrant shall be for the sole and exclusive benefit of the
parties hereto and their successors and of the holders of this Warrant.
Section 6.06. Warrantholders. The Company may deem and treat the person in
-------------
whose name this Warrant is registered as the absolute owner for all purposes
whatever (notwithstanding any notation of ownership or other writing thereon
made by anyone other than the Company) and the Company shall not be affected by
any notice to the contrary. The terms
19
"Warrantholder" and holder of this Warrant and all other similar terms used
herein shall mean such person in whose name this Warrant is registered on the
books of the Company.
Section 6.07. Headings. The Article and Section headings herein are for
--------
convenience only and are not a part of this Warrant and shall not affect the
interpretation thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its President and attested by its Secretary.
Dated:___________, 199__
HIWAY TECHNOLOGIES, INC.
By [SIGNATURE ILLEGIBLE]^^
-----------------------
President
Attest:
[SIGNATURE ILLEGIBLE]^^
-----------------------
Secretary
20
ELECTION TO EXERCISE
TO HIWAY TECHNOLOGIES, INC.:
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by this Warrant for, and to purchase thereunder, _______shares of
Common Stock, as provided for therein, and tenders herewith payment of the
purchase price in full in the form of [cash or a bank check in the amount of
$_____.][$_______ principal amount of the Note and cash or a bank check in the
amount of $______] (delete one).
Please issue a certificate or certificates for such shares of Common Stock
in the name of, and pay any cash for any fractional shares to:
Name___________________INSERT SOCIAL
SECURITY OR (Please Print Name and Address)
OTHER IDENTIFYING NUMBER
_________________ Signature ___________________
_________________ Address _______________________
NOTE: The above signature should
correspond exactly with the name on
the face of this Warrant or with
the name of assignee appearing in
the assignment form below.
ASSIGNMENT
For value received, _________________________hereby sells, assigns and
transfers unto ________________________ the within Warrant, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint ______________________ attorney, to transfer said Warrant on the books
of the within-named Company, with full power of substitution in the premises.
Dated: ____________, ____
_________________________
NOTE: The above signature should correspond
exactly with the name on the face of
this Warrant.
