New Net2Phone cable telephony MSO .. Atlantic Broadband
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Cable industry veterans David Keefe and Edward Holleran founded Atlantic Broadband with ABRY Partners in March 2003. Supported by a management team with significant broadband cable experience, the company completed its $765 million purchase of cable operations from Charter Communications in March 2004 and is now ranked as a top 20 cable operator in the United States.
Atlantic Broadband is a privately held company with headquarters in Quincy, Massachusetts. The company has over 500 employees and 250,000 customers located in three operating regions: Western Pennsylvania, Miami Beach and Maryland/Delaware.
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Form 8-K for NET2PHONE INC
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17-Mar-2005
Sale of Equity
Item 3.02. Unregistered Sales of Equity Securities.
Warrant Program.
As previously disclosed, Net2Phone, Inc. ("Net2Phone") has established a warrant incentive program, allowing selected cable operators to earn warrants to purchase shares of Net2Phone common stock. The Board of Directors has reserved up to five million shares for issuance under this plan. Including the warrant granted to Atlantic Broadband Finance LLC ("Atlantic Broadband") described below, Net2Phone has issued warrants to purchase an aggregate of 4,372,486 shares of common stock pursuant to this program. The execution of definitive agreements with cable operators that met specific criteria triggered these warrant grants, which become exercisable as the cable operator reaches specified telephony subscriber levels.
Execution of Definitive Agreement.
In connection with, and in consideration for, the execution of a cable telephony and license agreement on March 11, 2005, Net2Phone issued a warrant to Atlantic Broadband on March 11, 2005 for the purchase of 1,083,438 shares of Net2Phone's common stock. The terms of this warrant provide that at any time prior to December 31, 2011, Atlantic Broadband or its transferees may elect to receive up to 1,083,438 shares (subject to certain customary adjustments) of Net2Phone's common stock, at a purchase price per share equal to $3.80 (subject to certain customary adjustments). Only vested warrant shares can be exercised, and vesting is based on the number of customers subscribing to Net2Phone's telephony service in Atlantic Broadband's footprint. The shares subject to the warrant vest as follows: beginning on the last day of the calendar quarter ending 12 months from the commercial launch date of the cable telephony services (expected late 2005), ten shares vest for each subscriber to Net2Phone's cable telephony service pursuant to the cable telephony and license agreement, and from and after such date until December 9, 2009, the warrant vests quarterly at a rate of ten shares per incremental net subscriber in existence on the last day of each calendar quarter.
Net2Phone has agreed to file a registration statement on Form S-3 with the Securities and Exchange Commission to register the shares of common stock issued upon exercise of the Atlantic Broadband warrant for resale. Net2Phone did not grant Atlantic Broadband demand or piggyback registration rights.
The issuance of the warrant was exempt from the registration requirements of the Securities Act of 1933, as amended (the Act), pursuant to Section 4(2) of the Act for transactions not involving a public offering and based on the fact that the warrant was issued to an accredited investor who had access to Net2Phone's financial and other relevant information. The issuance of the warrant did not involve the use of an underwriter and no commissions were paid in connection with the issuance of the warrant. |
