Exhibit 10.67

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
EXEMPTION FROM REGISTRATION UNDER THE FOREGOING LAWS.  ACCORDINGLY, THIS WARRANT
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT (i) AN OPINION OF
COUNSEL SATISFACTORY TO ZAMBA CORPORATION THAT SUCH SALE, TRANSFER OR OTHER
DISPOSITION MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR (ii) SUCH REGISTRATION.

 

ZAMBA CORPORATION

 

WARRANT
TO PURCHASE
SHARES OF SERIES A PREFERRED STOCK
OF NEXTNET WIRELESS, INC.

 

Date:       February 17, 2003

Minneapolis, Minnesota

 

FOR VALUE RECEIVED, Morgan Street Partners, LLC, or its successors or assigns
(“Holder”), is entitled to purchase from Zamba Corporation, a Delaware
corporation (the “Company”), up to125,000 fully paid and nonassessable shares of
NextNet Wireless Series A Preferred Stock held by the Company or such greater or
lesser number of such shares as may be determined by application of the
anti-dilution provisions of this Warrant, at the price of $6.00 per share,
subject to adjustments as noted below (the “Warrant Exercise Price”).  This
Warrant is issued in conjunction with Stock Purchase Agreements (the “Stock
Purchase Agreements”) executed on or around the date of this Warrant by
individuals who are not affiliates of Holder.

 

This Warrant may be exercised by Holder at any time or from time to time prior
to the close of business on May 17, 2004.

 

RECITALS:

 

A.            The Company owns shares of Series A Preferred Stock, $.0001 par
value per share (“Zamba’s NextNet Stock”), of NextNet Wireless, Inc., a Delaware
corporation (“NextNet”), pursuant to the Series A Preferred Stock Purchase
Agreement dated as of September 21, 1998 between Zamba and NextNet (the “Zamba
Purchase Agreement”); and Zamba’s NextNet Stock can be converted into common
shares of NextNet at the exchange ratio of three shares of NextNet common stock
for every one share of Zamba’s NextNet Stock.

 

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B.            Zamba’s NextNet Stock is also subject to the Second Amended and
Restated Investors’ Rights Agreement dated as of November 14, 2002 among the
Company, NextNet and the investors and founders identified therein (the
“Investors’ Rights Agreement”), the Right of First Refusal Agreement dated as of
September 21, 1998 among the Company, NextNet and the Series B purchasers
identified therein (the “Right of First Refusal Agreement”), and the Second
Amended and Restated Voting Agreement dated as of November 14, 2002, among
NextNet, the Company and certain other investors (the “Voting Agreement”).

 

This Warrant is subject to the following terms and conditions:

 

1.             Exercise.  The rights represented by this Warrant may be
exercised by the Holder, in whole or in part, by written election, in the form
set forth below, by the surrender of this Warrant (properly endorsed if
required) at the principal office of the Company, by payment to it by cash,
certified check or bank draft of the Warrant Exercise Price for the shares to be
purchased and by delivery of a subscription agreement, an investment letter
and/or similar documents acceptable to the Company demonstrating that the sale
of the shares to be purchased is exempt from registration under the Securities
Act of 1933, as amended, and any state securities law.  The shares so purchased
shall be deemed to be issued as of the close of business on the date on which
this Warrant has been exercised by payment to the Company of the Warrant
exercise price; provided, however, that this Warrant shall be exercisable only
for whole shares, and cash will be paid to Holder in lieu of any fractional
shares.  Certificates for the shares of stock so purchased, bearing an
appropriate restrictive legend, shall be delivered to the Holder promptly after
the rights represented by this Warrant shall have been so exercised, subject to
any remaining requirements or time necessary to clear the right of first refusal
set forth in Section 2(b), and, unless this warrant has expired, a new Warrant
representing the number of shares, if any, with respect to which this Warrant
has not been exercised shall also be delivered to the Holder hereof within such
time.  No fractional shares shall be issued upon the exercise of this Warrant.

 

2.             Shares.

 

(a)           All shares that may be issued upon the exercise of the rights
represented by this Warrant shall, upon issuance, be duly authorized and issued,
fully paid and nonassessable shares and free and clear of all liens, security
interests, charges and other encumbrances, other than restrictions on transfer
that are contained in the Zamba Purchase Agreement, the Right of First Refusal
Agreement, the Investors Rights Agreement, the Voting Agreement, all of which as
they may be amended from time to time, or are otherwise set forth herein or
imposed by applicable securities laws.  During the period within which the
rights represented by this Warrant may be exercised, the Company shall at all
times have authorized and reserved for the purpose of issue or transfer upon
exercise of the subscription rights evidenced by this Warrant a sufficient
number of shares of Zamba’s NextNet Stock to provide for the exercise of the
rights represented by this Warrant.

 

(b)           Promptly upon receipt of the purchase price under the Stock
Purchase Agreements, the Company shall deliver to NextNet a notice regarding the
shares covered by the Stock Purchase Agreements and this Warrant pursuant to the
Right of First Offer set forth in the

 

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Right of First Refusal Agreement.  If NextNet elects to exercise its right of
first refusal for the shares covered by the Stock Purchase Agreements, the
shares and rights covered by this Warrant shall be assigned to NextNet, and the
Holder shall not receive any shares of Zamba’s NextNet Stock pursuant to the
Stock Purchase Agreements or this Warrant.  If NextNet declines to exercise its
right of first refusal, the Company shall, within five business days after the
Company’s receipt of NextNet’s notice to decline its right, notify each investor
in NextNet eligible under the Right of First Refusal Agreement of its
opportunity to exercise its pro rata right of first refusal pursuant to the
Right of First Refusal Agreement.  If any of the eligible investors in NextNet
elects to exercise its pro rata right of first refusal, a pro rata portion of
the shares covered by this Warrant will be assigned to the respective
investor(s), and the number of shares of Zamba’s NextNet Stock that the Holder
will be eligible to acquire pursuant to this Warrant shall be reduced on a
share-for-share basis basis.

 

3.             Adjustment.  The Warrant Exercise Price shall be subject to
adjustment from time to time as hereinafter provided in this Section 3:

 

(a)           If prior to the delivery of the shares of Zamba’s NextNet Stock
the Company shall at any time consolidate with or merge into to another
corporation (where the Company is not the continuing corporation after such
merger, consolidation, sale of all or substantially all of its assets or other
change-in-control), or the Company shall sell, transfer or lease all or
substantially all of its assets, then, in any such case, the Holder thereupon
(and thereafter) shall continue to be entitled to be bound by the terms of this
Agreement and shall be entitled to receive the number of shares of Zamba’s
NextNet Stock set forth in the first paragraph of this Warrant.

 

(b)           If prior to the delivery of the shares of Zamba’s NextNet Stock
NextNet shall at any time consolidate with or merge into another corporation
(where NextNet is not the continuing corporation after such merger,
consolidation or other change-in-control), or NextNet shall sell, transfer or
lease all or substantially all of its assets, then, in any such case, the Holder
thereupon (and thereafter) shall be entitled to receive the number of shares of
Zamba’s NextNet Stock (or the proceeds resulting from the sale of such shares in
connection with such merger, consolidation, or other change-in-control) set
forth in the first paragraph of this Warrant.

 

4.             Representations and Warranties of the Holder.  As a material
inducement for the Company’s entrance into this Warrant, the Holder represents,
warrants, covenants and acknowledges to the Company that:

 

(a)           The Holder understands that the acquisition of the shares of
Zamba’s NextNet Stock pursuant to the terms hereof has not been registered under
the Securities Act of 1933, as amended (the “Securities Act”), or applicable
state securities laws.  Instead, Holder will acquire the Shares pursuant to
exemptions from such laws and in doing so is relying on, among other things, the
Holder’s representations, warranties, covenants and acknowledgements contained
herein.

 

(b)           The Holder is an “accredited investor” as such term is defined in
Rule 501(a) of Regulation D under the Securities Act, and as further represented
in Section 5 of this Agreement.

 

(c)           The Holder has sufficient knowledge and experience in financial
and business matters that the Holder is capable of evaluating the merits and
risks of investing in the shares of

 

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Zamba’s NextNet Stock, and the Holder is thoroughly familiar with NextNet’s
business, financial condition and prospects.

 

(d)           The Holder has been provided with or given access to such
information concerning NextNet, including, but not limited to, its business,
financial condition and prospects (collectively, “NextNet’s Business”), as the
Holder has requested and/or deems necessary and has utilized such information to
the Holder’s satisfaction for the purpose of making an investment in the shares
of Zamba’s NextNet Stock pursuant to the terms hereof.  The Holder hereby
acknowledges that it has made its own independent investigation of NextNet’s
Business and that it is not relying on any information which may been provided
by the Company, including, but not limited to, the Company’s officers,
directors, employees, agents and other representatives (collectively, the
“Company Representatives”), in connection with its acquisition of this Warrant
and of the shares of Zamba’s NextNet Stock.  The Holder hereby agrees to
indemnify and hold harmless each Company Representative in connection with any
loss, claim or demand which the Holder now has or in the future may have in
connection with its acquisition of the shares of Zamba’s NextNet Stock pursuant
to the terms hereof.

 

(e)           The Holder understands that the acquisition of the shares of
Zamba’s NextNet Stock is a highly speculative investment and involves a high
degree of risk.  The Holder acknowledges that it may not ever be able to resell
the shares of Zamba’s NextNet Stock purchased pursuant to the terms hereof,
whether at the price paid by the Holder or otherwise.  The Holder believes that
the investment in the shares of Zamba’s NextNet Stock is suitable based upon the
Holder’s investment objectives and financial needs and the Holder has adequate
means of providing for current financial needs and personal contingencies, has
no need for liquidity of investment with respect to the shares of Zamba’s
NextNet Stock and can afford a complete loss of such investment.

 

(f)            The Holder is acquiring the shares of Zamba’s NextNet Stock for
its own account, for investment purposes only, and without the intention of
reselling or redistributing the same.

 

(g)           The Holder is aware that, in the view of the Securities and
Exchange Commission, a purchase of the shares of Zamba’s NextNet Stock with an
intent to resell by reason of any foreseeable specific contingency or
anticipated change in market values, or any change in NextNet’s condition, or in
connection with a contemplated liquidation or settlement of any loan obtained
for the acquisition of the shares of Zamba’s NextNet Stock and for which such
shares were pledged, would constitute an intent inconsistent with the foregoing
representation.

 

(h)           If, contrary to the Holder’s foregoing intentions, it should later
desire to dispose of or transfer any of the shares of Zamba’s NextNet Stock in
any manner, the undersigned shall not do so without (i) first obtaining an
opinion of counsel satisfactory to NextNet that such proposed disposition or
transfer may lawfully be made without registration pursuant to the Securities
Act and applicable state securities laws or (ii) registering the resale of such
shares under the Securities Act and applicable state securities laws.

 

(i)            Neither the Company nor NextNet has any obligation to register
the shares of Zamba’s NextNet Stock for resale under the Securities Act or any
applicable state securities

 

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laws, or to take any other action which would facilitate the availability of
federal or state registration exemptions in connection with any resale of such
shares.  Accordingly, the Holder may be prohibited by law from selling or
otherwise transferring or disposing of the Shares and likely will may have to
bear the economic risk of its investment in NextNet for an indefinite period.

 

(j)            The Holder, if other than an individual, represents that (a) the
Holder was not organized for the specific purpose of acquiring the shares of
Zamba’s NextNet Stock; and (b) this Agreement has been duly authorized by all
necessary action on the part of the Holder, has been duly executed by an
authorized officer or representative of the Holder, and is a legal, valid, and
binding obligation of the Holder enforceable in accordance with its terms.

 

(k)           There is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Holder who might be entitled to any fee or commission from the Company or
NextNet upon consummation of the transactions contemplated by this Agreement.

 

(l)            Holder agrees to be bound by the transfer restrictions described
in Section 3.6 of the Zamba Purchase Agreement.

 

(m)          Holder acknowledges that the provisions of the Right of First
Refusal Agreement shall continue to apply to the shares of Zamba’s NextNet Stock
acquired by Holder.

 

(n)           Holder acknowledges that he or she has already received a copy of
the Investors’ Rights Agreement.  Holder understands that, pursuant to the terms
of the Investors’ Rights Agreement, the registration rights described in Section
1 and the right of first offer described in Section 2.6 thereof have not been
assigned to the Holder by the Company.  Accordingly, the Holder is not entitled
to any registration rights or rights of first offer with respect to the Holder’s
ownership of the shares of Zamba’s NextNet Stock purchased pursuant to the terms
hereof.

 

(o)           Holder acknowledges that the shares of Zamba’s NextNet Stock shall
continue to be subject to the terms and conditions of the Zamba Purchase
Agreement, the Investors’ Rights Agreement, and the Voting Agreement, except for
the provisions of those agreements that, by their nature, are not transferable
or assignable to Holder.

 

(p)           Until such time as Zamba beneficially holds fewer than 100,000
shares of NextNet Series A Preferred Stock, Holder shall vote or act with
respect to any and all of its shares of NextNet Series A Preferred Stock
acquired hereunder so as to elect the nominee of Zamba to be the representative
of the Series A shareholders on the NextNet Board of Directors.

 

(q)           Holder has informed the purchasers under the Stock Purchase
Agreements of the rights granted to Holder pursuant to this Warrant, including
the number of shares Holder is eligible to purchase, the exercise price of the
Warrant, and the term of the Warrant.

 

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5.             Accredited Investor Status.               The Holder is an
“accredited investor” as defined in Rule 501(a) of Regulation D of the
Securities Act, because the Holder meets at least one of the following criteria
(please check one):

 

o            The Holder is a natural person whose individual net worth, or joint
net worth with his or her spouse, exceeds $1,000,000 at the time of the Holder’s
purchase; or

 

o            The Holder is a natural person who had an individual income in
excess of $200,000 in each of the two most recent years or joint income with the
Holder’s spouse in excess of $300,000 in each of those years and who reasonably
expects to reach the same income level in the current year; or

 

o            The Holder is either (i) a bank as defined in Section 3(a)(2) of
the Securities Act, or any savings and loan association or other institution as
defined in Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity, any broker or dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, (ii) an insurance company as
defined in Section 2(13) of the Securities Act, (iii) an investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in Section 2(a)(48) of such Act, (iv) a Small Business
Investment Company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958, or (v) an
employee benefit plan within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act, which plan fiduciary is
either a bank, savings and loan association, insurance company or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self directed plan, with investment decisions made solely
by persons who are accredited investors; or

 

o            The Holder is a private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940; or

 

o            The Holder is an organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the shares of
Zamba’s NextNet Stock, with total assets in excess of $5,000,000; or

 

o            The Holder is a director or executive officer of NextNet; or

 

o            The Holder is a trust, with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the shares of Zamba’s NextNet
Stock, whose purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) of Regulation D of the Securities Act; or

 

o            The Holder is any entity in which all of the equity owners are
accredited investors.

 

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6.             No Rights as Shareholder.  This Warrant shall not entitle the
Holder to any voting rights or other rights as a stockholder of the Company or
NextNet.

 

7.             Transfer.  This Warrant and all rights hereunder shall not be
transferable, in whole or in part, by the holder hereof without the prior
written consent of the Company or NextNet, which consent shall not be
unreasonably withheld; provided, however, that any such proposed transfer must
be in compliance with applicable securities laws and in compliance with the
legend set forth above.  The bearer of this Warrant, when endorsed, may be
treated by NextNet and all other persons dealing with this Warrant as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights represented by this Warrant.

 

8.             Miscellaneous.

 

(a)           Binding Effect.  This Warrant shall be binding upon and inure to
the benefit of and be enforceable against the parties hereto and their
respective successors and permitted assigns.

 

(b)           Governing Law.  This Warrant shall in all respects be governed by,
and enforced and interpreted in accordance with, the laws of the State of
Minnesota, except with respect to its rules relating to conflicts of laws.

 

(c)           Legends.  The shares of Zamba’s NextNet Stock issued to the Holder
pursuant to this Warrant shall contain the following legends:

 

THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
EXEMPTION FROM REGISTRATION UNDER THE FOREGOING LAWS.  ACCORDINGLY, THESE SHARES
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF WITHOUT (i) AN OPINION OF
COUNSEL SATISFACTORY TO NEXTNET WIRELESS, INC. THAT SUCH SALE, TRANSFER OR OTHER
DISPOSITION MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR (ii) SUCH REGISTRATION.

 

THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT BY AND AMONG
NEXTNET WIRELESS, INC. AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF WHICH
MAY BE OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY INTEREST IN SUCH SHARES
THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME
BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT.

 

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THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN RIGHT OF
FIRST REFUSAL AGREEMENT BY AND BETWEEN THE STOCKHOLDER, NEXTNET WIRELESS, INC.
AND CERTAIN HOLDERS OF PREFERRED STOCK OF THE CORPORATION.  COPIES OF SUCH
AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION.

 

(d)           Notices.  All notices, consents, requests, demands, instructions
or other communications provided for herein shall be in writing and shall be
deemed validly given, made and served when (a) delivered personally, (b) sent by
certified or registered mail, postage prepaid, (c) sent by reputable overnight
delivery service, or (d) sent by telephonic facsimile transmission, and, pending
the designation of another address, addressed as follows:

 

If to the Company:

 

Zamba Corporation

 

 

3033 Excelsior Blvd., Suite 200

 

 

Minneapolis, Minnesota 55416

 

 

Attn:  Chief Financial Officer

 

 

Fax: (952) 893-3948

 

 

 

If to the Holder:

 

 

 

 

 

 

 

 

 

 

Fax:

 

(e)           Entire Agreement and Counterparts.  This Agreement evidences the
entire agreement between the Company and the Holder relating to the subject
matter hereof and supersedes in all respects any and all prior oral or written
agreements or understandings.  This Agreement may not be amended or modified,
and no provisions hereof may be waived, except by written instrument signed by
both the Company and the Holder.  This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one Agreement.

 

(f)            The Holder and the Company understand the meaning and legal
consequences of the agreements, representations and warranties contained
herein.  The Holder and the Company agree that such agreements, representations
and warranties shall survive and remain in full force and effect after the
execution hereof and payment for the shares of Zamba’s NextNet Stock to be
purchased pursuant to the terms hereof.

 

(g)           Any controversy or claim arising out of or relating to this
Warrant, the Holder’s acquisition of the shares of Zamba’s NextNet Stock or any
breach of this Agreement, shall be settled by arbitration administered by the
American Arbitration Association in accordance with its Securities Arbitration
Rules, and judgment on the award rendered by the Arbitrator(s) may be entered in
any court having jurisdiction thereof.

 

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(h)           Headings.  Section headings used in this Agreement have no legal
significance and are used solely for convenience of reference.

 

(i)            Expenses.  Each party shall pay for its own legal, accounting and
other similar expenses incurred in connection with the transaction contemplated
by this Agreement.

 

IN WITNESS WHEREOF, the Company and the Holder have executed this Warrant as of
the date set forth above.

 

 

ZAMBA CORPORATION

 

 

 

 

 

By:

/s/ Michael H. Carrel

 

 

Name: Michael H. Carrel

 

 

Title: CFO

 

MORGAN STREET PARTNERS, LLC

 

 

By: /s/ Ronald Eibensteiner

 

Name: Title: President

 

Address:

800 Nicollet Mall, Suite 2690

 

 

Minneapolis, MN 55402

 

 

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WARRANT EXERCISE

 

(To be signed only upon exercise of this warrant)

 

The undersigned, the Holder of the foregoing warrant, hereby irrevocably elects
to exercise the purchase right represented by such warrant for, and to purchase
thereunder,                 shares of common stock of Zamba Corporation, to
which such warrant relates and herewith makes payment of $                   
therefor in cash, certified check or bank draft and requests that the
certificates for such shares be issued in the name of, and be delivered to
               , whose address is set forth below the signature of the
undersigned.

 

Dated:

 

 

 

 

 

 

 

 

 

 

 

Signature

 

 

 

 

 

 

If shares are to be issued other than to Holder:

 

Social Security or other Tax Identification No.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please print present name and address

 

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WARRANT ASSIGNMENT

 

(To be signed only upon transfer of this warrant in accordance with Section 6)

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                     the right represented by the foregoing
warrant to purchase the shares of common stock of Zamba Corporation and appoints
                                          attorney to transfer such right on the
books of Zamba Corporation, with full power of substitution in the premises.

 

Dated:

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature

 

 

 

 

 

 

 

 

Social Security or other Tax Identification No.

 

 

 

 

 

 

 

Please print present name and complete address

 

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