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EXHIBIT 10.60
THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT TO PURCHASE COMMON STOCK
Corporation: FUTURELINK CORP, A DELAWARE CORPORATION .
Number of Shares: 13,140
Class of Stock: COMMON STOCK
Initial Exercise Price: 24 3/8
Issue Date: 12/16/99
Expiration Date: IMMEDIATELY AFTER THE EXPIRATION OF THE TERM OF
MASTER LEASE AGREEMENT NO. 12035 BY AND BETWEEN XXX
XXXXXXXXXXX AND FURTURELINK CORP. DATED AS OF
DECEMBER 21, 1999 (AS EXTENDED BY ANY AMENDMENTS
THERETO AND SUBJECT TO ARTICLE 4.1 HEREOF)
THIS WARRANT CERTIFIES THAT, in consideration of the payment of the
payment of $1.00 and for other good and valuable consideration. XXX XXXXXXXXXXX
or registered assignee ("Holder") is entitled to purchase the number of fully
paid and nonassessable shares (the "Shares") of the class of securities (the
"Underlying Securities") of the Company at the Initial Exercise Price per Share
(the "Warrant Price") all as set forth above and as adjusted pursuant to Article
2 of this Warrant, subject to the provisions and upon the terms and conditions
set forth in this Warrant.
1. EXERCISE
1.1 Method of Exercise. Holder may exercise this Warrant by delivering this
Warrant and a duly executed Notice of Exercise to the principal office of the
Company. Unless Holder is exercising the conversion right set forth in Section
1.2, Holder shall also deliver to the Company a check for the aggregate Warrant
Price for the Shares being purchased.
1.2 Conversion Right. In lieu of exercising this Warrant as specified in
Section 1.1, Holder may from time to time convert this Warrant, in whole or in
part, into a number of Shares determined by dividing (a) the aggregate fair
market value of the Shares or other securities otherwise issuable upon exercise
of this Warrant minus the aggregate Warrant Price of such Shares by (b) the fair
market value of one Share. The fair market value of the Shares shall be
determined pursuant to Section 1.3.
1.3 Fair Market Value. If the Underlying Securities are traded regularly in
a public market, the fair market value per Share shall be the closing price per
share of the Underlying
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Securities as reported on the principal public securities market on which the
Underlying Securities then trade for the business day immediately before Holder
delivers its Notice of Exercise to the Company. If such Underlying Securities
are not regularly traded on a public market, the Board of Directors of the
Company shall determine fair market value in its reasonable good faith judgment.
The foregoing notwithstanding, if Holder advises the Board of Directors in
writing that Holder disagrees with such determination, then the Company and
Holder shall promptly agree upon a reputable investment banking firm to
undertake such valuation.
1.4 Delivery of Certificate and New Warrant. Promptly after Holder
exercises or converts this Warrant, the Company shall deliver to Holder
certificates for the Shares acquired and, if this Warrant has not been fully
exercised or converted and has not expired, a new Warrant representing the
Shares not so acquired.
1.5 Replacement of Warrants. On receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of loss, theft or destruction, on delivery of a reasonable indemnity
or, in the case of mutilation, or surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.
1.6 Repurchase on Sale, Merger or Consolidation of the Company.
1.6.1 "Acquisition". For the purposes of this Warrant, "Acquisition"
means any (i) sale, (ii) license or other disposition of all or
substantially all of the assets (including intellectual property) of the
Company, or (iii) any reorganization, consolidation, or merger of the
Company where the holders of the Company's securities before the
transaction beneficially own less than 50% of the outstanding voting
securities of the surviving entity after the transaction.
1.6.2 Assumption of Warrant. Upon the closing of any Acquisition the
successor entity shall assume the obligations of this Warrant, and this
Warrant shall be exercisable for the same securities, cash, and property as
would be payable for the Shares issuable upon exercise of the unexercised
portion of this Warrant as if such Shares were outstanding on the record
date for the Acquisition and subsequent closing. The Company shall cause
the surviving corporation to assume the obligations of this Warrant.
2. ADJUSTMENTS TO THE SHARES
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a
dividend on Underlying Securities or on its common stock payable in common stock
or other securities, subdivides the outstanding Underlying Securities or its
common stock or makes any similar change in its capital stock, then upon
exercise of this Warrant, Holder shall receive without cost to Holder, the total
number and kind of securities to which Holder would have been entitled had
Holder owned the Shares of record as of the date that the dividend, subdivision
or similar event occurred.
2.2 Reclassification, Exchange or Substitution. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the Underlying
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Securities issuable upon exercise or conversion of this Warrant, Holder shall be
entitled to receive, upon exercise or conversion of this Warrant, the number and
kind of securities and property that Holder would have received if this Warrant
had been exercised immediately before such reclassification, exchange,
substitution or other event. Such an event shall include any automatic
conversion of the outstanding or issuable securities of the Company of the same
class or series as the Shares to common stock pursuant to the terms of the
Company's Certificate of Incorporation or other charter documents upon the
closing of a registered public offering of the Company's capital stock. The
Company or its successor shall promptly issue to Holder a new Warrant for such
new securities or other property. The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 2 including, without limitation, adjustments to the
Warrant Price and to the number of securities or property issuable upon exercise
of the new Warrant. The provisions of this Section 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.
2.3 Adjustments for Combinations, Etc. If the outstanding Underlying
Securities are combined or consolidated, by reclassification or otherwise, into
a lesser number of shares, the Warrant Price shall be proportionately increased.
2.4 No Impairment. The Company shall not, by amendment of its Certificate
of Incorporation or other charter documents or through a reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed under this
Warrant by the Company, but shall at all times in good faith assist in carrying
out all the provisions of this Article 2 and in taking all such action as may be
necessary or appropriate to protect Holder's rights under this Article against
impairment. If the Company takes any action affecting the Underlying Securities
or its common stock other than as described above that adversely affects
Holder's rights under this Warrant, the Warrant Price shall be adjusted downward
and the number of Shares issuable upon exercise of this Warrant shall be
adjusted upward in such a manner that the aggregate Warrant Price of this
Warrant is unchanged.
2.5 Certificate as to Adjustments. Upon each adjustment of the Warrant
Price, the Company at its expense shall promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder as follows:
(1) The initial Warrant Price referenced on the first page of this
Warrant is not greater than the fair market value per share of the
Underlying Securities as of the date of this Warrant.
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(2) The Company shall at times reserve and keep available out of its
authorized capital stock, solely for purpose of issuance upon the exercise
of the Warrant, such number of shares of Underlying Securities or other
securities, properties or rights as shall be issuable upon the exercise
thereof. The Company shall at times reserve and keep available out of its
authorized shares of capital stock, solely for the purpose of issuance upon
the conversion of the Underlying Securities, such number of shares of
capital stock or other securities, properties or rights as shall be
issuable upon the conversion thereof, if any. All Shares which may be
issued upon the exercise of the purchase right represented by this Warrant,
and all securities, if any, issuable upon conversion of the Shares, shall,
upon issuance be duly authorized, validly issued, fully paid and
nonassessable, and free of any liens and encumbrances except for
restrictions on transfer provided for herein or under applicable federal
and state securities laws. As long as the Warrants shall be outstanding and
the Company shall have a class of its securities registered under the
Securities Act of 1933, as amended (the "Act"), or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), the Company shall use its
best efforts to cause all Shares issuable upon the exercise of the Warrants
to be listed (subject to official notice of issuance) on all securities
exchanges on which the Underlying Securities, or securities underlying the
Underlying Securities, if any, may then be listed and/or quoted.
3.2 Notice of Certain Events. If the Company proposes at any time (a) to
declare any dividend or distribution upon its common stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of common stock; (d) to
merge or consolidate with or into any other corporation, or sell, license, or
convey all or substantially all of its assets, or to liquidate, dissolve or wind
up; or (e) offer holders of registration rights the opportunity to participate
in an underwritten public offering of the company's securities for cash, then,
in connection with each such event, the company shall give Holder (1) at least
20 days prior written notice of the date on which a record will be taken for
such dividend, distribution, or subscription rights (and specifying the date on
which the holders of common stock will be entitled thereto) or for determining
rights to vote, if any, in respect of the matters referred to in (c) and (d)
above; (2) in the case of the matters referred to in (c) and (d) above at least
20 days prior written notice of the date when the same will take place (and
specifying the date on which the holders of common stock will be entitled to
exchange their common stock for securities or other property deliverable upon
the occurrence of such event); and (3) in the case of the matter referred to in
(e) above, the same notice as is given holders of such registration rights.
3.3 Information Rights. So long as the Holder holds this Warrant and/or any
of the Shares, the Company shall deliver to the Holder promptly after mailing,
copies of all information and other communications sent to the shareholders of
the Company.
3.4 Registration . If, at any time commencing after the date hereof and as
long as the Warrants have not terminated, the Company proposes to register any
of its equity securities under the Act (other than in connection with the
Company's initial public offering or a merger or pursuant to Form X-0, X-0 or
comparable registration statement) it will give written notice, at least thirty
(30) days prior to the filing of each such registration statement, to Holder of
its intention to do so. If Holder notifies the Company within twenty (20) days
after receipt of any
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such notice of its desire to include any Shares (or the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) in such proposed
registration statement, the Company shall afford Holder the opportunity to have
any such Shares (or the securities issuable, directly or indirectly, upon
conversion of the Shares, if any) registered on such registration statement (a
"Piggyback Registration"). Holder shall be entitled to one Piggyback
Registration.
4. MISCELLANEOUS.
4.1 Term; Notice of Expiration. This Warrant is exercisable, in whole or in
part, at any time and from time to time on or before the Expiration Date set
forth above. The Company shall give Holder written notice of Holder's right to
exercise this Warrant not more than 90 days and not less than 30 days before the
Expiration Date. If the notice is not so given, the Expiration Date shall
automatically be extended until 30 days after the date the Company delivers the
notice to Holder.
4.2 Legends. This Warrant and the Shares (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) shall be
imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
4.3 Compliance with Securities Laws on Transfer. This Warrant and the
Shares issuable upon exercise this Warrant (and the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) may not be
transferred or assigned in whole or in part without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company). The Company
shall not require Holder to provide an opinion of counsel if the transfer is to
an affiliate of Holder or if there is no material question as to the
availability of current information as referenced in Rule 144(c), Holder
represents that it has complied with Rule 144(d) and (e) in reasonable detail,
the selling broker represents that it has complied with Rule 144(f), and the
Company is provided with a copy of Holder's notice of proposed sale.
4.4 Transfer Procedure. Subject to the provisions of Section 4.3, Holder
may transfer all or part of this Warrant or the Shares issuable upon exercise of
this Warrant (or the securities issuable, directly or indirectly, upon
conversion of the Shares, if any) by giving the Company notice of the portion of
the Warrant being transferred setting forth the name, address and taxpayer
identification number of the transferee and surrendering this Warrant to the
Company for reissuance to the transferee(s) (and Holder, of applicable). Unless
the Company is filing financial information with the Securities and Exchange
Commission pursuant to the Exchange
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Act, the Company shall have the right to refuse to transfer any portion of this
Warrant to any person who directly competes with the Company.
4.5 Notices. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such Holder from time
to time.
4.6 Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.
4.7 "Market Stand-Off" Agreement. Holder hereby agrees that it will not,
without the prior written consent of the managing underwriter, during the period
commencing on the date of the final prospectus relating to the Company's initial
public offering and ending on the date specified by the Company and the managing
underwriter (such period not to exceed one hundred eighty (180) days) (i) lend,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any share
of common stock or any securities convertible into or exercisable or
exchangeable for common stock (whether such shares or any such securities are
then owned by Holder or are thereafter acquired), or (ii) enter into any swap or
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the common stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of common
stock or such securities, in cash or otherwise. The foregoing provisions of this
Section 4.8 shall only be applicable to the Holder if all officers and directors
of the Company enter into similar agreements and only for so long as such
agreements are in effect. The underwriters in connection with the Company's
initial public offering are intended third party beneficiaries of this Section
4.8 and shall have the right, power and authority to enforce the provisions
hereof as though they were a party hereto. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to the
Shares until the end of such period.
4.8 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to its principles regarding conflicts of law.
FUTURELINK CORP.
By: /s/ Xxxx X. X. Xxxxx
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Name: Xxxx X. X. Xxxxx
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Title: Vice President and General Counsel
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