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EXHIBIT 10.62
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 (THE "COMPANY")
Warrant Holder XXX XXXXXXXXXXX
Number of Shares: 4,903 SHARES
Class of Stock: COMMON STOCK, NO PAR VALUE
Initial Exercise Price: $24.375 PER SHARE
Issue Date: AUGUST 8, 2000
Expiration Date: JUNE 30, 2002
THIS WARRANT CERTIFIES that in consideration of the payment of $1.00
and for other good and valuable consideration, XXX Xxxxxxxxxxx or its registered
assignee ("Holder") is entitled to purchase the number of fully paid and
nonassessable shares (the "Shares") of common stock of the Company (the
"Underlying Securities") at the Initial Exercise Price per Share (the "Warrant
Price") 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. One Thousand Six Hundred and Forty Seven (1,647) of the Warrants are
being issued in connection with Supplement No. 4 to the Master Lease Agreement
No. 12035 between XXX Xxxxxxxxxxx and the Company (the "Master Lease"), and
Three Thousand Two Hundred and Fifty Six (3,256) of the Warrants are being
issued in connection with Supplement No. 5 to the Master Lease.
1. EXERCISE
1.1 Method of Exercise. Holder may exercise this Warrant by delivering
this Warrant and a duly executed notice (the "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 at the time of conversion 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 1.4.
1.3 Time of Exercise or Conversion. Holder may not exercise or convert
this Warrant until
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the earlier of June 30, 2001, and the date a registration statement registering
the Underlying Securities is declared effective by the Securities and Exchange
Commission under the Securities Act of 1933. The Company represents that it
intends to file a shelf registration statement (the "Shelf Registration") by
September 30, 2000, and agrees to register the Underlying Securities in
connection therewith. The Company, however, does not guaranty that the Shelf
Registration will be filed before September 30, 2000, or at all, or that the
Shelf Registration if filed will become effective, and the Company shall not
have any liability if the Shelf Registration is not filed timely or at all, or
does not become effective.
1.4 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 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 the 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.
1.5 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.
1.6 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 an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense shall execute and deliver, in lieu of this Warrant, a new warrant of
like tenor.
1.7 Repurchase on Sale, Merger or Consolidation of the Company.
1.6.1 "Acquisition". For the purposes of this Warrant,
"Acquisition" means any (i) sale, license or other disposition of all
or substantially all of the assets (including intellectual property) of
the Company, or (ii) 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
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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 the securities issuable directly or
indirectly upon conversion of the Underlying Securities, if any) payable in
common stock, or other securities, subdivides the outstanding Underlying
Securities (or the securities issuable directly or indirectly upon conversion of
the Underlying Securities, if any) 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 Securities (or the
securities issuable directly or indirectly upon conversion of the Underlying
Securities, if any) 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 for
the Shares 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 charter 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 (or the securities issuable directly or indirectly upon conversion of
the Underlying Securities, if any) 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 charter
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
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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.
3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1 Representations and Warranties. The Company hereby represents and
warrants to the Holder that:
(1) 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 warrants, 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, issued to the public in connection herewith may then be
listed and/or.
3.2 Notice of Certain Events. If the Company proposes at any time (a)
to offer for subscription pro rata to the holders of shares of common stock of
the Company or securities convertible into shares of common stock of the
Company, additional shares of stock of any class or series or other rights; (b)
to effect any reclassification or recapitalization of common stock; or (c) to
sell, license, or convey all or substantially all of its assets, or to
liquidate, dissolve or wind up, 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
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(b) above; (2) in the case of the matters referred to in (b) 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).
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 to the shareholders
of the Company.
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.
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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 Exchange Act Rule 144(c),
Holder represents that it has complied with Exchange Act Rule 144(d) and (e) in
reasonable detail, the selling broker represents that it has complied with
Exchange Act 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 Sections 4.3 and
4.7, Holder may transfer this Warrant or all or any part of 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 such transfer 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 Section 13(a) of the Exchange 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
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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 4.7 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
4.7 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/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Secretary
By: /s/ Xxxxxxx Xxxxx
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Xxxx Xxxxx, Senior Vice President,
Administration
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