p13
Page 52 of 81 Pages
(12) The adjustment provisions contained in Subsections (2),
(4) and (5) above shall terminate and be of no further force and
effect at such time as the closing bid price of the Common Stock
equals or exceeds 200% of the initial Exercise Price for twenty (20)
consecutive trading days.
(13) Irrespective of any adjustments in the Exercise Price or
the number or kind of shares purchasable upon exercise of this
Warrant, Warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated
in the similar Warrants initially issuable pursuant to this
Agreement.
(g) OFFICER'S CERTIFICATE. Whenever the Exercise Price shall be adjusted
as required by the provisions of the foregoing Section, the Company shall
forthwith file in the custody of its Secretary or an Assistant Secretary at its
principal office and with its stock transfer agent, if any, an officer's
certificate showing the adjusted Exercise Price determined as herein provided,
setting forth in reasonable detail the facts requiring such adjustment,
including a statement of the number of additional shares of Common Stock, if
any, and such other facts as shall be necessary to show the reason for and the
manner of computing such adjustment. Each such officer's certificate shall be
made available at all reasonable times for inspection by the holder or any
holder of a Warrant executed and delivered pursuant to Section (a) and the
Company shall, forthwith after each such adjustment, mail a copy by certified
mail of such certificate to the Holder or any such holder.
(h) NOTICES TO WARRANT HOLDERS. So long as this Warrant shall be
outstanding, (i) if the Company shall pay any dividend or make any distribution
upon the Common Stock or (ii) if the Company shall offer to the holders of
Common Stock for subscription or purchase by them any share of any class or any
other rights or (iii) if any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company to another
corporation, or voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be effected, then in any such case, the Company shall cause
to be mailed by certified mail to the Holder, at least fifteen days prior the
date specified in (x) or (y) below, as the case may be, a notice containing a
brief description of the proposed action and stating the date on which (x) a
record is to be taken for the purpose of such dividend, distribution or rights,
or (y) such reclassification, reorganization, consolidation, merger, conveyance,
lease, dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or other securities
shall receive cash or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation or
winding up.
(i) RECLASSIFICATION, REORGANIZATION OR MERGER. In case of any
reclassification, capital reorganization or other change of outstanding shares
of Common Stock of the Company, or in case of any consolidation or merger of the
Company with or into another corporation (other than a merger with a subsidiary
in which merger the Company is the continuing corporation and which does not
result in any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the class issuable upon exercise of this
Warrant) or in case of any sale, lease or conveyance to another corporation of
the property of the Company as an entirety, the Company shall, as a condition
precedent to such transaction, cause effective provisions to be made so that the
Holder shall have the right thereafter by exercising this Warrant at any time
Page 53 of 81 Pages
prior to the expiration of the Warrant, to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reclassification, capital reorganization and other change, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
which might have been purchased upon exercise of this Warrant immediately prior
to such reclassification, change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Warrant. The foregoing provisions of this Section (i) shall similarly apply to
successive reclassifications, capital reorganizations and changes of shares of
Common Stock and to successive consolidations, mergers, sales or conveyances. In
the event that in connection with any such capital reorganization or
reclassification, consolidation, merger, sale or conveyance, additional shares
of Common Stock shall be issued in exchange, conversion, substitution or
payment, in whole or in part, for a security of the Company other than Common
Stock, any such issue shall be treated as an issue of Common Stock covered by
the provisions of Subsection (1) of Section (f) hereof.
(j) REGISTRATION UNDER THE SECURITIES ACT OF 1933. The holder will have
registration rights with respect to the Warrant Shares as more particularly set
forth in the subscription agreement executed in connection with the Private
Placement.
(k) REDEMPTION.
(1) The Warrants may be redeemed, at the option of the Company
on not less than thirty (30) days notice (the "Redemption Notice")
to the Holders, at a redemption price of $0.05 per Warrant (the
"Redemption Price"), if (i) the average closing bid price of the
Company's Common Stock for 20 consecutive trading days ending within
five days of the date of the Redemption Notice exceeds the 200% of
the Exercise Price (the "Target Price") and (ii) either a
registration statement covering the Warrant Shares has been declared
effective by the Securities and Exchange Commission or two years has
elapsed since the issuance of the Warrants and the Holder is not
subject to any lock-up agreement with respect to the Warrants or the
Warrant Shares. The date fixed for redemption of the Warrants (the
"Redemption Date") shall be set forth in the Redemption Notice.
(2) Any right to exercise a Warrant shall terminate at 5:00
P.M. (New York time) on the business day immediately preceding the
Redemption Date. On and after the Redemption Date, Holders of the
Warrants shall have no further rights except to receive, upon
surrender of the Warrant, the Redemption Price.
(3) From and after the Redemption Date, the Company shall, at
the place specified in the Redemption Notice, upon presentation and
surrender to the Company by or on behalf of the Holder thereof of
one or more Warrant Certificates evidencing Warrants to be redeemed,
deliver or cause to be delivered to or upon the written order of
such Holder a sum in cash equal to the Redemption Price of each such
Warrant. From and after the Redemption Date and upon the deposit or
setting aside by the Company of a sum sufficient to redeem all the
Warrants called for redemption, such Warrants shall expire and
become void and all rights hereunder and under the Warrant
Certificates, except the right to receive payment of the Redemption
Price,
Page 54 of 81 Pages
shall cease.
(4) If the shares of the Company's Common Stock are subdivided
or combined into a greater or smaller number of shares of Common
Stock, the Target Price shall be proportionally adjusted by the
ratio which the total number of shares of Common Stock outstanding
immediately prior to such event bears to the total number of shares
of Common Stock to be outstanding immediately after such event.
FUTURELINK DISTRIBUTION CORP.
By:
------------------------------------
Cameron Chell, Chief Executive
Officer
By:
------------------------------------
Raghu Kilambi, Chief Financial
Officer
Dated: July 19, 1999
Page 55 of 81 Pages
PURCHASE FORM
Dated___________
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing ________ shares of Common Stock and hereby
makes payment of ________ in payment of the actual exercise price thereof.
---------------
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name_________________________________________
(Please typewrite or print in block letters)
Address______________________________________
Signature____________________________________
ASSIGNMENT FORM
FOR VALUE RECEIVED, ____________________hereby sells, assigns and
transfers unto
Name_________________________________________
(Please typewrite or print in block letters)
Address______________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
______ shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _____________ Attorney, to transfer the same on the books
of the Company with full power of substitution in the premises.
Date________________________
Signature___________________
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