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EXHIBIT 99.5
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE STATE SECURITIES LAWS. THE
WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THOSE LAWS OR UNLESS THE COMPANY
HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH DISPOSITION IS
IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
Right to Purchase __________ Shares
of Common Stock of VSource, Inc.
VSOURCE, INC.
Common Stock Purchase Warrant
VSOURCE, INC., a Nevada corporation (the "Company"), hereby certifies
that, for value received, ___________________________ (the "Holder"), located at
____________________________ is entitled, subject to the terms set forth below,
to purchase from the Company at any time or from time to time on or before 5:00
p.m., Pacific Standard time, on September 17, 2005 (the "Expiration Date"),
__________________ (________) fully paid and nonassessable shares of common
stock of the Company (the "Common Stock") at a purchase price per share equal to
the Purchase Price, as defined herein. The number of such shares of Common Stock
and the Purchase Price are subject to adjustment as provided in this Warrant.
The initial purchase price for shares subject to this Warrant will be Six and
41/100 Dollars ($6.41) per share (the "Initial Purchase Price"), and will be
adjusted from time to time as provided herein. The Initial Purchase Price or, if
such price has been adjusted, the price per share of Common Stock as last
adjusted pursuant to the terms hereof is referred to as the "Purchase Price"
herein.
1. EXERCISE OF WARRANT. This Warrant may be exercised by the Holder
hereof in full or in part at any time or from time to time until the Expiration
Date by surrender of this Warrant and the subscription form annexed hereto (duly
executed by the Holder), to the Company, and by making payment, in cash or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying (a) the number of shares of Common Stock
designated by the Holder in the subscription form by (b) the Purchase Price then
in effect. On any partial exercise the Company will forthwith issue and deliver
to or upon the order of the Holder hereof a new Warrant of like tenor, in the
name of the Holder hereof, providing in the aggregate on the face or faces
thereof for the purchase of the number of shares of Common Stock for which such
Warrant may still be exercised.
2. DELIVERY OF STOCK CERTIFICATES, ETC., ON EXERCISE. As soon as
practicable after the exercise of this Warrant, the Company will cause to be
issued in the name of and delivered to the Holder hereof a certificate for the
number of fully paid and nonassessable shares of Common Stock (or Other
Securities) to which the Holder shall be entitled on such exercise, plus, in
lieu of any fractional share to which the Holder would otherwise be entitled,
cash equal to such fraction multiplied by the then current fair market value (as
reasonably determined by the Company) of one full share, together with any other
stock or other securities or property (including cash, where applicable) to
which the Holder is entitled upon such exercise. "Other Securities" shall mean
any stock (other than Common Stock) and other securities of the Company or any
other person (corporate or otherwise) which the Holder at any time shall be
entitled to receive, or shall have received, on the exercise of this Warrant, in
lieu of or in addition to Common Stock, or which at any time shall be issuable
or shall have been issued in exchange for or in replacement of Common Stock or
Other Securities pursuant to Sections 3 or 4.
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3. ADJUSTMENT.
(a) Initial Purchase Price; Subsequent Adjustment of Price and
Number of Purchasable Shares. The Initial Purchase Price will be adjusted from
time to time as provided below. The Initial Purchase Price or, if such price has
been adjusted, the price per share of Common Stock as last adjusted pursuant to
the terms hereof is referred to as the "Purchase Price" herein. Upon each
adjustment of the Purchase Price, the Holder will thereafter be entitled to
purchase, at the Purchase Price resulting from such adjustment, the number of
shares of Common Stock obtained by multiplying the Purchase Price in effect
immediately before such adjustment by the number of shares of Common Stock
purchasable pursuant to this Warrant immediately before such adjustment and
dividing the product by the Purchase Price resulting from such adjustment.
(b) Adjustment for Stock Splits and Combinations. If the
Company at any time or from time to time after the date of this Warrant effects
a subdivision of the outstanding Common Stock, by stock split or otherwise, the
Purchase Price then in effect immediately before that subdivision shall be
proportionately decreased; and, conversely, if the Company at any time or from
time to time after the date of this Warrant combines the outstanding shares of
Common Stock, by reverse stock split or otherwise, the Purchase Price then in
effect immediately before that combination shall be proportionately increased.
Any adjustment under this Section 3(b) shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(c) Adjustment for Certain Dividends and Distributions. In the
event the Company at any time or from time to time after the date of this
Warrant either makes, or fixes a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Purchase
Price then in effect shall be decreased as of the time of such issuance or, in
the event such a record date is fixed, as of the close of business on such
record date, by multiplying the Purchase Price then in effect by a fraction (1)
the numerator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance on the close of
business on such record date, and (2) the denominator of which shall be (i) the
total number of shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date plus
(ii) the number of shares of Common Stock issuable in payment of such dividend
or distribution; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Purchase Price shall be recomputed accordingly as of the
close of business on such record date or date fixed therefor and thereafter the
Purchase Price shall be adjusted pursuant to this Section 3(c) as of the time of
actual payment of such dividend or distribution. For purposes of the foregoing
formula, "the total number of shares of Common Stock issued and outstanding" on
a particular date shall include shares of Common Stock issuable upon conversion
of stock or securities convertible into Common Stock and the exercise of
warrants, options or rights for the purchase of Common Stock which are
outstanding on such date.
(d) Adjustments for Other Dividends and Distributions. In the
event the Company at any time or from time to time after the date of this
Warrant makes, or fixes a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Company other than shares of Common Stock, then and in each
such event, provision shall be made so that the Holder shall receive upon
exercise hereof, in addition to the number of shares of Common Stock receivable
thereupon, the amount of securities of the Company which it would have received
had this Warrant been converted into Common Stock as of the date of such event
and had it thereafter, during the period from the date of such event to and
including the date of exercise, retained such securities receivable by it as
aforesaid during such period, subject to all other adjustments called for during
such period under this Section 3 with respect to the rights of the Holder.
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(e) Adjustment for Recapitalization, Reclassification, or
Exchange. If the Common Stock issuable upon the exercise of this Warrant is
changed into the same or a different number of shares of any class or classes of
stock of the Company, whether by recapitalization, reclassification or other
exchange (other than a subdivision or combination of shares, or a stock dividend
or a reorganization, merger, consolidation or sale of assets, provided for
elsewhere in this Section 3), then and in any such event the Holder shall have
the right thereafter to exercise this Warrant to purchase the kind and amount of
stock and other securities and property receivable upon such recapitalization,
reclassification or other exchange by holders of the number of shares of Common
Stock which might have been purchased under this Warrant immediately prior to
such recapitalization, reclassification or other exchange, all subject to
further adjustment as provided herein.
(f) Reorganizations, Mergers, Consolidations or Sales of
Assets. If at any time or from time to time there is a capital reorganization of
the Common Stock (other than a subdivision or combination of shares or a stock
dividend or a recapitalization, reclassification or other exchange of shares,
provided for elsewhere in this Section 3) or a merger or consolidation of the
Company with or into another corporation, or the sale of all or substantially
all of the Company's assets to any other person, then, as a part of such capital
reorganization, merger, consolidation or sale, provision shall be made so that
the Holder shall thereafter be entitled to receive upon exercise of this Warrant
the number of shares of stock or other securities or property of the Company, or
of the successor corporation resulting from such capital reorganization, merger,
consolidation or sale, to which a holder of the number of shares of Common Stock
deliverable upon such conversion would have been entitled on such capital
reorganization, merger, consolidation or sale. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section 3
with respect to the rights of the Holder after the capital reorganization,
merger, consolidation or sale to the end that the provisions of this Section 3
(including the number of shares deliverable upon exercise of this Warrant) shall
continue to be applicable after that event and shall be as nearly equivalent to
the provisions hereof as may be practicable.
(g) Sale of Shares Below Conversion Price.
(1) If at any time or from time to time after the
date hereof the Company issues or sells, or is deemed by the express provisions
of this Section 3(g) to have issued or sold, Additional Shares of Common Stock
(as hereinafter defined), other than as a dividend or other distribution on any
class of stock as provided in Section 2 and other than upon a subdivision or
combination of shares of Common Stock as provided in Section 2, for an Effective
Price (as hereinafter defined) less than the then existing Conversion Price,
then and in each such case the then existing Conversion Price shall be reduced,
as of the opening of business on the date of such issue or sale, to a price
determined by multiplying that Conversion Price by a fraction the numerator of
which shall be (A) the number of shares of Common Stock outstanding at the close
of business on the day next preceding the date of such issue or sale, plus (B)
the number of shares of Common Stock which the aggregate consideration received
(or by the express provisions hereof is deemed to have been received) by the
Company for the total number of Additional Shares of Common Stock so issued
would purchase at such Conversion Price, plus (C) the number of shares of Common
Stock underlying Other Securities (as hereinafter defined) and the denominator
of which shall be (X) the number of shares of Common Stock outstanding at the
close of business on the date of such issue after giving effect to such issue of
Additional Shares of Common Stock, plus (Y) the number of shares of Common Stock
underlying the Other Securities at the close of business on the date of such
issue or sale.
(2) For the purpose of making any adjustment required
under this Section 3(g), the consideration received by the Company for any issue
or sale of securities shall (A) to the extent it consists of cash be computed at
the amount of cash received by the Company, (B) to the extent it consists of
property other than cash, be computed at the fair value of that property as
determined in
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accordance with the procedure set forth in Section 2 above, and (C) if
Additional Shares of Common Stock, Convertible Securities (as hereinafter
defined) or rights or options to purchase either Additional Shares of Common
Stock or Convertible Securities are issued or sold together with other stock or
securities or other assets of the Company for a consideration which covers both,
be computed as the portion of the consideration so received that may be
reasonably determined in good faith by the Board to be allocable to such
Additional Shares of Common Stock, Convertible Securities or rights or options
under the procedure set forth in Section 2 above.
(3) For the purpose of the adjustment required under
this Section 3(g), if the Company issues or sells any rights or options for the
purchase of, or stock or other securities convertible into, Additional Shares of
Common Stock (such convertible stock or securities being hereinafter referred to
as "Convertible Securities") and if the Effective Price of such Additional
Shares of Common Stock is less than the Conversion Price then in effect, then in
each case the Company shall be deemed to have issued at the time of the issuance
of such rights or options or Convertible Securities the maximum number of
Additional Shares of Common Stock issuable upon exercise or conversion thereof
and to have received as consideration for the issuance of such shares an amount
equal to the total amount of the consideration, if any, received by the Company
for the issuance of such rights or options or Convertible Securities, plus, in
the case of such rights or options, the minimum amounts of consideration, if
any, payable to the Company upon the exercise of such rights or options, plus,
in the case of Convertible Securities, the minimum amounts of consideration, if
any, payable to the Company (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) upon the conversion
thereof. No further adjustment of the Conversion Price, adjusted upon the
issuance of such rights, options or Convertible Securities, shall be made as a
result of the actual issuance of Additional Shares of Common Stock on the
exercise of any such rights or options or the conversion of any such Convertible
Securities. If any such rights or options or the conversion privilege
represented by any such Convertible Securities shall expire without having been
exercised, the Conversion Price adjusted upon the issuance of such rights,
options or Convertible Securities shall be readjusted to the Conversion Price
which would have been in effect had an adjustment been made on the basis that
the only Additional Shares of Common Stock so issued were the Additional Shares
of Common Stock, if any, actually issued or sold on the exercise of such rights
or options or rights of conversion of such Convertible Securities, and such
Additional Shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise, plus the
consideration, if any, actually received by the Company for the granting of all
such rights or options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted,
plus the consideration, if any, actually received by the Company (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion of such Convertible Securities.
(4) "Additional Shares of Common Stock" shall mean
all shares of Common Stock issued by the Company after the date hereof, whether
or not subsequently reacquired or retired by the Company, other than: (A) shares
of Common Stock issued upon conversion of the Series 2-A Preferred Stock or any
other options or warrants or convertible securities outstanding or issuable on
the date hereof; (B) shares of Common Stock issuable or issued to the directors,
officers and employees of or consultants to the Company; (C) shares of Common
Stock issuable or issued as part of an acquisition by the Company of all of or
certain assets (including technology rights) or shares of another company or
entity whether through a purchase, merger, exchange, reorganization or the like;
(D) shares of Common Stock issuable or issued pursuant to equipment financing or
leasing arrangements; or (E) shares issued in a public offering of the Company's
securities. The "Effective Price" of Additional Shares of Common Stock shall
mean the quotient determined by dividing the total number of Additional Shares
of Common Stock issued or sold, or deemed to have been issued or sold by the
Company under this Section 3(g), into the aggregate consideration received, or
deemed to have been received by the Company for such issue under this Section
3(g), for such Additional Shares of Common Stock. "Other Securities" with
respect to
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an issue or sale of Additional Shares of Common Stock shall mean (i) preferred
stock, debentures and notes convertible into Common Stock, and (ii) options or
warrants to purchase Common Stock at a price that is no greater than 95% of the
Effective Price of such issue or sale of Additional Shares of Common Stock. The
"number of shares of Common Stock underlying Other Securities" on a particular
date shall mean the number of shares of Common Stock issuable upon the exercise
or conversion, as the case may be, of such Other Securities at the close of
business on such date but only to the extent that the holders thereof have the
fully vested legal right to exercise or convert such Other Securities on such
date and to retain the Common Stock issued upon such exercise or conversion.
(5) Certificate of Adjustment. Upon the occurrence of
each adjustment or readjustment of the Purchase Price and/or the number of
shares of Common Stock subject to this Warrant, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof, and shall prepare and furnish to the Holder a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based.
4. EXERCISE UPON REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case at
any time or from time to time, the Company intends to (a) effect a
reorganization, (b) consolidate with or merge into any other person, (c) sell or
transfer all or substantially all of its properties or assets to any other
person, (d) dissolve, (e) consummate an initial public offering of its
securities; or if the Company is sold through the sale of its capital stock,
then, notwithstanding any other provision of this Warrant, in each such case, as
a condition of such reorganization, consolidation, merger, sale dissolution,
conveyance, or offering the Company shall give at least fifteen (15) business
days notice to the Holder of such pending transaction whereby the Holder shall
have the right to exercise this Warrant prior to any such reorganization,
consolidation, merger, sale, dissolution, conveyance or offering. Any exercise
of this Warrant pursuant to notice under this Section shall be conditioned upon
the closing of such reorganization, consolidation, merger, sale, dissolution,
conveyance or offering which is the subject of the notice and the exercise of
this Warrant shall not be deemed to have occurred until immediately prior to the
closing of such transaction.
5. FURTHER ASSURANCES. The Company will take all action that may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of stock, free from all taxes, liens and
charges with respect to the issue thereof, on the exercise of all or any portion
of this Warrant from time to time outstanding.
6. NOTICES OF RECORD DATE, ETC. In the event of:
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend on, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all of the assets of the Company to or the sale, consolidation or
merger of the Company with, to or into any other person, or
(c) Any voluntary or involuntary dissolution, liquidation or winding-up
of the Company; then and in each such event the Company will mail or cause to be
mailed to the Holder, at least fifteen (15) business days prior to such record
date, a notice specifying (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding up is to take place,
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and the time, if any is to be fixed, as of which the holders of record of Common
Stock (or Other Securities) shall be entitled to exchange their shares of Common
Stock (or Other Securities) for securities or other property deliverable on such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up, and (iii) the amount and
character of any stock or other securities, or rights or options with respect
thereto, proposed to be issued or granted, the date of such proposed issue or
grant and the persons or class of persons to whom such proposed issue or grant
is to be offered or made. Such notice shall also state that the action in
question or the record date is subject to the effectiveness of a registration
statement under the Securities Act or a favorable vote of stockholders if either
is required. Such notice shall be mailed at least fifteen (15) business days
prior to the date specified in such notice on which any such action is to be
taken or the record date, whichever is earlier. The Holder shall use its best
efforts to decide whether to exercise this Warrant within ten (10) days of its
receipt of such notice.
7. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company will at all times reserve and keep available out but unissued shares of
capital stock, solely for issuance and delivery on the exercise of this Warrant,
a sufficient number of shares of Common Stock (or Other Securities) to effect
the full exercise of this Warrant and the exercise, conversion or exchange of
any other warrant or security of the Company exercisable for, convertible into,
exchangeable for or otherwise entitling the Holder to acquire shares of Common
Stock (or Other Securities), and if at any time the number of authorized but
unissued shares of Common Stock (or Other Securities) shall not be sufficient to
effect such exercise, conversion or exchange, the Company shall take such action
as may be necessary to increase its authorized but unissued shares of Common
Stock (or Other Securities) to such number as shall be sufficient for such
purposes.
8. TRANSFER OF WARRANT. This Warrant cannot be transferred without the
prior written consent of the Company, which consent shall not be unreasonably
withheld; provided, however, the Holder may transfer this Warrant to any of its
affiliates without such consent so long as such transfer complies with all
applicable securities laws.
9. NO RIGHTS AS A STOCKHOLDER. This Warrant shall not entitle the
Holder hereof to any voting rights or other rights as a stockholder of the
Company.
10. NOTICES, ETC. All notices which are required to be given pursuant
to this Warrant shall be in writing and shall be delivered by certified mail,
return receipt requested, first class postage prepaid, or sent by overnight
express or similarly recognized overnight delivery with receipt acknowledged or
by facsimile, with a copy thereof sent by one of the other means. Notices shall
be deemed to have been given at the time delivered and shall be addressed as
follows or to such other address as a party may designate by proper notice
hereunder.
If to Holder: To the address set forth on the first page hereof.
If to the Company: VSource, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attn.: CEO
11. SECURITIES LAWS. By acceptance of this Warrant, the Holder
represents to the Company that the Holder is an "accredited investor" within the
meaning of Regulation D adopted under the Securities Act, that this Warrant is
being acquired for the Holder's own account and for the purpose of investment
and not with a view to, or for sale in connection with, the distribution
thereof, nor with any present intention of distributing or selling the Warrant
or the Common Stock issuable upon exercise of the
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Warrant, and that it is an investor in securities of companies in the
development stage and acknowledges that it can bear the economic risk of its
investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the shares subject to this Warrant. The Holder acknowledges and agrees that
this Warrant and the Common Stock issuable upon exercise of this Warrant (if
any) have not been (and at the time of acquisition by the Holder, will not have
been or will not be) registered under the Securities Act or under the securities
laws of any state, in reliance upon certain exemptive provisions of such
statutes. The Holder further recognizes and acknowledges that because this
Warrant and the Common Stock issuable upon exercise of this Warrant are
unregistered, they may not be eligible for resale, and may only be resold in the
future pursuant to an effective registration statement under the Securities Act
and any applicable state securities laws, or pursuant to a valid exemption from
such registration requirements and that the Holder must, therefore, bear the
economic risk of such investment indefinitely.
12. LEGEND. Unless theretofore registered for resale under the
Securities Act, each certificate for shares issued upon exercise of this Warrant
shall bear the following or a similar legend:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or
any applicable state securities laws. The securities have been
acquired for investment and may not be resold, transferred or
assigned in the absence of an effective registration statement
for the securities under the Securities Act of 1933, as
amended, or an opinion of counsel acceptable to the Company
that such disposition is in compliance with the Securities Act
and any applicable state securities laws.
13. MISCELLANEOUS. This Warrant and any terms 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. This Warrant shall be construed and enforced in accordance with and
governed by the internal laws of the State of California, without regard to
conflict of laws principles. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
The invalidity or unenforceability of any provision hereof shall in no way
affect the validity or enforceability of any other provision.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
on its behalf by one of its officers thereunto duly authorized as of September
18, 2000.
VSOURCE, INC.
By:
--------------------------------------------
Xxxxxx X. XxXxxxxxx, President and CEO
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FORM OF SUBSCRIPTION
VSOURCE, INC.
(To be signed only on exercise of Warrant)
TO: VSOURCE, INC.
1. The undersigned Holder of the attached original, executed Warrant
hereby elects to exercise its purchase right under such Warrant with respect to
shares of Common Stock, as defined in the Warrant, of VSource, Inc., a Nevada
corporation (the "Company").
2. The undersigned Holder is hereby paying the aggregate purchase price
for such shares of Common Stock (the "Exercise Shares") (i) by the enclosed
certified or official bank check payable in United States dollars to the order
of the Company in the amount of $___________, or (ii) by wire transfer of United
States funds to the account of the Company in the amount of $______________,
which transfer has been made before or simultaneously with the delivery of this
Form of Subscription pursuant to the instructions of the Company.
3. Please issue a stock certificate or certificates representing the
appropriate number of shares of Common Stock in the name of the undersigned
Holder.
Dated:_______________________
____________________________________
Signature of Holder
