9. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
10. Registration Rights. The Holder of this Warrant has been granted certain registration rights by the Company. These registration rights are set forth in a Registration Rights Agreement entered into by the Company and the Purchaser dated as of even date of this Warrant.
11. Maximum Exercise. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of the Note or the Warrant an amount that would (a) be convertible into that number of Ordinary Shares which, when added to the number of Ordinary Shares otherwise beneficially owned by such Holder including those issuable upon exercise of warrants of the Company held by such Holder would exceed 4.99% of the outstanding Ordinary Shares of the Company at the time of conversion or (b) (ii) exceed twenty five percent (25%) of the aggregate dollar trading volume of the Ordinary Share for the thirty (30) day trading period immediately preceding delivery of a Notice of Conversion to the Company. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The conversion limitation described in this Section 11 shall automatically become null and void without any notice to Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default, or upon 75 days prior notice to the Company, except that at no time shall the beneficial ownership exceed 19.99% of the borrower’s Ordinary Shares as of the date hereof. Notwithstanding anything contained herein to the contrary, (i) the number of Ordinary Shares issuable by the Company and acquirable by the Holder pursuant to the terms of this Warrant and/or the Note issued by the Company to the Holder pursuant to this Securities Purchase Agreement, plus (ii) the number of Ordinary Shares issuable by the Company and acquirable by the Holder pursuant to the terms of the Note and/or Warrant issued by the Company to the Holder pursuant to that Securities Purchase Agreement entered into by and among the Company, BOScom Ltd. and the Holder as of September 29, 2005, shall not exceed an aggregate of 1,270,720 of the Company’s Ordinary Shares, (subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Ordinary Shares).
8
12. Rights of Shareholders. No Holder shall be entitled, as a Warrant holder, to vote or receive dividends or be deemed the holder of the Ordinary Shares or any other securities of the Company, which may at any time be issuable upon the exercise of this Warrant for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of shares, reclassification of shares, change of nominal value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the Ordinary Shares issuable upon the exercise hereof shall have become deliverable, as provided herein.
13. Warrant Agent. The Company may, by written notice to each Holder of the Warrant, appoint an agent for the purpose of issuing Ordinary Shares (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 8, and replacing this Warrant pursuant to Section 9, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.
14. Transfer on the Company’s Books. Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.
15. Notices, Etc. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder or, until any such Holder furnishes to the Company an address, then to, and at the address of, the last Holder of this Warrant who has so furnished an address to the Company.
16. Voluntary Adjustment by the Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the Board of Directors of the Company.
10
17. Miscellaneous. 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. This Warrant shall be governed by and construed in accordance with the laws of State of New York without regard to principles of conflicts of laws. Any action brought concerning the transactions contemplated by this Warrant shall be brought only in the state courts of New York or in the federal courts located in the state of New York; provided, however, that the Holder may choose to waive this provision and bring an action outside the state of New York. The Company hereby agrees to submit to the jurisdiction of such courts and waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant. 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. Each of the Company and the Holder acknowledges that its legal counsel participated in the preparation of this Warrant and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Warrant to favor any party against the other party.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS.]
10
IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.
| | B.O.S. BETTER ON-LINE SOLUTIONS LTD.
By: —————————————— Name: Adiv Baruch Title: CEO |
| |
By: —————————————— Name: Nehemia Kaufman Title: CEO |
11
EXHIBIT A
EXERCISE NOTICE
(To Be Signed Only On Exercise Of Warrant)
TO: | B.O.S. Better On-Line Solutions Ltd. |
Attention: Chief Financial Officer
The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):
________
________ | ________ Ordinary Shares covered by such Warrant; or
the maximum number of Ordinary Shares covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2. |
The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Warrant, which is $___________. Such payment takes the form of (check applicable box or boxes):
________
________
________ | $__________ in lawful money of the United States; and/or
the cancellation of such portion of the attached Warrant as is exercisable for a total of _______ Ordinary Shares (using a Fair Market Value of $_______ per share for purposes of this calculation); and/or
the cancellation of such number of Ordinary Shares as is necessary, in accordance with the formula set forth in Section 2.2, to exercise this Warrant with respect to the maximum number of Ordinary Shares purchasable pursuant to the cashless exercise procedure set forth in Section 2. |
The undersigned requests that the certificates for such shares be issued in the name of, and delivered to ________________________ whose address is ____________________________________.
The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Ordinary Shares under the Securities Act of 1933, as amended (the "Securities Act") or pursuant to an exemption from registration under the Securities Act.
Dated: _______________________________ | _____________________________________________ (Signature must conform to name of Holder as specified on the face of the Warrant)
Address: ____________________________________ ____________________________________ |
A-1
EXHIBIT B
FORM OF TRANSFEROR ENDORSEMENT
(To Be Signed Only On Transfer Of Warrant)
FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS, ASSIGNS, AND TRANSFERS UNTO THE PERSON(S) NAMED BELOW UNDER THE HEADING “TRANSFEREES” THE RIGHT REPRESENTED BY THE WITHIN WARRANT TO PURCHASE THE PERCENTAGE AND NUMBER OF SHARES OF ORDINARY SHARES OF B.O.S. BETTER ON-LINE SOLUTIONS LTD. INTO WHICH THE WITHIN WARRANT RELATES SPECIFIED UNDER THE HEADINGS “PERCENTAGE TRANSFERRED” AND “NUMBER TRANSFERRED,” RESPECTIVELY, OPPOSITE THE NAME(S) OF SUCH PERSON(S) AND APPOINTS EACH SUCH PERSON ATTORNEY TO TRANSFER ITS RESPECTIVE RIGHT ON THE BOOKS OF B.O.S. BETTER ON-LINE SOLUTIONS LTD. WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.
Transferees
| Address
| Percentage Transferred
| Number Transferred
|
---|
| | | | | | | | | | | |
| | | | | | | | | | | |
| |
| |
| |
| |
| | | |
| | | | | | | | | | | |
| |
| |
| |
| |
| | | |
| | |
| |
| |
| |
| |
DATED: _______________________________ | _____________________________________________ (SIGNATURE MUST CONFORM TO NAME OF HOLDER AS SPECIFIED ON THE FACE OF THE WARRANT)
ADDRESS: ____________________________________ ____________________________________ |
| | SIGNED IN THE PRESENCE OF:
—————————————— (NAME) |
ACCEPTED AND AGREED: [TRANSFEREE]
—————————————— (NAME) | |
B-1