THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES
ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH HEREIN.
WARRANT
FOR VALUE RECEIVED, Phasecom Inc., a Delaware corporation (the "Company"),
hereby grants to Biblica Investment Limited, a British Virgin Islands company
("Holder"), effective as of the 2nd day of June, 1999, the right to purchase
from the Company up to Four Hundred and Twenty Five Thousand (425,000) shares
of Common Stock of the Company (taking into account the 2-for-1 stock split
of the Company effective February 13, 1998) (the "Warrant Shares") subject to
the following terms and conditions:
1. TERM. Subject to the terms and conditions set forth herein, this
Warrant may be exercised in whole or in part, at any time during the
period from the date of issuance of this Warrant through December 31, 2001
(the "Exercise Period").
2. EXERCISE PRICE. The exercise price for each Warrant Share purchasable
hereunder shall be Fifteen Cents (US$0.15) (the "Warrant Exercise Price").
3. EXERCISE OF WARRANT. The purchase rights represented by this Warrant
may be exercised by the Holder, in whole or in part, at any time and from
time to time before the end of the Exercise Period by surrender of this
Warrant at the principal office of the Company in Cupertino, California
(or such other office or agency of the Company as may be designated by
notice in writing to the Holder at the address of the Holder appearing on
the books of the Company), together with the Notice of Exercise annexed
hereto duly completed and executed on behalf of the Holder accompanied by
payment in full of the amount of the aggregate Warrant Exercise Price in
immediately available funds in United States Dollars. Certificates
representing the Warrant Shares purchased hereunder shall be delivered to
the Holder within thirty (30) business days after the later of (i) the
date on which this Warrant shall have been exercised as aforesaid or (ii)
the date the Company obtains all necessary governmental consents or
approvals, if any, required to consummate the transactions contemplated
herein, but Holder shall be deemed the record owner
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of such Warrant Shares as of and from the close of business on the date
on which this Warrant shall be surrendered.
4. FRACTIONAL INTEREST. The Company shall not be required to issue any
fractional shares of Common Stock on the exercise of this Warrant.
5. WARRANT CONFERS NO RIGHTS OF SHAREHOLDER. Holder shall not have any
rights as a shareholder of the Company with regard to the Warrant Shares
prior to actual exercise resulting in the purchase of the Warrant Shares,
and payment of the Warrant Exercise Price.
6. COMPLIANCE WITH LAWS AND REGULATIONS. The exercise of the Warrant and
the issuance and transfer of Warrant Shares shall be subject to compliance
by the Company and Holder with all applicable requirements of federal and
state securities laws and with all applicable requirements of any stock
exchange on which the Company's Common Stock may be listed at the time of
such issuance or transfer. Further, the Company may require as a condition
of transfer of any Shares pursuant to any exercise of the Warrant that the
Holder furnish a written representation that he is purchasing or acquiring
the Warrant Shares for investment and not with a view to resale or
distribution to the public. The Holder hereby represents and warrants
that he understands that the Warrant Shares are "restricted securities,"
as defined in Rule 144 under the Securities Act, and that any resale of
the Warrant Shares must be in compliance with the registration
requirements of the Securities Act, or an exemption therefrom, and with
the requirements of any applicable "Blue Sky" laws. Each certificate
representing Warrant Shares shall bear the legends set forth below and
with any other legends that may be required by the Company or by any
Federal or state securities laws:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE RESTRICTED SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES THEREUNDER,
AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM.
Holder understands that the Company is under no obligation to register
or qualify the Warrant Shares with the Securities and Exchange Commission,
any state securities commission or any stock exchange to effect such
compliance.
7. RESTRICTIONS ON TRANSFER RE: REGULATION S
7.1 NOT A "U.S. PERSON" The Holder hereby certifies that (i) he is
not a "U.S Person" as defined under Rule 902, Section (o) of
Regulation S promulgated under the Securities Act and is not
acquiring the Securities for the account or
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benefit of any U.S. Person, and (ii) he is acquiring the Warrant
Shares in an "offshore transaction" as defined under Section (i) of
such Rule 902.
7.2. TRANSFER RESTRICTIONS The Company shall not register any transfer
of the Warrant Shares not made pursuant to a valid registration
statement, an exemption therefrom, or in accordance with the
provisions of Regulation S. In addition to any other restrictions on
transfer set forth in this Warrant Agreement, the Holder agrees to
transfer the Warrant Shares only (i) in accordance with the
provisions of Regulation S, pursuant to registration under the
Securities Act, or pursuant to an available exemption from
registration, and (ii) in accordance with any applicable state
securities laws. Unless so registered or exempt therefrom, such
transfer restrictions shall include but not be limited to and the
Holder warrants and represents the following:
7.2.1. Holder shall not sell the Warrant Shares to any U.S. Person,
whether directly or indirectly, or for the account or benefit
of any such U.S. Person for a period of at least one (1)
year after the purchase of the Warrant Shares or under
certain conditions not less than forty (40) days after the
Company becomes a reporting issuer as that term is defined in
the Securities and Exchange Act of 1934, as amended.
7.2.2. Any other offer or sale of the Warrant Shares shall be made
only if any subsequent purchaser certifies in writing that it
is not a U.S. Person and is not acquiring the Warrant Shares
for the account or benefit of any U.S. Person or is a U.S.
Person who purchased the Warrant Shares in a transaction
that did not require registration under the Securities Act;
and
7.2.3. Any transferee of the Warrant Shares shall agree in writing
to resell the Warrant Shares only in accordance with the
provisions of Regulations S, pursuant to registration under
the Securities Act, or pursuant to an available exemption
from registration.
7.3. COMPLIANCE. To the best knowledge of the Company, it is issuing
the Warrant pursuant to Regulation S and has complied with its
terms. The Company undertakes to use its best efforts in order to
assist the Holder in disposing of the Shares pursuant to, and
in compliance with, Regulation S.
8. HOLDER'S WARRANTIES AND REPRESENTATIONS
Holder represents and warrants that (a) the Warrant Shares being
purchased upon the exercise of the Warrant are purchased for its own
account for investment, and not with a view to the resale or
distribution thereof; (b) the Company, or one of its
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officers or Directors, has provided Holder with sufficient knowledge of
the character, business acumen, and general business and financial
circumstances of the individuals controlling the Company; (c) he has
sufficient business and financial experience to permit him to protect
his own interests in connection with his purchase hereunder; (d) he is
aware that the Warrant Shares have not been registered under the Act, or
qualified under the Israeli Securities Law of 1968, as amended, or the
Delaware Corporation Laws, as amended;
9. MARKET STAND-OFF
In connection with any underwritten public offering by the Company of its
equity securities pursuant to an effective registration statement filed
under the Securities Act for such period as the Company or its
underwriters may request (such period not to exceed 180 days following
the date of the applicable offering), the Holder shall not, directly or
indirectly, sell, make any short sale of, loan, hypothecate, pledge,
offer, grant or sell any option or other contract for the purchase of,
purchase any option or other contract for the sale of, or otherwise
dispose of or transfer, or agree to engage in any of the foregoing
transactions with respect to, any Warrant Shares acquired under this
Warrant Agreement without the prior written consent of the Company or
its underwriters.
10. RESERVATION OF SHARES. The Company agrees at all times during the
Exercise Period to have authorized and reserved, for the exclusive
purpose of issuance and delivery upon exercise of this Warrant, a
sufficient number of Common Stock to provide for the exercise of the
rights represented hereby.
11. ADJUSTMENT FOR RE-CLASSIFICATION OF CAPITAL STOCK. If the Company at
any time during the Exercise Period shall, by subdivision, combination
or re-classification of securities, change any of the securities to
which purchase rights under this Warrant exist under the same or
different number of securities of any class or classes, this Warrant
shall thereafter entitle the Holder to acquire such number and kind of
securities as would have been issuable as a result of such change with
respect to the Warrant Shares immediately prior to such subdivision,
combination or re-classification. If the Company's Common Stock are
subdivided into a greater number of Common Stock the Exercise Price for
the Warrant Shares shall be proportionately reduced and the Warrant
Shares shall be proportionately increased; and conversely, if the
Company's Common Stock are combined into a smaller number of Common
Stock, the Exercise Price shall be proportionately increased, and the
Warrant Shares shall be proportionately decreased.
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12. NONTRANSFERABILITY OF WARRANT
The Warrant may not be transferred in any manner and may be exercised
during the lifetime of Holder only by Holder.
13. TAX MATTERS
Holder shall bear any and all tax consequences which may result in
connection with the grant of the warrant and/or the exercise thereof and
all such taxes, if any, shall be paid solely by Holder. Holder shall
indemnify the Company or any subsidiary or parent company thereof, and
hold each of them harmless, against and from any liability for any of
the above-mentioned taxes, or any other tax, in any jurisdiction,
relating to the grant or exercise of the Warrant or the sale or other
disposition of any or all of the Warrant Shares, and for any penalties,
interest or linkage differentials in respect of any such tax.
14. SUCCESSORS AND ASSIGNS
Except as otherwise provided herein, this Agreement, and all terms
hereof, shall inure to the benefit of and be binding upon the parties
hereto and their respective successors, executors, administrators or
assigns.
15. ENTIRE AGREEMENT
This Agreement and all exhibits hereto and therein constitute the entire
agreement between the parties pertaining to the subject matter hereof
and supersede all prior and contemporaneous agreements, undertakings,
negotiations and discussions, whether oral or written.
16. NOTICES
All notices, demands, consents or other communications required or
permitted hereunder shall be in writing and shall be deemed to have been
given when personally delivered or five (5) business days (including
Saturday) if sent by first class airmail, return receipt requested or
the next business day if sent by Telefax, Express Mail, Federal Express
or similar service, addressed, if to the Company, to its U.S. counsel
Bay Venture Counsel, LLP Lake Merritt Plaza Building 1999 Harrison
Street, Suite 1300 Oakland, California, 94612 (telephone 510-273-8750;
and facsimile 510-834-7440), and if to a Holder, to his address as it
appears on the Company's records.
17. GOVERNING LAW
This Agreement shall be governed by and construed solely in accordance
with the laws of the State of California as such laws are applied to
agreements between
6
California residents entered into and to be performed entirely within
California. In the event of any controversy or claim arising out of or
relating to this agreement, or breach thereof, the parties may apply
solely to the compatible courts in the state of California.
18. ACCEPTANCE
HOLDER HAS READ AND UNDERSTANDS THE TERMS AND PROVISIONS OF THIS WARRANT
AGREEMENT, AND ACCEPTS THE WARRANT SUBJECT TO ALL THE TERMS AND CONDITIONS
OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
[SEAL]
/s/ Yehuda Atai
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PHASECOM INC. BIBLICA INVESTMENT LIMITED
Delaware Corporation British Virgin Island Company
By: /s/ Stephen P. Pezzola By: Yehuda Atai
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