Exhibit 10.10
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THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAW, AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING THIS WARRANT AND/OR
SUCH SECURITIES, OR THE HOLDER RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF
THE WARRANT AND/OR SUCH SECURITIES SATISFACTORY TO THE COMPANY STATING THAT SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION
REQUIREMENTS UNDER APPLICABLE STATE OR FOREIGN LAW.
WARRANT TO PURCHASE ORDINARY SHARES
-----------------------------------
R.T.S. Software Ltd., an Israeli Company (the "Company") hereby grants to
Hapoalim Nechasim (Menayot) Ltd. (the "Holder"), the right to purchase from the
Company the number of Ordinary Shares of the Company, nominal value NIS 0.10
each (the "Ordinary Shares") specified below, subject to the terms and
conditions set forth below, effective as of March 15, 1999 (the "Effective
Date").
1 Number of Ordinary Shares Available for Purchase
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This Warrant may be exercised to purchase that number of the Company's
Ordinary Shares having an aggregate exercise price in an amount equivalent
to one million United States dollars (US$1,000,000), at an exercise price
per each Ordinary Share which shall be calculated as set forth in Section 2
below, subject to adjustments under Section 8 of this Warrant (the "Warrant
Shares").
1 Exercise Price
--------------
The exercise price for each Warrant Share purchasable hereunder shall be
calculated as set forth below, subject to adjustments under Section 8 of
this Warrant (the "Warrant Price"):
(i) in the event that, at any time during the period commencing on the
Effective Date and ending at 23:59 on December 31, 1999, the Company
shall: (a) issue its securities in a Qualified Financing (as such term
is defined below in this Section 2); or (b) issue its securities in an
Initial Public Offering (as such term is defined below in this Section
2); (c) enter into a sale of all or substantially all of the Company's
property and assets; or (d) enter into a merger or consolidation of
the Company with or into another corporation or in the event of any
acquisition of all or substantially all the outstanding share capital
of the Company, for a consideration either in cash or exchange of
securities (including, without limitation, any transaction following
which more than fifty
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percent (50%) of the Company's shares are held by persons who, prior
to the said transaction, held less than fifty percent (50%) of the
Company's shares) or any other business combination (such transactions
described in (a), (b), (c) and (d) above are collectively referred to
as "Liquidity Events"), the exercise price for each Warrant Share
purchasable hereunder shall be equal to eighty percent (80%) of the
price per share paid by purchasers of the Company's securities in the
Liquidity Event (assuming such price was calculated on a fully-diluted
and as-converted basis, taking into account all convertible
securities, convertible loans, warrants, options and all other rights,
whatsoever, to receive shares - the "Event Price");
(ii) in the event that a Liquidity Event shall not be consummated prior to
23:59 on December 31, 1999, then at any time during the period
commencing on 00:00 on January 1, 2000 and ending at 23:59 on March
31, 2000, the exercise price for each Warrant Share purchasable
hereunder shall be equal to the lower of: (i) the Event Price of a
Liquidity Event closing any time during the period commencing on 00:00
on January 1, 2000 and ending at 23:59 on March 31, 2000; or (ii) a
price reflecting a pre money Company valuation of US$100,000,000,
which shall be equal to a fraction, the numerator of which is
US$100,000,000, and the denominator of which is the total number of
issued and outstanding shares of the Company at the time of exercise
(on a fully diluted and as-converted basis, taking into account all
convertible securities, convertible loans, warrants, options and all
other rights, whatsoever, to receive shares). As an illustration of
the foregoing, if the number of issued and outstanding shares of the
Company, on a fully diluted and as converted basis, as of the date of
exercise, is 14,959,224 shares, and the Warrant Price applicable to
the exercise of this Warrant on the date hereof would be
US$100,000,000/14,959,224 = US$6.685.
(iii) Subject to the provisions of Section 3 hereof, in the event that a
Liquidity Event shall not be consummated prior to 23:59 on March 31,
2000, then at any time during the period commencing on 00:00 on April
1, 2000 and ending at 23:59 on June 30, 2000, the exercise price for
each Warrant Share purchasable hereunder shall be equal to the lower
of: (i) the Event Price of a Liquidity Event closing any time during
the period commencing on 00:00 on January 1, 2000 and ending at 23:59
on June 30, 2000; or (ii) a price reflecting a pre money Company
valuation of US$80,000,000, which shall be equal to a fraction, the
numerator of which is US$80,000,000, and the denominator of which is
the total number of issued and outstanding shares of the Company at
the time of exercise (on a fully diluted and as-converted basis,
taking into account all convertible securities, convertible loans,
warrants, options and all other rights, whatsoever, to receive
shares). As an illustration of the foregoing, if the number of issued
and outstanding shares of the Company, on a fully diluted and as
converted basis, as of the date of exercise, is 14,959,224 shares, and
the Warrant Price applicable to the exercise of this Warrant on the
date hereof would be US$80,000,000/14,959,224 = US$5.348.
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(d) Subject to the provisions of Section 3 hereof, in the event that a
Liquidity Event shall not be consummated prior to 23:59 on June 30,
2000, the exercise price for each Warrant Share purchasable hereunder
following such date shall be equal to a price reflecting a pre money
Company valuation of US$60,000,000, which shall be equal to a
fraction, the numerator of which is US$60,000,000, and the denominator
of which is the total number of issued and outstanding shares of the
Company at the time of exercise (on a fully diluted and as-converted
basis, taking into account all convertible securities, convertible
loans, warrants, options and all other rights, whatsoever, to receive
shares). As an illustration of the foregoing, if the number of issued
and outstanding shares of the Company, on a fully diluted and as
converted basis, as of the date of exercise, is 14,959,224 shares, and
the Warrant Price applicable to the exercise of this Warrant on the
date hereof would be US$60,000,000/14,959,224= US$4.011.
(e) For the avoidance of doubt it is hereby clarified that in no event
shall the Warrant Price or the Event Price reflect a pre money Company
valuation of less than US$60,000,000.
For the purpose of this Warrant, the term "Qualified Financing" shall mean
the closing of the first financing after the date hereof in which the
Company issues Equity Securities (as defined below) and in which persons
and/or entities other than, or in addition to, the Company's existing
shareholders immediately prior to the Qualified Financing, contribute
aggregate gross proceeds to the Company in such financing in excess of two
million United States Dollars (US$2,000,000). Equity Securities shall mean
securities of the share capital of the Company other than options, warrants
or convertible debentures or loans.
For purposes of this Warrant "Initial Public Offering" shall mean the first
underwritten public offering pursuant to an effective registration
statement under the Securities Act , or any other securities law of any
other jurisdiction, covering the offering and sale of shares of Ordinary
Shares for the account of the Company (other than a registration statement
effected solely to implement an employee benefit plan, a transaction in
which Rule 145 of the Securities and Exchange Commission is applicable or
any other form or type of registration in which the Ordinary Shares cannot
be included pursuant to the Securities and Exchange Commission rules of
practices).
All references to dates and time are made according to the time in the
State of Israel.
3. Term
----
This Warrant may be exercised, in whole, or in part (subject to Section 4
below), during the period beginning on the Effective Date and ending on the
date which is the earlier of: (i) three (3) years following the Effective
Date; (ii) immediately following the closing of an Initial Public Offering;
and (iii) immediately following the closing of an event described in
Section 2(i)(c) and (d) hereof. Notwithstanding the foregoing, if, at the
conclusion of the initial 12-month period of the credit line of up to
US$4,000,000 given to Company by the Holder, the Holder does not extend
such
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credit line for an additional 12-month period, then this Warrant shall
immediately terminate upon the termination of the initial 12-month period
of such credit line.
4. Exercise of Warrant
-------------------
This Warrant may be exercised in whole or in part on one occasion during
its term. The Warrant may be exercised by the surrender of the Warrant to
the Company at its principal office together with the Notice of Exercise
annexed hereto duly completed and executed on behalf of the Holder.
a. Exercise for Cash
-----------------
To exercise for cash, the Notice of Exercise must be accompanied by
payment in full of the amount of the aggregate purchase price of the
Warrant Shares being purchased upon such exercise in immediately
available funds, in U.S. Dollars or NIS equivalent thereof, based on
the representative rate of exchange published by the Bank of Israel
and known at the time of payment.
b. Net Exercise
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In lieu of the payment method set forth in Section 4(a) above, upon
the closing of a Liquidity Event described in Sections 2(i)(b),
2(i)(c) or 2(i)(d), the Holder may elect to exchange the Warrant for a
number of Warrant Shares equal to the increase in value of the Warrant
Shares otherwise purchasable hereunder on the date of exchange. If
the Holder elects to exchange this Warrant as provided in this Section
4(b), the Holder shall tender to the Company the Warrant along with
the Notice of Exercise, and the Company shall issue to the Holder the
number of Warrant Shares computed using the following formula:
X = Y (A-B)
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A
Where X = the number of Warrant Shares to be issued to the Holder.
Y = the number of shares of Warrant Shares purchasable under the
Warrant (as adjusted to the date of such calculation, but excluding
those shares already issued under this Warrant).
A = the Fair Market Value (as defined below) of one share of the
Company's Ordinary Shares.
B = Exercise Price (as adjusted to the date of such calculation).
"Fair Market Value" of an Ordinary Share shall mean:
(i) Except as set forth in subsection 4.b.(ii) (below), if the
Company's Ordinary Shares are not publicly traded, then as
determined by the Company's Board of Directors in good faith.
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(ii) If the exercise date is the date of closing of a public offering
of the Company's Ordinary Shares pursuant to an effective
registration statement under the Securities Act, then the public
offering price (before deduction of discounts, commissions or
expenses) in such offering.
In the event of a net exercise, the entire Warrant must be
surrendered, and no new Warrant shall be issued.
c. Issuance of Shares on Exercise
------------------------------
The Company agrees that the Warrant Shares so purchased shall be
issued as soon as practicable thereafter, and that the Holder shall
be deemed the record owner of such Warrant Shares as of and from the
close of business on the date on which this Warrant shall be
surrendered, together with payment in full as required above. In the
event of a partial exercise, the Company shall concurrently issue to
the Holder a replacement Warrant on the same terms and conditions as
this Warrant, but representing the number of Warrant Shares remaining
after such partial exercise.
d. Conditional Exercise
--------------------
In any connection with a Liquidity Event, such exercise may be made
conditional upon the completion of such Liquidity Event.
5. Fractional Interest
-------------------
No fractional shares will be issued in connection with any exercise
hereunder, and the number of Warrant Shares issued shall be rounded to the
nearest whole number.
6. Warrant Confers No Rights of Shareholder
----------------------------------------
Except as otherwise set forth in this Warrant, the 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 any Warrant
Shares.
7. Investment Representation
-------------------------
Neither this Warrant nor the Warrant Shares issuable upon the exercise of
this Warrant have been registered under the Securities Act, or any other
securities laws. The Holder acknowledges by acceptance of the Warrant that
(a) it has acquired this Warrant for investment and not with a view to
distribution; (b) it has either a pre-existing personal or business
relationship with the Company, or its executive officers, or by reason of
its business or financial experience, it has the capacity to protect its
own interests in connection with the transaction; and (c) it is an
accredited investor as that term is defined in Regulation D promulgated
under the Securities Act. The Holder agrees that any Warrant Shares
issuable upon exercise of this Warrant will be acquired for investment and
not with a view to distribution and such Warrant Shares will not be
registered under the Securities Act and applicable state securities laws
and that such Warrant Shares may have to be held indefinitely unless they
are
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subsequently registered or qualified under the Securities Act and
applicable state securities laws, or based on an opinion of counsel
reasonably satisfactory to the Company, an exemption from such registration
and qualification is available. The Holder, by acceptance hereof, consents
to the placement of legend(s) on all securities hereunder as to the
applicable restrictions on transferability in order to ensure compliance
with the Securities Act, unless in the opinion of counsel for the Company
such legend is not required in order to ensure compliance with the
Securities Act. The Company may issue stop transfer instructions to its
transfer agent in connection with such restrictions.
8. Adjustment of Warrant Price and Number of Shares
------------------------------------------------
The number and kind of securities purchasable initially upon the exercise
of this Warrant and the Warrant Price shall be subject to adjustment from
time to time upon the occurrence of certain events, as follows:
a. Adjustment for Shares Splits and Combinations If the Company at any
---------------------------------------------
time or from time to time during the term of this Warrant effects a
subdivision of the outstanding Ordinary Shares, the number of Ordinary
Shares issuable upon exercise of this Warrant immediately before the
subdivision shall be proportionately increased, and conversely, if the
Company at any time or from time to time combines the outstanding
Ordinary Shares, the number of Ordinary Shares issuable upon exercise
of this Warrant immediately before the combination shall be
proportionately decreased. Any adjustment under this Section 8(a)
shall become effective at the close of business on the date the
subdivision or combination becomes effective.
b. Adjustment for Certain Dividends and Distributions In the event the
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Company at any time or from time to time, during the term of this
Warrant makes, or fixes a record date for the determination of holders
of Ordinary Shares entitled to receive a dividend or other
distribution payable in additional shares of Ordinary Shares, then and
in each such event the number of Ordinary Shares issuable upon
exercise of this Warrant shall be increased 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 number of Ordinary
Shares issuable upon exercise of this Warrant by a fraction: (i) the
numerator of which shall be the total number of Ordinary Shares issued
and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of Ordinary
Shares issuable in payment of such dividend or distribution, and (ii)
the denominator of which is the total number of shares of Ordinary
Shares issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date; provided,
---------
however, that if such record date is fixed and such dividend is not
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fully paid or if such distribution is not fully made on the date fixed
thereof, the number of Ordinary Shares issuable upon exercise of this
Warrant shall be recomputed accordingly as of the close of business on
such record date and thereafter the number of shares of Ordinary
Shares issuable upon exercise of this Warrant shall be adjusted
pursuant to this Section 8(b) as of the time of actual payment of such
dividends or distributions.
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c. Adjustments for Other Dividends and Distributions. In the event the
-------------------------------------------------
Company at any time or from time to time during the term of this
Warrant makes, or fixes a record date for the determination of holders
of Ordinary Shares entitled to receive a dividend or other
distribution payable in securities of the Company other than Ordinary
Shares, then in each such event provision shall be made so that the
Holder shall receive upon exercise of this Warrant, in addition to the
number of Ordinary Shares receivable thereupon, the amount of
securities of the Company that the Holder would have received had this
Warrant been exercised for Ordinary Shares immediately prior to such
event (or the record date for such event) and had the Holder
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 and the Company's
Articles of Association with respect to the rights of the Holder.
d. Adjustment for Reclassification, Exchange and Substitution If the
----------------------------------------------------------
Ordinary Shares issuable upon the exercise of this Warrant are changed
into the same or a different number of shares of any class or classes
of shares, whether by recapitalization, reclassification or otherwise
(other than a subdivision or combination of shares or shares dividend
or a reorganization, merger, consolidation or sale of assets, provided
for elsewhere in this Section), then and in any such event the Holder
shall have the right thereafter to exercise this Warrant into the kind
and amount of shares and other securities receivable upon such
recapitalization, reclassification or other change, by holders of the
number of shares of Ordinary Shares for which this Warrant might have
been exercised immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment as
provided herein and under the Company's Articles of Association.
e. Reorganization, Mergers, Consolidations or Sales of Assets If at any
----------------------------------------------------------
time or from time to time during the term of this Warrant there is a
capital reorganization of the Ordinary Shares (other than a
recapitalization, subdivision, combination, reclassification or
exchange of shares provided for elsewhere in this Subsection) 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
shares or properties and assets to any other person, then, as a part
of such 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 or other
securities or property of the Company, or of the successor corporation
resulting from such merger or consolidation or sale, to which a holder
of Ordinary Shares deliverable upon conversion would have been
entitled on such capital reorganization, merger, consolidation or
sale. In any such case (except to the extent any cash or property is
received in such transaction), appropriate adjustment shall be made in
the application of the provisions of this Subsection and the Company's
Articles of Association with respect to the rights of the Holder after
the reorganization, merger, consolidation or sale to the end that the
provisions of this Subsection and the Company's Articles of
Association (including adjustment of the number of
-8-
shares of Ordinary Shares issuable upon exercise of this Warrant)
shall be applicable after that event and be as nearly equivalent to
the provisions hereof as may be practicable.
f. Other Transactions. In the event that the Company shall issue shares
-------------------
to its shareholders as a result of a split-off, spin-off or the like,
then the Company shall give the Holder a 30 days written notice prior
to the completion of such issuance or other action.
g. General Protection. The Company will not, by amendment of its Articles
------------------
of Association or through any reorganization, recapitalization,
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 hereunder, or impair the economic interest of the Holder,
but will at all times in good faith assist in the carrying out of all
the provisions hereof and in taking of all such actions and making all
such adjustments as may be necessary or appropriate in order to
protect the rights and the economic interests of the Holder against
impairment.
h. Notice of Capital Changes. If at any time during the term of this
-------------------------
Warrant there shall be any capital reorganization or reclassification
of the capital shares of the Company, or consolidation or merger of
the Company with, or sale of all or substantially all of its assets to
another company or there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company, or other
transaction described in this Section 8, then, in any one or more of
said cases, the Company shall give the Holder written notice, by
registered or certified mail, postage prepaid, of the date on which
such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up shall take place, as the case
may be. Such notice shall also specify the date as of which the
holders of record of Ordinary Shares shall participate in such
subscription rights, or shall be entitled to exchange their Ordinary
Shares for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be. Such
written notice shall be given at least fourteen (14) days prior to the
action in question and not less than fourteen (14) days prior to the
record date in respect thereto.
i. Adjustment of Warrant Price. Upon each adjustment in the number of
---------------------------
Ordinary Shares purchasable hereunder, the Warrant Price shall be
proportionately increased or decreased, as the case may be, in a
manner that is the inverse of the manner in which the number of
Ordinary Shares purchasable hereunder shall be adjusted.
j. Notice of Adjustments. Whenever the Warrant Price or the number of
---------------------
Ordinary Shares purchasable hereunder shall be adjusted pursuant to
Section 8 hereof, the Company shall prepare a certificate signed by
the chief financial officer of the Company setting forth, in
reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated,
and the Warrant Price and the number of Ordinary
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Shares purchasable hereunder after giving effect to such adjustment,
and shall cause copies of such certificate to be mailed (by first
class mail, postage prepaid) to the Holder.
9. Transfer of This Warrant or Securities Issuable on Exercise Hereof
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a. With respect to any offer, sale or other disposition of this Warrant
or securities into which such Warrant may be exercised, the Holder
will give written notice to the Company prior thereto, describing
briefly the manner thereof, together with, if requested by the
Company, a written opinion of such Holder's counsel, to the effect
that such offer, sale or other distribution may be effected without
registration or qualification (under any federal or state law then in
effect). Such opinion letter and all such transferees must warrant
and represent that each such transferee is an "accredited" investor as
that term is defined under Regulation D of the Securities Act.
Promptly, as practicable, upon receiving such written notice and
opinion and warranties and representations, if so requested, the
Company, as promptly as practicable, shall deliver to the Holder one
or more replacement Warrant certificates on the same terms and
conditions as this Warrant for delivery to the transferees. Each
Warrant thus transferred and each certificate representing the
securities thus transferred shall bear legend(s) as to the applicable
restrictions on transferability in order to ensure compliance with the
Securities Act, unless in the opinion of counsel for the Company such
legend is not required in order to ensure compliance with the
Securities Act. The Company may issue stop transfer instructions to
its transfer agent in connection with such restrictions. Any
provision of this Warrant to the contrary notwithstanding, the Holder
may not offer, sell or otherwise dispose of this Warrant to any third
party, other than (i) to a wholly owned subsidiary of Bank Hapoalim
B.M., or (ii) to any other transferee approved by the Company in
writing in its sole discretion. In addition to the above, any
transfer of this Warrant or the Warrant Shares shall be subject to the
provisions of the Company's Articles of Association.
b. In the event that the Company or its shareholders receive an offer to
transfer all or substantially all of the shares in the Company, or to
effect a merger or acquisition, or sale of all or substantially all of
the assets of the Company, then the Company shall promptly inform the
Holder in writing of such offer.
10. Registration Rights
-------------------
The Company covenants and agrees as follows:
The Holder shall have registration rights in accordance with and subject to
an Amendment and Restatement Investors Rights Agreement dated April 22,
1998 (the "Amended Investors Rights Agreement") between the Company and
certain of its shareholders, pursuant to which the Company granted such
shareholders registration rights as provided therein, and therefore (i) the
Holder of this Warrant shall be deemed to be a Holder (as defined in the
Amended Investors Rights Agreement) and (ii) (x) the Warrant Shares, and
(y) any Ordinary Shares of the Company issued as a dividend or other
distribution with respect to, or in exchange for or in replacement of, such
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Warrant Shares shall be deemed to be included in the definition of
Registrable Shares (as defined in the Amended Investors Rights Agreement).
Rights and Obligations Survive Exercise and Expiration of Warrant. The
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rights and obligations of the Company and the Holder set forth in this
Section 10 and in the Registration Rights shall survive the exercise,
conversion and expiration of this Warrant only if this Warrant is exercised
and only with respect to the Warrant Shares issued in respect of this
Warrant.
11. Representations and Warranties.
------------------------------
The Company represents and warrants to the Holder as follows:
a. This Warrant has been duly authorized and executed by the Company and
is a valid and binding obligation of the Company enforceable in
accordance with its terms.
b. The Warrant Shares are duly authorized and reserved for issuance by
the Company and, when issued in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable and not subject to any
preemptive rights.
c. The execution and delivery of this Warrant are not, and the issuance
of the Warrant Shares upon exercise of this Warrant in accordance with
the terms hereof will not be, inconsistent with the Company's Articles
of Association, do not and will not contravene any law, governmental
rule or regulation, judgment or order applicable to the Company, and,
except for consents that have already been obtained by the Company, do
not and will not conflict with or contravene any provision of, or
constitute a default under, any indenture, mortgage, contract or other
instrument of which the Company is a party or by which it is bound or
require the consent or approval of, the giving of notice to, the
registration with or the taking of any action in respect of or by, any
Federal, state or local government authority or agency or other
person.
The Holder hereby represents and warrants to the Company as follows:
one. Holder has been provided with a copy of the Amended Investors
Rights Agreement, has carefully read its terms and by executing this
Warrant hereby agrees to be bound by the provisions of the Amended
Investors Rights Agreement applicable to a "Holder" (as defined
therein).
two. Holder has been provided with a copy of the Articles of
Association of the Company (the "Articles") and has carefully read the
provisions thereof (including without limitation the provisions of the
"Drag Along Right" as set forth in Article _____).
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12. Expenses
--------
The Company will pay the Israeli Stamp Duty on the issuance of the Warrant
Shares, and will notify the Israeli Companies Registrar of such issuance
within the time period required by law. The Stamp Duty on this Warrant, if
any, will be paid in full by the Company.
13. Loss, Theft, Destruction or Mutilation of Warrant
-------------------------------------------------
Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Warrant or Shares
certificate, and in case of loss, theft or destruction, of indemnity, or
security reasonably satisfactory to it, and upon reimbursement to the
Company of all reasonable expenses incidental thereto, and upon surrender
and cancellation of such Warrant or Shares certificate, if mutilated, the
Company will make and deliver a new Warrant or Shares certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or Shares
certificate.
14. Notices
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Any notice or other communication hereunder shall be in writing and shall
be deemed to have been given upon delivery, if personally delivered or
three business days after deposit if deposited in the mail for mailing by
certified mail, postage prepaid, and addressed as follows:
If to Holder: Bank Hapoalim B.M.
Electronics Group - Industrial Sector
41-45 Rothschild Blvd.
Tel Aviv, Israel
attn.: Ruthi Simha
fax: 03-567-5699
If to Company: R.T.S. Software Ltd.
5 Kiriat Hamada Street
Har Hotzvim, Jerusalem, Israel
attn.: Samuel HaCohen or Yohanan Engelhardt
fax: 02-5815507
With a copy to: R.T.S. Software Inc.
attn.: Samuel HaCohen or Yohanan Engelhardt
fax: 1-781-890-2953
Each of the above addressees may change its address for purposes of this
paragraph by giving to the other addressees notice of such new address in
conformance with this paragraph.
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15. Applicable Law; Jurisdiction
----------------------------
This Warrant shall be governed by and construed in accordance with the laws
of the State of Israel as applicable to contracts between two residents of
the State of Israel entered into and to be performed entirely within the
State of Israel. Any dispute arising under or in relation to this Warrant
shall be resolved exclusively in the competent court for Tel Aviv-Jaffa
district, and each of the parties hereby submits irrevocably to the
exclusive jurisdiction of such court.
16. Entire Agreement
----------------
This Warrant constitutes the entire agreement between the parties hereto
with regard to the subject matters hereof, and supercedes any prior
communications, agreements and/or understandings between the parties hereto
with regard to the subject matters hereof.
Dated: March 15, 1999
R.T.S. SOFTWARE LTD.
By: Samuel HaCohen Yohanan Engelhardt
---------------------------- ---------------------------
Title: President and CEO CFO
---------------------------- ---------------------------
/s/ Samuel HaCohen /s/ Yahanan Engelhardt
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Agreed to and accepted:
Hapoalim Nechasim (Menayot) Ltd.
By: Y. Elinar /s/ I.M. Behar
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Name: /s/ Y. Elinar I. M. Behar
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Title: Members of the Board of Management
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Address: 41-45 Rothschild Blvd.
Tel Aviv, Israel
-13-
NOTICE OF EXERCISE
To:
1. The undersigned hereby elects to purchase _________ shares of Ordinary
Shares of ____________, pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price for such shares in full.
2. In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Ordinary Shares are being acquired solely
for the account of the undersigned and not as a nominee for any other
party, or for investment, and that the undersigned will not offer, sell or
otherwise dispose of any such shares of Ordinary Shares except under
circumstances that will not result in a violation of the Securities Act of
1933, as amended, or any state securities laws.
3. Please issue a certificate representing said shares of Ordinary Shares in
the name of the undersigned.
4. Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned.
5 [Optional] This exercise is made contingent upon the closing of the Initial
Public Offering on [____________]. In the event that such closing does not
take place on or before such date, this exercise shall be withdrawn.
___________________ ____________________________
(Date) (Print Name)
____________________________
(Signature)