Exhibit 10.12
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WARRANT
to Purchase up to an Aggregate of _______ Ordinary Shares
(Subject to Adjustment) of
R.T.S. Software Ltd.
at U.S. $__ per share
VOID AFTER 10:00 a.m. (prevailing Tel Aviv time)
on _______________
THIS IS TO CERTIFY that the holder specified below ("Holder") is entitled to
purchase, subject to the provisions of this Warrant, from R.T.S. Software Ltd.
(the "Company"), at any time on or after the date hereof (the "Effective Date")
and until ________________, an aggregate of up to ________ (subject to
adjustment) fully and nonassessable Ordinary Shares, nominal value New Israeli
Shekel ("NIS") 0.10 per share (the "Ordinary Shares"), of the Company at a price
of US$___ per Ordinary Share or the NIS equivalent thereof (the "Exercise
Price"). The amount and kind of securities purchasable pursuant to the rights
granted hereunder and the Exercise Price for such securities are subject to
adjustment pursuant to the further provisions of this Warrant.
1. EXERCISE OF WARRANT
Subject to the provisions hereof, this Warrant may be exercised in whole
or in part, at any time or from time to time on or after the Effective Date
and until ______________. This Warrant shall be exercised by presentation
and surrender hereof to the Company at the principal office of the Company;
accompanied by
1. a written notice of exercise; and
2. payment to the Company, for the account of the Company, of the Exercise
Price for the number of Ordinary Shares specified in such notice.
The Exercise Price for the number of Ordinary Shares specified in the
notice shall be payable in immediately available funds, at the option of the
Holder, in U.S. dollars or the NIS equivalent thereof, based on the
Representative Rate of Exchange published by the Bank of Israel known as of
the time of payment.
Upon such presentation and surrender, the Company shall issue promptly to
the Holder the Ordinary Shares to which the Holder is entitled hereunder.
If this Warrant should be exercised in part only, the Company shall, upon
surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder to purchase the balance of the
Ordinary Shares purchasable hereunder. Upon receipt by the Company of this
Warrant, in proper form for exercise and the Exercise Price for the Ordinary
Shares being purchased at such time, the Holder shall be deemed to be the
holder of record of
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the Ordinary Shares issuable upon such exercise, notwithstanding that the
share transfer books of the Company shall then be closed or that
certificates representing such Ordinary Shares shall not then be actually
delivered to the Holder. The Company shall pay any and all expenses, any
stamp duty and any other charges that may be payable in connection with the
issuance of the Ordinary Shares and the preparation and delivery of share
certificates pursuant to this Paragraph 1 in the name of the Holder.
No fractions of Ordinary Shares shall be issued in connection with the
exercise of this Warrant, and the number of Ordinary Shares issued shall be
rounded down to the nearest whole number.
Notwithstanding the foregoing, in the event of (i) the initial public
offering of the Company (the "IPO"), (ii) on or after the merger of the
Company with or into another company or entity, in which the Company is not
the surviving entity (a "Merger") or (iii) on or after the sale of all or
substantially all of the assets of the Company (a "Sale") then, in lieu of
exercising this Warrant as provided above, in whole or in part, the Holder
may elect to receive simultaneously with the Closing of the IPO, or
simultaneously with the closing of the Merger or Sale, by the surrender and
cancellation of this Warrant or any such portion thereof to the Company,
Ordinary Shares equal to the value of the Warrant (or the portion thereof
being canceled) by written notice of such election to the Company, at the
principal office of the Company, in which event the Company shall issue to
the Holder, for no additional consideration, that number of Ordinary Shares
computed using the following formula:
Y(A - B)
X = -----------------
A
X equals the number of Ordinary Shares to be issued to the Holder;
Y equals the number of Ordinary Shares which would otherwise have been
purchasable under this Warrant (or the portion thereof being canceled);
B equals the Exercise Price per Ordinary Share in effect at the time of
exercise pursuant to this Warrant (as may be adjusted pursuant to the
terms of this Warrant); and
A shall equal the "Fair Value" of one share of the Company's Ordinary
Shares. Fair Value shall mean in the event that this Warrant is
exercised in accordance with the above formula (i) if in connection with
an IPO, then the Fair Value shall equal the price of an Ordinary Share
as sold to the public, or (ii) if in connection with a Merger or Sale,
the value of such share(s) as determined for the purposes of the Merger
or Sale, or (iii) if other than in connection with an IPO or a Merger or
Sale and if a public market exists for the securities then subject to
this Warrant and such securities are listed on a U.S. nationally
recognized stock exchange or on the Nasdaq stock market, then the Fair
Value shall equal the last sale or trading price of such securities as
reported on such exchange or market, as applicable; provided, however,
if no public market exists for the securities
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then the Fair Value shall be determined in good faith by the Board of
Directors of the Company, but if such determination is challenged in
good faith by the Holder, then as determined by an independent appraiser
mutually satisfactory to the Company and the Holder, which determination
shall be binding upon the parties.
2. RESERVATION OF SHARES: PRESERVATION OF RIGHTS
The Company hereby agrees that at all times it will maintain and reserve
such number of authorized but unissued Ordinary Shares so that this Warrant
may be exercised without additional authorization of Ordinary Shares after
giving effect to all other options, warrants, convertible securities and
other rights to acquire Ordinary Shares of the Company. All shares of
Ordinary Shares issuable pursuant to the terms hereof, when issued upon
exercise of this Warrant in accordance with the terms hereof shall be duly
and validly issued and fully paid and nonassessable, not subject to
preemptive rights and shall be free and clear of all liens, encumbrances,
equities and claims. The Company further agrees that it will not, by charter
amendment or through reorganization, consolidation, merger, dissolution or
sale of assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by the Company.
3. EXCHANGE OR LOSS OF WARRANT
This Warrant is exchangeable, upon presentation and surrender hereof at the
principal office of the Company, only in connection with a partial exercise
hereof. The Company shall be under no obligation to issue replacement
warrants for the aggregate number of shares covered hereby except as
described herein. The term "Warrant" as used herein includes any Warrant or
Warrants for which this Warrant may be exchanged. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and (in the case of loss, theft
or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like terms, tenor and date.
4. ADJUSTMENT
The number of Ordinary Shares purchasable upon the exercise of this Warrant
and the Exercise Price shall be subject to adjustment from time to time or
upon exercise as provided in this paragraph 4.
4.1. If, during the term of this Warrant, the Company shall distribute a
stock dividend or shares of capital stock pursuant to a
reclassification of its Ordinary Shares to the holders of Ordinary
Shares (i.e., bonus shares), the number of Ordinary Shares purchasable
upon exercise of this Warrant shall be increased by multiplying such
number of shares to be purchased under this Warrant by a fraction of
which the denominator shall be the number of Ordinary Shares
outstanding at the close of business on the day
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immediately preceding the date of such distribution and the numerator
shall be the sum of such number of shares and the total number of bonus
shares, such increase to become effective immediately after the opening
of business on the date following such distribution, and upon the
happening of such an event the Exercise Price shall be adjusted
appropriately.
4.2. If, during the term of this Warrant, the outstanding Ordinary Shares
shall be subdivided into a greater number of Ordinary Shares, the
number of Ordinary Shares purchasable upon exercise of this Warrant at
the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and,
conversely, if the outstanding Ordinary Shares shall each be combined
into a smaller number of Ordinary Shares, the number of Ordinary Shares
purchasable upon exercise of this Warrant at the opening of business on
the day following the day upon which such combination becomes effective
shall be proportionately decreased, and in each such case the Exercise
Price shall be adjusted appropriately.
4.3. Reorganization, Reclassification, Merger, Consolidation or Disposition
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of Assets
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(a) In case the Company shall reorganize its capital, reclassify its
capital stock, consolidate or merge with or into another
corporation or sell, transfer or otherwise dispose of all or
substantially all of its property, assets or business to another
corporation and pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets,
(i) shares of capital stock of the successor or acquiring
corporation or of the Company (if it is the surviving corporation)
or (ii) any cash, shares of stock or other securities or property
of any nature whatsoever (including warrants or other subscription
or purchase rights) in addition to or in lieu of capital stock of
the successor or acquiring corporation ("Other Property") are to
be received by or distributed to the holders of Ordinary Shares of
the Company who are holders immediately prior to such transaction,
then the Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of capital stock of
the successor or acquiring corporation or of the Company, if it is
the surviving corporation, and Other Property receivable upon or
as a result of such reorganization, reclassification, merger,
consolidation or disposition of assets by a holder of the number
of shares of Ordinary Shares for which this Warrant is exercisable
immediately prior to such event.
(b) In case of any such reorganization, reclassification, merger,
consolidation or disposition of assets, the successor or acquiring
corporation shall expressly assume the due and punctual observance
and performance of each and every covenant and condition of this
Warrant to be performed and observed by the
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Company and all the obligations and liabilities hereunder, subject
to such modifications as may be deemed appropriate (as determined
by resolution of the Board of Directors of the Company) in order
to provide for adjustments of shares of the Ordinary Shares for
which this Warrant is exercisable, which modifications shall be as
nearly equivalent as practicable to the adjustments provided for
in this Section 4.
(c) The provisions of this subsection 4.3 shall similarly apply to
successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.
4.4. Other Dilutive Events
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In case any event shall occur as to which the preceding subsections 4.1
through 4.3 are not strictly applicable but as to which the failure to
make any adjustment would not fairly protect the purchase rights
represented by this Warrant in accordance with the essential intent and
principles hereof then, in each such case, the Board of Directors of the
Company shall, in good faith, determine what adjustments are necessary
to preserve the purchase rights of the Holder represented by this
Warrant. The Company will notify the Holder of any such adjustments.
5. NOTICE OF CERTAIN EVENTS
The Holder of this Warrant shall not be entitled to any rights of a
shareholder. Notwithstanding, in case at any time:
5.1. There shall be any merger of the Company with, or any statutory
exchange of the Company's securities with the securities of, or sale of
all or substantially all of its assets to, another corporation; or
5.2. There shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then, in any one or more of such cases, the Company shall give written
notice, by first class mail, postage prepaid, addressed to the Holder at the
address of the Holder as shown on the books of the Company, of the date on
which such merger, exchange, 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 Ordinary Shares of record shall be entitled
to exchange their Ordinary Shares for securities or other property
deliverable upon such merger, exchange, sale, dissolution, liquidation or
winding up, as the case may be. Such written notice shall be given at least
twenty (20) days prior to the action in question.
6. NOTICE OF ADJUSTMENTS
Whenever the number of Ordinary Shares for which this Warrant is exercisable
is adjusted as provided in paragraph 4 hereof the Company shall promptly
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compute such adjustment and mail to the Holder at the last address provided
to the Company in writing a certificate, signed by the principal financial
officer of the Company, setting forth the number of Ordinary Shares for
which this Warrant is exercisable and the exercise price as a result of such
adjustment, a brief statement of the facts requiring such adjustment and the
detailed computation thereof and when such adjustment has or will become
effective.
7. RIGHTS OF THE HOLDER
7.1. Without limiting the foregoing or any remedies available to the Holder,
the Holder will be entitled to specific performance of the obligations
hereunder, and injunctive relief against actual or threatened
violations of the obligations of any person subject to this Warrant.
7.2. This Warrant shall not entitle the Holder to any voting rights or other
rights as a shareholder of the Company whatsoever, except the rights
expressed herein and no dividend or interest shall be payable or accrue
in respect of this Warrant.
8. REGISTRATION RIGHTS
Following the completion of the Company's initial public offering of its
Ordinary Shares, the Company shall notify the Holder at any time it plans to
register its ordinary shares for sales to the public (other than
registration in connection with an IPO or pursuant to Forms F-4, F-8 and
their equivalents). The Holder shall have 20 days from the Company's mailing
of such notice to indicate whether it desires that the Ordinary Shares
issuable upon exercise of this Warrant (the "Warrant Shares") be included in
such offering. If the Holder hereof so requests that the Warrant Shares be
so registered in such offering, the Company shall use its best efforts to
include such Warrant Shares in such offering; provided, however, that if the
managing underwriter of such offering determines in its sole discretion that
the number of Ordinary Shares to be sold by persons other than the Company
should be limited (or excluded completely), then the number of Warrant
Shares to be included in such offering shall be reduced (pro rata with
persons other than the Company who hold registration rights and desire to be
included in the offering, all in proportion to relative ownership of shares
of the Company). It shall be a condition to the exercise of its rights
hereunder that the Holder hereof enters into an underwriting agreement as
requested by the managing underwriter of such offering, and abide by the
terms and conditions set forth therein. The registration rights provided by
this section shall not be assignable, and shall terminate on the fourth
anniversary of the date of this Warrant.
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8. NOTICE GENERALLY
Any notice, demand, request, consent, approval, declaration, delivery or
communication hereunder to be made pursuant to the provisions of this
Warrant shall be sufficiently given or made if in writing and shall be
deemed to have been validly served, given or delivered (a) when sent after
receipt of confirmation or answer back if sent by telex or telecopy or other
similar facsimile transmission, (b) two (2) business days after deposit with
a reputable international two (2) day courier with all charges prepaid or
(c) when delivered if hand-delivered by messenger, all of which shall be
properly addressed to the party to be notified and sent to the address or
number indicated, to the Holder, or the holder of Ordinary Shares at its
last known address appearing on the books of the Company maintained for such
purpose, and to the Company at:
RTS Software, Ltd.
Science Based Industries Campus
P.O. Box 23052
Jerusalem 91230, Israel
or at such other address as may be submitted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice.
9. TERMINATION
This Warrant and the rights conferred hereby shall terminate on March 31,
2002.
10. LIMITATION ON TRANSFER
This Warrant shall be transferable in whole or in part only to a subsidiary
of the Holder, provided that if the Holder ceases to hold the majority of
any of the means of control of such subsidiary, this Warrant shall be
transferred back to the Holder.
11. GOVERNING LAW
This Warrant shall be governed by, and construed in accordance with, the
laws of the State of Israel, without giving effect to the rules respecting
conflict of law, and the parties hereto irrevocably submit to the sole and
exclusive jurisdiction of the Courts of Israel in respect of any dispute or
matter arising out of or connected with this Warrant.
DATED: ___________________ RTS Software Ltd.
By: _____________________
Name: _____________________
Title: _____________________
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Agreed to and accepted:
_____________________________
Name of Holder
By: _____________________
Name: _____________________
Title: _____________________
Address: _____________________
_____________________