Exhibit 2.2
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS.
THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED AND THE
SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT CANNOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE WARRANT OR
SHARES UNDER SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT.
I.I.S INTELLIGENT INFORMATION SYSTEMS LIMITED
WARRANT TO PURCHASE ORDINARY SHARES
Void after Right to Purchase ______ Ordinary Shares
(Subject to adjustment)
PREAMBLE
I.I.S. Intelligent Information Systems Ltd. ("IIS" or the "Company"), an
Israeli company, hereby certifies that, for value received, ____________, whose
address is ___________________________________________, or its registered
assigns (hereinafter, the "Registered Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company at any time or from time to
time before 5:00 P.M. Israeli time, on December 20, 2003 (the "Expiration
Date"), _________ of the Company's fully paid and non-assessable Ordinary
Shares, par value NIS 0.003 per share (the "Ordinary Shares"), at the purchase
price per share of $4.50 (the "Initial Exercise Price"). The number of such
Ordinary Shares and the Initial Exercise Price are subject to adjustment as
provided herein.
This Warrant is one of the Warrants to Purchase Ordinary Shares (the
"Warrants"), evidencing the right to purchase Ordinary Shares of the Company,
issued pursuant to a Securities Purchase Agreement (the "Securities Purchase
Agreement"), dated January 31, 2001, between the Company and the Purchasers
identified therein. The Securities Purchase Agreement contains certain
additional terms that are binding upon the Company and each Registered Holder of
the Warrants. A copy of the Securities Purchase Agreement may be obtained by
any Registered Holder of the Warrants from the Company upon written request.
Capitalized terms used but not defined herein shall have the meanings set forth
in the Securities Purchase Agreement.
Section 1. Exercise of Warrant.
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(a) Exercise by Payment. To exercise this Warrant in whole or in part, the
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holder hereof shall deliver to the Company at its principal office, (a) a
written notice, in substantially the form of the Subscription Notice appearing
at the end of this Warrant, of such holder's election to exercise this Warrant,
which notice shall specify the number of Ordinary Shares to be purchased, (b) an
official bank check, payable to the Company in an amount equal to the multiple
of the Exercise Price (as adjusted) and the number of Ordinary Shares being
purchased, and (c) this Warrant. The Company shall as promptly as practicable,
and in any event within 20 days thereafter, execute and deliver or cause to be
executed and delivered, in accordance with such notice, a certificate or
certificates representing the aggregate number of Ordinary Shares specified in
such notice. The share certificate or certificates so delivered shall be issued
in the name of such holder or such other name as shall be designated in such
notice. Such certificate or certificates shall be deemed to have been issued
and such holder or any other person so designated to be named therein shall be
deemed for all purposes to have become a holder of record of such shares as of
the date such notice is received by the Company as aforesaid. If this Warrant
shall have been exercised only in part, the Company shall, at the time of
delivery of said certificate or certificates, deliver to such holder a new
Warrant evidencing the rights of such holder to purchase the remaining Ordinary
Shares called for by this Warrant, which new Warrant shall in all other respects
be identical to this Warrant, or, at the request of such holder, appropriate
notation may be made on this Warrant and the same returned to such holder. The
Company shall pay all expenses, taxes and other charges payable in connection
with the preparation, issue and delivery of such share certificates and new
Warrants, except that, in case such share certificates or new Warrants shall be
registered in a name or names other than the name of the holder of this Warrant,
funds sufficient to pay all shares transfer taxes that are payable upon the
issuance of such shares certificate or certificates or new Warrants shall be
paid by the holder hereof at the time of delivering the notice of exercise
mentioned above.
(b) All shares issued upon the exercise of this Warrant shall be validly
issued, fully paid and non-assessable and, if the Common Shares is then listed
on a national securities exchange, then Common Shares issued upon the exercise
of this Warrant shall be duly listed thereon.
(c) The Company shall not be required upon any exercise of this Warrant to
issue a certificate representing any fraction of a share of Warrant Shares, but,
in lieu thereof, shall pay to the holder of this Warrant cash in an amount equal
to a corresponding fraction (calculated to the nearest 1/100 of a share) of the
market value of one share of Warrant Shares, as of the date of receipt by the
Company of notice of exercise of this Warrant, as determined in good faith by
the Board of Directors of the Company.
Section 2. Transfer, Division and Combination.
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This Warrant and all rights hereunder are transferable, in whole or in
parts, on such books at such office, upon surrender of this Warrant at such
office, together with a written assignment of this Warrant duly executed by the
holder hereof or his agent or attorney and funds sufficient to pay any shares
transfer taxes payable upon the making of such transfer. Upon such surrender
and payment the Company shall execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees and in the denominations
specified in such instrument of assignment, and this Warrant shall promptly be
canceled. If and when this Warrant is assigned in blank, the Company may (but
shall not be obliged to) treat the bearer hereof as the absolute owner of this
Warrant for all purposes and the Company shall not be affected by any notice to
the contrary.
This Warrant may be divided upon presentation hereof at such principal
office of the Company, together with a written notice specifying the names and
denominations in which new Warrants are to be issued, signed by the holder
hereof or his agent or attorney. Subject to compliance with the preceding
paragraph as to any transfer that may be involved in such division, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided in accordance with such notice.
The Company shall pay all expenses, taxes (other than share transfer taxes)
and other charges payable in connection with the preparation, issue and delivery
of Warrants hereunder.
Section 3. Restrictions on Transfer of Warrants and Shares.
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This Warrant shall be transferable only under circumstances such that the
transfer is exempt from the requirements of registration under the Securities
Act of 1933, as amended (or any similar statute then in effect) and any
applicable state securities law.
Section 4. Certain Covenants.
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The Company covenants and agrees that:
(a) it will at all times reserve and set apart and have, free from
preemptive or any other third party rights, a number of shares of
authorized but unissued Ordinary Shares sufficient to enable it at any time
to fulfill all its obligations hereunder; and
(b) before taking any action that would cause an adjustment reducing
the Exercise Price below the then par value of the shares issuable upon
exercise of the Warrants, the Company will take any corporate action that
may be necessary in order that the Company may validly and legally issue
fully paid and nonassessable at such adjusted Exercise Price.
Section 5. Notices.
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In case the Company proposes
(a) to pay any dividend payable in shares (of any class or classes) or
in Convertible Securities upon its Ordinary Shares or make any distribution
(other than ordinary cash dividends) to the holders of its Ordinary, or
(b) to grant to the holders of its Ordinary Shares generally any
rights or options, or
(c) to effect any capital reorganization or reclassification of shares
of the Company, or
(d) to consolidate with, or merge into, any other corporation, to
transfer all or substantially all of its assets, or to become a party to a
transaction involving the sale of the outstanding shares of the Company, or
(e) to effect the liquidation, dissolution or winding up of the
Company,
then the Company shall cause notice of any such intended action to be given to
all holders of record of outstanding Warrants not less than 30 days before the
date on which the transfer books of the Company shall close or a record be taken
for such share dividend, distribution or granting of rights or options, or the
date when such capital reorganization, reclassification, consolidation, merger,
transfer, sale, liquidation, dissolution or winding up shall be effective, as
the case may be.
Any notice or other document required or permitted to be given or delivered
to holders of record of Warrants shall be mailed first-class postage prepaid to
each such holder at the last address shown on the books of the Company
maintained for the registry and transfer of the Warrants. Any notice or other
document required or permitted to be given or delivered to holders of record of
shares issued pursuant to Warrants shall be mailed by postage prepaid to each
such holder at such holder's address as the same appears on the share records of
the Company. Any notice or other document required or permitted to be given or
delivered to the Company shall be mailed first class postage prepaid to the
principal office of the Company, as set forth under Section 1 hereof, or
delivered to the office of one of the Company's executive officers at such
address, or such other address within the United States of America as shall have
been furnished by the Company to the holders of record of such Warrants and the
holders of record of such shares.
Section 6. Limitation of Liability; Not Shareholders; Rights Offers.
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(a) No provision of this Warrant , in the absence of affirmative action by
the holder hereof to purchase shares, shall be construed as conferring upon the
holder hereof the right to vote or to consent or to receive dividends or to
receive notice as a shareholder in respect of meetings of shareholders for the
election of directors of the Company or any other matter whatsoever as
shareholders of the Company.
(b) No provision hereof, in the absence of affirmative action by the holder
hereof to purchase shares, and no mere enumeration herein of the rights or
privileges of the holder hereof, shall give rise to any liability of such holder
for the purchase price or as a shareholder of the Company, whether such
liability is asserted by the Company, creditors of the Company or others.
(c) If the Company's shareholders are offered any securities whatsoever by
a rights issue, the Company shall offer identical rights on the same terms and
conditions to the holder of this Warrant, as if the holder had exercised this
Warrant in full immediately prior to the date of conferring the right to
participate in the rights issue.
Section 7. Loss, Destruction, etc, of Warrants.
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Upon receipt of evidence reasonably satisfactory to the Company of the
loss, theft, mutilation or destruction of any Warrant, and in the case of any
such loss, theft or destruction upon delivery of a bond of indemnity in such
form and amount as shall be reasonably satisfactory to the Company, or in the
event of such mutilation upon surrender and cancellation of the Warrant, the
Company will make and deliver a new Warrant, of like tenor, in lieu of such
lost, stolen, destroyed or mutilated Warrant. Any Warrant issued under the
provisions of this Section 7 in lieu of any Warrant alleged to be lost,
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destroyed or stolen, or of any mutilated Warrant, shall constitute an original
contractual obligation on the part of the Company.
Section 8. Adjustment.
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The Initial Exercise Price shall be subject to adjustment from time to
time or upon exercise as provided in this Section 8.
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(a) Additional Issuances. If the Company shall, at any time or from
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time to time prior to the exercise or Expiration Date, whichever is earlier (the
"Option Period"), issue any New Securities for consideration per share less than
the applicable Exercise Price in effect immediately prior to the issuance of
such Additional Shares, the Exercise Price for the Warrant in effect immediately
prior to each such issuance shall automatically (except as otherwise provided in
this Section 8(a)) be lowered to that price.
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"New Securities" shall mean any shares of the Company, whether or not
now authorized, and rights, options or warrants to purchase capital stock, and
securities of any type whatsoever that are, or may become, convertible into
capital stock; provided that the term "New Securities" shall not include (i)
securities offered to the public; (ii) securities issued pursuant to the
acquisition of another corporation by the Company by merger, purchase of
substantially all the assets of another corporation or any other reorganization
whereby the Company owns not less than fifty-one percent (51%) of the voting
power of such corporation (iii) shares of the Company issuable upon exercise or
options or warrants outstanding on the date hereof or issued or granted pursuant
to this Warrant; (iv) securities issued to employees or consultants of the
Company pursuant to any stock option plan or stock purchases or stock bonus
arrangement approved by the Board of Directors of the Company; (v) securities
issued pursuant to payment of any dividend or distribution with respect to all
of the Company's issued and outstanding capital stock; or (vi) Ordinary Shares
issued pursuant to the conversion of Debentures or exercise of warrants issued
pursuant to the Securities Purchase Agreement; or (vii) securities issued to a
strategic investor, who, in addition to its equity investment in the Company,
has the capability to provide significant added value to the Company's
business.;
For the purposes of any adjustment of the Exercise Price pursuant to
this Section 8(a), the following provisions shall be applicable:
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(i) In the case of the issuance of Ordinary Shares for consideration
in whole or in part in property other than cash, the value of such property or
consideration other than cash shall be deemed to be the fair market value of
such property, irrespective of any accounting treatment.
(ii) In the case of the issuance of Ordinary Shares for consideration
in whole or in part other than cash or property, the value of such consideration
shall be deemed to be the aggregate par value of such Shares, less the value of
any other consideration received by the Company.
(iii) In the case of the issuance of options or other rights to
purchase or subscribe for securities by their terms convertible into or
exchangeable for shares or options to purchase or other rights to subscribe for
such convertible or exchangeable securities:
(A) the aggregate maximum number of Ordinary Shares deliverable upon
exercise of such options to purchase or rights to subscribe for Shares shall be
deemed to have been issued at the time such options or rights were issued and
for a consideration equal to the consideration, if any, received by the Company
upon the issuance of such options or rights plus the minimum purchase price
provided in such options or rights for the Shares covered thereby;
(B) the aggregate maximum number of Ordinary Shares deliverable upon
conversion of, or in exchange for, any such convertible or exchangeable
securities or upon the exercise of options to purchase or rights to subscribe
for such convertible or exchangeable securities and subsequent conversion or
exchange thereof shall be deemed to have been issued at the time such securities
were issued or such options or rights were issued and for a consideration equal
to the consideration received by the Company for any such securities and related
options or rights, provided that in making the foregoing calculations, such
convertible or exchangeable securities shall be deemed to have been converted or
redeemed;
(C) if there is any change in the exercise price of, or number of
shares deliverable upon exercise of, any such options or rights or upon the
conversion or exchange of any such convertible or exchangeable securities (other
than a change resulting from the antidilution provisions thereof), then the
Exercise Price shall automatically be readjusted in proportion to such change;
and
(D) upon the expiration of any such options or rights or the
termination of any such rights to convert or exchange such convertible or
exchangeable securities, the Exercise Price shall be automatically readjusted to
the Exercise Price that would have obtained had such options, rights or
convertible or exchangeable securities not been issued.
(b) Share Dividend; Subdivision; Split of Shares. If the number of
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Ordinary Shares outstanding at any time during the Option Period is increased by
a shares dividend payable in Ordinary Shares or by a subdivision or split-up of
Ordinary Shares, then, following the record date fixed for the determination of
holders of shares entitled to receive such shares dividend, subdivision or
split-up, the Exercise Price shall be appropriately decreased and the number of
Ordinary Shares issuable on exercise of the Warrant shall be increased in
proportion to such increase in outstanding shares.
(c) Combination of Shares. If, at any time during the Option Period,
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the number of Ordinary Shares outstanding is decreased by a combination of the
outstanding Ordinary Shares, then, following the record date for such
combination, the Exercise Price shall be appropriately increased and the number
of Ordinary Shares issuable on exercise of the Warrant shall be decreased in
proportion to such decrease in outstanding shares.
(d) Reorganization; Merger, etc. In the event, at any time during
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the Option Period, of any capital reorganization, or any reclassification,
exchange or substitution of the shares of the Company (other than a change in
par value or from par value to no par value or from no par value to par value or
as a result of a share dividend or subdivision, split-up or combination of
shares), or the consolidation or merger of the Company with or into another
person (other than consolidation or merger in which the Company is the
continuing corporation and which does not result in any change in the powers,
designations, preferences and rights, or the qualifications, limitations or
restrictions, if any, of the share capital of the Company) or of the sale or
other disposition of all or substantially all the properties and assets of the
Company as an entirety to any other person (any such transaction, an
"Extraordinary Transaction"), then the Company shall provide appropriate
adjustment to the Exercise Price and other terms of this Warrant after the
effectiveness of such Extraordinary Transaction such that the Warrant upon the
effectiveness of the Extraordinary Transaction shall be exercisable into the
kind and number of shares or other securities or property of the Company, or of
the corporation resulting from or surviving such Extraordinary Transaction, that
a holder of the number of Ordinary Shares deliverable (immediately prior to the
effectiveness of the Extraordinary Transaction) upon exercise of this Warrant
would have been entitled to receive upon such Extraordinary Transaction. The
provisions of this Section 8(d) shall similarly apply to successive
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Extraordinary Transactions.
(e) Calculations. All calculations under this Section 8 shall be
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made to the nearest one-tenth of a cent ($0.001) or to the nearest one-tenth of
a share, as the case may be.
(f) Deferred Issuance. In any case in which the provisions of this
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Section 8 shall require that an adjustment shall become effective immediately
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after a record date for an event, the Company may defer until the occurrence of
such event (1) issuing to the holder of any Warrant exercised after such record
date and before the occurrence of such event the additional shares issuable upon
such exercise by reason of the adjustment required by such event over and above
the shares issuable upon such exercise before giving effect to such adjustment,
and (2) paying to such holder any cash amounts in lieu of fractional shares;
provided, however, that the Company shall deliver to such holder a due xxxx or
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other appropriate instrument evidencing such holder's right to receive such
additional shares, and such cash, upon the occurrence of the event requiring
such adjustment.
(g) Adjustment in case of Early Repayment. In the event that the
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Company makes early repayment of the Debenture issued to the Registered Holder
pursuant to the Securities Purchase Agreement, the Initial Exercise Price will
be reduced to $4.00 (and if the Initial Exercise Price shall then be subject to
all the adjustments hereunder, effected both before and after such adjustment).
(h) Statement of Adjustment. Whenever the Exercise Price is adjusted
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pursuant to any of the foregoing provisions of this Section 8, the Company shall
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promptly
prepare a written statement signed by the President of the Company, setting
forth the adjustment, determined as provided in this Section, and in reasonable
detail the facts requiring such adjustment and the calculation thereof. Such
statement shall be filed among the permanent records of the Company and a copy
thereof shall be furnished to the holder of this Warrant without request and
shall at all reasonable times during business hours be open to inspection by
holders of the Warrants.
Section 9. Negotiability, Etc. This Warrant is issued upon the
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following terms, to all of which each Registered Holder or owner hereof by the
taking hereof consents and agrees:
(a) subject to the terms of the Securities Purchase Agreement, title
to this Warrant may be transferred by endorsement (by the Registered Holder
hereof executing the form of assignment at the end hereof) and delivery in the
same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or rights in this Warrant in favor of each such bona fide
purchaser, and each such bona fide purchaser shall acquire absolute title hereto
and to all rights represented hereby; and
(c) 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.
Section 10. Governing Law, Exclusive Jurisdiction.
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This Warrant shall be governed by the laws of the State of Israel, without
giving effect to the rules respecting conflict of law. Any dispute connected
herewith shall be submitted solely to the courts of Tel-Aviv, which are granted
exclusive jurisdiction over any such dispute.
Section 11. Entire Agreement; Modification; Waiver. This Warrant
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constitutes the entire agreement between the parties pertaining to the subject
matter herein, and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties. No supplement,
modification, or amendment of this Warrant shall be binding unless executed in
writing by the parties hereto. No waiver of any of the provisions of this
Warrant shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver.
[Signature page follows]
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and
delivered in its name by a duly authorized officer.
Dated:
I.I.S. INTELLIGENT INFORMATION SYSTEMS LIMITED
By: ______________________________
Name: Xxxx Xxxxxxx
Title: Chairman and CEO.
Attest:
By: _____________________________
Name: ___________________________
Title: __________________________
SUBSCRIPTION NOTICE
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented by such Warrant for, and to purchase
thereunder, __________ Ordinary Shares covered by such Warrant and herewith
makes payment in full therefor of $__________ cash, and requests that
certificates for such shares (and any securities or property deliverable upon
such exercise) be issued in the name of and delivered to
__________________________________________ whose address is
__________________________________________.
The undersigned agrees that, in the absence of an effective registration
statement with respect to Ordinary Shares issued upon this exercise, the
undersigned is acquiring such Ordinary Shares for investment and not with a view
to distribution thereof and that the certificate or certificates representing
such Ordinary Shares will bear an appropriate legend.
Name: _____________________
By: _______________________
Title: ____________________
Dated: ____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________________ the rights represented by the foregoing
Warrant of ____________________ and appoints __________________________ attorney
to transfer said rights on the books of said corporation, with full power of
substitution in the premises.
Name: _____________________
By: _______________________
Title: ____________________
Dated: ____________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatever.
