Exhibit 4.(A)8
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
ViryaNet Ltd., an Israeli Company whose shares are currently publicly traded on
Nasdaq and on the Tel Aviv Stock Exchange ("TASE") (the "Company"), hereby
grants to Bank Hapoalim Ltd. or any of its subsidiaries (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"), set forth below, subject to
the terms and conditions set forth below, effective as of February 13, 2002 (the
"Effective Date").
1. Number of Ordinary Shares Available for Purchase and Exercise Price
This Warrant may be exercised to purchase up to 600,000 Ordinary
Shares, at an exercise price per each Ordinary Share of $0.5 (fifty
cents) (the "Warrant Price"), subject to adjustments under Section 8 of
this Warrant (the "Warrant Shares"), for an aggregate exercise amount
equal to three Hundred Thousand U.S. Dollars ($300,000).
2. 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) four (4) years following the
Effective Date, and (ii) immediately prior to the closing of (x) a sale
of all or substantially all of the Company's assets or shares, or (y) a
merger or consolidation into another entity in which the Company is not
the surviving entity or (z) a merger or consolidation in which the
shareholders of the Company immediately prior to such merger or
consolidation hold less then 51% of the surviving entity following the
merger or consolidation.
3. Exercise of Warrant
This Warrant may be exercised in whole or in part on any number of
occasions 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
In lieu of the payment method set forth in Section 3(a) above,
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 3(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) If the Company's Ordinary Shares are listed on a
national securities exchange or is quoted on the
National Association of Securities Dealers, Inc.
Automated Quotation/National Market System
(NASDAQ/NMS), then the average closing or last sale
price, respectively, reported for the five (5)
trading days prior to the exercise date.
(ii) If the Company's Ordinary Shares are not listed on a
national securities exchange or quoted on NASDAQ/NMS,
but are traded in the over-the-counter market, then
the average of the mean of the closing bid and asked
prices as reported for the five (5) trading days
prior to the exercise date.
(iii) It is agreed between the parties that as long as the
Company's Ordinary Shares are either listed on
NASDAQ/NMS or are traded in the over the
counter market in the US then the prices of the
Company's Ordinary Shares on the TASE shall be
disregarded for the purposes of the calculation of
the Fair Market Value of such shares. In the event
that the Company's Ordinary Shares are not listed on
a national securities exchange or quoted on
NASDAQ/NMS and are not traded in the over-the-counter
market, then the average closing price reported on
the TASE for the five (5) trading days prior to the
exercise date.
(iii) If the Company's Ordinary Shares are not publicly
traded, then as determined by the Company's Board of
Directors in good faith.
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 merger or acquisition of the Company,
such exercise may be made conditional upon the completion of
such transaction.
4. Fractional Interest
No fractional shares will be issued in connection with any exercise
hereunder, and the number of Warrant Shares issued shall be rounded
down to the nearest whole number.
5. 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.
6. 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
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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
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.
7. 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 7(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 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 fully paid or if such distribution is not
fully made on the date fixed thereof, the number of
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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 7(b) as of the time of
actual payment of such dividends or distributions.
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
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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 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 7, 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.
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j. Notice of Adjustments. Whenever the Warrant Price or the
number of Ordinary Shares purchasable hereunder shall be
adjusted pursuant to Section 7 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 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.
8. Transfer of This Warrant or Securities Issuable on Exercise Hereof
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.
9. Registration Rights
The Company covenants and agrees as follows:
The Holder shall have registration rights in accordance with and
subject to the 2000 Amendment and Restatement to Investors Rights
Agreement dated April 5, 2000, as amended (the "2000 Amended Investors
Rights Agreement") between the Company
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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 2000 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 Warrant Shares shall be deemed
to be included in the definition of Registrable Shares (as defined in
the 2000 Amended Investors Rights Agreement); provided, however that
the Holder can not activate a "demand" by himself or together with
others but only join a "demand" effected by the other holders of
Registrable Shares (as defined in the 2000 Amended Investors Rights
Agreement).
Rights and Obligations Survive Exercise and Expiration of Warrant The
rights and obligations of the Company and the Holder set forth in this
Section 9 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.
10. 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 represents and warrants to the Company as follows:
x. Xxxxxx has been provided with a copy of the 2000 Amended
Investors Rights Agreement, has carefully read its terms and
by executing this Warrant hereby agrees to be bound by the
provisions of the 2000 Amended Investors Rights Agreement
applicable to a "Holder" (as defined therein).
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x. Xxxxxx has been provided with a copy of the Articles of
Association of the Company and has read the provision thereof.
11. 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.
12. Notices
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 Xxxxxx
00-00 Xxxxxxxxxx Xxxx.
Xxx Xxxx, Xxxxxx
attn.: Meiri Xxxxxxxx
fax: 00-000-0000
If to Company: ViryaNet Ltd.
0 Xxxxxx Xxxxxx Xxxxxx
Har Hotzvim, Jerusalem, Israel
attn.: Xxxxxx XxXxxxx or Xxxxxxx Xxxxxxxxxx
fax: 00-0000000
With a copy to: ViryaNet Inc..
attn.: Xxxxxx XxXxxxx or Xxxxxxx Xxxxxxxxxx
fax: 0-000-000-0000
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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13. 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.
14. Stamp Tax
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.
15. 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: February 13, 2002
VIRYANET LTD.
By:
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Title:
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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.
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(Date) (Print Name)
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(Signature)
