EXHIBIT 10.48
Warrant
THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL ORDINARY SHARES ISSUABLE
HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("THE ACT") AND MAY NOT BE SOLD, OFFERED FOR
SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT
UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE
SALE OF SUCH SECURITIES HAS BEEN REGISTERED UNDER THE ACT.
WARRANT TO PURCHASE ORDINARY SHARES
OF ON TRACK INNOVATIONS LTD.
NO. 1
This Certifies That, for value received, Herald Investment Trust PLC,
(the "Holder"), is entitled, subject to the terms and conditions of this
Warrant, to purchase from On Track Innovations Ltd., an Israeli corporation (the
"Company"), at a price per share as specified below up to 90,909 Ordinary
Shares, par value NIS 0.1 each (subject to adjustment for stock splits,
recapitalization events and the like) (the "Warrant Shares").
Terms used herein and not otherwise defined shall have the meaning
assigned thereto in the Stock and Warrant Purchase Agreement dated July 10, 2003
between the Holder and the Company attached hereto as Exhibit 1 (the
"Agreement").
1. CERTAIN DEFINITIONS. As used in this Warrant the following terms shall have
the following respective meanings:
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Registered Holder" means any Holder in whose name this Warrant is
registered upon the books and records maintained by the Company.
"Warrant" as used herein, includes this Warrant and any warrant
delivered in substitution or exchange therefor as provided herein.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1 Due Authorization; Consents. All corporate action on the part of
the Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of, and the performance of all obligations
of the Company under, this Warrant, and the authorization, issuance, reservation
for issuance and delivery of all of the Warrant Shares, has been taken. This
Warrant is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject,
as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors' rights generally and to
general equitable principles. All consents, approvals and authorizations of, and
registrations, qualifications and filings with, any federal or state
governmental agency, authority or body, or any third party, required in
connection with the execution, delivery and performance of this Warrant and the
consummation of the transactions contemplated hereby have been obtained.
2.2 Governmental Consents. All consents, approvals, orders,
authorizations or registrations, qualifications, designations, declarations or
filings with any governmental authority on the part of Company required in
connection with the consummation of the transactions contemplated herein have
been obtained.
2.3 Compliance with Other Instruments. The execution, delivery and
performance of and compliance with this Warrant and the consummation of the
transactions contemplated hereby will not be in conflict with or constitute,
with or without the passage of time or the giving of notice or both, either a
default under the Memorandum of Association, Articles of Association, other
constitutive document, or any agreement or contract of the Company, or a
violation of any statutes, laws, regulations or orders, or an event which
results in the creation of any lien, charge or encumbrance upon any asset of the
Company.
3. EXERCISE OF WARRANT
3.1A. Subject to compliance with the terms and conditions of this
Warrant and applicable securities laws, this Warrant may be exercised, in whole
or in part with respect to the applicable number of Warrant Shares, at an
exercise price (the "Exercise Price") of U.S. $3.85 per Warrant Share; provided
that in the event a registration statement under the United States Securities
Act of 1933, as amended, covering the Warrant Shares is not declared effective
by January 10, 2004, the then applicable Exercise Price shall decrease by twenty
percent (20%) at the end of each quarter thereafter until such registration
statement is declared effective.
3.1B. The Holder may exercise this Warrant in respect of the applicable
number of Warrant Shares, at any time or from time to time by the delivery
(including, without limitation, delivery by facsimile) of the form of Notice of
Exercise attached hereto as Exhibit 2 (the "Notice of Exercise"), duly executed
by the Holder, at the principal office of the Company, and as soon as
practicable after such date, surrendering:
(a) this Warrant at the principal office of the Company, and
(b) payment, (i) in cash (by check) or by wire transfer, of an
amount equal to the product obtained by multiplying the number of shares of
Warrant Shares being purchased upon such exercise by the then applicable
Exercise Price, except that if Holder is subject to HSR Act Restrictions (as
defined in Section 3.6 below), the Exercise Amount shall be paid to the Company
within five (5) business days of the termination of all HSR Act Restrictions.
3.2. Fractional Shares. The Company shall pay the Holder cash in lieu
of any fraction of a share equal to such fraction of the Exercise Price of one
whole share of Warrant Shares. No fractional shares or scrip representing
fractional shares shall be issued upon an exercise of this Warrant.
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3.3. HSR Act. The Company hereby acknowledges that exercise of this
Warrant by Holder may subject the Company and/or the Holder to the filing
requirements of the HSR Act and that Holder may be prevented from exercising
this Warrant until the expiration or early termination of all waiting periods
imposed by the HSR Act ("HSR Act Restrictions").
3.4. Partial Exercise; Effective Date of Exercise. In case of any
partial exercise of this Warrant, the Company shall cancel this Warrant upon
surrender hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares of Warrant Shares purchasable hereunder. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above. However,
if Holder is subject to HSR Act filing requirements this Warrant shall be deemed
to have been exercised on the date immediately following the date of the
expiration of all HSR Act Restrictions. The person entitled to receive the
shares of Warrant Shares issuable upon exercise of this Warrant shall be treated
for all purposes as the holder of record of such shares as of the close of
business on the date the Holder is deemed to have exercised this Warrant.
3.5 Expiration of Warrant. This Warrant shall expire, with respect to
the applicable number of Warrant Shares only, on the earlier to occur of : (a)
the date that is five (5) years following the date of this Warrant; (b) the
merger or consolidation of the Company with or into, or the sale of all or
substantially all of the assets or shares of the Company to, another person or
entity, following which the Company is not the surviving entity ("M&A
Transaction"); provided, however, that the Holder receives at least 30 days'
prior written notice of such follow on offering and shall be entitled to make
its exercise of this Warrant conditional upon the closing of such transaction.
4. VALID ISSUANCE; TAXES. All shares of Warrant Shares issued upon the exercise
of this Warrant shall be validly issued, fully paid and non-assessable, and the
Company shall pay all taxes and other governmental charges that may be imposed
in respect of the issue or delivery thereof. The Company shall not be required
to pay any tax or other charge imposed in connection with any transfer involved
in the issuance of any certificate for shares of Warrant Shares in any name
other than that of the Registered Holder of this Warrant, and in such case the
Company shall not be required to issue or deliver any stock certificate or
security until such tax or other charge has been paid, or it has been
established to the Company's reasonable satisfaction that no tax or other charge
is due.
5. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. In addition to any
adjustment to the Warrant Shares required by the terms of such Warrant Shares in
the Company's Articles of Association, the number of shares of Warrant Shares
issuable upon exercise of this Warrant (or any shares of stock or other
securities or property receivable or issuable upon exercise of this Warrant) and
the Purchase Price are subject to adjustment upon occurrence of the following
events:
5.1. Adjustment for Share Splits, Share Subdivisions or Combinations of
Shares. The Purchase Price of this Warrant shall be proportionally decreased and
the number of shares of Warrant Shares issuable upon exercise of this Warrant
(or any shares of stock or other securities at the time issuable upon exercise
of this Warrant) shall be proportionally increased to reflect any stock split or
subdivision of the Company's Warrant Shares or Ordinary Shares. The Purchase
Price of this Warrant shall be proportionally increased and the number of shares
of Warrant Shares issuable
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upon exercise of this Warrant (or any shares of stock or other securities at the
time issuable upon exercise of this Warrant) shall be proportionally decreased
to reflect any combination of the Company's Shares.
5.2. Adjustment for Dividends or Distributions of Shares or Other
Securities or Property. In case the Company shall make or issue, or shall fix a
record date for the determination of eligible holders entitled to receive, a
dividend or other distribution with respect to the Warrant Shares (or any shares
of stock or other securities at the time issuable upon exercise of the Warrant)
payable in (a) securities of the Company or (b) assets (excluding cash dividends
paid or payable solely out of retained earnings), then, in each such case, the
Holder of this Warrant on exercise hereof at any time after the consummation,
effective date or record date of such dividend or other distribution, shall
receive, in addition to the shares of Warrant Shares (or such other stock or
securities) issuable on such exercise prior to such date, and without the
payment of additional consideration therefor, the securities or such other
assets of the Company to which such Holder would have been entitled upon such
date if such Holder had exercised this Warrant on the date hereof and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and/or all other additional stock available
by it as aforesaid during such period giving effect to all adjustments called
for by this Section 5.
5.3. Reclassification. If the Company, by reclassification of
securities or otherwise, shall change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Purchase Price therefore shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 5. No adjustment shall be made pursuant to this Section 5.3 upon any
conversion or redemption of the Warrant Shares which is the subject of Section
5.5.
5.4. Adjustment for Capital Reorganization, Merger or Consolidation. In
case of any capital reorganization of the capital stock of the Company (other
than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), or any merger or consolidation of the Company
with or into another corporation, or the sale of all or substantially all the
assets of the Company then, and in each such case, as a part of such
reorganization, merger, consolidation, sale or transfer, lawful provision shall
be made so that the Holder of this Warrant shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified herein and
upon payment of the Purchase Price then in effect, the number of shares of stock
or other securities or property of the successor corporation resulting from such
reorganization, merger, consolidation, sale or transfer that a holder of the
shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 5. The foregoing provisions of this Section 5.4 shall similarly
apply to successive reorganizations, consolidations, mergers, sales and
transfers and to the stock or securities of any other corporation that are at
the time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the Holder hereof for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of
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such consideration shall be determined in good faith by the Company's Board of
Directors. In all events, appropriate adjustment (as determined in good faith by
the Company's Board of Directors) shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of this Warrant
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant. This Section 5.4 is subject to Section 3.8 above.
6. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the Purchase
Price, or number or type of shares issuable upon exercise of this Warrant, the
Chief Financial Officer or Controller of the Company shall compute such
adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Purchase
Price. The Company shall promptly send (by facsimile and by either first class
mail, postage prepaid or overnight delivery) a copy of each such certificate to
the Holder.
7. LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory to the
Company of the ownership of and the loss, theft, destruction or mutilation of
this Warrant, and of indemnity reasonably satisfactory to it, and (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company will
execute and deliver in lieu thereof a new Warrant of like tenor as the lost,
stolen, destroyed or mutilated Warrant.
8. RESERVATION OF WARRANT SHARES. The Company hereby covenants that at all times
there shall be reserved for issuance and delivery upon exercise of this Warrant
such number of shares of Warrant Shares or other shares of capital stock of the
Company as are from time to time issuable upon exercise of this Warrant and,
from time to time, will take all steps necessary to amend its Articles of
Association to provide sufficient reserves of shares of Warrant Shares issuable
upon exercise of this Warrant. All such shares shall be duly authorized, and
when issued upon such exercise, shall be validly issued, fully paid and
non-assessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale and free and clear of all preemptive
rights, except encumbrances or restrictions arising under federal or state
securities laws. Issuance of this Warrant shall constitute full authority to the
Company's officers who are charged with the duty of executing share certificates
to execute and issue the necessary certificates for shares of Warrant Shares
upon the exercise of this Warrant.
9. [Intentionally omitted]
10. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees that,
absent an effective registration statement filed with the SEC under the
Securities Act of 1933 (the "Act"), covering the disposition or sale of this
Warrant or the Warrant Shares issued or issuable upon exercise hereof as the
case may be, and registration or qualification under applicable state securities
laws, such Holder will not sell, transfer, pledge, or hypothecate any or all
such Warrants or Warrant Shares, unless such transfer is performed in compliance
with the provisions of the Company's Articles of Association and either (i) the
Company has received an opinion of counsel, in form and substance reasonably
satisfactory to the Company, to the effect that such registration is not
required in connection with such disposition or (ii) the sale of such securities
has been registered under the Act.
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11. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant, the Holder
hereby represents, warrants and covenants that any shares of stock purchased
upon exercise of this Warrant shall be acquired for investment only and not with
a view to, or for sale in connection with, any distribution thereof; that the
Holder has had such opportunity as such Holder has deemed adequate to obtain
from representatives of the Company such information as is necessary to permit
the Holder to evaluate the merits and risks of its investment in the Company;
that the Holder is able to bear the economic risk of holding such shares as may
be acquired pursuant to the exercise of this Warrant for an indefinite period;
that the Holder understands that the shares of stock acquired pursuant to the
exercise of this Warrant will not be registered under the Act (unless otherwise
required pursuant to exercise by the Holder of the registration rights, if any,
previously granted to the registered Holder) and will be "restricted securities"
within the meaning of Rule 144 under the Act and that the exemption from
registration under Rule 144 will not be available for at least one year from the
date of exercise of this Warrant, subject to any special treatment by the SEC
for exercise of this Warrant pursuant to Section 3.2, and even then will not be
available unless a public market then exists for the stock, adequate information
concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and that all stock certificates
representing shares of stock issued to the Holder upon exercise of this Warrant
may have affixed thereto a legend substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE
AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
12. NO RIGHTS OR LIABILITIES AS SHAREHOLDERS. This Warrant shall not entitle the
Holder to any voting rights or other rights as a shareholder of the Company. In
the absence of affirmative action by the Holder to purchase Warrant Shares by
exercise of this Warrant no provisions of this Warrant, and no enumeration
herein of the rights or privileges of the Holder hereof shall cause such Holder
hereof to be a shareholder of the Company for any purpose.
13. NOTICES. All notices and other communications hereunder shall be in writing
and shall be given in person, by registered mail (registered international air
mail if mailed internationally), by an overnight courier service which obtains a
receipt
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to evidence delivery, or by facsimile transmission (provided that written
confirmation of receipt is provided), addressed as set forth below:
If to the Company: On Track Innovations Ltd.
Z.H.R. Industrial Zone
Rosh Xxxx, Xxxxxx 12000
With a copy to: Xxxxxx, Xxxxxxx, Xxxxx & Co., Law Offices
00X Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx 00000
Attn: Xxx Xxxxxxx, Adv.
Fax Number: x000-0-0000000
If to Holder: Herald Investment Trust PLC
00 Xxxxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Or such other address as any party may designate to the other in accordance with
the aforesaid procedure. All notices and other communications delivered in
person or by courier service shall be deemed to have been given as of three (3)
business days after sending thereof, those given by facsimile transmission shall
be deemed given twenty-four hours following transmission, and all notices and
other communications sent by registered mail (or air mail if the posting in
international) shall be deemed given seven (7) days after posting.
14. HEADINGS. The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.
15. GOVERNING LAW; JURISDICTION. Any claim arising under or relating to this
Warrant, shall be governed by the laws of the State of Israel, without regard to
principles of conflict of laws. Each party hereto consents that any legal action
or proceeding against it under, arising out of or in any manner relating to this
Warrant shall be brought exclusively in the courts of the State of New York
located in New York County or in the United States District Court for the
Southern District of New York. Each party hereto expressly waives any right to a
trial by jury in any action or proceeding under this Warrant, and agrees that
any such action or proceeding shall be tried before a court and not before a
jury.
16. NO IMPAIRMENT. The Company will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Registered Holder
of this Warrant against impairment. Without limiting the generality of the
foregoing, the Company (a) will not increase the par value of any shares of
stock issuable upon the exercise of this Warrant above the amount payable
therefor upon such exercise, and (b) will take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable shares of Warrant Shares upon exercise of this
Warrant.
17. NOTICES OF RECORD DATE. In case:
17.1. the Company shall take a record of the holders of its Warrant
Shares (or other stock or securities at the time receivable upon the exercise of
this Warrant), for the purpose of entitling them to receive any dividend or
other distribution, or any
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right to subscribe for or purchase any shares of stock of any class or any other
securities or to receive any other right; or
17.2. of any consolidation or merger of the Company with or into
another corporation, any capital reorganization of the Company, any
reclassification of the share capital of the Company, or any conveyance of all
or substantially all of the assets of the Company to another corporation in
which holders of the Company's stock are to receive stock, securities or
property of another corporation; or
17.3. of any voluntary dissolution, liquidation or winding-up of the
Company; or
17.4. of any redemption or conversion of all outstanding Ordinary
Shares or Warrant Shares;
then, and in each such case, if applicable, the Company will mail or cause to be
mailed to the Registered Holder of this Warrant a notice specifying, as the case
may be, (i) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation,
winding-up, redemption or conversion is to take place, and the time, if any is
to be fixed, as of which the holders of record of Warrant Shares, Ordinary
Shares or (such stock or securities as at the time are receivable upon the
exercise of this Warrant), shall be entitled to exchange their shares of Warrant
Shares, Ordinary Shares (or such other stock or securities), for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such
notice shall be delivered at least ten (10) days prior to the date therein
specified.
18. SEVERABILITY. If any term, provision, covenant or restriction of this
Warrant is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Warrant shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
19. COUNTERPARTS. For the convenience of the parties, any number of counterparts
of this Warrant may be executed by the parties hereto and delivered by
facsimile, and each such executed counterpart shall be, and shall be deemed to
be, an original instrument.
20. NO INCONSISTENT AGREEMENTS. The Company will not on or after the date of
this Warrant enter into any agreement with respect to its securities which
prohibits the rights granted to the Holders of this Warrant. The rights granted
to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to holders of the Company's securities
under any other agreements, except rights that have been waived or lapsed.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of
July 10, 2003.
HERALD INVESTMENT TRUST PLC On Track Innovations Ltd.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxx Xxxxxx
Xxxxx Xxxxxxx Xxxx Xxxxxx
Printed Name Printed Name
Fund Manager President
Title Title
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EXHIBIT 1
AGREEMENT
[OMITTED - will be furnished to the Securities
and Exchange Commission upon request.]
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EXHIBIT 2
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
On Track Innovations Ltd. WARRANT NO. __
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
the securities of On Track Innovations Ltd., as provided for therein, and (check
the applicable box):
|_| Tenders herewith payment of the exercise price in full in the form of
cash or (by check) or by wire transfer in same-day funds in the amount
of $____________ for _________ such securities, pursuant to the
Warrant.
|_|
Please issue a certificate or certificates for such securities in the name of,
and pay any cash for any fractional share to (please print name, address and
social security number):
Name: _____________________________________________________
Address: _____________________________________________________
Signature: _____________________________________________________
Note: The above signature should correspond exactly with the name on the first
page of this Warrant Certificate.
If said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder rounded up to the next higher whole number of shares.
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