Exhibit 10.13
-------------
WARRANT
to Purchase up to an Aggregate of __________ Ordinary Shares
(Subject to Adjustment) of
R.T.S. Software Ltd.
at the Exercise Price (as defined below)
VOID AFTER 10:00 a.m. (prevailing Tel Aviv time)
on the Termination Date (as defined below)
THIS IS TO CERTIFY that __________ ("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 April 11, 2000 (the "Effective Time") and
until the Termination Date (as defined below), an aggregate of up to _________
(subject to adjustment) fully paid and nonasseasable Ordinary Shares, nominal
value New Israeli Shekel ("NIS") 0.1 per share (the "Ordinary Shares"), of the
Company, at a price per share in US dollars or the NIS equivalent thereof,
calculated using the formula set forth in Exhibit A attached hereto (the
"Exercise Price").
1 EXERCISE OF WARRANT
Subject to the provisions hereof, this Warrant may be exercised by the
Holder in whole or in part at any time or from time to time following the
Effective Time and until the earliest of (i) April 11, 2005, (ii) a
consolidation, merger or reorganization involving the Company or a sale of
all or substantially all of the assets of the Company, or (iii) sale or
transfer of the majority of the issued and outstanding share capital of the
Company, other than through an initial public offering ("IPO") of the
Company's securities (the "Termination Date"). (The period commencing on
the Effective Time and ending on the Termination Date shall be referred to
herein as the "Warrant Exercise Period").
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 is 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, the Holder shall be deemed to be the
holder of record of 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 lieu of exercising this Warrant as
provided above, in whole or in part, the Holder may elect to receive, 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 in effect at the time of exercise pursuant to
this formula (as may have been or 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 (as sold to the
public) of one Ordinary Share, 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 National 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, that if no public
market exists for the securities, 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 shall be 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 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, 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 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
----------------------------------------------------------------------
of Assets
---------
(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
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 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
---------------------
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 to receive
notices of corporate actions as any holder of Ordinary Shares.
Notwithstanding the foregoing, 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 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 for
the rights expressed herein and no dividend or interest shall be
payable or accrue in respect of this Warrant.
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 the Ordinary
Shares at its last known address appearing on the books of the Company
maintained for such purpose, and to the Company at:
R.T.S. 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. EFFECTIVENESS AND TERMINATION
This Warrant and the rights conferred hereby shall become effective at the
Effective Time and shall terminate on the Termination Date.
10. LIMITATION ON TRANSFER
This Warrant shall not be transferable in whole or in part to any third
party other than to a permitted transferee pursuant to Section 2.3 of that
certain Amended and Restated Shareholders Agreement, dated April 5, 2000,
by and among the Holder and certain other shareholders of the Company.
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 exclusive
jurisdiction of the Courts of Israel in respect of any dispute or matter
arising out of or in connection with this Warrant.
DATED: April 11, 2000 R.T.S. Software Ltd.
By: ________________
Name: ________________
Title:________________
Exhibit A
---------
EXERCISE PRICE
--------------
1 Certain Definitions
--------------------
In this Warrant the following terms shall have the meaning ascribed thereto
herein:
"Discount" - shall mean:
In the event of a Liquidation Event: (i) 30% of the Liquidation Event Price
in the event that the Liquidation Event is consummated within four (4)
months of the Effective Date, (ii) 40% of the Liquidation Event Price in
the event that the Liquidation Event is consummated after four (4) month of
the Effective Date but on or before nine (9) months of the Effective Date
and (iii) 50% of the Liquidation Event Price in the event that the
Liquidation Event is consummated after nine (9) months of the Effective
Date;
In the event of a Qualified Private Placement: (a) 25% of the Qualified
Private Placement Price in the event that the Qualified Private Placement
is consummated within nine (9) months of the Effective Date, or (b) 40% of
the Qualified Private Placement Price in the event that the Qualified
Private Placement is consummated after nine (9) months of the Effective
Date;
In the event of an IPO: (i) 30% of the IPO Price in the event that the IPO
is consummated within four (4) months of the Effective Date, (ii) 40% of
the IPO Price in the event that the IPO is consummated after four (4) month
of the Effective Date but on or prior to nine (9) months of the Effective
Date and (iii) 50% of the IPO Price in the event that the IPO is
consummated after nine (9) months of the Effective Date;
"Effective Date" shall mean March 20, 2000;
"IPO" shall mean an initial public offering of the Company's securities
yielding to the Company gross proceeds of at least US$20 million;
"IPO Price" shall mean the actual price per share at which the Company's
shares are offered to the public in the IPO;
"Liquidation Event" shall mean a liquidation, dissolution, merger of the
Company with another entity, acquisition of all of the Company's equity
shares by another entity or acquisition of all or substantially all of the
Company's assets by another entity;
"Liquidation Event Price" the actual price per share determined in the
Liquidation Event for a Series C-2 Preferred Share, par value NIS 0.1;
Non Qualified Private Placement" shall mean a Private Placement, which
doesn't qualify as a Qualified Private Placement;
"Non Qualified Private Placement Price" shall mean the actual price paid
per share in the Non Qualified Private Placement;
"Private Placement" shall mean a subsequent investment in the Company's
Share Capital;
"Qualified Private Placement" shall mean a Private Placement yielding to
the Company gross proceeds of at least US$10 million of which at least US$5
million are invested by third parties who are not shareholders of the
Company prior to the date hereof;
"Qualified Private Placement Price" shall mean the actual price paid per
share in the Qualified Private Placement.
1 The Exercise Price per Ordinary Share shall equal:
95% of the balance between (i) (a) the IPO Price, if an IPO is consummated
prior to a Liquidation Event or a Qualified Private Placement, or (b) the
Liquidation Event Price, if a Liquidation Event is consummated prior to an
IPO or a Qualified Private Placement, or (c) the Qualified Private
Placement Price, if a Qualified Private Placement is consummated prior to
an IPO or a Liquidation Event and (ii) the Discount.
1 Notwithstanding Section 2 of this Exhibit A, in the event that the Company
consummates a Non Qualified Private Placement prior to an IPO or a
Liquidation Event or a Qualified Private Placement, then the Holder of this
Warrant shall have the right to elect that the Exercise Price of this
Warrant shall equal 95% of the Non Qualified Private Placement Price. Such
election shall be communicated in writing to the Company within 15 business
days from the closing of the Non Qualified Private Placement and shall be
final and binding upon the Holder.
