EXHIBIT 3
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
The Nasdaq SmallCap Market (the "COMPANY"), hereby grants to Telvent Investments
SL (the "HOLDER"), the right to purchase from the Company the number of Ordinary
Shares of the Company, nominal value NIS 1.0 each (the "ORDINARY SHARES"), set
forth below, subject to the terms and conditions set forth below, effective as
of _______ (the "EFFECTIVE DATE").
1. NUMBER OF ORDINARY SHARES AVAILABLE FOR PURCHASE AND EXERCISE PRICE
This Warrant may be exercised to purchase up to 63,898 Ordinary Shares.
The exercise price for each Ordinary Share shall be $1.1268 (the
"WARRANT PRICE"), subject to adjustments under Section 7 of this
Warrant (the "WARRANT SHARES").
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 2 years following the Effective Date.
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. This Warrant may be exercised for
cash only. 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.
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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.
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 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:
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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 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.
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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 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. 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.
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
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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 to any 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. 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.
10. 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
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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.
11. 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: Telvent Investment X.X
Xxxxx Xxxxxxxxx, 0
00.000 Xxxxxxxxxx
Xxxxxx
Xxxxx
Attn: Xxx Xxxxxx Xxxxxxx.
Fax: x(00)000 00 00 00
If to Company: ViryaNet Ltd.
0 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxxx
attn.: Xxxxxx XxXxxxx
fax: 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.
12. 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.
13. 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:
VIRYANET LTD.
By: /s/ Xxxxxx XxXxxxx
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Title: Chairman
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