Exhibit 10.8
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WARRANT
to Purchase up to an Aggregate of _____ Convertible Preferred C-1 Shares
(Subject to Adjustment) of
RTS Software Ltd.
at NIS 0.1 per share
THIS IS TO CERTIFY that _________________ (the "Holder") is entitled to
purchase, subject to the provisions of this Warrant, from RTS Software Ltd. (the
"Company"), at any time on or after the date hereof (the "Effective Date"), an
aggregate of up to ______ (subject to adjustment) fully and nonassessable
Convertible Preferred Shares, nominal value New Israeli Shekel ("NIS") 0.1 per
share (the "Convertible Preferred Shares"), of the Company at a price of NIS 0.1
per share (the "Exercise Price"). In the event that all of the outstanding
Convertible Preferred Shares are converted into Ordinary Shares, this Warrant
shall be exercisable solely for such Ordinary Shares and any references
throughout this Warrant to shares of Convertible Preferred Shares shall be
deemed to refer to the Ordinary Shares into which the Convertible Preferred
Shares may be converted. The amount and kind of securities purchasable pursuant
to the rights granted hereunder and the Exercise Price for such securities are
subject to adjustment pursuant to the further provisions of this Warrant.
1. EXERCISE OF WARRANT
Subject to the provisions hereof, this Warrant may be exercised in
whole or in part, at any time or from time to time on or after the
Effective Date. 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 shares specified in such notice.
The Exercise Price for the number of shares specified in the notice
shall be payable in immediately available good funds, at the option of
the Holder, in NIS.
Upon such presentation and surrender, the Company shall issue promptly
to the Holder the Convertible Preferred Shares to which the Holder is
entitled hereunder.
If this Warrant should be 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 Convertible Preferred Shares purchasable hereunder.
Upon receipt by the Company of this
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Warrant, in proper form for exercise, the Holder shall be deemed to be
the holder of record of the Convertible Preferred Shares issuable upon
such exercise, notwithstanding that the share transfer books of the
Company shall then be closed or that certificates representing such
Convertible Preferred 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 Convertible Preferred Shares and the preparation and
delivery of share certificates pursuant to this Paragraph 1 in the
name of the Holder.
No fractions of Convertible Preferred Shares shall be issued in
connection with the exercise of this Warrant, and the number of
Convertible Preferred Shares issued shall be rounded down to the
nearest whole number.
Notwithstanding the foregoing, in the event of (i) the initial public
offering of the Company (the "IPO"), (ii) on or after the merger of
the Company with or into another company or entity, in which the
Company is not the surviving entity (a "Merger") or (iii) on or after
the sale of all or substantially all of the assets of the Company (a
"Sale") then, in lieu of exercising this Warrant as provided above, in
whole or in part, the Holder may elect to receive simultaneously with
the Closing of the IPO, or simultaneously with the closing of the
Merger or Sale, by the surrender and cancellation of this Warrant or
any such portion thereof to the Company, Convertible Preferred 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
Convertible Preferred Shares computed using the following formula:
Y(A - B)
X = -----------------
A
X equals the number of Convertible Preferred Shares to be issued to
the Holder;
Y equals the number of Convertible Preferred 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
Convertible Preferred 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 that number of
the Company's Ordinary Shares into which one share of the
Company's Preferred Shares is Convertible, or (ii) if in
connection with a Merger or Sale, the value of such share(s) as
determined for the
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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 stock 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, 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 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 Convertible
Preferred Shares after giving effect to all other options, warrants,
convertible securities and other rights to acquire Convertible Preferred
Shares of the Company. In addition, the Company will maintain and
reserve such number of authorized but unissued Ordinary Shares as will
be sufficient to permit the conversion in full of all issued or issuable
Convertible Preferred Shares. All shares of Convertible Preferred Shares
(and Ordinary Shares issuable upon conversion thereof) 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 and
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
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The number of Convertible Preferred Shares (and the number of Ordinary
Shares issuable upon conversion thereof) 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.
4.2. 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 Convertible Preferred Shares to the
holders of Convertible Preferred Shares (i.e., bonus shares), the
number of Convertible Preferred 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 Convertible Preferred
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 Convertible
Preferred Shares shall be subdivided into a greater number of
Convertible Preferred Shares, the number of Convertible Preferred
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 Convertible Preferred Shares shall
each be combined into a smaller number of Convertible Preferred
Shares, the number of Convertible Preferred 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
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Disposition of Assets
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(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
Convertible Preferred Shares of the Company who are holders
immediately prior to such transaction,
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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
Convertible Preferred 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 shares of the Convertible Preferred 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
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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 be entitled to the same rights to
receive notices of corporate actions as any holder of Convertible
Preferred Shares as provided in the Company's Articles of Association or
otherwise. Notwithstanding, 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;
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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 Convertible Preferred Shares
of record shall be entitled to exchange their Convertible Preferred
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 Convertible Preferred Shares for which this
Warrant is exercisable is adjusted as provided in paragraph 4 hereof or
whenever the rate at which the Convertible Preferred Shares are
convertible into Ordinary Shares is adjusted pursuant to the Company's
Articles of Association, 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
office of the Company, setting forth the number of Convertible Preferred
Shares (and the number of Ordinary Shares into which the Convertible
Preferred Shares may be converted) 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.
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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
the rights expressed herein and no dividend or interest shall be
payable or accrue in respect of this Warrant.
8. REGISTRATION RIGHTS
The Holder shall have the registration and other rights and be subject
to the obligations, set forth in the Investors Rights Agreement, dated
the date hereof, as it may be amended from time to time as provided
therein, with respect to the Ordinary Shares issued or issuable upon
conversion of the Convertible Preferred Shares issuable or issued upon
the exercise of this Warrant.
9. 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 Convertible Preferred Shares (or the Ordinary Shares
issuable upon conversion thereof) at its last known address appearing on
the books of the Company maintained for such purpose, and to the Company
at:
RTS 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.
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10. LIMITATION ON TRANSFER
This Warrant shall be transferable in whole or in part only to a
subsidiary of the Holder.
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 connected with this Warrant.
DATED: February 27, 1998 RTS SOFTWARE LTD.
By: __________________
Name: __________________
Title: __________________
