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.
THIS WARRANT IS NOT TRANSFERABLE
WARRANT TO PURCHASE ORDINARY SHARES
BVR Systems (1998) Ltd., an Israeli Company (the "COMPANY"), hereby grants to
HSN General Managers Holdings Limited Partnership (the "HOLDER"), the right to
purchase from the Company 6,000,000 Ordinary Shares of the Company, nominal
value NIS 1.00 (the "ORDINARY SHARES"), subject to the terms and conditions set
forth below, effective as of March 21, 2006 (the "EFFECTIVE DATE").
1. NUMBER OF ORDINARY SHARES AVAILABLE FOR PURCHASE
This Warrant may be exercised to purchase up to 6,000,000 Ordinary Shares
having an aggregate exercise price in the amount of two million one hundred
sixty thousand U.S. Dollars ($2,160,000) (the "EXERCISE AMOUNT"), at an
exercise price per each Ordinary Share as set forth in Section 2 below,
subject to adjustments under Section 7 of this Warrant (the "WARRANT
SHARES").
2. EXERCISE PRICE
The exercise price for each Warrant Share purchasable hereunder shall be
equal to 36 Cents ($0.36), subject to adjustments under Section 7 of this
Warrant (the "WARRANT PRICE").
3. TERM
This Warrant may be exercised, in whole or in part, at any time and from
time to time, during the period beginning on the Effective Date and until
March __, 2009 (the "EXERCISE PERIOD").
4. EXERCISE OF WARRANT
This Warrant may be exercised in whole or in part on one or more occasions
during the Exercise Period. 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
To exercise this Warrant, the Notice of Exercise must be accompanied
by payment in full of the amount of the aggregate Exercise Amount of
the Warrant Shares being purchased upon such exercise in immediately
available funds.
b. ISSUANCE OF SHARES ON EXERCISE
The Company agrees that the Warrant Shares so purchased shall be
issued as soon as possible after receipt of the Notice of Exercise and
payment of the exercise price and 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, in accordance with Section 4 above, 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.
c. MANDATORY EXERCISE
In the event that:
(i) the average closing price of the ordinary shares of the Company
equals or exceeds $0.45 per share, during a period of 90 consecutive
days (the "Period"); and
(ii) the trade volume of the ordinary shares of the Company is at
least $1 million during the Period; and
(iii) either the Company registered the Holder's ordinary shares in
the Company or the Warrant Shares under the Securities Act of 1933
making such shares transferable without any restrictions, or 12 months
from the date hereof have elapsed;
the Holder must exercise this Warrant within 14 days from the end of
the Period, or the Warrant will expire (as the sole and only
consequence in the event the Holder does not exercise the Warrant).
The Company shall notify the Holder within 2 days of the end of the
Period that the mandatory exercise provisions of this Section 4c. is
effective.
- 2 -
5. FRACTIONAL INTEREST
No fractional shares will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares the Company shall make
cash payment therefor upon the basis of the current market price of such
shares then in effect as determined in good faith by the Company's Board of
Directors.
6. 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.
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 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 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.
- 3 -
c. ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the event the
Company at any time or from time to time 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
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. Similar adjustments will be made in the event of a
consolidation, merger or reorganization of the Company with or into,
or a sale of all or substantially all of the Company's assets, or
substantially all of the Company's issued and outstanding share
capital, to, any other company, or any other entity or person.
e. 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.
- 4 -
f. GENERAL PROTECTION. The Company will not by amendment of its Articles
of Association or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of its 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 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 economic interest of the Holder against any impairment.
8. REPRESENTATIONS AND COVENANTS OF THE COMPANY. The Company represents and
warrants as follows:
a. that all corporate actions on the part of the Company, its officers,
directors and shareholders necessary for the sale and issuance of the
Warrant and the Warrant Shares and the performance of the Company's
obligations hereunder have been taken and are effective as of the date
hereof.
b. All of the Warrants Shares issuable upon the exercise of this Warrant
will, upon issuance, be fully paid and nonassessable, and free from
all liens, charges, preemptive rights, rights of first refusal and
similar rights with respect to the issue thereof.
9. REPRESENTATIONS AND WARRANTIES BY THE HOLDER. The Holder represents and
warrants to the Company as follows:
a. The Holder understands that the Warrant and the Warrant Shares have
not been registered under the Securities Act, or another comparable
law, by reason of their issuance in a transaction exempt from
registration under the Securities Act pursuant to Section 4(2)
thereof, and that the Holder must therefore bear the economic risk of
such investment indefinitely, unless the Warrant Shares have been
registered for resale under the Securities Act or such resale is
exempted from such registration. The Holder is aware of the provisions
of Rule 144 promulgated under the Securities Act and its requirements
for the resale of the Warrant Shares which permits limited resale of
shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things, the existence of a
public market for the shares, the availability of certain current
public information about the Company, the resale occurring not less
than one year after a party has purchased and paid for the security to
be sold, the sale being effected through a "broker's transaction" or
in transactions directly with a "market maker" and the number of
shares being sold during any three-month period not exceeding
specified limitations.
- 5 -
b. The Holder has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the
purchase of this Warrant and Warrant Shares purchasable pursuant to
the terms of this Warrant and of protecting its interests in
connection therewith. The Holder is able to bear the economic risk of
the purchase of the Warrant Shares pursuant to the terms of this
Warrant including an entire loss of the value of such investment.
c. The Holder understands that the Warrant and the Warrant Shares have
not been registered under the Securities Act, in part, by reason of a
specific exemption from the registration provisions of the Act, the
availability of which depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of the Holder's
representations as expressed herein.
10. RESTRICTIVE LEGEND
The Holder 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.
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, 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, if mutilated, the Company will make and deliver a new Warrant of
like tenor and dated as of such cancellation, in lieu of such Warrant.
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.
Dated: March 21, 2006
BVR SYSTEMS (1998) LTD.
By: /s/ Xxxxxx Xxxxxxx
----------------------
Title: CFO
By: /s/ Xxxx Xxxxxx
-------------------
Title: Chairman
- 6 -
NOTICE OF EXERCISE
TO:
BVR Systems (1998) Ltd.
00 Xxxxxxxxx Xxxxxx,
Xxxx Xx'xxxx
XXXXXX
1. The undersigned hereby elects to purchase _________ shares of Ordinary
Shares of BVR Systems (1998) Ltd., pursuant to the terms of the attached
Warrant, (a) tenders herewith payment of the purchase price for such shares
in full.
2. In exercising this Warrant, the undersigned hereby confirms and
acknowledges the representation under Section 9 of the Warrant and 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:
_________________
_________________
_________________
_________________
4. Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned.
______________________ _________________________
(Date) (Print Name)
_________________________
(Signature)
- 7 -
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.
THIS WARRANT IS NOT TRANSFERABLE
WARRANT TO PURCHASE ORDINARY SHARES
BVR Systems (1998) Ltd., an Israeli Company (the "COMPANY"), hereby grants to
HSN General Managers Holdings Limited Partnership (the "HOLDER"), the right to
purchase from the Company 6,000,000 Ordinary Shares of the Company, nominal
value NIS 1.00 (the "ORDINARY SHARES"), subject to the terms and conditions set
forth below, effective as of March 21, 2006 (the "EFFECTIVE DATE").
1. NUMBER OF ORDINARY SHARES AVAILABLE FOR PURCHASE
This Warrant may be exercised to purchase up to 6,000,000 Ordinary Shares
having an aggregate exercise price in the amount of three million two
hundred forty thousand U.S. Dollars ($3,240,000) (the "EXERCISE AMOUNT"),
at an exercise price per each Ordinary Share as set forth in Section 2
below, subject to adjustments under Section 7 of this Warrant (the "WARRANT
SHARES").
2. EXERCISE PRICE
The exercise price for each Warrant Share purchasable hereunder shall be
equal to 54 Cents ($0.54), subject to adjustments under Section 7 of this
Warrant (the "WARRANT PRICE").
3. TERM
This Warrant may be exercised, in whole or in part, at any time and from
time to time, during the period beginning on the Effective Date and until
March __, 2009 (the "EXERCISE PERIOD").
4. EXERCISE OF WARRANT
This Warrant may be exercised in whole or in part on one or more occasions
during the Exercise Period. 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
To exercise this Warrant, the Notice of Exercise must be accompanied
by payment in full of the amount of the aggregate Exercise Amount of
the Warrant Shares being purchased upon such exercise in immediately
available funds.
b. ISSUANCE OF SHARES ON EXERCISE
The Company agrees that the Warrant Shares so purchased shall be
issued as soon as possible after receipt of the Notice of Exercise and
payment of the exercise price and 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, in accordance with Section 4 above, 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.
c. MANDATORY EXERCISE
In the event that:
(i) the average closing price of the ordinary shares of the Company
equals or exceeds $0.675 per share, during a period of 90 consecutive
days (the "Period"); and
(ii) the trade volume of the ordinary shares of the Company is at
least $1 million during the Period; and
(iii) either the Company registered the Holder's ordinary shares in
the Company or the Warrant Shares under the Securities Act of 1933
making such shares transferable without any restrictions, or 12 months
from the date hereof have elapsed;
the Holder must exercise this Warrant within 14 days from the end of
the Period, or the Warrant will expire (as the sole and only
consequence in the event the Holder does not exercise the Warrant).
The Company shall notify the Holder within 2 days of the end of the
Period that the mandatory exercise provisions of this Section 4c. is
effective.
- 2 -
5. FRACTIONAL INTEREST
No fractional shares will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares the Company shall make
cash payment therefor upon the basis of the current market price of such
shares then in effect as determined in good faith by the Company's Board of
Directors.
6. 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.
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 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 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.
- 3 -
c. ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the event the
Company at any time or from time to time 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
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. Similar adjustments will be made in the event of a
consolidation, merger or reorganization of the Company with or into,
or a sale of all or substantially all of the Company's assets, or
substantially all of the Company's issued and outstanding share
capital, to, any other company, or any other entity or person.
e. 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.
f. GENERAL PROTECTION. The Company will not by amendment of its Articles
of Association or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of its 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 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 economic interest of the Holder against any impairment.
- 4 -
8. REPRESENTATIONS AND COVENANTS OF THE COMPANY. The Company represents and
warrants as follows:
a. that all corporate actions on the part of the Company, its officers,
directors and shareholders necessary for the sale and issuance of the
Warrant and the Warrant Shares and the performance of the Company's
obligations hereunder have been taken and are effective as of the date
hereof.
b. All of the Warrants Shares issuable upon the exercise of this Warrant
will, upon issuance, be fully paid and nonassessable, and free from
all liens, charges, preemptive rights, rights of first refusal and
similar rights with respect to the issue thereof.
9. REPRESENTATIONS AND WARRANTIES BY THE HOLDER. The Holder represents and
warrants to the Company as follows:
a. The Holder understands that the Warrant and the Warrant Shares have
not been registered under the Securities Act, or another comparable
law, by reason of their issuance in a transaction exempt from
registration under the Securities Act pursuant to Section 4(2)
thereof, and that the Holder must therefore bear the economic risk of
such investment indefinitely, unless the Warrant Shares have been
registered for resale under the Securities Act or such resale is
exempted from such registration. The Holder is aware of the provisions
of Rule 144 promulgated under the Securities Act and its requirements
for the resale of the Warrant Shares which permits limited resale of
shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things, the existence of a
public market for the shares, the availability of certain current
public information about the Company, the resale occurring not less
than one year after a party has purchased and paid for the security to
be sold, the sale being effected through a "broker's transaction" or
in transactions directly with a "market maker" and the number of
shares being sold during any three-month period not exceeding
specified limitations.
b. The Holder has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the
purchase of this Warrant and Warrant Shares purchasable pursuant to
the terms of this Warrant and of protecting its interests in
connection therewith. The Holder is able to bear the economic risk of
the purchase of the Warrant Shares pursuant to the terms of this
Warrant including an entire loss of the value of such investment.
- 5 -
c. The Holder understands that the Warrant and the Warrant Shares have
not been registered under the Securities Act, in part, by reason of a
specific exemption from the registration provisions of the Act, the
availability of which depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of the Holder's
representations as expressed herein.
10. RESTRICTIVE LEGEND
The Holder 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.
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, 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, if mutilated, the Company will make and deliver a new Warrant of
like tenor and dated as of such cancellation, in lieu of such Warrant.
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.
Dated: March 21, 2006
BVR SYSTEMS (1998) LTD.
By: /s/ Xxxxxx Xxxxxxx
----------------------
Title: CFO
By: /s/ Xxxx Xxxxxx
-------------------
Title: Chairman
- 6 -
NOTICE OF EXERCISE
TO:
BVR Systems (1998) Ltd.
00 Xxxxxxxxx Xxxxxx,
Xxxx Xx'xxxx
XXXXXX
1. The undersigned hereby elects to purchase _________ shares of Ordinary
Shares of BVR Systems (1998) Ltd., pursuant to the terms of the attached
Warrant, (a) tenders herewith payment of the purchase price for such shares
in full.
2. In exercising this Warrant, the undersigned hereby confirms and
acknowledges the representation under Section 9 of the Warrant and 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:
_________________
_________________
_________________
_________________
4. Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned.
______________________ _________________________
(Date) (Print Name)
_________________________
(Signature)
- 7 -
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.
THIS WARRANT IS NOT TRANSFERABLE
WARRANT TO PURCHASE ORDINARY SHARES
BVR Systems (1998) Ltd., an Israeli Company (the "COMPANY"), hereby grants to
HSN General Managers Holdings Limited Partnership (the "HOLDER"), the right to
purchase from the Company 6,000,000 Ordinary Shares of the Company, nominal
value NIS 1.00 (the "ORDINARY SHARES"), subject to the terms and conditions set
forth below, effective as of March 21, 2006 (the "EFFECTIVE DATE").
1. NUMBER OF ORDINARY SHARES AVAILABLE FOR PURCHASE
This Warrant may be exercised to purchase up to 6,000,000 Ordinary Shares
having an aggregate exercise price in the amount of six million U.S.
Dollars ($6,000,000) (the "EXERCISE AMOUNT"), at an exercise price per each
Ordinary Share as set forth in Section 2 below, subject to adjustments
under Section 7 of this Warrant (the "WARRANT SHARES").
2. EXERCISE PRICE
The exercise price for each Warrant Share purchasable hereunder shall be
equal to one US Dollar ($1.00), subject to adjustments under Section 7 of
this Warrant (the "WARRANT PRICE").
3. TERM
This Warrant may be exercised, in whole or in part, at any time and from
time to time, during the period beginning on the Effective Date and until
March __, 2009 (the "EXERCISE PERIOD").
4. EXERCISE OF WARRANT
This Warrant may be exercised in whole or in part on one or more occasions
during the Exercise Period. 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
To exercise this Warrant, the Notice of Exercise must be accompanied
by payment in full of the amount of the aggregate Exercise Amount of
the Warrant Shares being purchased upon such exercise in immediately
available funds.
b. ISSUANCE OF SHARES ON EXERCISE
The Company agrees that the Warrant Shares so purchased shall be
issued as soon as possible after receipt of the Notice of Exercise and
payment of the exercise price and 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, in accordance with Section 4 above, 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.
c. MANDATORY EXERCISE
In the event that:
(i) the average closing price of the ordinary shares of the Company
equals or exceeds $1.25 per share, during a period of 90 consecutive
days (the "Period"); and
(ii) the trade volume of the ordinary shares of the Company is at
least $1 million during the Period; and
(iii) either the Company registered the Holder's ordinary shares in
the Company or the Warrant Shares under the Securities Act of 1933
making such shares transferable without any restrictions, or 12 months
from the date hereof have elapsed;
the Holder must exercise this Warrant within 14 days from the end of
the Period, or the Warrant will expire (as the sole and only
consequence in the event the Holder does not exercise the Warrant).
The Company shall notify the Holder within 2 days of the end of the
Period that the mandatory exercise provisions of this Section 4c. is
effective.
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5. FRACTIONAL INTEREST
No fractional shares will be issued in connection with any exercise
hereunder, but in lieu of such fractional shares the Company shall make
cash payment therefor upon the basis of the current market price of such
shares then in effect as determined in good faith by the Company's Board of
Directors.
6. 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.
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 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 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.
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c. ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the event the
Company at any time or from time to time 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
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. Similar adjustments will be made in the event of a
consolidation, merger or reorganization of the Company with or into,
or a sale of all or substantially all of the Company's assets, or
substantially all of the Company's issued and outstanding share
capital, to, any other company, or any other entity or person.
e. 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.
f. GENERAL PROTECTION. The Company will not by amendment of its Articles
of Association or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of its 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 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 economic interest of the Holder against any impairment.
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8. REPRESENTATIONS AND COVENANTS OF THE COMPANY. The Company represents and
warrants as follows:
a. that all corporate actions on the part of the Company, its officers,
directors and shareholders necessary for the sale and issuance of the
Warrant and the Warrant Shares and the performance of the Company's
obligations hereunder have been taken and are effective as of the date
hereof.
b. All of the Warrants Shares issuable upon the exercise of this Warrant
will, upon issuance, be fully paid and nonassessable, and free from
all liens, charges, preemptive rights, rights of first refusal and
similar rights with respect to the issue thereof.
9. REPRESENTATIONS AND WARRANTIES BY THE HOLDER. The Holder represents and
warrants to the Company as follows:
a. The Holder understands that the Warrant and the Warrant Shares have
not been registered under the Securities Act, or another comparable
law, by reason of their issuance in a transaction exempt from
registration under the Securities Act pursuant to Section 4(2)
thereof, and that the Holder must therefore bear the economic risk of
such investment indefinitely, unless the Warrant Shares have been
registered for resale under the Securities Act or such resale is
exempted from such registration. The Holder is aware of the provisions
of Rule 144 promulgated under the Securities Act and its requirements
for the resale of the Warrant Shares which permits limited resale of
shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things, the existence of a
public market for the shares, the availability of certain current
public information about the Company, the resale occurring not less
than one year after a party has purchased and paid for the security to
be sold, the sale being effected through a "broker's transaction" or
in transactions directly with a "market maker" and the number of
shares being sold during any three-month period not exceeding
specified limitations.
b. The Holder has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the
purchase of this Warrant and Warrant Shares purchasable pursuant to
the terms of this Warrant and of protecting its interests in
connection therewith. The Holder is able to bear the economic risk of
the purchase of the Warrant Shares pursuant to the terms of this
Warrant including an entire loss of the value of such investment.
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c. The Holder understands that the Warrant and the Warrant Shares have
not been registered under the Securities Act, in part, by reason of a
specific exemption from the registration provisions of the Act, the
availability of which depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of the Holder's
representations as expressed herein.
10. RESTRICTIVE LEGEND
The Holder 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.
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, 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, if mutilated, the Company will make and deliver a new Warrant of
like tenor and dated as of such cancellation, in lieu of such Warrant.
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.
Dated: March 21, 2006
BVR SYSTEMS (1998) LTD.
By: /s/ Xxxxxx Xxxxxxx
----------------------
Title: CFO
By: /s/ Xxxx Xxxxxx
-------------------
Title: Chairman
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NOTICE OF EXERCISE
TO:
BVR Systems (1998) Ltd.
00 Xxxxxxxxx Xxxxxx,
Xxxx Xx'xxxx
XXXXXX
1. The undersigned hereby elects to purchase _________ shares of Ordinary
Shares of BVR Systems (1998) Ltd., pursuant to the terms of the attached
Warrant, (a) tenders herewith payment of the purchase price for such shares
in full.
2. In exercising this Warrant, the undersigned hereby confirms and
acknowledges the representation under Section 9 of the Warrant and 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:
_________________
_________________
_________________
_________________
4. Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned.
______________________ _________________________
(Date) (Print Name)
_________________________
(Signature)
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