THIS WARRANT HAS BEEN, AND THE WARRANT SHARES (AS DEFINED HEREIN) WHICH MAY BE PURCHASED UPON THE EXERCISE OF THIS WARRANT MAY BE, ACQUIRED SOLELY FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED...
THIS
WARRANT HAS BEEN, AND THE WARRANT SHARES (AS DEFINED HEREIN) WHICH MAY BE
PURCHASED UPON THE EXERCISE OF THIS WARRANT MAY BE, ACQUIRED SOLELY FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT
OF 1933, AS AMENDED (THE "ACT"), THE ISRAELI SECURITIES LAW, 5728-1968 (THE
“LAW”) OR ANY APPLICABLE STATE OR COMPARABLE SECURITIES LAW OF A U.S. OR
NON-U.S. JURISDICTION. SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT COVERING THIS WARRANT AND/OR THE WARRANT SHARES OR
AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE,
ASSIGNMENT, OFFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT, AND THE QUALIFICATION REQUIREMENTS
UNDER THE LAW AND/OR OF ANY APPLICABLE STATE OR COMPARABLE SECURITIES LAW OF
A
U.S. OR NON-U.S. JURISDICTION.
WARRANT
TO
PURCHASE SHARES
OF
(the
"Company")
DATE
OF
GRANT: April 14, 2008
VOID
AFTER: April 14, 2013
THIS
CERTIFIES THAT,
for
value received, the Holder (as defined herein) is entitled to purchase from
the
Company Warrant Shares (as defined herein), at the Exercise Price (as defined
herein) per Warrant Share, and at an aggregate amount of up to the Exercise
Amount (as defined herein), at any time and from time to time until the
Termination Date, subject to the provisions and upon the terms and conditions
hereinafter set forth in this Warrant.
1. Definitions.
As
used
herein the following defined terms shall have the meaning ascribed to them
in
this Section as follows:
1
"Business
Day"
shall
mean each day on which at least two of the three biggest banking institutions
in
Israel are open for business.
"Convertible
Securities" shall
mean options or warrants to purchase, or rights to subscribe for, shares of
the
Company, or securities that by their terms are convertible into or exchangeable
for equity securities of the Company, or options or warrants to purchase, or
rights to subscribe for, such convertible or exchangeable securities.
"Encumbrance”
means
and includes any interest or equity of any person (including any right to
acquire, option, or right of preemption) or any mortgage, charge, pledge, lien,
or assignment, or any other encumbrance or security interest or arrangement
of
whatsoever nature over or in the relevant property.
"Exercise
Amount" shall
mean four hundred fifty thousand dollars ($450,000).
"Holder"
shall
mean Plenus and/or any other third party to whom this Warrant is assigned or
transferred in accordance with the terms hereof.
"Issuance
of Additional Shares"
shall
mean the issuance of shares or Convertible Securities of the Company, other
than:
shares
of
the Company issued upon conversion or exchange of Convertible Securities
existing on the date hereof;
up
to
4,411,910 Ordinary Shares reserved for issuance to, and/or options thereto
granted to, employees, directors or consultants of the Company pursuant to
the
Company's option plan existing on the date hereof.
“Last
Round of Financing” shall
mean the private investment in the Company's equity (PIPE) consummated in
accordance with the Share Purchase and Warrant Agreement, dated December 19,
2007, by and among the Company and certain investors named therein.
"Loan
Agreement"
means
that certain loan agreement between the Company and Plenus dated April 1,
2008.
“M&A
Transaction”
shall
mean (i) the consolidation of the Company with, or a merger with or into, or
a
sale of Company securities (by the Company or by the Company’s shareholders) to
any third party, pursuant to which the Company’s shareholders immediately prior
to such transaction will own less than 51% of the surviving entity immediately
following such transaction, or (ii) an acquisition or other transfer of all
or
substantially all of the Company’s assets other than to an entity at least 51%
of the outstanding share capital of which is beneficially owned by the
Company.
"Plenus"
means
Plenus II, Limited Partnership, Plenus II (D.C.M.), Limited
Partnership,
Plenus
III, Limited Partnership, Plenus III (D.C.M.), Limited Partnership,
Plenus
III (2), Limited Partnership and Plenus
III (C.I.), L.P.
2
“Realization
Event”
shall
mean an SPO or M&A Transaction.
"SPO"
shall
mean the consummation of a secondary public offering by the Company of the
Company's securities.
“Termination
Date”
shall
mean April 14, 2013.
"Warrant
Shares"
shall
mean fully paid-up ordinary shares of the Company, par value NIS 0.05 each
("Ordinary
Shares"),
having all rights, privileges and preferences (contractual, economic or
otherwise), attached to such class of shares or otherwise granted to any holder
of such class of shares.
Capitalized
terms not otherwise defined herein, shall have the meaning ascribed to them
in
the Loan Agreement.
2. Number
and Class of Warrant Shares; Exercise Price.
(a) Number
of Warrant Shares.
The
Holder shall be entitled to purchase such number of Warrant Shares that is
equal
to the quotient obtained by dividing the Exercise Amount by the Exercise Price.
(b) Exercise
Period. The
Holder may exercise the Warrant, in whole or in part, at any time and from
time
to time, on any Business Day, until the Termination Date (the “Exercise
Period”).
(c) Exercise
Price.
Subject
to the adjustments more fully set forth in this Warrant, the exercise price
for
each Warrant Share, shall be $0.64 (the "Initial
Exercise Price").
The
Initial Exercise Price as adjusted pursuant to the provisions contained herein
is herein referred to as the "Exercise
Price".
3. Method
of Exercise; Payment.
(a) Cash
Exercise.
The
Warrant may be exercised by the Holder by the surrender of this Warrant (with
duly executed Notice of Exercise in the form attached hereto as Exhibit
A)
at the
principal office of the Company, and by the payment to the Company, concurrently
with the delivery of the Notice of Exercise, of the Exercise Price for each
Warrant Share underlying the exercised portion of the Warrant, in cash, in
immediately available funds, or in another method acceptable to the
Company.
(b)
Net
Exercise.
In lieu
of the payment method set forth in Section 3(a) above, the Holder may, in its
sole discretion, elect to exchange the Warrant for a number of Warrant Shares
computed by using the following formula:
X
=
Y
(A-B)
A
| Where | X = the number of Warrant Shares to be issued to the Holder |
|
Y
= the number of Warrant Shares underlying the portion of the Warrant
being
exercised
|
3
|
A
=
the average closing price of an Ordinary Share on NASDAQ for the
thirty
(30) consecutive trading days immediately preceding the date of exercise
|
B
=
Exercise Price
(c) Conditional
Exercise.
In the
event that the Holder intends to exercise this Warrant upon a Realization Event,
the Holder shall be entitled to condition such exercise on the consummation
of a
Realization Event and shall indicate same on the Notice of Exercise and, having
done so, the Holder will only be required to pay the applicable aggregate
Exercise Price if, and at such time as, the Realization Event is
consummated.
(d) Share
Certificates; Partial Exercise.
As soon
as practicable but in any event not later than seven (7) Business Days following
the delivery of the Notice of Exercise and the Warrant (and, unless the Holder
elects to exercise the Warrant on a net-exercise basis, subject to the payment
of the Exercise Price per each Warrant Share underlying the exercised portion
of
the Warrant) the Company shall issue and cause the delivery to the Holder (or,
upon the Holder's written order, to any third party as such Holder may
designate) certificates representing the applicable class and number of Warrant
Shares so purchased and, unless this Warrant has been fully exercised, a new
Warrant representing the balance of the Warrant Shares with respect to which
this Warrant shall not have been exercised shall also be issued to the Holder
at
such time, provided, however, that no partial exercise shall be permitted
hereunder: (i) if the Warrant has already been partially exercised at least
two
(2) times during the 12-month period preceding such exercise, or (ii) said
partial exercise is in an amount lower than $75,000. Such Warrant shall be
deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a holder of record of such securities as of
the
date of surrender of the Notice of Exercise, the Warrants being exercised and
payment of the Exercise Price (unless exercised on a net-exercise basis), to
the
extent applicable, notwithstanding that the certificate representing the Warrant
Shares shall not actually have been delivered or that the stock transfer books
of the Company shall then be closed.
4. Shares
Fully Paid, Etc.
All of
the Warrant Shares issuable upon the exercise of the rights represented by
this
Warrant will, upon issuance and receipt of the Exercise Price therefor, be
fully
paid and non-assessable, and free from all taxes, liens and charges. The Company
will pay all taxes, if any, attributable solely to the issuance of the Warrant
and/or the Warrant Shares; provided,
for
the avoidance of doubt,
that
the Company shall not be required to pay any tax which may be payable in respect
of any secondary transfer of the Warrants or the Warrant Shares.
5. Adjustments.
The
number and kind of securities purchasable upon the exercise of this Warrant
and
the Exercise Price therefor shall be subject to adjustment from time to time
upon the occurrence of certain events, as follows:
(a)
Notwithstanding anything herein to the contrary, upon each Issuance of
Additional Shares at an effective price per share which is lower than the
Exercise Price, the Exercise Price will be automatically reduced to such lower
price. For the removal of doubts - no adjustment of an Exercise Price shall
be
made if it has the effect of increasing the Exercise Price beyond the Exercise
Price in effect immediately prior to such Issuance of Additional Shares.
4
(b) If
the
Company shall subdivide or combine its outstanding shares, each Exercise Price
shall be proportionately reduced, in case of subdivision of shares, as at the
effective date of such subdivision, or shall be proportionately increased,
in
the case of combination of shares, as at the effective date of such combination.
(c)
In the
event that the Company shall consummate an M&A Transaction, then provided
further the Warrant shall have not been exercised by such time, the Holder
shall, upon any exercise of this Warrant, at any time after the consummation
of
such M&A Transaction, be entitled to receive, in lieu of the Warrant Shares,
the shares or other securities or property to which such Holder would have
been
entitled upon the consummation of such consolidation, merger or conveyance
if
the Holder had exercised the Warrants immediately prior thereto and received
the
Warrant Shares, all subject to further adjustment as provided in this Section;
and the terms of the Warrant (including exercisability, transfer and adjustment
provisions of the Warrant) shall be applicable to the shares or other securities
or property receivable upon the exercise of the Warrant after the consummation
of such consolidation, merger or conveyance.
(d)
If at
any time prior to the exercise of the Warrant in full the Company shall pay
a
dividend to the holders of Ordinary Shares, payable in additional securities
or
rights convertible into, or entitling the holder thereof to receive directly
or
indirectly, additional securities (hereinafter referred to as “Securities
Equivalents”),
then
the Holder, upon any exercise of the Warrant, at any time after the date the
Company shall fix as the record date for the purpose of receiving such
Securities Equivalents, shall be entitled to receive, in addition to the
applicable Warrant Shares, the Securities Equivalents to which the Holder would
have been entitled upon the distribution of such Securities Equivalents if
the
Holder had exercised the Warrants immediately prior to the date that the Company
had fixed as the record date for the purpose of receiving such Securities
Equivalents and had held such Warrant Shares as of such date, all subject to
further adjustments as provided in this Section.
(e)
If at
any time prior to the exercise of the Warrant in full the Company shall
distribute to the holders of Ordinary Shares a dividend, whether payable out
of
earnings or surplus legally available for dividends or as a dividend in
liquidation or partial liquidation or by way of return of capital, each Exercise
Price shall be reduced by an amount equal to the Dollar amount of the per-share
distribution on the record date fixed for the purpose of such distribution
(or
if no such record date is fixed then on the date of such
payment).
(f)
The
Company will not by amendment of its organizational documents 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, 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 of the Holder against any impairment.
5
6. Notice
of Adjustments; Notice of Record Date.
Whenever the number of shares of the applicable class of Warrant Shares
purchasable hereunder or the Exercise Price thereof shall be adjusted pursuant
to Section 5 hereof, the Company shall provide written notice to the Holder
setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
and the number and class of shares of the applicable class of Warrant Shares
which may be purchased and the Exercise Price therefor after giving effect
to
such adjustment. Furthermore,
in the
event of any taking by the Company of a record of the holders of any class
of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend (including a cash dividend) or other distribution,
any
right to subscribe for, purchase or otherwise acquire any shares of any class
or
any other securities or property, or to receive any other right, the Company
shall mail to the Holder written notice, which shall be sent simultaneously
with
the notice sent to other shareholders of the Company, specifying the date on
which any such record and/or scheduled date of actual payment, if determined,
is
to be taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right.
7. Fractional
Shares.
This
Warrant may not be exercised for fractional shares. In the event of fractional
shares, the Company shall round the number of Warrant Shares issuable upon
such
exercise down to the nearest whole share and shall pay an amount in cash to
the
Holder equal to any such fractional share.
8. 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, or he or she has the knowledge and
experience in business and financial matters to evaluate the risks and merits
of
his or her investment, or it is not a “U.S. Xxxxx” within the meaning of
Regulation S promulgated under the Securities Act and is not acquiring the
Warrants for the account of a U.S. Person. 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 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 such or similar legend is not placed on all other
unregistered securities of the Company or 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.
6
9. Representations
and Covenants of the Company.
The
Company represents and covenants to the Holder as follows:
(a) 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. The Company undertakes that
all
additional corporate actions on the part of the Company, as may be required
in
connection with an adjustment pursuant hereto will be taken as promptly as
practicable.
(b) As
of the date of exercise of this Warrant, the Company shall record the Holder
in
the Company’s internal share register as required in accordance with the
applicable law and practice, as the owners, direct or beneficial, of the Warrant
Shares pursuant to the names provided by the Holder in the Notice of
Exercise.
(c)
At
all times when this Warrant may be exercised, the Company shall have authorized
and reserved for issuance sufficient Warrant Shares, free from pre-emptive
rights or other Encumbrance so that this Warrant may be exercised without
additional authorization of share capital after giving effect to all other
Convertible Securities or the need to receive any other consents of third
parties.
10. Restrictions
Upon Transfer.
(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
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
they are an "accredited" investor as that term is defined under Regulation
D of
the Securities Act. 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 such or similar legend is not placed on all other
unregistered securities of the Company or unless in the opinion of counsel
for
the Company such legend is not required in order to ensure compliance with
the
Securities Act.
For
the
sake of clarity – the foregoing provisions of this Section 10(a) shall not
apply to the Warrant or to securities into which such Warrant may be exercised,
after a registration statement with respect to such securities was filed with
the SEC and became effective, and for as long as such registration statement
is
effective.
(b) All
transfers of this Warrant shall be accompanied by an executed warrant transfer
deed, under which the transferee undertakes to be bound by all obligations
of
the Holder under this Warrant. The form of the deed of transfer is attached
hereto as Exhibit
B.
7
(c) Subject
to the foregoing and to applicable law, the Holder shall have the right to
transfer this Warrant and the Warrant Shares to any person it wishes.
11. No
Rights of Shareholders.
Except
for the rights granted pursuant to the Joinder, the Holder shall not be
entitled, as a Warrant holder, to vote or receive dividends or be deemed the
holder of the Warrant Shares or any other securities of the Company which may
at
any time be issuable on the exercise of this Warrant for any purpose, nor shall
anything contained herein be construed to confer upon the Holder, as such,
any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of shares, reclassification of shares,
change of par value, consolidation, merger, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights
or
otherwise until the Warrant shall have been exercised and the Warrant Shares
purchasable upon the exercise hereof shall have become deliverable, as provided
herein.
12. Notices.
All
notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by registered mail, postage prepaid, faxed or
electronically mailed or delivered by hand to the following
addresses:
|
If
to the Company:
|
|
|
00
Xxxx Xxxxxxxxxx Xxxxxx
|
|
|
Xxx
Xxxx 00000, Israel
|
|
|
Attention:
Chief Financial Officer
|
|
|
Faximile:
+ 972-3-647-4681
|
|
|
E-mail:
xxxxxxxxx@xxxxxx.xxx
|
|
|
If
to the Plenus:
|
Plenus
Management (2004) Ltd.
|
|
-
and -
|
|
|
Plenus
Management III 2007 Ltd.
|
|
|
00
Xxxx Xxxx Xxxxxxx
|
|
|
Herzliya
Pituach
|
|
|
Israel
|
|
|
Attention:
Xxxxxx Xxxxxx
|
|
|
Facsimile:
972-9-957-8770
|
|
|
E-mail:
xxxxx@xxxxxx.xx.xx
|
or
to
such other address with respect to a party as such party shall notify the other
party in writing as above provided. Any notice sent in accordance with this
Section 11 shall be effective (i) if mailed within Israel, three (3) Business
Days after mailing, and in other cases within seven (7) Business Days after
mailing, (ii) if sent by messenger, upon delivery, and (iii) if sent via fax
or
electronic mail, upon transmission and electronic confirmation of receipt or
(if
transmitted and received on a non-Business Day) on the first Business Day
following transmission and electronic confirmation of receipt.
13. Governing
Law.
This
Warrant and all actions arising out of, or in connection with, this Warrant
shall be exclusively governed by, and construed in accordance with, the laws
of
the State of Israel. The parties hereto irrevocably submit to the exclusive
jurisdiction of the courts of Tel-Aviv in any action connected with this
Agreement.
8
14. Partial
Invalidity.
If any
provision of this Warrant is held by a court of competent jurisdiction to be
invalid or unenforceable under applicable law, then such provision shall be
excluded from this Warrant and the remainder of this Warrant shall be
interpreted as if such provision were so excluded and shall be enforceable
in
accordance with its terms; provided,
however,
that in
such event this Warrant shall be interpreted so as to give effect, to the
greatest extent consistent with and permitted by applicable law, to the meaning
and intention of the excluded provision.
15. Currency.
The
term "dollars" or the symbol "$" appearing in this Warrant shall mean the legal
currency of the United States of America, and all payments hereunder shall
be
made in such currency, unless otherwise agreed in writing by the Holder and
the
Company.
16.
Entire
Agreement; Amendment and Waiver.
This
Agreement and the Exhibits and Schedules hereto and thereto constitute the
full
and entire understanding and agreement between the parties with regard to the
subject matters hereof. All prior understandings and agreements among the
parties are void and of no further effect. Any term of this Agreement may be
amended, waived, or discharged (either prospectively or retroactively, and
either generally or in a particular instance), by a written instrument signed
by
all the parties to this Agreement.
|
By:
|
|
|
Title:
|
Agreed
and accepted:
_________________
|
By:
|
|
|
Title:
|
9
EXHIBIT
A
NOTICE
OF EXERCISE
Attn:
____________,
1.
[ ] [____]
(Check
and initial here if the undersigned elects this alternative)
The
undersigned hereby elects to purchase [FILL
IN NUMBER OF SHARES]
____________ shares of ______________ of the share capital of RADCOM
Ltd. pursuant to the terms of the attached Warrant (the "Warrant"),
and
tenders herewith payment in full for the purchase price of the shares being
purchased. [Such purchase is contingent upon _______________ in accordance
with
Section 3(c) of the Warrant.]
1.
[ ] [____]
(Check
and initial here if the undersigned elects this alternative )
In lieu
of exercising the Warrant for cash or a check, the undersigned hereby elects
to
effect the net exercise provision of Section 3(b) of the Warrant and receive
[FILL
IN NUMBER OF SHARES]
_________ shares of the share capital of RADCOM Ltd. pursuant to the terms
of
the Warrant according to the formula set forth in said section, to wit:
X
=
Y
(A-B) (
) =
(____)
[(_____) - (_____)]
A
(_____)
2. Please
issue a certificate or certificates representing said Warrant Shares in the
name
of the below list of entities, and record same in the Company’s internal share
registry, as follows:
|
Very
truly yours,
|
|
|
By:
|
|
|
Title:
|
|
|
Date:
|
|
10
EXHIBIT
B
FORM
OF TRANSFER
(To
be
signed only upon transfer of Warrant)
FOR
VALUE
RECEIVED, the undersigned (the "Transferor")
hereby
assigns and transfers unto ____________________ (the "Transferee")
the
right represented by the attached Warrant (the “Warrant”)
to
purchase Warrant Shares of the share capital of RADCOM Ltd., in an amount of
$
_________ out of the total Exercise Amount to which the Warrant relates. The
Transferor represents that the transfer is made in accordance with the terms
of
the Warrant.
Dated:
__________________
Signed
in
the presence of:
|
By:
|
|
|
Name:
|
And
the
undersigned Transferee hereby agrees to the transfer of said rights to which
the
Warrant relates, and agrees to be bound by the terms and conditions of the
Warrant. The undersigned represents that the transfer is made in accordance
with
the terms of the Warrant.
Dated:
__________________
|
By:
|
|
|
Name:
|
Signed
in
the presence of:
|
By:
|
|
|
Name:
|
11
