EXHIBIT 2.03
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
ORDINARY SHARES PURCHASE WARRANT
To Purchase __________ Ordinary Shares of
BluePhoenix Solutions Ltd.
THIS ORDINARY SHARES PURCHASE WARRANT CERTIFIES that, for value
received, _____________ (the "Holder"), is entitled, upon the terms and subject
to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after September 30, 2004 (the "Initial Exercise Date") and on or
prior to the close of business on the fifth anniversary of the Initial Exercise
Date (the "Termination Date") but not thereafter, to subscribe for and purchase
from BluePhoenix Solutions Ltd., an Israeli company (the "Company"), up to
____________ ordinary shares (the "Warrant Shares"), par value NIS 0.01 per
share, of the Company (the "Ordinary Shares"). The purchase price of one
Ordinary Share (the "Exercise Price") under this Warrant shall be $6.50, subject
to adjustment hereunder. Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in that certain Securities Purchase Agreement
(the "Purchase Agreement"), dated March 30, 2004, among the Company and the
purchasers signatory thereto.
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1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.
2. Authorization of Warrant Shares. The Company represents and
warrants that all Warrant Shares which may be issued upon the exercise of the
purchase rights represented by this Warrant will, upon exercise of the purchase
rights represented by this Warrant, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously with such issue).
3. Exercise of Warrant.
(a) Exercise of the purchase rights represented by this
Warrant may be made at any time or times on or after the Initial Exercise
Date and on or before the Termination Date by delivery to the Company of a
duly executed facsimile copy of the Notice of Exercise Form annexed hereto
(or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of such Holder
appearing on the books of the Company). Within 7 Trading Days from the
delivery to the Company of the Notice of Exercise Form by facsimile copy,
surrender of this Warrant and payment of the aggregate Exercise Price as
set forth above ("Warrant Share Delivery Date"), the Company shall (i)
record such issuance of such shares in the name of the Holder on the
records of the Company and (ii) deliver certificates for Warrant Shares
purchased hereunder to the Holder in the name of such Holder. This Warrant
shall be deemed to have been exercised on the date the Notice of Exercise
is delivered to the Company by facsimile copy, the Warrant has been
surrendered to the Company and the Exercise Price has been duly delivered
to the Company. Upon such exercise, the Warrant Shares shall be deemed to
have been issued, and the Holder or any other person so designated to be
named therein shall be deemed to have become a holder of record of such
shares for all purposes. If the Company fails to deliver to the Holder a
certificate or certificates representing the Warrant Shares pursuant to
this Section 3(a) by the Warrant Share Delivery Date, then the Holder will
have the right to rescind such exercise. In addition to any other rights
available to the Holder, if the Company fails to deliver to the Holder a
certificate or certificates representing the Warrant Shares pursuant to an
exercise on or before the Warrant Share Delivery Date, and if after such
date the Holder is required by its broker to purchase (in an open market
transaction or otherwise) Ordinary Shares to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder anticipated
receiving upon such exercise (a "Buy-In"), then the Company shall (1) pay
in cash to the Holder the amount by which (x) the Holder's total purchase
price (including brokerage commissions, if any) for the Ordinary Shares so
purchased exceeds (y) the amount obtained by multiplying (A) the number of
Warrant Shares that the Company was required to deliver to the Holder in
connection with the
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exercise at issue times (B) the price at which the sell order giving rise
to such purchase obligation was executed, and (2) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of Ordinary Shares that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder. For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an
attempted exercise of Ordinary Shares with an aggregate sale price giving
rise to such purchase obligation of $10,000, under clause (1) of the
immediately preceding sentence the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In,
together with applicable confirmations and other evidence reasonably
requested by the Company. Nothing herein shall limit a Xxxxxx's right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing Ordinary Shares upon exercise of the Warrant as
required pursuant to the terms hereof.
(b) If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, (i) deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant and (ii) record the issuance of the
purchased Warrant Shares in the name of the Holder on the records of the
Company.
(c) (i) The Company shall not effect any exercise of this Warrant
and the Holder shall not have the right to exercise any portion of this
Warrant, pursuant to Section 3(a) or otherwise, to the extent that after
giving effect to such issuance after exercise, the Holder (together with
the Holder's affiliates), as set forth on the applicable Notice of
Exercise, would beneficially own in excess of 4.99% of the number of
Ordinary Shares outstanding immediately after giving effect to such
issuance. For purposes of the foregoing sentence, the number of Ordinary
Shares beneficially owned by the Holder and its affiliates shall include
the number of Ordinary Shares issuable upon exercise of this Warrant with
respect to which the determination of such sentence is being made, but
shall exclude the number of Ordinary Shares which would be issuable upon
(A) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by the Holder or any of its affiliates and (B) exercise
or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other
Debentures or Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the
Holder or any of its affiliates. Except as set forth in the preceding
sentence, for purposes of this Section 3(c), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act. To the
extent that the limitation contained in this Section 3(c) applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by the Holder) and of which a portion of this Warrant is
exercisable shall be in the sole
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discretion of such Holder, and the submission of a Notice of Exercise
shall be deemed to be such Holder's determination of whether this Warrant
is exercisable (in relation to other securities owned by such Holder) and
of which portion of this Warrant is exercisable, in each case subject to
such aggregate percentage limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination. For
purposes of this Section 3(c), in determining the number of outstanding
Ordinary Shares, the Holder may rely on the number of outstanding Ordinary
Shares as reflected in (x) the Company's most recent Form 20-F, (y) a more
recent public announcement by the Company or (z) any other notice by the
Company or the Company's Transfer Agent setting forth the number of
Ordinary Shares outstanding. Upon the written or oral request of the
Holder, the Company shall within two Trading Days confirm orally and in
writing to the Holder the number of Ordinary Shares then outstanding. In
any case, the number of outstanding Ordinary Shares shall be determined
after giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by the Holder or its affiliates since the
date as of which such number of outstanding Ordinary Shares was reported.
(ii) If the Company has not obtained Shareholder Approval (as
defined below) if required, then the Company may not issue upon exercise
of this Warrant in the aggregate, in excess of 19.999% of the number of
Ordinary Shares outstanding on the Trading Day immediately preceding the
Closing Date, less any Ordinary Shares issued upon conversion of or as
payment of interest on the Debentures or upon prior exercise of this or
any other Warrant issued pursuant to the Purchase Agreement (such number
of shares, the "Issuable Maximum"). If on any attempted exercise of this
Warrant, the issuance of Warrant Shares would exceed the Issuable Maximum
and the Company shall not have previously obtained the vote of
shareholders (the "Shareholder Approval"), if any, as may be required by
the applicable law or by the applicable rules and regulations of the
Principal Market (or any successor entity) to approve the issuance of
Ordinary Shares in excess of the Issuable Maximum pursuant to the terms
hereof, then the Company shall issue to the Holder requesting a Warrant
exercise such number of Warrant Shares as may be issued below the Issuable
Maximum and, with respect to the remainder of the aggregate number of
Warrant Shares, this Warrant shall not be exercisable until and unless
Shareholder Approval has been obtained.
(d) If at any time after one year from the date of issuance of this
Warrant there is no effective Registration Statement registering the
resale of the Warrant Shares by the Holder, then this Warrant may also be
exercised at such time by means of a "cashless exercise" in which the
Holder shall be entitled to receive a certificate for the number of
Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by
(A), where:
(A) = the VWAP on the Trading Day immediately preceding the date of
such election;
(B) = the Exercise Price of this Warrant, as adjusted; and
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(X) = the number of Warrant Shares issuable upon exercise of this
Warrant in accordance with the terms of this Warrant by means
of a cash exercise rather than a cashless exercise.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be
entitled to purchase upon such exercise, the Company shall pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price.
5. Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
6. Closing of Books. The Company will not close its shareholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
7. Transfer, Division and Combination.
(a) Subject to compliance with any applicable securities laws and the
conditions set forth in Sections 1 and 7(e) hereof and to the provisions of
Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder
are transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant
or Warrants in the name of the assignee or assignees and in the denomination
or denominations specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of this Warrant not so
assigned, and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney; provided,
however, that the Holder may not transfer and/or divide this Warrant in part
unless the amount being transferred has an aggregate Exercise Price of at
least $100,000 at the time of such transfer and/or such division does not
result in the issuance of any new warrants with an aggregate Exercise
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Price of less than $100,000 at the time of such division. Subject to
compliance with Section 7(a), as to any transfer which may be involved in
such division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant or Warrants to be divided or
combined in accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 7.
(d) The Company agrees to maintain, at its aforesaid office, books for
the registration and the registration of transfer of the Warrants.
(e) If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the
Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the
Company a written opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that such transfer may be made without
registration under the Securities Act and under applicable state securities
or blue sky laws, (ii) that the holder or transferee execute and deliver to
the Company an investment letter in form and substance acceptable to the
Company and (iii) that the transferee be an "accredited investor" as defined
in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8) promulgated under the
Securities Act or a qualified institutional buyer as defined in Rule 144A(a)
under the Securities Act.
8. No Rights as Shareholder until Exercise. This Warrant does not entitle
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price (or by means of a cashless exercise), the
Warrant Shares so purchased shall be and be deemed to be issued to such Holder
as the record owner of such shares as of the close of business on the later of
the date of such surrender or payment.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any share
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or share certificate, if mutilated,
the Company will make and deliver a new Warrant or share certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or share
certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.
11. Adjustments of Exercise Price and Number of Warrant Shares.
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(a) Stock Splits, etc. The number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In
case the Company shall (i) pay a dividend in Ordinary Shares or make a
distribution in Ordinary Shares to holders of its outstanding Ordinary
Shares, (ii) subdivide its outstanding Ordinary Shares into a greater number
of shares, (iii) combine its outstanding Ordinary Shares into a smaller
number of Ordinary Shares, or (iv) issue any shares in a reclassification of
the Ordinary Shares, then the number of Warrant Shares purchasable upon
exercise of this Warrant immediately prior thereto shall be adjusted so that
the Holder shall be entitled to receive the kind and number of Warrant Shares
or other securities of the Company which it would have owned or have been
entitled to receive had such Warrant been exercised in advance thereof. Upon
each such adjustment of the kind and number of Warrant Shares or other
securities of the Company which are purchasable hereunder, the Holder shall
thereafter be entitled to purchase the number of Warrant Shares or other
securities resulting from such adjustment at an Exercise Price per Warrant
Share or other security obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares
purchasable pursuant hereto immediately prior to such adjustment divided by
the number of Warrant Shares or other securities of the Company that are
purchasable pursuant hereto immediately thereafter resulting from such
adjustment. An adjustment made pursuant to this paragraph shall become
effective immediately after the effective date of such event retroactive to
the record date, if any, for such event.
(b) Anti-Dilution Provisions. During the Exercise Period, the Exercise
Price shall be subject to adjustment from time to time as provided in this
Section 11(b). In the event that any adjustment of the Exercise Price as
required herein results in a fraction of a cent, such Exercise Price shall be
rounded up or down to the nearest cent.
(i) Adjustment of Exercise Price. If and whenever the Company issues
or sells, or in accordance with Section 11(b)(ii) hereof is deemed to have
issued or sold, any Ordinary Shares for an effective consideration per
share of less than the then Set Price, or for no consideration (such lower
price, the "Base Share Price" and such issuances collectively, a "Dilutive
Issuance"), then, (a) from the Initial Exercise Date until the 6th month
anniversary of the Effective Date, the Exercise Price shall be reduced,
and only reduced, to a price equal to 114% of the Base Share Price (if the
Registration Statement is unavailable for use by the Holder during such
period, such period shall be extended for such number of unavailable
days)(provided that if 114% of the Base Share Price exceeds the
pre-adjusted Exercise Price, no adjustment shall occur) and (b) after the
6th month anniversary of the Effective Date (as extended in clause (a)
above) and subject to section 4.18 of the Purchase Agreement, the Exercise
Price shall be reduced, and only reduced, by multiplying the Exercise
Price by a fraction, the numerator of which is the number of Ordinary
Shares issued and outstanding immediately prior to the Dilutive Issuance
plus the number of Ordinary Shares which the offering price for such
Dilutive Issuance would purchase at the then Exercise Price, and the
denominator of which shall be the sum of the number of Ordinary Shares
issued and outstanding immediately prior to the Dilutive Issuance plus 88%
of the
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number of Ordinary Shares so issued or issuable in connection with the
Dilutive Issuance (provided that if the numerator exceeds the denominator,
no adjustment shall occur); provided, however, that for purposes hereof,
all securities exercisable, convertible into or exchangeable for Ordinary
Shares ("Convertible Securities") shall be deemed outstanding immediately
after the issuance of such Ordinary Shares. Such adjustment shall be made
whenever such Ordinary Shares or Convertible Securities are issued.
(ii) Effect on Exercise Price of Certain Events. For purposes of
determining the adjusted Exercise Price under Section 11(b) hereof, the
following will be applicable:
(A) Issuance of Rights or Options. If the Company in any
manner issues or grants any warrants, rights or options, whether or
not immediately exercisable, to subscribe for or to purchase Ordinary
Shares or Convertible Securities (such warrants, rights and options to
purchase Ordinary Shares or Convertible Securities are hereinafter
referred to as "Options") and the effective price per share for which
Ordinary Shares are issuable upon the exercise of such Options is less
than the then Set Price ("Below Base Price Options"), then the maximum
total number of Ordinary Shares issuable upon the exercise of all such
Below Base Price Options (assuming full exercise, conversion or
exchange of Convertible Securities, if applicable) will, as of the
date of the issuance or grant of such Below Base Price Options, be
deemed to be outstanding and to have been issued and sold by the
Company for such price per share and the maximum consideration payable
to the Company upon such exercise (assuming full exercise, conversion
or exchange of Convertible Securities, if applicable) will be deemed
to have been received by the Company. For purposes of the preceding
sentence, the "effective price per share for which Ordinary Shares are
issuable upon the exercise of such Below Base Price Options" is
determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the issuance or
granting of all such Below Base Price Options, plus the minimum
aggregate amount of additional consideration, if any, payable to the
Company upon the exercise of all such Below Base Price Options, plus,
in the case of Convertible Securities issuable upon the exercise of
such Below Base Price Options, the minimum aggregate amount of
additional consideration payable upon the exercise, conversion or
exchange thereof at the time such Convertible Securities first become
exercisable, convertible or exchangeable, by (ii) the maximum total
number of Ordinary Shares issuable upon the exercise of all such Below
Base Price Options (assuming full conversion of Convertible
Securities, if applicable). No further adjustment to the Exercise
Price will be made upon the actual issuance of such Ordinary Shares
upon the exercise of such Below Base Price Options or upon the
exercise, conversion or exchange of Convertible Securities issuable
upon exercise of such Below Base Price Options.
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(B) Issuance of Convertible Securities. If the Company in any
manner issues or sells any Convertible Securities, whether or not
immediately convertible (other than where the same are issuable upon
the exercise of Options) and the effective price per share for which
Ordinary Shares are issuable upon such exercise, conversion or
exchange is less than the then Set Price, then the maximum total
number of Ordinary Shares issuable upon the exercise, conversion or
exchange of all such Convertible Securities will, as of the date of
the issuance of such Convertible Securities, be deemed to be
outstanding and to have been issued and sold by the Company for such
price per share and the maximum consideration payable to the Company
upon such exercise (assuming full exercise, conversion or exchange of
Convertible Securities, if applicable) will be deemed to have been
received by the Company. For the purposes of the preceding sentence,
the "effective price per share for which Ordinary Shares are issuable
upon such exercise, conversion or exchange" is determined by dividing
(i) the total amount, if any, received or receivable by the Company as
consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise,
conversion or exchange thereof at the time such Convertible Securities
first become exercisable, convertible or exchangeable, by (ii) the
maximum total number of Ordinary Shares issuable upon the exercise,
conversion or exchange of all such Convertible Securities. No further
adjustment to the Exercise Price will be made upon the actual issuance
of such Ordinary Shares upon exercise, conversion or exchange of such
Convertible Securities.
(C) Change in Option Price or Conversion Rate. If there is a
change at any time in (i) the amount of additional consideration
payable to the Company upon the exercise of any Options; (ii) the
amount of additional consideration, if any, payable to the Company
upon the exercise, conversion or exchange of any Convertible
Securities; or (iii) the rate at which any Convertible Securities are
convertible into or exchangeable for Ordinary Shares (in each such
case, other than under or by reason of provisions designed to protect
against dilution), the Exercise Price in effect at the time of such
change will be readjusted to the Exercise Price which would have been
in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed additional consideration
or changed conversion rate, as the case may be, at the time initially
granted, issued or sold.
(D) Calculation of Consideration Received. If any Ordinary
Shares, Options or Convertible Securities are issued, granted or sold
for cash, the consideration received therefor for purposes of this
Warrant will be the amount received by the Company therefor, before
deduction of reasonable commissions, underwriting discounts or
allowances or other reasonable expenses paid or incurred by the
Company
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in connection with such issuance, grant or sale. In case any Ordinary
Shares, Options or Convertible Securities are issued or sold for a
consideration part or all of which shall be other than cash, the
amount of the consideration other than cash received by the Company
will be the fair market value of such consideration, except where such
consideration consists of securities, in which case the amount of
consideration received by the Company will be the fair market value
(closing bid price, if traded on any market) thereof as of the date of
receipt. In case any Ordinary Shares, Options or Convertible
Securities are issued in connection with any merger or consolidation
in which the Company is the surviving corporation, the amount of
consideration therefor will be deemed to be the fair market value of
such portion of the net assets and business of the non-surviving
corporation as is attributable to such Ordinary Shares, Options or
Convertible Securities, as the case may be. The fair market value of
any consideration other than cash or securities will be determined in
good faith by an investment banker or other appropriate expert of
national reputation selected by the Company and reasonably acceptable
to the holder hereof, with the costs of such appraisal to be borne by
the Company.
(E) Exceptions to Adjustment of Exercise Price.
Notwithstanding the foregoing, no adjustment will be made under this
Section 11(b) in respect of (1) an Exempt Issuance or (2) registered
offerings by the Company of its securities whereby the Holders
purchase 100% of such offering.
(iii) Minimum Adjustment of Exercise Price. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise
Price in effect at the time such adjustment is otherwise required to be
made, but any such lesser adjustment shall be carried forward and shall be
made at the time and together with the next subsequent adjustment which,
together with any adjustments so carried forward, shall amount to not less
than 1% of such Exercise Price.
12. Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. In case the Company shall reorganize its capital, reclassify its
share capital, consolidate or merge with or into another corporation (where the
Company is not the surviving corporation or where there is a change in or
distribution with respect to the Ordinary Shares of the Company), or sell,
transfer or otherwise dispose of its property, assets or business to another
corporation and, pursuant to the terms of such reorganization, reclassification,
merger, consolidation or disposition of assets, shares of common stock of the
successor or acquiring corporation, or 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 common stock of
the successor or acquiring corporation ("Other Property"), are to be received by
or distributed to the holders of Ordinary Shares of the Company, then the Holder
shall have the right thereafter to receive, upon exercise of this Warrant, the
number of Ordinary Shares of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and
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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 Ordinary Shares for which this Warrant is exercisable immediately
prior to such event. In case of any such reorganization, reclassification,
merger, consolidation or disposition of assets, the successor or acquiring
corporation (if other than the Company) 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 in good faith by resolution of the Board of Directors
of the Company) in order to provide for adjustments of Warrant Shares for which
this Warrant is exercisable which shall be as nearly equivalent as practicable
to the adjustments provided for in this Section 12. For purposes of this Section
12, "common stock of the successor or acquiring corporation" shall include stock
of such corporation of any class which is not preferred as to dividends or
assets over any other class of stock of such corporation and which is not
subject to redemption and shall also include any evidences of indebtedness,
shares of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified date
or the happening of a specified event and any warrants or other rights to
subscribe for or purchase any such stock. The foregoing provisions of this
Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or number
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
15. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of its
Ordinary Shares for the purpose of entitling them to receive a dividend or
other distribution, or any right to subscribe for or purchase any
evidences of its indebtedness, any shares of stock of any class or any
other securities or property, or to receive any other right, or
(b) there shall be any capital reorganization of the Company,
any reclassification or recapitalization of the share capital of the
Company or any consolidation or merger of the Company with, or any sale,
transfer or other disposition of all or substantially all the property,
assets or business of the Company to, another corporation or,
11
(c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 20 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Ordinary Shares shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Ordinary Shares shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Xxxxxx appearing on the books of the Company and delivered in
accordance with Section 17(d).
16. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued
Ordinary Shares a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing share
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Principal Market
upon which the Ordinary Shares may be listed.
Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.
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Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
17. Miscellaneous.
--------------
(a) Jurisdiction. All questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement.
(b) Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant will have restrictions upon resale
imposed by state and federal securities laws.
(c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Xxxxxx's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Purchase Agreement.
(e) Limitation of Liability. No provision hereof, in the absence of
any affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Ordinary
Shares or as a shareholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
(g) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders
13
from time to time of this Warrant and shall be enforceable by any such Holder or
holder of Warrant Shares.
(h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.
(i) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.
(j) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
********************
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[SIGNATURE PAGE TO ORDINARY SHARES PURCHASE WARRANT]
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.
Dated: March __, 2004
BLUEPHOENIX SOLUTIONS LTD.
By:___________________________
Name:
Title:
15
NOTICE OF EXERCISE
To: BluePhoenix SolutionS Ltd.
(1)___The undersigned hereby elects to purchase ________ Warrant Shares of
BluePhoenix Solutions Ltd. pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in
full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] the cancellation of such number of Warrant Shares as is
necessary, in accordance with the formula set forth in
subsection 3(d), to exercise this Warrant with respect to the
maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 3(d).
(3) Please issue a certificate or certificates representing said Warrant Shares
in the name of the undersigned or in such other name as is specified below:
-------------------------------
The Warrant Shares shall be delivered to the following:
-------------------------------
-------------------------------
-------------------------------
(4) Accredited Investor. The undersigned is an "accredited
investor" as defined in Regulation D promulgated under the Securities Act of
1933, as amended.
[PURCHASER]
By: ______________________________
Name:
Title:
Dated: ________________________
ASSIGNMENT FORM
(To assign the foregoing warrant, execute this form and
supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to
_______________________________________________ whose address is
---------------------------------------------------------------.
---------------------------------------------------------------
Dated: ______________, _______
Holder's Signature: _____________________________
Holder's Address: _____________________________
-----------------------------
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.
