WARRANT AGREEMENT dated as of _________ __, 1996 between Accent
Software International Ltd., a corporation organized under the laws of the State
of Israel (the "Company"), and Sands Brothers & Co., Ltd. (hereinafter referred
to as the "Representative").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to the Representative, in its
individual capacity and not as representative of the several Underwriters
(defined below) warrants ("Warrants") to purchase up to an aggregate of 180,000
units (the "Units") each Unit consisting of one ordinary share of the Company,
nominal value NIS .01 per share (the "Underlying Shares") and one Ordinary Share
purchase warrant (the "Underlying Warrants") to purchase one (1) Ordinary Share
(the "Underlying Warrant Shares"), at an exercise price of $_______ (subject to
adjustment in certain circumstances); and
WHEREAS, the Representative has agreed, pursuant to the underwriting
agreement (the "Underwriting Agreement") dated _________ ___, 1996 between the
Representative, as representative of the several Underwriters named in Schedule
A to the Underwriting Agreement (the "Underwriters") and the Company, to act as
one of the underwriters in connection with the Company's proposed public
offering (the "Public Offering") of 1,800,000 Units (the "Public Units") at a
public offering price of $____ per Public Unit; and
WHEREAS, the Warrants issued pursuant to this Agreement are being
issued by the Company to the Representative or officers or partners of the
Representative and members of the selling group or the underwriting syndicate
and/or their officers or partners, in consideration for, and as part of the
Representative's compensation in connection with, the Representative acting as
one of the underwriters pursuant to the Underwriting Agreement;
NOW, THEREFORE, in consideration of the premises, the payment by the
Representative to the Company of ONE HUNDRED EIGHTY DOLLARS ($180.00), the
agreements herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. GRANT.
The Representative, and/or its designees who are officers or partners
of the Representative or members of the selling group or underwriting syndicate
in connection with the Public Offering, are hereby granted the right to
purchase, at any time from __________ __, 1997 [ONE YEAR ANNIVERSARY OF
EFFECTIVE DATE] until 5:00 P.M., New York City time, on _______ __, 2001 [FIVE
YEAR ANNIVERSARY OF EFFECTIVE DATE] (the "Warrant Exercise Term"), up to 180,000
Units at an initial exercise price (subject to adjustment as provided in Article
8 hereof) of $______ per Unit [140% OF PUBLIC OFFERING PRICE], each Unit
consisting of one Underlying Share and one Underlying Warrant to purchase one
(1) Underlying Warrant Share, at an exercise price of $_______ [140%
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OF PUBLIC OFFERING PRICE] (subject to adjustment in certain circumstances).
The Underlying Warrants are exercisable until 5:00 P.M., New York City time on
__________ __, 2001. Except as to exercise price and otherwise provided in
Section 13 hereof, the Units are in all respects identical to the Public Units
being sold to the public pursuant to the terms and provisions of the
Underwriting Agreement.
2. WARRANT CERTIFICATES.
The warrant certificates (the "Warrant Certificates") delivered and to
be delivered pursuant to this Agreement shall be in the form set forth as
Exhibit A, attached hereto and made a part hereof, with such appropriate
insertions, omissions, substitutions and other variations as required or
permitted by this Agreement.
3. EXERCISE OF WARRANTS.
3.1 CASH EXERCISE. The Warrants initially are exercisable at a
price of $_____ per Unit purchased [140% OF PUBLIC OFFERING PRICE], payable in
cash or by check to the order of the Company, or any combination of cash or
check, subject to adjustment as provided in Article 8 hereof. Upon surrender of
the Warrant Certificate with the annexed Form of Election to Purchase duly
executed, together with payment of the Exercise Price (as hereinafter defined)
for the Units purchased, at the principal office of the Company in Israel
(presently located at 28 Xxxxxx Xxxxxx Xxxxxx, X.X. Xxx 00000, Xxxxxxxxx 00000,
Xxxxxx) or at the office of its transfer agent, the registered holder of a
Warrant Certificate ("Holder" or "Holders") shall be entitled
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to receive a certificate or certificates for the Underlying Shares so purchased
and a certificate or certificates for the Underlying Warrants so purchased. The
purchase rights represented by each Warrant Certificate are exercisable at the
option of the Holder hereof, in whole or in part (but not as to fractional
Units). In the case of the purchase of less than all the Units purchasable
under any Warrant Certificate, the Company shall cancel said Warrant Certificate
upon the surrender thereof and shall execute and deliver a new Warrant
Certificate of like tenor for the balance of the Units purchasable thereunder.
3.2 CASHLESS EXERCISE. At any time during the Warrant Exercise
Term, the Holder may, at its option, exchange this Warrant, in whole or in part
(a "Warrant Exchange"), into the number of Units determined in accordance with
this Section 3.2, by surrendering this Warrant at the principal office of the
Company or at the office of its transfer agent, accompanied by a notice stating
such Holder's intent to effect such exchange, the number of Units to be
exchanged and the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for the
Underlying Shares and Underlying Warrants issuable upon such Warrant Exchange
and, if applicable, a new warrant of like tenor evidencing the balance of the
Units remaining subject to this Warrant, shall be issued as of the Exchange Date
and delivered to the Holder within three (3) days
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following the Exchange Date. In connection with any Warrant Exchange, this
Warrant shall represent the right to subscribe for and acquire the number of
Units (rounded to the next highest integer) equal to (i) the number of Units
specified by the Holder in its Notice of Exchange (the "Total Number") less (ii)
the number of Units equal to the quotient obtained by dividing (A) the product
of the Total Number and the existing Exercise Price (as hereinafter defined) by
(B) the current market value of a Public Unit.
4. ISSUANCE OF CERTIFICATES.
Upon the exercise of the Warrants, the issuance of certificates [for
the Underlying Shares purchased and the Underlying Warrants purchased, and upon
the exercise of the Underlying Warrants, the issuance of certificates for the
Underlying Warrant Shares purchased shall be made forthwith (and in any event
within three business days thereafter) without charge to the Holder thereof
including, without limitation, any tax which may be payable in respect of the
issuance thereof, and such certificates shall (subject to the provisions of
Article 5 hereof) be issued in the name of, or in such names as may be directed
by, the Holder thereof; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of any such certificates in a name other than that
of the Holder and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of
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such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
The Warrant Certificates and the certificates representing the
Underlying Shares, the Underlying Warrants and the Underlying Warrant Shares
shall be executed on behalf of the Company by the manual or facsimile signature
of the present or any future Chairman or Vice Chairman of the Board of Directors
or President or Vice President of the Company under its corporate seal
reproduced thereon, attested to by the manual or facsimile signature of the
present or any future Secretary or Assistant Secretary of the Company. Warrant
Certificates shall be dated the date of execution by the Company upon initial
issuance, division, exchange, substitution or transfer.
Upon exercise, in part or in whole, of the Warrants, certificates
representing the Underlying Shares, the Underlying Warrants and the Underlying
Warrant Shares shall bear a legend substantially similar to the following:
"The securities represented by this certificate and the other
securities issuable upon exercise thereof have not been registered
under the Securities Act of 1933, as amended (the "Act"), and may not
be offered or sold except (i) pursuant to an effective registration
statement under the Act, (ii) to the extent applicable, pursuant to
Rule 144 under the Act (or any similar rule under such Act relating to
the disposition of securities), or (iii) upon the delivery by the
holder to the Company of an opinion of counsel, reasonably
satisfactory to counsel to the Company, stating that an exemption from
registration under such Act is available."
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5. RESTRICTION ON TRANSFER OF WARRANTS.
The Holder of a Warrant Certificate, by its acceptance thereof,
covenants and agrees that the Warrants are being acquired as an investment and
not with a view to the distribution thereof, and that the Warrants may not be
sold, transferred, assigned, hypothecated or otherwise disposed of, in whole or
in part, for a period of one (1) year from the date hereof, except to officers
or partners of the Representative or to any member of the selling group
participating in the distribution to the public of the Public Units and/or their
respective officers or partners.
6. PRICE.
6.1 INITIAL AND ADJUSTED EXERCISE PRICE. The initial exercise
price of each Warrant shall be $_______ per Unit [140% OF PUBLIC OFFERING
PRICE]. The adjusted exercise price shall be the price which shall result from
time to time from any and all adjustments of the initial exercise price in
accordance with the provisions of Article 8 hereof.
6.2 EXERCISE PRICE. The term "Exercise Price" herein shall mean
the initial exercise price or the adjusted exercise price, depending upon the
context.
7. REGISTRATION RIGHTS.
7.1 REGISTRATION UNDER THE SECURITIES ACT OF 1933. None of the
Warrants, the Units, the Underlying Shares, the Underlying Warrants or the
Underlying Warrant Shares have been registered for purposes of public
distribution under the Securities Act of 1933, as amended (the "Act").
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7.2 REGISTRABLE SECURITIES. As used herein the term
"Registrable Security" means each of the Warrants, the Units, the Underlying
Shares, the Underlying Warrants, the Underlying Warrant Shares and any Ordinary
Shares issued upon any stock split or stock dividend in respect of such
Underlying Shares or Underlying Warrant Shares; provided, however, that with
respect to any particular Registrable Security, such security shall cease to be
a Registrable Security when, as of the date of determination, (i) it has been
effectively registered under the Act and disposed of pursuant thereto, (ii)
registration under the Act is no longer required for subsequent public
distribution of such security or (iii) it has ceased to be outstanding. The
term "Registrable Securities" means any and/or all of the securities falling
within the foregoing definition of a "Registrable Security." In the event of
any merger, reorganization, consolidation, recapitalization or other change in
corporate structure affecting the Ordinary Shares, such adjustment shall be made
in the definition of "Registrable Security" as is appropriate in order to
prevent any dilution or enlargement of the rights granted pursuant to this
Article 7.
7.3 PIGGYBACK REGISTRATION. If, at any time during the five
years following the date of this Agreement, the Company proposes to prepare and
file one or more post-effective amendments to the registration statement filed
in connection with the Public Offering or any new registration statement or
post-effective amendments thereto covering equity or debt securities of the
Company, or any such securities of the Company held by its
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shareholders (in any such case, other than in connection with a merger,
acquisition or pursuant to Form S-8 or successor form), (for purposes of this
Article 7, collectively, a "Registration Statement"), it will give written
notice of its intention to do so by registered mail ("Notice"), at least thirty
(30) business days prior to the filing of each such Registration Statement, to
all holders of the Registrable Securities. Upon the written request of such a
holder (a "Requesting Holder"), made within twenty (20) business days after
receipt of the Notice, that the Company include any of the Requesting Holder's
Registrable Securities in the proposed Registration Statement, the Company
shall, as to each such Requesting Holder, use its best efforts to effect the
registration under the Act of the Registrable Securities which it has been so
requested to register ("Piggyback Registration"), at the Company's sole cost and
expense and at no cost or expense to the Requesting Holders.
7.4 DEMAND REGISTRATION.
(a) At any time during the Warrant Exercise Term, any
"Majority Holder" (as such term is defined in Section 7.4(c) below) of the
Registrable Securities shall have the right (which right is in addition to the
piggyback registration rights provided for under Section 7.3 hereof),
exercisable by written notice to the Company (the "Demand Registration
Request"), to have the Company prepare and file with the Securities and Exchange
Commission (the "Commission"), on one occasion, at the sole expense of the
Company, a Registration Statement and such other documents, including a
prospectus, as may be necessary (in
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the opinion of both counsel for the Company and counsel for such Majority
Holder), in order to comply with the provisions of the Act, so as to permit a
public offering and sale of the Registrable Securities by the holders thereof,
for twelve (12) consecutive months.
(b) The Company covenants and agrees to give written notice
of any Demand Registration Request to all holders of the Registrable Securities
within ten (10) days from the date of the Company's receipt of any such Demand
Registration Request. After receiving notice from the Company as provided in
this Section 7.4(b), holders of Registrable Securities may request the Company
to include their Registrable Securities in the Registration Statement to be
filed pursuant to Section 7.4(a) hereof by notifying the Company of their
decision to include such securities within ten (10) days of their receipt of the
Company's notice.
(c) The term "Majority Holder" as used in this Section 7.4
shall mean any holder or any combination of holders of Registrable Securities,
if included in such holders' Registrable Securities are that aggregate number of
Ordinary Shares (including Ordinary Shares already issued, Ordinary Shares
issuable pursuant to the exercise of outstanding Warrants, Underlying Warrant
Shares already issued and Underlying Warrant Shares issuable pursuant to the
exercise of outstanding Underlying Warrants) as would constitute a majority of
the aggregate number of Ordinary Shares (including Ordinary Shares already
issued and Ordinary Shares issuable pursuant to the
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exercise of outstanding Warrants) included in all of the Registrable Securities.
7.5 COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION. The
Company covenants and agrees as follows:
(a) In connection with any registration under Section 7.4
hereof, the Company shall file the Registration Statement as expeditiously as
possible, but in no event later than thirty (30) days following receipt of any
demand therefor, shall use its best efforts to have any such Registration
Statements declared effective at the earliest possible time, and shall furnish
each holder of Registrable Securities such number of prospectuses as shall
reasonably be requested.
(b) The Company shall pay all costs, fees and expenses in
connection with all Registration Statements filed pursuant to Sections 7.3 and
7.4(a) hereof including, without limitation, the Company's legal and accounting
fees, printing expenses, and blue sky fees and expenses.
(c) The Company will take all necessary action which may be
required in qualifying or registering the Registrable Securities included in a
Registration Statement for offering and sale under the securities or blue sky
laws of such states as are requested by the holders of such securities, provided
that the Company shall not be obligated to execute or file any general consent
to service of process or to qualify as a foreign corporation to do business
under the laws of any such jurisdiction.
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(d) The Company shall indemnify any holder of the
Registrable Securities to be sold pursuant to any Registration Statement and any
underwriter or person deemed to be an underwriter under the Act and each person,
if any, who controls such holder or underwriter or person deemed to be an
underwriter within the meaning of Section 15 of the Act or Section 20(a) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), against all loss,
claim, damage, expense or liability (including all expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever) to which
any of them may become subject under the Act, the Exchange Act or otherwise,
arising from such registration statement to the same extent and with the same
effect as the provisions pursuant to which the Company has agreed to indemnify
the Underwriters contained in Section 7 of the Underwriting Agreement and to
provide for just and equitable contribution as set forth in Section 8 of the
Underwriting Agreement.
(e) Any holder of Registrable Securities to be sold
pursuant to a Registration Statement, and its successors and assigns, shall
severally, and not jointly, indemnify, the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage or expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished
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in writing by or on behalf of such holder, or its successors or assigns, for
specific inclusion in such Registration Statement to the same extent and with
the same effect as the provisions contained in Section 7 of the Underwriting
Agreement pursuant to which the Underwriters have agreed to indemnify the
Company and to provide for just and equitable contribution as set forth in
Section 8 of the Underwriting Agreement.
(f) Nothing contained in this Agreement shall be construed
as requiring any Holder to exercise his Warrants or Underlying Warrants prior to
the initial filing of any Registration Statement or the effectiveness thereof.
(g) If the Company shall fail to comply with the provisions
of this Article 7, the Company shall, in addition to any other equitable or
other relief available to the holders of Registrable Securities, be liable for
any or all incidental, special and consequential damages sustained by the
holders of Registrable Securities, requesting registration of their Registrable
Securities.
(h) Except as set forth in Section 7.5(i) hereof, the
Company shall not permit the inclusion of any securities other than the
Registrable Securities to be included in any Registration Statement filed
pursuant to Section 7.4 hereof, or permit any other registration statement to be
or remain effective during the effectiveness of a Registration Statement filed
pursuant to Section 7.4 hereof, without the prior written consent of the
Majority Holders, which consent shall not be unreasonably withheld.
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(i) The Company shall deliver promptly to each holder of
Registrable Securities participating in the offering in which such Holder's
shares are being registered pursuant to Section 7.3 hereof and requesting the
correspondence and memoranda described in this Section 7.5(i) and to the
managing underwriter, if any, copies of all correspondence between the
Commission and the Company, its counsel or auditors and all memoranda relating
to discussions with the Commission or its staff with respect to the Registration
Statement and permit each holder of Registrable Securities and underwriters to
do such investigation, upon reasonable advance notice, with respect to
information contained in or omitted from the Registration Statement as it deems
reasonably necessary to comply with applicable securities laws or rules of the
National Association of Securities Dealers, Inc. Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as any such holder
of Registrable Securities or underwriter shall reasonably request.
(j) Upon the written request therefor by any holders of
Registrable Securities, the Company shall include in the Registration Statement
covering any of the Registrable Securities any other securities of the Company
held by such holders of Registrable Securities as of the date of filing of such
Registration Statement, including, without limitation,
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restricted Ordinary Shares, options, warrants or any other securities
convertible into Ordinary Shares.
8. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SECURITIES. The
following adjustments apply to the Exercise Price of the Warrants with respect
to the Units purchasable upon exercise of the Warrants.
8.1 COMPUTATION OF ADJUSTED PRICE. In case the Company shall at
any time after the date hereof pay a dividend in Ordinary Shares or make a
distribution in Ordinary Shares, then upon such dividend or distribution the
Exercise Price in effect immediately prior to such dividend or distribution
shall forthwith be reduced to a price determined by dividing:
(a) an amount equal to the total number of Ordinary
Shares outstanding immediately prior to such dividend or distribution multiplied
by the Exercise Price in effect immediately prior to such dividend or
distribution, by
(b) the total number of Ordinary Shares outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance
with the provisions of this Section 8.1, the Ordinary Shares issuable by way of
dividend or other distribution on any stock of the Company shall be deemed to
have been issued immediately after the opening of business on the date following
the date fixed for the determination of stockholders entitled to receive such
dividend or other distribution.
8.2 SUBDIVISION AND COMBINATION. In case the Company shall at
any time subdivide or combine the outstanding
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Ordinary Shares, the Exercise Price shall forthwith be proportionately decreased
in the case of subdivision or increased in the case of combination.
8.3 ADJUSTMENT IN NUMBER OF SECURITIES. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Article 8, the number of
Units issuable upon the exercise of each Warrant shall be adjusted to the
nearest full Unit by multiplying a number equal to the Exercise Price in effect
immediately prior to such adjustment by the number of Units issuable upon
exercise of the Warrants immediately prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price; provided, however, that if
an event occurs that results in an adjustment of the number and/or price of the
Ordinary Shares issuable upon exercise of the warrants underlying the Public
Units pursuant to Section 9 of the Warrant Agreement by and among the Company,
the Representative and American Stock Transfer & Trust Company dated as of
____________ ____, 1996 ("Public Warrant Agreement"), resulting in automatic
adjustment in the number and/or price of the Underlying Warrant Shares issuable
upon exercise of the Underlying Warrants pursuant to Section 8.5 hereof, then
the adjustment provided for in this Section 8.3 shall not, in such instance,
result in any further adjustment in the aggregate number of Ordinary Shares
ultimately issuable upon exercise of the Underlying Warrants.
8.4 RECLASSIFICATION, CONSOLIDATION, MERGER, ETC. In case of
any reclassification or change of the outstanding Ordinary Shares (other than a
change in nominal value to no
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nominal value, or from no nominal value to nominal value, or as a result of a
subdivision or combination), or in the case of any consolidation of the Company
with, or merger of the Company into, another corporation (other than a
consolidation or merger in which the Company is the surviving corporation and
which does not result in any reclassification or change of the outstanding
Ordinary Shares, except a change as a result of a subdivision or combination of
such shares or a change in par value, as aforesaid), or in the case of a sale or
conveyance to another corporation of the property of the Company as an entirety,
the Holders shall thereafter have the right to purchase the kind and number of
shares of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance as if the
Holders were the owners of both the Underlying Shares and Underlying Warrant
Shares immediately prior to any such events at a price equal to the product of
(x) the number of Ordinary Shares issuable upon exercise of the Holders'
Warrants and Underlying Warrants (y) the Exercise Price in effect immediately
prior to the record date for such reclassification, change, consolidation,
merger, sale or conveyance as if such Holders had exercised the Warrants and the
Underlying Warrants.
8.5 ADJUSTMENT OF UNDERLYING WARRANTS' EXERCISE PRICE AND
SECURITIES ISSUABLE UPON EXERCISE OF UNDERLYING WARRANTS. With respect to any
of the Underlying Warrants, whether or not the Warrants have been exercised and
whether or not the Warrants are issued and outstanding, the exercise price
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for, and the number of, Underlying Warrant Shares issuable upon exercise of the
Underlying Warrants shall be automatically adjusted in accordance with Section 9
of the Public Warrant Agreement, upon the occurrence of any of the events
described therein. Thereafter, until the next such adjustment or until
otherwise adjusted in accordance with this Section 8, the Underlying Warrants
shall be exercisable at such adjusted exercise price and for such adjusted
number of Underlying Warrant Shares.
8.6 DETERMINATION OF OUTSTANDING ORDINARY SHARES. The number of
Ordinary Shares at any one time outstanding shall include the aggregate number
of shares issued or issuable upon the exercise of options, rights, warrants and
upon the conversion or exchange of convertible or exchangeable securities.
8.7 DIVIDENDS AND OTHER DISTRIBUTIONS WITH RESPECT TO
OUTSTANDING SECURITIES. In the event that the Company shall at any time prior
to the exercise of all Warrants declare a dividend (other than a dividend
consisting solely of Ordinary Shares or a cash dividend or distribution or
otherwise distribute to its shareholders any monies, assets, property, rights,
evidences of indebtedness, securities (other than Ordinary Shares), whether
issued by the Company or by another person or entity, or any other thing of
value, the Holder or Holders of the unexercised Warrants shall thereafter be
entitled, in addition to the Ordinary Shares or other securities receivable upon
the exercise thereof, to receive, upon the exercise of such Warrants, the same
monies, property, assets, rights, evidences of
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indebtedness, securities or any other thing of value that they would have been
entitled to receive at the time of such dividend or distribution. At the time
of any such dividend or distribution, the Company shall make appropriate
reserves to ensure the timely performance of the provisions of this Subsection
8.7.
8.8 SUBSCRIPTION RIGHTS FOR ORDINARY SHARES OR OTHER SECURITIES.
In the case the Company or an affiliate of the Company shall at any time after
the date hereof and prior to the exercise of all the Warrants issue any rights
to subscribe for Ordinary Shares or any other securities of the Company or of
such affiliate to all the shareholders of the Company, the Holders of the
unexercised Warrants shall be entitled, in addition to the Ordinary Shares or
other securities receivable upon the exercise of the Warrants, to receive such
rights at the time such rights are distributed to the other shareholders of the
Company.
9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES.
Each Warrant Certificate is exchangeable without expense, upon the
surrender hereof by the registered Holder at the principal executive office of
the Company, for a new Warrant Certificate of like tenor and date representing
in the aggregate the right to purchase the same number of Ordinary Shares in
such denominations as shall be designated by the Holder thereof at the time of
such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or
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destruction, of indemnity or security reasonably satisfactory to it, and
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of the Warrants, if mutilated, the Company will
make and deliver a new Warrant Certificate of like tenor, in lieu thereof.
10. ELIMINATION OF FRACTIONAL INTERESTS.
The Company shall not be required to issue certificates representing
fractions of Warrant Shares or Underlying Warrants upon the exercise of the
Warrants nor shall it be required to issue scrip or pay cash in lieu of
fractional interests, it being the intent of the parties that all fractional
interests shall be eliminated by rounding any fraction up to the nearest whole
number of Warrant Shares or Underlying Warrants.
11. RESERVATION AND LISTING OF SECURITIES.
The Company shall at all times reserve and keep available out of its
authorized Ordinary Shares, solely for the purpose of issuance upon the exercise
of the Warrants and the Underlying Warrants, such number of Ordinary Shares as
shall be issuable upon the exercise thereof. The Company covenants and agrees
that, upon exercise of the Warrants and payment of the Exercise Price therefor,
all Ordinary Shares which are issuable upon such exercise shall be duly and
validly issued, fully paid, non-assessable and not subject to the preemptive
rights of any shareholder. The Company further covenants and agrees that, upon
exercise of the Underlying Warrants and payment of the respective Underlying
Warrant exercise price therefor, all Underlying Warrant Shares issuable upon
such exercise shall be duly and
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validly issued, fully paid, non-assessable and not subject to the preemptive
rights of any shareholder. As long as the Warrants shall be outstanding, the
Company shall use its best efforts to cause all Units and Ordinary Shares
issuable upon the exercise of the Warrants and the Underlying Warrants to be
listed on or quoted by the NASDAQ SmallCap Market, or listed on such national
securities exchanges as requested by the Underwriter.
12. NOTICES TO WARRANT HOLDERS.
Nothing contained in this Agreement shall be construed as conferring
upon the Holder or Holders the right to vote or to consent or to receive notice
as a shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the expiration of
the Warrants and their exercise, any of the following events shall occur:
(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 distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of current or
retained earnings, as indicated by the accounting treatment of such
dividend or distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its
Ordinary Shares any additional shares of capital stock of the Company
or securities convertible
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into or exchangeable for shares of capital stock of the Company, or
any option, right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of
all or substantially all of its property, assets and business as an
entirety shall be proposed; or
(d) reclassification or change of the outstanding Ordinary
Shares (other than a change in nominal value to no nominal value, or
from no nominal value to nominal value, or as a result of a
subdivision or combination), consolidation of the Company with, or
merger of the Company into, another corporation (other than a
consolidation or merger in which the Company is the surviving
corporation and which does not result in any reclassification or
change of the outstanding Ordinary Shares, except a change as a result
of a subdivision or combination of such shares or a change in par
value, as aforesaid), or a sale or conveyance to another corporation
of the property of the Company as an entirety is proposed; or
(e) The Company or an affiliate of the Company shall
propose to issue any rights to subscribe for Ordinary Shares or any
other securities of the Company or of such affiliate to all the
shareholders of the Company;
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then, in any one or more of said events, the Company shall give written notice
of such event at least fifteen (15) days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
payment of any such dividend or distribution, or the issuance of any convertible
or exchangeable securities or subscription rights, options or warrants, or any
proposed dissolution, liquidation, winding up or sale.
13. UNDERLYING WARRANTS.
The form of the certificates representing the Underlying Warrants (and
the form of election to purchase Underlying Warrant Shares upon the exercise of
the Underlying Warrants and the form of assignment printed on the reverse
thereof) shall be substantially as set forth in Exhibit "A" to the Public
Warrant Agreement, provided, however, each Underlying Warrant comprising part of
the Units issuable upon exercise of the Warrants shall evidence the right to
initially purchase one (1) fully paid and non-assessable Ordinary Share in
respect of the Underlying Warrant at an initial purchase price of $ per
share until , 2001. [140% OF PUBLIC OFFERING
-23-
PRICE] As set forth in Section 8.5 of this Agreement, the exercise price of the
Underlying Warrants and the number of Ordinary Shares issuable upon the exercise
of the Underlying Warrants are subject to adjustment, whether or not the
Warrants have been exercised and the Underlying Warrants have been issued, in
the manner and upon the occurrence of the events set forth in Section 9 of the
Public Warrant Agreement, which is hereby incorporated herein by reference and
made a part hereof as if set forth in its entirety herein. Subject to the
provisions of this Agreement and upon issuance of the Underlying Warrants, each
registered holder of such Underlying Warrants shall have the right to purchase
from the Company (and the Company shall issue to such registered holders) up to
the number of fully paid and non-assessable Underlying Warrant Shares (subject
to adjustment as provided herein and in the Public Warrant Agreement), free and
clear of all preemptive rights of shareholders, provided that such registered
holder complies, in connection with the exercise of such holders' Underlying
Warrants, with the terms governing exercise of the Public Warrants set forth in
the Public Warrant Agreement, and pays the applicable exercise price, determined
in accordance with the terms of the Public Warrant Agreement. Upon exercise of
the Underlying Warrants, the Company shall forthwith issue to the registered
holder of any such Underlying Warrants, in such holder's name or in such name as
they may be directed by such holder, certificates for the number of Underlying
Warrant Shares so purchased. Except as otherwise provided in Section 8.8
hereof, the Underlying Warrants shall be governed in all respects
-24-
by the terms of the Public Warrant Agreement. The Underlying Warrants shall be
transferable in the manner provided in the Public Warrant Agreement, and upon
any such transfer, a new Underlying Warrant shall be issued promptly to the
transferee. The Company covenants to, and agrees with, each Holder that without
the prior written consent of all the Holders, the Public Warrant Agreement will
not be modified, amended, cancelled, altered or superseded, and that the Company
will send to each Holder, irrespective of whether or not the Warrants have been
exercised, any and all notices required by the Public Warrant Agreement to be
sent to holders of the Public Warrants.
14. NOTICES.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or mailed by registered or certified mail, return receipt requested:
(f) If to a registered Holder of the Warrants, to the
address of such Holder as shown on the books of the Company; or
(g) If to the Company, to the address set forth in Section
3 of this Agreement or to such other address as the Company may
designate by notice to the Holders.
15. SUPPLEMENTS AND AMENDMENTS.
The Company and the Representative may from time to time supplement or
amend this Agreement without the approval of any Holders of Warrant Certificates
in order to cure any
-25-
ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Representative may deem necessary or desirable and which the Company and
the Representative deem not to adversely affect the interests of the Holders of
Warrant Certificates.
16. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company and the Holders inure to the benefit of their respective
successors and assigns hereunder.
17. TERMINATION.
This Agreement shall terminate at the close of business on __________,
200_ [THREE YEARS AFTER LAST DATE OF EXERCISE OF WARRANTS TO GIVE SUFFICIENT
COVERAGE FOR REGISTRATION OF THE SECURITIES AND PERIOD OF SALE.]
Notwithstanding the foregoing, this Agreement will terminate on any earlier date
when all Warrants and Underlying Warrants have been exercised and all Warrant
Securities have been resold to the public; provided, however, that the
provisions of Section 7.4 shall survive such termination until the close of
business on _________, 200_ [THREE YEARS PLUS THE TIME PERIOD ABOVE IN THIS
SECTION 17.].
18. GOVERNING LAW.
This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of New York and for all
purposes shall be construed in accordance with the laws of said State.
-26-
19. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and the Underwriter and any other registered
holder or holders of the Warrant Certificates, or Warrant Securities any legal
or equitable right, remedy or claim under this Agreement; and this Agreement
shall be for the sole and exclusive benefit of the Company and the Underwriter
and any other holder or holders of the Warrant Certificates, Warrants or the
Shares.
20. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
[SEAL] ACCENT SOFTWARE INTERNATIONAL, LTD.
By:__________________________________
Name:
Title:
Attest:
_______________________
SANDS BROTHERS & CO., LTD.
-27-
By:__________________________________
Name:
Title:
-28-
EXHIBIT A
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., NEW YORK TIME, _________, 199_
No. W- _______ Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that Sands Brothers & Co., Ltd. or
registered assigns, is the registered holder of _______ Warrants to purchase, at
any time from _______, 199_ until 5:00 P.M. New York City time on ________, 199_
("Expiration Date"), up to _____ Units of Accent Software International Ltd., a
corporation organized under the laws of the State of Israel (the "Company") at
the initial exercise price, subject to adjustment in certain events (the
"Exercise Price"), of $____ per Unit, upon surrender of this Warrant Certificate
and payment of the Exercise Price at an office or agency of the Company, but
subject to the conditions set forth herein and in the warrant agreement dated as
of ____________, 1996 between the Company and Sands Brothers & Co., Ltd. (the
"Warrant Agreement"). Each Unit consists of one ordinary share of the Company,
nominal value NIS .01 per share (the "Underlying Shares") and one Ordinary Share
purchase warrant (the "Underlying Warrants"). Payment of the Exercise Price may
be made in cash, or by certified or official bank check in New York Clearing
House funds payable to the order of the Company, or any combination of cash or
check.
The Underlying Warrants comprising part of the Units will be
exercisable until , 2001, each Underlying Warrant entitling the holder
thereof to purchase one fully-paid and non-assessable Ordinary Share, at an
initial exercise price subject to adjustment in certain events, of $ per
share. The Underlying Warrants are issuable pursuant to the terms and
provisions of a certain agreement dated as of , 1996 by and among
the Company, Sands Brothers & Co., Ltd. and
American Stock Transfer & Trust Company (the "Public Warrant Agreement"). The
Public Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to (except as otherwise provided in
the Warrant Agreement) for a description of the rights, limitations of rights,
manner of exercise, anti-dilution provisions and other provisions with respect
to the Underlying Warrants.
No Warrant may be exercised after 5:00 P.M., New York City time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to in a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events, the Exercise Price and/or number of the Company's securities issuable
thereupon may, subject to certain conditions, be adjusted. In such event, the
Company will, at the request of the holder, issue a new Warrant Certificate
evidencing the adjustment in the Exercise Price and the number and/or type of
securities issuable upon the exercise of the Warrants; provided, however, that
the failure of the Company to issue such new Warrant Certificates shall not in
any way change, alter, or otherwise impair, the rights of the holder as set
forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax, or other governmental charge
imposed in connection therewith.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated: ___________, 199_ ACCENT SOFTWARE INTERNATIONAL LTD.
[SEAL] By:__________________________
Name:
Title:
Attest:
______________________
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _________ Shares and
herewith tenders in payment for such Shares cash or a certified or official bank
check payable in New York Clearing House Funds to the order of ACCENT SOFTWARE
INTERNATIONAL LTD in the amount of $ _________ , all in accordance with the
terms hereof. The undersigned requests that a certificate for such Shares be
registered in the name of ____________________ , whose address is
__________________, and that such Certificate be delivered to
__________________, whose address is _____________.
Dated: Signature:
------------------------
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate.)
________________________________
________________________________
(Insert Social Security or Other
Identifying Number of Holder)
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED _________________________________
hereby sells, assigns and transfers unto
______________________________________________________________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________, Attorney, to
transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Dated: Signature:
----------------------------------
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant
Certificate)
_______________________________
_______________________________
(Insert Social Security or Other
Identifying Number of Assignee)
