EXHIBIT 4.8
TAT Warrant Agreement
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement"), is made as of the 15th day of June,
2004 BY AND BETWEEN
(1) TAT Technologies Ltd. ("TAT"), an Israeli public company, whose shares are
traded on Nasdaq; and
(2) TA-TOP, Limited Partnership ("TATOP"), a limited partnership wholly owned
by (x) TA-TEK Ltd., an Israeli private company, wholly owned by FIMI
Opportunity Fund, L.P., a limited partnership formed under the laws of the
State of Delaware, and by (y) FIMI Israel Opportunity Fund Limited
Partnership, a limited partnership, registered in Israel (the "Opportunity
Fund").
WHEREAS
(a) On the date hereof, TAT and TATOP are entering into (i) a Share Purchase
Agreement (the "SPA"), pursuant to which TATOP shall purchase from TAT, at
the Closing (as defined in the SPA) 857,143 Ordinary Shares of TAT, nominal
value NIS 0.90 each, and (ii) a Credit Line Agreement (the "Credit Line
Agreement"), pursuant to which TATOP shall make available to TAT a Credit
Line (as defined therein), all subject to the terms and conditions more
fully set forth therein.
(b) In connection with the foregoing, TAT agrees to grant TATOP, at the
Closing, a non-assignable Warrant (the "Warrant") to purchase up to 500,000
Ordinary Shares of TAT, nominal value NIS 0.90 per share (the "Warrant
Shares"), for an aggregate amount of US$ 4,250,000 (the "Warrant Amount"),
all subject to the terms and conditions hereof.
Therefore, in consideration of the foregoing, TAT and the TATOP, for value
received, hereby agree as follows:
1. Issue of Warrant.
1.1 General. At the Closing (as defined in the SPA), TAT will authorize, issue
and deliver to TATOP the Warrant to purchase the Warrant Shares for the Warrant
Amount.
1.2 No Rights as Shareholder. Nothing contained in this Agreement or in the
Warrant shall, prior to an exercise thereof, as stipulated hereunder, be
construed as conferring upon TATOP or its Permitted Transferees (as defined
below) any rights as a shareholder of TAT, including (without limitation) the
right to vote, receive dividends, consent or receive notices in respect of any
meeting of shareholders for the election of directors of TAT or any other
matter. For purposes of this Agreement, "Permitted Transferees" shall mean:
TATOP's partners or the shareholders or partners (as applicable) of such
partners, or any entity solely and irrevocably
TAT Warrant Agreement
controlled by TA-TEK Ltd., FIMI 2001 Ltd. or by ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ (for so long as
▇▇. ▇▇▇▇▇▇ remains the CEO or equivalent position in Opportunity Fund or any
successor fund).
2. Exercise; Exercise Price.
(a) The Exercise Price per each Warrant Share shall be US$8.5 (the
"Exercise Price"), subject to the adjustments set forth below.
(b) TATOP may exercise the Warrant, in whole or in part (provided that each
exercise shall be of at least 25,000 Warrant Shares (the "Minimum Quantity")),
at any time and from time to time (each, an "Exercise") during the Exercise
Period (as defined in Section 3 below) by delivering a written Notice of
Exercise (the "Notice of Exercise") to TAT, specifying the number of Warrant
Shares underlying the exercised portion of the Warrant, together with the full
payment in cash (to a bank account to be designated by TAT) of the Exercise
Price due to TAT with respect to such Warrant Shares (the "Exercise
Consideration"), and the Warrant Certificate, which in the case of a partial
exercise, will be replaced by a new Warrant Certificate, as more fully set forth
below. For purposes of this Agreement, the date on which the Notice of Exercise
is delivered to TAT shall be referred to as the "Exercise Date".
(c) Exercise on a Net-Issuance Basis.
In lieu of payment to TAT of the Exercise Consideration as set forth in
subsection (a) above, TATOP may inform TAT in the Notice of Exercise that it
elects to exercise the Warrant on a net-issuance basis, in which case, the
Warrant shall be exercisable, in whole or in part (provided that "Y" below shall
not be less than the Minimum Quantity), at any time and from time to time during
the Exercise Period, into the number of Warrant Shares calculated pursuant to
the formula set forth below. In such notice, TATOP will specify the amount for
which TATOP desires to exercise the Warrant.
Formula:
X = Y x (A - B)
-----------
A
Where:
X = the number of Warrant Shares to be issued to TATOP;
Y = the number of Warrant Shares obtainable upon
exercise of the relevant
portion of the Warrant;
A = the average closing price of an Ordinary
Share of TAT on Nasdaq over a thirty (30)
trading days preceding the exercise date;
and
B = the Exercise Price of the Warrant Shares,
as adjusted pursuant to the provisions
contained herein.
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TAT Warrant Agreement
3. Exercise Period. TATOP may exercise part (but not less than the Minimum
Quantity as set forth above) or all of the Warrant, at any time, and from time
to time, until the termination of the 66 month period commencing at the Closing.
4. Warrant Shares.
4.1 Reservation of Warrant Shares. TAT represents that it will reserve and
at all times keep reserved, so long as any portion of the Warrant remains
outstanding, out of its authorized share capital, such number of Ordinary Shares
as may be subject to purchase under the outstanding Warrant.
4.2 Issue. By no later than seven (7) business days following the Exercise
Date and (unless TATOP elects to exercise the Warrant on a Net-Issuance Basis)
payment of the Exercise Consideration as set forth in Section 2 above, TAT shall
issue and cause to be delivered to TATOP or, upon the written order of TATOP, to
any third party as TATOP may designate, a certificate or certificates (the
"Warrant Share Certificate") of the number of full Warrant Shares so purchased,
together with cash, as provided in Section 5.6 hereof in respect of any
fractional Warrant Shares otherwise issuable upon such surrender. Such Warrant
Shares, delivered upon Exercise, shall be duly authorized, validly issued, fully
paid and nonassessable, shall not be subject to call, forfeiture or preemptive
rights and shall be delivered free and clear of all Encumbrances (as defined
below).
The term "Encumbrance" means and includes any interest or equity of any person
(including any right to acquire, option, or right of preemption) or any
mortgage, charge, pledge, lien, or assignment, or any other encumbrance or
security interest or arrangement of whatsoever nature over or in the relevant
property.
Such Warrant Share Certificates shall be deemed to have been issued and any
person so designated to be named therein shall be deemed to have become a holder
of record of such securities as of the Exercise Date and payment of the Exercise
Consideration, to the extent applicable, notwithstanding that the Warrant Share
Certificates representing such securities shall not actually have been delivered
or that the stock transfer books of TAT shall then be closed. In the event of a
partial exercise of the Warrant at any time prior to the expiry of the Exercise
Period, a new certificate evidencing the remaining amount applicable to the
Warrant will be issued by TAT.
4.3 Payment of Taxes. TAT will pay all stamp duty, if any, attributable to
the issuance of the Warrant Shares.
5. Adjustment of Exercise Price and Number of Warrant Shares. The Exercise Price
and/or the number and type of securities purchasable upon the exercise of the
Warrant shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
5.1. Adjustments.
5.1.1 If TAT subdivides or combines its Ordinary Shares, the Exercise
Price shall be proportionately reduced or increased, as
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TAT Warrant Agreement
applicable, as at the effective date of such subdivision or
combination, or if TAT fixes a record date for the purpose of so
subdividing or combination, as at such record date, whichever is
earlier.
5.1.2 If TAT at any time (i) makes a distribution of bonus shares or
(ii) issues by reclassification of its Ordinary Shares other
securities of TAT, then the number of Warrant Shares purchasable
upon exercise of the Warrant immediately prior thereto shall be
adjusted so that TATOP shall be entitled to receive the kind and
number of Warrant Shares or other securities of TAT which it
would have owned or would have been entitled to receive
immediately after the occurrence of any of the events described
above, had the Warrant been exercised immediately prior to the
occurrence of such event or any record date with respect thereto.
Any adjustment made pursuant to this subsection 5.1.2 shall
become effective immediately after the effective date of such
event retroactive to the record date, if any, for such event. For
the avoidance of doubt, if the distribution or reclassification
is eventually called-off, the adjustment made pursuant to this
Section shall be cancelled as of the announcement of the
cancellation of such distribution or reclassification. Whenever
the number of Warrant Shares purchasable upon the exercise of the
Warrant is adjusted, as herein provided, the Exercise Price
payable upon the exercise of such Warrant shall be adjusted by
multiplying such Exercise Price immediately prior to such
adjustment by a fraction, the numerator of which shall be the
number of Warrant Shares purchasable upon the exercise of the
Warrant immediately prior to such adjustment, and the denominator
of which shall be the number of Warrant Shares so purchasable
immediately thereafter.
5.1.3 If at any time TAT shall distribute a dividend in liquidation or
partial liquidation or by way of return of capital, or a dividend
payable out of earnings or surplus legally available for
dividends (each, a "Distribution"), the Exercise Price shall be
reduced by an amount equal to the per-share distribution actually
paid by TAT as of the date fixed for the purpose of such
Distribution; provided, however, that if the Distribution is
eventually called off, the adjustment made pursuant to this
section shall be cancelled as of such announcement.
5.2. Merger; Consolidation. In the event that TAT consolidates with or
merge with or into another corporation or convey all or substantially all of its
assets to another corporation or other entity, then, in each such case, TATOP,
upon any exercise of this Warrant, at any time after the consummation of such
consolidation, merger, or conveyance, shall be entitled to receive, in lieu of
the Warrant Shares receivable upon the exercise of the Warrant prior to such
consummation, the shares or
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TAT Warrant Agreement
other securities or property to which it would have been entitled upon the
consummation of such consolidation, merger or conveyance if it had exercised the
Warrant immediately prior thereto, all subject to further adjustment as provided
in this Section, and the successor or purchasing corporation or other entity in
such consolidation, merger or conveyance (if not TAT) shall duly execute and
deliver to TATOP a supplement hereto acknowledging such corporation's or
entity's obligations under the Warrant; and in each such case, the terms of the
Warrant (including the exercisability and adjustment provisions of the Warrant)
shall be applicable to the shares or other securities or property receivable
upon the exercise of the Warrant after the consummation of such consolidation,
merger or conveyance.
5.3 No Impairment. TAT will not, through any reorganization,
recapitalization, 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 to be observed or performed
hereunder by TAT, but both parties will at all times in good faith assist in the
carrying out of all the provisions of this Agreement and in the taking of all
such action as may be necessary or appropriate in order to protect the rights
hereunder against impairment.
5.4 No Fractional Shares. No fractional shares shall be issued upon
exercise of all or any portion of a Warrant, and the number of Warrant Shares to
be issued shall be rounded to the nearest whole share (with cash being paid by
TAT for any unissued fractional shares).
5.5 Notice of Adjustment. Upon the occurrence of each adjustment or
readjustment of the Exercise Price or the number of Warrant Shares pursuant to
this Section 5, TAT, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to
TATOP a certificate setting forth each adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
certificate shall also set forth (i) the Exercise Price at the time in effect,
and (ii) the amount, if any, of other property which at the time would be
received upon the conversion of the outstanding Warrant.
5.6 Notices of Record Date or Payment Date. In the event of any taking by
TAT of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend
(including a cash dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of any class or any other securities or
property, or to receive any other right, TAT shall mail to TATOP a notice, which
shall be sent simultaneously with the notice sent to other shareholders of TAT,
specifying the date on which any such record and/or scheduled date of actual
payment, if determined, is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right.
6. Miscellaneous.
6.1. Notices. Any notice pursuant to this Agreement by TAT or by TATOP
shall be in writing and shall be deemed to have been duly given (i) if given by
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TAT Warrant Agreement
facsimile transmission (to the fax numbers set forth herein) on the business day
on which such transmission is sent and confirmed, or (ii) if given by mail (to
the addresses set forth herein), two business days following the date it was
sent.
Each party may from time to time change the address or fax number to which
notices to it are to be delivered or mailed hereunder by notice in accordance
herewith to the other party.
Addresses and Facsimile Numbers:
--------------------------------
TA-TOP, Limited Partnership
c/o TA-TEK Ltd., its general partner
c/o FIMI 2001 Ltd.
"▇▇▇▇▇▇▇▇▇▇ House"
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Tel: ▇▇-▇▇▇▇▇▇▇
Fax: ▇▇-▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇, Adv.
Naschitz, ▇▇▇▇▇▇▇ & Co.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Facsimile: ▇▇▇▇-▇-▇▇▇-▇▇▇▇
TAT: TAT Technologies Ltd.
Industrial ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
PO Box. 80 (70750)
Facsimile Number: [ ]
With a copy to: ▇. ▇▇▇▇▇▇▇▇,
▇. ▇▇▇▇▇▇▇▇ & Co.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇-▇▇▇▇▇▇▇
Attn: Adv. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
6.2 Assignment; Successors. Except as set forth below, TATOP may not sell,
assign or transfer the Warrant or any portion or right thereof. Nothing
contained herein shall be construed as limiting, in any way, the right of TATOP
to sell, assign or otherwise transfer the Warrant Shares, subject to the
provisions of applicable law.
Notwithstanding the above, upon the liquidation or dissolution of TATOP, TATOP
may transfer the Warrant to its Permitted Transferees; provided, however that
FIMI 2001 Ltd. shall at all time continue to represent the Permitted Transferees
(as defined in Section 1.2 above), pursuant to an irrevocable power of attorney,
for all purposes of this
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TAT Warrant Agreement
Agreement and the Warrant.
6.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Israel. The parties hereto irrevocably
submit to the exclusive jurisdiction of the courts of Tel-Aviv in any action
connected with this Agreement.
6.4. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than TAT and TATOP any
legal or equitable right, remedy or claim under this Agreement. This Agreement
shall be for the sole and exclusive benefit of TAT and TATOP.
6.5. Form of Warrant. The text of the Non-Assignable Warrant Certificate
evidencing the Warrant (the "Warrant Certificate") and of the form of election
to purchase Warrant Shares shall be substantially as set forth in Exhibit 1
attached hereto. The Exercise Price and, accordingly, number of Warrant Shares
issuable upon exercise of the Warrant is subject to adjustment upon the
occurrence of certain events, all as herein provided.
6.6. Warrant Certificate.
6.6.1 Mutilated or Missing Warrant. In case the Warrant Certificate
shall be mutilated, lost, stolen or destroyed, TAT shall, at the request of
the affected TATOP, issue and deliver in exchange and substitution for and
upon cancellation of the mutilated certificate or in lieu of and
substitution for the certificate lost, stolen or destroyed, a new
non-assignable Warrant Certificate representing an equivalent right or
interest, but only upon receipt of evidence reasonably satisfactory to TAT
of such loss, theft or destruction of such Warrant Certificate.
6.6.2 Entire Agreement; Amendment and Waiver.
This Agreement and the Exhibits and Schedules hereto and thereto constitute
the full and entire understanding and agreement between the parties with
regard to the subject matters hereof. All prior understandings and
agreements among the parties are void and of no further effect. Any term of
this Agreement may be amended, waived, or discharged (either prospectively
or retroactively, and either generally or in a particular instance), by a
written instrument signed by all the parties to this Agreement.
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TAT Warrant Agreement
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
TAT Technologies Ltd.
By: _______________________
Name: _______________________
Title: _______________________
TA-TOP, Limited Partnership.
By: TA-TEK Ltd., its general partner
Name and Title:
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TAT Warrant Agreement
EXHIBIT 1
Non-Assignable Warrant Certificate No. ________
WARRANT TO PURCHASE ORDINARY SHARES
VOID AFTER 5:00 p.m. ISRAEL TIME, ON [ ].
TAT Technologies Ltd.
INCORPORATED UNDER THE LAWS OF THE STATE OF ISRAEL
This certifies that, for value received, TATOP, Limited Partnership the
registered holder hereof ("TATOP"), is entitled to purchase from TAT
Technologies Ltd. ("TAT"), at any time during the Exercise Period (as defined in
the Warrant Agreement (the "Agreement")) commencing at 9.00 a.m., Israel Time,
on the first day of the Exercise Period and ending before 5.00 p.m., Israel
Time, on the last day of the Exercise Period, 500,000 Ordinary Shares of TAT
(the "Warrant Shares"), at a purchase price per share of US$8.5 (the "Exercise
Price"). The number and type of securities purchasable upon exercise of each
Warrant evidenced hereby and the Exercise Price shall be subject to adjustment
from time to time as set forth in the Agreement.
The terms of this Warrant are subject to the terms and provisions contained in
the Agreement.
The Warrant evidenced hereby may be exercised in whole or in part by
presentation of this Warrant Certificate with the Irrevocable Exercise Notice in
the form attached hereto, duly executed (with a signature guarantee as provided
thereon) and, if not exercised on a Net-Issuance Basis as set forth in Section
2(b) of the Agreement, simultaneous payment of the Exercise Consideration at the
principal office of TAT. Payment of such Exercise Consideration shall be made at
the option of TATOP in cash or by bank check, in same day funds.
Upon any partial exercise of the Warrant evidenced hereby, there shall be signed
and issued, to TATOP, a new Warrant Certificate in respect of the balance of the
Warrant Shares as to which the Warrant evidenced hereby shall not have been
exercised. No fractional Ordinary Shares will be issued upon the exercise of
rights to purchase hereunder, but TAT shall pay the cash value of any fraction
upon the exercise of one or more Warrant.
This Warrant is neither transferable nor assignable.
TAT Technologies Ltd.______
______________________________
ATTEST:_______________________
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TAT Warrant Agreement
Dated: __________
TAT Technologies Ltd.
Industrial ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ Via Fax: _______
(POBox 80/70750) and Registered Mail
IRREVOCABLE EXERCISE NOTICE
TA-TOP, Limited Partnership, hereby irrevocably elects to exercise the right of
purchase represented by the Non-Assignable Warrant Certificate with respect to
________ [Note: not less than 25,000] Ordinary Shares (the "Shares"), with cash
payment equal to the Exercise Price of US$8.5 per share/on a Net Issuance Basis
(Please delete the non-applicable option)
and requests that certificates for the Ordinary Shares be issued in the name of:
(name and address must be printed or typewritten)
_____________________________
TA-TOP, Limited Partnership,
_____________________________
Address
and, if the Shares shall be less than the total number of Ordinary Shares that
TATOP is entitled to purchase pursuant to this Warrant, a new Warrant
Certificate shall be registered for the balance of the Ordinary Shares in the
name of the undersigned and delivered to the address stated below.
Dated: __________________
TA-TOP, Limited Partnership
(Please Print)
Address:______________________________
______________________________
Signature: ___________________________
Note: The above signature must correspond with the name as written upon the face
of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatever.
Signature Witnessed:
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