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EXHIBIT 4.16
THIS WARRANT AND ANY SECURITIES TO BE ISSUED UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAW OF ANY STATE AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS
WARRANT AND SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT.
GILAT-TO-HOME INC.
SERIES C CONVERTIBLE PREFERRED STOCK PURCHASE WARRANT
AUGUST 7, 2000
VOID AFTER AUGUST 7, 2005
Warrant to Purchase
Shares of Series C Convertible Preferred Stock
GILAT-TO-HOME INC., a Delaware corporation (the "Company"), for
value received, hereby certifies that THE FIRST INTERNATIONAL BANK OF ISRAEL
LTD., or registered assigns (the "Holder"), is entitled to purchase from the
Company shares of Series C Convertible Preferred Stock, par value $0.05 per
share, of the Company (the "Series C Shares"), in an amount equal to the Warrant
Quantity at the Exercise Price per Share at any time or from time to time after
the Initial Measurement Date but prior to 5:00 P.M., New York City time, on the
earlier of (i) the twentieth Business Day after the Obligation Satisfaction Date
or (ii) August 7, 2005 (subject to Section 20 hereof, the "Expiration Date"),
all subject to the terms, conditions and adjustments set forth below in this
Warrant.
1. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms shall have the meanings indicated:
"Acquiring Person" shall mean, with reference to the transactions
referred to in clauses (a) through (d) of Section 3.1, the continuing or
surviving corporation of a consolidation or merger with the Company (if other
than the Company), the transferee of substantially all of the properties of the
Company, the corporation consolidating with or merging into the Company in a
consolidation or merger in connection with which the Common Stock is changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or, in the case of a capital reorganization or
reclassification, the Company.
"Acquisition Price" shall mean, as applied to the Common Stock,
(a) the Market Price on the date immediately preceding the date on which any
transaction to which Section 3 applies is consummated, or (b) if a purchase,
tender or exchange offer is made by the Acquiring
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Person (or by any of its affiliates) to the holders of the Common Stock and such
offer is accepted by the holders of more than 50% of the outstanding shares of
Common Stock, the greater of (i) the price determined in accordance with the
provisions of the foregoing clause (a) of this sentence and (ii) the Market
Price on the date immediately preceding the acceptance of such offer by the
holders of more than 50% of the outstanding shares of Common Stock.
"Amended and Restated Stockholders Agreement" dated and effective
as of April 11, 2000, by and among the Company, Spacenet Inc., a Delaware
corporation, Microsoft G-Holdings, a Nevada corporation, EchoStar Communications
Corporation, a Nevada corporation, ▇▇▇▇▇▇ ▇▇▇▇ Investors II, L.P., FS Employee
Investors LLC and FS Parallel Fund L.P., as amended.
"Business Day" shall mean any day other than a Saturday or a
Sunday or a day on which commercial banking institutions in the City of New York
are authorized by law to be closed. Any reference to "days" (unless Business
Days are specified) shall mean calendar days.
"Capital Stock" means any and all shares, interests,
participations, warrants, options or other equivalents (however designated) of
capital stock of a corporation or any and all equivalent ownership interests in
a Person (other than a corporation).
"Commission" shall mean the Securities and Exchange Commission or
any successor agency having jurisdiction to enforce the Securities Act.
"Common Stock" shall mean the common stock, par value $0.05 per
share, of the Company, such term to include any stock into which such Common
Stock shall have been changed or any stock resulting from any reclassification
of such Common Stock, and all other stock of any class or classes (however
designated) of the Company the holders of which have the right, without
limitation as to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference.
"Company" shall have the meaning assigned to it in the
introduction to this Warrant, such term to include any corporation or other
entity which shall succeed to or assume the obligations of the Company hereunder
in compliance with Section 4.
"Current Market Price" shall mean, on any date specified herein,
the average of the daily Market Price during the 10 consecutive trading days
commencing 15 trading days before such date, except that, if on any such date
the shares of Common Stock are not listed or admitted for trading on any
national securities exchange or quoted in the over-the-counter market, the
Current Market Price shall be the Market Price on such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations thereunder, or any
successor statute.
"Exercise Date" shall have the meaning set forth in Section 2.1(a)
of this Warrant.
"Expiration Date" shall have the meaning assigned to it in the
introduction to this Warrant.
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"Exercise Price Per Share" shall mean an amount equal to
$350,000,000 divided by the total number of outstanding shares of Capital Stock
of the Company (and/or Other Securities), on a fully diluted basis, on each
Exercise Date.
"FIBI Registration Rights Agreement" shall mean the Registration
Rights Agreement dated as of August 7, 2000, between the Company and The First
International Bank of Israel Ltd.
"Financing Agreement" shall mean the Financing Agreement, dated as
of June 26, 2000, by and among the Company, the financial institutions from time
to time a party thereto, and the Holder, as agent for the financial institutions
party thereto, as amended, supplemented or otherwise modified from time to time.
"Holder" shall have the meaning assigned to it in the introduction
to this Warrant.
"Initial Measurement Date" shall mean the earlier of (i) the date
of the Company's Initial Public Offering or (ii) August 7, 2002.
"Initial Public Offering" means the underwritten sale of shares of
Common Stock registered for sale under the Securities Act pursuant to an
effective registration statement at an aggregate sales price equal to at least
$40 million, immediately following which sale the Company will be required to
file periodic reports pursuant to Sections 13 and 15 of the Exchange Act.
"Investor Agreements" has the meaning assigned to such term in
Section 10(b) of this Warrant.
"Market Price" shall mean, on any date specified herein, the
amount per share of the Common Stock, equal to (i) the last reported sale price
of such Common Stock, regular way, on such date or, in case no such sale takes
place on such date, the average of the closing bid and asked prices thereof
regular way on such date, in either case as officially reported on the principal
national securities exchange on which such Common Stock is then listed or
admitted for trading, (ii) if such Common Stock is not then listed or admitted
for trading on any national securities exchange but is designated as a national
market system security by the NASD, the last reported trading price of the
Common Stock on such date, (iii) if there shall have been no trading on such
date or if the Common Stock is not so designated, the average of the closing bid
and asked prices of the Common Stock on such date as shown by the NASD automated
quotation system, or (iv) if such Common Stock is not then listed or admitted
for trading on any national exchange or quoted in the over-the-counter market,
the fair value thereof (as of a date which is within 20 days of the date as of
which the determination is to be made) determined in good faith by the Board of
Directors of the Company.
"Market Value" shall mean, with respect to a share of common stock
(or equivalent equity interests) of the Acquiring Person or its Parent on any
date specified herein, (a) the average of the last sale prices, regular way, on
the 20 consecutive trading days immediately preceding such date or, if there
shall have been no sale on any such day, the average of the closing bid and
asked prices on such date, in each case as officially reported on the principal
national securities exchange on which such common stock is at the time listed or
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admitted to trading, (b) if such common stock is not then listed or admitted to
trading on any national securities exchange, but is designated as a national
market system security by the NASD, the last trading price of the common stock
on such date, or if there shall have been no trading on such date or if the
common stock is not so designated, the average of the reported closing bid and
asked prices on such 20 days as shown by the NASD automated quotation system, or
(c) if such common stock is not then listed or admitted for trading on any
national exchange or quoted in the over-the-counter market, the fair value
thereof (as of a date which is within 20 days of the date as of which the
determination is to be made) determined by an investment banking firm chosen by
the Company and acceptable to the Holder and hired at the Company's expense for
the purpose of determining the Market Value.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"Note" shall mean the term note, dated August 7, 2000, of the
Company originally issued to the Holder in the aggregate principal amount of $30
million pursuant to the Financing Agreement, such term also to include any notes
issued in substitution for such Note.
"Obligations" shall have the meaning given to such term in the
Financing Agreement.
"Obligation Satisfaction Date" shall mean the date, following a
Qualified Offering, on which the Company's Obligations are satisfied.
"Other Securities" shall mean any Capital Stock (other than Series
C Shares) and other securities of the Company or any other Person (corporate or
otherwise) which the holders of the Warrants at any time shall be entitled to
receive, or shall have received, upon the exercise of the Warrants, in lieu of
or in addition to Series C Shares, or which at any time shall be issuable or
shall have been issued in exchange for or in replacement of Series C Shares or
Other Securities pursuant to Section 3 or otherwise.
"Parent" shall mean, as to any Acquiring Person, any corporation
which (a) controls the Acquiring Person directly or indirectly through one or
more intermediaries, (b) is required to include the Acquiring Person in the
consolidated financial statements contained in such Parent's Annual Report on
Form 10-K and (c) is not itself included in the consolidated financial
statements of any other person (other than its consolidated subsidiaries).
"Person" shall mean any individual, firm, partnership,
corporation, trust, joint venture, association, joint stock company, limited
liability company, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof,
and shall include any successor (by merger or otherwise) of such entity.
"Purchase Price" shall have the meaning assigned to it in Section
2.1(a) of this Warrant.
"Qualified Offering" shall mean an offering of shares of Common
Stock (including an Initial Public Offering if it would otherwise qualify as a
Qualified Offering) for sale under the Securities Act pursuant to an effective
registration statement, immediately
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following which sale the Company shall have satisfied all of its Obligations
under the Financing Agreement.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement dated as of February 15, 2000, by and among Microsoft G-Holdings,
Inc., a Nevada corporation ("G-Holdings"), the Company, and Spacenet Inc, a
Delaware corporation ("Spacenet"), as amended and joined pursuant to the
Amendment and Joinder to Registration Rights Agreement, dated as of April 11,
2000, by and among EchoStar Communications Corporation, a Nevada corporation,
▇▇▇▇▇▇ ▇▇▇▇ Investors II, L.P., FS Employee Investors LLC, FS Parallel Fund
L.P., Microsoft G-Holdings, the Company and Spacenet.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder, or any successor
statute.
"Series C Shares" has the meaning assigned to such term in the
introductory paragraph of this Warrant.
"Transfer Agent" has the meaning assigned to it in Section 7.
"Warrant" shall mean this Series C Convertible Preferred Stock
Purchase Warrant.
"Warrant Quantity" means, (i) if the Initial Measurement Date
occurs prior to August 7, 2002, the number of Series C Shares such that,
assuming conversion of such Series C Shares on the Exercise Date, the number of
shares of Common Stock (or Other Securities) into which such Series C Shares are
convertible is equal to 0.40% of the fully diluted outstanding Common Stock
(and/or Other Securities) of the Company on the applicable Exercise Date; or
(ii) if the Initial Measurement Date is August 7, 2002, the number of Series C
Shares such that, assuming conversion of such Series C Shares on the Exercise
Date, the number of shares of Common Stock (or Other Securities) into which such
Series C Shares are convertible is equal to 0.45% of the fully diluted
outstanding Common Stock (and/or Other Securities) of the Company on the
applicable Exercise Date.
2. EXERCISE OF WARRANT.
2.1. Manner of Exercise; Payment of the Purchase Price. (a) This
Warrant may be exercised by the Holder hereof, in whole or in part, at any time
or from time to time on any Business Day on or after the Initial Measurement
Date but prior to the Expiration Date (with each date of exercise being referred
to herein as an "Exercise Date"), by surrendering to the Company at its
principal office this Warrant, with the form of Election to Purchase Shares
attached hereto as Exhibit A (or a reasonable facsimile thereof) duly executed
by the Holder and accompanied by payment in the amount equal to the product of
the aggregate Exercise Price Per Share multiplied by the number of Series C
Shares specified in such form (the "Purchase Price").
(b) Payment of the Purchase Price may be made as follows (or by
any combination of the following): (i) in United States currency by cash or
delivery of a certified
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check or bank draft payable to the order of the Company or by wire transfer to
the Company, (ii) by cancellation of all or any part of the unpaid principal
amount of Notes held by the Holder in an amount equal to the Purchase Price,
(iii) by cancellation of such number of Series C Shares otherwise issuable to
the Holder upon such exercise as shall be specified in such Election to Purchase
Shares, such that the excess of the aggregate Current Market Price of the number
of shares of Common Stock into which such Series C Shares are convertible on the
Exercise Date over the portion of the Purchase Price attributable to such shares
shall equal the Purchase Price attributable to the Series C Shares to be issued
upon such exercise, in which case such amount shall be deemed to have been paid
to the Company and the number of Series C Shares issuable upon such exercise
shall be reduced by such specified number, or (iv) by surrender to the Company
for cancellation certificates representing shares of Common Stock of the Company
owned by the Holder (properly endorsed for transfer in blank) having a Current
Market Price on the Exercise Date equal to the Purchase Price.
2.2. When Exercise Effective. Each exercise of this Warrant
shall be deemed to have been effected immediately prior to the close of business
on the Exercise Date and at such time the Person or Persons in whose name or
names any certificate or certificates for Series C Shares (or Other Securities)
shall be issuable upon such exercise as provided in Section 2.3 shall be deemed
to have become the holder or holders of record thereof for all purposes.
2.3. Delivery of Stock Certificates, etc.; Charges, Taxes and
Expenses. (a) As soon as practicable after each exercise of this Warrant, in
whole or in part, and in any event within five Business Days thereafter, the
Company shall cause to be issued in the name of and delivered to the Holder as
the Holder may direct,
(i) a certificate or certificates for the number of Series C
Shares (or Other Securities) to which the Holder shall be entitled upon
such exercise plus, in lieu of issuance of any fractional share to which
the Holder would otherwise be entitled, if any, a check for the amount of
cash equal to the same fraction multiplied by the Current Market Price on
the Exercise Date per shares of Common Stock into which such Series C
Shares are convertible (or, in lieu of payment of cash for fractional
shares, the Company may round up the number of Series C Shares issued to
the Holder to the nearest whole share), and
(ii) in case such exercise is for less than all of the Warrant
Quantity purchasable under this Warrant, a new Warrant or Warrants of
like tenor, for the balance of the Warrant Quantity purchasable
hereunder.
(b) Issuance of certificates for Series C Shares upon the
exercise of this Warrant shall be made without charge to the Holder hereof for
any issue or transfer tax or other incidental expense, in respect of the
issuance of such certificates, all of which such taxes and expenses shall be
paid by the Company.
2.4. Company to Reaffirm Obligations. The Company shall, at the
time of each exercise of this Warrant, upon
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the request of the Holder hereof, acknowledge in writing its continuing
obligation to afford to such Holder all rights to which such Holder shall
continue to be entitled after such exercise in accordance with the terms of this
Warrant, provided that if the Holder of this Warrant shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford such rights to the Holder.
3. CONSOLIDATION, MERGER, ETC.
3.1. Adjustments for Consolidation, Merger, Sale of Assets,
Reorganization, etc. In case the Company after the date hereof (a) shall
consolidate with or merge into any other Person and shall not be the continuing
or surviving corporation of such consolidation or merger, (b) shall permit any
other Person to consolidate with or merge into the Company and the Company shall
be the continuing or surviving Person but, in connection with such consolidation
or merger, the Series C Shares, Common Stock or Other Securities shall be
changed into or exchanged for stock or other securities of any other Person or
cash or any other property, (c) shall transfer all or substantially all of its
properties or assets to any other Person, or (d) shall effect a capital
reorganization or reclassification of the Series C Shares, Common Stock or Other
Securities, then proper provision shall be made so that, upon the basis and the
terms and in the manner provided in this Warrant, the Holder of this Warrant,
upon the exercise hereof at any time after the consummation of such transaction,
shall be entitled to receive (at the aggregate Exercise Price Per Share that
would have been in effect at the time of such consummation for all Series C
Shares or Other Securities issuable upon exercise immediately prior to such
consummation), in lieu of the Series C Shares or Other Securities issuable upon
such exercise prior to such consummation, either of the following as shall be
elected by the Holder (such election to be made within one year after the date
of the consummation of such transaction by written notice to the Acquiring
Person or its Parent, as the case may be, and, in the absence of such notice,
the provisions of clause (ii) below shall be deemed to have been elected by the
Holder):
(i) the highest amount of securities, cash and property to
which the Holder actually would have been entitled as a shareholder upon
such consummation if the Holder had exercised this Warrant immediately
prior thereto, subject to adjustments (subsequent to such corporate
action) as nearly equivalent as possible to the adjustments provided for
in Section 4, or
(ii) the number of shares of common stock of the Acquiring
Person or its Parent, whichever meets the requirements set forth below,
determined by dividing (a) the amount equal to the product obtained by
multiplying (1) the number of shares of Common Stock (or Other
Securities) to which the Holder of this Warrant would have been entitled
had the Holder exercised this Warrant (and the conversion rights
attributable to the Series C Shares issued upon exercise) immediately
prior to such consummation, times (2) the greater of the Acquisition
Price and the Purchase Price in effect on the date immediately preceding
the date of such consummation, by (b) the Market Value per share of the
common stock of the Acquiring Person or its Parent, as the case may be,
on the date immediately preceding the date of such consummation;
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If the Holder of this Warrant shall elect (or shall be deemed to elect) to
receive common stock pursuant to clause (ii) above, such Holder shall be
entitled to receive, upon the basis stated in such clause (ii), only the common
stock of the Acquiring Person.
3.2. Assumption of Obligations. Notwithstanding anything
contained in this Warrant or in the Financing Agreement to the contrary, the
Company shall not effect any of the transactions described in clauses (a)
through (d) of Section 3.1 unless, prior to the consummation thereof, each
Person (other than the Company) which may be required to deliver any stock,
securities, cash or property upon the exercise of this Warrant as provided
herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (a) the obligations of the Company
under this Warrant (and if the Company shall survive the consummation of such
transaction, such assumption shall be in addition to, and shall not release the
Company from, any continuing obligations of the Company under this Warrant), and
(b) the obligation to deliver to the Holder such shares of stock, securities,
cash or property as, in accordance with the foregoing provisions of this Section
3, the Holder may be entitled to receive. Nothing in this Section 3 shall be
deemed to authorize the Company to enter into any transaction not otherwise
permitted by the Financing Agreement.
4. OTHER DILUTIVE EVENTS. In case any event shall occur as to
which the provisions of Section 3 are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights of the Holder in
accordance with the essential intent and principles of such Sections, then, in
each such case, the Board of Directors of the Company shall make an adjustment
in the application of such provisions, in accordance with such essential intent
and principles, so as to preserve, without dilution, the purchase rights
represented by this Warrant.
5. NO DILUTION OR IMPAIRMENT. The Company shall not, by
amendment of its certificate of incorporation or through any consolidation,
merger, reorganization, transfer of assets, 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 action as may be necessary or appropriate in order to protect the rights of
the Holder of this Warrant against dilution or other impairment. Without
limiting the generality of the foregoing, the Company (a) shall not permit the
par value of any shares of stock receivable upon the exercise of this Warrant to
exceed the amount payable therefor upon such exercise, and (b) shall take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Series C Shares (or Other
Securities, if applicable), free from all taxes, liens, security interests,
encumbrances, preemptive rights and charges on the exercise of the Warrant.
6. NOTICES OF CORPORATE ACTION. In the event of: (a) any
taking by the Company of a record of the holders of any class of securities for
the purpose of determining the holders thereof who are entitled to receive any
dividend (other than a regularly scheduled cash dividend payable out of
consolidated earnings or earned surplus, determined in accordance with generally
accepted
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accounting principles, in an amount not exceeding the amount of the immediately
preceding cash dividend for such period) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or (b) any
capital reorganization of the Company, any reclassification or recapitalization
of the capital stock of the Company, any consolidation or merger involving the
Company and any other Person, any transaction or series of transactions in which
more than 50% of the voting securities of the Company are transferred to another
Person, or any transfer, sale or other disposition of all or substantially all
the assets of the Company to any other Person, or (c) any voluntary or
involuntary dissolution, liquidation or winding-up of the Company, the Company
shall mail to the Holder a notice specifying (i) the date or expected date on
which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right, and (ii) the date or expected date on which any such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, sale, 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
record of Common Stock (or Other Securities, or Series C Shares) shall be
entitled to exchange their shares of Common Stock (or Other Securities, or
Series C Shares) for the securities or other property deliverable upon such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at
least thirty (30) days prior to the date therein specified.
7. RESERVATION OF STOCK, ETC. The Company shall at all times
reserve and keep available, solely for issuance and delivery upon exercise of
the Warrant, the number of shares of Series C Shares (or Other Securities) from
time to time issuable upon exercise of the Warrant and the number of shares of
Common Stock into which such Series C Shares are convertible. All Series C
Shares (or Other Securities) issuable upon exercise of the Warrant shall be duly
authorized and, when issued upon such exercise, shall be validly issued and, in
the case of shares, fully paid and nonassessable with no liability on the part
of the Holder thereof, and, in the case of all securities, shall be free from
all taxes, liens, security interests, encumbrances, preemptive rights and
charges. The transfer agent for the Series C Shares, which may be the Company
("Transfer Agent"), and every subsequent Transfer Agent for any shares of the
Company's capital stock issuable upon the exercise of any of the purchase rights
represented by this Warrant, are hereby irrevocably authorized and directed at
all times until the Expiration Date to reserve such number of authorized and
unissued shares as shall be requisite for such purpose. The Company shall keep
copies of this Warrant on file with the Transfer Agent for the Series C Shares
and with every subsequent Transfer Agent for any shares of the Company's capital
stock issuable upon the exercise of the rights of purchase represented by this
Warrant. The Company shall supply such Transfer Agent with duly executed stock
certificates for such purpose. Subsequent to the Expiration Date, no Series C
Shares need be reserved in respect of this Warrant.
8. REPRESENTATIONS OF THE HOLDER. The Holder (i) represents
that it is acquiring the Warrant for its own account for investment and not with
a view to any distribution or public offering within the meaning of the
Securities Act, (ii) acknowledges that the Warrant and the Series C Shares
issuable upon exercise thereof have not been registered under the Securities Act
or any state securities laws.
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9. REPRESENTATIONS AND COVENANTS OF THE COMPANY. The Company
hereby restates the representations and warranties of the "Borrower" set forth
in Sections 5.01(a), (b), (d), and (cc) of the Financing Agreement. The Company
is not a party to any Investor Agreements other than those Investor Agreements
existing as of the date of this Warrant, true and complete copies of which have
all been delivered to the Holder. Within thirty (30) days of the date hereof the
Company shall have received consent to the Company's execution, delivery and
performance of this Warrant and the FIBI Registration Rights Agreement from each
of the parties to the Amended and Restated Stockholders' Agreement and each of
the parties to the Registration Rights Agreement. The failure of the Company to
obtain such consent within 30 days shall constitute an "Event of Default" under
the Financing Agreement (as such term is defined therein).
10. COVENANTS OF THE COMPANY.
(a) Information. So long as the Company shall not have filed a
registration statement pursuant to Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company shall furnish the Holder:
(i) as soon as available and in any event within 30 days after
the end of each of the first three fiscal quarters of the Company, consolidated
balance sheets, consolidated statements of income and consolidated statements of
retained earnings and cash flow of the Company and its consolidated
subsidiaries, as at the end of such fiscal quarter; and for the period
commencing at the end of the immediately preceding fiscal year and ending with
the end of such fiscal quarter, setting forth in each case in comparative form
the figures for the corresponding date or period of the immediately preceding
fiscal year, all in reasonable detail and certified by the chief financial
officer of the Company as fairly presenting, in all material respects, the
financial position of the Company and its consolidated subsidiaries as of the
end of such fiscal quarter and the results of operations and changes in
financial position of the Company and its consolidated subsidiaries for such
fiscal quarter, in accordance with generally accepted accounting principles
applied in a manner consistent with that of the most recent audited financial
statements of the Company, subject to year end adjustments and the absence of
footnotes;
(ii) as soon as available, and in any event within 75 days after
the end of each fiscal year of the Company, consolidated balance sheets,
consolidated and statements of income and consolidated statements of retained
earnings and cash flow of the Company and its consolidated subsidiaries, as at
the end of such fiscal year, setting forth in comparative form the corresponding
figures for the immediately preceding fiscal year, all in reasonable detail and
prepared in accordance with generally accepted accounting principles, and with
respect to the consolidated financial statements accompanied by a report and an
unqualified opinion, prepared in accordance with generally accepted auditing
standards, of an independent certified public accountants of recognized standing
selected by the Company;
(iii) as soon as available and in any event within 30 days of the
end of each month, an internally prepared consolidated balance sheets, and
consolidated statements of income and consolidated statements of retained
earnings and cash flow for such month of the
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Company and its consolidated subsidiaries, for the period from the beginning of
such fiscal year to the end of such month, setting forth in comparative form the
corresponding figures for the related periods in the prior fiscal year, all in
reasonable detail and certified by the chief financial officer of the Company as
fairly presenting, in all material respects, the financial position of the
Company and its consolidated subsidiaries as of the end of such month and the
results of operations of the Company and its consolidated subsidiaries for such
month, in accordance with generally accepted accounting principles applied in a
manner consistent with that of the most recent audited financial statements of
the Company, subject to quarterly and year end adjustments and the absence of
footnotes; and
(iv) any other information (including, without limitation,
information required by a stockholder for purposes of preparing or filing tax
returns) that the Holder may reasonably request.
(b) Most Favored Nation Covenant. Without the consent of the
Holder, the Company will not enter into any written or oral investment
agreement, purchase agreement, shareholders agreement, voting agreement, co-sale
agreement, option or warrant agreement, registration rights agreement, side
letter of any kind, or other agreement, understanding or arrangement in
connection with the issuance of, or concerning any rights or restrictions
regarding, shares of the Company's Capital Stock with any stockholder or other
third party ("Investor Agreements") except for those Investor Agreements
existing as of the date of this Warrant, true and complete copies of which have
all been delivered to the Holder, and shall not agree to any amendments with
respect to any existing Investor Agreements. The Company shall furnish to the
Holder a copy of any Investor Agreement (or amendments thereto) entered into
after the date hereof.
11. REGISTRATION AND TRANSFER OF WARRANT, ETC.
11.1. Warrant Register; Ownership of Warrant. The Warrant shall
be registered in a warrant register (the "Warrant Register") as it is issued and
transferred, which Warrant Register shall be maintained by the Company at its
principal office or, at the Company's election and expense, by a Warrant Agent
or the Company's Transfer Agent. The Company shall be entitled to treat the
registered Holder of the Warrant on the Warrant Register as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Warrant on the part of any other Person, and
shall not be affected by any notice to the contrary, except that, if properly
assigned pursuant to Section 11.2 below, the Warrant may be exercised by a new
holder without a new Warrant first having been issued.
11.2. Transfer of Warrant. If applicable, this Warrant and all
rights hereunder are transferable in whole or in part, without charge to the
Holder hereof, upon surrender of this Warrant with a properly executed Form of
Assignment at the principal office of the Company (or such other office or
agency of the Company as it may in writing designate to the Holder). Upon any
partial transfer, the Company shall at its expense issue and deliver to the
Holder a new Warrant of like tenor, in the name of the Holder, which shall be
exercisable for such number of Series C Shares with respect to which
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rights under this Warrant were not so transferred and to the transferee a new
Warrant of like tenor, in the name of the transferee, which shall be exercisable
for such number of Series C Shares with respect to which rights under this
Warrant were so transferred.
11.3. Replacement of Warrants. On receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender of such Warrant to the Company at its principal office
and cancellation thereof, the Company at its expense shall execute and deliver,
in lieu thereof, a new Warrant of like tenor.
11.4. Fractional Shares. The Company shall not be required to
issue fractions of shares upon exercise of this Warrant or to distribute
certificates which evidence fractional shares. In lieu of fractional shares, the
Company shall make payment to the Holder at the time of exercise of this Warrant
as herein provided in an amount of cash equal to such fraction multiplied by the
Current Market Price on the Exercise Date per shares of Common Stock into which
such Series C Shares are convertible (or, in lieu of payment of cash for
fractional shares, the Company may round up the number of Series C Shares issued
to the Holder to the nearest whole share).
11.5 Legend. The certificates evidencing Series C Shares
issuable upon the exercise of this Warrant shall bear a legend substantially as
follows:
"THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE, AND MAY NOT
BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO
THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS
WARRANT AND SUCH SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE CONDITIONS
SPECIFIED IN THIS WARRANT."
12. REMEDIES; SPECIFIC PERFORMANCE. The Company stipulates that
there would be no adequate remedy at law to the Holder of this Warrant in the
event of any default or threatened default by the Company in the performance of
or compliance with any of the terms of this Warrant and accordingly, the Company
agrees that, in addition to any other remedy to which the Holder may be entitled
at law or in equity, the Holder shall be entitled to seek to compel specific
performance of the obligations of the Company under this Warrant, without the
posting of any bond, in accordance with the terms and conditions of this Warrant
in any court of the United States or any
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State thereof having jurisdiction, and if any action should be brought in equity
to enforce any of the provisions of this Warrant, the Company shall not raise
the defense that there is an adequate remedy at law. Except as otherwise
provided by law, a delay or omission by the Holder hereto in exercising any
right or remedy accruing upon any such breach shall not impair the right or
remedy or constitute a waiver of or acquiescence in any such breach. No remedy
shall be exclusive of any other remedy. All available remedies shall be
cumulative.
13. NO RIGHTS OR LIABILITIES AS SHAREHOLDER. Nothing contained
in this Warrant shall be construed as conferring upon the Holder hereof any
rights as a shareholder of the Company or as imposing any obligation on the
Holder to purchase any securities or as imposing any liabilities on the Holder
as a shareholder of the Company, whether such obligation or liabilities are
asserted by the Company or by creditors of the Company.
14. NOTICES. All notices and other communications (and
deliveries) provided for or permitted hereunder shall be made in writing by hand
delivery, telecopier, any courier guaranteeing overnight delivery or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed (a) if to the Company, to the attention of its President at its
principal office located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such
other address as may hereafter be designated in writing by the Company to the
Holder in accordance with the provisions of this Section, or (b) if to the
Holder, at its address as it appears in the Warrant Register.
All such notices and communications (and deliveries) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; when receipt is acknowledged, if telecopied; on the next Business
Day, if timely delivered to a courier guaranteeing overnight delivery; and five
days after being deposited in the mail, if sent first class or certified mail,
return receipt requested, postage prepaid; provided, that the exercise of any
Warrant shall be effective in the manner provided in Section 2.
15. AMENDMENTS. This Warrant and any term hereof may not be
amended, modified, supplemented or terminated, and waivers or consents to
departures from the provisions hereof may not be given, except by written
instrument duly executed by the party against which enforcement of such
amendment, modification, supplement, termination or consent to departure is
sought.
-13-
14
16. DESCRIPTIVE HEADINGS, ETC. The headings in this Warrant are
for convenience of reference only and shall not limit or otherwise affect the
meaning of terms contained herein. Unless the context of this Warrant otherwise
requires: (1) words of any gender shall be deemed to include each other gender;
(2) words using the singular or plural number shall also include the plural or
singular number, respectively; (3) the words "hereof", "herein" and "hereunder"
and words of similar import when used in this Warrant shall refer to this
Warrant as a whole and not to any particular provision of this Warrant, and
Section and paragraph references are to the Sections and paragraphs of this
Warrant unless otherwise specified; (4) the word "including" and words of
similar import when used in this Warrant shall mean "including, without
limitation," unless otherwise specified; (5) "or" is not exclusive; and (6)
provisions apply to successive events and transactions.
17. GOVERNING LAW. This Warrant shall be governed by, and
construed in accordance with, the laws of the State of New York (without giving
effect to the conflict of laws principles thereof).
18. JUDICIAL PROCEEDINGS. Any legal action, suit or proceeding
brought against the Company with respect to this Warrant may be brought in any
federal court of the Southern District of New York or any state court located in
New York County, State of New York, and by execution and delivery of this
Warrant, the Company hereby irrevocably and unconditionally waives any claim (by
way of motion, as a defense or otherwise) of improper venue, that it is not
subject personally to the jurisdiction of such court, that such courts are an
inconvenient forum or that this Warrant or the subject matter may not be
enforced in or by such court. The Company hereby irrevocably and unconditionally
consents to the service of process of any of the aforementioned courts in any
such action, suit or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, at its address set forth or provided for in
Section 14, such service to become effective 10 days after such mailing. Nothing
herein contained shall be deemed to affect the right of any party to serve
process in any manner permitted by law or commence legal proceedings or
otherwise proceed against any other party in any other jurisdiction to enforce
judgments obtained in any action, suit or proceeding brought pursuant to this
Section.
19. REGISTRATION RIGHTS AGREEMENT. The shares of Common Stock
(and Other Securities) issuable upon conversion of the Series C Shares issuable
upon exercise of this Warrant shall constitute Registrable Securities (as such
term is defined in the FIBI Registration Rights Agreement). The Holder of this
Warrant shall be entitled to all of the benefits afforded to a holder of any
such Registrable Securities under the FIBI Registration Rights Agreement and the
Holder, by its acceptance of this Warrant, agrees to be bound by and to comply
with the terms and conditions of the FIBI Registration Rights Agreement
applicable to such holder as a holder of such Registrable Securities.
-14-
15
20. EXPIRATION. The Company shall give the Holder of this
Warrant not less than twenty Business Days nor more than nine months notice of
the expiration of the right to exercise this Warrant. The right to exercise this
Warrant shall expire at 5:00 p.m., New York City time, on the Expiration Date,
unless the Company shall fail to give such notice as aforesaid, in which event
the right to exercise this Warrant shall not expire until a date twenty Business
days after the date on which the Company shall give the Holder notice of the
expiration of the right to exercise this Warrant.
GILAT-TO-HOME INC.
By: /s/ ▇▇▇▇ GAT
---------------------------
Name: ▇▇▇▇ Gat
Title:
-15-
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EXHIBIT A to
Series C Convertible Preferred
Shares Purchase Warrant
FORM OF
ELECTION TO PURCHASE SHARES
The undersigned hereby irrevocably elects to exercise the Warrant
to purchase ____ shares of Series C Convertible Preferred Stock, par value
$______ per share ("Series C Shares"), of GILAT-TO-HOME INC. and hereby [makes
payment of $________ therefor] [or] [makes payment therefor by application
pursuant to Section 2.1(b)(ii) of the Warrant of $_______ aggregate principal
amount of Notes (as defined in the Warrant)] [or] [makes payment therefor by
reduction pursuant to Section 2.1(b)(iii) of the Warrant of the number of Series
C Shares otherwise issuable to the Holder upon Warrant exercise by ___ shares]
[or] [makes payment therefor by delivery of the following Common Stock
Certificates of the Company (properly endorsed for transfer in blank) for
cancellation by the Company pursuant to Section 2.1(b)(iv) of the Warrant,
certificates of which are attached hereto for cancellation [list certificates by
number and amount]]. The undersigned hereby requests that certificates for such
shares be issued and delivered as follows:
ISSUE TO:
-----------------------------------------------------------------------
(NAME)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
--------------------------------------------------------------------------------
(SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER)
DELIVER TO:
---------------------------------------------------------------------
(NAME)
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
If the number of Series C Shares purchased (and/or reduced) hereby
is less than the number of Series C Shares covered by the Warrant, the
undersigned requests that a new Warrant representing the number of Series C
Shares not so purchased (or reduced) be issued and delivered as follows:
ISSUE TO:
-----------------------------------------------------------------------
(NAME OF HOLDER(1))
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
DELIVER TO:
---------------------------------------------------------------------
(NAME OF HOLDER(1))
--------------------------------------------------------------------------------
(ADDRESS, INCLUDING ZIP CODE)
Dated: , 20 [NAME OF HOLDER(1)]
------------- --
By:
---------------------------
Name:
Title:
-------------------------
(1) Name of Holder must conform in all respects to name of holder as
specified on the face of the Warrant.
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EXHIBIT B to
Series C Convertible Preferred
Shares Purchase Warrant
[FORM OF] ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and
transfers unto the Assignee named below all of the rights of the undersigned to
purchase Series C Convertible Preferred Stock, par value $_____ per share
("Series C Shares") of GILAT-TO-HOME INC. represented by the Warrant, with
respect to the number of Series C Shares set forth below:
Name of Assignee Address No. of Shares
---------------- ------- -------------
and does hereby irrevocably constitute and appoint ________ Attorney to make
such transfer on the books of GILAT-TO-HOME INC. maintained for that purpose,
with full power of substitution in the premises.
Dated: , 20 [NAME OF HOLDER(1)]
------------- --
By:
---------------------------
Name:
Title:
-------------------------
(1) Name of Holder must conform in all respects to name of holder as
specified on the face of the Warrant.
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AMENDMENT TO WARRANT AGREEMENT
Reference is hereby made to (i) the Gilat-to-Home Inc. Series C Convertible
Preferred Stock Purchase Warrant, dated as of January 26, 2000, between
Gilat-to-Home Inc. (the "Company") and The First International Bank of Israel
Ltd. (the "Holder") whereby the Holder is entitled to purchase from the Company
shares of Series C Convertible Preferred Stock (the "Warrant Agreement") and
(ii) the Financing Agreement, dated as of August 7, 2000, between the Company,
the financial institutions from time to time party thereto (collectively the
"Lenders"), and Bank Leumi USA, as agent for the Lenders (as amended by the
First Amendment and Joinder to the Financing Agreement, dated as of August 7,
2000, hereinafter referred to as the "Financing Agreement").
The undersigned hereby agree that, upon execution of this Amendment, Section
10(b) of the Warrant Agreement shall be amended by adding the following phrase
immediately after the words "Investor Agreements" in the ninth line thereof:
"which amendments would not otherwise be permitted under Section
6.02(j) of the Financing Agreement (whether or not the Financing
Agreement shall then be in effect)"
Except as amended hereby, the Warrant Agreement shall remain in full force and
effect.
This Amendment shall be governed by, and construed in accordance with, the laws
of the State of New York (without giving effect to the conflict of laws
principles thereof).
This Amendment may be executed in one or more counterparts, each of which shall
be deemed an original, and all of which shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the undersigned has caused this Amendment to be duly
executed by its duly authorized officer as of the 4th day of September, 2000.
GILAT-TO-HOME INC.
By: /s/ ZUR ▇▇▇▇▇▇▇
-----------------------------
Name:
Title:
THE FIRST INTERNATIONAL BANK OF ISRAEL LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
THE FIRST INTERNATIONAL BANK OF ISRAEL LTD.
By: /s/ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇. ▇▇▇▇▇▇
Title:
19
The following is the amended Section 10(b) of the Warrant Agreement in its
entirety:
(b) Most Favored Nation Covenant. Without the consent of the Holder, the
Company will not enter into any written or oral investment agreement, purchase
agreement, shareholders agreement, voting agreement, co-sale agreement, option
or warrant agreement, registration rights agreement, side letter of any kind,
or other agreement, understanding or arrangement in connection with the
issuance of, or concerning any rights or restrictions regarding, shares of the
Company's Capital Stock with any stockholder or other third party ("Investor
Agreements") except for those Investor Agreements existing as of the date of
this Warrant, true and complete copies of which have all been delivered to the
Holder, and shall not agree to any amendments with respect to any existing
Investor Agreements which amendments would not otherwise be permitted under
Section 6.02(j) of the Financing Agreement (whether or not the Financing
Agreement shall then be in effect). The Company shall furnish to the Holder a
copy of any Investor Agreement (or amendments thereto) entered into after the
date hereof.