EXHIBIT 4.12
B.O.S. BETTER ONLINE SOLUTIONS LTD.
SHARE PURCHASE AGREEMENT
DATED AS OF
MAY 24, 2005
SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of May 24, 2005, by and among B.O.S Better Online Solutions Ltd., an Israeli
company (the "Company"), and the other parties listed on SCHEDULE 1 hereto (each
an "Investor" and collectively, the "Investors").
WHEREAS, subject to the terms and conditions herein, the Investors desire
to acquire from the Company, and the Company desires to issue to the Investors
Ordinary Shares of the Company, par value NIS 4.00 each (each, a "Share" and
collectively, the "Shares", and when referred to the shares to be purchased by
each Investor, such number of shares as set forth opposite such Investor's name
in the column labeled "No. of Shares" on SCHEDULE 1 hereto) for the amounts set
forth in SCHEDULE 1 hereto.
WHEREAS, the Company wishes to issue to the Investors warrants to purchase
Shares in connection with the Investors' purchase of the Shares hereunder, and
each Investor wishes to purchase such number of warrants as set forth opposite
such Investor's name in the column labeled "No. of Warrants" on SCHEDULE 1
hereto, on the terms and conditions hereof;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investors
hereby agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 Subject to the satisfaction of the terms and conditions described
in this Agreement, at the Closing (as defined below) the Company agrees to
sell to each Investor, and each Investor severally and not jointly agrees
to purchase from the Company, such number of Shares, against such amount,
as is set forth opposite such Investor's name in the columns labeled "No.
of Shares" and "Purchase Amount", respectively, on SCHEDULE 1 hereto, and
reflecting a price of $2.30 per Ordinary Share.
1.2 At the Closing, the Company shall issue and deliver to each of the
Investors a Warrant in the form attached hereto as EXHIBIT A (the
"WARRANTS") to purchase such number of Shares as is set forth opposite such
Investor's name in the columns labeled "No. of Warrants". The Warrants
shall be exercisable for a period of three (3) years from the date of
issuance (the "WARRANT ISSUE DATE"). The Warrants' exercise price shall be
$2.50 per Share for the first year, and shall be increased to $2.75 per
Share starting from the first anniversary of the Warrant Issue Date and to
$3.03 per Share starting from the second anniversary of the Warrant Issue
Date.
1.3 The parties agree that during the period ending 30 days from the
date hereof, SCHEDULE 1 hereto may be revised to reflect an additional
investment (the "Additional Investment") by additional investors listed
therein (the "Additional Investors"), such that the total investment in the
Company pursuant to this Agreement shall be up to $2,500,000, provided
however, that the shareholdings of any particular Additional Investor
immediately following Closing shall not exceed 5% of the issued share
capital of the Company, calculated as of immediately following the Closing
(the "Condition"). The Company shall be obligated to accept the Additional
Investment or any portion thereof, subject to the satisfaction of the
Condition.
2. CLOSING. The execution and delivery of this Agreement shall occur upon
delivery by facsimile of executed signature pages of this Agreement and all
other documents, instruments and writings required to be delivered pursuant to
this Agreement to Amit, Pollak, Matalon & Co., NYP Tower, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.,
▇▇▇-▇▇▇▇ ▇▇▇▇▇ Israel, attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Adv., Fax: (▇▇▇) ▇ ▇▇▇-▇▇▇▇. The
closing of the purchase and sale of the Shares will take on June 30, 2005, on
which date the conditions for Closing set forth in Sections 6 and 7 herein shall
be satisfied in full or waived by the appropriate party thereunder , or at such
different date as may be mutually acceptable to the Investors and the Company
(the "Closing"). At the Closing, each Investor shall deliver to the Company
payment in full (without deduction of any fees or taxes) for the Shares to be
purchased by such Investor in the amount set forth opposite such Investor's name
in the column labeled "Purchase Amount" on SCHEDULE 1, via wire transfer of
immediately available funds or bank or cashier's check. At the Closing, the
Company will deliver to each Investor (or Investor Representative, as the case
may be), the share register of the Company, and a duly executed share
certificate, both reflecting such number of shares set forth opposite such
Investor's name in column labeled "No. of Shares", a Warrant validly executed by
the Company, and a legal opinion of the Company's legal counsel in the form
attached herein as EXHIBIT C.
3. USE OF PROCEEDS. The Company shall use the proceeds from the
transactions contemplated hereby to enhance the general working capital of the
Company, to finance potential acquisitions or as otherwise decided by the
Company's Board of Directors.
4. REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company hereby
represents and warrants to each Investor that:
4.1 CORPORATE ORGANIZATION. The Company is a corporation duly
incorporated and validly existing under the laws of Israel, and has the
corporate power to own its property and to carry on its business as now
being conducted. The Company's shares are traded on the Nasdaq National
Market and on the Tel-Aviv Stock Exchange and as such it is subject to both
US and Israeli Securities Laws.
4.2 DUE AUTHORIZATION AND VALID ISSUANCE. The Company has the
corporate power to enter into this Agreement and the Registration Rights
Agreement (as defined below) (collectively, the "Transaction Documents").
The Transaction Documents have been, or will have been, at the time of
their respective execution and delivery, duly executed and delivered by a
duly authorized officer of the Company. Prior to the Closing of this
Agreement, the Company shall have acted to complete all corporate action
necessary on its part for the issuance, sale and delivery of the Shares.
The Shares being purchased by the Investors hereunder will, upon issuance
and payment therefore pursuant to the terms hereof, be duly authorized,
validly issued, fully paid and nonassessable.
4.3 BINDING AGREEMENT. The Transaction Documents constitute valid and
legally binding obligations of the Company enforceable against the Company
in accordance with their terms, except as (i) such enforceability may be
limited by bankruptcy, insolvency, reorganization, arrangement, moratorium
or similar laws relating to or affecting the rights of creditors and
contracting parties generally, (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefore may be brought, and (iii) rights to indemnity and contribution
may be limited by Israeli or U.S. state or federal securities laws
applicable to the Company or by the public policy underlying such laws.
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4.4 NON-CONTRAVENTION. Neither the execution and delivery of the
Transaction Documents, nor the consummation of the transactions or the
performance of the obligations contemplated hereby and thereby will result
in any violation or breach of Company's articles of association, by-laws,
board resolutions, shareholders resolutions or any agreement to which the
Company is a party.
4.5 NO CONSENT. To the Company's best knowledge, and in reliance on
the representations of the Investors given in Section 5 hereof, except for
reporting obligations and approvals required under applicable security laws
and market regulations in Israel and the United States and for approvals by
the Office of the Chief Scientist and the Investment Center of the Ministry
of Industry, Trade and Labor (if required), no consent of any governmental
body or third party is required to be made or obtained by the Company in
connection with the execution and delivery of the Transaction Documents by
the Company or the consummation by the Company of the transactions or the
performance of the obligations contemplated hereby and thereby by the
Company.
4.6 CAPITALIZATION. The authorized share capital of the Company
consists as of the date hereof: 8,750,000 Ordinary Shares, par value NIS
4.00 per share, of which, as of March 31, 2005, 4,838,651 Ordinary Shares
are issued and outstanding, 1,566,658 Ordinary shares are reserved for
issuance upon the exercise of warrants and of employee, director and
consultant options already granted by the Company and further 40,930
Ordinary Shares (which number is proposed to be increased by 375,000
subject to the Company's shareholders' approval) are reserved for issuance
under the Company's ▇▇▇▇ ▇▇▇▇▇▇▇ Share Option Plan, upon the exercise of
options to be granted thereunder. Any change in the above capitalization
between the date hereof and the date of the Closing shall not constitute a
default under this Agreement, provided, however, that such change is the
result of the conversion or exercise of outstanding convertible securities,
options or warrants of the Company that were granted or issued prior to the
date hereof. Except as set forth above, in the Company's Filings under the
Securities Exchange Act of 1934 (the "Exchange Act Filings") or in the
Company's Audited Financial Statements (as defined below) there are no
outstanding warrants or options or other rights to purchase the Company's
shares.
4.7 FINANCIAL STATEMENTS.
(a) The audited consolidated financial statements of the Company
as of December 31, 2004 and the related notes thereto, as filed by the
Company with the Securities and Exchange Commission under Form 6-K on
March 30, 2005 and on April 5, 2005 (the "AUDITED FINANCIAL
STATEMENTS"), are true, correct and complete in all material respects
and fairly present the financial position of the Company as of their
respective dates, and have been prepared in accordance with the books
and records of the Company as at the applicable dates and for the
applicable periods. Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods therein specified, except as
may be disclosed in the notes to such financial statements, or as may
be permitted by the Securities and Exchange Commission and except as
disclosed in the filings the Company made in connection with such
statements, if any.
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(b) Other than as reported in the Company's current reports,
since December 31, 2004, there has not been any event or material
adverse change in the business or financial conditions of the Company
as reflected in the financial statements which, individually or
collectively with other events or changes, could have a material
adverse effect on the Company.
4.8 LEGAL PROCEEDINGS. Except as disclosed in the Company's public
filings, there is no material legal or governmental proceeding pending or,
to the knowledge of the Company, threatened to which the Company is or may
be a party.
4.9 INTELLECTUAL PROPERTY. (i)The Company, either directly or through
its subsidiaries, owns or possesses sufficient rights to use all material
patents, patent rights, trademarks, copyrights, licenses, inventions, trade
secrets, trade names and know-how (collectively, "Intellectual Property")
described or referred to in the Company's public filings as owned or
possessed by it, except where the failure to currently own or possess would
not have a material adverse effect on the Company, (ii) to the knowledge of
the Company, the Company is not infringing, nor has it received any notice
of, any asserted infringement of, any rights of a third party with respect
to any Intellectual Property that, individually or in the aggregate, would
have a material adverse effect on the Company.
4.10 COMPLIANCE WITH LAW. To the knowledge of the Company, the
business of the Company is conducted in accordance with applicable laws,
including without limitation securities laws and regulations, except to
extent that, individually or in the aggregate, would not cause a material
adverse effect on the Company.
4.11 DISCLOSURE. The representations and warranties of the Company
contained in this Section 4 as of the date hereof and as of the Closing,
and the Company's Exchange Act Filings, as of their respective dates, do
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements herein, in light of the
circumstances under which they are made, not misleading. The Company
understands and confirms that the Investor will rely on the foregoing
representations in effecting the transaction contemplated in the
Transaction Documents and other transactions in securities of the Company.
5. REPRESENTATIONS OF THE INVESTORS. Each of the Investors severally but
not jointly represents to the Company that:
5.1 ENFORCEABILITY. If such Investor is a corporation, partnership,
limited liability company, trust or other entity, (i) it is authorized and
qualified and has full right and power to become an investor in the
Company, is authorized to purchase the Shares and to perform its
obligations pursuant to the provisions hereof, (ii) the person signing the
Transaction Documents to which such Investor is a party and any other
instrument executed and delivered therewith on behalf of such Investor has
been duly authorized by such entity and has full power and authority to do
so, and (iii) such Investor has not been formed for the specific purpose of
acquiring an interest in the Company.
5.2 RESTRICTIONS ON TRANSFERABILITY AND HEDGING.
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5.2.1 Such Investor understands that (i) the Shares have not been
registered under the Securities Act of 1933, or under the laws of any
other jurisdiction; (ii) such Shares cannot be sold, transferred or
otherwise disposed of unless they are subsequently registered under
the Securities Act and, where required, under the laws of other
jurisdictions or unless an exemption from registration is then
available; and (iii) there is now no registration statement on file
with the Securities and Exchange Commission with respect to the Shares
to be purchased by the Investor.
5.2.2 Such Investor acknowledges and agrees that the certificates
representing the Shares shall bear restrictive legends as counsel to
the Company may determine are necessary or appropriate, including
without limitation, legends under applicable securities laws similar
to the following:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933. The shares have been acquired for investment
and may not be sold, transferred, assigned or otherwise disposed of in the
absence of an effective registration statement with respect to the shares
evidenced by this certificate, filed and made effective under the
Securities Act of 1933, or an opinion of the Company's counsel that
registration under such Act is not required."
5.2.3 The Company will not register any transfer of Shares not
made in accordance with applicable law.
5.3 OFFSHORE TRANSACTION. Such Investor is not a "U.S. Person", as
such term is defined in Regulation S under the Securities Act of 1933, its
principal address is outside the United States and it has no present
intention of becoming a resident of (or moving its principal place of
business to) the United States. Such Investor was located outside the
United States at the time any offer to sell and any other action in
connection with such offer and sale was made to such Investor and at the
time that the buy order was originated by the Investor. The Shares are
being acquired solely for such Investor's own account, and in no event and
without derogating from the foregoing, for the account or the benefit of a
U.S. person.
5.4 INVESTMENT PURPOSES. The Shares are being acquired for investment
purposes. The Shares are not being purchased with a view to, or for sale in
connection with, any distribution or other disposition thereof. The
Investor has no present plans to enter into any contract, undertaking,
agreement or arrangement for any such resale, distribution or other
disposition and it will not divide its interest in the Company's Shares
with others, resell or otherwise distribute the Shares in violation of
federal or state US Securities laws or the Israeli Securities Law.
5.5 INFORMATION AND ADVICE.
5.5.1 Without derogating from the Company's representations and
relying thereon, such Investor has carefully reviewed and understands
the risks of a purchase of the Shares. In connection with such
Investor's investment in the Company, it has obtained the advice of
its own investment advisors, counsel and accountants (the "Advisors").
Such Investor and its Advisors have reviewed the Company's public
filings
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5.6 SOPHISTICATION AND RISK.
5.6.1 It has such knowledge and experience in financial and
business matters, that it is capable of evaluating, and has evaluated,
the merits and risks of the Offering. By reason of its business or
financial experience, it has the capacity to protect its interests in
connection with an investment in the Company.
5.6.2 It understands that no Israeli or U.S. federal or state
agency has passed upon the Shares or made any finding or determination
as to the fairness of the transactions contemplated in the Transaction
Documents.
5.6.3 It understands that the Shares are speculative investments
which involve a high degree of risk, including the risk that such
Investor might lose its entire amount invested in the Company.
5.6.4 It understands that any tax benefits that may be available
to such Investor may be lost through adoption of new laws, amendments
to existing laws or regulations, or changes in the interpretation of
existing laws and regulations.
5.6.5 It has the financial ability to bear the economic risk of
its investment in the Company and has adequate net worth and means of
providing for the Investor's current needs and contingencies to
sustain a complete loss of the Investor's investment and has no need
for liquidity in the Investor's investment in the Company.
5.6.6 It is an "Accredited Investor," as such term is defined in
Rule 501 of Regulation D under the Securities Act of 1933.
5.7 NO SOLICITATION. At no time was such Investor presented with or
solicited by any leaflet, public promotional meeting, newspaper or magazine
article, radio or television advertisement or any other form of general
advertising or general solicitation concerning the Offering.
5.8 BROKER-DEALER. The Investor is not a broker-dealer, nor is it an
affiliate of any broker-dealer.
5.9 FURTHER INDEBTEDNESS. Such Investor acknowledges that no provision
of the Transaction Documents executed and delivered by the Company in
connection with this Agreement restricts, or shall be construed to
restrict, in any way the ability of the Company to incur indebtedness or to
issue share capital or other equity securities (or securities convertible
into equity securities) of the Company or to grant liens on its property
and assets.
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5.10 VOTING AND/OR INVESTMENT CONTROL OVER THE INVESTOR. Each Investor
has made available to the Company or shall make available to the Company,
upon the Company's reasonable request made pursuant to a demand of any
regulatory authority or in accordance with any applicable rule or
regulation, a list of individuals who have or share voting and/or
investment control over such Investor. The Investor shall update such list
as reasonably requested by the Company to comply with request for such
information from any regulatory body.
5.11 HOLDINGS. SCHEDULE 1 attached hereto reflects the holdings of the
Company's shares by each Investor and its affiliates as of the date hereof,
and as of the Closing.
5.12 AVAILABILITY OF EXEMPTIONS. The Investor understands that the
Shares are being offered and sold in reliance on a transactional exemption
or exemptions from the registration requirements of Israeli and U.S.
Federal and state securities laws and the Company is relying upon the truth
and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Investor set forth herein in
order to determine the applicability of such exemptions and the suitability
of such Investor to acquire the Shares.
5.13 DISCLOSURE. The representations and warranties of the Investor
contained in this Section 5 as of the date hereof and as of the Closing, do
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated herein or necessary to make the
statements herein, in light of the circumstances under which they are made,
not misleading. Each Investor understands and confirms that the Company
will rely on the foregoing representations in effecting the transaction
contemplated in the Transaction Documents and other transactions in
securities of the Company.
6. CONDITIONS OF EACH INVESTOR'S OBLIGATION AT THE CLOSING. The obligation
of each Investor to purchase its respective Shares is subject to the fulfillment
or waiver by such Investor prior to or on the date of the Closing of the
conditions set forth in this Section 6. In the event that any such condition is
not satisfied to the satisfaction of an Investor, then such non-satisfied
Investor shall not be obligated to proceed with the purchase of such securities.
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company under this Agreement shall be true in all material respects
as of the Closing, with the same effect as though made on and as of such
date.
6.2 COMPLIANCE WITH AGREEMENTS. The Company shall have performed and
complied in all material respects with all agreements or conditions
required by this Agreement to be performed and complied with by it prior to
or as of the Closing.
6.3 REGISTRATION RIGHTS AGREEMENT. As of the Closing, the Registration
Rights Agreement in the form attached hereto as EXHIBIT B (the
"Registration Rights Agreement") shall have been executed and delivered by
the Company and each Investor.
6.4 WARRANTS. As of the Closing, the Warrants shall have been executed
and delivered by the Company and each Investor.
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6.5 ISSUANCE OF SHARES. As of the Closing, the Shares purchased by the
Investors shall have been duly issued to the Investors.
6.6 NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
6.7 GOVERNMENT APPROVALS. The Company shall have received all
necessary approvals by the Office of the Chief Scientist and the Investment
Center of the Ministry of Industry, Trade and Labor with respect to the
transactions contemplated hereby. The Investors shall have executed any
confirmations required by the Office of Chief Scientist for the grant of
such approvals.
6.8 SHAREHOLDERS APPROVAL. The consummation of the transactions and
the performance of the Company's obligations contemplated hereby, including
the issuance of the Shares and the Warrants shall have been approved by the
Company's shareholders.
6.9 NOTICES TO NASDAQ AND THE TASE. The Company shall have made all
required filings of notices with Nasdaq and the Tel Aviv Stock Exchange.
7. CONDITIONS OF THE COMPANY'S OBLIGATION AT THE CLOSING. The obligation of
the Company to issue the Shares to the Investors at the Closing is subject to
the fulfillment or waiver by the Company prior to or on the Closing of the
conditions set forth in this Section 7. In the event that any such condition is
not satisfied to the satisfaction of the Company, then the Company shall not be
obligated to proceed with the sale of the securities under this Agreement.
7.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of all Investors under this Agreement shall be true in all material
respects as of the Closing, with the same effect as though made on and as
of such date.
7.2 COMPLIANCE WITH AGREEMENTS. All Investors shall have performed and
complied in all respects with all agreements or conditions required by this
Agreement to be performed and complied with by it prior to or as of the
Closing.
7.3 REGISTRATION RIGHTS AGREEMENT. As of the Closing, the Registration
Rights Agreement shall have been executed and delivered by all of the
Investors.
7.4 NO INJUNCTION. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
7.5 DELIVERY OF PURCHASE AMOUNT. Each of the Investors shall have
delivered to the Company its respective Purchase Amount for the Shares at
the Closing Date.
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7.6 GOVERNMENT APPROVALS. The Company shall have received all
necessary approvals by the Office of the Chief Scientist and the Investment
Center of the Ministry of Industry, Trade and Labor with respect to the
transactions contemplated hereby. The Investors shall have executed the
confirmations required by the Office of Chief Scientist for the grant of
such approvals.
7.7 SHAREHOLDERS APPROVAL. The consummation of the transactions and
the performance of the Company's obligations contemplated hereby, including
the issuance of the Shares and the Warrants shall have been approved by the
Company's shareholders.
7.8 NOTICES TO NASDAQ AND THE TASE. The Company shall have made all
required filings of notices with Nasdaq and the Tel Aviv Stock Exchange.
7.9 DESIGNATION OF INVESTORS' REPRESENTATIVES. Each Investor who is
not organized under Israeli law shall have delivered to the Company a
written notice designating a representative in Israel for the purpose of
receipt of the shares certificate (the "Investor's Representative").
7.10 The Company shall use commercially reasonable efforts to provide
for the fulfillment of all conditions set forth in Sections 7.6 7.7 and 7.8
hereof. In the event that such conditions for closing are not satisfied
within 120 days from the date hereof, then without derogating from any
remedy to which the Investors shall be entitled to, each of the Investors
shall be entitled to terminate this Agreement with respect to itself.
8. COVENANTS OF THE COMPANY AND THE INVESTORS REGARDING INDEMNIFICATION.
8.1 COMPANY INDEMNIFICATION. The Company agrees to indemnify, hold
harmless, reimburse and defend each Investor, each of the Investor's
officers, directors, agents, affiliates, control persons, and principal
shareholders, against any claim, cost, expense, liability, obligation, loss
or damage (including reasonable legal fees) of any nature, incurred by or
imposed upon such Investor which results, arises out of or is based upon:
(i) any misrepresentation by the Company or any breach of any warranty by
the Company in this Agreement; or (ii) any breach or default in performance
by Company of any covenant or undertaking to be performed by Company
hereunder or under any other agreement entered into by the Company and
Investor relating hereto or thereto.
8.2 INVESTORS' INDEMNIFICATION. Each Investor agrees to indemnify,
hold harmless, reimburse and defend the Company and each of the Company's
officers, directors, agents, affiliates, control persons and principal
shareholders, at all times against any claim, cost, expense, liability,
obligation, loss or damage (including reasonable legal fees) of any nature,
incurred by or imposed upon the Company or such other parties, which
results, arises out of or is based upon: (i) any misrepresentation by such
Investor or breach of any warranty by the Investor in this Agreement; or
(ii) any breach or default in performance by the Investor of any covenant
or undertaking to be performed by the Investor hereunder.
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8.3 LISTING. The Company shall promptly secure the listing of the
Ordinary Shares issuable upon the exercise of the Warrant on the NASDAQ
National Market or on any other market upon which the Company's Ordinary
Shares are then listed (the "Principal Market") (subject to official notice
of issuance) and shall maintain such listing so long as any other Ordinary
Shares shall be so listed. The Company will maintain the listing of its
Ordinary Shares on the Principal Market, and will comply in all material
respects with the Company's reporting, filing and other obligations under
applicable laws and regulations.
8.4 MARKET REGULATIONS. The Company shall notify the SEC, NASDQ, the
Israeli Securities Authority and the Tel-Aviv Stock Exchange, in accordance
with their requirements, of the transactions contemplated by this
Agreement, and shall take all other necessary action and proceedings as may
be required and permitted by applicable law, rule and regulation, for the
legal and valid issuance of the Shares to the Investors.
8.5 REPORTING REQUIREMENTS. The Company will timely file with the SEC
all reports required to be filed pursuant to the Exchange Act by foreign
private issuers and refrain from terminating its status as an issuer
required by the Exchange Act to file reports thereunder even if the
Exchange Act or the rules or regulations thereunder would permit such
termination.
8.6 REISSUANCE OF SECURITIES. The Company agrees to reissue
certificates representing the Shares without the legends at such time as:
(a) The holder thereof is permitted to dispose of such Shares pursuant
to Rule 144 under the Securities Act or any other applicable law or
regulation; or
(b) Upon resale subject to an effective registration statement after
such Securities are registered under the Securities Act.
The Company agrees to cooperate with the Investor in connection with all resales
pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions necessary to
allow such resales provided the Company and its counsel receive reasonably
requested representations from the selling Investor and its broker.
9. CONFIDENTIALITY. Any information disclosed to each of the Investors or
their respective Advisors, which has not previously been made available to the
general public by the Company, if any, shall be considered Confidential
Information. Each Investor acknowledges the confidential nature of the
Confidential Information it may have received, and agrees that the Confidential
Information is the valuable property of the Company. Each Investor agrees that
it and its Advisors shall not reproduce any of the Confidential Information
without the prior written consent of the Company, nor shall they use any
Confidential Information for any purpose except as permitted by and in the
performance of this Agreement, or divulge all or any part of the Confidential
Information to any third party. The confidentiality obligations undertaken
hereunder will remain in full force and effect regardless of the execution and
consummation or termination of this Agreement.
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10. MISCELLANEOUS.
10.1 AMENDMENTS. This Agreement may be modified, supplemented or
amended only by a written instrument executed by all of the parties.
10.2 NOTICES. Any notice that is required or provided to be given
under this Agreement shall be deemed to have been sufficiently given and
received for all purposes, (i) when delivered in writing by hand, upon
delivery; (ii) if sent via facsimile, upon transmission and electronic
confirmation of receipt (and if transmitted and received on a non-business
day, on the first business day following transmission and electronic
confirmation of receipt), (iii) seven (7) business days (and fourteen (14)
business days for international mail) after being sent by certified or
registered mail, postage and charges prepaid, return receipt requested, or
(iv) three (3) business days after being sent by internationally overnight
delivery providing receipt of delivery, to the following addresses:
if to the Company, B.O.S. Better On Line Solutions Ltd., Beit ▇▇▇▇▇,
100 BOS Road, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ attn: ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CFO, facsimile: (▇▇▇) ▇ ▇▇▇-▇▇▇▇, with a copy to
Amit, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., NYP Tower, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Adv. Fax: (▇▇▇) ▇ ▇▇▇-▇▇▇▇; or at
any other address designated by the Company to the Investors in
writing;
if to an Investor, to its address listed on SCHEDULE 1 hereto or at
any other address designated by the Investor to the Company in
writing.
10.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained herein or in any Transaction Document shall
survive after the execution and delivery of this Agreement or such
certificate or document, as the case may be, for a period of 24 months from
the Closing. All covenants and agreements in any Transaction Documents
shall survive in accordance with their terms. This Section shall survive
the termination of this Agreement for any reason.
10.4 DELAYS OR OMISSIONS; WAIVER. Except as expressly provided herein,
no delay or omission to exercise any right, power or remedy accruing to any
party under this Agreement shall impair any such right, power or remedy of
such party nor shall it be construed to be a waiver of any breach or
default, or an acquiescence thereto, or of a similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default
be deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character
on the part of any party hereto of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective
only to the extent specifically set forth in such writing.
10.5 OTHER REMEDIES. Any and all remedies herein expressly conferred
upon a party shall be deemed cumulative with, and not exclusive of, any
other remedy conferred hereby or by law on such party, and the exercise of
any one remedy shall not preclude the exercise of any other.
- 11 -
10.6 ENTIRE AGREEMENT. This Agreement and the exhibits and schedules
hereto, constitute the entire understanding and agreement of the parties
hereto with respect to the subject matter hereof and thereof and supersede
all prior and contemporaneous agreements or understandings, inducements or
conditions, express or implied, written or oral, between the parties with
respect hereto and thereto.
10.7 HEADINGS. All section headings herein are inserted for
convenience only and shall not modify or affect the construction or
interpretation of any provision of this Agreement.
10.8 SEVERABILITY. Should any one or more of the provisions of this
Agreement (including its exhibits and schedules) or of any agreement
entered into pursuant to this Agreement be determined to be illegal or
unenforceable, all other provisions of this Agreement and of each other
agreement entered into pursuant to this Agreement, shall be given effect
separately from the provision or provisions determined to be illegal or
unenforceable and shall not be affected thereby. The parties further agree
to replace such void or unenforceable provision of this Agreement with a
valid and enforceable provision, which will achieve, to the extent
possible, the economic, business and other purposes of the void or
unenforceable provision.
10.9 ASSIGNMENT. This Agreement may not be assigned in whole or in
part by any Investor without the prior written consent of the Company.
10.10 GOVERNING LAW AND VENUE. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Israel,
without regard to conflict of laws provisions. Any dispute arising under or
in relation to this Agreement shall be adjudicated in the competent court
of Tel Aviv-Jaffa district only, and each of the parties hereby submits
irrevocably to the exclusive jurisdiction of such court.
10.11 EXPENSES. The Company shall pay reasonable fees plus expenses
and VAT of one legal counsel representing the Investors up to a maximum of
$15,000 plus VAT.
10.12 BROKER'S OR FINDER'S FEES. It is acknowledged that the Company
has used Cukierman & Co. Investment House Ltd. as its financial advisor for
the transactions contemplated hereby (the "Broker"). The Company will pay
the Broker fees in an amount equal to six percent (6%) plus VAT (as
applicable) of all proceeds generated from the transactions contemplated
hereby. It is hereby clarified, that the Investors shall not be liable to
pay the Broker any broker's or finder's fee or any other commission or
similar fee, directly or indirectly, on account of any action taken by the
Company in connection with any of the transactions contemplated under this
Agreement.
10.13 COUNTERPARTS. This Agreement may be executed concurrently in any
number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
10.14 FURTHER ACTIONS. At any time and from time to time, each party
agrees, without further consideration, to take such actions and to execute
and deliver such documents as may be reasonably necessary to effectuate the
purposes of this Agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.)
- 12 -
IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
as of the date first set forth above.
B.O.S. BETTER ON LINE SOLUTIONS LTD.
By:____________________________
Name: ______________________
Title: _______________________
CATALYST FUND L.P.
By:____________________________
Name: ______________________
Title: _______________________
_____________________________
By:____________________________
Name: ______________________
Title: _______________________
- 13 -
SCHEDULE 1
PRE-CLOSING SHARE POST-CLOSING SHARE
INVESTOR'S NAME AND PURCHASE NO. OF NO. OF HOLDINGS HOLDINGS
ADDRESS AMOUNT SHARES WARRANTS (EXCLUDING WARRANTS) (EXCLUDING WARRANTS)
------- ------ ------ -------- -------------------- --------------------
AMOUNT PERCENT AMOUNT PERCENT
------ ------- ------ -------
CATALYST FUND L.P. US$ 793,500 345,000 207,000 947,275 19.58% 1,292,275 22.31%
ADDITIONAL INVESTORS
Brada Investments US$ 500,000 217,391 130,434 0.00 0.00% 217,391 3.75%
Limited
▇▇▇ ▇▇▇▇ ▇▇.,
▇▇▇▇▇▇▇▇▇
Arizona Maritime Inc. US$ 200,000 86,956 52,174 0.00 0.00% 86,956 1.5%
c/o Lyras Financial
Services Ltd.,
▇▇-▇▇ ▇▇▇▇▇▇ ▇▇.,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇
Egean Financiera US$ 200,000 86,956 52,174 0.00 0.00% 86,956 1.5%
Corporation
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ & ▇
▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Vamos Inc. US$ 250,000 108,695 65,217 89,286 1.85% 197,981 3.42%
c/▇ ▇▇▇▇
▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇ ▇▇, ▇▇▇▇▇▇
Meitav Gemel Ltd. US$ 250,010 108,700 65,220 0.00 0.00% 108,700 1.87%
40 ▇▇▇▇▇▇▇▇ ▇▇.
▇.▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Total Additional
Investment US$ 1,400,010
Total Investment US$ 2,193,510
- 14 -
EXHIBIT A
WARRANT
THIS WARRANT AND THE ORDINARY SHARES ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE ORDINARY
SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO B.O.S. BETTER ON-LINE SOLUTIONS LTD. THAT SUCH
REGISTRATION IS NOT REQUIRED.
Right to Purchase up to _________ Ordinary Shares of
B.O.S. BETTER ON-LINE SOLUTIONS LTD.
(subject to adjustment as provided herein)
ORDINARY SHARES PURCHASE WARRANT
No. _________________ Issue Date: _________, 2005
B.O.S. BETTER ON-LINE SOLUTIONS LTD. a corporation incorporated under the
laws of the State of Israel hereby certifies that, for value received,
________________, or assigns (the "Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company (as defined herein) from and after
the Issue Date of this Warrant and at any time or from time to time before 5:00
p.m., New York time, through the close of business June 30, 2008 (the
"Expiration Date"), up to ______ fully paid and nonassessable Ordinary Shares
(as hereinafter defined), NIS 4.00 nominal value per share, at the applicable
Exercise Price per share (as defined below). The number and character of such
Ordinary Shares and the applicable Exercise Price per share are subject to
adjustment as provided herein.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" shall include B.O.S. Better On-Line Solutions
Ltd. and any corporation which shall succeed, or assume the obligations of,
B.O.S. Better On-Line Solutions Ltd. hereunder.
(b) The term "Ordinary Shares" includes (i) the Company's Ordinary
Shares, nominal value NIS 4.00 per share; and (ii) any other securities
into which or for which any of the securities described in (i) may be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any shares (other than
Ordinary Shares) and other securities of the Company or any other person
(corporate or otherwise) which the Holder of the Warrant at any time shall
be entitled to receive, or shall have received, on the exercise of the
Warrant, in lieu of or in addition to Ordinary Shares, or which at any time
shall be issuable or shall have been issued in exchange for or in
replacement of Ordinary Shares or Other Securities pursuant to Section 4 or
otherwise.
(d) The "Exercise Price" applicable under this Warrant shall be a
price of $2.50 per Ordinary Share during for the first year for the Issue
Date, and shall be increased to $2.75 per Ordinary Share starting from the
first anniversary of the Issue Date and to $3.03 per Share starting from
the second anniversary of the Issue Date.
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that Share Purchase Agreement dated as of the date
hereof by and among the Company and the Investors (as defined therein).
1. EXERCISE OF WARRANT.
1.1 NUMBER OF SHARES ISSUABLE UPON EXERCISE. From and after the date
hereof through and including the Expiration Date, the Holder shall be
entitled to receive, upon exercise of this Warrant in whole or in
part, by delivery of an original or fax copy of an exercise notice in
the form attached hereto as Exhibit A (the "Exercise Notice") and
payment in accordance with Section 2.2 below, Ordinary Shares of the
Company (the "Warrant Shares"), subject to adjustment pursuant to
Section 4.
1.2 FAIR MARKET VALUE. For purposes hereof, the "Fair Market Value" of an
Ordinary Share as of a particular date (the "Determination Date")
shall mean:
(a) If the Company's Ordinary Shares are traded on the American Stock
Exchange or another national exchange or are quoted on the
National or SmallCap Market of The Nasdaq Stock Market, Inc.
("Nasdaq"), then the closing or last sale price, respectively,
reported for the last business day immediately preceding the
Determination Date.
(b) If the Company's Ordinary Shares are not traded on the American
Stock Exchange or another national exchange or on the Nasdaq but
is traded on the NASD OTC Bulletin Board, then the mean of the
average of the closing bid and asked prices reported for the last
business day immediately preceding the Determination Date.
(c) If (a) and (b) are not applicable but the Company's Ordinary
Shares are traded on the Tel-Aviv Stock Exchange, then the
closing price reported for the last business day immediately
preceding the Determination Date.
2
(d) Except as provided in clause (e) below, if the Company's Ordinary
Shares are not publicly traded, then as shall be mutually agreed
between the Company and the Holder, or, if the Company and the
Holder are not able to reach an agreement within two (2) business
days from the date of the Exercise Notice, as shall be determined
by an appraiser the identity of which shall be agreed upon by the
Holder and the Company, or, if the Holder and the Company fail to
reach an agreement as to the appraisers identity, the identity of
such appraiser shall be determined by the Chairman of the Israeli
Bar Association.
(e) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the Company's
Articles of Association (the "Articles"), then all amounts to be
payable per share to holders of the Ordinary Shares pursuant to
the Articles in the event of such liquidation, dissolution or
winding up, plus all other amounts to be payable per share in
respect of the Ordinary Shares in liquidation under the Articles,
assuming for the purposes of this clause (e) that all of the
Ordinary Shares then issuable upon exercise of the Warrant are
outstanding at the Determination Date.
1.3 COMPANY ACKNOWLEDGMENT. The Company will, at the time of the partial
exercise of the Warrant, upon the request of the Holder hereof
acknowledge in writing its continuing obligation to afford to such
Holder any rights to which such Holder shall continue to be entitled
after such partial exercise in accordance with the provisions of this
Warrant. If the Holder shall fail to make any such request, such
failure shall not affect the continuing obligation of the Company to
afford to such Holder any such rights.
3
2. PROCEDURE FOR EXERCISE.
2.1 DELIVERY OF SHARE CERTIFICATES, ETC., ON EXERCISE. The Company agrees
that the Ordinary Shares purchased upon exercise of this Warrant shall
be deemed to be issued to the Holder as the record owner of such
shares as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares in
accordance herewith. As soon as practicable after the exercise of this
Warrant in full or in part, and in any event within three (3) business
days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the Holder, or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may direct in compliance
with applicable securities laws, a certificate or certificates for the
number of duly and validly issued, fully paid and nonassessable
Ordinary Shares (or Other Securities) to which the Holder shall be
entitled on such exercise, plus, in lieu of any fractional share to
which such Holder would otherwise be entitled, cash equal to such
fraction multiplied by the then Fair Market Value of one full share,
together with any other shares or other securities and property
(including cash, where applicable) to which such Holder is entitled
upon such exercise pursuant to Section 1 or otherwise.
2.2 EXERCISE. (a) Payment may be made either (i) in cash, by wire transfer
or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Exercise Price, (ii) by
delivery of the Warrant, or Ordinary Shares receivable upon exercise
of the Warrant in accordance with Section (b) below, or (iii) by a
combination of any of the foregoing methods, for the number of
Ordinary Shares specified in such Exercise Notice (as such exercise
number shall be adjusted to reflect any adjustment in the total number
of Ordinary Shares issuable to the Holder per the terms of this
Warrant) and the Holder shall thereupon be entitled to receive the
number of duly authorized, validly issued, fully-paid and
non-assessable Ordinary Shares (or Other Securities) determined as
provided herein.
(b) Notwithstanding any provisions herein to the contrary, if the Fair
Market Value of one Ordinary Share is greater than the Exercise Price (at the
date of calculation as set forth below), in lieu of exercising this Warrant for
cash, the Holder may elect to receive shares equal to the value (as determined
below) of this Warrant (or the portion thereof being exercised) by surrender of
this Warrant at the principal office of the Company together with the properly
endorsed Exercise Notice in which event the Company shall issue to the Holder a
number Ordinary Shares computed using the following formula:
X= Y (A-B)
---------
A
Where
X = the number of Ordinary Shares to be issued to the Holder
4
Y = the number of Ordinary Shares purchasable under the Warrant or, if
only a portion of the Warrant is being exercised, the portion of the
Warrant being exercised (at the date of such calculation)
A = the Fair Market Value of one of the Company's Ordinary Shares (at
the date of such calculation)
B = Exercise Price (as adjusted to the date of such calculation)
3. EFFECT OF REORGANIZATION, ETC.; ADJUSTMENT OF EXERCISE PRICE.
3.1 REORGANIZATION, CONSOLIDATION, MERGER, ETC. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, including the sale of
substantially all of the Company's outstanding share capital to a
corporate third party, in consideration for such third party's
securities, or (c) transfer all or substantially all of its properties
or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case,
as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of
this Warrant, on the exercise hereof as provided in Sections 1 and 2
at any time after the consummation of such reorganization,
consolidation or merger or the effective date of such dissolution, as
the case may be, shall receive, in lieu of the Ordinary Shares (or
Other Securities) issuable on such exercise prior to such consummation
or such effective date, the shares and other securities and property
(including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case
may be, if such Holder had so exercised this Warrant, immediately
prior thereto, all subject to further adjustment thereafter as
provided in Section 4.
3.2 EXTRAORDINARY EVENTS REGARDING ORDINARY SHARES. In the event that the
Company shall (a) issue additional shares as a dividend or other
distribution on outstanding Ordinary Shares, (b) subdivide its
outstanding Ordinary Shares, or (c) combine its outstanding Ordinary
Shares into a smaller number of Ordinary Shares, then, in each such
event, the Exercise Price shall, simultaneously with the happening of
such event, be adjusted by multiplying the then Exercise Price by a
fraction, the numerator of which shall be the number of Ordinary
Shares outstanding immediately prior to such event and the denominator
of which shall be the number of Ordinary Shares outstanding
immediately after such event, and the product so obtained shall
thereafter be the Exercise Price then in effect. The Exercise Price,
as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this
Section 3.2. The number of Ordinary Shares that the Holder of this
Warrant shall thereafter, on the exercise hereof be entitled to
receive shall be increased or decreased, as the case may be, to a
number determined by multiplying the number of Ordinary Shares that
would otherwise (but for the provisions of this Section 3.2) be
issuable on such exercise by a fraction of which (a) the numerator is
the Exercise Price that would otherwise (but for the provisions of
this Section 3.2) be in effect, and (b) the denominator is the
Exercise Price in effect on the date of such exercise.
5
4. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment or
readjustment in the Ordinary Shares (or Other Securities) issuable on the
exercise of the Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional Ordinary Shares (or Other Securities) issued or sold or deemed to
have been issued or sold, (b) the number of Ordinary Shares (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of Ordinary Shares to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to the Holder of the Warrant.
5. RESERVATION OF SHARES, ETC., ISSUABLE ON EXERCISE OF WARRANT. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrant, Ordinary Shares (or Other Securities)
from time to time issuable on the exercise of the Warrant.
6. REPRESENTATIONS AND WARRANTIES BY THE HOLDER. The Holder represents and
warrants to the Company as follows:
6.1 Holder understands that the Warrant is being offered and sold pursuant
to an exemption or exemptions from registration requirements of
Israeli and US Federal and state securities laws and that the Company
is relying upon the truth and accuracy of Holder's representations
contained in that Share Purchase Agreement of even date herewith,
including, without limitation, that the Holder is an "accredited
investor" within the meaning of Regulation D under the Securities Act
of 1933.
6.2 Holder has substantial experience in evaluating and investing in
private placement transactions of securities in companies similar to
the Company so that it is capable of evaluating the merits and risks
of its investment in the Company and has the capacity to protect its
own interests. Holder is able to bear the economic risk of this
investment.
6
6.3 Holder is acquiring the Warrant and the Ordinary Shares issuable upon
exercise of the Warrant for its own account for investment only, and
not as a nominee or agent and not with a view towards or for resale in
connection with their distribution.
7. ASSIGNMENT; EXCHANGE OF WARRANT. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered Holder hereof (a "Transferor") in whole or in
part. On the surrender for exchange of this Warrant, with the Transferor's
endorsement in the form of Exhibit B attached hereto (the "Transferor
Endorsement Form") and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, a legal opinion from the Transferor's counsel that
such transfer is exempt from the registration requirements of applicable
securities laws, the Company at its expense (but with payment by the Transferor
of any applicable transfer taxes) will record the transfer on the books of the
Company and issue and deliver to or on the order of the Transferor thereof a new
Warrant of like tenor, in the name of the Transferor and/or the transferee(s)
specified in such Transferor Endorsement Form (each a "Transferee"), calling in
the aggregate on the face or faces thereof for the number of Ordinary Shares
called for on the face or faces of the Warrant(s) so surrendered by the
Transferor.
8. REPLACEMENT OF WARRANT. On receipt 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 or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
9. REGISTRATION RIGHTS. The Holder of this Warrant has been granted certain
registration rights by the Company. These registration rights are set forth in a
Registration Rights Agreement entered into by the Company and the Holder dated
as of even date of this Warrant.
10. RIGHTS OF SHAREHOLDERS. No Holder shall be entitled, as a Warrant
holder, to vote or receive dividends or be deemed the holder of the Ordinary
Shares or any other securities of the Company, which may at any time be issuable
upon the exercise of this Warrant for any purpose, nor shall anything contained
herein be construed to confer upon the Holder, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action (whether upon any recapitalization,
issuance of shares, reclassification of shares, change of nominal value,
consolidation, merger, conveyance, or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until the
Warrant shall have been exercised and the Ordinary Shares issuable upon the
exercise hereof shall have become deliverable, as provided herein.
7
11. TRANSFER ON THE COMPANY'S BOOKS. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.
12. NOTICES, ETC. All notices and other communications from the Company to
the Holder of this Warrant shall be deemed to have been sufficiently given and
received for all purposes, (i) when delivered in writing by hand, upon delivery;
(ii) if sent via facsimile, upon transmission and electronic confirmation of
receipt (and if transmitted and received on a non-business day, on the first
business day following transmission and electronic confirmation of receipt),
(iii) seven (7) business days (and fourteen (14) business days for international
mail) after being sent by certified or registered mail, postage and charges
prepaid, return receipt requested, or (iv) three (3) business days after being
sent by internationally overnight delivery providing receipt of delivery, to the
address as may have been furnished to the Company in writing by such Holder or,
until any such Holder furnishes to the Company an address, then to, and at the
address of, the last Holder of this Warrant who has so furnished an address to
the Company.
13. MISCELLANEOUS. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be governed by and construed in accordance with the
laws of the State of Israel without regard to principles of conflicts of laws.
Any dispute arising under or in relation to this Agreement shall be adjudicated
in the competent court of Tel Aviv-Jaffa district only, and each of the parties
hereby submits irrevocably to the exclusive jurisdiction of such court. In the
event that any provision of this Warrant is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision, which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of this Warrant. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS.]
8
IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.
B.O.S. BETTER ON-LINE SOLUTIONS LTD.
By:
------------------------
Name:
------------------------
Title:
------------------------ ------------------------
9
EXHIBIT A
FORM OF SUBSCRIPTION
[omitted]
A - 1
EXHIBIT B
FORM OF TRANSFEROR ENDORSEMENT
(To Be Signed Only On Transfer Of Warrant)
[omitted]
B - 1
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of May 24, 2005, by and between B.O.S. Better Online Solutions Ltd., an
Israeli corporation (the "Company"), and the other parties listed on Schedule 1
hereto (each an "INVESTOR" and collectively, the "INVESTORS"). The Company and
the Investors shall be referred to herein collectively as the "PARTIES".
This Agreement is made pursuant to the Share Purchase Agreement of even
date hereof, by and between the Investors and the Company (the "Share Purchase
Agreement").
The Company and the Investor hereby agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
that are defined in the Share Purchase Agreement shall have the meanings given
to such terms in the Share Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:
"AFFILIATE" of any specified person means any other person, directly or
indirectly, controlling or controlled by or under common control with such
specified person. For the purpose of this definition "control" as used with
respect to any person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of such
person, whether through the ownership of voting securities or by agreement or
otherwise.
"COMMISSION" means the Securities and Exchange Commission.
"ORDINARY Shares" means the Company's Ordinary Shares, NIS 4.00 nominal
value per share.
"EFFECTIVENESS DATE" means the 365th day following the date hereof.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section 3(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
any successor statute.
"HOLDER" or "HOLDERS" means the Investor or any of its successors to the
extent any of them hold Registrable Securities, provided that only registered
holders of Registrable Securities shall be counted for purposes of calculating
any proportion of holders entitled to take any action, receive any damages or
give any notice pursuant to this Agreement.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(c).
"MAJORITY HOLDERS" shall means the Holders of a majority of the then
outstanding aggregate amount of Registrable Securities registered under a
Registration Statement, provided that Registrable Securities which have been
sold or otherwise transferred pursuant to the Registration Statement or Rule 144
shall not be included in the calculation of Majority Holders.
"PROCEEDING" means an action, claim, suit, investigation or Proceeding
(including, without limitation, an investigation or partial Proceeding, such as
a deposition), whether commenced or threatened.
"PROSPECTUS" means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"REGISTRABLE SECURITIES" means the Ordinary Shares purchased pursuant to
the Share Purchase Agreement, the Ordinary Shares issued upon exercise of the
Warrants, and any shares issued to the Investors in connection therewith prior
to the date the Registration Statement was declared effective by the Commission,
including bonus shares and shares granted pursuant to a share split.
"REGISTRATION STATEMENT" means each registration statement required to be
filed hereunder, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and any
successor statute.
2
"TRADING MARKET" means any of the NASD OTC Bulletin Board, NASDAQ SmallCap
Market, the Nasdaq National Market, the American Stock Exchange, the New York
Stock Exchange and the Tel Aviv Stock Exchange.
"WARRANTS" means the warrants issued pursuant to the Share Purchase
Agreement.
2. All references in this Agreement to amendments or supplements to the
Registration Statement, any preliminary Prospectus or Prospectus shall be deemed
to mean and include the filing of any document under the Exchange Act, after the
date of such Registration Statement, preliminary Prospectus or Prospectus, as
the case may be, which is incorporated by reference therein.
3. REGISTRATION.
(a) Not later then 90 days from the date of the Closing of the Share
Purchase Agreement, the Company shall prepare and file with the Commission a
Registration Statement covering the Registrable Securities for an offering to be
made on a continuous basis pursuant to Rule 415. The Registration Statement
shall be on Form F-3 (except if the Company is not then eligible to register for
resale the Registrable Securities on Form F-3, in which case such registration
shall be on another appropriate form in accordance herewith). The Company shall
use its reasonable commercial efforts to cause the Registration Statement to
become effective and remain effective as provided herein. The Company shall
cause the Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, but in any event no later
than the Effectiveness Date. The Company shall use its reasonable commercial
efforts to keep the Registration Statement continuously effective under the
Securities Act until the date which is the earlier date of when (i) all
Registrable Securities have been sold; (ii) all Registrable Securities may be
sold by non-Affiliates of the Company immediately without registration under the
Securities Act and without volume restrictions pursuant to Rule 144(k), as
determined by the counsel to the Company on the basis of the Holders'
representations, pursuant to a written opinion letter to such effect, addressed
and acceptable to the Company's transfer agent; or (iii) the second anniversary
of the Closing Date (the "Effectiveness Period").
(b) If: (i) the Registration Statement is not declared effective by the
Commission by the Effectiveness Date; (ii) after the Registration Statement is
filed with and declared effective by the Commission, the Registration Statement
ceases to be effective (by suspension, excluding a suspension of all trading on
the Trading Market, or otherwise) as to all Registrable Securities to which it
is required to relate at any time prior to the expiration of the Effectiveness
Period (without being succeeded immediately by an additional registration
statement filed and declared effective) for a period of time which shall exceed
30 days in the aggregate per year or more than 20 consecutive calendar days
(defined as a period of 365 days commencing on the date the Registration
Statement is declared effective); or (iii) at any time prior to the expiration
of the Effectiveness Period the Ordinary Shares are not listed or quoted on any
Trading Market, or are suspended from trading on any Trading Market (except for
the Tel Aviv Stock Exchange) for a period of three (3) consecutive trading days
(provided the Company shall not have been able to cure such trading suspension
within 30 days of the notice thereof or list the Ordinary Stock on another
Trading Market); (any such failure or breach being referred to as an "Event,"
and for purposes of clause (i) the date on which such Event occurs, or for
purposes of clause (ii) the date which such 30 day or 20 consecutive day period
(as the case may be) is exceeded, or for purposes of clause (iii) the date on
which such three (3) trading day period is exceeded, being referred to as "Event
Date"), then until the applicable Event is cured, the Company shall pay to each
Holder an amount in cash, equal to One Percent (1.0%) for each thirty (30) day
period (prorated for partial periods) on a daily basis of the Unregistered Share
Value. Unregistered Share Value shall mean the value of the Shares subject to
registration hereunder (less any Shares that can then be freely sold by the
Investors pursuant to any available exemption), which value shall be determined
on the basis of the average closing price of the Shares on the Trading Market
during the 10 days prior to the end of the applicable month.
3
(c) While such Event continues, such liquidated damages shall be paid not
less often than each thirty (30) days. Any unpaid liquidated damages as of the
date when an Event has been cured by the Company shall be paid within seven (7)
business days following the date on which such Event has been cured by the
Company.
(d) The Parties agree and acknowledge that any payment made by the Company
pursuant to this Section 3 may be subject to tax, deduction, withholding or
governmental charge under law, and the Company shall not be required to
"gross-up" such payments to the benefit of the Investors hereunder.
(e) Within three business days of the date on which the Registration
Statement is declared effective, the Company shall cause its counsel to issue a
blanket opinion in the form attached hereto as Exhibit A, to the transfer agent
stating that the shares are subject to an effective registration statement and
can be reissued free of restrictive legend upon notice of a sale by Investor and
confirmation by Investor that it has complied with the prospectus delivery
requirements, provided that the Company has not advised the transfer agent
orally or in writing that the opinion has been withdrawn. Copies of the blanket
opinion required by this Section 2(c) shall be delivered to Investor within the
time frame set forth above.
4. REGISTRATION PROCEDURES. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will:
(a) prepare and file with the Commission the Registration Statement with
respect to such Registrable Securities, respond as promptly as possible to any
comments received from the Commission, and use its reasonable commercial efforts
to cause the Registration Statement to become and remain effective for the
Effectiveness Period with respect thereto, and promptly provide to the Investor
copies of all filings and Commission letters of comment relating thereto;
4
(b) prepare and file with the Commission such amendments and supplements to
the Registration Statement and the Prospectus used in connection therewith as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by the
Registration Statement and to keep such Registration Statement effective until
the expiration of the Effectiveness Period;
(c) furnish to the Investor such number of copies of the Registration
Statement and the Prospectus included therein (including each preliminary
Prospectus) as the Investor reasonably may request to facilitate the public sale
or disposition of the Registrable Securities covered by the Registration
Statement;
(d) list the Registrable Securities covered by the Registration Statement
with any securities exchange on which the Ordinary Shares of the Company are
then listed;
(e) immediately notify the Investor at any time when a Prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event, of which the Company has knowledge, as a result of which the
Prospectus contained in such Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing; and
(f) make available for inspection by the Investor and any attorney,
accountant or other agent retained by the Investor, all relevant publicly
available, non-confidential financial and other records, pertinent corporate
documents and properties of the Company as is customary for due diligence
examinations in connection with public offerings, and cause the Company's
officers, directors and employees to supply all such relevant publicly available
non-confidential information reasonably requested by the attorney, accountant or
agent of the Investor.
5. REGISTRATION EXPENSES. All expenses relating to the Company's compliance
with Sections 2 and 3 hereof, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the NASD, fees of
transfer agents and registrars are called "Registration Expenses". All selling
commissions applicable to the sale of Registrable Securities, are called
"Selling Expenses." The Company shall only be responsible for all Registration
Expenses and not for any Selling Expenses.
5
6. INDEMNIFICATION.
(a) In the event of a registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, the Company will indemnify and hold
harmless the Investor, and its officers, directors and each other person, if
any, who controls the Investor within the meaning of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which the
Investor, or such persons may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Securities were registered under the Securities Act
pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Investor, and each such person for any
reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon (A) any untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by or on
behalf of the Investor or any such person in writing specifically for use in any
such document; (B) use of the Registration Statement or the related Prospectus
following a Discontinuation Event (as defined below), provided Investor received
prior notice of such Discontinuation Event; or (C) if the Investor fails to
deliver a Prospectus, as then amended or supplemented, provided that the Company
shall have delivered to the Investor such Prospectus.
Notwithstanding the foregoing, the Company shall not be liable for any losses,
claims, damages or liabilities by reason of any compromise, consent to entry of
judgment, or settlement effected without the Company's prior written consent,
which consent shall not be unreasonably withheld or conditioned.
(b) In the event of a registration of the Registrable Securities under the
Securities Act pursuant to this Agreement, the Investor will indemnify and hold
harmless the Company, and its officers, directors and each other person, if any,
who controls the Company within the meaning of the Securities Act, against all
losses, claims, damages or liabilities, joint or several, to which the Company
or such persons may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact which was furnished in writing by the Investor to
the Company expressly for use in (and such information is contained in) the
Registration Statement under which such Registrable Securities were registered
under the Securities Act pursuant to this Agreement, any preliminary Prospectus
or final Prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company and each such
person for any reasonable legal or other expenses incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action, provided, however, that the Investor will be liable in any such case if
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission so made in conformity with information furnished in writing
to the Company by or on behalf of the Investor specifically for use in any such
document.
6
(c) Promptly after receipt by a party entitled to claim indemnification
hereunder (an "Indemnified Party") of notice of the commencement of any action,
such Indemnified Party shall, if a claim for indemnification in respect thereof
is to be made against a party hereto obligated to indemnify such Indemnified
Party (an "Indemnifying Party"), notify the Indemnifying Party in writing
thereof, but the omission so to notify the Indemnifying Party shall not relieve
it from any liability which it may have to such Indemnified Party hereunder,
except for any liability which it may have to such Indemnified Party if and to
the extent the Indemnifying Party is substantially prejudiced by such omission.
In case any such action shall be brought against any Indemnified Party and it
shall notify the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to the Indemnified Party, and, after notice from the Indemnifying
Party to such Indemnified Party of its election so to assume and undertake the
defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party for any legal expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof; if the Indemnified Party retains its own
counsel, then the Indemnified Party shall pay all fees, costs and expenses of
such counsel, provided, however, that, if the defendants in any such action
include both the Indemnified Party and the Indemnifying Party and the
Indemnified Party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the Indemnifying Party or if the interests of the Indemnified Party
reasonably may be deemed to conflict with the interests of the Indemnifying
Party, the Indemnified Party shall have the right to select one separate counsel
and to assume such legal defenses and otherwise to participate in the defense of
such action, with the reasonable expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the
Indemnifying Party as incurred.
(d) In order to provide for just and equitable contribution in the event of
joint liability under the Securities Act in any case in which that an
Indemnified Party or any officer, director or controlling person thereof, makes
a claim for indemnification pursuant to this Section 5 but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced, notwithstanding
the fact that this Section 5 provides for indemnification in such case, then the
Indemnifying Party will contribute to the aggregate losses, claims, damages or
liabilities to which it may be subject (after contribution from others) in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and the relative fault of the Indemnified Party as well as any other
relevant equitable considerations. Relative fault shall be determined by
reference to, among other things, whether any untrue statement or omission or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information provided by the Indemnifying Party or the
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
7
(e) The provisions of this Section 5 will remain in full force and effect
and survive the sale by the Investor of the Registrable Securities covered by
the Registration Statement.
7. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company or by a Holder, of
any of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement.
(b) COMPLIANCE. Each Holder covenants and agrees that it will comply with
the prospectus delivery requirements of the Securities Act as applicable to it
in connection with sales of Registrable Securities pursuant to the Registration
Statement.
(c) DISCONTINUED DISPOSITION. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of a Discontinuation Event (as defined below), such Holder will
forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing by the Company that the use of the applicable Prospectus may
be resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement. The Company may provide
appropriate stop orders to enforce the provisions of this paragraph. For
purposes of this Section 7(c), a "Discontinuation Event" shall mean (i) when the
Commission notifies the Company whether there will be a "review" of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders); (ii) any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to such Registration Statement or Prospectus or
for additional information; (iii) the issuance by the Commission of any stop
order suspending the effectiveness of such Registration Statement covering any
or all of the Registrable Securities or the initiation of any Proceedings for
that purpose; (iv) the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; (v) the occurrence of any event
or passage of time that makes the financial statements included in such
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading;
8
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Majority Holders. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of certain Holders and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates; provided, however, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
NOTICES. Any notice or request hereunder may be given to the Company or the
Investor at the respective addresses set forth for such Investor in the Share
Purchase Agreement and in accordance with the notice provisions stipulated
therein.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
hereto. The Company may not assign its rights or obligations hereunder without
the prior written consent of each Holder. Each Holder may not assign its
respective rights hereunder (or any part thereof) without the prior written
consent of the Company.
(f) EXECUTION AND COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(g) GOVERNING LAW. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Israel, without regard to the principles of conflicts of law thereof. Each party
irrevocably agrees that all Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement shall
be commenced exclusively in the competent court of Tel Aviv-Jaffa district only.
9
(h) SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]
10
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
B.O.S. BETTER ONLINE SOLUTIONS LTD.
By: By:
--------------------------- -------------------------------
Name: Name:
--------------------------- -------------------------------
Title: Title:
--------------------------- -------------------------------
ADDRESS FOR NOTICES: ADDRESS FOR NOTICES:
Beit ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CFO Attention:
Facsimile: (▇▇▇) ▇ ▇▇▇-▇▇▇▇ Facsimile:
11
EXHIBIT A
[Month __, 200__]
[Transfer Agent]
Re: B.O.S. Better Online Solutions Ltd. Registration Statement on
Form [F-3]
-------------------------------------------------------------
Ladies and Gentlemen:
As counsel to B.O.S. Better Onlilne Solutions Ltd., an Israeli corporation
(the "Company"), we have been requested to render our opinion to you in
connection with the resale by the individuals or entitles listed on Schedule A
attached hereto (the "Selling Shareholders"), of an aggregate of [amount] shares
(the "Shares") of the Company's Ordinary Shares.
A Registration Statement on Form [F-3] under the Securities Act of 1933, as
amended (the "Act"), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on [date]. Enclosed is the
Prospectus dated [date]. We understand that the Shares are to be offered and
sold in the manner described in the Prospectus.
Based upon the foregoing, upon request by the Selling Shareholders at any
time while the registration statement remains effective, it is our opinion that
the Shares have been registered for resale under the Act and new certificates
evidencing the Shares upon their transfer or re-registration by the Selling
Shareholders may be issued without restrictive legend. The Company will advise
you if the registration statement is not available or effective at any point in
the future.
Very truly yours,
[Company counsel]
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SCHEDULE A
Shares
Selling Shareholder Being Offered
------------------- -------------