Exhibit 4.2
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REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (the" AGREEMENT") is made as of the 17th day
of May, 2000, by and between Electric Fuel Corporation ("EFC") and Koor
Industries Limited ("KOOR").
RECITALS
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WHEREAS, Koor has purchased certain Common Stock of EFC in accordance with a
Share Purchase and Agreement (the "INVESTMENT AGREEMENT"), dated as of May 17,
2000, made by and among EFC and Koor.
WHEREAS, EFC would like to grant Koor certain registration rights with respect
to their Common Stock in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereto agree as follows:
CERTAIN DEFINITIONS
The term "Act" means the Securities Act of 1933, as amended.
The term "Form S-3" means such form under the Act as in effect on the date
hereof or any registration form under the Act subsequently adopted by the SEC as
a successor thereto which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
The terms "register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Act, and the declaration or ordering of effectiveness of
such registration statement or document.
The term "Holder" refers to a holder of Registrable Securities.
The term "Registrable Securities" means all EFC Common Stock purchased by Koor
under the Investment Agreement; provided, however, that any Common Stock that
could be distributed by the holder thereof (in accordance with applicable law)
within three (3) months without the registration of such shares, shall not be
deemed to be Registrable Securities.
The term "SEC" shall mean the Securities and Exchange Commission.
REGISTRATION RIGHTS
Following the Closing of the Investment Agreement, EFC shall file as soon
as possible with the SEC a registration statement on Form S-3 (the "Registration
Statement") and shall use its best reasonable efforts to have such Registration
Statement to be declared effective as soon as possible with the SEC, which shall
include all of the Common Stock issued to Koor under the Investment Agreement.
LOCK UP BY KOOR
Koor undertakes not to:
Sell, transfer, pledge or otherwise dispose of any of the Common Stock issued to
it under the Investment Agreement prior to the completion of 2 months as of the
closing of the Investment Agreement.
Sell, transfer, pledge or otherwise dispose of more than 33.33% of the Common
Stock issued to it under the Investment Agreement prior to the completion of 4
months as of the closing of the Investment Agreement.
Sell, transfer, pledge or otherwise dispose of more than 66.66% of the Common
Stock issued to it under the Investment Agreement prior to the completion of 6
months as of the closing of the Investment Agreement.
Notwithstanding anything to the contrary herein, Koor may enter into private
Hedging transactions with respect to the Registrable Securities.
None of the information supplied or to be supplied by EFC for inclusion or
incorporation by reference in the Registration Statement will, at the time the
Registration Statement are filed with the SEC and at the time they become
effective under the Act, 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 statement therein not misleading.
EFC will pay all expenses in connection with the filing of the Registration
Statement, other than expenses of Koor's counsel, and shall keep the
Registration Statement effective and current until the completion of a period of
18 months as of the date the completion of the lock up on the Common Stock held
by Koor as detailed in Section 3.1 above. plus any applicable Disclosure
Blackout Period, Non-Disclosure Blackout Period and Primary Offering Black Out
Period (collectively, the "Effectiveness Period").
With a view to making available to the Holder the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of EFC to the public
without registration or pursuant to the registration statements on Form S-3, EFC
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other documents
required of EFC under the Securities Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request a written statement by EFC that it
has complied with the foregoing subsections 6(a) and 6(b).
In the event that Koor shall unreasonably delay any action required to be taken
by it in order for EFC to be able to file a Registration Statement in compliance
with the foregoing provisions, EFC shall not be deemed to be in breach of these
provisions in respect of non-registration of the pertinent shares of Koor under
such Registration Statement.
If EFC determines in good faith that the Registration Statement includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein as necessary to make the statements therein not misleading
in light of the circumstances then existing, EFC shall promptly make such
disclosure and amend any such Registration Statement as may be required under
applicable securities laws to keep such Registration Statement effective, and
Koor shall, upon receipt of notice from EFC to that effect, be prohibited from
reselling any EFC Common Stock for a period of 60 days ("Disclosure Blackout
Period"), unless EFC notifies them of the earlier termination of any Disclosure
Blackout Period; provided, however, that in no event shall a cumulative
Disclosure Blackout Periods exceed 60 days during any 12-month period.
Notwithstanding the aforesaid, if EFC's Board of Directors determines that the
registration and distribution of the EFC Common Stock pursuant to a Registration
Statement would interfere with any pending financing, acquisition, public
offering, corporation reorganization or any other material corporate development
involving EFC (or would require premature disclosure thereof), during the
Effectiveness Period, EFC may at any time and from time to time give Koor
written notice of such determination and upon receipt of such notice, Koor shall
be prohibited from reselling any EFC Common Stock for a period of up to 60 days
(a "Non-Disclosure Blackout Period"), unless EFC notifies Koor of the earlier
termination of any Non-Disclosure Blackout Period; provided, however, that in no
event shall the cumulative Non-Disclosure Blackout Period exceed 120 days during
the Effectiveness Period.
In addition, if EFC sells shares of its Common Stock in an underwritten public
offering (the "Primary Offering") pursuant to a registration statement, Koor
shall be prohibited from reselling any EFC Common Stock for a period of 180 days
from the effective date of such Primary Offering (a "Primary Offering Black Out
Period"), unless EFC notifies Koor of the earlier termination of such Primary
Offering Black Out Period.
INDEMNIFICATION RELATING TO THE REGISTRATION STATEMENT
To the extent permitted by law, EFC will indemnify and hold harmless the Holder,
the partners, officers, directors and shareholders of the Holder, legal counsel
and accountants for the Holder, any underwriter (as defined in the Securities
Act) for such Holder and each person, if any, who controls Holder or underwriter
within the meaning of the Securities Act or the 1934 Act against any losses,
expenses, claims, damages, or liabilities to which they become subject under the
Securities Act, the 1934 Act or other United States federal or state laws or the
securities laws of the State of Israel or any other jurisdiction in which the
Registrable Shares are sold, insofar as such losses, expenses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"violation"): (i) any untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto; (ii) 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 in
light of the circumstances under which they were made, or (iii) any violation or
alleged violation by the Company of the Securities Act, the 1934 Act, any
Federal or state securities law or any rule or regulation promulgated under the
Securities Act, the 1934 Act or any federal or state securities law, or any of
the securities laws of the State of Israel or any other jurisdiction in which
the Registrable Shares are sold or any rule or regulation thereunder; and EFC
will reimburse each such Holder, officer or director, underwriter or controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable to the Holder, underwriter or controlling person in any such
case for any such loss, claim, damage, liability, or action to the extent that
it arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished to the Company expressly for
use in connection with such registration by the Holder, underwriter or
controlling person provided further, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Holder or underwriter, or any person controlling such Holder or
underwriter, from whom the person asserting any such losses, claims, damages or
liabilities purchased shares in the offering, if a copy of the prospectus (as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such Holder or
underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the shares to such person, and
if the prospectus (as so amended or supplemented) would have cured the defect
giving rise to such loss, claim, damage or liability.
To the extent permitted by law, each selling Holder will indemnify and hold
harmless EFC, each of its directors, each of its officers who have signed the
Registration Statement, each person, if any, who controls EFC within the meaning
of the Securities Act, any underwriter (within the meaning of the Securities
Act) for EFC, any person who controls such underwriter, and any Holder selling
securities in such registration statement or any directors or officers or any
persons controlling such parties, against any losses, claims, expenses, damages,
or liabilities to which any of the forgoing persons become subject under the
Securities Act, the 1934 Act or other United States federal or state securities
law, or any of the securities laws of the State of Israel or any other
jurisdiction in which the Registrable Shares are sold, insofar as such losses,
expenses, claims, damages, liabilities (or actions in respect thereto) arise out
of or are based upon any Violation (including alleged Violation), in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished to EFC by such Holder
expressly for use in connection with such registration; and each such Holder
will reimburse any persons intended to be indemnified pursuant to this section
for any legal or other expenses reasonably incurred by such person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity
agreement contained in this Section shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld: provided that in no event shall any indemnity
under this Section exceed the gross proceeds from the offering received by such
Holder.
Promptly after receipt by an indemnified party of notice of the commencement of
any action (including any governmental action), such indemnified party will, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 11, notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party (together with all other indemnified parties that may be represented
without conflict by one counsel) shall have the right to retain its own counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to notify an indemnifying party in
writing within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnifying party under this Section
11, but the omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 11.
If the indemnification provided for in this Section 11 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission.
The obligations of EFC and the Holder under this Section 11 shall survive the
completion of any offering of Registrable Securities hereunder.
MISCELLANEOUS.
Further Assurances. Each of the parties hereto shall perform such further acts
and execute such further documents as may reasonably be necessary to carry out
and give full effect to the provisions of this Agreement and the intentions of
the parties as
reflected thereby.
Governing Law; Jurisdiction. This Agreement shall be governed by and construed
according to the laws of the State of Israel, without regard to the conflict of
laws provisions thereof. Any dispute arising under or in relation to this
Agreement shall be resolved in the competent court of Tel Aviv-Jaffa district,
and each of the parties hereby submits irrevocably to the jurisdiction of such
court.
Successors and Assigns. This Agreement and the rights hereunder shall be deemed
to be solely for the benefit of Koor and its successors, and the registration
rights hereunder may not be assigned or transferred to third parties.
Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and enforceable against the parties
actually executing such counterpart, and all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first
hereinabove set forth.
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ELECTRIC FUEL CORPORATION KOOR INDUSTRIES LIMITED
BY:____________ BY:____________