EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
by and among
Xxxxxx Electronic Engineering Ltd.
and
Mivtach Shamir Holdings Ltd.
and
Mez-Op Holdings Ltd
November 18, 2003
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made as of the
18th of November, 2003, by and among: (i) Xxxxxx Electronic Engineering Ltd., a
company organized under the laws of the State of Israel whose shares are listed
for trading on the Tel-Aviv Stock Exchange (the "COMPANY"); (ii) Mivtach Shamir
Holdings Ltd. ("MIVTACH SHAMIR"), and (iii) Mez-Op Holdings Ltd. ("FIMI" and,
collectively with Mivtach Shamir, the "SHAREHOLDERS").
WITNESSETH:
WHEREAS, Mivtach Shamir is the holder of 2,847,554 Ordinary Shares, constituting
approximately 27% of the Company's issued share capital and FIMI is the holder
of 1,771,053 Ordinary Shares and certain options to purchase Ordinary Shares,
constituting an aggregate of approximately 17% of the Company's issued share
capital. (Less the treasury shares).
WHEREAS, the Shareholders may be subject to certain restrictions with respect to
the sale of their Company shares if the Company were to list its shares for
trading on a Unites States securities exchange (including Nasdaq); and
WHEREAS, the Shareholders and the Company desire to set forth certain matters
regarding the registration rights of the shares of the Company held by the
Shareholders if the Company lists its shares for trading on a U.S. securities
exchange (including Nasdaq).
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereby agree as follows:
1. DEFINITIONS; EFFECT OF AGREEMENT.
Definitions. As used herein, the following terms have the following
meanings:
"COMMISSION" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
Securities Act.
"CONTROL" means direct or indirect ownership of more than 50% of the
equity or voting capital of an entity, or possession of the right and
power to direct the policy and management of such entity.
"FORM F-3" means Form F-3 under the Securities Act, as in effect on the
date hereof or any registration form under the Securities Act
subsequently adopted by the Securities and Exchange Commission (the
"SEC") which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with
the SEC.
"HOLDER" means any holder of outstanding Registrable Shares.
"IPO" means the Company's initial underwritten public offering of its
Ordinary Shares pursuant to an effective registration statement under
the Securities Act.
"ORDINARY SHARES" means the Ordinary Shares of the Company, par value
NIS 1.00 , subject to a Reclassification Event.
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"PERMITTED TRANSFEREE" shall mean a person or entity which receives
shares pursuant to the transfer of all or any of the shares held by a
Shareholder (the "TRANSFEROR") to: (i) a company Controlled by the
Transferor; (ii) a company that Controls the Transferor; (iii) an
entity under common Control with the Transferor, (iv) in the case of a
transfer by a partnership (including a limited partnership) or limited
liability company, to any partners or members thereof, or any
partnership (including a limited partnership) or limited liability
company managed by the same management company or to the partners or
members thereof; (v) in the case of a corporate body, to its
shareholders in the same proportion as their ownership interest in the
corporate body; or (vi) in the case of a trustee, to the beneficiary or
beneficiaries for whom the trustee is holding shares.
"PERSON" means an individual, fund, company, unincorporated
association, trust, joint venture, governmental agency, or other
entity, whether domestic or foreign.
"RECLASSIFICATION EVENT" means any share combination or subdivision
(split), bonus shares or any other recapitalization of the Company's
shares.
"REGISTER", "REGISTERED" and "REGISTRATION" refer to a registration
effected by filing a registration statement in compliance with the
Securities Act and the declaration or ordering by the SEC of
effectiveness of such registration statement.
"REGISTRABLE SHARES" means Ordinary Shares held by the Shareholders,
including bonus shares and share dividends payable with respect to such
shares, and Ordinary Shares of the Company which hereafter may be
purchased or acquired by the Shareholders. Notwithstanding the
foregoing, Registrable Shares shall not include otherwise Registrable
Shares (i) sold to or through a broker or dealer or underwriter in a
public distribution or a public securities transaction, or (ii) which
could be disposed of, under applicable law, within six (6) months
without registration, pursuant to Rule 144.
"RULE 144" shall mean Rule 144 under the Securities Act or any
successor or similar rule as may be enacted by the Commission from time
to time.
"SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
2. INCIDENTAL REGISTRATION.
2.1. If, at any time (upon or after the Company's IPO), the
Company proposes to register any of its securities for its
own account (the "COMPANY'S SECURITIES") or for the account
of any other person, other than (a) in a registration under
Section 3 of this Agreement or (b) a registration on Form S-8
or Form F-4, the Company shall give notice to the Holder of
such intention, at least 15 days prior to the filing of the
registration statement in connection with such registration.
Upon the written request of the Holder given within ten (10)
days after receipt of any such notice, the Company shall
include in such registration (subject to Section 2.2 below)
all of the Registrable Shares indicated in such request of
the Holder, so as to permit the disposition of the shares so
requested.
2.2. Notwithstanding any other provision of this Section 2, if the
managing underwriter advises the Company in writing that in
its opinion the number of securities requested to be included
in such registration exceeds the number that can be sold in
such offering without adversely affecting such underwriter's
ability to effect an orderly distribution of such securities,
the
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Company will include in such registration: (i) first, the
Company's Securities; and (ii) second, the number of
Registrable Shares requested to be included by Holders, pro
rata to their respective shareholdings in the Company at such
time (calculated on a fully diluted basis), which in the
opinion of such underwriter, can be sold.
3. DEMAND REGISTRATION.
3.1. At any time commencing 120 days following the closing of the
Company's IPO. A Holder or Holders (the "INITIATING HOLDERS")
of at least 20% of the Registrable Shares then outstanding
may request in writing that all or part of its Registrable
Shares shall be registered under the Securities Act. Promptly
upon the receipt of such request, the Company shall give
notice to the other Holders of such request, at least 20 days
prior to the filing of the registration statement in
connection with such registration. Upon the written request
of any other Holder given within ten (10) days after receipt
of any such notice, the Company shall include in such
registration (subject to Section 3.3 below) all of the
Registrable Shares indicated in such request of the other
Holders. Thereafter, the Company shall, as promptly as
practicable, and in any event within 3 (three) months of the
written request of the Initiating Holder, make best
reasonable efforts to file a registration statement with the
Commission with respect to all Registrable Shares indicated
in the written request by the Initiating Holders and other
Holders, and any related qualification or compliance (a
"DEMAND"); provided, however, that notwithstanding the
foregoing, the Company shall not file any registration
statement with the Commission with respect to any Registrable
Shares indicated in any written Request by the Initiating
Holders and other Holders before the expiration of 180 days
following the Closing of the Company's IPO.
3.2. The Holders shall be entitled to an aggregate of three (3)
Demands.
3.3. Notwithstanding any other provision of this Section 3, no
Demand, including for purposes of this Section only, a
registration request under Section 3.6, shall be binding on
the Company if: (i) the Company has filed any registration
statement for the registration of its equity securities
(other than on a form S-8 or similar registration for
employee shares) within the previous ninety (90) days, or
(ii) the anticipated gross proceeds from the sale of the
shares to be included in the Registration is less than Five
Million United States Dollars ($5,000,000). In addition, if
the Company shall furnish to the Holders participating in any
such registration a certificate signed by the Chief Executive
Officer of the Company stating that, in the good faith
judgment of the Board of Directors, it would be detrimental
to the Company and the Shareholders for such registration
statement to be filed or become effective and it is therefore
essential to defer the filing or effectiveness of such
registration statement, the Company shall have the right to
defer such filing or effectiveness for a period of not more
than one hundred and eighty (180) days after receipt of the
request of the Initiating Holder (the "DELAY PERIOD"). The
Company agrees that it shall not file any other registration
statement on behalf of itself or any other party during such
Delay Period.
3.4. Any registration proceeding begun pursuant to Section 3.1
that is subsequently withdrawn at the request of the Holders
shall not count toward the number of Demands, if such
withdrawal is based upon (i) material
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adverse information relating to the Company or its condition,
business and prospects, or (ii) a political or marker
situation affecting the value of the Registrable Securities,
which is different from that generally known to the
Initiating Holder at the time of its request. If a
registration begun pursuant to this Section 3 is subsequently
withdrawn at the request of the Holders for any other reason,
it shall count towards the number of Demands.
3.5. Notwithstanding any other provision of this Section 3, if the
managing underwriter advises the Holders who have indicated
that they wish to participate in such registration, in
writing, that in the managing underwriter's opinion the
number of securities requested to be included in such
registration exceeds the number that can be sold in such
offering without adversely affecting such underwriter's
ability to effect an orderly distribution of such securities,
the Company will include in such registration the number of
Registrable Shares requested to be included that, in the
opinion of such underwriters, can be sold, in the
registration. The number of Registrable Securities that each
Holder (including the Initiating Shareholder) may include in
such registration shall be determined on a pro rata basis
(calculated on a fully diluted at such time).
3.6. F-3 Registration. After the Company becomes eligible to use
Form F-3, subject to the provisions of Section 3.3, if the
Company shall receive from any Holder a written request or
requests that the Company effect a registration on Form F-3
and any related qualification or compliance with respect to
Registrable Shares, the Company shall promptly give notice to
the other Holders of such request, at least 15 days prior to
the filing of the registration statement in connection with
such registration. Upon the written request of any other
Holder given within ten (10) days after receipt of any such
notice, the Company shall include in such registration
(subject to the provision more fully set forth in this
Section 3.6) all of the Registrable Shares indicated in the
request of the Holders. The Company shall then effect such
registration and all such qualifications and compliances as
may be so requested and as would permit or facilitate the
sale and distribution of all or such Registrable Shares as
are specified in the requests; provided, however, that the
Company shall not be obligated to effect any such
registration, qualification, or compliance, pursuant to this
Section 3.6 if the Company has, within the eighteen (18)
month period preceding the date of such request, already
effected one (1) registration for the Holders requesting
registration pursuant to this Section 3.6. The Company
undertakes that it will, once having qualified for
registration on Form F-3, use its best efforts to comply with
all necessary filings and other requirements so as to
maintain such qualification for a period of two (2) years.
3.7. Black Out Periods. At any time when a registration statement
effected hereunder relating to Registrable Securities is
effective, upon written notice from the Company to each of
the Holders that either: (i) the Board of Directors of the
Company, in its reasonable judgment, resolves that such
Holders' sale of Registrable Securities pursuant to the
registration statement would adversely interfere with any
major acquisition, corporate reorganization or other similar
transaction involving the Company (a "TRANSACTION BLACKOUT");
or (ii) the Company determines, in the good faith judgment of
the general counsel of the Company, that such Holders' sale
of
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Registrable Securities pursuant to the registration statement
would require disclosure of material information that the
Company has a bona fide business purpose for preserving as
confidential or the Company is unable to comply with
Commission requirements and that such disclosure will be
detrimental to the Company (an "INFORMATION BLACKOUT"); then
the Holders shall suspend sales of Registrable Securities
pursuant to such registration statement until the earlier of:
(A) (1) in the case of a Transaction Blackout, the earliest
of (a) one month after the completion of such acquisition,
corporate reorganization or other similar transaction; (b)
promptly after abandonment of such acquisition, corporate
reorganization or other similar transaction; and (c) 120 days
after the date of the Company's written notice of Transaction
Blackout; or (2) in the case of an Information Blackout, the
earlier of (a) the date upon which such material information
is disclosed to the public or ceases to be material; and (b)
90 days after the Company makes such good faith
determination, and (B) such time as the Company notifies each
of the Holders that sales pursuant to such registration
statement may be resumed.
4. DESIGNATION OF UNDERWRITER.
4.1. In the case of any registration effected pursuant to Section
3, should the offering be underwritten, the Company and the
Holders participating in the Demand registration shall confer
as to the selection of a managing underwriter. Should they
fail to reach agreement, the selection shall be made by the
Initiating Holder.
4.2. In the case of any registration initiated by the Company
under Section 2, the Company shall have the right to
designate the managing underwriter in any underwritten
offering.
5. EXPENSES.
All expenses incurred in connection with any registration under
Sections 2 and 3 shall be borne by the Company; provided, however, that
each of the Holders shall pay its pro rata portion of the discounts or
commissions payable to any underwriter and shall bear its own
attorney's fees and disbursements.
6. INDEMNIFICATION AND CONTRIBUTION.
In the event of any registered offering of Ordinary Shares
pursuant to this Agreement:
6.1. The Company will indemnify and hold harmless, to the fullest
extent permitted by law, each Holder participating in such
registration and any underwriter who participates as an
underwriter in such registered offering, and each person, if
any, who controls s Holder or such underwriter, from and
against any and all losses, damages, claims, liabilities,
joint or several, costs and expenses (including any amounts
paid in any settlement effected with the Company's prior
written consent) to which such Holder or any such underwriter
or controlling person may become subject under applicable law
or otherwise, insofar as such losses, damages, claims,
liabilities (or actions or proceedings in respect thereof),
costs or expenses arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material
fact contained in the registration statement or included in
the prospectus, as amended or supplemented, or (ii) the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in
which they are made,
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not misleading, and the Company will reimburse each of the
Holders, any underwriter and each such controlling person of
a Holder or the underwriter, promptly upon demand, for any
reasonable legal or any other expenses incurred by them in
connection with investigating, preparing to defend or
defending against or appearing as a third-party witness in
connection with such loss, claim, damage, liability, action
or proceeding; provided, however, that the Company will not
be liable towards a specific Holder, the underwriter or
controlling person to the extent that any such loss, damage,
liability, cost or expense arises out of or is based upon an
untrue statement or omission in such registration statement
or prospectus so made in conformity with information
furnished to the Company in writing by such Holder, such
underwriter or such controlling persons specifically for use
in such registration statement; provided, further, that this
indemnity shall not be deemed to relieve any underwriter of
any of its due diligence obligations; provided, further, that
the indemnity agreement contained in this Section 6.1 shall
not apply to amounts paid in settlement of any such claim,
loss, damage, liability or action if such settlement is
effected without the consent of the Company, which consent
shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any
investigation made by or on behalf of any Holder, the
underwriter or any controlling person of a Holder or the
underwriter, and regardless of any sale in connection with
such offering by a Holder. Such indemnity shall survive the
transfer of securities by a Holder but in no event shall the
Company pay more than once in respect of any loss, damage,
claim or liability; or (iii) indemnification of a Holder
against any violation or alleged violation by the Company of
the Securities Act of 1933, Securities Exchange Act of 1934
or the state securities laws of individual U.S. states.
6.2. Each Holder participating in a registration will indemnify
and hold harmless the Company, any underwriter for the
Company, and each person, if any, who controls the Company or
such underwriter, from and against any and all losses,
damages, claims, liabilities, costs or expenses (including
any amounts paid in any settlement effected with such selling
Holder's consent) to which the Company or any such
controlling person and/or any such underwriter may become
subject under applicable law or otherwise, insofar as such
losses, damages, claims, liabilities (or actions or
proceedings in respect thereof), costs or expenses arise out
of or are based on (i) any untrue statement or alleged untrue
statement of any material fact contained in the registration
statement or included in the prospectus, as amended or
supplemented, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of
the circumstances in which they were made, not misleading,
and such Holder will reimburse the Company, any underwriter
and each such controlling person of the Company or any
underwriter, promptly upon demand, for any reasonable legal
or other expenses incurred by them in connection with
investigating, preparing to defend or defending against or
appearing as a third-party witness in connection with such
loss, claim, damage, liability, action or proceeding; in each
case to the extent; provided, however, that such Holder shall
be liable in any such case only to the extent that any such
loss, damage, liability, cost or expense arises out of or is
based upon an untrue statement or omission in such
registration or prospectus made in strict
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conformity with written information furnished to the Company
by such Holder specifically for use in such registration
statement; and provided, further, that this indemnity shall
not be deemed to relieve any underwriter of any of its due
diligence obligations; and provided, further, that the
indemnity agreement contained in this Section 6.2 shall not
apply to amounts paid in settlement of any such claim, loss,
damage, liability or action if such settlement is effected
without the consent of such Holder, as the case may be, which
consent shall not be unreasonably withheld. In any event, the
indemnification obligations under this Section 6.2 shall not
exceed the net proceeds received by the Shareholder pursuant
to the public offering.
6.3. Promptly after receipt by an indemnified party pursuant to
the provisions of Sections 6.1 or 6.2 of notice of the
commencement of any action involving the subject matter of
the foregoing indemnity provisions, but in any event no fewer
than ten (10) days before the date designated in such notice
as the date by which an answer must be served (or such
extension thereof, provided that the extension has been
granted in writing by the plaintiff and that no admission or
consent to jurisdiction or other waiver has been granted or
implied by the request for such an extension), such
indemnified party will, if a claim thereof is to be made
against the indemnifying party pursuant to the provisions of
said Sections 6.1 or 6.2, promptly notify the indemnifying
party of the commencement thereof. In case such action is
brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the
indemnifying party shall have the right to participate in,
and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants
in any action include both the indemnified party and the
indemnifying party and there is a conflict of interests which
would prevent counsel for the indemnifying party from also
representing the indemnified party, the indemnified party or
parties shall have the right to select one separate counsel
to participate in the defense of such action on behalf of
such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election
so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party pursuant to the
provisions of said Sections 6.1 or 6.2 for any legal or other
expense subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) the
indemnified party shall have employed counsel in accordance
with the provision of the preceding sentence, (ii) the
indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the notice
of the commencement of the action and within 15 days after
written notice of the indemnified party's intention to employ
separate counsel pursuant to the previous sentence, or (iii)
the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the
indemnifying party. No indemnifying party will consent to
entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or
litigation.
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6.4. Contribution. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an
indemnified party, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party
on the other from the registration or (ii) if the allocation
provided by clause (i) above is not permitted by applicable
law, or provides a lesser sum to the indemnified party than
the amount hereinafter calculated, in such proportion as is
appropriate to reflect not only the relative benefits
received by the indemnifying party on the one hand and the
indemnified party on the other but also the relative fault of
the indemnifying party and the indemnified party as well as
any other relevant equitable considerations. No person guilty
of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
7. OBLIGATIONS OF THE COMPANY.
Whenever required under this Agreement to effect the registration of
any Registrable Shares, the Company shall, as expeditiously as
possible:
7.1. (i) prepare and file with the SEC a registration statement
with respect to such Registrable Shares and use its best
efforts to cause such registration statement to become
effective, (ii) upon the request of the Holder of the
Registrable Shares registered thereunder, keep a registration
statement filed pursuant to Section 2 effective until the
distribution contemplated in the Registration Statement has
been completed, but not more than 30 days.
7.2. prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in
connection with such registration statement as may be
reasonably necessary to comply with the provisions of the
Securities Act with respect to the disposition of all
Registrable Shares covered by such registration statement.
7.3. furnish to each of the Holders with a copy of the prospectus,
including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents
as it may reasonably request in order to facilitate the
disposition of Registrable Shares owned by it.
7.4. in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement,
in usual and customary form, with the managing underwriter of
such offering. Each of the Holders participating in such
underwriting shall also enter into and perform its
obligations under such an agreement.
7.5. notify the Holders of Registrable Shares covered by such
registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the
prospectus included 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
the light of the circumstances then existing.
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7.6. cause all Registrable Shares registered pursuant hereunder to
be listed on the securities exchange (including Nasdaq), if
any, on which similar securities issued by the Company are
then listed.
7.7. provide a transfer agent and registrar for all Registrable
Shares registered pursuant hereunder and a CUSIP number for
all such Registrable Shares, in each case not later than the
effective date of such registration.
7.8. take such action as is required under the securities laws of
such states of the United States as the Holders shall
reasonably request; provided, however, that the Company shall
not be required to qualify to do business as a foreign
corporation, or to file any general consent to service of
process, in any state.
7.9. furnish, at the request of the Holders requesting
registration of Registrable Shares pursuant to this
Agreement, on the date that such Registrable Shares are
delivered to the underwriters for sale in connection with a
registration pursuant to this Agreement, if such securities
are being sold through underwriters, or, if such securities
are not being sold through underwriters, on the date that the
registration statement with respect to such securities
becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given
to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holder requesting
registration of Registrable Shares and (ii) a letter dated
such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the
underwriters, if any, and to the Holder requesting
registration of Registrable Shares.
8. CONDITIONS TO REGISTRATION OBLIGATIONS.
The Company shall not be obligated to effect the registration of
Registrable Shares pursuant to this Agreement unless the Holders of
such Registrable Shares consent to the following conditions:
8.1. conditions requiring the Holders to comply with all
applicable provisions of the Securities Act and the
Securities and Exchange Act including, but not limited to,
the prospectus delivery requirements of the Securities Act,
and to furnish to the Company information about sales made in
such public offering;
8.2. conditions prohibiting the Holders upon receipt of
telegraphic or written notice from the Company that it is
required by law to correct or update the registration
statement or prospectus from effecting sales of the
Registrable Shares until the Company has completed the
necessary correction or updating; and
8.3. conditions prohibiting the sale of Registrable Shares by the
Holders during the process of the registration until the
Registration Statement is effective.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
Each of the Holders may assign rights to cause the Company to register
pursuant to this Agreement all or part of its Registrable Shares to a
purchaser of at least one third of the Ordinary Shares held by such
Holder or to a Permitted Transferee that would not be able to dispose
of such shares under Rule 144 within six months from the date of such
sale. The transferor shall, within twenty (20) days after such
transfer, furnish
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the Company with written notice of the name and address of such
transferee and the securities with respect to which such registration
rights are being assigned, and the transferee's written agreement to be
bound by this Agreement.
10. LOCK-UP AND OTHER REQUIREMENTS OF THE HOLDERS.
In any registration of the Company's shares pursuant to Sections 2 or 3
above, the Holders agree that any sales of Registrable Shares may be
subject to a "lock-up" period restricting such sales for up to one
hundred and eighty (180) days, and the Holders will agree to abide by
such customary "lock-up" period of up to one hundred and eighty (180)
days as is required by the underwriter in such a registration and
further agree to execute such further documents as may be required by
the underwriters to effectuate such "lock-up". In addition, the Holders
may not participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's securities on the basis
provided in any customary underwriting arrangements and (ii) provides
any relevant information and completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements, and other
documents required under the terms of such underwriting arrangements.
11. RULE 144.
At any time and from time to time after the earlier of the close of
business on such date as (a) a registration statement filed by the
Company under the Securities Act becomes effective, or (b) the Company
registers a class of securities under Section 12 of the United States
Securities Exchange Act of 1934, as amended, or any federal statute or
code which is a successor thereto (the "EXCHANGE ACT") the Company
shall:
11.1. Make and keep available adequate current public information
with respect to the Company within the meaning of Rule 144(c)
under the Securities Act (or similar rule then in effect);
11.2. Furnish to the Holders of Registrable Shares forthwith upon
request (i) a written statement by the Company as to its
compliance with the informational requirements of Rule 144(c)
(or similar rule then in effect) or (ii) a copy of the most
recent annual or quarterly report of the Company; and
11.3. Use its best efforts to comply with all other necessary
filings and other requirements so as to enable the Holders
and any transferee thereof to sell Registrable Shares under
Rule 144 under the Securities Act (or similar rule then in
effect).
12. OTHER REGISTRATION RIGHTS
The Company shall not grant registration rights with respect to any
securities of the Company to any Person that are equal or superior to
the registration rights granted to the Holders pursuant to this
Agreement, except with the written consent of each Holder.
13. MISCELLANEOUS
13.1. 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.
13.2. Governing Law; Jurisdiction. This Agreement shall be governed
by, and construed in accordance with, the laws of the State
of Israel; provided,
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however, that with respect to maters specifically related to
the federal securities laws of the United States, such laws
shall govern. All disputes arising under this Agreement or in
connection with the transactions hereunder shall be resolved
between the parties in good faith. If the parties hereto fail
to agree within twenty (20) days after a party shall have
requested such Arbitration, each party shall select an
arbitrator and the two arbitrators shall select, by mutual
agreement, a third arbitrator. The proceedings will take
place in Tel-Aviv, Israel. The arbitrator(s) shall not be
bound by any judicial rules of evidence or procedure but
shall be bound by the substantive law of the State of Israel
and will have to elaborate the grounds of his/their decision.
The arbitral award shall be final and binding upon the
parties, and judgment upon the award may be entered in any
court having jurisdiction, or application may be made to such
Court for a judicial acceptance of the award or for an order
of enforcement, as the case may be.
13.3. Successors and Assigns; Except as otherwise expressly limited
herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs,
executors, and administrators of the parties hereto. None of
the rights, privileges, or obligations set forth in, arising
under, or created by this Agreement may be assigned or
transferred without the prior consent in writing of each
party to this Agreement except that, upon the consummation of
a transfer of shares to a Permitted Transferee or the sale of
at least one third of the Shares held by a Shareholder to a
person that would hold such shares as restricted securities
and that would not be able to dispose of such shares under
Rule 144 within six months from the date of such sale, such
Permitted Transferee or purchaser, as the case may be, shall
succeed to (or share in) all rights and privileges of the
transferor (as a Shareholder) under this Agreement as if it
were an original party hereto.
Without derogating from the provisions of the previous
paragraph, no assignment or transfer under this Section 15.3
shall be made unless the transferee agrees to be bound by all
agreements binding upon the transferor immediately prior to
such transfer.
13.4. Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement between the parties with
regard to the subject matter hereof.
13.5. Amendments. Any term of this Agreement may be amended with
the written consent of the Holders and the Company.
13.6. Section Headings; Preamble. All article and section headings
are inserted for convenience only and shall not modify or
affect the construction or interpretation of any provision of
this Agreement. The preamble to this Agreement is
incorporated herein and forms an integral part of this
Agreement.
13.7. Communications. All notices or other communications hereunder
shall be in writing and shall either be given in person, sent
by registered mail (registered international air mail if
mailed internationally), sent by an overnight courier service
which obtains a receipt to evidence delivery, or transmitted
by facsimile transmission (provided that written confirmation
of receipt is provided), to the addresses of the parties set
forth in this Agreement, or such other address as any party
may designate to the other in accordance with the
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aforesaid procedure. All notices and other communications
delivered in person or by courier service shall be deemed to
have been given as of two business days after sending
thereof, those given by facsimile transmission shall be
deemed given twenty-four hours following transmission, and
all notices and other communications sent by registered mail
(or air mail if the posting is international) shall be deemed
given five (5) days after posting.
13.8. Delays or Omissions. No delay or omission to exercise any
right, power, or remedy accruing to any party upon any breach
or default under this Agreement, shall be deemed a waiver of
any such breach or default. Any waiver, permit, consent, or
approval of any kind or character on the part of any party 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. All
remedies, either under this Agreement or by law or otherwise
afforded to any of the parties, shall be cumulative and not
alternative.
13.9. Severability. If any provision of this Agreement is held by a
court of competent jurisdiction to be unenforceable under
applicable law, then such provision shall be excluded from
this Agreement and the remainder of this Agreement shall be
interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms; provided,
however, that in such event this Agreement shall be
interpreted so as to give effect, to the greatest extent
consistent with and permitted by applicable law, to the
meaning and intention of the excluded provision as determined
by such court of competent jurisdiction.
13.10. 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.
MITACH SHAMIR HOLDINGS LTD.
By /s/ Xxxx Xxxxxx
------------------------
Name Xxxx Xxxxxx
Title Chairman
Address: 4 Koifman St. Tel-Aviv
MEZ-OP HOLDINGS LTD.
By /s/ Xxxxx Xxxxxx
------------------------
Name Xxxxx Xxxxxx
Title Director
Address: 00 Xxxxxx Xxxxxx Xxxxx, Tel-Aviv
Xxxxxx Electronic Engineering Ltd.
By /s/ Xxxxxxx Xxxxxxx
------------------------
Name Xxxxxxx Xxxxxxx
Title Chief Financial Officer
Address: 00 Xxxxxx Xx. Xxxx Xxxxxx
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