Exhibit 4.1
-----------
ELECTRIC FUEL CORPORATION
COMMON STOCK PURCHASE AGREEMENT
May 17, 2000
To: Koor Industries Limited
Ladies and Gentlemen:
Electric Fuel Corporation, a Delaware corporation (the "Company"), proposes
to sell (the "Offering") to Koor Industries Ltd. (the "Purchaser") 1,000,000
shares (the "Shares") of Company's Common Stock, $0.01 par value per share, at a
purchase price per share of $10, for an aggregate investment amount of
$10,000,000 (ten million) (the "Purchase Price"). In connection with and in
consideration for the sale and purchase of the Shares, the Company and the
Purchaser agree to abide by the mutual covenants contained herein.
1. Sale and Purchase of the Shares. On the basis of the representations,
warranties and agreements contained in, and subject to the terms and conditions
of this Share Purchase Agreement (the "Agreement"), the Company agrees to sell
to the Purchaser, and the Purchaser agree to purchase from the Company, the
Shares. The purchase price per share shall be $10.
In the event that within the 180 days immediately following the Closing
hereunder (the "Investment Adjustment Period"), the Company issues shares of its
Common Stock or securities convertible into its Common Stock at a price per
share below $10, other than to its employees and consultants under its Stock
option Plan (the "Investment Adjustment Price"), then it shall issue to the
Purchaser, for no additional consideration, additional shares of the Company's
Common Stock such that the total number of shares of the Company's Common Stock
issued in consideration for the Purchase Price multiplied by the Investment
Adjustment Price shall equal the Purchase Price.
In addition to the above, In the event that the average closing price of
the Company's Common Stock on the Nasdaq National Market ("NASDAQ") for the 30
days ending on the day (the "CERTAIN DAY") immediately preceding the date which
is six months following the Closing (the "ACQUISITION ADJUSTMENT PRICE", and
such 30 day period, the "ACQUISITION ADJUSTMENT PERIOD") is below $10 (the
"REDUCED PRICE"), the Company shall issue to the Purchaser, for no additional
consideration (the "ACQUISITION ADJUSTMENT"), additional Common Stock of the
Company calculated in accordance with the following formula:
A = (10,000,000/B - 1,000,000) * C
Whereas:
A = number of additional Common Stock issued for no consideration under
the Acquisition Adjustment;
B = the Reduced Price;
C = a fraction, the numerator of which is 1,000,000 minus the number of
all Common Stock sold by the Purchaser until Certain Day, and the
denominator of which is 1,000,000;
PROVIDED, HOWEVER, that in no event shall the Company be required to issue
shares in excess of 481,481 (four hundred and eighty one thousand, four hundred
and eighty one) additional shares of its Common Stock in satisfaction of its
obligations under the Acquisition Adjustment, except with respect to any stock
splits or other recapitalizations.
2. Delivery and Payment. Concurrently with the signature of this
Agreement, the Purchaser will pay to the Company the Purchase Price and the
Company shall deliver the Shares to the Purchaser. Payment of the Purchase
Price shall be made by wire transfer in immediately available funds in U.S.
dollars to account number # 023248 in the name of Electric Fuel Limited at
First International Bank, Jerusalem, Branch 012, provided, however, that the
Purchaser may, at their option wire New Israeli Shekels in lieu of U.S. dollars
at the Bank HaPoalim U.S. dollar cash sell rate (i.e. the rate at which the
bank sells to buyers) as of the Closing of the Offering. The closing (the
"CLOSING") of the Offering shall take place concurrently with the signature of
this Agreement at the offices of Meitar, Liquornik, Geva & Co.. The day on
which the Closing takes place shall be referred to herein as the "Closing
Date".
3. Offering of Shares. The Shares will be offered and sold to the
Purchaser without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance on the exemption therefrom provided by
Section 4(2) of the Securities Act.
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchaser as follows:
(a) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the state of Delaware.
The Company's wholly-owned Israeli subsidiary, Electric Fuel (E.F.L.)
Limited ("EFL"), is duly incorporated and is validly existing. Each of
the Company and EFL is qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
assets or properties (owned, leased or licensed) or the nature of its
business makes such qualification necessary, except for such jurisdictions
where the failure to so qualify, individually or in the aggregate, would
not have a material adverse
effect on the assets or properties, business, results of operations or
financial condition, taken as a whole, of the Company and EFL.
(b) All necessary corporate action has been duly and validly taken to
authorize the execution, delivery and performance of this Agreement by the
Company. This Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
(c) Neither the execution, delivery and performance of this Agreement
by the Company nor the consummation of any of the transactions contemplated
hereby or thereby (including, without limitation, the issuance and sale by
the Company of the Shares) will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or constitute a default
(or an event which with notice or lapse of time or both would constitute a
default) under, or require any consent or waiver under, or result in the
execution or imposition of any material lien, charge or encumbrance upon
any properties or assets of the Company pursuant to the terms of, any
material indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or by which the Company or any
of its properties or businesses is bound, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation applicable to
the Company, or violate any provision of the charter or by-laws of the
Company or EFL, except for such consents or waivers that have already been
obtained and are in full force and effect, or such consents or waivers the
failure to so obtain would not individually or in the aggregate, have a
material adverse effect upon the assets or properties, business, results of
operations or financial condition, taken as a whole, of the Company and
EFL.
(d) The Company's Annual Reports on Form 10-K for the fiscal year
ended December 31, 1998 and December 31, 1999, the Company's Form 10-Qs for
the fiscal periods ended March 31, 1999, June 30, 1999, September 30, 1999
and March 31, 2000 and all documents filed with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange
Act of 1934, as amended (the "Exchange Act") (such documents are
hereinafter referred to as the "Exchange Act Documents") were filed in a
timely manner and, when they were filed (or, if any amendment with respect
to any such document was filed, when such amendment was filed), conformed
in all material respects to the requirements of the Exchange Act, and the
rules and regulations thereunder, and did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Subsequent to the respective dates as of which information was given in the
Exchange Act Documents, except as described therein, there has not been any
material adverse change in the Company's operations, and, to the Company's
knowledge, no event has occurred which with notice or lapse of time or
both,
that would constitute such a material adverse change, in the assets or
properties, business, results of operations or financial condition of the
Company taken as a whole.
(e) Other than as previously disclosed to the Purchaser, there are no
claims for brokerage commissions or finder's fees on similar compensation
in connection with the transactions by this Agreement based on any
arrangement or agreement made by or on behalf of the Company other than as
previously disclosed to the Purchaser, and the Company agrees to indemnify
and hold the Purchaser harmless against any damages incurred as a result of
any such claims.
5. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to Company that:
(a) It has full power and authority to execute, deliver and perform
this Agreement. This Agreement constitutes a valid and legally binding
obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles.
(b) The Shares, to be received by the Purchaser will be acquired for
investment for the Purchaser's own account, and not with a view to the
distribution of any part thereof. Other then in context of "Hedging"
transactions, the Purchaser has no present intention of selling, granting
any participation in, or otherwise distributing the same. The Purchaser
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer, or grant participation to such person or to any
third person, with respect to any of the Shares.
(c) The Purchaser understands that the Shares may not be sold,
transferred, or otherwise disposed of without registration under the
Securities Act, or an exemption therefrom, and that in the absence of an
effective registration statement covering the Shares or an available
exemption from registration under the Securities Act, the Shares must be
held indefinitely. In the absence of an effective registration statement
covering the Shares, the Purchaser will sell, transfer, or otherwise
dispose of the Shares only in a manner consistent with its representations
and agreements set forth herein.
(d) The Purchaser understands that until the Shares are registered
under the Securities Act, the certificates evidencing the Shares may bear
substantially the following legends:
(i) "THE SECURITIES EVIDENCED HEREBY WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND APPLICABLE
STATE LAW, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM (IN EACH CASE BASED UPON
DOCUMENTATION SATISFACTORY TO THE COMPANY, INCLUDING AN
OPINION OF COUNSEL SATISFACTORY TO IT THAT REGISTRATION
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE LAWS IS
NOT REQUIRED) OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT."
(ii) Any legend required by any applicable law.
(e) The Purchaser is an "accredited investor" as such term is defined
in Rule 501(a)(1) promulgated pursuant to the Securities Act.
(f) The Purchaser's financial condition is such that it is able to
bear the risk of holding the Shares for an indefinite period of time.
(g) The Purchaser has such knowledge and experience in financial and
business matters and in making high risk investments of this type and is
capable of evaluating the merits and risks of the purchase of the Shares.
The Purchaser has conducted its own due diligence with respect to the
Offering contemplated hereby, has received all the documents and
information regarding the Company that the Purchaser has requested, has
been afforded the opportunity to ask questions of and receive answers from
officers or other representatives of the Company concerning Company's
business, assets and financial position, and after conducting such due
diligence is not aware of any breach of any of the representations and
warranties of the Company contained in this Agreement.
(h) There are no claims for brokerage commissions or finder's fees or
similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf
of the Purchaser, and the Purchaser agrees to indemnify and hold the
Company harmless against any damages incurred as a result of any such
claims.
(i) The Purchaser acknowledges that the Company will rely upon the
truth and accuracy of the foregoing acknowledgments, representations and
agreements and agrees that, if any of the acknowledgments, representations
and agreements are no longer accurate, it shall promptly notify the
Company, and the Company acknowledges that the representations and the
agreements of the Purchaser herein are without prejudice to the
representations and warranties of the Company contained in Section 4 above.
6. Registration Rights. The Purchaser shall have registration rights with
respect to the Shares as detailed in the Registration Right Agreement which is
attached as Schedule "A" of this Agreement.
7. Covenant of the Company. The Company covenants and agrees as follows:
The Company shall use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date, and to satisfy all conditions precedent
to the delivery of the Purchase Price.
8. Covenants of the Purchaser. The Purchaser covenants and agrees as
follows:
(a) The Purchaser shall use its reasonable best efforts to do and
perform all things required or necessary to be done and performed under
this Agreement by it prior to the Closing Date, and to satisfy all
conditions precedent to the delivery of the Shares.
(b) The Purchaser agrees that from the date hereof until the fifth
anniversary of the Closing Date, it will not, and will not permit any of
its Affiliates, as defined in the Securities Act, to directly or indirectly
or in conjunction with or through any Associate (as defined in Rule 12b-2
of the Exchange Act), (i) solicit proxies with respect to any capital stock
or other voting securities of the Company under any circumstances, or
become a "participant" in any "election contest" relating to the election
of directors of the Company (as such terms are used in Rule 14a-11 of
Regulation 14A of the Exchange Act) or (ii) make an offer for the
acquisition of substantially all of the assets or capital stock of the
Company or induce or assist any other person to make such an offer or (iii)
form or join any "group" within the meaning of Section 13(d)(3) of the
Exchange Act with respect to any capital stock or other voting securities
of the Company for the purpose of accomplishing the actions referred to in
clauses (i) and (ii). The covenant contained in this section 10(b) shall
expire in relation to the Purchaser upon the sale by the Purchaser of the
Shares issued to it hereunder.
9. Miscellaneous. This Agreement has been and is made for the benefit of
the Purchaser and the Company, and their respective successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchaser of
Shares from the Purchaser merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed or
delivered or by telephone or telegraph if subsequently confirmed in writing, (a)
if to the Purchaser to Koor Industries Limited, Beit Platinum, Ha'arbaah 21
Street, Tel Aviv, attention: Xxxxx Xxx Xxxxxx, with a copy to Xxxx Xxxxx,
Xxxxxx, Xxx and Xxxxxx, 0 Xxxxxxxx Xxxxxx, Xxx Xxxx and (b) if to the Company,
to Xxxxxx Xxxxxx, Electric Fuel Ltd., Western Industrial Zone, X.X. Xxx 000,
Xxx Xxxxxxx 00000, Xxxxxx, with a copy to Xxx Xxxx or Xxxxxx Xxxxxx, Adv.,
Meitar, Liquornik, Geva & Co., 00 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx Xxx 00000,
Israel.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Israel, without regard to any conflicts or choice of law
principles which would cause the application of the internal laws of any
jurisdiction other than the State of Israel.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
[THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
ELECTRIC FUEL CORPORATION
By___________________________
Title:
Agreed and accepted:
KOOR INDUSTRIES LTD.
