Exhibit 5
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") made as of January 1,
2007 by and among ELBIT VISION SYSTEMS LTD. (the "COMPANY") and ELBIT LTD.
("ELBIT").
W I T N E S S E T H:
WHEREAS, Elbit holds 2,647,643 Ordinary Shares of the Company and together
with Water Technologies Ltd., a fully owned subsidiary of Elbit, holds warrants
to purchase 1,512,939 Ordinary Shares of the Company (all of such Ordinary
Shares, including the Ordinary Shares issuable upon exercise of such warrants
being the "SHARES"), and the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT").
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereby agree as follows:
1. REGISTRATION OF SHARES.
(a) The Company shall file with the United States Securities and Exchange
Commission (the "SEC") a registration statement on Form F-1 or Form F-3 under
the 1933 Act, as determined in the sole discretion of the Company, with respect
to the registration of the Shares (the "REGISTRATION STATEMENT") by no later
than September 30, 2007 (the "SUBMISSION DATE"); provided, that in the event the
Company files a registration statement for its benefit and/or for the benefit of
selling shareholders, other than a registration of securities in a Rule 145
transaction or with respect to an employee benefit plan, prior to such date (the
"COMPANY REGISTRATION STATEMENT"), (i) the Company shall notify Elbit a
reasonable time in advance of the planned filing date, and (ii) Elbit shall be
permitted to include some or all of the Shares in such registration statement,
provided that Elbit notifies the Company in writing in a timely fashion, of its
desire, and number of Shares, to be included in such registration statement.
Notwithstanding the foregoing, the Company shall use its best efforts to file
the Registration Statement prior to the Submission Date, provided that such
commitment shall not require the Company to file the Registration Statement
prior to the filing of its Annual Report on Form 20-F for the year ended
December 31, 2006, with the SEC. The Company shall provide Elbit a reasonable
time to review and comment on the Registration Statement (and any amendments or
supplements) before it is filed.
(b) The Company shall prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective until
the earlier of (i) the date on which all of the Shares may immediately be resold
without registration during any 90 day period by reason of Rule 144 under the
1933 Act or any other rule of similar effect; or (ii) such time as all Shares
have been sold.
(c) The Company shall furnish to Elbit such number of copies of
prospectuses and such other documents as Elbit may reasonably request, in order
to facilitate the public sale or other disposition of all or any of the Shares
held by Elbit;
(d) The Company shall use reasonable efforts to cause the Registration
Statement to become effective as soon as practicable after filing. The Company
shall notify Elbit upon receipt of confirmation from the SEC that the
Registration Statement has been declared effective.
(e) The Company shall notify Elbit, during the time when a prospectus
relating to the Shares is required to be delivered under the 1933 Act, on a
timely basis, of any event as a result of which the prospectus included in the
Registration Statement contains an untrue statement of a material fact or omits
any fact necessary to make the statements in the prospectus not misleading, in
view of the circumstances in which they were made; and, at the request of Elbit,
prepare a supplement or amendment to the prospectus so that, when delivered to
purchasers of the Shares, the prospectus, as supplemented or amended, does not
contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements in the prospectus not misleading, in view of
the circumstances in which they were made, and notify Elbit on the day of the
filing of such supplement or amendment.
(f) Once the Registration Statement has been declared effective by the SEC,
the Company shall cause all the Shares to be quoted on the Over the Counter
Bulletin Board or any other exchange on which the Company's Ordinary Shares are
listed as promptly as practicable.
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(g) In the event of the issuance of any stop order suspending the
effectiveness of the Registration Statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any securities included in the Registration Statement for sale in any
jurisdiction, the Company shall notify Elbit on the day of such issuance, use
reasonable efforts to promptly obtain the withdrawal of such order, and notify
Elbit on the day of such withdrawal, if so ordered.
(h) The Company shall reasonably cooperate with Elbit in providing
information reasonably required in connection with any filings to be made by
Elbit in connection with sales under Rule 144.
(i) Notwithstanding anything to the contrary herein, it is hereby
clarified, that Elbit shall not have the right to demand an underwritten
offering.
2. EXPENSES. The Company shall bear all expenses in connection with the
registration procedures set forth in Section 1 and the registration of the
Shares pursuant to the Registration Statement, other than fees and expenses, if
any, of counsel or other advisers to Elbit or underwriting discounts, brokerage
fees and commissions incurred by Elbit, if any.
3. INDEMNITIES. In the event of any registered offering of Ordinary Shares
of the Company pursuant to this Agreement:
(a) The Company will indemnify and hold Elbit, its officers, directors and
employees, harmless, to the fullest extent permitted by law, 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 consent) to which Elbit 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 preliminary or final
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, not misleading, and the Company will reimburse Elbit , 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 in any such case to the extent that any such loss, damage, liability,
cost or expense 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 by Elbit specifically for inclusion therein;
PROVIDED, FURTHER, that the indemnity agreement contained in this subsection
3(a) 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.
(b) Elbit will indemnify and hold the Company, its officers, directors and
employees, and any underwriters for the Company harmless from and against any
and all losses, damages, claims, liabilities, costs or expenses (including any
amounts paid in any settlement effected with the selling shareholder's consent)
to which the Company 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 or alleged untrue statement of any material fact
contained in the registration statement or included in the preliminary or final
prospectus, as amended or supplemented, or (ii) the omission or the 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 Elbit will reimburse the Company and
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, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in strict conformity with
written information furnished by Elbit specifically for inclusion therein. The
foregoing indemnity agreement is subject to the condition that, insofar as it
relates to any such untrue statement (or alleged untrue statement) or omission
(or alleged omission) made in the preliminary prospectus but eliminated or
remedied in the amended prospectus at the time the registration statement
becomes effective or in the final prospectus, such indemnity agreement shall not
inure to the benefit of (i) the Company and (ii) any underwriter, if a copy of
the final prospectus was not furnished to the person or entity asserting the
loss, liability, claim or damage at or prior to the time such furnishing is
required by the 1933 Act; 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 subsection
3(b) 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 Elbit, which consent shall not be unreasonably withheld.
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(c) Promptly after receipt by an indemnified party pursuant to the
provisions of Sections 3(a) or 3(b) of notice of the commencement of any action
involving the subject matter of the foregoing indemnity provisions, such
indemnified party will, if a claim thereof is to be made against the
indemnifying party pursuant to the provisions of said Section 3(a) or 3(b),
promptly notify the indemnifying party of the commencement thereof; but the
omission to notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than hereunder, except to
the extent that the indemnifying party is prejudiced in its ability to defend
such action. 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 3(a) or 3(b) 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 fifteen (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. The indemnification provisions under this Section 3 will remain in
full force and effect regardless of any investigation by the indemnified
party(ies).
4. MISCELLANEOUS.
4.1 GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed in all respects by, the internal laws of the State of Israel
(without giving effect to principles of conflicts of laws). Each party to this
Agreement consents to the exclusive jurisdiction and venue of the courts of
District of Tel Aviv-Jaffa in the State of Israel.
4.2 SUCCESSORS AND ASSIGNS. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assignees, heirs, executors and
administrators of the parties hereto.
4.3 ENTIRE AGREEMENT; NO RIGHTS IN FAVOR OF THIRD PARTY; AMENDMENTS. This
Agreement constitutes the full and entire understanding and agreement between
the parties with regard to the subject matters hereof and thereof shall
supersede all prior agreements and understandings relating thereto. This
Agreement shall not be construed as conferring any rights to any person not a
party hereto. Neither this Agreement nor any term hereof may be amended, waived,
discharged or terminated except by an instrument in writing signed by the
parties hereto.
4.4 NOTICES. All notices and other communications required or permitted to
be given or sent hereunder shall be in writing and shall be deemed to have been
sufficiently given or delivered for all purposes if mailed by registered mail,
sent by fax or delivered by hand to the following respective addresses until
otherwise directed by notice as aforesaid:
To Elbit: Elbit Ltd.
3 Azrieli Center, 42nd Floor,
Triangle Building, Tel Aviv
Tel: 00-000 0000
Fax: 03 - 000 0000
Att: General Counsel
To the Company: Elbit Vision Systems Ltd.
Xxx Xxxxxxxxxx Xxxx
X.X.X. 000
Xxxxxxx 00000, Xxxxxx
Fax: 04 - 000-0000
Attention: Chief Executive Officer
With a copy to: Xxxxx Xxxxx & Co.
One Azrieli Xxxxxx (Xxxxx Xxxxx)
00xx Xxxxx
Xxx Xxxx 00000, Xxxxxx
Fax: 03 - 000-0000
Att: Xxxxxx Xxxxxxx
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provided, however, that notice of change of address shall be effective only upon
actual receipt.
All notices sent by registered mail shall be deemed to have been received:
(i) within three (3) business days following the date on which it was deposited
postage prepaid in the mail; (ii) within one (1) business day after it was
transmitted by fax and confirmation of receipt has been obtained; and (iii) if
delivered by hand shall be deemed to have been received at the time of actual
receipt.
4.5 DELAYS OR OMISSIONS. No delay or omission to exercise any right, power
or remedy, upon any breach or default under this Agreement, shall impair any
such right, power or remedy of such holder nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of any
similar breach or default thereafter occurring.
4.6 WAIVER OF DEFAULT. No waiver with respect to any breach or default in
the performance of any obligation under the terms of this Agreement shall be
deemed to be a waiver with respect to any subsequent breach or default, whether
of similar or different nature. Any waiver, permit, consent or approval of any
kind or character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement shall be effective only if made in writing and only
to the extent specifically set forth in such writing. All remedies, either under
this Agreement or by virtue of law or otherwise afforded to any holder, shall be
cumulative and not alternative.
4.7 RIGHTS; SEVERABILITY. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
The parties hereto shall be obliged to draw up an arrangement in accordance with
the meaning and the object of the invalid provision.
4.8 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
5. CORPORATE APPROVAL. Notwithstanding anything to the contrary herein,
this Agreement is contingent upon approval of this Agreement by the shareholders
of the Company. The Company will recommend that its shareholders approve the
terms of the Agreement at the next meeting of its shareholders, which will take
place no later than December 31, 2006.
IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement in one or more counterparts, as of the date first above-mentioned.
_______________________ ___________________________
ELBIT LTD. ELBIT VISION SYSTEMS LTD.
By:____________________ By: _______________________
Title: ________________ Title: ____________________
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