EXHIBIT 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 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 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 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 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 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
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 charger or
by-laws of the Company or EFL, except for such consents 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 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 a 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 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, 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 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
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 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 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: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
By: /s/ Xxxxxx Xxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxx
Title: President and Chief Executive Officer
Agreed and accepted:
KOOR INDUSTRIES LTD.
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: General Counsel
By: /s/ Ran Maidan
-----------------------------------------------
Name: Ran Maidan
Title: Assistant to the Chief Financial Officer
