REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of December 31, 2001, among Mentergy Ltd., a company
organized under the laws of the State of Israel (the "Company"), and the
undersigned Investors (each an "Investor," and collectively, the
"Investors").
This Agreement is made pursuant to the Refinancing Agreement,
dated as of the date hereof, among the Company and the Investors (the
"Refinancing Agreement").
The Company and the Investors hereby agree as follows:
1. Definitions
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Capitalized terms used and not otherwise defined herein that are
defined in this Agreement shall have the meanings given such terms in the
Refinancing Agreement. As used in this Agreement, the following terms shall
have the following meanings:
"Advice" shall have meaning set forth in Section 4(m).
"Affiliate" means, with respect to any Person, any other Person
that directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, "control,"
when used with respect to any Person, means the possession, direct or
indirect, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms of "affiliated,"
"controlling" and "controlled" have meanings correlative to the foregoing.
"Business Day" means any day except Friday, Saturday and any day
which shall be a legal holiday or a day on which banking institutions in
the State of Israel generally are authorized or required by law or other
government actions to close.
"Closing Date" shall have the meaning set forth in the Agreement.
"Commission" means the United States Securities and Exchange
Commission.
"Debentures" means the Convertible Debentures issued to certain
of the Investors pursuant to the Refinancing Agreement.
"Effectiveness Date" means the 120th day following the written
request for registration by the Initiating Interested Holders or the
Initiating Holders pursuant to Section 2(a) or (b) hereof, as the case may
be.
"Effectiveness Period" shall have the meaning set forth in
Section 2(e).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" or "Holders" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section
6(c).
"Indemnifying Party" shall have the meaning set forth in Section
6(c).
"Interested Parties" means Xxxxxx Insurance Company Ltd.,
Discount Investment Company Ltd., Xxxxxx Xxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxx
Xxxxxxxxx and Xxxxxx Xxxxxx.
"Investor" means Bank Ha'poalim B.M., Bank Leumi Le'Israel B.M.,
The First International Bank of Israel, Ltd., and Trefoil Gilat Investors
L.P. ("Trefoil"), and the Interested Parties.
"Losses" shall have the meaning set forth in Section 6(a).
"Person" means an individual or a corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration,
as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Registrable Securities
covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
"Registrable Securities" means (i) the Shares acquired by the
Interested Parties and Trefoil pursuant to the refinancing Agreement and
(ii) the Shares issuable to the Investors upon exercise of the Debentures
and/or the Warrants.
"Registration Statement" means the registration statements
contemplated by Section 2, including (in each case) the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the Company's Ordinary Shares, NIS 0.04 nominal
value per share.
"Special Counsel" means one special counsel to the Holders.
"Underwritten Registration or Underwritten Offering" means a
registration in connection with which securities of the Company are sold to
an underwriter for re-offering to the public pursuant to an effective
registration statement.
"Warrants" means the warrants issued to certain of the Investors
pursuant to the Refinancing Agreement.
2. Demand Registration Rights
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(a) Demand by Interested Parties. At any time prior to June 30,
2003, any one or more Interested Parties ("Initiating Interested Holders")
shall have the right to require the Company to effect the registration
under the Securities Act of all of such Interested Parties' Registrable
Securities, by delivering a written notice thereof to the Company
specifying the number of Registrable Securities and the intended method of
distribution. Upon receipt of such notice from the Initiating Interested
Holder(s), the Company will promptly give written notice of such requested
registration to all other Interested Parties, and thereupon the Company
will use its commercially reasonable efforts to effect registration under
the Securities Act of (i) the Registrable Securities that the Company has
been so requested to register by such Initiating Interested Holders and
(ii) all other Registrable Securities which the Company has been requested
to register by other Interested Parties (such holders together with the
Initiating Holders are hereinafter referred to as the "Interested Selling
Holders") by written notice given to the Company within ten (10) days after
the giving of such written notice by the Company.
(b) Demand by Investors. At any time on and after June 30, 2003,
any one or more Investors holding in the aggregate at least 15% of the
outstanding Shares ("Initiating Holders") shall have the right to require
the Company to effect the registration under the Securities Act of all or a
portion of such Investors' Registrable Securities, by delivering a written
notice thereof to the Company specifying the number of shares of
Registrable Securities and the intended method of distribution. Upon
receipt of such notice from the Initiating Holders, the Company will
promptly give written notice of such requested registration to all
registered holders of Registrable Securities, and thereupon the Company
will use its commercially reasonable efforts to effect registration under
the Securities Act of (i) the Registrable Securities that the Company has
been so requested to register by such Initiating Holders and (ii) all other
Registrable Securities which the Company has been requested to register by
the holders thereof (such holders together with the Initiating Holders are
hereinafter referred to as the "Selling Holders") by written notice given
to the Company within ten (10) days after the giving of such written notice
by the Company. Each Initiating Holder shall be entitled to require the
Company to effect one registration pursuant to this Section 2(b).
(c) Registration Statement Form. Registrations under this Section
2 shall be on such appropriate registration form of the Commission as shall
be selected by the Company.
(d) Selection of Underwriters. The underwriters of each
underwritten offering of the Registrable Securities so to be registered
shall be selected by the Company and shall be reasonably acceptable to the
Interested Selling Holders (in the case of a registration under Section
2(a) above) or the Selling Holders (in the case of a registration under
Section 2(b) below) of more than 50% of the Registrable Securities so to be
registered.
(e) Effectiveness. The Company shall use its commercially
reasonable efforts to cause the Registration Statement to be declared
effective under the Securities Act prior to the Effectiveness Date, and
shall use its commercially reasonable efforts to keep such Registration
Statement continuously effective under the Securities Act and Registration
Statement demanded pursuant to Section 2(b) shall not be deemed to have
been effected (including for purposes of the last sentence of Section 2(b))
until the date which is one hundred and twenty days after the date that
such Registration Statement is declared effective by the Commission or such
earlier date when all Registrable Securities covered by such Registration
Statement have been sold or may be sold without volume restrictions
pursuant to Rule 144(k) as determined by the counsel to the Company (the
"Effectiveness Period").
(f) Rights to Withdraw. If the managing underwriter of any
underwritten offering shall advise the Company and the Interested Selling
Holders or the Selling Holders, as the case may be, that the Registrable
Securities requested to be included in such Registration Statement cannot
be sold in such offering within a price range acceptable to the holders of
66-2/3% of the Registrable Securities requested to be included in such
registration, then the holders of 66-2/3% of the Registrable Securities
requested to be included in such registration shall have the right to
notify the Company in writing that they have determined that the
Registration Statement be abandoned or withdrawn, in which event the
Company shall abandon or withdraw such Registration Statement, provided
however, that as to registration under Section 2(a) the Initiating
Interested Holder(s) will be entitled to continue such registration
notwithstanding such notice. In the event of such abandonment or
withdrawal, such request shall not be counted for purposes of the requests
for registration to which the Selling Holders, are entitled pursuant to
Section 2(b).
(g) Priority in Requested Registration. If the managing
underwriter of any Underwritten Offering with respect to any registration
under this Section 2 shall advise the Company that, in its opinion, the
number of securities requested to be included in such registration exceeds
the number which can be sold in such offering within a price range
acceptable to the holders of 66-2/3% of the Registrable Securities
requested to be included in such registration, and the Interested Selling
Holders or the Selling Holders, as the case may be, do not elect to abandon
or withdraw the Registration Statement pursuant to Section 2(f), the
Company will include in such registration, to the extent of the number
which the Company is so advised can be sold in such offering without so
adversely affecting the price, the following Registrable Securities
requested to be included in such registration: (i) in the case of
registration pursuant to Section 2(a), the Registrable Securities requested
to be included by the Interested Selling Holders pro rata among such
holders on the basis of the percentage of the Registrable Securities of
such holders requested so to be registered and (ii) in the case of
registration pursuant to Section 2(b) pursuant to Section 3 hereunder.
(h) Postponement.
(i) Section 2(a) Registration Statement. The Company shall
be entitled to postpone for a period not exceeding ninety (90) consecutive
days in every 12 months, the filing of any Registration Statement required
to be prepared and filed by it pursuant to Section 2(a) or the
effectiveness of any such Registration Statement as a result of
circumstances beyond its control or if the managing underwriter of any
underwritten offering shall advise the Company that, in its reasonable
opinion, the registration of the Registrable Securities requested to be
registered would materially affect the price and/or market of the Shares.
In such event, the Company shall promptly notify the proposed Interested
Selling Holders.
(ii) Section 2(b) Registration Statement. The Company shall
be entitled to postpone the filing of any Registration Statement required
to be prepared and filed by it pursuant to Section 2(b) or the
effectiveness of any such Registration Statement as a result of a legal
impediment or as a result of other circumstances beyond its control and/or
if or if the managing underwriter of any underwritten offering shall advise
the Company that, in its reasonable opinion, the registration of the
Registrable Securities requested to be registered would materially affect
the price and/or market of the Shares and/or the parties to the Agreement
otherwise agree. In such event, the Company shall promptly notify the
proposed Selling Holders. The Company may exercise such right to postpone
only once every 12 months and for a period not exceeding sixty days.
(i) No Holder may participate in any Underwritten Offering
hereunder unless such Holder (i) agrees to sell its Registrable Securities
on the basis provided in any underwriting agreement approved by the Persons
entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, power of attorney, indemnities, underwriting
agreements and other documents required under the terms of such
arrangements.
3. Piggyback Registration. If the Company at any time proposes to
register any of its securities, other than a registration on Form S-8 or
Form F-4, it shall give notice to the Investors of such intention. Upon the
written request of any Investor given within ten (10) days after receipt of
any such notice, the Company shall take all actions under its power and
control to include in such registration all of the Registrable Securities
held by such Investor and indicated in such request, so as to permit the
disposition of the shares so registered. Notwithstanding anything in this
Section 3, if the managing underwriter of an Underwritten Offering advises
the Company in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the Registrable Securities to be
included in such Registration Statement at the request of the Investors
pursuant to this Section shall be excluded from such registration and
Underwritten Offering to the extent necessary to satisfy such limitation in
the following manner: (i) in the first registration of securities subject
to this Section 3, first shares held by the Investors other than the
Interested Parties pro rata based on the respective number of Registrable
Securities requested to be included in such Registration Statement, and
then to the extent necessary, Registrable Securities requested to be
included in such Registration Statement by the Interested Parties pro rata
based on the respective number of Registrable Securities requested to be
included in such Registration Statement by such Interested Parties; and
(ii) in all other registrations after the first registration subject to
this Section 3, pro rata based on the respective number of Registrable
Securities requested to be included in such Registration Statement by the
Investors, without distinction among Interested Parties and other
Investors. The notice and registration rights of the Investors hereunder
will expire as to any Investor when all of the shares held by such Investor
may be resold without volume restrictions pursuant to Rule 144(k).
4. Registration Procedures
In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Prepare and file with the Commission a Registration Statement
in accordance with Section 2 hereof and cause the Registration Statement to
become effective and remain effective as provided herein; provided,
however, that prior to the filing of the Registration Statement or any
amended or supplement thereto the Company shall furnish to the Holders of
Registrable Securities to be sold copies of such documents proposed to be
filed.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may
be necessary to keep the applicable Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period; (ii) cause the related Prospectus to be amended or supplemented by
any required Prospectus supplement, and as so supplemented or amended to be
filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and (iii) comply in all material
respects with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by
the Registration Statement during the applicable period in accordance with
the intended methods of disposition by the Holders thereof.
(c) Notify the Holders of Registrable Securities to be sold (i)
(A) when a Registration Statement, Prospectus of any Prospectus Supplement
or post-effective amendment to a Registration Statement is proposed to be
filed; (B) whenever the Commission notifies the Company whether there will
be a "review" of such Registration Statement; (C) whenever the Company
receives any comments from the Commission in respect of a Registration
Statement; and (D) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental
authority for amendments or supplements to the Registration Statement or
Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iv) of the receipt by
the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening
of any Proceeding for such purpose; and
(d) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order suspending the effectiveness of the
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale
in any jurisdiction, at the earliest practicable moment.
(e) Furnish to each Holder of Registrable Securities to be sold,
without charge, at least one conformed copy of each Registration Statement
and each amendment thereto, including financial statements and schedules,
all documents incorporated or deemed to be incorporated therein by
reference, and all exhibits to the extent requested by such Holder
(including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.
(f) Deliver to each Holder of Registrable Securities to be sold,
without charge, as many copies of the Prospectus or Prospectuses (including
each form of prospectus) and each amendment or supplement thereto as such
Holder may reasonably request; and the Company hereby consents to the use
of such Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement
thereto.
(g) Use its best efforts to register or qualify or cooperate with
the selling Holders in connection with the registration or qualification
(or exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder requests in writing,
to keep each such registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts
or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then
so qualified or to take any action that would subject it to general service
of process in any such jurisdiction where it is not than so subject or
subject the Company to any material tax in any such jurisdiction where it
is not then so subject.
(h) Use its best efforts to cause all Registrable Securities
relating to such Registration Statement to be listed on the Nasdaq National
Market ("NASDAQ") or any other securities exchange, quotation system,
market or over-the-counter bulletin board, if any, on which similar
securities issued by the Company are then listed following effectiveness of
such registration statement.
(i) In the case of an Underwritten Offering, enter into such
agreements (including an underwriting agreement in form, scope and
substance as is customary in Underwritten Offerings) and take all such
other actions in connection therewith (including those reasonably requested
by any managing underwriters and the Holders of a majority of the
Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities, and whether or not an
underwriting agreement is entered into, (i) make such representations and
warranties to such Holders and such underwriters as are customarily made by
issuers to underwriters in underwritten public offerings, and confirm the
same if and when requested; (ii) obtain and deliver copies thereof to each
Holder and the managing underwriters, if any, of opinions of counsel to the
Company addressed to each Holder and each such underwriter, covering the
matters customarily covered in opinions requested in Underwritten Offerings
and such other matters as may be reasonably requested by such Special
Counsel and underwriters; (ii) use its best reasonable efforts to obtain
and deliver copies to the Holders and the managing underwriters, if any, of
"cold comfort" letters and updates thereof from the independent certified
public accountants of the Company, addressed to the Company in form and
substance as are customary in connection with Underwritten Offerings; and
(iii) deliver such documents and certificates as may be reasonably
requested by the Holders of a majority of the Registrable Securities being
sold, their Special Counsel and any managing underwriters to evidence the
continued validity of the representations and warranties made pursuant to
clause 3(i)(i) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement
entered into by the Company.
(j) Make available for inspection by the selling Holders and any
representative of such Holders at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries, and
cause the officers, directors, agents and employees of the Company and its
subsidiaries to supply all information in each case reasonably requested by
any such Holder, representative, underwriter, attorney or accountant in
connection with the Registration Statement; provided, however, that any
information that is determined in good faith by the Company in writing to
be of a confidential nature at the time of delivery of such information
shall be kept confidential by such Persons, unless (i) disclose of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities; or (ii) such information
becomes generally available to the public other than as a result of a
disclosure or failure to safeguard by such Person.
(k) Comply with all applicable rules and regulations of the
Commission.
(l) The Company may require each selling Holder to furnish to the
Company such information regarding the distribution of such Registrable
Securities and the beneficial ownership of Shares held by such Holder as is
required by law to be disclosed in the Registration Statement, and the
Company may exclude from such registration the Registrable Securities of
any such Holder who unreasonably fails to furnish such information within a
reasonable time after receiving such request.
(m) Each Holder covenants and agrees that (i) it will not sell
any Registrable Securities under the Registration Statement until it has
received copies of the Prospectus as then amended or supplemented as
contemplated in Section 4(f) and notice from the Company that such
Registration Statement and any post-effective amendments thereto have
become effective as contemplated by Section 4(c) and (ii) it and its
officers, directors or Affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the
Registration Statement.
Each Holder agrees by its acquisition of such Registrable
Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 4(c)(ii),
4(c)(iii) or 4(c)(iv), such Holder will forthwith discontinue disposition
of such Registrable Securities under the Registration Statement, until such
Holder's receipt of the copies of the supplemented Prospectus and/or
amended Registration Statement, or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement.
5. Registration Expenses
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(a) Section 2(a) Registration Statement. All fees and expenses
incident to the filing and effectiveness of a Registration Statement under
Section 2(a) hereof shall be borne by the Interested Selling Holders pro
rata based on the number of Registrable Securities held by each such Holder
and to be sold pursuant to such Registration Statement whether or not
pursuant to an Underwritten Offering and whether or not the Registration
Statement is filed or becomes effective and whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without
limitation, fees and expenses (A) with respect to filings required to be
made with NASDAQ and (B) in compliance with state securities or Blue Sky
laws) (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing
prospectuses if the printing of prospectuses is requested by the managing
underwriters, if any, or by the holders of a majority of the Registrable
Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses of the Company, (iv) fees and disbursements
of counsel for the Company, Special Counsel for the Holders, and
underwriters, if any, (v) Securities Act liability insurance, if the
Company so desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including any underwriters.
(b) Section 2(b) Registration Statement. All fees and expenses
incident to the filing and effectiveness of a Registration Statement under
Section 2(b) hereof shall be borne by the Company whether or not pursuant
to an Underwritten Offering and whether or not the Registration Statement
is filed or becomes effective and whether or not any Registrable Securities
are sold pursuant to the Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation,
the items listed in clauses (i) through (vi) of Section 5(a) above.
6. Indemnification
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(a) Indemnification by the Company. The Company, shall indemnify
and hold harmless each Holder, the officers, directors, agents brokers,
investment advisors and employees of each of them, each Person who controls
any such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted
by applicable law, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation and
reasonable attorneys' fees) and expenses (collectively, "Losses"), insofar
as such Losses arise out of or relate to any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the
extent that such untrue statements or omissions arise out of or are based
upon information furnished in writing to the Company by such Holder for use
therein, or to the extent that such information relates to such Holder or
such Holder's proposed method of distribution of Registrable Securities;
provided, however, that the Company shall not be liable to any Holder or
any officer, director, agent, broker, investment advisor or employee or any
Person who controls such Holder or any officer, director, agent or employee
of such controlling Person with respect to any untrue or alleged untrue
statement or omission or alleged omission made in any preliminary
Prospectus that is corrected in a final Prospectus (or any amendment or
supplement thereto) if the person asserting such Losses purchased Shares
from a Holder in reliance upon such preliminary Prospectus (or a Prospectus
which was subsequently amended or supplemented) but was not sent or given a
copy of the final Prospectus (as amended or supplemented) or the
Prospectus, as subsequently amended or supplemented, that was made
available by the Company to such Holder at or prior to written confirmation
of the sale of the Shares to such person in any case where such delivery of
such final Prospectus (as amended or supplemented) is required.
(b) Indemnification by Holders. Each Holder shall, severally and
not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by the applicable law,
from and against all Losses (as determined by a court of competent
jurisdiction in a final judgment not subject to appeal or review) arising
out of or based upon any untrue statement of a material fact contained in
the Registration Statement, any Prospectus, or any form of prospectus, or
in any amendment or supplement thereto, or arising out of or based upon any
omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading to the extent, that such untrue
statement or omission is contained in any information so furnished in
writing by such Holder to the Company for inclusion in the Registration
Statement or such Prospectus such Prospectus or such form of prospectus or
to the extent that such information relates to such Holder or such Holder's
proposed method of distribution of Registrable Securities.
(c) Conduct of Indemnification Proceedings. If any Proceeding
shall be brought or asserted against any Person entitled to indemnity
hereunder (an "Indemnified Party"), such Indemnified Party shall promptly
notify the Person from whom indemnity is sought (the "Indemnifying Party")
in writing; and the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except
to the extent that it shall be determined by a court of competent
jurisdiction that such failure shall have materially adversely prejudiced
the Indemnifying Party.
(d) An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expenses of such
Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed
in writing to pay such fees and expenses; or (2) the Indemnifying Party
shall have failed promptly to assume the defense of such Proceeding and to
employ counsel reasonably satisfactory to such Indemnified Party in any
such Proceeding; or (3) the named parties to any such Proceeding (including
any impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party shall have been advised by
counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party. The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,
unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter
of such Proceeding.
(e) Contribution. If a claim for indemnification under Section
5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions
that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include, subject to the
limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such
fees or expenses if the indemnification provided for in this Section was
available to such party in accordance with its terms. The parties hereto
agree that it would not be just and equitable if contribution pursuant to
this Section 5(d) were determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
7. Miscellaneous
-------------
(a) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the same shall be in writing and signed by
the Company and the Holders of at least two-thirds of the then outstanding
Registrable Securities; provided however, any amendment relating to Section
2(a) shall require the affirmative vote of two-thirds of the then
outstanding Registrable Securities held by the Interested Holders.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of at least a majority of
the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(b) Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered upon
(i) receipt, when delivered personally (ii) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 5:00 p.m. (Israel time)
on a Business Day; (iii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:00 p.m. (Israel
time) on any; or (iv) receipt, when delivered by a reputable overnight
delivery service, in each case properly addressed to the party to receive
the same. The address and facsimile numbers for such communications shall
be:
If to the Company: Mentergy Ltd.
Address: 4 Rechov Ha'chilazon, 52522, Ramat Gan
Facsimile: 000-0-0000000
Attention: Bytan Mucznick
With copies to: Gross, Kleinhandler, Hodak, Halevy, Xxxxxxxxx & Co.
Law Offices
One Azrieli Center, Circular Tower
Xxx Xxxx 00000, Xxxxxx
Facsimile: 972-3-607-4422
Attention: Xxxxxx Xxxxx, Adv.
If to an Investor, to its address in the Agreement.
Each party shall provide five days' prior written notice to the other
party of any change in address or facsimile number.
If to any other Person who is then the registered Holder;
To the address of such Holder as it appears in the stock transfer
books of the Company or such other address as may be designated
in writing hereafter, in the same manner, by such Person.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties and shall inure to the benefit of each Holder. Each Holder may
assign its rights under this Registration Rights Agreement to a third
party, upon (i) a sale of such Holder's Registrable Securities to such
third party, and (ii) written consent of such third party to be bound by
this registration Agreement. However, if the Holder is a bank, such Holder
may assign its corresponding rights under this Registration Rights
Agreement, under same terms and conditions stated above, only to another
bank or financial institute. It is hereby agreed however, that an
Interested Holder may not assign its rights under Section 2(a) hereto
without the Company's consent. The Company may not assign its rights or
obligations hereunder without the prior written consent of each Holder.
(d) Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements or understandings, oral or written, with
respect to such matters.
(e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement.
(f) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Israel without regard to the principles of conflicts of law thereof. Each
party hereby irrevocably submits to the exclusive jurisdiction of the Tel
Aviv-Jaffa District Court for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper.
(g) Severability. If any term, provisions, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term, provision, covenant or
restriction.
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
MENTERGY LTD.
/s/ X. Xxxxxx
By: /s/ X. Xxxxxxx
------------------------------
Name: X. Xxxxxx Xxxxx Xxxxxxx
Title: Chairman CFO
------------------------------- --------------------------------
XXXXXX INSURANCE COMPANY LTD. DISCOUNT INVESTMENT COMPANY LTD.
/s/ Xxxxx Xxxxxxxx
By: /s/ Root Lapidot By: /s/ Xxxx Xxx-Xxx
---------------------------- -----------------------------
Name: Root Lapidot Name:
Title: V. President Title:
/s/ X. Xxxxxx /s/ X. Xxxxxx by proxy
------------------------------- --------------------------------
XXXXXX XXXXXX XXXXXX XXXXXXXXX
/s/ X. Xxxxxx /s/ X. Xxxxxx by proxy
------------------------------- --------------------------------
XXXXXX XXXXXXXXX XXXXXX XXXXXX
/s/ Xxxxx Xxxxx
/s/ Xxxxxxx Xxxxx, Adv. /s/ Jacob Konortov
------------------------------- --------------------------------
TREFOIL GILAT INVESTORS L.P. FIRST INTERNATIONAL BANK OF
ISRAEL LTD.
By: Xxxxxxx Xxxxx, Adv. By:
---------------------------- -----------------------------
Name: Name:
Title: Title:
/s/ Xxxx Xxxxx /s/ Xxxxx Xxxxxx
/s/ Xxx Xxxxx /s/ Xxxx Xxxx
------------------------------- --------------------------------
BANK HAPOALIM B.M. BANK LEUMILE-ISRAEL B.M.
By: By:
---------------------------- -----------------------------
Name: Name:
Title: Title:
