EXHIBIT 2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made as
of the 17 day of May, 2000, by and between Electric Fuel Corporation
("EFC") and Koor Industries Limited ("KOOR").
RECITALS
WHEREAS, Koor has purchased certain Common Stock of EFC in
accordance with a Share Purchase and Agreement (the "INVESTMENT
AGREEMENT"), dated as of May 17, 2000, made by and among EFC and Koor.
WHEREAS, EFC, would like to xxxxx Xxxx certain registration
rights with respect to their Common Stock in accordance with the terms
hereof.
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the parties hereto agree as follows:
1. Certain definitions:
(i) The term "Act" means the Securities Act of 1933, as amended.
(ii) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC as a successor thereto which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
(iii) The terms "register", "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the
declaration or ordering of effectiveness of such registration statement or
document.
(iv) The term "Holder" refers to a holder of Registrable
Securities.
(v) The term "Registrable Securities" means all EFC Common
Stock purchased by Koor under the Investment Agreement; provided, however,
that any Common Stock that could be distributed by the holder thereof (in
accordance with applicable law) within three (3) months without the
registration of such shares, shall not be deemed to be Registrable
Securities.
(vi) The term "SEC" shall mean the Securities and Exchange
Commission.
2. Registration Rights
Following the Closing of the Investment Agreement, EFC shall file as
soon as possible with the SEC a registration statement on Form S-3 (the
"Registration Statement") and shall use its best reasonable efforts to have
such Registration Statement to be declared effective as soon as possible
with the SEC, which shall include all of the Common Stock issued to Koor
under the Investment Agreement.
3. Lock Up by Koor
3.1 Koor undertakes not to:
(i) Sell, transfer, pledge or otherwise dispose of any of the
Common Stock issued to it under the Investment Agreement prior to the
completion of 2 months as of the closing of the Investment Agreement.
(ii) Sell, transfer, pledge or otherwise dispose of more than
33.33% of the Common Stock issued to it under the Investment Agreement
prior to the completion of 4 months as of the closing of the Investment
Agreement.
(iii) Sell, transfer, pledge or otherwise dispose of more than
66.66% of the Common Stock issued to it under the Investment Agreement
prior to the completion of 6 months as of the closing of the Investment
Agreement.
3.2 Notwithstanding anything to the contrary herein, Koor may
enter into private Hedging transactions with respect to the Registrable
Securities.
4. None of the information supplied or to be supplied by EFC for
inclusion or incorporation by reference in the Registration Statement will,
at the time the Registration Statement are filed with the SEC and at the
time they become effective under the Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statement therein not misleading.
5. EFC will pay all expenses in connection with the filing of the
Registration Statement, other than expenses of Koor's counsel, and shall
keep the Registration Statement effective and current until the completion
of a period of 18 months as of the date the completion of the lock up on
the Common Stock held by Koor as detailed in Section 3.1 above, plus any
applicable Disclosure Blackout Period, Non-Disclosure Blackout Period and
Primary Offering Black Out Period (collectively, the "EFFECTIVENESS
PERIOD").
6. With a view to making available to the Holder the benefits of Rule
144 promulgated under the Securities Act and any other rule or regulation
of the SEC that may at any time permit a Holder to sell securities of EFC
to the public without registration or pursuant to the registration
statements on Form S-3, EFC agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other
documents required of EFC under the Securities Act and the 1934
Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request a written
statement by EFC that it has complied with the foregoing
subsections 6(a) and 6(b).
7. In the event that Koor shall unreasonably delay any action
required to be taken by it in order for EFC to be able to file a
Registration Statement in compliance with the foregoing provisions, EFC
shall not be deemed to be in breach of these provisions in respect of non-
registration of the pertinent shares of Koor under such Registration
Statement.
8. If EFC determines in good faith that the Registration Statement
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein as necessary to make the
statements therein not misleading in light of the circumstances then
existing, EFC shall promptly make such disclosure and amend any such
Registration Statement as may be required under applicable securities laws
to keep such Registration Statement effective, and Koor shall, upon receipt
of notice from EFC to that effect, be prohibited from reselling any EFC
Common Stock for a period of 60 days ("DISCLOSURE BLACKOUT PERIOD"), unless
EFC notifies them of the earlier termination of any Disclosure Blackout
Period; provided, however, that in no event shall a cumulative Disclosure
Blackout Periods exceed 60 days during any 12-month period.
9. Notwithstanding the aforesaid, if EFC's Board of Directors
determines that the registration and distribution of the EFC Common Stock
pursuant to a Registration Statement would interfere with any pending
financing, acquisition, public offering, corporation reorganization or any
other material corporate development involving EFC (or would require
premature disclosure thereof), during the Effectiveness Period, EFC may at
any time and from time to time give Koor written notice of such
determination and upon receipt of such notice, Koor shall be prohibited
from reselling any EFC Common Stock for a period of up to 60 days (a
"NON-DISCLOSURE BLACKOUT PERIOD"), unless EFC notifies Koor of the earlier
termination of any Non-Disclosure Blackout Period; provided, however, that
in no event shall the cumulative Non- Disclosure Blackout Period exceed 120
days during the Effectiveness Period.
10. In addition, if EFC sells shares of its Common Stock in an
underwritten public offering (the "PRIMARY OFFERING") pursuant to a
registration statement, Koor shall be prohibited from reselling any EFC
Common Stock for a period of 180 days from the effective date of such
Primary Offering ( a "PRIMARY OFFERING BLACK OUT PERIOD"), unless EFC
notifies Koor of the earlier termination of such Primary Offering Black Out
Period.
11. Indemnification relating to the Registration Statement
11.1 To the extent permitted by law, EFC will indemnify and hold
harmless the Holder, the partners, officers, directors and shareholders of
the Holder, legal counsel and accountants for the Holder, any underwriter
(as defined in the Securities Act) for such Holder and each person, if any,
who controls Holder or underwriter within the meaning of the Securities Act
or the 1934 Act against any losses, expenses, claims, damages, or
liabilities to which they become subject under the Securities Act, the 1934
Act or other United States federal or state laws or the securities laws of
the State of Israel or any other jurisdiction in which the Registrable
Shares are sold, insofar as such losses, expenses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"violation"): (i) any untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto; (ii)
the omission or alleged omission to state therein a material fact required
to be stated therein, or necessary to make the statements therein not
misleading in light of the circumstances under which they were made, or
(iii) any violation or alleged violation by the Company of the Securities
Act, the 1934 Act, any Federal or state securities law or any rule or
regulation promulgated under the Securities Act, the 1934 Act or any
federal or state securities law, or any of the securities laws of the State
of Israel or any other jurisdiction in which the Registrable Shares are
sold or any rule or regulation thereunder; and EFC will reimburse each such
Holder, officer or director, underwriter or controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
Section shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability, or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable to the Holder, underwriter or
controlling person in any such case for any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished to the Company expressly for use in connection with
such registration by the Holder, underwriter or controlling person provided
further, however, that the foregoing indemnity agreement with respect to
any preliminary prospectus shall not inure to the benefit of any Holder or
underwriter, or any person controlling such Holder or underwriter, from
whom the person asserting any such losses, claims, damages or liabilities
purchased shares in the offering, if a copy of the prospectus (as then
amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such
Holder or underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
shares to such person, and if the prospectus (as so amended or
supplemented) would have cured the defect giving rise to such loss, claim,
damage or liability.
11.2 To the extent permitted by law, each selling Holder will
indemnify and hold harmless EFC, each of its directors, each of its
officers who have signed the Registration Statement, each person, if any,
who controls EFC within the meaning of the Securities Act, any underwriter
(within the meaning of the Securities Act) for EFC, any person who controls
such underwriter, and any Holder selling securities in such registration
statement or any directors or officers or any persons controlling such
parties, against any losses, claims, expenses, damages, or liabilities to
which any of the foregoing persons become subject under the Securities Act,
the 1934 Act or other United States federal or state securities law, or any
of the securities laws of the State of Israel or any other jurisdiction in
which the Registrable Shares are sold, insofar as such losses, expenses,
claims, damages, liabilities (or actions in respect thereto) arise out of
or are based upon any Violation (including alleged Violation), in each case
to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished to EFC
by such Holder expressly for use in connection with such registration; and
each such Holder will reimburse any persons intended to be indemnified
pursuant to this section for any legal or other expenses reasonably
incurred by such person in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if
such settlement is effected without the consent of the Holder, which
consent shall not be unreasonably withheld; provided that in no event shall
any indemnity under this Section exceed the gross proceeds from the
offering received by such Holder.
11.3 Promptly after receipt by an indemnified party of notice
of the commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 11, notify the indemnifying party
in writing of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party
so desires, jointly with any other indemnifying party similarly noticed, to
assume the defense thereof with counsel mutually satisfactory to the
parties; provided, however, that an indemnified party (together with all
other indemnified parties that may be represented without conflict by one
counsel) shall have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between
such indemnified party and any other party represented by such counsel in
such proceeding. The failure to notify an indemnifying party in writing
within a reasonable time of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnifying party under this
Section 11, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 11.
11.4 If the indemnification provided for in this Section 11 is
held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or
expense referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such loss,
liability, claim, damage or expense in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of
the indemnified party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage or expense,
as well as any other relevant equitable considerations. The relative fault
of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or
omission.
11.5 The obligations of EFC and the Holder under this Section
11 shall survive the completion of any offering of Registrable Securities
hereunder.
12. Miscellaneous.
12.1 Further Assurances. Each of the parties hereto shall
perform such further acts and execute such further documents as may
reasonably be necessary to carry out and give full effect to the provisions
of this Agreement and the intentions of the parties as reflected thereby.
12.2 Governing Law; Jurisdiction. This Agreement shall be
governed by and construed according to the laws of the State of Israel,
without regard to the conflict of laws provisions thereof. Any dispute
arising under or in relation to this Agreement shall be resolved in the
competent court of Tel Aviv-Jaffa district, and each of the parties hereby
submits irrevocably to the jurisdiction of such court.
12.3 Successors and Assigns. This Agreement and the rights
hereunder shall be deemed to be solely for the benefit of Koor and its
successors, and the registration rights hereunder may not be assigned or
transferred to third parties.
12.4 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and enforceable
against the parties actually executing such counterpart, and all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
first hereinabove set forth.
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
