Exhibit 7(f)
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") made as of February
21, 2006, by and among ELBIT VISION SYSTEMS LTD. (the "COMPANY") and
MIVTACH-SHAMIR HOLDINGS LTD. ("MIVTACH").
W I T N E S S E T H:
WHEREAS, the Company and Mivtach are parties to that certain Agreement
dated January 2, 2006 (the "LEAD AGREEMENT") pursuant to which Mivtach has have
agreed to provide the Company with a loan in consideration for the Company
issuing Mivtach (i) a Convertible Note (the "NOTE") which is convertible into
six million (6,000,000) Ordinary Shares of the Company (the "NOTE SHARES"); and
(ii) a warrant (the "WARRANT") to purchase up to four million (4,000,000)
Ordinary Shares of the Company (the "WARRANT SHARES" and together with the Note
Shares, the "LOAN SHARES"); and
WHEREAS, concurrently with the consummation of the Lead Agreement, Mivtach
has agreed to purchase an aggregate of two million nine hundred thirty nine
thousand one hundred ninety two (2,939,192) Ordinary Shares of the Company from
certain shareholders of the Company (the "SCAN SHARES"); and
WHEREAS, in order to induce Mivtach to execute and deliver the Lead
Agreement, 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 SCAN SHARES.
(a) Within sixty (60) days of the Closing Date (as defined in the Lead
Agreement), the Company shall file with the United States Securities and
Exchange Commission (the "SEC") a registration statement under the 1933 Act with
respect to the registration of the Scan Shares (the "SCAN REGISTRATION
STATEMENT") and use its best efforts to keep such registration statement
effective until the date on which Mivtach has sold all the Scan Shares covered
by the Scan Registration Statement (the "SCAN REGISTRATION PERIOD") .
(b) The Company shall prepare and file with the SEC such amendments and
supplements to the Scan Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Scan Registration Statement
effective at all times during the Scan Registration Period.
(c) The Company shall furnish to Mivtach such number of copies of
prospectuses and such other documents as Mivtach may reasonably request, in
order
to facilitate the public sale or other disposition of all or any of the Scan
Shares by Mivtach;
(d) The Company shall notify Mivtach upon receipt of confirmation from the
SEC that the Scan Registration Statement has been declared effective.
(e) The Company shall notify Mivtach, at the time when a prospectus
relating to the Scan Shares is required to be delivered under the 1933 Act, as
soon as is reasonably practical, of any event as a result of which the
prospectus included in the Scan 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 any Mivtach, prepare a supplement or amendment
to the prospectus so that, when delivered to purchasers of the Scan 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 Mivtach on the day of the filing of such supplement or
amendment.
(f) Once the Scan Registration Statement has been declared effective by the
SEC, the Company shall cause all the Scan Shares to be quoted on the Over the
Counter Bulletin Board or any other exchange on which the Company's Ordinary
Shares are listed.
(g) In the event of the issuance of any stop order suspending the
effectiveness of the Scan 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 Scan Registration Statement for sale in any
jurisdiction, the Company shall notify Mivtach on the day of such issuance, use
reasonable efforts to promptly obtain the withdrawal of such order, and notify
Mivtach on the day of such withdrawal, if so ordered.
2. REGISTRATION OF NOTE SHARES AND WARRANT SHARES.
(a) Within ninety (90) days of the conversion by Mivtach of the Note into
the Note Shares, in accordance with the terms of the Note, the Company shall
file with the SEC a registration statement under the 1933 Act with respect to
the registration of the Loan Shares (the "LOAN REGISTRATION STATEMENT" and
together with the Scan Registration Statement, the "REGISTRATION STATEMENTS")
and use its best efforts to keep such registration statement effective until the
date on which Mivtach has sold all the Loan Shares covered by the Loan
Registration Statement (the "LOAN REGISTRATION PERIOD").
(b) The Company shall prepare and file with the SEC such amendments and
supplements to the Loan Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Loan Registration Statement
effective at all times during the Loan Registration Period.
(c) The Company shall furnish to Mivtach such number of copies of
prospectuses and such other documents as Mivtach may reasonably request, in
order
to facilitate the public sale or other disposition of all or any of the Scan
Shares by Mivtach;
(d) The Company shall notify Mivtach upon receipt of confirmation from the
SEC that the Loan Registration Statement has been declared effective.
(e) The Company shall notify Mivtach, at the time when a prospectus
relating to the Scan Shares is required to be delivered under the 1933 Act, as
soon as is reasonably practical, of any event as a result of which the
prospectus included in the Loan 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 any Mivtach, prepare a supplement or amendment
to the prospectus so that, when delivered to purchasers of the Scan 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 Mivtach on the day of the filing of such supplement or
amendment.
(f) Once the Loan Registration Statement has been declared effective by the
SEC, the Company shall cause all the Scan Shares to be quoted on the Over the
Counter Bulletin Board or any other exchange on which the Company's Ordinary
Shares are listed.
(g) In the event of the issuance of any stop order suspending the
effectiveness of the Loan 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 Loan Registration Statement for sale in any
jurisdiction, the Company shall notify Mivtach on the day of such issuance, use
reasonable efforts to promptly obtain the withdrawal of such order, and notify
Mivtach on the day of such withdrawal, if so ordered.
3. EXPENSES. The Company shall bear all expenses in connection with the
registration procedures set forth in Sections 1 and 2 above and the registration
of the Scan Shares and Loan Shares pursuant to the Registration Statements,
other than fees and expenses, if any, of counsel or other advisers to Mivtach or
underwriting discounts, brokerage fees and commissions incurred by the Mivtach,
if any.
4. 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 harmless, to the fullest extent
permitted by law, Mivtach, and each person, if any, who controls Mivtach 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 Mivtach or controlling person 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 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 Mivtach and each such controlling
person of Mivtach, 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 Mivtach or such
controlling persons in writing specifically for inclusion therein; provided,
further, that the indemnity agreement contained in this subsection 4(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) Mivtach will indemnify and hold harmless the Company, any underwriter
for the Company, and each person, if any, who controls the Company or such
underwriter, 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 controlling
person and/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 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 Mivtach will reimburse the Company, any underwriter and each
such controlling person of the Company or 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
Mivtach 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 4(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 Mivtach, which consent shall not be unreasonably
withheld.
(c) Promptly after receipt by an indemnified party pursuant to the
provisions of Sections 4(a) or 4(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 4(a) or 4(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 4(a) or 4(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.
5. MISCELLANEOUS.
5.1 ARBITRATION. All disputes arising under this Agreement or in connection
with the transactions hereunder shall be resolved between the parties in good
faith, however, if these efforts fail the dispute shall be resolved by
arbitration by a sole arbitrator. The arbitrator shall be chosen by agreement of
the parties hereto. If they fail so to agree within twenty (20) days after a
party shall have requested such arbitration, the arbitrator shall be appointed
by the Chairman of the Israel Bar. The arbitration proceedings will take place
in Tel-Aviv, Israel. The arbitrator shall not be bound by any judicial rules of
evidence or procedure but he shall be bound by the substantive law of Israel and
he will have to elaborate the grounds of his decision. The arbitral award shall
be final and binding upon the parties, and judgment upon the award may be
entered in any court having jurisdiction, or application may be made to
such court for a judicial acceptance of the award or for an order of
enforcement, as the case may be. Subject to the above-mentioned arbitration
provisions, the sole jurisdiction for disputes arising under this Agreement
shall be vested with the courts of Tel-Aviv, Israel.
5.2 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.
5.3 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.
5.4 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 Mivtach: Mivtach-Shamir Holdings Ltd.
00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx-Xxxx 00000, Xxxxxx
Tel: 00-0000000
Fax: 00-0000000
With a copy to: Xxxxxx Xxxxxxx Schnitzer, Adv.
Shnitzer, Xxxxxxx, Xxxxxx & Co.
Gibor Sport Xxxx 00xx xxxxx
0 Xxxxxxxx Xxxxx Xxxxxx,
Xxxxx Xxx 00000, Israel
Tel: 00-0000000
Fax: 00-0000000
To the Company: Elbit Vision Systems Ltd.
Xxx Xxxxxxxxxx Xxxx
X.X.X. 000
Xxxxxxx 00000, Xxxxxx
Fax: 00-0000000
Attention: Chief Executive Officer
With a copy to: Xxxxx Xxxxxxxx, Adv.
Xxxxx Xxxxx & Co.
One Azrieli Xxxxxx (Xxxxx Xxxxx)
00xx Xxxxx
Xxx Xxxx 00000, Xxxxxx
Fax: 00-0000000
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.
5.5 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.
5.6 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.
5.7 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.
5.8 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.
5.9 GOVERNING LAW. This Agreement shall be governed exclusively by, and
construed solely in accordance with, the laws of the State of Israel, excluding
the choice of law rules thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement one or more counterparts, as of the date first above-mentioned.
MIVTACH-SHAMIR HOLDINGS LTD. ELBIT VISION SYSTEMS LTD.
By: Xxxx Xxxxxx & Xxxxx Xxxxxx By: Xxxxxxx Xxxxxxx & Yaky Yanay
Signature: Signature:
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