EXHIBIT 4.12
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement"), dated as of March 9,
2004, is made by and between TEFRON LTD., an Israeli corporation ("Company"),
and BRITTANY CAPITAL MANAGEMENT LIMITED, organized and existing under the laws
of the Bahamas (the "Subscriber").
RECITALS
WHEREAS, upon the terms and subject to the conditions of the Private
Equity Credit Agreement ("Purchase Agreement"), between the Subscriber and the
Company, the Company has agreed to issue and sell to the Subscriber up to
Maximum Commitment Amount , as defined in the Purchase Agreement of the common
stock of the Company ("Subscribed Shares"), NIS 1.0 par value per share (the
"Common Stock"), and
WHEREAS, to induce the Subscriber to execute and deliver the Purchase
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, "Securities Act"),
and applicable state securities laws with respect to the Subscribed Shares;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Subscriber
hereby agree as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms shall have the
following meaning:
(i) "Potential Material Event" means any of the following: (a) the
possession by the Company of material information not ripe for disclosure in a
Registration Statement, which shall be evidenced by a good faith determination
by the Board of Directors of the Company that disclosure of such information in
the Registration Statement would be detrimental to the business and affairs of
the Company, or (b) any material engagement or activity by the Company which
would, in the good faith determination of the Board of Directors of the Company,
be adversely affected by disclosure in a Registration Statement at such time,
which determination shall be accompanied by a good faith determination by the
Board of Directors of the Company that the Registration Statement would be
materially misleading absent the inclusion of such information.
(ii) "Subscription Date" means the date of this Agreement.
(iii) "Subscriber" has the meaning set forth in the preamble to this
Agreement.
(iv) "Register", "registered" and "registration" refer to a registration
effected by preparing and filing a Registration Statement or Statements in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any successor rule providing for offering securities on a delayed or
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").
(v) "Registrable Securities" means the Subscribed Shares.
(vi) "Registration Statement" means a registration statement of the
Company under the Securities Act.
(b) Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Purchase Agreement.
2. REGISTRATION.
(A) MANDATORY REGISTRATION. The Company shall prepare and file with the
SEC, no later than April 29, 2004 ("Required Filing Date") a Registration
Statement on Form F-2 ("Registration Statement"), or such other appropriate
Registration Statement, pursuant to Rule 457(o) of the Securities Act, no less
than such number of Put Shares equal to the result of (a) $8,000,000 divided by
(b) the Purchase Price calculated as if a Put Notice had been delivered 15
Trading Days prior to the Required Filing Date.Such Registration Statement shall
state that, in accordance with the Securities Act, it also covers such
indeterminate number of additional shares of Common Stock as may become issuable
to prevent dilution resulting from stock splits, or stock dividends. If at any
time the number of Subscribed Shares exceeds the aggregate number of shares of
Common Stock then registered, the Company shall, within ten (10) business days
after receipt of written notice from the Subscriber, file with the SEC an
additional Registration Statement on Form F-2 or any other applicable
registration statement, to register the Subscribed Shares that exceed the
aggregate number of shares of Common Stock already registered.
(B) TERMINATION. If the Registration Statement covering the Registrable
Securities required to be filed by the Company pursuant to Section 2(a) hereof
is not declared effective within one hundred twenty (120) days after the
Required Filing Date, then the commitment contained in the Purchase Agreement
and in this Agreement (the "Commitment") shall, at the option of the Investor,
terminate.
3. OBLIGATION OF THE COMPANY. In connection with the registration of
the Registrable Securities, the Company shall do each of the following:
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(a) Prepare, and file with the SEC on or before the Required
Filing Date , a Registration Statement with respect to not less than the number
of Registrable Securities provided in Section 2(a) above, and, thereafter, use
its reasonable efforts to cause the Registration Statement relating to the
Registrable Securities to become effective the earlier of (a) five (5) business
days after notice from the Securities and Exchange Commission that the
Registration Statement may be declared effective, or (b) one hundred twenty
(120) days after the Required Filing Date, and keep the Registration Statement
effective at all times until the earliest of (i) the date that is one year after
the completion of the last Closing Date under the Purchase Agreement, (ii) the
date when the Subscriber may sell all Registrable Securities under Rule 144
without volume limitations, or (iii) the date the Subscriber no longer owns any
of the Registrable Securities (collectively, the "Registration Period"), which
Registration Statement (including any amendments or supplements, thereto and
prospectuses contained therein) shall 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, in the light of the circumstances
under which they were made, not misleading;
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and use its reasonable efforts to allow the Subscriber to
comply with the provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by the Registration
Statement under Rule 144 promulgated under the Securities Act until the
expiration of the Registration Period.
(c) Permit a single firm of counsel designated by Subscriber to
review the Registration Statement and all amendments and supplements thereto a
reasonable period of time (but not less than three (3) Business Day) prior to
their filing with the SEC, and not file any document in a form to which such
counsel reasonably objects.
(d) Notify Subscriber and Subscriber's legal counsel identified
to the Company (which, until further notice, shall be deemed to be Xxxxxxx &
Xxxxxx, LLP, ATTN: Xxxxxx Xxxxxxx, Esq.; "SUBSCRIBER'S COUNSEL") (and, in the
case of (i)(A) below, not less than one (1) Business Day prior to such filing)
and (if requested by any such person) confirm such notice in writing no later
than one (1) Business Day following the day (i): (A) when a prospectus or any
prospectus supplement or post-effective amendment to the Registration Statement
is proposed to be filed; (B) whenever the SEC notifies the Company whether there
will be a "review" of such Registration Statement; (C) whenever the Company
receives (or a representative of the Company receives on its behalf) any oral or
written comments from the SEC respect of a Registration Statement (copies or, in
the case of oral comments, written or oral summaries of such comments shall be
promptly furnished by the Company to Subscriber's Counsel); 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 SEC or any other Federal or state
governmental authority for amendments or supplements to the Registration
Statement or the prospectus or for additional information; (iii) of the issuance
by the SEC 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) if at any time any of the representations
or warranties of the Company contained in any agreement (including any
securities purchase agreement) contemplated hereby ceases to be true and correct
in all material respects; (v) 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 (vi) of
the occurrence of any event that to the knowledge of the Company makes any
statement made in the Registration Statement or the prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to the Registration Statement,
the prospectus or other documents In addition, the Company shall furnish
Subscriber's Counsel with copies of all intended written responses to the
comments contemplated in clause (C) of this Section not later than one (1)
Business Day in advance of the filing of such responses with the SEC so that
Subscriber shall have the opportunity to comment thereon.
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(e) Furnish to Subscriber, (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company, one (1) copy of the Registration Statement, each preliminary prospectus
and the prospectus, and each amendment or supplement thereto, and (ii) such
number of copies of a prospectus, including a preliminary prospectus, and all
amendments and supplements thereto and such other documents, as the Subscriber
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by the Subscriber;
(f) Use diligent efforts to (i) register and/or qualify the
Registrable Securities covered by the Registration Statement under such other
securities or blue sky laws of such jurisdictions as the Subscriber may
reasonably request and in which significant volumes of shares of Common Stock
are traded, (ii) prepare and file in those jurisdictions such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof at all
times during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualification in effect at all
times during the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions: PROVIDED, HOWEVER, that the Company shall not be required in
connection therewith or as a condition thereto to (A) qualify to do business in
any jurisdiction where it would not otherwise be required to qualify but for
this Section 3(f), (B) subject itself to general taxation in any such
jurisdiction, (C) file a general consent to service of process in any such
jurisdiction, (D) provide any undertakings that cause more than nominal expense
or burden to the Company or (E) make any change in its charter or by-laws or any
then existing contracts, which in each case the Board of Directors of the
Company determines to be contrary to the best interests of the Company and its
stockholders;
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(g) As promptly as practicable after becoming aware of the
happening of any event of which the Company has knowledge as a result of which
the prospectus included in the Registration Statement, as then in effect,
includes any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
("Registration Default"), use all diligent efforts to promptly prepare a
supplement or amendment to the Registration Statement or other appropriate
filing with the SEC to correct such untrue statement or omission, and any other
necessary steps to cure the Registration Default, and deliver a number of copies
of such supplement or amendment to the Subscriber as the Subscriber may
reasonably request. Except as provided in Section 3(i) below, failure to cure
the Registration Default within thirty (30) days (and sixty (60) days in the
event the Registration Default results from the filing of a Form 20-F) shall
result in the Company paying liquidated damages of 1% of the cost of all common
stock then held by the investor and an additional 1% for each additional thirty
(30) day period (sixty (60) day period in the event the Registration Default
results from the filing of a Form 20-F) and an additional fraction of 1% pro
rata for each portion of each additional thirty (30) day period (sixty (60) day
period in the event the Registration Default results from the filing of a Form
20-F) , beginning on the date of suspension. Notwithstanding the foregoing, the
Company shall not pay any penalty in the event the Company, in writing, within
20 Trading Days after the end of the relevant thirty (30) day period (or sixty
(60) day period in the event the Registration Default results from the filing of
a Form 20-F) offers to promptly purchase the Common Stock then held by the
Investor or introduces to the Investor a third party willing to do so at the
cost price to the Investor.
(h) As promptly as practicable after becoming aware of such
event, notify the Subscriber (or, in the event of an underwritten offering, the
managing underwriters) of the issuance by the SEC of any notice of effectiveness
or any stop order or other suspension of the effectiveness of the Registration
Statement at the earliest possible time;
(i) Notwithstanding the foregoing, if at any time or from time to
time after the date of effectiveness of the Registration Statement, the Company
notifies Investor in writing of the existence of a Potential Material Event or
that the Company has financial information that must be disclosed on a Form 20-F
or a Form 6-K ("Blackout Notice"), Investor shall not offer or sell any
Registrable Securities, or engage in any other transaction involving or relating
to the Registrable Securities, from the time of the giving of notice with
respect to a Potential Material Event or updated financial information until
Investor receives written notice from the Company that such Potential Material
Event either has been disclosed to the public or no longer constitutes a
Potential Material Event or that such financial information has been disclosed
to the public, as the case may be; PROVIDED, HOWEVER, that (a) the Company may
not so suspend the right to such holders of Registrable Securities for more than
six fifteen (15) day periods ("Blackout Period") in the aggregate during any
12-month period during the periods the Registration Statement is required to be
in effect, or (b) that if such Blackout Period exceeds the permitted ten (10)
day periods, the Company shall pay damages of 1% of the cost of all common stock
then held by the Investor for each thirty (30) day period, beginning on the date
such Blackout Period should have ended and an additional fraction of 1% pro rata
for each portion of each additional thirty (30) day period. Notwithstanding the
foregoing, the Company shall not pay any penalty in the event the Company
offers, in writing, within 20 Trading Days after the end of the relevant thirty
(30) day period (or sixty (60) day period in the event the Registration Default
results from the filing of a Form 20-F)to promptly purchase the Common Stock
then held by the Investor or introduces to the Investor a third party willing to
do so at the cost price to the Investor.
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(j) Use its commercially reasonable efforts, if eligible, either
to (i) cause all the Registrable Securities covered by the Registration
Statement to be listed on the Principal Market (as defined in the Purchase
Agreement) and on each additional national securities exchange on which
securities of the same class or series issued by the Company are then listed, if
any, if the listing of such Registrable Securities is then permitted under the
rules of such exchange, or (ii) secure designation of all the Registrable
Securities covered by the Registration Statement as a National Association of
Securities Dealers Automated Quotations System ("Nasdaq) "Small Capitalization"
within the meaning of Rule 11Aa2-1 of the SEC under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the quotation of the Registrable
Securities on the Nasdaq Small Cap Market; or if, despite the Company's
commercially reasonable efforts to satisfy the preceding clause (i) or (ii), the
Company is unsuccessful in doing so, to secure NASD authorization and quotation
for such Registrable Securities on the over-the-counter bulletin board;
PROVIDED, HOWEVER, that the Subscriber acknowledges that the Company does not
currently meet the requirements for continued listing on the New York Stock
Exchange.:
(k) Provide a transfer agent for the Registrable Securities not
later than the effective date of the Registration Statement;
(l) (m) Subsequent to the delivery of a Put Notice, take all
other reasonable actions necessary to expedite and facilitate distribution to
the Subscriber of the Registrable Securities pursuant to the Registration
Statement.
4. OBLIGATIONS OF THE SUBSCRIBER. In connection with the registration
of the Registrable Securities, the Subscriber shall have the following
obligations;
(a) It shall be a condition precedent to the obligations of the
Company to complete the registration pursuant to this Agreement with respect to
the Registrable Securities that the Subscriber shall timely furnish to the
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of the Registrable Securities held by
it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall timely execute such documents in connection
with such registration as the Company may reasonably request.
(b) The Subscriber, by such Subscriber's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Registration Statement hereunder; and
(c) The Subscriber agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(g)
or 3(h) above, the Subscriber will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until the Subscriber receives the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or 3(h) and, if
so directed by the Company, the Subscriber shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in the Subscriber's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice.
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5. EXPENSES OF REGISTRATION. (a) All reasonable expenses incurred in
connection with Registrations, filings or qualifications pursuant to Section 3,
including, without limitation, all Registration, listing, and qualifications
fees, printers and accounting fees and the fees and disbursements of counsel for
the Company shall be borne by the Company. Fees and disbursements for counsel
for the Investor is governed by Section 10.8 of the Purchase Agreement. If the
Investor requests an underwritten offering of the Registrable Securities, the
Investor will be responsible for the fees and disbursements of the underwriters
(including any underwriting commissions and discounts) and their legal counsel
and accountants.
(b) Except as otherwise provided for in SCHEDULE 5(b) attached
hereto, the Company nor any of its subsidiaries has, as of the date hereof, and
the Company shall not on or after the date of this Agreement until disposition
of the Registrable Securities or the termination of the Purchase Agreement,
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to Investor in this Agreement or otherwise conflicts
with the provisions hereof. Except as otherwise provided for in SCHEDULE 5(b),
the Company has not previously entered into any agreement granting any
registration rights with respect to any of its securities to any person. Except
as otherwise provided for in this SECTION 5, and without limiting the generality
of the foregoing, without the written consent of Investor, the Company shall not
grant to any person the right to request the Company to Register any securities
of the Company under the Securities Act unless the rights so granted do not
cause the termination of this Agreement (without derogating from the Company's
right to terminate the Purchase Agreement and this Agreement in accordance with
the provisions of Section 2.6 of the Purchase Agreement) , and are not otherwise
in conflict or inconsistent with the provisions of this Agreement and the other
Transaction Documents
6. INDEMNIFICATION. After Registrable Securities are included in a
Registration Statement under this Agreement:
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(a) To the extent permitted by law, the Company will indemnify
and hold harmless, the Subscriber, the directors, if any, of such Subscriber,
the officers, if any, of such Subscriber, and each person, if any, who controls
the Subscriber within the meaning of the Securities Act or the Exchange Act
(each, an "Indemnified Person"), against any losses, claims, damages,
liabilities or expenses (joint or several) incurred (collectively, "Claims") to
which any of them may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any post-effective amendment thereof or 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, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in the light of the
circumstances under which the statements therein were made, not misleading or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation under the
Securities Act, the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being collectively referred to as
"Violations"). The Company shall reimburse the Subscriber, promptly as such
expenses are incurred and are due and payable, for any reasonable legal fees or
other reasonable expenses incurred by them in connection with investigating or
defending any such Claim. Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 6(a) shall not
(i) apply to any Claims arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(e) hereof; (ii) be available to
the extent such Claim is based on a failure of the Subscriber to deliver or
cause to be delivered the prospectus made available by the Company; or (iii)
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld. The Subscriber will indemnify the Company, its officers,
directors and agents (including legal counsel) and each person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act against any Claims to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company, by or on behalf
of such Subscriber, expressly for use in connection with the preparation of the
Registration Statement, subject to such limitations and conditions set forth in
the immediately preceding sentence. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of the
Indemnified Person or Indemnified Party.
(b) Promptly after receipt by an Indemnified Person under this
Section 6 of notice of the commencement of any action (including any
governmental action), such Indemnified Person shall, if a Claim in respect
thereof is to be made against any indemnifying party under this Section 6,
deliver to the indemnifying party a written notice of the commencement thereof
within 10 calendar days 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 control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person, as the case may be; PROVIDED, HOWEVER, that an
Indemnified Person shall have the right to retain its own counsel with the
reasonable fees and expenses to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person and the indemnifying
party would be inappropriate due to actual or potential differing interests
between such Indemnified Person and any other party represented by such counsel
in such proceeding. In such event, the Company shall pay for only one separate
legal counsel for the Subscriber selected by the Subscriber. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person under this Section 6, except to the extent
that the indemnifying party is prejudiced in its ability to defend such action.
The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.
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7. CONTRIBUTION. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; PROVIDED,
HOWEVER, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6; (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation; and (c)
contribution by any seller of Registrable Securities shall be limited in amount
to the net amount of proceeds received by such seller from the sale of such
Registrable Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making available to the
Investor the benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time permit the
Investor to sell securities of the Company to the public without registration
("Rule 144"), while the Investor owns Registrable Securities, the Company agrees
to use its reasonable best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other documents
required of the Company under the Exchange Act; and
(c) furnish to the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent reports and documents so
filed by the Company solely if unavailable by XXXXX, and (iii) such other
information as may be reasonably requested to permit the Investors to sell such
securities pursuant to Rule 144 without registration; and
(d) at the request of any Investor of Registrable Securities, give its
Transfer Agent irrevocable instructions (supported by an opinion of Company
counsel, if required or requested by the Transfer Agent) to the effect that,
upon the Transfer Agent's receipt from such Investor of:
(i) a certificate (a "Rule 144 Certificate") certifying
(A) that such Investor has held the shares of Registrable
Securities which the Investor proposes to sell (the
"Securities Being Sold") for a period of not less than
(1) year and (B) as to such other matters as may be
appropriate in accordance with Rule 144 under the
Securities Act, and
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(ii) an opinion of counsel acceptable to the Company (for
which purposes it is agreed that the initial Investor's
Counsel shall be deemed acceptable if such opinion is not
promptly given by Company Counsel) that, based on the Rule
144 Certificate, Securities Being Sold may be sold pursuant
to the provisions of Rule 144, even in the absence of an
effective Registration Statement,
the Transfer Agent is to effect the transfer of the Securities Being Sold
and issue to the buyer(s) or transferee(s) thereof one or more stock
certificates representing the transferred Securities Being Sold without any
restrictive legend and without recording any restrictions on the transferability
of such shares on the Transfer Agent's books and records (except to the extent
any such legend or restriction results from facts other than the identity of the
Investor, as the seller or transferor thereof, or the status, including any
relevant legends or restrictions, of the shares of the Securities Being Sold
while held by the Investor). If the Transfer Agent requires any additional
documentation at the time of the transfer, the Company shall deliver or cause to
be delivered all such reasonable additional documentation as may be necessary to
effectuate the issuance of an unlegended certificate.
9. MISCELLANEOUS.
(A) REGISTERED OWNERS. A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
(B) RIGHTS CUMULATIVE; WAIVERS. The rights of each of the parties under
this Agreement are cumulative. The rights of each of the parties hereunder shall
not be capable of being waived or varied other than by an express waiver or
variation in writing. Any failure to exercise or any delay in exercising any of
such rights shall not operate as a waiver or variation of that or any other such
right. Any defective or partial exercise of any of such rights shall not
preclude any other or further exercise of that or any other such right. No act
or course of conduct or negotiation on the part of any party shall in any way
preclude such party from exercising any such right or constitute a suspension or
any variation of any such right.
(C) BENEFIT; SUCCESSORS BOUND. This Agreement and the terms, covenants,
conditions, provisions, obligations, undertakings, rights, and benefits hereof,
shall be binding upon, and shall inure to the benefit of, the undersigned
parties and their heirs, executors, administrators, representatives, successors,
and permitted assigns.
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(D) ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof. There are no
promises, agreements, conditions, undertakings, understandings, warranties,
covenants or representations, oral or written, express or implied, between them
with respect to this Agreement or the matters described in this Agreement,
except as set forth in this Agreement and in the other documentation relating to
the transactions contemplated by this Agreement. Any such negotiations,
promises, or understandings shall not be used to interpret or constitute this
Agreement.
(E) ASSIGNMENT. The rights to have the Company register Registrable
Securities pursuant to this Agreement may be assigned by the Subscriber only to
an entity listed on Schedule 1 hereto (which Schedule will state such entity's
relationship to the Subscriber) (the "Transferee"), and only if: (a) the Company
receives a legal opinion in form and substance satisfactory to the Company that
the proposed transfer complies with federal and state securities laws and does
not adversely effect the validity of the transactions executed (or to be
executed) under this Agreement and the Purchase Agreement under federal and
state securities laws; (b) the assignment requires that the Transferee be bound
by all of the provisions contained in this Agreement, and Subscriber, the
Company and the Transferee enter into a written agreement, which shall be
enforceable by the Company against the Transferee and by the Transferee against
the Company, to assign such rights; and (c) immediately following such transfer
or assignment, the further disposition of such securities by the Transferee is
restricted under the Securities Act and applicable state securities laws. Prior
to the assignment the Company shall have the right to perform its own due
diligence regarding the Transferee and have the right to approve the assignment,
provided that such approval shall not be unreasonably withheld. In the event of
any delay in filing or effectiveness of the Registration Statement as a result
of such assignment, the Company shall not be liable for any damages arising from
such delay, or the payments set forth in Section 2(c) hereof. Except as provided
in this Section 9(e), the right to have the Company register Registrable
Securities pursuant to this Agreement may not be assigned or transferred by the
Subscriber.
(F) AMENDMENT. Any provision of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and Subscriber. Any amendment or waiver effected in accordance with this
Section 9 shall be binding upon the Company and any subsequent Transferees.
(G) SEVERABILITY. Each part of this Agreement is intended to be
severable. In the event that any provision of this Agreement is found by any
court or other authority of competent jurisdiction to be illegal or
unenforceable, such provision shall be severed or modified to the extent
necessary to render it enforceable and as so severed or modified, this Agreement
shall continue in full force and effect.
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(H) NOTICES. Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when personally
delivered (by hand, by courier, by telephone line facsimile transmission,
receipt confirmed, or other means) or sent by certified mail, return receipt
requested, properly addressed and with proper postage pre-paid (i) if to the
Company, at its executive office and (ii) if to the Subscriber, at the address
set forth under its name in the Purchase Agreement, with a copy to its
designated attorney, or at such other address as each such party furnishes by
notice given in accordance with this Section 9(h), and shall be effective, when
personally delivered, upon receipt and, when so sent by certified mail, five (5)
business days after deposit with the United States Postal Service.
(I) GOVERNING LAW. This Agreement shall be governed by the interpreted
in accordance with the laws of the State of New York without reference to its
conflicts of laws rules or principles. Each of the parties consents to the
exclusive jurisdiction of the federal courts of the State of Delaware in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on FORUM NON COVENIENS, to the bringing of any such proceeding in such
jurisdictions.
(J) JURY TRIAL WAIVER. THE COMPANY AND SUBSCRIBER HEREBY WAIVE A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE
PARTIES HERETO AGAINST THE OTHER IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THE TRANSACTION DOCUMENTS
(K) CONSENTS. The person signing this Agreement on behalf of each party
hereby represents and warrants that he has the necessary power, consent and
authority to execute and deliver this Agreement on behalf of that party.
(L) FURTHER ASSURANCES. In addition to the instruments and documents to
be made, executed and delivered pursuant to this Agreement, the parties hereto
agree to make, execute and deliver or cause to be made, executed and delivered,
to the requesting party such other instruments and to take such other actions as
the requesting party may reasonably require to carry out the terms of this
Agreement and the transactions contemplated hereby.
(M) SECTION HEADINGS. The Section headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(N) CONSTRUCTION. Unless the context otherwise requires, when used
herein, the singular shall be deemed to include the plural, the plural shall be
deemed to include each of the singular, and pronouns of one or no gender shall
be deemed to include the equivalent pronoun of the other or no gender.
(O) EXECUTION IN COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same agreement. This Agreement, once executed by a
party, may be delivered to the other party hereto by telephone line facsimile
transmission of a copy of this Agreement bearing the signature of the party so
delivering this Agreement. A facsimile transmission of this signed Agreement
shall be legal and binding on all parties hereto.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
COMPANY:
TEFRON LTD.
BY: /s/ Xxxxx Xxxxxx / /s/ Xxx Xxxxx
--------------------------------
ITS: CEO / CFO DATE:
---------------------------------------
BRITTANY CAPITAL MANAGEMENT
LIMITED
BY: /s/ Xxxxx X. Xxxxxx
-------------------
ITS: Xxxxx X. Xxxxxx , President
---------------------------
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SCHEDULE 1
Permitted Assignees
Southridge Partners L.P.
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SCHEDULE (5) (b)
The Company is party to a Registration Rights Agreement between the Company,
Macpell Industries Ltd. and Arwol Holdings Ltd. New investors in the Company,
Norfet, Limited Partnership and Lebor Partners, .L.P., are expected to join the
agreement upon the closing of their respective investments in the Company,
pursuant to their agreements with the Company entered into on February 17, 2004
and March 3, 2004, respectively.
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