EXHIBIT 10.1
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MEDIS TECHNOLOGIES LTD.
6% SENIOR CONVERTIBLE NOTES DUE 2010
REGISTRATION RIGHTS AGREEMENT
July 26, 2005
XXXXXXX SECURITIES CO. L.P.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Medis Technologies Ltd., a Delaware corporation (the "Company"),
proposes to issue and sell to the initial purchaser (the "Initial Purchaser")
named in the purchase agreement, dated July 26, 2005, by and between the Initial
Purchaser and the Company (the "Purchase Agreement"), its 6% Senior Convertible
Notes due 2010 (the "Securities"), upon the terms and subject to the conditions
set forth in such Purchase Agreement. As an inducement to the Initial Purchaser
to enter into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Initial Purchaser thereunder, the Company agrees with the
Initial Purchaser for the benefit of Holders (as defined herein) from time to
time of the Registrable Securities (as defined herein) as follows:
1. DEFINITIONS.
Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Purchase Agreement. As used in this
Registration Rights Agreement (this "Agreement"), the following defined terms
shall have the following meanings:
"Additional Interest" has the meaning assigned thereto in Section 7(a)
hereof.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Amount" means, at the time of computation of any Additional
Interest, (i) with respect to the Securities, the principal amount of the
Securities then outstanding, and (ii) with respect to shares of Common Stock
which have been issued upon conversion of Securities pursuant to the Indenture,
the principal amount of Securities that was converted into such number of
shares.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in the City of New York,
State of New York are authorized or obligated by law or executive order to
close.
"Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.
"Common Stock" means the Company's common stock, par value $0.01 per
share.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i) hereof.
"Effective Time" means the time at which the Commission declares any
Shelf Registration Statement effective or at which time any Shelf Registration
Statement otherwise becomes effective.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Holder" means any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).
"Indenture" means the Indenture, dated as of July 26, 2005, between the
Company and Wachovia Bank, National Association, pursuant to which the
Securities are to be issued, and as amended and supplemented from time to time
in accordance with its terms.
"Issue Date" means the first date of original issuance of the
Securities.
"Majority of Holders" means Holders holding over 50% of the aggregate
principal amount of Registrable Securities outstanding.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Election and Questionnaire substantially in the form of
Appendix A hereto.
"Notice Holder" has the meaning assigned thereto in Section 3(a)(i)
hereof.
The term "person" means an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement, 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 any Shelf Registration Statement and by all other amendments and
supplements to such prospectus, including all material incorporated by reference
in such prospectus and all documents filed after the date of such prospectus by
the Company under the Securities Act or the Exchange Act and incorporated by
reference therein.
"Registrable Securities" means all or any portion of the Securities
issued from time to time under the Indenture and the shares of Common Stock
issuable upon conversion of such Securities until (i) the earlier of: (A) two
years from the last date of original issuance of any
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Securities, and (B) the last date that the Company or any of its Affiliates (or
any predecessor thereto) was the owner of such Securities; or (ii) such shorter
period ending on the date that (w) all of the Holders of Registrable Securities
that are not Affiliates of the Company are able to sell all Registrable
Securities immediately without restriction pursuant to Rule 144(k) under the
Securities Act (or any successor rule or regulation which permits resales
thereof without further registration under the Securities Act), (x) all
Registrable Securities registered under the Shelf Registration Statements have
been sold, (y) all Registrable Securities have ceased to be outstanding, or (z)
all Registrable Securities are sold to the public pursuant to Rule 144 (or any
successor rule or regulation which permits resales thereof without further
registration under the Securities Act).
"Registration Default" has the meaning assigned thereto in Section 7(a)
hereof.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments and supplements to such registration statement and
Prospectus, including post-effective amendments, and all exhibits and all
material incorporated by reference in such registration statement and
Prospectus, and any additional "shelf" registration statements filed under the
Securities Act to permit the registration and sale of Registrable Securities
pursuant to Section 3(a)(ii) hereof.
"Suspension Period" has the meaning assigned thereto in Section 2(c)
hereof.
"Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.
The term "underwriter" means any underwriter, or any person deemed to
be an underwriter pursuant to the Securities Act and Exchange Act and the
respective rules and regulations thereunder, as in effect at any relevant time,
of Registrable Securities in connection with an offering thereof under a Shelf
Registration Statement.
Wherever there is a reference in this Agreement to a percentage of the
"principal amount" of Registrable Securities or to a percentage of Registrable
Securities, each share of Common Stock issued upon conversion of the Securities
which is a Registrable Security shall represent a principal amount or percentage
of Registrable Securities determined based on a quotient, (i) the numerator of
which shall be equal to the aggregate principal amount of Securities issued,
less the aggregate principal amount of Securities outstanding as of the date of
determination, and (ii) the denominator of which shall be equal to the aggregate
number of shares of Common Stock issued upon conversion of the Securities which
are Registrable Securities as of the date of determination.
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2. SHELF REGISTRATION.
(a) The Company shall, as soon as practicable, but no later than 120
calendar days following the Issue Date, file with the Commission a Shelf
Registration Statement relating to the offer and sale of the Registrable
Securities by the Holders from time to time in accordance with the methods of
distribution elected by such Holders and, thereafter, shall use its commercially
reasonable efforts to cause such initial Shelf Registration Statement to be
declared effective under the Securities Act no later than 180 calendar days
following the Issue Date; provided, however, that only Holders who are Notice
Holders shall be entitled to be named as a selling securityholder in any Shelf
Registration Statement as of the date it is declared effective or to use the
Prospectus forming a part thereof for offers and resales of Registrable
Securities. None of the Company's securityholders (other than Holders of
Registrable Securities) shall have the right to include any of the Company's
securities in the Shelf Registration Statement.
(b) Subject to Section 2(c) hereof, the Company shall use its
commercially reasonable efforts:
(i) to keep any Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of
Section 3(j) hereof, in order to permit the Prospectus forming a part
thereof to be usable by Holders until (A) the earlier of: (1) two years
from the last date of original issuance of any Securities, or (2) the
last date that the Company or any of its Affiliates was the owner of
such Securities; or (B) such shorter period ending on the date that (w)
all of the Holders of Registrable Securities that are not Affiliates of
the Company are able to sell all Registrable Securities immediately
without restriction pursuant to Rule 144(k) under the Securities Act
(or any successor rule or regulation which permits resales thereof
without further registration under the Securities Act), (x) all
Registrable Securities registered under the Shelf Registration
Statements have been sold, (y) all Registrable Securities have ceased
to be outstanding or (z) all Registrable Securities are sold to the
public pursuant to Rule 144 (or any successor rule or regulation which
permits resales thereof without further registration under the
Securities Act) (such period being referred to herein as the
"Effectiveness Period"); and
(ii) after the Effective Time of the initial Shelf
Registration Statement to take the actions provided for in Section
3(a)(ii) hereof after the receipt of a completed and signed Notice and
Questionnaire from any Holder of Registrable Securities that is not
then a Notice Holder.
The Company shall be deemed not to have used its commercially
reasonable efforts to keep any Shelf Registration Statement effective during the
Effectiveness Period if the Company voluntarily takes any action that would
result in Holders of Registrable Securities covered thereby not being able to
offer and sell any of such Registrable Securities under such Shelf Registration
Statement during that period, unless such action is (1) required by applicable
law and the Company thereafter promptly complies with the requirements of
Section 3(j) hereof, or (2) permitted pursuant to Section 2(c) hereof.
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(c) After the Effective Time of the initial Shelf Registration
Statement, the Company may suspend the use of any Prospectus by written notice
to the Notice Holders for a period not to exceed an aggregate of 60 calendar
days in any 12-month calendar period (each such period, a "Suspension Period")
if:
(i) an event has occurred and is continuing, as a result of
which the Shelf Registration Statement would, in the Company's
reasonable judgment, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(ii) the Company determines in good faith that the disclosure
of such event at such time would have a material adverse effect on the
Company and its subsidiaries taken as a whole.
3. REGISTRATION PROCEDURES.
In connection with the Shelf Registration Statements, the following
provisions shall apply:
(a) (i) not less than 45 calendar days prior to the time the
Company in good faith intends to have the initial Shelf Registration
Statement declared effective, the Company shall distribute the Notice
and Questionnaire to the Holders of Registrable Securities. The Company
shall take action to name as a selling securityholder in the initial
Shelf Registration Statement at the Effective Time each Holder that
completes, executes and delivers a Notice and Questionnaire to the
Company (a "Notice Holder") prior to or on the 30th calendar day after
such Holder's receipt thereof so that such Holder is permitted to
deliver the Prospectus forming a part thereof to purchasers of such
Holder's Registrable Securities in accordance with applicable law. The
Company shall not be required to take any action to name any Holder as
a selling securityholder in the initial Shelf Registration Statement at
the time of its effectiveness or to enable any Holder to use the
Prospectus forming a part thereof for resales of Registrable Securities
unless such Holder has returned a completed and signed Notice and
Questionnaire to the Company in a timely manner.
(ii) After the Effective Time of the initial Shelf
Registration Statement, the Company shall, upon the request of any
Holder of Registrable Securities that is not then a Notice Holder,
promptly send a Notice and Questionnaire to such Holder. After the
Effective Time of the initial Shelf Registration Statement, the Company
shall (A) as promptly as practicable, after the date a completed and
signed Notice and Questionnaire is delivered to the Company, and in any
event within 10 Business Days or, if the Company is required to file
with the Commission a new Shelf Registration, 30 calendar days, after
such date, prepare and file with the Commission (1) a supplement to the
Prospectus or, if required by applicable law, a post-effective
amendment to the Shelf Registration Statement or an additional Shelf
Registration Statement, and (2) any other document required by
applicable law, so that the Holder delivering such Notice and
Questionnaire is named as a selling securityholder in a Shelf
Registration Statement and is permitted to deliver the Prospectus to
purchasers of such Holder's Registrable
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Securities in accordance with applicable law, and (B) use its
commercially reasonable efforts to cause any post-effective amendment
or such additional Shelf Registration Statement to become effective
under the Securities Act as promptly as is practicable; but in any
event by the date that is (i) 10 Business Days after the date such
post-effective amendment, or (ii) 45 calendar days after the date such
additional Shelf Registration Statement is required to be filed;
provided, however, that the Company shall not be obligated to take the
actions set forth in this clause (ii) more than once in any fiscal
quarter or more than three times in the aggregate; and provided,
further, that if a Notice and Questionnaire is delivered to the Company
during a Suspension Period, the Company shall not be obligated to take
the actions set forth in this clause (ii) until the termination of such
Suspension Period.
(b) The Company shall furnish to each Notice Holder, prior to the
Effective Time, and without charge, a copy of the Shelf Registration Statement
initially filed with the Commission, and shall furnish to such Notice Holders,
prior to the filing with the Commission, copies of each amendment thereto and
each amendment or supplement, if any, to the Prospectus included therein (other
than supplements solely for the purpose of naming one or more Notice Holders as
selling securityholders), and shall use its commercially reasonable efforts to
reflect in each such document, at the Effective Time or when so filed with the
Commission, as the case may be, such comments as such Notice Holders and their
respective counsel reasonably may propose.
(c) The Company shall promptly take such action as may be necessary so
that (i) each of the Shelf Registration Statements and any amendment or
supplement thereto and the Prospectus forming a part thereof and any amendment
or supplement thereto (and each report or other document incorporated therein by
reference in each case) complies in all material respects with the Securities
Act and the Exchange Act and the respective rules and regulations thereunder, as
in effect at any relevant time, (ii) each of the Shelf Registration Statements
and any amendment or supplement thereto does not, when it becomes effective,
contain an 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
light of the circumstances under which they were made, not misleading, and (iii)
each Prospectus forming a part of any Shelf Registration Statement, and any
amendment or supplement to such Prospectus, in the form delivered to purchasers
of the Registrable Securities during the Effectiveness Period, does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(d) The Company shall promptly advise each Notice Holder, and shall
confirm such advice in writing if so requested by any such Notice Holder:
(i) when the initial Shelf Registration Statement has been
filed with the Commission and when the initial Shelf Registration
Statement has become effective, in each case making a public
announcement thereof by publishing the information on the Company's
website or through such other broad, public medium as the Company may
reasonably and in good faith see fit;
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(ii) when any supplement to the Prospectus, Shelf Registration
Statement or post-effective amendment to a Shelf Registration has been
filed with the Commission and, with respect to a Shelf Registration
Statement or any post-effective amendment, when the same has been
declared effective by the Commission;
(iii) of any request by the Commission for amendments or
supplements to any Shelf Registration Statement or the Prospectus
included therein or for additional information;
(iv) of the issuance by the Commission of any stop order
suspending the effectiveness of any Shelf Registration Statement or the
initiation of any proceedings for such purpose;
(v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included in any Shelf Registration Statement for sale in any
jurisdiction or the initiation of any proceeding for such purpose; and
(vi) of the happening of any event or the existence of any
state of facts that requires the making of any changes in any Shelf
Registration Statement or the Prospectus included therein so that, as
of such date, such Shelf Registration Statement and Prospectus do not
contain an untrue statement of a material fact and do not omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading (which advice shall be accompanied by an
instruction to such Holders to suspend the use of the Prospectus until
the requisite changes have been made, which notice need not specify the
nature of the event giving rise to such suspension).
(e) The Company shall use its commercially reasonable efforts to
prevent the issuance, and if issued to obtain the withdrawal at the earliest
possible time, of any order suspending the effectiveness of any Shelf
Registration Statement.
(f) The Company shall, as promptly as reasonably practicable, furnish
to each Notice Holder, upon their request and without charge, at least one
conformed copy of the Shelf Registration Statement and any amendment or
supplement thereto, including financial statements but excluding schedules, all
documents incorporated or deemed to be incorporated therein by reference and all
exhibits (unless requested in writing to the Company by such Notice Holder).
(g) The Company shall, during the Effectiveness Period, deliver to each
Notice Holder, without charge, as many copies of each Prospectus in which the
Notice Holder is listed as a selling securityholder included in the applicable
Shelf Registration Statement and any amendment or supplement thereto as such
Notice Holder may reasonably request; and the Company consents (except during a
Suspension Period or during the continuance of any event described in Section
3(d) (iii)-(vi) above) to the use of the Prospectus and any amendment or
supplement thereto by each of the Notice Holders in connection with the offering
and sale of the Registrable Securities covered by the Prospectus and any
amendment or supplement thereto during the Effectiveness Period.
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(h) Prior to any offering of Registrable Securities pursuant to a Shelf
Registration Statement, the Company shall (i) register or qualify or cooperate
with the Notice Holders and their respective counsel 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 Notice Holder may reasonably request in writing, (ii) keep such
registrations or qualifications or exemptions therefrom in effect and comply
with such laws so as to permit the continuance of offers and sales in such
jurisdictions for so long as may be necessary to enable any Notice Holder or
underwriter, if any, to complete its distribution of Registrable Securities
pursuant to such Shelf Registration Statement, and (iii) take any and all other
actions necessary or advisable to enable the disposition in such jurisdictions
of such Registrable Securities; PROVIDED, HOWEVER, that in no event shall the
Company be obligated to (A) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to so
qualify but for this Section 3(h), or (B) subject itself to general or unlimited
service of process or to taxation in any such jurisdiction if they are not now
so subject.
(i) Unless any Registrable Securities shall be in book-entry only form,
the Company shall cooperate with the Notice Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold pursuant to any Shelf Registration Statement, which certificates, if so
required by any securities market or exchange upon which any Registrable
Securities are quoted or listed, shall be penned, lithographed or engraved, or
produced by any combination of such methods, on steel engraved borders, and
which certificates shall be free of any restrictive legends and in such
permitted denominations and registered in such names as Notice Holders may
request in connection with the sale of Registrable Securities pursuant to such
Shelf Registration Statement.
(j) Upon the occurrence of any event or the existence of any fact
contemplated by paragraph 3(d)(vi) above, subject to Section 2(c) hereof, the
Company shall promptly, but in any event within 15 Business Days following such
occurrence or existence, prepare and file (and have declared effective) a
post-effective amendment to any Shelf Registration Statement or an amendment or
supplement to the related Prospectus included therein or file any other document
with the Commission so that, as thereafter delivered to purchasers of the
Registrable Securities, the Prospectus will not include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Notice Holders of the occurrence of
any event or the existence of any fact contemplated by paragraph 3(d)(vi) above,
the Notice Holder shall suspend the use of the Prospectus until the requisite
supplement or amendment to the Prospectus has been made or a post-effective
amendment to the applicable Shelf Registration Statement shall become effective.
(k) Not later than the Effective Time of a Shelf Registration
Statement, the Company shall provide a CUSIP number for the Securities to be
sold pursuant to a Shelf Registration Statement.
(l) The Company shall comply with the Securities Act and the Exchange
Act and the respective rules and regulations thereunder, as in effect at any
relevant time, and make generally available to its securityholders earnings
statements (which need not be audited) satisfying the
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provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12 month period (or 90 days after the end of any 12 month
period if such period is a fiscal year), or such shorter period as required by
the Securities Act and the Exchange Act and the respective rules and regulations
thereunder, as in effect at any relevant time.
(m) Not later than the Effective Time of the initial Shelf Registration
Statement, the Company shall use its commercially reasonable efforts to cause
the Indenture to be qualified under the Trust Indenture Act; in connection with
such qualification, the Company shall cooperate with the Trustee under the
Indenture to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the Trust Indenture
Act; and the Company shall execute, and shall use commercially reasonable
efforts to cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely manner.
In the event that any such amendment or modification referred to in this Section
3(m) involves the appointment of a new trustee under the Indenture, the Company
shall appoint a new trustee thereunder pursuant to the applicable provisions of
the Indenture.
(n) The Company shall make reasonably available for inspection by one
or more representatives of the Notice Holders, designated in writing by a
Majority of Holders whose Registrable Securities are included in a Shelf
Registration Statement, any underwriter participating in any disposition
pursuant to any Shelf Registration Statement, and any attorney, accountant or
other agent retained by such Notice Holders or any such underwriter (i) all
relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and (ii) cause the Company's
officers, directors and employees to make available for inspection all
information reasonably requested by such Notice Holders or any such underwriter,
attorney, accountant or agent in connection with such Shelf Registration
Statement, in each case, as is customary for similar due diligence examinations;
provided, however, that such persons shall, at the Company's request, first
agree in writing with the Company that any information that is reasonably and in
good faith designated by the Company in writing as confidential at the time of
delivery or inspection, as the case may be, of such information shall be kept
confidential by such persons and shall be used solely for the purposes of
exercising rights under this Agreement, unless such disclosure is made in
connection with a court proceeding or required by law, or such records,
information or documents become available to the public generally or through a
third party without an accompanying obligation of confidentiality; and provided
further that, if the foregoing inspection and information gathering would
otherwise disrupt the Company's conduct of its business, such inspection and
information gathering shall, to the greatest extent possible, be coordinated on
behalf of the Notice Holders and the other parties entitled thereto by one
counsel designated by and on behalf of the Notice Holders and other parties.
Notwithstanding anything contained herein to the contrary, in no event will the
method of distribution of the Registrable Securities take the form of an
underwritten offering without the consent of the Company (which consent shall
not be unreasonably withheld).
(o) The Company will use its commercially reasonable efforts to cause
the Common Stock issuable upon conversion of the Securities to be quoted or
listed on the Nasdaq National Market or other market or stock exchange on which
the Common Stock primarily trades on or prior to the Effective Time of each
Shelf Registration Statement hereunder.
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(p) The Company will cooperate and assist in any filings required to be
made with the National Association of Securities Dealers, Inc.
(q) The Company shall use its commercially reasonable efforts to take
all other steps necessary to effect the registration, offering and sale of the
Registrable Securities covered by each Shelf Registration Statement contemplated
hereby, including entering into such customary agreements and take all such
other necessary actions in connection therewith.
4. REGISTRATION EXPENSES.
The Company shall bear all fees, costs and expenses incurred in
connection with the performance by the Company of its obligations under Sections
2 and 3 of this Agreement whether or not any of the Shelf Registration
Statements are declared effective. Such fees, costs and expenses 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 the National Association of Securities Dealers, Inc., and (B) of compliance
with United States federal and state securities or "blue sky" laws (including
under the laws of such jurisdictions as the Holders whose Registrable Securities
are included in a Shelf Registration Statement may reasonably designate), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities in a form eligible for deposit with The
Depository Trust Company), (iii) duplication expenses relating to copies of any
Shelf Registration Statement or Prospectus delivered to any Holders hereunder,
(iv) fees and disbursements of counsel and independent accountants for the
Company in connection with the Shelf Registration Statement, and (v) reasonable
fees and disbursements of the Trustee and its counsel and of the registrar and
transfer agent for the Common Stock. In addition, the Company shall bear or
reimburse the Notice Holders for reasonable fees and disbursements of one firm
of legal counsel for the Holders, which shall initially be counsel to the
Initial Purchaser, but which may, upon the written consent of the Initial
Purchaser (which shall not be unreasonably withheld), be another nationally
recognized law firm experienced in securities law matters designated by the
Company up to a maximum of $15,000 in the aggregate for the initial Shelf
Registration Statement and any post-effective amendment or additional Shelf
Registration Statement required by Section 3(a)(ii) hereof. In addition, the
Company shall pay the internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees performing legal
or accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange on which similar securities of the Company are then listed.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and
hold harmless each Holder, the Initial Purchaser, each person, if any, who
controls any such Holder or Initial Purchaser within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act and the respective
officers, directors, partners, employees, representatives and agents of any such
Holder or the Initial Purchaser or any controlling person, from and against any
loss, claim, damage, liability, cost or expense whatsoever as incurred
(including, but not limited to, attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim
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whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as any such
loss, claim, damage, liability, cost or expense (or action in respect thereof)
arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Shelf Registration Statement or
any amendment thereto or supplement thereof or any related preliminary
prospectus or the Prospectus or any amendment thereto or supplement thereof, or
arises out of, or is based upon, the omission or alleged omission to state
therein any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the Company shall not be liable to any
such indemnified party in any such case to the extent that any such loss, claim,
damage, liability, cost or expense arises out of, or is based upon, any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such indemnified party specifically
for use therein; and provided further, however, that the Company shall not be
liable to any such indemnified party in any such case to the extent that such
loss, claim, damage, liability, cost or expense arises from an offer or sale by
a Holder of Registrable Securities during a Suspension Period, if such
indemnified party is a Holder that received from the Company a notice of the
commencement of such Suspension Period prior to the making of such offer or
sale. The foregoing indemnity agreement is in addition to any liability that the
Company may otherwise have to any indemnified party. The Company shall not be
liable under this Section 5(a) for any settlement of any action effected without
its written consent, which shall not be unreasonably withheld; provided,
however, that with respect to actions pursuant to clauses (i), (ii) and (iii) of
Section 5(c), no such consent shall be required.
(b) INDEMNIFICATION BY THE NOTICE HOLDERS. Each Holder, severally and
not jointly, shall indemnify and hold harmless the Company, any affiliate or
subsidiary thereof, the Initial Purchaser, each other Holder, each person, if
any, who controls the Company, the Initial Purchaser or another Holder within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act and the respective officers, directors, partners, employees, representatives
and agents of the Company, any affiliate or subsidiary thereof, the Initial
Purchaser, any other Holder or any controlling person, from and against any
loss, claim, damage, liability, cost or expense whatsoever as incurred
(including, but not limited to, attorneys' fees and any and all expenses
whatsoever incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation), joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as any such loss, claim, damage, liability,
cost or expense (or action in respect thereof) arises out of, or is based upon,
any untrue statement or alleged untrue statement of a material fact contained in
the Shelf Registration Statement or any amendment thereto or any related
preliminary prospectus or the Prospectus or any amendment thereto or supplement
thereof, or arises out of, or is based upon, the omission or alleged omission to
state therein any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission made therein was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Holder specifically
for use therein. In no event shall the liability of any selling Holder
11
hereunder be greater in amount than the dollar amount of the proceeds received
by such Holder upon the sale of the Registrable Securities pursuant to the Shelf
Registration Statement giving rise to such indemnification obligation. The
foregoing indemnity agreement is in addition to any liability that any Holder
may otherwise have to the Company, the Initial Purchaser and any such other
person.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party under this Section 5 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 5, notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability that it may have under this Section 5. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 5 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the indemnified party shall have the right to employ counsel to represent
jointly the indemnified party and its respective officers, directors, partners,
employees, representatives, agents and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the indemnified party against the indemnifying party under this Section 5 if
(i) employment of such counsel has been authorized in writing by the
indemnifying party, or (ii) such indemnifying party shall not have employed
counsel to have charge of the defense of such proceeding within 30 days of the
receipt of notice thereof, or (iii) such indemnified party shall have reasonably
concluded that the representation of such indemnified party and those officers,
directors, partners, employees, representatives, agents and controlling persons
by the same counsel representing the indemnifying party would be inappropriate
under applicable standards of professional conduct due to actual or potential
differing interests between them or where there may be one or more defenses
available to them that are different from, additional to or in conflict with
those available to the indemnifying party, and in any such event ((i), (ii) or
(iii)) the fees and expenses of such separate counsel shall be paid by the
indemnifying party as incurred. It is understood that the indemnifying party
shall not be liable for the fees and expenses of more than one separate firm (in
addition to local counsel in each jurisdiction, if necessary) for all
indemnified parties in connection with any proceeding or related proceedings. No
indemnifying party shall, without the prior written consent of the indemnified
parties, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened claim, investigation,
action, suit or proceeding in respect of which indemnity or contribution may be
or could have been sought hereunder (whether or not the indemnified party or
parties are actual or potential parties thereto) unless (A) such settlement,
compromise or judgment (1) includes an unconditional release of such indemnified
party from all liability arising out of such claim, investigation, action, suit
or proceeding, and (2) does not include a statement as to or an admission of
fault, culpability or failure to act by or on behalf of any indemnified party,
and (B) the indemnifying party confirms in writing its indemnification
obligations hereunder with respect to such settlement, compromise or judgment.
12
(d) CONTRIBUTION. If the indemnification provided for in this Section 5
is unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages, costs, expenses or liabilities (or actions in respect thereof)
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party on the other from the
registration of the Registrable Securities pursuant to the Shelf Registration,
or (ii) if the allocation provided by the foregoing clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages, costs, expenses or liabilities (or actions in respect
thereof) as well as any other relevant equitable considerations. The relative
fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Holder or such other indemnified
party, as the case may be, on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this Section 5(d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this Section 5(d). The
Company and the Holders 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 which does not take account of
the equitable considerations referred to herein. Notwithstanding any other
provision of this Section 5(d), no Holder of the Registrable Securities shall be
required to contribute any amount in excess of the amount by which the gross
proceeds received by such Holder from the sale of its Registrable Securities
pursuant to the Shelf Registration Statement exceeds the amount of damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 5(d),
each officer, director, partner, employee, representative or agent of an
indemnified party, and each person, if any, who controls such indemnified party
within the meaning of the Securities Act or the Exchange Act, shall have the
same rights to contribution as such indemnified party and each officer,
director, partner, employee, representative and agent of the Company, and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, shall have the same rights to contribution as the
Company. The Holders' respective obligations to contribute pursuant to this
Section 5(d) are several in proportion to the respective amount of Registrable
Securities they have sold pursuant to a Shelf Registration Statement and not
joint. The remedies provided for in this Section 5(d) are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(e) SURVIVAL. The indemnity and contribution provisions contained in
this Section 5 shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Initial Purchaser, any Holder, any
13
officer, director, partner, employee, representative or agent of the Initial
Purchaser or any Holder, or any person controlling the Initial Purchaser or any
Holder, or by or on behalf of the Company, its officers, directors, partners,
employees, representatives or agents or any person controlling the Company, and
(iii) any sale of Registrable Securities pursuant to a Shelf Registration
Statement.
6. HOLDER'S OBLIGATIONS.
Each Holder agrees, by acquisition of the Registrable Securities, that
no Holder of Registrable Securities shall be entitled to sell any of such
Registrable Securities pursuant to a Shelf Registration Statement or to receive
a Prospectus relating thereto, unless such Holder has furnished the Company with
a Notice and Questionnaire as required pursuant to Section 3(a) hereof
(including the information required to be included in such Notice and
Questionnaire) and the information set forth in the next sentence. Each Notice
Holder agrees to promptly furnish to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Notice Holder not misleading and any other information regarding such
Notice Holder and the distribution of such Registrable Securities as may be
required to be disclosed in the Shelf Registration Statement under applicable
law, pursuant to comments from the Commission or as the Company may from time to
time reasonably request. Any sale of any Registrable Securities by any Notice
Holder shall constitute a representation and warranty by such Notice Holder that
the information relating to such Notice Holder and its plan of distribution is
as set forth in the Prospectus delivered by such Notice Holder in connection
with such disposition, that such Prospectus does not, as of the time of such
sale, contain any untrue statement of a material fact relating to or provided by
such Notice Holder or its plan of distribution and that such Prospectus does
not, as of the time of such sale, omit to state any material fact relating to or
provided by such Notice Holder or its plan of distribution necessary in order to
make the statements in such Prospectus, in the light of the circumstances under
which they were made, not misleading.
7. ADDITIONAL INTEREST.
(a) Notwithstanding any postponement of the effectiveness
pursuant to Section 2(a) hereof, if:
(i) on or prior to the 120th day following the Issue Date, a
Shelf Registration Statement has not been filed with the Commission, or
(ii) on or prior to the 180th day following the Issue Date,
such initial Shelf Registration Statement is not declared effective by
the Commission, or
(iii) after the effectiveness date of any Shelf Registration
Statement, (A) such Shelf Registration Statement ceases to be effective
or usable for the offer and sale of Registrable Securities (other than
due to a Suspension Period), and the Company fails to file (and have
declared effective), within fifteen Business Days, a post-effective
amendment to such Shelf Registration Statement or amendment or
supplement to the Prospectus contained therein or such other document
with the Commission to make such Shelf Registration Statement effective
or such Prospectus usable, or (B) the Suspension
14
Periods exceed 60 calendar days, whether or not consecutive, in any
12-month calendar period, or
(iv) the Company shall have failed to timely comply with any
of its obligations set forth in Section 3(a)(ii) hereof, provided that
such failure is not solely due to the failure of a Holder of
Registrable Securities to perform its obligations set forth in Section
3(a)(ii) hereof (each of (i) through (iv) a "Registration Default"),
the Company shall be required to pay additional interest ("Additional
Interest"), from and including the day following such Registration Default to
but excluding the day on which such Registration Default is cured, at a rate per
annum equal to an additional one-half of one percent (0.50%) of the Applicable
Amount during the 90-day period immediately following the occurrence of such
Registration Default and shall increase by 0.25% per annum from and including
the 91st day after such Registration Default, and by an additional 0.25% on each
successive 91st day thereafter unless and until all Registration Defaults have
been cured.
(b) In the case of a Registration Default described in Sections
7(a)(i)-(iii) above, Additional Interest, if any, shall be payable only to
Notice Holders and, in respect of a Registration Default described in Section
7(a)(iv) above, Additional Interest, if any, shall be payable only to Notice
Holders to whom such Registration Default relates.
(c) Any amounts to be paid as Additional Interest pursuant to paragraph
(a) of this Section 7 shall be paid by wire transfer of immediately available
funds or by federal funds check on the first interest payment date following the
date on which such Additional Interest begins to accrue.
(d) Except as provided in Section 9(a) hereof, the Additional Interest
as set forth in this Section 7 shall be the exclusive cash remedy available to
the Holders of Registrable Securities for such Registration Default. In no event
shall the Company be required to pay Additional Interest in excess of the amount
set forth above, regardless of whether one or multiple Registration Defaults
exist.
8. RULE 144.
The Company covenants to the Holders of the Registrable Securities that
the Company shall use its commercially reasonable efforts to timely file the
reports required to be filed by it under the Exchange Act (including the reports
under Section 13 and 15(d) of the Exchange Act referred to in subparagraph
(c)(1) of Rule 144 of the Securities Act) and the rules and regulations adopted
by the Commission thereunder, all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration under the
Securities Act within the limitations of the exemption provided by Rule 144
under the Securities Act, as such may be amended from time to time, or any
similar or successor rule or regulation hereafter adopted by the Commission.
Upon the request of any Holder of Registrable Securities in connection with that
Holder's sale pursuant to Rule 144, the Company shall deliver to such Holder a
written statement as to whether it had complied with such requirements.
15
9. MISCELLANEOUS.
(a) SPECIFIC PERFORMANCE. The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Initial Purchaser and the Holders from time
to time may be irreparably harmed by any such failure, and accordingly agree
that the Initial Purchaser and such Holders, in addition to any other remedy to
which they may be entitled at law or in equity and without limiting the remedies
available to the Notice Holders under Section 7 hereof, shall be entitled to
compel specific performance of the obligations of the Company under this
Agreement in accordance with the terms and conditions of this Agreement, in any
court of the United States or any State thereof having jurisdiction.
(b) AMENDMENTS AND WAIVERS. This Agreement, including this Section
9(b), may be amended, and waivers or consents to departures from the provisions
hereof may be given, only by a written instrument duly executed by the Company
and a Majority of Holders. Each Holder of Registrable Securities outstanding at
the time of any such amendment, waiver or consent or thereafter shall be bound
by any amendment, waiver or consent effected pursuant to this Section 9(b),
whether or not any notice, writing or marking indicating such amendment, waiver
or consent appears on the Registrable Securities or is delivered to such Holder.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing, shall be delivered by hand
delivery, by telecopier, by courier guaranteeing overnight delivery or by
first-class mail, return receipt requested, and shall be deemed given (i) when
made, if made by hand delivery, (ii) upon confirmation, if made by telecopier
(provided notice is also given by some other means permitted by this Section
9(c)), (iii) one Business Day after being deposited with such courier, if made
by overnight courier or (iv) on the date indicated on the notice of receipt, if
made by first-class mail, to the parties as follows:
(x) if to a Holder of Registrable Securities, at the most
current address given by such Holder to the Company
in a Notice and Questionnaire or any amendment
thereto;
a. if to the Company, to:
Medis Technologies Ltd.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
16
1. if to the Initial Purchaser, to:
XxXxxxx Securities Co. L.P.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, Senior Managing Director
Facsimile: (000) 000-0000
with a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx., Esq.
Facsimile: (000) 000-0000
or to such other address as such person may have furnished to the other
persons identified in this Section 9(c) in writing in accordance herewith.
(d) PARTIES IN INTEREST. The parties to this Agreement intend that all
Holders of Registrable Securities shall be entitled to receive the benefits of
this Agreement and that any Notice Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities which are included in a Shelf Registration Statement. All
of the terms and provisions of this Agreement shall be binding upon, shall inure
to the benefit of and shall be enforceable by the respective successors and
assigns of the parties hereto and any Holder from time to time of the
Registrable Securities to the aforesaid extent. In the event that any transferee
of any Holder of Registrable Securities shall acquire Registrable Securities, in
any manner, whether by gift, bequest, purchase, operation of law or otherwise,
such transferee shall, without any further writing or action of any kind, be
entitled to receive the benefits of and, if a Notice Holder, be conclusively
deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement to the aforesaid extent.
(e) COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed
in any number of counterparts and by the parties hereto in separate
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.
Facsimile signatures shall constitute original signatures for all purposes of
this Agreement.
(f) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
provisions relating to conflicts of law.
17
(h) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
(i) SURVIVAL. The respective indemnities, agreements, covenants,
representations, warranties and other provisions set forth in this Agreement or
made pursuant hereto shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of the Initial Purchaser, any Holder, or any officer, director, partner,
employee, representative or agent of the Initial Purchaser or such Holder, any
agent or underwriter, any officer, director, partner, employee, representative
or agent or of such agent or underwriter, or any controlling person of any of
the foregoing, and shall survive the transfer and registration of the
Registrable Securities of such Holder.
SUBMISSION TO JURISDICTION; APPOINTMENT OF AGENT FOR SERVICE.
The Company agrees that any suit, action or proceeding against the
Company arising out of or based upon this Agreement or the transactions
contemplated hereby may be instituted in any state or federal court in The City
of New York, New York, and waives any objection which it may now or hereafter
have to the laying of venue of any such proceeding, and irrevocably submits to
the non-exclusive jurisdiction of such courts in any suit, action or proceeding.
The Company expressly accepts the non-exclusive jurisdiction of any such court
in respect of any such suit, action or proceeding. The Company agrees that a
final judgment in any such proceeding brought in any such court shall be
conclusive and binding thereupon and may be enforced in any other court in the
jurisdiction to which the Company is or may be subject by suit upon such
judgment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE IN COUNTERPARTS FOLLOWS]
18
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
MEDIS TECHNOLOGIES LTD.
By: /s/ Xxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
Accepted as of the date hereof:
XXXXXXX SECURITIES CO. L.P.
By: /s/ Xxxx Xxxxxxxx
----------------------------
Name: Xxxx Xxxxxxxx
Title: Senior Managing Director
APPENDIX A
MEDIS TECHNOLOGIES LTD.
FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial holder of 6% Senior Convertible Notes due
July 15, 2010 (the "Notes") of Medis Technologies Ltd. (the "Company" or
"Registrant") or common stock, par value $.01 per share (the "common stock" and,
together with the Notes, the "Registrable Securities"), of the Company
understands that the Registrant has filed or intends to file with the Securities
and Exchange Commission (the "Commission") a registration statement on Form S-3
(the "Shelf Registration Statement") for the registration and resale under Rule
415 of the Securities Act of 1933, as amended (the "Securities Act"), of the
Registrable Securities, in accordance with the terms of the Registration Rights
Agreement (the "Registration Rights Agreement"), among the Company and the
initial purchaser named therein. A copy of the Registration Rights Agreement is
available from the Company upon request at the address set forth below. Each
capitalized term not otherwise defined herein shall have the meaning ascribed
thereto in the Registration Rights Agreement.
Each beneficial owner of Registrable Securities is entitled to the
benefits of the Registration Rights Agreement. In order to sell or otherwise
dispose of any Registrable Securities pursuant to the Shelf Registration
Statement, a beneficial owner of Registrable Securities generally will be
required to be named as a selling securityholder in the related prospectus,
deliver a prospectus to purchasers of Registrable Securities and be bound by
those provisions of the Registration Rights Agreement applicable to such
beneficial owner (including certain indemnification provisions, as described
below). Beneficial owners that do not complete this Notice and Questionnaire and
deliver it to the Company as provided below will not be named as selling
securityholders in the prospectus and, therefore, will not be permitted to sell
any Registrable Securities pursuant to the Shelf Registration Statement.
Beneficial owners are encouraged to complete and deliver this Notice and
Questionnaire prior to the effectiveness of the Shelf Registration Statement so
that such beneficial owners may be named as selling securityholders in the
related prospectus at the time of effectiveness. The Company has agreed to pay
additional amounts pursuant to the Registration Rights Agreement under certain
circumstances as set forth therein.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the "Selling Securityholder") of
Registrable Securities hereby gives notice to the Company of its intention to
sell or otherwise dispose of Registrable Securities beneficially owned by it and
listed below in Item 3 pursuant to the Shelf Registration Statement. The
undersigned, by signing and returning this Notice and Questionnaire, understands
A-1
that it will be bound by the terms and conditions of this Notice and
Questionnaire and the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the undersigned has
agreed to indemnify and hold harmless the Company and the Company's directors
and officers and each person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act of 1934, as amended (the "Exchange Act"), from and against certain losses
arising in connection with statements concerning the undersigned made in the
Shelf Registration Statement or the related prospectus in reliance upon the
information provided in this Notice and Questionnaire.
The undersigned hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:
A-2
QUESTIONNAIRE
1. (a) Full Legal Name of Selling Securityholder:
___________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as (a)
above) through which Registrable Securities listed in Item 3
below are held:
___________________________________________________
(c) Full Legal Name of DTC Participant (if applicable and if not
the same as (b) above) through which Registrable Securities
listed in Item 3 below are held:
___________________________________________________
2. Address for Notices to Selling Securityholder:
____________________________________________________________
Telephone: _________________________________________________
Fax: _______________________________________________________
Contact Person: ____________________________________________
3. Beneficial Ownership of Registrable Securities:
(a) Type and Principal Amount of Registrable Securities
beneficially owned:
___________________________________________________
(b) CUSIP No(s). of such Registrable Securities beneficially
owned:
___________________________________________________
4. Beneficial Ownership of Other Securities of the Company owned by the
Selling Securityholder:
____________________________________________________________
Except as set forth below in this Item 4, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
(a) Type and Amount of Other Securities beneficially owned by the
Selling Securityholder:
___________________________________________________
(b) CUSIP No(s). of such Other Securities beneficially owned:
___________________________________________________
5. Relationship(s) with the Company:
____________________________________________________________
B-1
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (5% or
more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates)
during the past three years.
State any exceptions here:
____________________________________________________________
6. Plan of Distribution:
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Registrable Securities listed above
in Item 3 pursuant to the Shelf Registration Statement only as follows
(if at all). Such Registrable Securities may be sold from time to time
directly by the undersigned or, alternatively, through underwriters,
broker-dealers or agents. If the Registrable Securities are sold
through underwriters or broker-dealers, the Selling Securityholder will
be responsible for underwriting discounts or commissions or agent's
commissions. Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time
of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which
may involve block transactions) (i) on any national securities exchange
or quotation service on which the Registrable Securities may be listed
or quoted at the time of sale, (ii) in the over-the-counter market, or
(iii) in transactions otherwise than on such exchanges or services or
in the over-the-counter market. The undersigned may also loan or pledge
Registrable Securities to broker-dealers that in turn may sell such
securities.
State any exceptions here:
____________________________________________________________
____________________________________________________________
NOTE: In no event will such method(s) of distribution take the form of
an underwritten offering of the Registrable Securities without the
prior agreement of the Company. The undersigned acknowledges that it
understands its obligation to comply with the provisions of the
Exchange Act and the rules thereunder relating to stock manipulation,
particularly Regulation M thereunder (or any successor rules or
regulations), in connection with any offering of Registrable Securities
pursuant to the Registration Rights Agreement. The undersigned agrees
that neither it nor any person acting on its behalf will engage in any
transaction in violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under
the Registration Rights Agreement to indemnify and hold harmless certain persons
as set forth therein. Pursuant to the Registration Rights Agreement, the Company
has agreed under certain circumstances to indemnify the Selling Securityholder
against certain liabilities. In accordance with the undersigned's obligation
under the Registration Rights Agreement to provide such information as may be
required by law for inclusion in the Shelf Registration Statement, the
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Shelf Registration Statement remains effective. All
notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing at the address set forth below. In the event that the
undersigned transfers all or any portion of the Registrable Securities listed in
Item 3 above after the date on which such information is provided to the
Company, the undersigned agrees to notify the transferee(s) at the time of
transfer of its rights and obligations under this Notice and Questionnaire and
the Registration Rights Agreement. By signing below, the undersigned consents to
the disclosure of the information provided in response to Items 1 through 6
above and the inclusion of such information in the Shelf Registration Statement
and the related prospectus. The undersigned understands that such information
will be relied upon by the Company in connection with the preparation or
amendment of the Shelf Registration Statement and the related prospectus.
B-2
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
__________________________________
Beneficial Owner
By: ______________________________
Name:
Title:
Date: _________________
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE TO THE COMPANY AT:
Medis Technologies Ltd.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: President
B-3
EXHIBIT 1 TO NOTICE AND QUESTIONNAIRE
NOTICE OF TRANSFER PURSUANT
TO REGISTRATION STATEMENT
Medis Technologies Ltd.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Medis Technologies Ltd.
__% Senior Convertible Notes due 2010 (the "Notes")
Ladies and Gentlemen:
Please be advised that __________ has transferred $_________ aggregate
principal amount of the above-referenced Notes or ________ shares of the
Company's common stock issued on conversion or repurchase of Notes, pursuant to
the Registration Statement on Form S-3 (File No. 333-________) filed by the
Company.
We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above named beneficial owner of the Notes
or common stock is named as a selling securityholder in the Prospectus, dated
___________, or in amendments or supplements thereto, and that the aggregate
principal amount of the Notes or number of shares of common stock transferred
are [all or a portion of] the Notes or common stock listed in such Prospectus,
as amended or supplemented, opposite such owner's name.
Very truly yours,
[name]
By:__________________________________
(Authorized Signature)
Dated: ______________
