Exhibit 3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of June 6,
2007, is made by and among Elbit Vision Systems Ltd., a company organized under
the laws of Israel, with headquarters located at 0 Xxxxxxx Xxxxxx, Xxxxxxxx
Industrial Park, Kadima, P.O.B. 5030, Israel (the "COMPANY") and Elbit Ltd., a
company organized under the laws of the State of Israel, of 3 Azrieli Center,
Tel-Aviv, Israel ("ELBIT").
WHEREAS:
A. Pursuant to a certain Share Purchase Agreement between the Company and Elbit,
dated June 6, 2007, the Company has issued to Elbit the number ordinary shares
of the Company nominal value NIS 1.0 (the "ORDINARY SHARES") and warrants to
purchase ordinary shares of the Company nominal value NIS 1.0 (the "WARRANT
SHARES"), set forth in SCHEDULE 1 hereto
B. The Company has agreed to provide Elbit with certain registration rights with
respect to the Ordinary Shares and Warrant Shares, under the Securities Act of
1933, as amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the "1933 ACT"), and applicable state
securities laws.
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
Elbit hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
a. "BUSINESS DAY" means any day other than Saturday, Sunday or any
other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.
b. "INVESTOR" means Elbit, any transferee or assignee thereof to whom
Elbit assigns its rights under this Agreement and who agrees in writing to
become bound by the provisions of this Agreement and any transferee or
assignee thereof to whom a transferee or assignee assigns its rights under
this Agreement and who agrees in writing to become bound by the provisions
of this Agreement.
c. "PERSON" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and governmental or any department or agency thereof.
d. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant
to Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis ("RULE 415"), and the
declaration or ordering of effectiveness of such Registration Statement(s)
by the United States Securities and Exchange Commission (the "SEC").
e. "REGISTRABLE SECURITIES" means (i) the Ordinary Shares, (ii) the
Warrant Shares issued or issuable upon exercise of the Warrants and (iii)
any shares issued or issuable with respect to the Ordinary Shares, the
Warrant Shares or the Warrants as a result of any share split, share
dividend, recapitalization, exchange or similar event or otherwise, without
regard to any limitations on exercise of the Warrants.
f. "REGISTRATION STATEMENT" means a registration statement or
registration statements of the Company filed under the 1933 Act covering
the Registrable Securities.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Securities Purchase Agreement.
2. REGISTRATION.
a. MANDATORY REGISTRATION. The Company shall use its best efforts to
prepare and file with the SEC, by July 31, 2007 a Registration Statement on
Form F-3, covering the resale of all of the Registrable Securities. In the
event that Form F-3 is unavailable for such a registration, the Company
shall use such other form as is available for such a registration. The
Registration Statement prepared pursuant hereto shall register for resale
all of the Ordinary Shares and Warrant Shares.
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b. ALLOCATION OF REGISTRABLE SECURITIES. In the event that the SEC
requires that in order for the Registration Statement to be declared
effective, the number of Registrable Securities included in the
Registration Statement be reduced, then there shall be excluded from such
registration Registrable Securities held by the Investor and registrable
securities that are held by Mivtach Shamir Holdings Ltd., or any affiliate
thereof, included in such registration, pro rata among them, to the extent
necessary to satisfy such limitation. .
c. ADDITIONAL REGISTRATION STATEMENT. In the event that Company
reduces the number of Registrable Securities covered by Registration
Statement described in Section 2b, pursuant to the circumstances set forth
in Section 2b, the Company shall file a new Registration Statement (on the
short form available therefor, if applicable), so as to cover the remaining
Registrable Securities as soon as practicable after the remaining
Registrable Securities may be covered by a new Registration Statement.
3. OBLIGATIONS OF THE INVESTOR.
a. At least seven (7) Business Days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify the
Investor in writing of the information the Company requires from the
Investor if the Investor elects to have any of the Investor's Registrable
Securities included in such Registration Statement. 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 of an
Investor that the Investor shall 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 effectiveness of the registration of such
Registrable Securities and shall execute such documents in connection with
such registration as the Company may reasonably request. All information
provided to the Company by the Investor pursuant to this Section 3(a) shall
be in writing, and such writing shall expressly acknowledge that the
information is being provided for use in connection with the preparation of
the Registration Statement or any such amendment thereof or supplement
thereto.
b. The Investor, by its 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 any Registration Statement
hereunder, unless the Investor has notified the Company in writing of the
Investor's election to exclude all of the Investor's Registrable Securities
from such Registration Statement.
c. The Investor covenants and agrees that it will comply with the
prospectus delivery requirements of the 1933 Act as applicable to it in
connection with sales of Registrable Securities pursuant to a Registration
Statement.
4. EXPENSES.
The Company shall bear all expenses in connection with the registration
procedures set forth in Sections 1 and 2 above, other than fees and expenses, if
any, of counsel or other advisers to the Investor or underwriting discounts,
brokerage fees and commissions incurred by the Investor, if any.
5. INDEMNITIES. In the event of any registered offering of Ordinary Shares
of the Company pursuant to this Agreement:
a. The Company will indemnify and hold harmless, to the fullest extent
permitted by law, the Investor, the directors, officers, partners,
employees, agents, representatives or and each person, if any, who controls
the Investor (each an "INDEMNITEE") from and against any and all losses,
damages, claims, liabilities, joint or several, costs and expenses
(including any amounts paid in any settlement effected with the Company's
consent) to which an Indemnitee may become subject under applicable law or
otherwise, insofar as such losses, damages, claims, liabilities (or actions
or proceedings in respect thereof), costs or expenses arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the registration statement or included in the
final prospectus, as amended or supplemented, or (ii) the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances in which they are made, not misleading, and the Company will
reimburse an Indemnitee, promptly upon demand, for any reasonable legal or
any other expenses incurred by them in connection with investigating,
preparing to defend or defending against or appearing as a third-party
witness in connection with such loss, claim, damage, liability, action or
proceeding; PROVIDED, HOWEVER, that the Company will not be liable in any
such case to the extent that any such loss, damage, liability, cost or
expense arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished in writing by such Indemnitee; PROVIDED, FURTHER,
that the indemnity agreement contained in this subsection 5(a) shall not
apply to amounts paid in settlement of any such claim, loss, damage,
liability or action if such settlement is effected without the consent of
the Company, which consent shall not be unreasonably withheld.
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b. The Investor will indemnify and hold harmless the Company, any
underwriter for the Company, and each person, if any, who controls the
Company or such underwriter, from and against any and all losses, damages,
claims, liabilities, costs or expenses (including any amounts paid in any
settlement effected with the selling shareholder's consent) to which the
Company or any such controlling person and/or any such underwriter may
become subject under applicable law or otherwise, insofar as such losses,
damages, claims, liabilities (or actions or proceedings in respect
thereof), costs or expenses arise out of or are based on (i) any untrue or
alleged untrue statement of any material fact contained in the registration
statement or included in the prospectus, as amended or supplemented, or
(ii) the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances in which they were made, not misleading,
and the Investor will reimburse the Company, any underwriter and each such
controlling person of the Company or any underwriter, promptly upon demand,
for any reasonable legal or other expenses incurred by them in connection
with investigating, preparing to defend or defending against or appearing
as a third-party witness in connection with such loss, claim, damage,
liability, action or proceeding; in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was so made in strict conformity with written
information furnished by the Investor specifically for inclusion therein.
The foregoing indemnity agreement is subject to the condition that, insofar
as it relates to any such untrue statement (or alleged untrue statement) or
omission (or alleged omission) made in the preliminary prospectus but
eliminated or remedied in the amended prospectus at the time the
registration statement becomes effective or in the final prospectus, such
indemnity agreement shall not inure to the benefit of (i) the Company and
(ii) any underwriter, if a copy of the final prospectus was not furnished
to the person or entity asserting the loss, liability, claim or damage at
or prior to the time such furnishing is required by the 1933 Act; PROVIDED,
FURTHER, that this indemnity shall not be deemed to relieve any underwriter
of any of its due diligence obligations; PROVIDED, FURTHER, that the
indemnity agreement contained in this subsection 5(b) shall not apply to
amounts paid in settlement of any such claim, loss, damage, liability or
action if such settlement is effected without the consent of the Investor,
which consent shall not be unreasonably withheld.
c. Promptly after receipt by an indemnified party pursuant to the
provisions of Sections 5(a) or 5(b) of notice of the commencement of any
action involving the subject matter of the foregoing indemnity provisions,
such indemnified party will, if a claim thereof is to be made against the
indemnifying party pursuant to the provisions of said Section 5(a) or 5(b),
promptly notify the indemnifying party of the commencement thereof; but the
omission to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than
hereunder, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action. In case such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; PROVIDED,
HOWEVER, that if the defendants in any action include both the indemnified
party and the indemnifying party and there is a conflict of interests which
would prevent counsel for the indemnifying party from also representing the
indemnified party, the indemnified party or parties shall have the right to
select one separate counsel to participate in the defense of such action on
behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of said Sections 5(a) or 5(b)
for any legal or other expense subsequently incurred by such indemnified
party in connection with the defense thereof, unless (i) the indemnified
party shall have employed counsel in accordance with the provision of the
preceding sentence, (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the notice of the
commencement of the action and within fifteen (15) days after written
notice of the indemnified party's intention to employ separate counsel
pursuant to the previous sentence, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. No indemnifying party will consent to
entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect to such
claim or litigation.
6. AMENDMENT OF REGISTRATION RIGHTS.
Provisions 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 the
Investor. Any amendment or waiver effected in accordance with this Section 6
shall be binding upon the Investor and the Company. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities. No consideration shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.
Page 3 of 5 pages
7. MISCELLANEOUS.
a. A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the record owner of such Registrable Securities.
b. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated
and kept on file by the sending party); or (iii) one Business Day after
deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company:
Elbit Vision Systems Ltd.
0 Xxxxxxx Xxxxxx,
Xxxxxxxx Industrial Park,
Kadima, X.X. Xxx 00000,
Xxxxxx
Telephone: 000-0-000 1610
Fax: 000-0-000 1700
With a copy to (which shall not constitute notice):
Xxxxx Xxxxx & Co.
One Azrieli Center, Round Tower, Tel Aviv, Israel
Telephone: x(000)-0-000-0000
Facsimile: x(000)-0-000-0000
Attention: Xxxxxx Xxxxxxx, Adv.
If to Elbit:
3 Azrieli Center
Tel-Aviv,
Israel
Telephone: x(000) 0-000-0000
Fax: x(000) 0-000-0000
Attn: General Counsel
c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
d. This Rights Agreement shall be governed by and construed in
accordance with the internal laws of the State of Israel, without giving
effect to any statutes concerning choice or conflict of law (whether of the
State of Israel or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Israel. Any
controversy or claim arising out of or in connection with this agreement or
any breach or alleged breach hereof shall be exclusively resolved by the
competent courts of Haifa, Israel, and each of the parties hereby
irrevocably submits to the exclusive jurisdiction of such courts.
e. This Agreement, the Securities Purchase Agreement, the Warrants and
the instruments referenced herein and therein constitute the entire
agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
This Agreement, the Securities Purchase Agreement, the Warrants and the
instruments referenced herein and therein supersede all prior agreements
and understandings among the parties hereto with respect to the subject
matter hereof and thereof.
f. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
Page 4 of 5 pages
g. This Agreement may be executed in identical 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 facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this
Agreement.
h. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such
other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
i. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent and no rules
of strict construction will be applied against any party.
j. This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.
k. This Agreement shall terminate and be of no further effect on the
date on which the Investor shall have sold, or can sell pursuant to Rule
144 and Regulation S, all of the Registrable Securities, without any
limitation whatsoever, including any volume limitations, and further
provided, that the restrictive legend was removed of all the Registrable
Securities.
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY:
ELBIT VISION SYSTEMS LTD.
By: _____________________
Name:
Title:
ELBIT LTD.
By: _____________________
Name:
Title:
SCHEDULE OF BUYERS
ADDRESS AND NUMBER OF NUMBER OF
NAME FACSIMILE NUMBER ORDINARY SHARES WARRANT SHARES
--------- ----------------- ------------ ----------------
ELBIT LTD. 3 Azrieli Center 2,174,603 396,825
Tel-Aviv,
Israel
(000)0-000-0000
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