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REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is made
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and entered into as of January 10, 2000, among Nexus Telocation Systems Ltd., a
corporation organized under the laws of Israel (the "Company"), and the parties
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who have executed this Agreement and whose names appear on Schedule I hereto
(each party listed on Schedule I hereto is sometimes individually referred to
herein as a "Purchaser" and all such parties are sometimes collectively referred
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to herein as the "Purchasers").
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This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof among the Company and the Purchasers (the
"Purchase Agreement").
The Company and the Purchasers hereby agree as follows:
1. Definitions
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Capitalized terms used and not otherwise defined herein shall
have the meanings given such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"Advice" has meaning set forth in Section 3(d) hereof.
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"Affiliate" means, with respect to any Person, any other
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Person that directly or indirectly controls or is controlled by or under common
control with such Person. For the purposes of this definition, "control," when
used with respect to any Person, means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms "affiliated," controlling" and "controlled" have
meanings correlative to the foregoing.
"Business Day" means any day except Saturday, Sunday and any
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day which shall be a legal holiday or a day on which banking institutions in the
State of New York or Israel generally are authorized or required by law or other
government actions to close.
"Commission" means the Securities and Exchange Commission.
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"Common Stock" means the Company's Ordinary Shares, nominal
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value NIS 0.01 per share.
"Demand Registration(s)" has the meaning set forth in Section
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2(b) hereof.
"Dollars" or the "$" means United States Dollars, the lawful
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money of the United States.
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"Effectiveness Date" means the earlier of (i) the fifth
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Business Day after the Company has received notice (written or oral) from the
Commission that the Commission Staff will not be reviewing the Registration
Statement or has no further comments on the Registration Statement or (ii) the
150th day following the First Closing Date; provided, however, that the Company
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shall use its best efforts to cause the Registration Statement to be declared
effective within 90 days following the First Closing Date.
"Effectiveness Period" has the meaning set forth in Section
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2(a) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
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amended.
"Filing Date" means as soon as practicable but in no event
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later than the 30th day following the First Closing Date.
"First Closing" means the First Closing as defined in the
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Purchase Agreement.
"First Closing Date" means the First Closing Date as defined
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in the Purchase Agreement.
"Holder" or "Holders" means the holder or holders, as the case
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may be, from time to time of Registrable Securities.
"Indemnified Party" has the meaning set forth in Section 5(c)
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hereof.
"Indemnifying Party" has the meaning set forth in Section 5(c)
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hereof.
"Initial Registration Statement" has the meaning set forth in
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Section 2(a) hereof.
"Lead Investor" means QEG-NTS Holdings LLC; provided that to
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the extent that QEG-NTS Holdings LLC transfers any Registrable Securities to any
of Quantum Emerging Growth Fund N.V. or its affiliates (such term shall include
any funds managed by Xxxxx Fund Management LLC or any of its affiliates), then
the term "Lead Investor" shall refer to QEG-NTS Holdings LLC and/or such other
entity or entities.
"Losses" has the meaning set forth in Section 5(a) hereof.
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"Majority Holders" means the Holders of at least fifty-one
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(51%) percent of the Registrable Securities.
"Nasdaq" means the SmallCap Market System of the Nasdaq Stock
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Market.
"NIS" means New Israeli Shekel, the lawful money of Israel.
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"Person" means an individual or a corporation, partnership,
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trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
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"Per Share Market Value" means on any particular date the
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closing sale price per share of the Common Stock on such date (as reported by
Bloomberg Information Services, Inc., or any successor reporting service) on
Nasdaq or, if the Common Stock is not then quoted on Nasdaq, any Subsequent
Market on which the Common Stock is then listed.
"Proceeding" means an action, claim, suit, investigation or
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proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
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Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), 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 the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
"Registrable Securities" means (i) the shares of Common Stock
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issued to the Purchasers upon the consummation of the First Closing pursuant to
the Purchase Agreement, (ii) the shares of Common Stock issuable to the
Purchasers upon the consummation of the Second Closing pursuant to the Purchase
Agreement, (iii) any shares of Common Stock issued to the Purchasers upon
exercise of their preemptive rights (the "Preemptive Rights") as provided in the
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Purchase Agreement and (iv) any shares of the Company's capital stock issued to
the Purchasers with respect to (i), (ii) or (iii) as a result of any stock
split, stock dividend, recapitalization, exchange or similar event or otherwise.
"Registration Delay Payment" has the meaning set forth in
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Section 2(d) hereof.
"Registration Statement" means the Initial Registration
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Statement and any additional registration statements contemplated by Sections
2(b) and 6(d) hereof, including (in each case) the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission
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pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission
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pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
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"Rule 415" means Rule 415 promulgated by the Commission
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pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Second Closing" shall mean the Second Closing as defined in
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the Purchase Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
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"Subsequent Market" means the National Market System of the
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Nasdaq Stock Market, the American Stock Exchange or the New York Stock Exchange.
"Trading Day" means a day on which the Nasdaq (or in the event
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the Common Stock is not traded on Nasdaq, such other Subsequent Market on which
the Common Stock is listed) is open for trading.
"Underwritten Offering" means a registration in connection
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with which securities of the Company are sold to an underwriter for reoffering
to the public pursuant to an effective registration statement.
2. Registration Requirements
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(a) Filing and Effectiveness Obligations. On or prior to the
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Filing Date, the Company shall prepare and file with the Commission a
Registration Statement (the "Initial Registration Statement") which shall cover
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all Registrable Securities for an offering to be made on a continuous basis
pursuant to a "Shelf" registration statement under Rule 415. The Initial
Registration Statement shall be on Form F-3 or any successor form (except if the
Company is not then eligible to register for resale the Registrable Securities
on Form F-3, in which case such registration shall be on another appropriate
form in accordance herewith, subject to the reasonable consent of the Lead
Investor, provided that the Lead Investor owns Registrable Securities at such
time). The Company shall use its best efforts to cause the Initial Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof, but in any event on or prior to the
Effectiveness Date, and to keep such Initial Registration Statement continuously
effective under the Securities Act, until the date when all Registrable
Securities covered by such Initial Registration Statement have been sold or may
be sold without volume restrictions pursuant to Rule 144, as determined by
counsel to the Company pursuant to a written opinion letter addressed to the
Holders and the Company's transfer agent to such effect (the "Effectiveness
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Period").
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(b) Demand Registration. At any time when an Initial
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Registration Statement covering the Registrable Securities is not effective
(during any period in which an Initial Registration Statement is otherwise
required to be effective pursuant to Section 2(a)), the Majority Holders may
request in writing that the Company effect a registration under the Securities
Act for all or part of the Registrable Securities for sale in the manner
specified in such request, and on a form that may be used for the registration
of such Registrable Securities. All registrations requested pursuant to the
foregoing are referred to herein as "Demand Registrations." A Demand
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Registration may be effected on no more than two (2) occasions. Within ten days
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after receipt of any request pursuant to this Section 2(b), the Company will
give written notice of such request to all other Holders of Registrable
Securities, and will include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein within fifteen (15) Business Days after the receipt of the Company's
notice; provided, however, that the Company shall not be required to register
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any Registrable Securities pursuant to this Section 2(b) that are eligible for
sale pursuant to Rule 144 without regard to volume restrictions. If requested by
the Majority Holders, a Demand Registration shall be in the form of an
Underwritten Offering. In such event, and if the managing underwriters advise
the Company and such Holders in writing that in their opinion the amount of
Registrable Securities and other securities, if any, proposed to be sold in such
Underwritten Offering exceeds the amount of Registrable Securities and other
securities, if any, which can be sold in such Underwritten Offering, and based
on such determination recommends inclusion in such registration statement of
fewer Registrable Securities than proposed to be sold by the Holders, then (a)
the number of Registrable Securities of the Holders included in such
registration statement shall be reduced pro rata among such Holders (based upon
the number of Registrable Securities requested to be included in the
registration) or (b) none of the Registrable Securities of the Holders shall be
included in such registration statement if the Company, after consultation with
the underwriter(s), recommends the inclusion of none of such Registrable
Securities; provided, however, that if securities are being offered for the
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account of other persons or entities (including the Company), such reduction
shall not represent a greater fraction of the number of Registrable Securities
intended to be offered by the Holders than the fraction of similar reductions
imposed on such other persons or entities (including the Company).
(c) Underwriter. If a Demand Registration is an Underwritten
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Offering, the Holders of a majority of the Registrable Securities to be included
in such offering shall designate the lead underwriter, who shall be acceptable
to the Company (such approval not to be unreasonably withheld) and the Company
may designate one or more co-managing underwriters. No Holder may participate in
any Underwritten Offering hereunder unless such Holder (i) agrees to sell its
Registrable Securities on the basis provided in any underwriting agreements
entered into in connection therewith and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such agreements.
(d) Penalties. If (i) the Initial Registration Statement
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covering all the applicable Registrable Securities and required to be filed by
the Company pursuant to this Agreement is not declared effective by the
Commission on or before the Effectiveness Date or (ii) on any day after the
Registration Statement has been declared effective by the Commission sales of
all the Registrable Securities required to be included on a Registration
Statement cannot be made pursuant to the Registration Statement (including,
without limitation, because of a failure to keep the Registration Statement
effective, to disclose such information as is necessary for sales to be made
pursuant to the Initial Registration Statement, or to register sufficient shares
of Common Stock, but excluding any periods when such sales cannot be made solely
by reason of any act or omission attributable to the Purchasers), then, as
partial relief for the damages to any Holder by reason of any such delay in or
reduction of its ability to sell the Registrable Securities (which remedy shall
not be exclusive of any other remedies available at law or in equity), the
Company shall pay to each Holder an amount in cash (a "Registration Delay
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Payment") equal to the difference between (A) the product of (1) the number
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shares of Registrable Securities such Holder attempts to sell and (2) the Per
Share Market Value on the last trading date immediately prior to such sale, and
(B) the purchase price received by the Holder in a bona fide transaction wherein
it has used commercially reasonable efforts to obtain the highest price possible
with respect to the sale of such shares of Common Stock; provided, however, that
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nothing contained herein shall require the Holders to effect a Demand
Registration. Notwithstanding the foregoing, if sales cannot be made pursuant to
a Registration Statement for reasons other than the Company's negligence or
failure to act, prior to the imposition of any Registration Delay Payment the
Company shall have five (5) Business Days (beginning on the first day when sales
cannot be made pursuant to such Registration Statement) to cure such condition
so that sales of all Registrable Securities required to be included on a
Registration Statement can be made pursuant to such Registration Statement.
3. Registration Procedures
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In connection with the Company's registration obligations
hereunder, the Company shall:
(a) Preparation of Registration Statement. Prepare and file
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with the Commission on or prior to the Filing Date a Registration Statement on
Form F-3 or its successor form (or if the Company is not then eligible to
register for resale the Registrable Securities on Form F-3 such registration
shall be on another appropriate form in accordance herewith (which shall include
a Plan of Distribution substantially in the form of Exhibit A annexed hereto,
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unless in connection with an Underwritten Offering) or, in connection with an
Underwritten Offering hereunder, such other form agreed to by the Company and a
majority of the Registrable Securities to be covered by such Registration
Statement), and cause the Registration Statement to become effective and remain
effective as provided herein; provided, however, that not less than three (3)
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Business Days prior to the filing of the Registration Statement or any related
Prospectus or any amendment or supplement thereto (including any document that
would be incorporated therein by reference), the Company shall, if reasonably
practicable (i) furnish to the Holders and any managing underwriter copies of
all such documents proposed to be filed (including documents incorporated by
reference), which documents will be subject to the review of such Holders and
any managing underwriter, and (ii) cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of respective counsel to such Holders
and such underwriters, to conduct a reasonable investigation within the meaning
of the Securities Act. The Company shall not file the Registration Statement or
any such Prospectus or any amendments or supplements thereto to which the Lead
Investor or any managing underwriter shall reasonably object, and will not
request acceleration of such Registration Statement without prior notice to such
counsel. The sections of such Registration Statement covering information with
respect to the Holders, the Holder's beneficial ownership of securities of the
Company or the Holders intended method of disposition of Registrable Securities
shall conform to the information provided to the Company by each of the Holders.
(b) Amendments. (i) Prepare and file with the Commission such
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amendments, including post-effective amendments, to the Registration Statement
as may be necessary to keep the Registration Statement continuously effective
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for the Effectiveness Period and prepare and file with the Commission such
additional Registration Statements as are required to be filed hereunder in
order to register for resale under the Securities Act all of the Registrable
Securities, (ii) cause the related Prospectus to be amended or supplemented by
any required Prospectus supplement, and as so supplemented or amended to be
filed pursuant to Rule 424 (or any similar provisions then in force) promulgated
under the Securities Act, (iii) respond as promptly as possible to any comments
received from the Commission with respect to the Registration Statement or any
amendment thereto and as promptly as practicable, but in no event later than
five (5) Business Days, (iv) provide the Holders true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement, and (v) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented. In the event the number of shares available under
a Registration Statement filed pursuant to this Agreement becomes insufficient
to cover the Registrable Securities, the Company shall amend the Registration
Statement, or file a new Registration Statement (on the short form available
therefore, if applicable), or both, so as to cover such Registrable Securities,
in each case as soon as practicable, but in any event within twenty (20)
Business Days after the necessity therefor arises. The Company shall use its
best efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof, but in no event
later than ninety (90) days after the date on which the Company reasonably first
determines (or reasonably should have determined) the need therefor. The
provisions of Section 2(d) shall be applicable with respect to such obligation.
(c) Notifications. Notify the Holders of Registrable
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Securities to be sold, and any managing underwriter, as promptly as possible
(and, in the case of (i)(a) below, not less than five (5) days prior to such
filing and, in the case of (i)(c) below, not later than the first Business Day
after effectiveness) and (if requested by any such Person) confirm such notice
in writing no later than one (1) Business Day following the day (i) (a) when a
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement is proposed to be filed, (b) when the Commission notifies
the Company whether there will be a "review" of such Registration Statement and
whenever the Commission comments in writing on such Registration Statement and
(c) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the Commission or any
other Federal or state governmental authority for amendments or supplements to
the Registration Statement or Prospectus or for additional information, (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose, (iv) any of the
representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated hereby ceases to be true and
correct in all material respects, (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose, and (vi) of the occurrence of any event that makes any statement made
in the Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
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that requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (other than with respect to the filing of requisite Forms
6-K and 20-F, which shall be incorporated by reference in the Prospectus).
(d) Advice. Each Holder agrees by its acquisition of such
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Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c)(ii), 3(c)(iii),
3(c)(iv), 3(c)(v) or 3(c)(vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration Statement
until such Holder's receipt of the copies of the supplemented Prospectus and/or
amended Registration Statement, or until it is advised in writing (the "Advice")
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by the Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of a Holder in accordance with the terms of the Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an
Holder has entered into a contract for sale prior to the Holder's receipt of a
notice from the Company of the happening of any event of the kind described in
Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(c)(vi) and for which the
Holder has not yet settled.
(e) Supplements and Post-Effective Amendments. Upon the
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occurrence of any event contemplated by Section 3(c)(vi), as promptly as
possible prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will 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.
(f) Copies of Registration Statement. Furnish to each Holder
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and any managing underwriter, without charge, at least one conformed copy of
each Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested by
such Holder or such managing underwriter (including those previously furnished
or incorporated by reference) promptly after the filing of such documents with
the Commission.
(g) Copies of Prospectus. Promptly deliver to each Holder and
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any managing underwriter, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Holder or such managing underwriter may reasonably
request, and the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders and any
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underwriters in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto.
(h) Blue Sky. Prior to any public offering of Registrable
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Securities, use its best efforts to register or qualify or cooperate with the
selling Holders and any underwriters 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 Holder or underwriter
requests in writing, to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period and to do any and
all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the Company shall not be required to qualify
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generally to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to general service of process in any
such jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.
(i) Certificates. Cooperate with the Holders and any managing
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underwriter to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to a Registration
Statement, which certificates shall be free, to the extent permitted by
applicable law and the Purchase Agreement, of all restrictive legends, and to
enable such Registrable Securities to be in such denominations and registered in
such names as any Holder or managing underwriter may request.
(j) Listing. (i) Cause all Registrable Securities relating to
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such Registration Statement to be authorized for quotation on Nasdaq as soon as
practicable after the Closing; (ii) maintain such listing of all such
Registrable Securities on Nasdaq; (iii) provide the Holders evidence of such
listing; (iv) refrain from taking any action which may result in the delisting
or suspension of the Common Stock on Nasdaq; and (v) pay all fees and expenses
in connection with satisfying its obligations hereunder.
(k) Underwriting Agreement. Enter into such agreements
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(including an underwriting agreement in form, scope and substance as is
customary in Underwritten Offerings) and take all such other actions in
connection therewith (including those reasonably requested by any managing
underwriter and the Holders of a majority of the Registrable Securities being
sold) in order to expedite or facilitate the disposition of such Registrable
Securities, and whether or not an underwriting agreement is entered into, (i)
make such representations and warranties to such Holders and such underwriters
as are customarily made by issuers to underwriters in underwritten public
offerings, and confirm the same if and when requested, (ii) in the case of an
Underwritten Offering, obtain and deliver copies thereof to the managing
underwriters, if any, or in the case of non-Underwritten Offerings, if
reasonably requested by the selling Holders (and at the expense of such selling
Holders), obtain and deliver copies thereof to such selling Holders, of opinions
of counsel to the Company and updates thereof addressed to each such
underwriter, in form, scope and substance reasonably satisfactory to any such
managing underwriters and counsel to the selling Holders covering the matters
customarily covered in opinions requested in Underwritten Offerings and such
other matters as may be reasonably requested by such counsel and such
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underwriters, (iii) immediately prior to the effectiveness of the Registration
Statement, and, in the case of an Underwritten Offering, at the time of delivery
of any Registrable Securities sold pursuant thereto, and, in the case of
non-Underwritten Offerings, at such time as the selling Holders may reasonably
request (and at the expense of such selling Holders), obtain and deliver copies
to the Holders and the managing underwriters, if any, of "cold comfort" letters
and updates thereof from the independent certified public accountants of the
Company (and, if required, any other independent certified public accountants of
any subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data is, or is required to be, included
in the Registration Statement), addressed to each of the underwriters, if any,
in form and substance as are customary in connection with Underwritten
Offerings, (iv) if an underwriting agreement is entered into, the same shall
contain indemnification provisions and procedures no less favorable to the
selling Holders and the underwriters, if any, than those set forth in Section 5
(or such other provisions and procedures acceptable to the managing
underwriters, if any, and Holders of a majority of Registrable Securities
participating in such Underwritten Offering and (v) deliver such documents and
certificates as may be reasonably requested by the Holders of a majority of the
Registrable Securities being sold, their counsel and any managing underwriters
to evidence the continued validity of the representations and warranties made
pursuant to clause 3(k)(i) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company.
(l) Due Diligence. Make available for inspection by the
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selling Holders, any representative of such Holders, any underwriter
participating in any disposition of Registrable Securities, and any attorney or
accountant retained by such selling Holders or underwriters, at the offices
where normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors, agents and employees of the
Company and its subsidiaries to supply all information in each case reasonably
requested by any such Holder, representative, underwriter, attorney or
accountant in connection with the Registration Statement; provided, however,
that if any information is determined in good faith by the Company (in writing)
to be of a confidential nature at the time of delivery of such information, then
prior to delivery of such information, the Company and the Holders shall enter
into a confidentiality agreement reasonably acceptable to the Company and the
Holders providing that such information shall be kept confidential, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities (provided,
however, that the Company shall be given notice of any such pending disclosure
so that the Company may seek a protective order), (ii) disclosure of such
information, in the opinion of counsel to such Person, is required by law, (iii)
such information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard by such Person or (iv) such
information becomes available to such Person from a source other than the
Company and such source is not known by such Person to be bound by a
confidentiality agreement with the Company.
(m) Earnings Statement. Comply in all material respects with
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all applicable rules and regulations of the Commission and make generally
available to its securityholders earning statements satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158.
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(n) Information. The Company may require each selling Holder
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to furnish to the Company information regarding such Holder and the distribution
of such Registrable Securities as is required by law to be disclosed in the
Registration Statement, and the Company may exclude from such registration the
Registrable Securities of any such Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such request, and such
shall not form the basis for penalties pursuant to Section 2(d) hereof.
The Company shall hold in confidence and not make any
disclosure of information concerning a Holder provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction (provided, however,
that the Holder shall be given notice of any such pending disclosure so that the
Holder may seek a protective order), or (iv) such information has been made
generally available to the public other than by disclosure in violation of this
or any other agreement. The Company agrees that it shall, upon learning that
disclosure of such information concerning a Holder is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to such Holder prior to making such disclosure, and allow the Holder, at
its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, such information.
If the Registration Statement refers to any Holder by name or otherwise
as the holder of any securities of the Company, then such Holder shall have the
right to require (if such reference to such Holder by name or otherwise is not
required by the Securities Act or any similar Federal statute then in force) the
deletion of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
(o) Suspensions. Use its best efforts to avoid the issuance
-----------
of, or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of the Registration Statement or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
(p) Responses to the Commission. The Company agrees to respond
---------------------------
fully and completely to any and all comments on a Registration Statement
received from the Commission staff as promptly as reasonably possible, but in no
event later than fifteen (15) Business Days of the receipt of such comments,
regardless of whether such comments are in oral or written form.
(q) Confirmation of Effectiveness. Within two (2) Business
-------------------------------
Days after a Registration Statement which covers applicable Registrable
Securities is ordered effective by the Commission, the Company shall deliver,
and shall cause legal counsel for the Company to deliver, to the transfer agent
for such Registrable Securities (with copies to the Holders whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the Commission in the form
attached hereto as Exhibit B.
11
Page 66 of 91 Pages
4. Registration Expenses.
---------------------
All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company,
whether or not pursuant to an Underwritten Offering and whether or not the
Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement; provided
that the Company shall not be responsible for fees and commissions of any
underwriters used by the Holders in connection with the Initial Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, reasonable fees and expenses (A) with respect to filings
required to be made with Nasdaq and each other securities exchange or market on
which Registrable Securities are required hereunder to be quoted and (B) in
compliance with state securities or Blue Sky laws (including, without
limitation, fees and disbursements of counsel for the Holders in connection with
Blue Sky qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the managing underwriter, if any, or the Holders of a majority
of Registrable Securities being sold may designate)), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities and of printing Pospectuses), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company
and the Holders, (v) Securities Act liability insurance, if the Company so
desires such insurance and (vi) reasonable fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement. In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, and the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.
5. Indemnification
---------------
(a) Indemnification by the Company. The Company shall,
---------------------------------
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents (including any underwriters
retained by such Holder in connection with the offer and sale of Registrable
Securities), investment advisors and employees of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all joint or several losses, claims,
damages, liabilities, costs (including, without limitation, costs of preparation
and attorneys' fees) and expenses (collectively, together with actions,
proceedings or inquiries by any regulatory or self-regulatory organization,
whether commenced or threatened, "Losses"), as incurred, arising out of or
relating to (i) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of
12
Page 67 of 91 Pages
prospectus or in any amendment or supplement thereto or in any preliminary
Prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that such untrue
statements or omissions are based solely upon and in conformity with information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, which information was reasonably relied on by the
Company for use therein or to the extent that such information relates to such
Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
prospectus or in any amendment or supplement thereto (provided that the Company
amended any disclosure with respect to the method of distribution upon written
notice from the Holders that such section of the Prospectus should be revised in
any way) or (ii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any other law, including, without limitation,
any state securities law, or any rule or regulation thereunder relating to the
offer or sale of Registrable Securities. The Company shall not, however, be
liable for any Losses to any Holder with respect to any untrue or alleged untrue
statement of material fact or omission or alleged omission of material fact if
such statement or omission was made in a preliminary Prospectus and such Holder
did not receive a copy of the final Prospectus (or any amendment or supplement
thereto) at or prior to the confirmation of the sale of the Registrable
Securities in any case where such delivery is required by the Securities Act and
the untrue or alleged untrue statement of material fact or omission or alleged
omission of material fact contained in such preliminary Prospectus was corrected
in the final Prospectus (or any amendment or supplement thereto), unless the
failure to deliver such final Prospectus (as amended or supplemented) was a
result of noncompliance by the Company with Section 3(g) of this Agreement. The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally
--------------------------
and not jointly, indemnify and hold harmless the Company, the directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or arising solely out of or based solely upon any omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading to the extent, but only to the extent, that
such untrue statement or omission is contained in any information so furnished
in writing by such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus and that such information was
reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus or such form of prospectus or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of prospectus; provided, however, that the indemnity
agreement contained in this Section 5(b) shall not apply to amounts paid in
settlement of any Losses if such settlement is effected without the prior
written consent of such Holder. In no event shall the liability of any selling
Holder hereunder be greater in amount than the dollar amount of the net proceeds
13
Page 68 of 91 Pages
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding
---------------------------------------
shall be brought or asserted against any Person entitled to indemnity hereunder
(an "Indemnified Party"), such Indemnified Party promptly shall notify the
------------------
Person from whom indemnity is sought (the "Indemnifying Party") in writing, and
-------------------
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, however, that the failure of any Indemnified Party to give such notice
-------- -------
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in
writing to pay such fees and expenses, or (ii) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding, or
(iii) the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the reasonable
expense of the Indemnifying Party). The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.
All fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party, which notice shall be delivered no more frequently than on a
monthly basis (regardless of whether it is ultimately determined that an
Indemnified Party is not entitled to indemnification hereunder; provided, that
the Indemnifying Party may require such Indemnified Party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such Indemnified Party is not entitled to indemnification
hereunder).
14
Page 69 of 91 Pages
(d) Contribution. If a claim for indemnification under Section
------------
5(a) or 5(b) is unavailable to an Indemnified Party because of a failure or
refusal of a court of competent jurisdiction to enforce such indemnification in
accordance with its terms (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or expenses
incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms. In no event shall any selling Holder be required to
contribute an amount under this Section 5(d) in excess of the net proceeds
received by such Holder upon sale of the Registrable Securities pursuant to the
Registration Statement giving rise to such contribution obligation.
The parties hereto 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 that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. 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.
The indemnity and contribution agreements contained in this
Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
6. Miscellaneous
-------------
(a) Remedies. In the event of a breach by the Company or by a
--------
Holder of any of their obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
15
Page 70 of 91 Pages
(b) No Inconsistent Agreements. Neither the Company nor any of
--------------------------
its subsidiaries has, as of the date hereof, nor shall the Company or any of its
subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Except as disclosed in Schedule 3.4 of the Purchase Agreement, neither the
Company nor any of its subsidiaries has previously entered into any agreement
granting any registration rights with respect to any of its securities to any
Person. Without limiting the generality of the foregoing, without the written
consent of the Majority Holders, the Company shall not grant to any Person the
right to request the Company to register any securities of the Company under the
Securities Act unless the rights so granted are subordinated in all respects to
the rights in full of the Holders set forth in Section 2 herein, and are not
otherwise in conflict or inconsistent with the provisions of this Agreement.
This Agreement, together with the Purchase Agreement, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters.
(c) No Piggyback on Registrations. The Company shall not after
-----------------------------
the date hereof enter into any agreement providing such right to any of its
securityholders, unless the right so granted is not in conflict or inconsistent
with the provisions of this Agreement.
(d) Piggy-Back Registrations. Except as provided herein if, at
------------------------
any time when there is not an effective Registration Statement covering the
Registrable Securities, the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form F-4 (as promulgated under the Securities Act) or
its then equivalent relating to equity securities to be issued solely in
connection with any acquisition of any entity or business, the Company shall
send to each Holder of Registrable Securities written notice of such
determination within two (2) Business Days thereof and, if within ten (10) days
after receipt of such notice, any such Holder shall so request in writing,
(which request shall specify the Registrable Securities intended to be disposed
of by the Holders), the Company will use reasonable efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the Holder, to the extent requisite
to permit the disposition of the Registrable Securities so to be registered;
provided, that if at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to such Holder and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay expenses in accordance with Section 4 hereof), and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities being registered pursuant to this Section 6(d) for the
same period as the delay in registering such other securities. The Company shall
include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered; provided, however, that the
-------- -------
Company shall not be required to register any Registrable Securities pursuant to
this Section 6(d) that are eligible for sale pursuant to Rule 144(k) of the
Securities Act. In the case of an underwritten public offering, if the managing
16
Page 71 of 91 Pages
underwriter(s) or underwriter(s) should reasonably object to the inclusion of
the Registrable Securities in such registration statement, then if the Company
after consultation with the underwriter's representative should reasonably
determine that the inclusion of such Registrable Securities would materially
adversely affect the offering contemplated in such registration statement, and
based on such determination recommends inclusion in such registration statement
of fewer Registrable Securities then proposed to be sold by the Holders, then
(x) the number of Registrable Securities of the Holders included in such
registration statement shall be reduced pro rata among such Holders (based upon
the number of Registrable Securities requested to be included in the
registration) or (y) none of the Registrable Securities of the Holders shall be
included in such registration statement if the Company, after consultation with
the underwriter(s), recommends the inclusion of none of such Registrable
Securities; provided, however, that if securities are being offered for the
-------- -------
account of other persons or entities as well as the Company, such reduction
shall not represent a greater fraction of the number of Registrable Securities
intended to be offered by the Holders than the fraction of similar reductions
imposed on such other persons or entities (other than the Company).
Notwithstanding the foregoing, the Company shall not file any registration
statement under the Securities Act (other than on Form F-4) relating to the
offer and sale of any equity securities of the Company, or offer or sell any
equity securities of the Company in a transaction exempt from registration
pursuant to Regulation S under the Securities Act, from the date of this
Agreement until such time as the Initial Registration Statement has been
effective for a period of sixty (60) Trading Days, which period shall be tolled
if the effectiveness of the Initial Registration Statement is suspended for any
reason whatsoever.
(e) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Majority Holders; provided, however, that for the purposes of this
-------- -------
sentence, Registrable Securities that are owned, directly or indirectly, by the
Company, or an Affiliate of the Company are not deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders and that does not directly or indirectly affect the rights of other
Holders may be given by the Majority Holders to which such waiver or consent
relates; provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the provisions of
the immediately preceding sentence. Any amendment or waiver effected in
accordance with this Section shall be binding upon each Holder, each future
Holder, and the Company. Upon effectiveness of each such amendment or waiver,
the Company shall promptly give written notice thereof to the Holders who have
not previously consented thereto in writing.
(f) Notices. Any notice or other communication required or permitted to
-------
be given hereunder shall be in writing and shall be deemed to have been received
(a) upon hand delivery (receipt acknowledged) or delivery by telex (with correct
answer back received), telecopy or facsimile (with transmission confirmation
report) at the address or number designated below (if received by 5:00 p.m. New
York City time where such notice is to be received), or the first Business Day
following such delivery (if received after 5:00 p.m. New York City time where
such notice is to be received) or (b) on the second Business Day following the
17
Page 72 of 91 Pages
date of mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications are (i) if to the Company to 6B Tfutzot
Xxxxxx Xxxxxx Xxxxxxxxx 00000, Xxxxxx, Attn: Xxxxx Xxxxxx, fax no. (011)
000-0-000-0000, with copies to Xxxxx Xxxxx & Co., 3 Xxxxxx Xxxxxx Xxxxxx, Xxx
Xxxx, Xxxxxx, 00000, Attn: Orly Tsioni, Advocate, fax no. 000-000-0-000-0000 and
to Xxxxxx Xxxxxxx & Xxxxxxx, 0 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn:
Xxxxxx Xxxxxxxx, Esq., fax no. 732-3232and (ii) if to any Purchaser to the
address set forth on Schedule I hereto with copies to those specified on the
signature pages hereto and to Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxxxx Xxxxxx, Esq., fax no.
(000) 000-0000 or such other address as may be designated in writing hereafter,
in the same manner, by such Person.
(g) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign its rights hereunder in the manner and to
the Persons as permitted under the Purchase Agreement. In addition, the rights
of each Holder hereunder, including the right to have the Company register for
resale Registrable Securities in accordance with the terms of this Agreement,
shall be automatically assignable by each Holder if: (i) the Holder agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned, (iii) following such
transfer or assignment the further disposition of such securities by the
transferee or assignees is restricted under the Securities Act and applicable
state securities laws, and (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this Section, the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
of this Agreement. The rights to assignment shall apply to the Holders'(and to
subsequent) successors and assigns.
(h) Notice of Request for Registration. The Company shall
------------------------------------
provide the Holders with written notice of any request made by any Person that
the Company effect a registration under the Securities Act with respect to any
shares of the Company's equity securities. Such notice shall be delivered to the
Holders pursuant to Section 6(f) hereof as promptly as possible, but in no event
later than two (2) Business Days of receipt thereof.
(i) Counterparts. This Agreement may be executed in any number
------------
of 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. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) Governing Law. All questions concerning the construction,
-------------
validity, enforcement and interpretation of this Agreement shall be governed by
18
Page 73 of 91 Pages
and construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of law. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the
City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consent to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUIRE, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OR THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREUNDER.
(k) Cumulative Remedies. The remedies provided herein are
--------------------
cumulative and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(n) Shares Held by The Company and its Affiliates. Whenever
-----------------------------------------------
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its directly controlled Affiliates shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.
19
Page 74 of 91 Pages
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
NEXUS TELOCATION SYSTEMS LTD.
By:__________________________
Name:
Title:
QEG-NTS HOLDINGS LLC
By:__________________________
Name:
Title:
HAPOALIM ELECTRONICS
COMMUNICATIONS LTD.
By:__________________________
Name:
Title:
BVR TECHNOLOGIES LTD.
By:__________________________
Name:
Title:
_____________________________
XXXXX XXXXXXXX
Page 75 of 91 Pages
THE EMERGING MARKETS
TELECOMMUNICATIONS FUND, INC.
By:__________________________
Name:
Title:
EMV CTSL LLC
By:__________________________
Name:
Title:
CLAL (ISRAEL) LTD.
By:__________________________
Name:
Title:
CLAL INDUSTRIES AND INVESTMENTS LTD.
By:________________________________
Name:
Title:
GLADCOVE INTERNATIONAL LTD.
By:__________________________
Name:
Title:
Page 76 of 91 Pages
ADASHA PROJECT INITIATION
DEVELOPMENT (TA) LTD.
By:__________________________
Name:
Title:
SHREM, FUDIM, XXXXXX & CO. LTD.
By:____________________________
Name:
Title:
DS FOUNDERS GROUP L.P.
By:__________________________
Name:
Title:
THE CANADA ISRAEL OPPORTUNITY FUND II
By:__________________________________
Name:
Title:
THE KAHANOFF FOUNDATION
By:__________________________
Name:
Title:
Page 77 of 91 Pages
LEADER HOLDINGS & INVESTMENTS LTD.
By:_______________________________
Name:
Title:
_____________________________
XXXXXX XXXXX
_____________________________
ITAMAR PATISHI
Page 78 of 91 Pages
SCHEDULE I
Purchasers:1
QEG-NTS Holdings LLC
Hapoalim Electronic Communications Ltd.
BVR Technologies Ltd.
The Emerging Markets
Telecommunications Fund, Inc.
EMV CTSL LLC
Gladcove International Ltd.
Clal Industries and Investment Ltd.
Clal (Israel) Ltd.
Xxxxx Xxxxxxxx
Adasha Project
Initiation Development(TA) Ltd.
Leader Holdings & Investments Ltd.
Shrem, Fudim, Xxxxxx & Co. Ltd.
Xxxxxx Xxxxx
Xxxxxx Patishi
DS Founders Group L.P.
The Canada Israel Opportunity Fund II
The Kahanoff Foundation
________________________
1 The address each of the Purchasers shall be that address set forth next to
such Purchaser's name on Part I to Exhibit A of the Securities Purchase
Agreement
Page 79 of 91 Pages
EXHIBIT A
PLAN OF DISTRIBUTION
Our company is registering the shares of common stock on
behalf of the selling stockholders. All costs, expenses and fees in connection
with the registration of the shares offered by this prospectus will be borne by
the Company, other than brokerage commissions and similar selling expenses, if
any, attributable to the sale of shares which will be borne by the selling
stockholders. Sales of shares may be effected by selling stockholders from time
to time in one or more types of transactions (which may include block
transactions) on the SmallCap Market System of the Nasdaq Stock Market, in the
over-the-counter market, in negotiated transactions, through put or call options
transactions relating to the shares, through short sales of shares, or a
combination of such methods of sale, at market prices prevailing at the time of
sale, or at negotiated prices. Such transactions may or may not involve brokers
or dealers. The selling stockholders have advised our company that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-dealers regarding the sale of their securities, nor is
there an underwriter or coordinated broker acting in connection with the
proposed sale of shares by the selling stockholders.
The selling stockholders may enter into hedging transactions
with broker-dealers or other financial institutions. In connection with such
transactions, broker-dealers or other financial institutions may engage in short
sales of the shares or of securities convertible into or exchangeable for the
shares in the course of hedging positions they assume with selling stockholders.
The selling stockholders may also enter into options or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealers or other financial institutions of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as amended or supplemented to reflect such
transaction).
The selling stockholders may make these transactions by
selling shares directly to purchasers or to or through broker-dealers, which may
act as agents or principals. Such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from selling stockholders and/or
the purchasers of shares for whom such broker-dealers may act as agents or to
whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
The selling stockholders and any broker-dealers that act in
connection with the sale of shares are "underwriters" within the meaning of
Section 2(11) of the Securities Act, and any commissions received by such
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals might be deemed to be underwriting discounts or commissions
under the Securities Act. The selling stockholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving sales
of the shares against certain liabilities, including liabilities arising under
the Securities Act.
Page 80 of 91 Pages
Because selling stockholders are "underwriters" within the
meaning of Section 2(11) of the Securities Act, the selling stockholders will be
subject to the prospectus delivery requirements of the Securities Act. Our
company has informed the selling stockholders that the anti-manipulative
provisions of Regulation M promulgated under the Exchange Act may apply to their
sales in the market.
Selling stockholders also may resell all or a portion of the
shares in open market transactions in reliance upon Rule 144 under the
Securities Act, provided they meet the criteria and conform to the requirements
of Rule 144.
Upon our company being notified by a selling stockholder that
any material arrangement has been entered into with a broker-dealer for the sale
of shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing:
o the name of each such selling stockholder and of the
participating broker-dealer(s);
o the number of shares involved;
o the initial price at which such shares were sold;
o the commissions paid or discounts or concessions allowed to
such broker-dealer(s), where applicable;
o that such broker-dealer(s) did not conduct any
investigation to verify the information set out or
incorporated by reference in this prospectus; and
o other facts material to the transactions.
Page 81 of 91 Pages
EXHIBIT B
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn.:
Re: NEXUS TELOCATION SYSTEMS LTD.
Ladies and Gentlemen:
We are counsel to Nexus Telocation Systems Ltd., a corporation
organized under the laws of Israel (the "Company"), and have represented the
Company in connection with that certain Securities Purchase Agreement (the
"Purchase Agreement") entered into by and among the Company and the buyers named
therein (collectively, the "Holders") pursuant to which the Company issued to
the Holders shares of the Company's common stock, par value NIS 0.01 per share.
Pursuant to the Purchase Agreement, the Company also has entered into a
Registration Rights Agreement with the Holders (the "Registration Rights
Agreement") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement) under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on _______________, 1999, the Company filed a Registration Statement
on Form F-3 (File No. _____________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the Registrable
Securities which names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
cc: [LIST NAMES OF HOLDERS]
