Exhibit 10.42
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REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (the" Agreement") is made as of the 15
day of March, 2000, by and between Electric Fuel Corporation ("EFC"), Tadiran
Limited ("Tadiran") and Koor Industries Limited ("Koor").
RECITALS
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WHEREAS, Tadiran has purchased certain Common Stock of EFC, $0.01 per share
("Common Stock") in accordance with a Share and Assets Purchase Agreement (the
"Acquisition Agreement"), dated as of March, 15, 2000, made by and among EFC,
Tadiran, Tadiran Batteries Limited and Tadiran Electric Industries Corporation.
WHEREAS, Koor has purchased certain Common Stock of EFC in accordance with
a Share Purchase and Agreement (the "Investment Agreement"), dated as of March,
15 2000, made by and among EFC and Koor.
WHEREAS, EFC would like to grant Tadiran and Koor certain registration
rights with respect to their Common Stock in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereto agree as follows:
Certain definitions:
The term "Act" means the Securities Act of 1933, as amended.
The term "Form S-3" means such form under the Act as in effect on the date
hereof or any registration form under the Act subsequently adopted by the SEC as
a successor thereto which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
The terms "register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Act, and the declaration or ordering of effectiveness of
such registration statement or document.
The term "Holder" refers to a holder of Registrable Securities.
The term "Registrable Securities" means (1) all EFC Common Stock purchased by
Tadiran under the Acquisition Agreement, and (ii) all EFC Common Stock purchased
by Koor under the Investment Agreement; provided, however, that any Common Stock
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that could be distributed by the holder thereof (in accordance with applicable
law) within three (3) months without the registration of such shares, shall not
be deemed to be Registrable Securities.
The term "SEC" shall mean the Securities and Exchange Commission.
Registration Rights
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Following the Closing of the Acquisition Agreement, EFC shall file as soon as
possible with the SEC a registration statement on Form S-3 (the "Registration
Statement") and shall use its best reasonable efforts to have such Registration
Statement to be declared effective as soon as possible with the SEC, which shall
include all of the Common Stock issued to Koor under the Investment Agreement as
well as all of the Common Stock issued to Tadiran under the Acquisition
Agreement;
Following the completion of the Effectiveness Period (as defined in Section 5
below), Koor and Tadiran shall have collectively two demand registration rights,
provided that Koor is an affiliate (as such a term is defined in the Act) of EFC
at such time that Koor or Tadiran request such demand registration.
If Koor or Tadiran intend to distribute the Registrable Securities covered by
their request under Section 2.2 by means of an underwriting, they shall so
advise EFC as a part of their request made pursuant to such Section and EFC
shall have the right to designate the managing underwriter(s) in any
underwritten offer.
The provisions of this Agreement with respect to the Registration Statement
shall also apply, mutatis mutandis, to a registration statement of EFC filed in
connection with a demand registration under Section 2.2.
Lock Up by Koor and Tadiran
Koor undertakes not to sell under the Registration Statement any of the Common
Stock issued to it under the Investment Agreement prior to the completion of 6
months as of the date hereof.
Tadiran undertakes not to sell under the Registration Statement (i) half of the
Common Stock issued to it under the Acquisition Agreement until the completion
of 9 months as of the date hereof, and (ii) the remaining Common Stock issued to
it under the Acquisition Agreement until the completion of 12 months as of the
date hereof.
Nothing herein shall prevent Koor or Tadiran to enter into private Hedging
transactions with respect to the Registrable Securities.
None of the information supplied or to be supplied by EFC for inclusion or
incorporation by reference in the Registration Statement will, at the time the
Registration Statement are filed with the SEC and at the time they become
effective under the Act, 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 statement therein not misleading.
EFC will pay all expenses in connection with the filing of the Registration
Statement, other than expenses of Tadiran's and Koor's counsel, and shall keep
the Registration Statement effective and current until the completion of a
period of 18 months as of the date the completion of the lock up on the Common
Stock held by Koor as detailed in Section 3.1 above. plus any applicable
Disclosure Blackout Period, Non-Disclosure Blackout Period and Primary Offering
Black Out Period (collectively, the "Effectiveness Period").
With a view to making available to the Holders the benefits of Rule 144
promulgated under the Securities Act and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of EFC to the public
without registration or pursuant to the registration statements on Form S-3, EFC
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
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(b) file with the SEC in a timely manner all reports and other documents
required of EFC under the Securities Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request a written statement by EFC that it
has complied with the foregoing subsections 6(a) and 6(b).
In the event that any of Koor or Tadiran shall unreasonably delay any action
required to be taken by it in order for EFC to be able to file a Registration
Statement in compliance with the foregoing provisions, EFC shall not be deemed
to be in breach of these provisions in respect of non-registration of the
pertinent shares of Tadiran or Koor under such Registration Statement.
If EFC determines in good faith that the Registration Statement includes an
untrue statement of a material fact or omits to state a material fact required
to be stated therein as necessary to make the statements therein not misleading
in light of the circumstances then existing, EFC shall promptly make such
disclosure and amend any such Registration Statement as may be required under
applicable securities laws to keep such Registration Statement effective, and
Tadiran and Koor shall, upon receipt of notice from EFC to that effect, be
prohibited from reselling any EFC Common Stock for a period of 60 days
("Disclosure Blackout Period"), unless EFC notifies them of the earlier
termination of any Disclosure Blackout Period; provided, however, that in no
event shall a cumulative Disclosure Blackout Periods exceed 60 days during any
12-month period.
Notwithstanding the aforesaid, if EFC's Board of Directors determines that the
registration and distribution of the EFC Common Stock pursuant to a Registration
Statement would interfere with any pending financing, acquisition, public
offering, corporation reorganization or any other material corporate development
involving EFC (or would require premature disclosure thereof), during the
Effectiveness Period, EFC may at any time and from time to time give Tadiran and
Koor written notice of such determination and upon receipt of such notice,
Tadiran and Koor shall be prohibited from reselling any EFC Common Stock for a
period of up to 60 days (a "Non-Disclosure Blackout Period"), unless EFC
notifies Tadiran and Koor of the earlier termination of any Non-Disclosure
Blackout Period; provided, however, that in no event shall the cumulative Non-
Disclosure Blackout Period exceed 120 days during the Effectiveness Period.
In addition, if EFC sells shares of its Common Stock in an underwritten public
offering (the "Primary Offering") pursuant to a registration statement, Tadiran
and Koor shall be prohibited from reselling any EFC Common Stock for a period of
180 days from the effective date of such Primary Offering (a "Primary Offering
Black Out Period"), unless EFC notifies Tadiran and Koor of the earlier
termination of such Primary Offering Black Out Period.
Indemnification relating to the Registration Statement
To the extent permitted by law, EFC will indemnify and hold harmless each one of
the Holders, the partners, officers, directors and shareholders of each one of
the Holders, legal counsel and accountants for each one of the Holders, any
underwriter (as defined in the Securities Act) for such Holder and each person,
if any, who controls Holder or underwriter within the meaning of the Securities
Act or the 1934 Act against any losses, expenses, claims, damages, or
liabilities to which they become subject under the Securities Act, the 1934 Act
or other United States federal or state laws or the securities laws of the State
of Israel or any other jurisdiction in which the Registrable Shares are sold,
insofar as such losses, expenses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "violation"): (i) any untrue statement
of a material fact contained in such registration statement, including
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any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto; (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made, or (iii) any violation or alleged violation by the Company
of the Securities Act, the 1934 Act, any Federal or state securities law or any
rule or regulation promulgated under the Securities Act, the 1934 Act or any
federal or state securities law, or any of the securities laws of the State of
Israel or any other jurisdiction in which the Registrable Shares are sold or any
rule or regulation thereunder; and EFC will reimburse each such Holder, officer
or director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable to the Holders,
underwriter or controlling person in any such case for any such loss, claim,
damage, liability, or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity with written
information furnished to the Company expressly for use in connection with such
registration by the Holders, underwriter or controlling person provided further,
however, that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Holder or underwriter, or any
person controlling such Holder or underwriter, from whom the person asserting
any such losses, claims, damages or liabilities purchased shares in the
offering, if a copy of the prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Holder or underwriter to such person, if
required by law so to have been delivered, at or prior to the written
confirmation of the sale of the shares to such person, and if the prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
loss, claim, damage or liability.
To the extent permitted by law, each selling Holder will indemnify and hold
harmless EFC, each of its directors, each of its officers who have signed the
Registration Statement, each person, if any, who controls EFC within the meaning
of the Securities Act, any underwriter (within the meaning of the Securities
Act) for EFC, any person who controls such underwriter, and any Holder selling
securities in such registration statement or any directors or officers or any
persons controlling such parties, against any losses, claims, expenses, damages,
or liabilities to which any of the forgoing persons become subject under the
Securities Act, the 1934 Act or other United States federal or state securities
law, or any of the securities laws of the State of Israel or any other
jurisdiction in which the Registrable Shares are sold, insofar as such losses,
expenses, claims, damages, liabilities (or actions in respect thereto) arise out
of or are based upon any Violation (including alleged Violation), in each case
to the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished to EFC by such Holder
expressly for use in connection with such registration; and each such Holder
will reimburse any persons intended to be indemnified pursuant to this section
for any legal or other expenses reasonably incurred by such person in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
Section shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holders, which consent shall not be unreasonably withheld: provided that
in no event shall any indemnity under this Section exceed the gross proceeds
from the offering received by such Holder.
Promptly after receipt by an indemnified party of notice of the commencement of
any action (including any governmental action), such indemnified party will, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 11, notify the indemnifying party in writing
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of the commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party (together with all other indemnified parties that may
be represented without conflict by one counsel) shall have the right to retain
its own counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to notify an
indemnifying party in writing within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnifying party under
this Section 11, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 11.
if the indemnification provided for in this Section 11 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission.
The obligations of EFC and the Holders under this Section 11 shall survive the
completion of any offering of Registrable Securities hereunder.
Miscellaneous.
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Further Assurances. Each of the parties hereto shall perform such further acts
and execute such further documents as may reasonably be necessary to carry out
and give full effect to the provisions of this Agreement and the intentions of
the parties as reflected thereby.
Governing Law; Jurisdiction. This Agreement shall be governed by and construed
according to the laws of the State of Israel, without regard to the conflict of
laws provisions thereof. Any dispute arising under or in relation to this
Agreement shall be resolved in the competent court of Tel Aviv-Jaffa district,
and each of the parties hereby submits irrevocably to the jurisdiction of such
court.
Successors and Assigns. This Agreement and the rights hereunder shall be deemed
to be solely for the benefit of Tadiran, Koor and their successors, and the
registration rights hereunder may not be assigned or transferred to third
parties.
Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and enforceable against the parties
actually executing such counterpart, and all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first
hereinabove set forth.
/s/ /s/ /s/
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Electric Fuel Corporation Tadiran Limited Koor Industries Limited
By:__________ By:___________ By:__________
