SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 10)*
Electric Fuel Corporation
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(Name of Issuer)
Common Stock $0.01 Par Value
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(Title of Class of Securities)
284871-10-0
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(CUSIP Number)
Steven M. Plon, Esquire, Buchanan Ingersoll Professional Corporation
Eleven Penn Center, 14th Floor, Philadelphia, PA 19103, (215) 665-3608
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 28, 1999
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(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement[ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the claim of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d1(a) for other parties to whom copies are to be
sent.
*The remainder of this coverage page shall be filed out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that action of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s)
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Page 1 of 6 Pages
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CUSIP No. 284871-10-0 Page 2 of 6 Pages
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1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Leon S. Gross S.S. No. ###-##-####
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
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(b)
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3. SEC USE ONLY
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4. SOURCE OF FUNDS* PF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e)
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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7. SOLE VOTING POWER
NUMBER OF 4,101,004
SHARES [includes 375,000 warrants to purchase common stock]
BENEFICIALLY ----------------------------------------------------
OWNED BY 8. SHARED VOTING POWER
EACH 175,000
REPORTING ----------------------------------------------------
PERSON 9. SOLE DISPOSITIVE POWER
WITH 3,961,004
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10. SHARED DISPOSITIVE POWER
315,000 [140,000 shares are subject to a
Security Agreement and 175,000 are held
jointly as a Co-Trustee of the Rose Gross
Charitable Foundation].
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,276,004 [includes 375,000 warrants to purchase common stock]
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 26.6% of
the issued and outstanding stock(1)
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14. TYPE OF REPORTING PERSON*
IN
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(1) Based upon 15,728,387 shares of common stock outstanding upon the closing
of the 1999 Private Placement and assuming exercise of warrants to purchase
375,000 Shares held by Mr. Gross.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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Page 3 of 6 Pages
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AMENDMENT NO. 10 TO SCHEDULE 13D
This Amendment No. 10 to the Schedule 13D dated February 23, 1996, as
amended by the First Amendment to Schedule 13D dated April 30, 1996, the Second
Amendment to Schedule 13D dated September 1, 1996, the Third Amendment to
Schedule 13D dated October 11, 1996, the Fourth Amendment to Schedule 13D dated
December 27, 1996, the Fifth Amendment to Schedule 13D dated May 12, 1997, the
Sixth Amendment to Schedule D dated December 3, 1997, the Seventh Amendment to
Schedule 13D dated September 28, 1998, the Eighth Amendment to Schedule 13D
dated October 14, 1999 and the Ninth Amendment to Schedule 13D dated October 28,
1999 (the "Existing Schedule 13D"), is being filed by the undersigned in
accordance with Rule 13d-2(a) of the general rules and regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and amends the
Existing Schedule 13D to the extent set forth below. Terms defined in the
Existing Schedule 13D are used herein as so defined.
Item 3. Source and Amount of Funds or Other Consideration.
Amend Item 3 of the Existing Schedule 13D by adding the following paragraph:
The Shares of the Issuer purchased by Mr. Gross as part of the private
placement pursuant to a Stock Purchase Agreement dated December 28, 1999 were
acquired at a cost of $750,000 (the "1999 Private Placement"). The funds
required for all of the foregoing Shares purchased by Mr. Gross were provided by
Mr. Gross' personal funds.
Item 4. Purpose of the Transaction.
Item 4 of the Existing Schedule 13D is amended by adding the following
paragraph:
Mr. Gross participated in the 1999 Private Placement primarily because of
the possibility that the Company will be successful in its business activities.
Mr. Gross may make dispositions and additional purchases subject to a number of
factors, including market prices of the Shares and his continuing review of the
business of and the prospects for the Issuer and general market and business
considerations.
Except as set forth in the preceding paragraph, Mr. Gross has no present
plans or proposals which relate to, or which would result in, any changes
specified in clauses (b) through (j) of Item 4 of Schedule 13D.
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Page 4 of 6 Pages
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Item 5. Interest in Securities of the Issuer.
The third paragraph of Items 5(a) and (b) of the Existing Schedule 13D is hereby
amended to read as follows:
Mr. Gross beneficially owns 4,276,004 Shares, or 26.6% of the Common Stock
outstanding following the 1999 Private Placement (based upon 15,728,387 shares
of common stock outstanding upon the closing of the 1999 Private Placement and
assuming the exercise of warrants to purchase 375,000 Shares held by Mr. Gross).
Of the 4,276,004 Shares beneficially owned by him, Mr. Gross has the sole power
to vote 4,101,004 Shares, assuming the exercise of warrants to purchase 375,000
Shares. The remaining 175,000 Shares are held jointly by Mr. Gross and Lawrence
M. Miller in their capacities as Co-Trustees of the Rose Gross Charitable
Foundation (the "Foundation"), a charitable foundation founded by Mr. Gross by
Agreement of Trust dated May 28, 1997. Mr. Gross has sole power to dispose of
all Shares beneficially owned by him, except for (i) rights as to disposition
for a total of 140,000 Shares granted to Madison Bank under a Security Agreement
and (ii) the 175,000 Shares owned by the Foundation. To the best of Mr. Gross'
knowledge, except as expressly set forth herein, no other person has the right
to receive or the power to direct the receipt of dividends from, or proceeds of
the sale of, the shares of Common Stock held by him.
Items 5(c) of the Existing Schedule 13D is hereby amended by adding the
following paragraphs:
(c) On December 28, 1999 Mr. Gross acquired 375,000 Shares at a purchase
price of $2.00 per share in the 1999 Private Placement. In connection with the
1999 Private Placement Mr. Gross was also issued warrants to purchase 375,000
Shares.
On November 15, 1999, the Foundation made a gift of 60,000 Shares.
Item 6. Contracts, Arrangements, Understanding or Relationship With Respect to
Securities of the Issuer.
Item 6 of the Existing Schedule 13D is hereby amended by adding the following
paragraphs:
Pursuant to a Securities Purchase Agreement dated December 28, 1999 between
the Issuer and Mr. Gross, on December 28, 1999 the Issuer issued 375,000 shares
of the Issuer's Common Stock, $.01 par value per share, to Mr. Gross at a price
of $2.00 per share, and warrants to acquire 375,000 Shares, for a total purchase
price of $750,000.
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Page 5 of 6 Pages
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Pursuant to the terms of the Securities Purchase Agreement, Mr. Gross has
agreed that for a period of five (5) years from the Closing Date, neither Mr.
Gross nor his Affiliates, as defined in the Securities Act, directly or
indirectly or in conjunction with or through any Associate (as defined in Rule
12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
will (i) solicit proxies with respect to any capital stock or other voting
securities of the Issuer under any circumstances, or become a "participant" in
any "election contest" relating to the election of directors of the Issuer (as
such terms are used in Rule 14a-11 of Regulation 14A of the Exchange Act) or
(ii) make an offer for the acquisition of substantially all of the assets or
capital stock of the Issuer or induce or assist any other person to make such an
offer or (iii) form or join any "group" within the meaning of Section 13(d)(3)
of the Exchange Act with respect to any capital stock or other voting securities
of the Issuer for the purpose of accomplishing the actions referred to in
clauses (i) and (ii) above other than pursuant to the Voting Rights Agreement
described below.
The Voting Rights Agreement, dated as of September 30, 1996 (the "Voting
Rights Agreement") was amended by Amendment No. 1 to Voting Rights Agreement on
December 28, 1999 (the "Voting Rights Agreement Amendment") in connection with
the transactions contemplated by the Securities Purchase Agreement. Pursuant to
the Voting Rights Agreement Amendment, each of Lawrence M. Miller (or, if
applicable, Alternate Director), Robert S. Ehrlich, Yehuda Harats and one person
to be designated for nomination by the 1999 Investors (so long as the 1999
Investors collectively own 1,200,000 shares of the Common Stock) shall serve as
members of the Board. The remaining terms of the Voting Rights Agreement were
not changed by the Voting Rights Agreement Amendment.
The foregoing descriptions of each of the Securities Purchase Agreement and
the Voting Rights Agreement Amendment are qualified in their entirety by
reference to the full text of the Securities Purchase Agreement and the Voting
Rights Agreement Amendment, copies of which are included as exhibits hereto and
are incorporated by reference herein.
Item 7. Material to be Filed as Exhibits.
Exhibit 1 - Securities Purchase Agreement
Exhibit 2 - Voting Rights Agreement Amendment
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Page 6 of 6 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
1/12/00
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Date
/s/ Leon S. Gross
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Leon S. Gross
Exhibit 1 - Securities Purchase Agreement
ELECTRIC FUEL CORPORATION
SECURITIES PURCHASE AGREEMENT
December 27, 1999
TO THE PURCHASERS SET FORTH ON EXHIBIT A
Ladies and Gentlemen:
Electric Fuel Corporation, a Delaware corporation (the "Company"),
proposes to sell (the "Offering") to the purchasers set forth on Exhibit A (the
"Purchasers") 1,800,000 shares (the "Shares") of its common stock, $.01 par
value per share (the "Common Stock") and warrants to purchase 1,800,000 shares
of Common Stock (the "Warrants", and together with the Shares, the
"Securities"), in the amounts and for the price set forth opposite each
Purchaser's name on Exhibit A. In connection with and in consideration for the
sale and purchase of the Securities, the Company and the Purchasers agree to
abide by the mutual covenants contained herein.
1. Sale and Purchase of the Securities. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this stock purchase agreement (the "Agreement"), the
Company agrees to sell to the Purchasers, and the Purchasers agree to purchase
from the Company, the Securities. The Purchasers will purchase the Shares at a
price of $2.00 per share. Of the Warrants, Warrants to purchase 1,200,000 shares
shall have an exercise price of $1.25 per share and shall expire on the date
which is six months after the Closing Date, and Warrants to purchase 600,000
shares shall have an exercise price of $4.50 per share and shall expire on the
first anniversary of the Closing Date. The Warrants shall be in the form
attached hereto.
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2. Delivery and Payment.
(a) On the Closing Date, the Purchasers will pay to Yigal Arnon & Co., as
escrow agent (the "Escrow Agent"), for the benefit of the Company an aggregate
of U.S.$3,600,000 (the "Purchase Price") and the Company shall deliver the
Securities to the Escrow Agent for the benefit of the Purchasers. Payment of the
Purchase Price shall be made by wire transfer in immediately available funds in
U.S. dollars or by delivery of a check for U.S. dollars to the Escrow Agent in
accordance with the wiring or delivery instructions provided below, provided,
however, that the Purchasers may, at their option wire or deliver New Israeli
Shekels in lieu of U.S. dollars at the Bank HaPoalim U.S. dollar cash sell rate
(i.e. the rate at which the bank sells to buyers) as of the close of business on
December 26, 1999. Notwithstanding the foregoing, the Purchasers agree that
$18,000 shall be paid to the Company in accordance with the wire transfer
instructions set forth on Annex I hereto. To the extent that monies are wired to
the Escrow Agent, they should be wired as follows: to account number 716383 in
the name of Yigal Arnon & Co. Trust Account, at Israel Discount Bank, Shlomzion
Hamalka Branch, branch number 11-063, and to the extent that payment is made via
check, delivery should be made to the attention of Barry Levenfeld, Adv. c/o
Yigal Arnon & Co., 22 Rivlin Street Jerusalem 91000, Israel. The Closing of the
Offering shall take place at the offices of the Company, Western Industrial
Zone, Bet Shemesh, Israel on December 27, 1999 or at such place and time on such
other date as shall be agreed upon by the Company and the Purchasers. The day on
which the Closing takes place shall be referred to herein as the "Closing Date."
(b) Pursuant to the terms of an Escrow Agreement to be entered into in
connection with the Closing in form and substance reasonably satisfactory to the
Company, the Purchasers and the Escrow Agent (the "Escrow Agreement"), the
Escrow Agent shall pay the Purchase Price to the Company and deliver the
Securities to the Purchasers upon receiving written notice from the Company to
the effect that the Securities and Exchange Commission has declared effective a
Form S-3 registration statement (the "Form S-3") filed by the Company to
register the resale of the Shares, the Warrants and the shares of Common Stock
issuable upon exercise of the Warrants (the "Effective Date") pursuant to the
terms of Section 8 below. The Escrow Agent shall hold the Purchase Price and the
Securities in escrow until the Effective Date.
(c) Notwithstanding anything in this Agreement to the contrary, the Parties
agree that the amount of Securities to be sold under this Agreement may be
reduced if without such reduction the Offering would require approval of the
Company's stockholders. In the event such reduction is required, the amount of
Securities by which the size of the Offering shall be reduced shall be
apportioned pro rata among the Purchasers.
3. Offering of Common Stock. The Common Stock will be offered and sold to
the Purchasers without being registered under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance on the exemption therefrom provided
by Section 4(2) of the Securities Act.
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Immediately after the Closing, the Company shall file the Form S-3 in
accordance with Section 8 below. At the Closing, the Company will also amend the
voting rights agreement by and among the Company, Leon S. Gross, Robert S.
Ehrlich and Yehuda Harats dated as of September 30, 1996 so as to amend such
agreement as of the Closing Date (the "Amended Voting Rights Agreement").
Pursuant to the Amended Voting Rights Agreement, the Purchasers shall be
entitled to have one designated nominee elected to the Board of Directors of the
Company so long as the Purchasers hold in the aggregate 1,200,000 shares of
Common Stock. This Agreement, the Escrow Agreement and the Amended Voting Rights
Agreement are hereinafter referred to collectively as the "Operative Documents."
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchasers as follows:
(a) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the state of Delaware. The
Company's wholly-owned Israeli subsidiary, Electric Fuel (E.F.L.) Limited
("EFL"), is duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation. Each
of the Company and EFL is qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
assets or properties (owned, leased or licensed) or the nature of its
business makes such qualification necessary, except for such jurisdictions
where the failure to so qualify, individually or in the aggregate, would
not have a material adverse effect on the assets or properties, business,
results of operations or financial condition, taken as a whole, of the
Company and EFL.
(b) All necessary corporate action has been duly and validly taken to
authorize the execution, delivery and performance of the Operative
Documents by the Company. This Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles. The Escrow Agreement and the Amended
Voting Rights Agreement have been duly and validly authorized, and when
executed and delivered, will constitute the legal, valid and binding
obligations of the Company enforceable against the Company in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
(c) Neither the execution, delivery and performance of the Operative
Documents by the Company nor the consummation of any of the transactions
contemplated hereby or thereby (including, without limitation, the issuance
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and sale by the Company of the Securities) will give rise to a right to
terminate or accelerate the due date of any payment due under, or conflict
with or result in the breach of any term or provision of, or constitute a
default (or an event which with notice or lapse of time or both would
constitute a default) under, or require any consent or waiver under, or
result in the execution or imposition of any material lien, charge or
encumbrance upon any properties or assets of the Company pursuant to the
terms of, any material indenture, mortgage, deed of trust or other
agreement or instrument to which the Company is a party or by which the
Company or any of its properties or businesses is bound, or any franchise,
license, permit, judgment, decree, order, statute, rule or regulation
applicable to the Company, or violate any provision of the charter or
by-laws of the Company or EFL, except for such consents or waivers that
have already been obtained and are in full force and effect, or, except for
in connection with the Form S-3, require any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency
or official, or such consents or waivers the failure to so obtain would not
individually or in the aggregate, have a material adverse effect upon the
assets or properties, business, results of operations or financial
condition, taken as a whole, of the Company and EFL.
(d) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, the Company's Form 10-Qs for the fiscal periods ended
March 31, 1999, June 30, 1999 and September 30, 1999 and all documents
filed with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (such documents are hereinafter referred to as the "Exchange Act
Documents") were filed in a timely manner and, when they were filed (or, if
any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects to the
requirements of the Exchange Act, and the rules and regulations thereunder,
and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Subsequent to the respective dates
as of which information was given in the Exchange Act Documents, except as
described therein, there has not been any material adverse change, and, to
the Company's knowledge, no event has occurred which with notice or lapse
of time or both, that would constitute such a material adverse change, in
the assets or properties, business, results of operations or financial
condition of the Company taken as a whole.
(e) There are no claims for brokerage commissions or finder's fees on
similar compensation in connection with the transactions by this Agreement
based on any arrangement or agreement made by or on behalf of the Company
other than as previously disclosed to the Purchasers, and the Company
agrees to indemnify and hold the Purchasers harmless against any damages
incurred as a result of any such claims.
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5. Representations and Warranties of the Purchasers. Each Purchaser
represents and warrants to Company that:
(a) Such Purchaser has full power and authority to execute, deliver
and perform each of this Agreement, the Escrow Agreement and the Amended
Voting Rights Agreement. This Agreement constitutes a valid and legally
binding obligation of such Purchaser, enforceable against such Purchaser in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
by general equitable principles.
(b) The Securities to be received by such Purchaser will be acquired
for investment for such Purchaser's own account, and not with a view to the
distribution of any part thereof. Such Purchaser has no present intention
of selling, granting any participation in, or otherwise distributing the
same. Such Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer, or grant participation to
such person or to any third person, with respect to any of the Securities.
(c) Such Purchaser understands that the Securities may not be sold,
transferred, or otherwise disposed of without registration under the
Securities Act, or an exemption therefrom, and that in the absence of an
effective registration statement covering the Securities or an available
exemption from registration under the Securities Act, the Securities must
be held indefinitely. In the absence of an effective registration statement
covering the Securities, such Purchaser will sell, transfer, or otherwise
dispose of the Securities only in a manner consistent with its
representations and agreements set forth herein.
(d) Such Purchaser understands that until the Securities are
registered under the Securities Act, the certificates evidencing the
Securities may bear substantially the following legends:
(i) "THE SECURITIES EVIDENCED HEREBY WERE ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND APPLICABLE
STATE LAW, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM (IN EACH CASE BASED UPON DOCUMENTATION SATISFACTORY TO
THE COMPANY, INCLUDING AN OPINION OF COUNSEL SATISFACTORY TO IT
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THAT REGISTRATION UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE LAWS IS NOT REQUIRED) OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT."
(ii) Any legend required by the Escrow Agreement, the Amended Voting
Agreement or any applicable law.
(e) Such Purchaser is an "accredited investor" as such term is defined
in Rule 501(a)(1) promulgated pursuant to the Securities Act.
(f) Such Purchaser's financial condition is such that he is able to
bear the risk of holding the Securities for an indefinite period of time.
(g) Such Purchaser has such knowledge and experience in financial and
business matters and in making high risk investments of this type that he
is capable of evaluating the merits and risks of the purchase of the
Securities.
(h) Such Purchaser has been furnished access to the business records
of the Company and such additional information and documents as such
Purchaser has requested and has been afforded an opportunity to ask
questions of and receive answers from representatives of the Company
concerning the business, operations, market potential, capitalization,
financial condition and prospects, and all other matters deemed relevant by
such Purchaser.
(i) There are no claims for brokerage commissions or finder's fees or
similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf
of such Purchaser, and such Purchaser agrees to indemnify and hold the
Company harmless against any damages incurred as a result of any such
claims.
(j) Such Purchaser acknowledges that the Company will rely upon the
truth and accuracy of the foregoing acknowledgments, representations and
agreements and agrees that, if any of the acknowledgments, representations
and agreements are no longer accurate, he shall promptly notify the
Company.
6. Conditions of the Purchaser's Obligations. The obligation of the
Purchasers to purchase the Securities is subject to each of the following terms
and conditions:
(a) The representations and warranties of the Company contained in
this Agreement shall be true and correct when made and on and as of the
Closing Date as if made on such date and the Company shall have performed
all covenants and agreements and satisfied all the conditions contained in
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this Agreement required to be performed or satisfied by it at or before the
Closing Date.
(b) The Company shall have executed and delivered the Escrow
Agreement and the Amended Voting Rights Agreement and delivered the
Securities to the Escrow Agent.
7. Conditions of the Company's Obligations. The obligation of the Company
to sell the Securities is subject to each of the following terms and conditions:
(a) The representations and warranties of the Purchasers contained in
this Agreement shall be true and correct when made and on and as of the
Closing Date as if made on such date and the Purchasers shall have
performed all covenants and agreements and satisfied all the conditions
contained in this Agreement required to be performed or satisfied by it at
or before the Closing Date.
(b) Receipt by the Escrow Agent of the Purchase Price from the
Purchasers and receipt by the Company of $18,000.
(c) The Purchasers shall have executed and delivered the Escrow
Agreement and the Amended Voting Rights Agreement.
8. Registration Rights. Promptly following the Closing, the Company shall
file and use its reasonable best efforts to have declared effective, the Form
S-3 registering for resale the Securities issued pursuant to this Agreement. The
Company shall use its reasonable efforts to maintain the effectiveness of the
Form S-3 until the date that is eighteen months after the Closing.
9. Covenant of the Company. The Company covenants and agrees as follows:
The Company shall use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date, and to satisfy all conditions precedent
to the delivery of the Common Stock.
10. Covenants of the Purchaser. The Purchasers covenant and agree as
follows:
(a) The Purchasers shall use their reasonable best efforts to do and
perform all things required or necessary to be done and performed under
this Agreement by the Purchasers prior to the Closing Date, and to satisfy
all conditions precedent to the delivery of the Securities.
(b) The Purchasers agree that from the date hereof until the fifth
anniversary of the Closing Date, they will not, and will not permit any of
his Affiliates, as defined in the Securities Act, to directly or indirectly
or in conjunction with or through any Associate (as defined in Rule 12b-2
of the Exchange Act), (i) solicit proxies with respect to any capital stock
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or other voting securities of the Company under any circumstances, or
become a "participant" in any "election contest" relating to the election
of directors of the Company (as such terms are used in Rule 14a-11 of
Regulation 14A of the Exchange Act) or (ii) make an offer for the
acquisition of substantially all of the assets or capital stock of the
Company or induce or assist any other person to make such an offer or (iii)
form or join any "group" within the meaning of Section 13(d)(3) of the
Exchange Act with respect to any capital stock or other voting securities
of the Company for the purpose of accomplishing the actions referred to in
clauses (i) and (ii) above other than pursuant to the Amended Voting Rights
Agreement.
(c) The holders of a majority of the Securities may act on behalf of
the Purchasers.
11. Miscellaneous. This Agreement has been and is made for the benefit of
the Purchasers and the Company, and their respective successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include any purchasers of
Securities from the Purchasers merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed or
delivered or by telephone or telegraph if subsequently confirmed in writing, (a)
if to the Purchasers to the address set forth on Exhibit A, with a copy
to:________________________; and (b) if to the Company, to Yehuda Harats,
Electric Fuel Ltd., Western Industrial Zone, P.O. Box 641, Bet Shemesh 99000,
Israel, with a copy to Jane D. Goldstein, Esq., Ropes & Gray, One International
Place, Boston, MA 02110 and David S. Glatt, Adv., Meitar, Liquornik, Geva & Co.,
16 Abba Hillel Silver Road, Ramat Gan 52506, Israel.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to any conflicts or choice of law
principles which would cause the application of the internal laws of any
jurisdiction other than the State of Delaware.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
[THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
8
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
ELECTRIC FUEL CORPORATION
By /s/ Robert S. Ehrlich
------------------------------------------
Title: Chairman & Chief Financial Officer
Agreed and accepted:
THE PURCHASERS
/s/ Leon S. Gross
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9
Exhibit 2 - Voting Rights Agreement Amendment
AMENDMENT NO. 1 TO
VOTING RIGHTS AGREEMENT
This Amendment No. 1 to Voting Rights Agreement (the "Amendment") made as
of December 27, 1999, by and among Electric Fuel Corporation, a Delaware
corporation (the "Company"), Leon S. Gross, Robert S. Ehrlich, Yehuda Harats and
the purchasers listed in the Securities Purchase Agreement dated as of December
27, 1999, by and among the Company and the purchasers listed therein (the "SPA"
and such purchasers, the "1999 Investors").
WHEREAS, the Company, Gross, Ehrlich and Harats (the "Original Parties")
entered into a Voting Rights Agreement dated as of September 30, 1996 (the
"Voting Rights Agreement"); and
WHEREAS, the Original Parties and the 1999 Investors (together, the
"Parties") desire to amend the Voting Rights Agreement in connection with the
closing of the SPA. Capitalized terms used herein and not defined shall have the
meanings assigned to them in the Voting Rights Agreement.
NOW THEREFORE, in consideration of the premises and agreements set forth
herein, the Parties agree with each other as follows:
1. Paragraph 1 of the Voting Rights Agreement shall be amended such that
the penultimate sentence thereof shall read as follows:
"Subject to the terms and conditions hereof, until the later of (i) the fifth
anniversary of the Closing or (ii) the fifth Meeting of Stockholders following
the Closing, each Stockholder agrees to vote all shares of Common Stock or other
voting securities of the Company over which such Stockholder has voting control,
whether directly or indirectly, and to take other necessary or desirable actions
within his or its control (whether as stockholder, director or officer of the
Company or otherwise, including without limitation attendance at meetings in
person or by proxy for purposes of obtaining a quorum and execution of written
consents in lieu of meetings), so that each of Lawrence M. Miller (or, if
applicable, Alternate Director), Robert S. Ehrlich, Yehuda Harats and one person
to be designated for nomination by the 1999 Investors (so long as the 1999
Investors collectively own 1,200,000 shares of the Common Stock) shall serve as
members of the Board."
2. The 1999 Investors shall become parties to the Voting Agreement by
countersignature of this Amendment.
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
duly executed as of the date first above written,
ELECTRIC FUEL CORPORATION
By /s/ Robert S. Ehrlich
---------------------------------------
Title: Chairman & Chief Financial Officer
/s/ Leon S. Gross
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Leon S. Gross
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Robert S. Ehrlich
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Yehuda Harats
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Purchasers
2
