Exhibit 10.2
 
REGISTRATION RIGHTS AGREEMENT
 
THIS REGISTRATION RIGHTS AGREEMENT (“Agreement”) is made as of the 2nd day of
February, 2016 by and between Arotech Corporation, a Delaware corporation (the
“Company”) and Admiralty Partners, Inc., a Delaware corporation (the
“Investor”).
 
W I T N E S S E T H :
 
WHEREAS, the Investor and the Company have entered into an Stock Purchase
Agreement (the “Purchase Agreement”); and
 
WHEREAS, the shares of the Company’s common stock, par value $0.01 per share
(“Common Stock”) are currently traded on the Nasdaq Global Market under the
ticker symbol “ARTX”; and
 
WHEREAS, pursuant to the terms of the Purchase Agreement, the Company is issuing
certain shares of Common Stock to the Investor (the “Shares”); and
 
WHEREAS, the Purchase Agreement provides that the Investor will be provided with
certain registration rights in respect of the Shares as set forth herein;
 
NOW, THEREFORE, in consideration of the mutual promises made herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
 
1.           Definitions. All terms not otherwise specifically defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement. For
purposes of this Agreement:
 
(a)           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 United States Securities Act of 1933 or
similar securities act in a jurisdiction other than the United States (the “1933
Act”), and the declaration or ordering of effectiveness of such registration
statement or document.
 
(b)           The term “Registrable Shares” means (1) the Shares and any other
shares of Common Stock of the Company owned or acquired by the Investor or his
Affiliates prior to the date of the filing of the Registration Statement
referenced in Section 2(a), and (2) any Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, the Shares or such other shares of
Common Stock, excluding in all cases, however, any Registrable Shares sold by a
person in a transaction in which his rights under this Registration Rights
Agreement are not assigned.
 
(c)           The number of shares of “Registrable Shares then outstanding”
shall be determined by the number of shares of Common Stock outstanding which
are, and the number of shares of Common Stock issuable pursuant to then
exercisable or convertible securities which are, Registrable Shares.
 
 
 

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(d)           The term “Form S-1” means such form under the 1933 Act as in
effect on the date hereof or any registration form under the 1933 Act
subsequently adopted by the United States Securities and Exchange Commission
(“SEC”) which does not permit inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
 
(e)           The terms “Form S-3” means such form under the 1933 Act as in
effect on the date hereof or any registration form under the 1933 Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
 
2.           Obligations of the Company. Subject to all of the provisions
contained in this Agreement, as soon as reasonably practicable following the
first anniversary of the Closing Date, and in any event within 45 days following
the first anniversary of the Closing Date, the Company shall:
 
(a)           Prepare and file with the SEC a Form S-1 or Form S-3 registering
all, but not less than all, of the Registrable Shares for trading on the same
securities exchange on which the Common Stock is then traded and use its
commercially reasonable best efforts to cause such registration statement to
become effective, and keep such registration statement effective until such time
as the Registrable Shares are freely tradeable without volume limitations under
Rule 144 promulgated under the Securities Act of 1933, as amended. Thereafter,
the Company shall provide the Investor for no consideration the Piggyback
Registration Rights as stipulated in subsection (g) below.
 
(b)           Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
1933 Act with respect to the disposition of all securities covered by such
registration statement.
 
(c)           Furnish or make available through EDGAR to the Investor such
number of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the 1933 Act, and such other documents as
the Investor may reasonably request in order to facilitate the disposition of
Registrable Shares.
 
(d)           Use its best efforts to (i) register and qualify the Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as shall be reasonably requested by the
Investor, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions; and
(ii) cause all such Registrable Shares covered by such registration statement to
be listed or traded on each securities exchange and trading system (if any),
including the OTC trading market, on which the Company’s Common Stock is then
listed or traded;
 
(e)           Keep the Investor advised in writing as to the initiation of
proceedings for the registration and qualification required hereby and as to the
completion thereof, and advise the Investor, upon request, of the progress of
such proceedings.
 
 
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(f)           Notify the Investor, at any time when a prospectus is required to
be delivered under the 1933 Act, of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary.
 
(g)           Until such time as the Registrable Shares are saleable without
restriction under Rule 144 promulgated under the 1933 Act, if the Company
determines to register any of its Securities, either for its own account or for
the account of any of its stockholders, it shall promptly give to the Investor
written notice to that effect, and shall include in such registration, except as
otherwise provided herein, all the Registrable Shares and any other shares of
Common Stock acquired by the Holder after the filing of the Registration
Statement referenced in Section 2(a) above, specified in the written reply
delivered by the Investor, which reply shall be delivered to the Company within
twenty days after the receipt of the Company’s said written notice. It is hereby
clarified that the piggyback right of the Investor under this subsection (g) may
be exercised in an unlimited number of times; provided, however, that the
Investor shall pay its incremental share for registrations as to which it
notifies the Company that it wishes to participate and thereafter abandons.
 
(h)           Notify the Investor, promptly after the Company receives notice
thereof, of the time when such registration statement has been declared
effective or a supplement to any prospectus forming a part of such registration
statement has been filed.
 
(i)           After such registration statement becomes effective, notify the
Investor of any request by the SEC that the Company amend or supplement such
registration statement or prospectus.
 
In addition, the Company shall ensure that, at all times after any registration
statement covering a public offering of securities of the Company under the
Securities Act shall have become effective, its insider trading policy shall
provide that the Company’s directors may implement a trading program under Rule
10b5-1 of the Exchange Act during times when such directors are permitted by the
Company’s blackout policy to trade in shares of the Company.
 
3.           Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Shares of the Investor that the Investor shall
furnish to the Company such information regarding itself, the Registrable Shares
held by it, and the intended method of disposition of such securities as shall
be reasonably required to effect the registration of the Registrable Shares as
reasonably requested by the Company.
 
4.           Expenses of Registration. All expenses incurred in connection with
a registration, filings or qualifications pursuant to Section 2 in respect of
the Registrable Shares (and any other shares included in such registration
pursuant to Section 2(g) above), including (without limitation) all
registration, filing and qualification fees, printers’ and accounting fees, and
fees and disbursements of counsel for the Company, and the reasonable fees and
disbursements of counsel for the Investor up to $10,000, shall be borne by the
Company.
 
 
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5.           Indemnification. In the event any Registrable Shares (or any other
shares included in such registration pursuant to Section 2(g) above) are
included in a registration statement under this Agreement:
 
(a)           The Company will indemnify and hold harmless to the fullest extent
permitted by law the Investor and each person, if any, who controls the Investor
within the meaning of the 1933 Act or the 1934 Act, together with their
respective directors, officers, members, managers, affiliates, general and
limited partners, stockholders, successors and assigns against any losses,
claims, damages, or liabilities (joint or several), actions or proceedings
(whether commenced or threatened) and expenses (including reasonable fees of
counsel and any amounts paid in any settlement effected with the Company’s
consent, which consent shall not be unreasonably withheld or delayed) to which
each such indemnified party may become subject under the Securities Act or
otherwise in respect thereof (collectively, “Losses”) to which they may become
subject insofar as such Losses, 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
or alleged untrue statement of a fact contained in such registration statement,
including any preliminary prospectus or final or summary prospectus contained
therein or any amendments or supplements thereto, together with the documents
incorporated by reference therein, or any Issuer Free Writing Prospectus
utilized in connection therewith, (ii) the omission or alleged omission to state
therein a fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged violation
by the Company of the 1933 Act, the 1934 Act, any other law, or any rule or
regulation promulgated under any of the foregoing; and the Company will pay to
the Investor or any such controlling person any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Losses; provided, however, that the indemnity agreement contained in this
subsection 5(a) shall not apply to amounts paid in settlement of any such Losses
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
Investor or any such controlling person for any such Losses 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 expressly for use in connection
with such registration by the Investor or any such controlling person. Such
indemnity and reimbursement of expenses shall remain in full force and effect
regardless of any investigation made by or on behalf of any such indemnified
party and shall survive the transfer of such securities by the Investor or any
other indemnified party.
 
(b)           The Investor will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement,
and each person, if any, who controls the Company within the meaning of the 1933
Act, against any Losses to which any of the foregoing persons may become
subject, under the 1933 Act, or the 1934 Act insofar as such Losses arise out of
or are based upon any 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 by the Investor expressly for use in connection
with such registration; and the Investor will pay any legal or other expenses
reasonably incurred by any person intended to be indemnified pursuant to this
subsection 5(b) in connection with investigating or defending any such Losses;
provided, however, that the indemnity agreement contained in this subsection
5(b) 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 Investor, which consent shall not be unreasonably withheld; and provided
further that the aggregate amount that the Investor shall be required to pay
pursuant to this Section 5 shall in no case be greater than the amount of the
net proceeds received by the Investor upon the sale of the Registrable Shares
(or any other shares sold by the Investor) pursuant to the registration
statement giving rise to such claim.
 
 
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(c)           Promptly after receipt by an indemnified party under this Section
5 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 5, deliver to the
indemnifying party a written notice 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 which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by 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 interest between
such indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, shall not
relieve the indemnifying party of its obligations hereunder except to the extent
such failure results in a lack of timely actual knowledge by the indemnifying
party and the indemnifying party suffers actual damage as a result thereof of
actual prejudices to its ability to defend such action.
 
(d)           If for any reason the foregoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under Section 5(a), (b) or
(c), then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of any Loss in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and the indemnified party, on the other hand, with respect to such
offering of securities.  The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission.  If, however, the
allocation provided in the second preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults but also the relative benefits of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations.  The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 5(d) were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
preceding sentences of this Section 5(d).  The amount paid or payable in respect
of any Loss shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such Loss.  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.  Notwithstanding anything in this Section 5(d) to the
contrary, no indemnifying party other than the Company shall be required
pursuant to this Section 5(d) to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of Registrable Shares
(and any other shares included in the registration pursuant to Section 2(g)) in
the offering to which the losses, claims, damages or liabilities of the
indemnified parties relate, less the amount of any indemnification payment made
by such indemnifying party pursuant to Sections 5(b) and (c).
 
 
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(e)           The indemnity and contribution agreements contained herein shall
be in addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party and shall survive the transfer
of the Registrable Securities by any such party.
 
(f)           The indemnification and contribution required by this Section 5
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or Losses are
incurred.
 
(g)           The obligations of the Company and Investor under this Section 5
shall survive the completion of any offering of Registrable Shares (and any
other shares included in the registration pursuant to Section 2(g)) in a
registration statement under this Agreement, and otherwise.
 
6.           Reports Under Securities Exchange Act of 1934. With a view to
making available to the Investor the benefits of Rule 144 promulgated under the
1933 Act and any other rule or regulation of the SEC that may at any time permit
the Investor to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
 
(a)           make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after the date hereof;
 
(b)           take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Investor to utilize Forms S-1 or S-3 for the sale of its Registrable Shares.
 
(c)           file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act; and
 
(d)           furnish to the Investor, so long as the Investor owns any
Registrable Shares (or other shares which the Investor may request to be
registered under Section 2(g)), forthwith upon request (i) a written statement
by the Company that it has complied with the reporting requirements of SEC Rule
144, the 1933 Act and the 1934 Act (at any time after it has become subject to
such reporting requirements), or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested in availing the Investor
of any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.
 
 
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7.           Assignment of Registration Rights. The rights to cause the Company
to register Registrable Shares (and other shares under Section 2(g)) pursuant to
this Agreement and all other rights under this Agreement may be assigned (but
only with all related obligations) by the Investor to any Affiliate (as such
term is defined in the 1934 Act) of the Investor or to any transferee of
Registrable Shares (or such other shares) who acquires such shares directly or
indirectly from the Investor in compliance with this Agreement, provided the
Investor shall, within a reasonable time after such transfer, furnish the
Company with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; provided, however, that the failure to provide such notice on a
timely basis shall not affect the Investor’s rights hereunder.
 
8.           Notices, etc. The Notice provisions of the Purchase Agreement shall
apply, mutatis mutandis, to this Agreement.
 
9.           No Inconsistent Agreements.  The rights granted to the Investor
hereunder do not in any way conflict with and are not inconsistent with any
other agreements to which the Company is a party or by which it is
bound.  Without the prior written consent of the Investor, the Company will not
enter into any agreement with respect to its securities that is inconsistent
with the rights granted in this Agreement or otherwise conflicts with the
provisions hereof or provides terms and conditions that are more favorable to,
or less restrictive on, the other party thereto than the terms and conditions
contained in this Agreement are to the Investor.
 
10.          General.
 
(a)           This Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of New York without regard to the choice of
law principles thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York located in New
York County and the United States District Court for the Southern District of
New York for the purpose of any suit, action, proceeding or judgment relating to
or arising out of this Agreement and the transactions contemplated hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND THE
OTHER TRANSACTION DOCUMENTS OR ARISING OUT OF THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY
AS TO THIS WAIVER.
 
(b)           This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
 
(c)           Except for those provisions of the Purchase Agreement referenced
herein, this Agreement constitutes the entire understanding and agreement of the
parties with respect to the subject matter of this Agreement and supersedes all
prior agreements or understandings, written or oral, between the parties with
respect to the subject matter hereof.
 
 
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(d)           The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither any failure nor any delay by any party
in exercising any right, power or privilege under this Agreement or any of the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of any such right, power
or privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
 
(e)           This Agreement may not be amended, supplemented, or otherwise
modified except by a written agreement executed by the party to be charged with
the amendment.
 
(f)           Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.
 
IN WITNESS WHEREOF, the parties have executed this Agreement or caused their
duly authorized officers to execute this Agreement as of the date first above
written.
 
The Company:  
AROTECH CORPORATION
         
By:   /s/ Steven Esses                                             
 
Name: Steven Esses
 
Title:  President and CEO
           
The Investor:
ADMIRALTY PARTNERS, INC.
         
By:   /s/ Jon B. Kutler                                              
 
Name: Jon B. Kutler
 
Title:   Chairman and CEO

                             
 
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