Document:

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                                                                      Exhibit 4a

                           ELECTRIC FUEL CORPORATION

                         SECURITIES PURCHASE AGREEMENT

December 28, 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") 1,425,000 shares (the "Shares") of its common stock, $.01 par
value per share (the "Common Stock") and warrants to purchase 1,425,000 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 950,000 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 475,000
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.
<PAGE>

     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.$2,850,000 (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 27, 1999.  Notwithstanding the foregoing, the Purchasers agree that
$14,250 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 28, 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.

     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
<PAGE>

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 950,000 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 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
<PAGE>

     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.

     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
<PAGE>

     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
                      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.
<PAGE>

          (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
     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:

<PAGE>

          (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 $14,250.

          (c)  The Purchasers shall have executed and delivered the Escrow
     Agreement and the Amendment No. 1 to 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
     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.

<PAGE>

          (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; 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 riginal, 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]

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          Please confirm that the foregoing correctly sets forth the agreement
among us.

                                                    Very truly yours,

                                                    ELECTRIC FUEL CORPORATION

                                                    By /s/ Robert Ehrlich
                                                      -----------------------
                                                      Title: Chairman and CFO

Agreed and accepted:

THE PURCHASERS

/s/ Gal Erez
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/s/ Gadi Regev
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/s/ Federman Holdings
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/s/ Apax Mutavim
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/s/ Leader Holdings and Investments Ltd.
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/s/ Sunny
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/s/ Yosef Strogo
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/s/ Dvir Katchman
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/s/ Joe Nahumi
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/s/ Dalia Pkornik
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<PAGE>

/s/ Shlomo Shefi
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/s/ Shuki Hershkovitch
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/s/ Uri Akerman
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/s/ Moshe Nehoray
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/s/ Volter Rozental
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/s/ Leon Gross
------------------------------------------<PAGE>

                                                                      Exhibit 4b

                                                                 FORM OF WARRANT

          THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF
          ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
          EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
          SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
          APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
          SUCH ACT OR SUCH LAWS.

                           ELECTRIC FUEL CORPORATION
                         COMMON STOCK PURCHASE WARRANT

                                                                    ______Shares

This certifies that, for value received, ____________ (the "Holder"), is
entitled, subject to the terms and conditions hereinafter set forth, at any
time, at or before the Expiration Date (as defined herein), but not thereafter,
to purchase up to ________ shares of Common Stock, par value $.01 per share (the
"Common Stock"), of Electric Fuel Corporation, a Delaware corporation (together
with its successors, the "Corporation"). The purchase price per share payable
upon the exercise of this Warrant shall be the Purchase Price. Upon exercise or
conversion, the Holder shall receive a certificate or certificates for the
Common Stock of the Corporation so purchased, upon presentation and surrender of
this Warrant to the Corporation, with the form of subscription duly executed,
and accompanied by payment of the Purchase Price of each share purchased as
hereinafter provided. Payment of the Purchase Price shall be made by certified
check or wire transfer.

          This Warrant is subject to the following terms and conditions:

     Section 1. Certain Definitions. For all purposes of this Warrant, unless
                -------------------
the context otherwise requires:

     (1)  "Common Stock" shall mean shares of Common Stock, par value $.01 per
share, of the Corporation.

     (2)  "Exercise Date" shall mean the date on which any holder shall exercise
its right to purchase Common Stock hereunder.

     (3)  "Expiration Date" shall mean the date that is [six months after the
Closing][12 months after the Closing].
<PAGE>

     (4)  "Purchase Price" shall mean [$1.25 per share][$4.50 per share].

     (5)  "Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

     Section 2.  Exercise of Warrant.
                 -------------------

     (1)  General.  The holder of this Warrant may, at any time, but not later
          -------
than the Expiration Date, exercise this Warrant at the times and for the number
of shares of Common Stock indicated, less the number of shares of Common Stock
as to which this Warrant has been previously exercised, at the Purchase Price in
effect on the Exercise Date.

     (2)  Mechanics of Exercise.  In order to exercise this Warrant in whole or
          ---------------------
in part, the holder hereof shall deliver to the Corporation the following: (i) a
written notice of such holder's election to exercise this Warrant, which notice
shall be in substantially the form of the Subscription Notice attached hereto as
Exhibit A and shall specify the number of shares of Common Stock to be
purchased, (ii) a certified check or checks or wire transfer payable to the
Corporation in an amount equal to the aggregate Purchase Price of the number of
shares of Common Stock being purchased, and (iii) this Warrant. The Corporation
shall, as promptly as practicable, and in any event within 10 days thereafter,
execute and deliver or cause to be executed and delivered, in accordance with
said notice, a certificate or certificates representing the aggregate number of
shares of Common Stock specified in said notice. The stock certificate or
certificates so delivered shall be in such denominations as may be specified in
said notice and shall be registered in the name of such holder or such other
name as shall be designated in said notice. Such certificate or certificates
shall be deemed to have been issued and such holder or any other person
designated to be named therein shall be deemed for all purposes to have become a
holder of record of such shares as of the date said notice and payment is
received by the Corporation as stated above. If this Warrant shall have been
exercised only in part, the Corporation shall, at the time of delivery of said
certificate or certificates, deliver to such holder a new Warrant evidencing the
rights of such holder to purchase the shares comprising the remaining shares of
Common Stock called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant, other than as provided for in Section 7
hereof or, at the request of such holder, appropriate notation may be made on
this Warrant and the same returned to such holder. The Corporation shall pay all
expenses, taxes and other charges payable in connection with the preparation,
issue and delivery of stock certificates and new Warrants under this Section.

     (3)  Fractional Shares.  No fractional shares or scrip representing
          -----------------
fractional shares shall be issued upon the exercise of any Warrant. If, upon the
exercise of any Warrant, the registered holder would, except for the provisions
of this Section 2, be entitled to receive a fractional share of Common Stock,
then an amount equal to such fractional share multiplied by the then fair market
value of a share of such Common Stock shall be paid by the Corporation in cash
to such registered holder.

     Section 3.  Legend on Certificates; Exercise Subject to Compliance with
                 -----------------------------------------------------------
<PAGE>

Laws; Transfer Restricted.
-------------------------

     (1)  Legend.  The holder understands that each certificate representing
          ------
shares of Common Stock issued upon exercise of all or part of this Warrant shall
be stamped or otherwise imprinted with a legend in substantially the following
form:

          "The shares represented by this certificate have been acquired for
     investment and have not been registered under the Securities Act of 1933,
     as amended (the "Securities Act") or any applicable state securities laws
     and may not be offered, sold or otherwise transferred without an effective
     registration statement related thereto or an opinion of counsel in form and
     substance satisfactory to the Corporation that such registration is not
     required under the Securities Act or such state laws."

     (2)  Compliance with Laws.  The holder acknowledges and agrees that the
          --------------------
exercise of this Warrant is subject to compliance with all federal and state
securities laws applicable to such exercise. The holder of this Warrant may not
exercise, sell, transfer or otherwise assign this Warrant unless there is a
registration statement under the Securities Act effective with regards to it or
unless the Corporation is provided with an opinion of counsel reasonably
satisfactory in form and substance to the Corporation, or such other assurances
as it may reasonably require, to the effect that such exercise, sale, transfer,
or assignment does not violate the Securities Act or applicable state securities
laws. This Warrant and the Shares of Common Stock issuable upon exercise hereof
shall be "Registrable Securities" as defined under the Registration Rights
Agreement entered into on the date hereof by the Holder, the Corporation and
other Purchasers identified therein.

     (3)  Warrant Holder Not Deemed A Stockholder.  No holder of this Warrant
          ---------------------------------------
shall, as such, be entitled to vote or to receive dividends or be deemed the
holder of Common Stock that may at any time be issuable upon exercise of such
Warrant for any purpose whatsoever, nor shall anything contained herein be
construed to confer upon the holder of this Warrant, as such, any of the rights
of a stockholder of the Corporation or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issue or reclassification of stock, change of par value or
change of stock to no par value, consolidation, merger or conveyance or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights, until such holder shall have exercised such Warrant and
been issued shares of Common Stock in accordance with the provisions hereof.

     Section 4.  Reservation of Shares; Validly Issued Shares.
                 --------------------------------------------

     (1)  Reservation of Shares.  The Corporation covenants that it will at all
          ---------------------
times reserve and hold available out of its authorized Common Stock, solely for
the purpose of issue upon exercise of the Warrants, such number of shares of
Common Stock as shall then be issuable upon the exercise of all outstanding
Warrants.

     (2)  Validly Issued Shares.  The Corporation covenants that all shares of
          ---------------------
Common Stock, which shall be issuable upon exercise of this Warrant, shall, at
the time of delivery, be duly authorized, validly issued, fully paid,
nonassessable, and free from all taxes, liens, and charges with respect to the
issue thereof (other than those
<PAGE>

which the Corporation shall promptly pay or discharge).

     (c)  Stock Dividends.  If and whenever at any time the Corporation shall
          ---------------
declare a dividend or make any other distribution upon any class or series of
stock of the Corporation payable in Common Shares or securities convertible into
or exercisable for Common Stock, the number of Common Shares to be obtained upon
exercise of this Warrant shall be proportionately adjusted to reflect the
issuance of any such securities issuable in payment of such dividend or
distribution.

     (d)  Subdivision or Combination of Stock.  If and whenever the Corporation
          -----------------------------------
shall at any time subdivide its outstanding Common Shares into a greater number
of shares, the Purchase Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding Common
Shares of the Corporation shall be combined into a smaller number of shares, the
Purchase Price in effect immediately prior to such combination shall be
proportionately increased.

     (e)  Recapitalizations.  If at any time or from time to time (a) there
          -----------------
shall be any capital reorganization or reclassification of the capital stock of
the Corporation, consolidation or merger of the Corporation with another
corporation (other than a consolidation or merger in which the Corporation is
the continuing corporation and which does not result in any reclassification of
the Common Stock) or (b) the Corporation pays any distribution or dividend in
cash or property of the Corporation in complete or partial liquidation (but not
including ordinary periodic cash dividends) (any such event being referred to
herein as a "recapitalization"), provision shall be made so that the holder of
this Warrant shall thereafter be entitled to receive upon exercise of the
Warrant the number of shares of stock or other securities or cash or property of
the Corporation (or of the successor corporation resulting from any
consolidation or merger) to which a holder of Common Shares deliverable upon
exercise would have been entitled on such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 5(e) with respect to the rights of the holder of the Warrant after
the recapitalization to the end that the provisions of this Section 5(e)
(including adjustment of the Purchase Price then in effect and the number of
shares for which the Warrant may be exercised) shall be applicable after that
event in as nearly an equivalent manner as may be practicable. The Corporation
shall not effect any such recapitalization, consolidation or merger unless, upon
the consummation thereof, the successor corporation shall assume by written
instrument the obligation to deliver to the holder of this Warrant such shares
of stock, securities, cash or property as such holder shall be entitled to
purchase in accordance with the foregoing provisions. The Corporation shall
provide at least ten days advance written notice to the holder of record of this
Warrant of the occurrence of any event which would be covered by this
Section 5(e).
<PAGE>

     Section 5.  Notices.
                 -------

     Any notice or other document required or permitted to be given or delivered
to the holder of record of the Warrant shall be (i) delivered personally; (ii)
mailed first class postage prepaid, or (iii) sent by overnight courier, next day
delivery, to such holder at the last address shown on the books of the
Corporation maintained for the registry and transfer of the Bonus Warrant. Any
notice or other document required or permitted to be given or delivered to the
Corporation shall be (i) delivered personally; (ii) mailed first class postage
prepaid or (iii) sent by overnight courier, next day delivery, to the principal
office of the Corporation at 885 Third Avenue, New York, New York 10022-4834, or
to its offices in the Western Industrial Zone, P.O. Box 641, Bet Shemesh 99000,
Israel, or delivered to such other address within the United States of America
as shall have been furnished by the Corporation to the holder of record of the
Warrant.

     Section 6.  Governing Law.  This Warrant shall be governed by and construed
                 -------------
under the internal laws of the State of Delaware (except for the conflict of
laws rules thereof). Any disputes with respect to this Warrant shall be resolved
by litigation in the Courts of the State of Delaware. The Corporation and the
holder of this Warrant each hereby irrevocably submit to the jurisdiction of
said Court and agree that neither will sue in connection with any matter covered
under this Warrant in any other court.

           [The remainder of this page is intentionally left blank.]
<PAGE>

     IN WITNESS WHEREOF, the Corporation has caused this Warrant to be signed in
its name by a duly authorized officer.

     Dated:

                                        ELECTRIC FUEL CORPORATION

                                        By:__________________________

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