<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities and Exchange Act of 1934
(Amendment No. )*
RADA ELECTRONIC INDUSTRIES LIMITED
----------------------------------------
(Name of Issuer)
Ordinary Shares, Par Value NIS .002 Per Share
---------------------------------------------
(Title of Class of Securities)
750115305
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(CUSIP Number)
Robert T. Burke
Mandel, Buder & Verges
101 Vallejo Street
San Francisco, CA 94111
(415) 781-4400
(Name, Address and Telephone Number Persons Authorized to Receive Notices and
Communications)
May 29, 1998
--------------------------------------------------------
(Date of Events 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 [_].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page should be filled 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 section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
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CUSIP NO. 750115305 PAGE 2 OF 8 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Howard P.L. Yeung
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
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SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
PF
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2 (e) [_]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Hong Kong
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SOLE VOTING POWER
7
NUMBER OF 540,000
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
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EACH SOLE DISPOSITIVE POWER
9
REPORTING 540,000
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
540,000
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[X]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
3.63%
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TYPE OF REPORTING PERSON*
14
IN
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*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
CUSIP No. 750115305 Page 3 of 8 Pages
ITEM 1: SECURITY AND ISSUER
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1. Class of Securities: Ordinary Shares, par value NIS.002 per share (the
"Ordinary Shares")
2. Issuer: Rada Electronic Industries Limited ("Rada")
3. Principal Address: Medinat Hayehudim 12, Herzliya-Pituach, Israel, 46120
ITEM 2: IDENTITY AND BACKGROUND
- ------- ------------------------
(a) REPORTING PERSON: Howard P.L. Yeung ("Yeung")
(b) Business Address: 2202 Kodak House II, 39 Healthy Street, East, North
Point, Hong Kong
(c) Principal Business: Investor
(d) Criminal Convictions (excluding traffic violations or similar
misdemeanors): None
(e) Civil Adjudication of Violation of Securities Laws: None
(f) Citizenship or place of organization: Hong Kong
* * * * * * * * * * * * * * * *
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CUSIP No. 750115305 Page 4 of 8 Pages
ITEM 3: SOURCE AND AMOUNT OF FUNDS
- ------------------------------------
If the warrants contained in the Stock Purchase Warrants discussed in Item 5(a)
below (the "Warrants") are exercised in full, the source of the purchase price
for the securities of Rada, in the aggregate amount of $1,170,000, would be
personal funds of Yeung.
ITEM 4: PURPOSE OF TRANSACTION
- -------------------------------
The Ordinary Shares of Rada to be purchased by Yeung if Yeung decides to
exercise the Warrants will be acquired for investment purposes. Subject
to applicable legal requirements and the factors referred to below, Yeung may
purchase Ordinary Shares pursuant to the Warrants, purchase shares in
the open market or in privately regulated transactions or dispose of any or all
shares he may then hold. Factors that may be considered by Yeung include
Rada's financial condition, business and prospects, other developments
concerning Rada, price levels of the Ordinary Shares, other opportunities
available to Yeung, and general political, economic and financial market
conditions in the United States, Hong Kong or Israel.
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CUSIP No. 750115305 Page 5 of 8 Pages
The Reporting Person does not have any plans or proposals which relate to or
would result in any of the actions specified in clauses (a) through (j) of Item
4 of Schedule 13D.
ITEM 5: INTEREST IN SECURITIES OF THE ISSUER
- ---------------------------------------------
(a) On May 29, 1998 (i) Rada entered into a warrant agreement, entitled
Stock Purchase Warrant, pursuant to which Yeung has been granted
Warrants to purchase, during the two year period following the advance
of the "First Loan" referred to in the Loan Agreement described in
Item 6, 120,000 Ordinary Shares at a purchase price of $1.50 per
Share, 120,000 Ordinary Shares at a purchase price of $2.00 per Share,
and 120,000 Ordinary Shares at a purchase price of $2.50 per Share
(the "First Stock Purchase Warrant"); and (ii) Rada undertook to enter
into a warrant agreement, entitled Stock Purchase Warrant, pursuant to
which Yeung would be granted Warrants to purchase, during the two year
period following Yeung's giving notice that he is prepared to make the
"Second Loan" referred to in the Loan Agreement described in Item
6,180,000 Ordinary Shares at a purchase price of $2.50 per Share (the
"Second Stock Purchase Warrant"; the First Stock Purchase Warrant and
the Second Stock Purchase Warrant being together referred to herein as
the "Stock Purchase Warrants"). If the Warrants are exercised in full,
the 540,000 Ordinary Shares issued to Yeung would represent 3.63% of
the total number of Ordinary Shares of Rada outstanding as of the date
hereof (i.e.,14,864,921), which number includes the 540,000 Ordinary
Shares that would be issued upon exercise of the Warrants.
Yeung owns 50% of the issued and outstanding capital stock of Horsham
Enterprises Limited, a British Virgin Islands corporation ("Horsham"),
and, as of the date hereof, Horsham owns 2,115,715 Ordinary Shares
of Rada (the "Horsham-Rada Shares"). If, by virtue of his ownership
interest in Horsham, Yeung is deemed to be the beneficial owner of the
Horsham-Rada Shares, then Yeung would, upon exercise of the Warrants
in full, be the beneficial owner of 2,655,715 Ordinary Shares. Such
2,655,715 Ordinary Shares would represent 17.87% of the total number
of Ordinary Shares of Rada outstanding as of the date hereof
(including the 540,000 Ordinary Shares that would be issued upon
exercise of the Warrants). The filing of this statement shall not be
construed as an admission that Yeung is the beneficial owner of the
Horsham-Rada Shares.
(b) Except as set forth in Item 5(a) above, no transactions in the class
of securities reported on were effected during the past sixty days by
the Reporting Person.
(c) Not applicable
(d) Not applicable
(e) Ownership below 5%: Not applicable
ITEM 6: CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
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TO SECURITIES OF THE ISSUER
---------------------------
None, except as set forth in Item 5(a) above and that certain Loan
Agreement dated May 29, 1998 between Yeung and Rada, as amended by that
certain Variation of Loan Agreement dated May 29, 1998 (the "Loan
Agreement"), pursuant to which (i) Yeung has agreed to lend Rada the
principal amount of $2,000,000 (the "First Loan") upon the terms and
conditions contained in the Loan Agreement; and (ii) Yeung may lend Rada
the principal amount of $1,000,000 (the "Second Loan") upon the terms and
conditions contained in the Loan Agreement, provided Yeung determines in
his absolute discretion that he is prepared to advance the Second Loan. The
First Loan and the Second Loan will bear interest at 11% per annum.
<PAGE>
CUSIP No. 750115305 Page 6 of 8 Pages
ITEM 7: EXHIBITS
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1. Stock Purchase Warrant by and between Rada and Yeung (concerning
360,000 of the Ordinary Shares).
2. Form of Stock Purchase Warrant by and between Rada and Yeung
(concerning 180,000 of the Ordinary Shares).
3. Loan Agreement, dated May 29, 1998, by and between Rada and Yeung, and
Variation of Loan Agreement dated May 29, 1998, by and between Rada and
Yeung.
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CUSIP No. 750115305 Page 7 of 8 Pages
SIGNATURE
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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.
/s/ Howard P.L. Yeung
_____________________________________
By: Howard P.L. Yeung
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CUSIP No. 750115305 Page 8 of 8 Pages
EXHIBIT INDEX
Exhibits
- --------
Exhibit 1 Stock Purchase Warrant
Exhibit 2 Form of Stock Purchase Warrant
Exhibit 3 Loan Agreement and Variation of Loan Agreement
<PAGE>
EXHIBIT 1
Schedule I
- ----------
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION S PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"). THIS AGREEMENT SHALL NOT CONSTITUTE AN
OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE 1933 ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
STOCK PURCHASE WARRANT
To Purchase 360,000 Shares of Common Stock of
RADA ELECTRONIC INDUSTRIES, LTD.
THIS CERTIFIES that, for value received, __________________________(the
"Investor"), is entitled, upon the terms and subject to the conditions
hereinafter set forth, at any time on or after the date hereof and on or prior
to __ May, 2000, (the "Termination Date") but not thereafter, to subscribe for
and purchase from RADA ELECTRONIC INDUSTRIES, LTD., an Israeli corporation with
headquarters situated at 12 Medinat Hayehudim St., Herzliya-Pituah Israel 4612
(the "Company"), 360,000 Ordinary Shares of 0.02 NIS (New Israeli Shekels) each
(the "Warrant Shares"). The purchase price of one Warrant Share (the "Exercise
Price") under this Warrant shall be US $1.5 (one and a half US Dollars) per
share for 120,000 Warrant Shares, US $2 (two US Dollars) for 120,000 Warrant
Shares and US $2.5 (two and a half US Dollars) for one 120,000 Warrant Shares.
This Warrant is being issued pursuant a Loan Agreement dated __ May,1998 (the
"Agreement") between the Company and the Investor and is subject to its terms.
In the event of any conflict between the terms of this Warrant and the
Agreement, the Agreement shall prevail.
1. Interpretation and Title of Warrant. (a) In this Warrant the term
-----------------------------------
"Common Stock" shall mean Ordinary Share of 0.02 NIS (New Israeli Sekels) each
of the Company.
(b) Prior to the expiration hereof and subject to compliance with applicable
laws, this Warrant and all rights hereunder are transferable, in whole or in
part, at the office or agency of the Company, by the holder hereof in person or
by duly authorized attorney, upon surrender of this Warrant together with the
Assignment From annexed hereto properly endorsed.
2. Authorization of Shares. The Company covenants that all shares of
-----------------------
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, and be capable of being validly issued, as fully paid and
nonassessable and
<PAGE>
2
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).
3. Exercise of Warrant. Exercise of the purchase rights represented by
-------------------
this Warrant may be made at any time or times, in whole or in part, before the
close of business on the Termination Date, or such earlier date on which this
Warrant may terminate as provided on paragraph 11 below, by the surrender of his
Warrant and the Subscription From annexed hereto duly executed, at the office of
the Company (or such other office or agency of the Company as it may designate
by notice in writing to the registered older hereof at the address of such
holder appearing on the books of the Company) and upon payment of the Exercise
Price of the shares thereby purchased; whereupon the holder of this Warrant
shall be entitled to receive a certificate for the number of shares of Common
Stock so purchased immediately. Certificates for shares purchased hereunder
shall be delivered to the holder hereof within five business days after the date
on which this Warrant shall have been exercised as aforesaid. Payment of the
Exercise Price of the shares may be by certified check or cashier's check or by
wire transfer to an account designated by the Company in an amount equal to the
Exercise Price multiplied by the number of shares being purchased.
4. No Fractional Shares or Scrip. No fractional shares or scrip
-----------------------------
representing fractional shares shall be issued upon the exercise of this
Warrant.
5. Charges, Taxes and Expenses. Issuance of certificates for shares of
---------------------------
Common Stock upon the exercise of this Warrant shall be made without charge to
the holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant. In the event certificates for shares of Common Stock are
to be issued in a name other than the name of the holder of this Warrant, this
Warrant when surrendered for exercise shall be accompanied by the Assignment
Form attached hereto duly executed by the holder hereof, together with evidence
reasonably satisfactory to the Company that such transfer or assignment is being
made in compliance with all applicable US federal and state securities laws
applicable to the Common Stock; and provided, that upon any such transfer or
--------
assignment, the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.
6. Closing of Books. The Company will at no time close its shareholder
----------------
books or records in any manner which interferes with the timely exercise of this
Warrant.
7. No Rights as Shareholder until Exercise. This Warrant does not entitle
---------------------------------------
the holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise thereof. If, however, at the time of the surrender
of this Warrant and purchase the holder hereof shall be entitled to exercise
this Warrant, the shares so purchased shall be and be deemed to be issued to
such holder as the record owner of
<PAGE>
3
such shares as of the close of business on the date on which this Warrant shall
have been exercised.
8. Assignment and Transfer of Warrant. This Warrant may be assigned by
----------------------------------
the surrender of this Warrant and the Assignment Form annexed hereto duly
executed at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered holder
hereof at the address of such holder appearing on the books of the Company);
provided, however, that this Warrant may not be resold or otherwise transferred
except (I) in a transaction registered under the 1933 Act, or (ii) in a
transaction pursuant to an exemption under the 1933 Act, if available, from such
registration and whereby, if requested by the Company, an opinion of counsel
reasonably satisfactory to the Company is obtained by the holder of this Warrant
to the effect that the transaction is so exempt.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
-------------------------------------------------
represents and warrants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction of any Warrant or stock
certificate, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the company will make and
deliver a new Warrant or stock certificate or like tenor and dated as of such
cancellation, in lieu of this Warrant or stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
---------------------------------
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not being legal
holiday.
11. Effect of Certain Events.
------------------------
(a) If at any time the Company proposes (I) to sell or otherwise convey
all or substantially all of its assets or (ii) to effect a transaction (by
merger or otherwise) in which more than 50% of the voting power of the Company
is disposed of (collectively, a "Sale or Merger Transaction"), in which the
consideration to be received by the Company or its shareholders consists solely
of cash, the Company shall give the holder of this Warrant thirty (30) days'
notice of the proposed effective date of the transaction specifying that the
Warrant shall terminate if the Warrant has not been exercised by the effective
date of the transaction.
(b) In case the Company shall at any time effect a Sale or Merger
Transaction in which the consideration to be received by the Company or its
shareholders consists in part of consideration other than cash, the holder of
this Warrant shall have the right thereafter to purchase, by exercise of this
Warrant and payment of the aggregate Exercise Price in effect immediately prior
to such action, the kind and amount of shares and other securities and property
which it would have owned or have been entitled to receive after the happening
of such transaction had this Warrant been exercised immediately prior thereto.
<PAGE>
4
12. Registration Rights. If the Company shall determine to register any
-------------------
of its securities either for its own account or the account of a security holder
or holders exercising their respective demand registration rights (whether or
not this Warrant has been exercised at that time), other than a registration
relating solely to employee benefit plans, or a registration relating to a
corporate reorganization or other transaction under Rule 145, or a registration
on any registration form that does not permit secondary sales, then the Company
shall (a) promptly give the Investor written notice thereof and (b) use its best
efforts, solely at the expense of the Company, to include in such registration
(and any related qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all the Warrant Shares specified in a written
request made by the Investor and received by the Company within ten (10) days
after the written notice from the Company described in clause (a) above is
received by the Investor. Such written request may specify all or a part of the
Warrant Shares. In addition, the Company shall use its best efforts to qualify
for registration on Form S-3 or any comparable or successor form or forms. After
the Company has qualified for the use of Form S-3 or any comparable or successor
form or forms, the Investor shall have the right to request, and the Company
shall use its best efforts to effectuate (solely at the expense of the
Company), registrations on Form S-3 (or such other form), such requests to be in
writing and to state the number of Warrant Shares to be disposed of and the
intended methods of disposition of such Shares by the Investor. The rights
granted to the Investor under this Section 12 shall survive exercise of this
Warrant and the issuance of Common Stock to the Investor in connection herewith,
but shall terminate once all such Common Stock issued to the Investor pursuant
hereto may immediately be sold by the Investor under Rule 144 during any ninety
(90) day period.
13. Adjustments of Exercise Price and Number of Warrant Shares. The
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number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter set forth:
(a) In case the Company shall (i) declare or pay a dividend in shares
of Common Stock or make a distribution in shares of Common Stock to holders of
its outstanding Common Stock, (ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (iv) issue any shares of its capital stock
in a reclassification of the Common Stock, the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior thereto shall be
adjusted so that the holder of this Warrant shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which he
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. An adjustment made pursuant to this clause shall
become effective immediately after the effective date of such event.
(b) In case the Company shall issue rights, options or warrants to
holders of its outstanding Common Stock entitling them at any time prior to the
exercise of this Warrant, to subscribe for or purchase shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock at a
Price Per Share (as defined in paragraph (d) below) which is lower at the date
of issuance thereof than the then Current Market Price (as defined in paragraph
(e) below) per
<PAGE>
5
share of Common Stock at such date, the number of Warrant Shares hereafter
purchasable upon the exercise of this Warrant shall be determined by multiplying
the number of Warrant Shares theretofore purchasable upon exercise of this
Warrant by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights, options or
warrants plus the number of additional shares of Common Stock actually
subscribed for and purchased, as a consequence of the issuance of such rights,
options or warrants, and of which the denominator shall be the number of shares
of Common Stock outstanding on the date of issuance of such rights, options or
warrants plus the number of shares which the aggregate Proceeds (as defined in
paragraph (d) below) received by the Company on exercise of such rights, options
and warrants would purchase at the Current Market Price per share of Common
Stock at the date of issuance of such rights, options or warrants. Such
adjustment shall be made whenever such rights, options or warrants are issued,
and shall become effective on the date of distribution retroactive to the record
date for the determination of stockholders entitled to receive such rights,
options or warrants.
(c) In case the Company shall distribute to holders of its shares of
Common Stock evidences of its indebtedness or assets (excluding dividends or
distributions referred to in paragraph (a) above or in the paragraph immediately
following this paragraph and excluding any dividend or distribution paid out of
the regained earnings of the Company) or rights, options or warrants, or
convertible or exchangeable securities containing the rights to subscribe for or
purchase shares of Common Stock (excluding those referred to in paragraph (b)
above), then in each case the number of Warrant Shares thereafter purchasable
upon the exercise of this Warrant shall be determined by multiplying the number
of Warrant Shares theretofore purchasable upon the exercise of this Warrant by a
fraction, of which the numerator shall be the then Current Market Price per
share of Common Stock on the date of such distribution, and of which the
denominator shall be such Current Market Price, less the then fair value (as
determined by the Board of Directors of the company, whose determination shall
be conclusive) of the portion of the assets or evidences of indebtedness so
distributed or of such subscription rights, options or warrants, or of such
convertible or exchangeable securities applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution retroactive to the record date for
the determination of shareholders entitled to receive such distribution.
(d) For purposes of this Section 13, "Price Per Share" shall be defined
and determined according to the following formula:
R
P = ---------
N
Where
P = Price Per Share,
<PAGE>
6
R = the "Proceeds" received or receivable by the Company which (i) in the
case of shares of Common Stock is the total amount received or
receivable by the company in consideration for the sale and issuance
of such shares; (ii) in the case of rights, options or warrants to
subscribe for or purchase shares of Common Stock or of securities
convertible into or exchangeable or exercisable for shares of Common
Stock, is the total amount received or receivable by the company in
consideration for the sale and issuance of such rights, options,
warrants or convertible or exchangeable or exercisable securities,
plus the minimum aggregate amount of additional consideration, other
than the surrender of such convertible or exchangeable securities,
payable to the company upon exercise, conversion or exchange thereof;
and (iii) in the case of rights, options or warrants to subscribe for
or purchase convertible or exchangeable or exercisable securities, is
the total amount received or receivable by the Company in
consideration for the sale and issuance of such rights, options or
warrants, plus the minimum aggregate amount of additional
consideration other than the surrender of such convertible or
exchangeable securities, payable upon the exercise, conversion or
exchange of such rights, options or warrants and upon the conversion
or exchange or exercise of the convertible or exchangeable or
exercisable securities; provided that in each case the proceeds
--------
received or receivable by the Company shall be deemed to be the gross
cash proceeds without deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase thereof by
underwriters or dealers or other performing similar services or any
expenses incurred in connection therewith,
and
N = the "Number of Shares," which (i) in the case of Common Stock is the
number of shares issued; (ii) in the case of rights, options or
warrants to subscribe for or purchase shares of Common Stock or of
securities convertible into or exchangeable or exercisable for shares
of Common Stock, is the maximum number of shares of Common Stock
initially issuable upon exercise, conversion or exchange thereof; and
(iii) in the case of rights, options or warrants to subscribe for or
purchase convertible or exchangeable or exercisable securities, is the
maximum number of shares of Common Stock initially issuable upon
conversion, exchange or exercise of the convertible, exchangeable or
exercisable securities issuable upon the exercise of such rights,
options or warrants.
If the Company shall issue shares of Common Stock or rights, options,
warrants or convertible or exchangeable or exercisable securities for a
consideration consisting, in whole or in part, of property other than cash, the
amount of such consideration shall be determined in good faith by the Board of
Directors of the Company whose determination shall be conclusive.
<PAGE>
7
(e) For the purpose of any computation under paragraphs (b), (c) or (d)
of this Section 13, the "Current Market Price" per share of Common Stock at any
date shall be the average of daily bid and asked price on Nasdaq of the Common
Stock for the thirty (30) trading days commencing 30 trading days before the
date of determination.
(f) Whenever the number of Warrant Shares purchasable upon the exercise of
this Warrant is adjusted, as herein provided, the Exercise Price per Warrant
Share payable upon exercise of this Warrant shall be adjusted by multiplying
such Exercise Price immediately prior to such adjustment by a fraction, of which
the numerator shall be the number of Warrant Shares (to which such Exercise
Price relate) purchasable upon the exercise of this Warrant immediately prior
to such adjustment, and of which the denominator shall be the number of such
Warrant Shares purchasable immediately thereafter, it being understood however,
that no such adjustment shall increase the aggregate Exercise Price payable
hereunder upon full exercise of this Warrant.
(g) No adjustment in the number of Warrant Shares purchasable hereunder
shall be required unless such adjustments, in the aggregate, would result in an
increase or decrease of at least one percent (1%) of the Exercise Price;
provided that any adjustments which by reason of this paragraph (g) are not
- --------
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest cent or to
the nearest one-thousandth of a share, as the case may be.
(h) No adjustment in the number of Warrant Shares purchasable upon the
exercise of this Warrant need be made under paragraph (b), (c) or (d) if the
Company issues or distributes to the holder of this Warrant the shares, rights,
options, warrants or convertible or exchangeable securities, or evidences of
indebtedness or assets referred to in those paragraphs which the holder of this
Warrant would have been entitled to receive had this Warrant been exercised
prior to the happening of such event or the record date with respect thereto. In
no event shall the Company be required or obligated to make any such
distribution otherwise than in its sole discretion. No adjustment in the number
of Warrant shares purchasable upon the exercise of this Warrant need be made for
sales of Common Stock pursuant to a Company plan for reinvestment of dividends
or interest. No adjustment need be made for a change in the par value of the
Common Stock.
(i) In the event that at any time, as a result of an adjustment made
pursuant to paragraph (a) above, the holder of this Warrant shall become
entitled to purchase any securities of the Company other than shares of Common
Stock, hereafter the number of such other shares so purchasable upon exercise of
this Warrant and the Exercise Price of such shares shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained in
paragraph (a) through (h), inclusive, above.
14. Voluntary Adjustment by the Company. The Company may at its option,
-----------------------------------
at any time during the term of this Warrant, reduce the then current Exercise
<PAGE>
8
Price to any amount and for any period of time deemed appropriate by the Board
of Directors of the Company.
15. Notice of Adjustment. Whenever the number of Warrant shares or number
--------------------
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly mail by registered or certified mail, return receipt requested, to the
transfer agent for the Common Stock and to the holder of this Warrant notice of
such adjustment or adjustments setting forth the number of Warrant Shares (and
other securities or property) purchasable upon the exercise of this Warrant and
the Exercise Price of such Warrant Shares after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting forth
computation by which such adjustment was made. Such notice, in absence of
manifest error, shall be conclusive evidence of the correctness of such
adjustment.
16. Authorized Shares. The Company covenants that during the period the
-----------------
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of Common Stock
upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of the Company's Common
Stock upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
shares of Common Stock may be issued as provided therein without violation of
any applicable law or regulation, or of any requirements of Nasdaq or any
domestic securities exchange upon which the Common Stock may be listed.
17. Miscellaneous.
-------------
(a) Issue Date. The provisions of this Warrant shall be construed and
----------
shall be given effect in all respects as if it had been issued and delivered by
the Company on the date hereof. This Warrant shall be binding upon any
successors or assigns of the Company. This Warrant shall be governed by and
construed according to the laws of England and Wales and the Company and the
Investor hereby irrevocably submit to the jurisdiction of the English Courts
save that the Investor reserves the right to commence any proceedings, suit
and/or actions in any legal jurisdiction in order to assert, defend and/or
enforce its rights, obligations and/or remedies whether hereunder or otherwise.
Without limiting the generality of the foregoing, it is agreed and understood
that the Investor may elect to commence any proceedings, suits and/or actions in
the federal or state courts located in the State of New York in order to assert,
defend and/or enforce its rights, obligations and/or remedies under the
provisions hereof relating to the United States securities laws, and the Company
hereby irrevocably submits to the jurisdiction of such courts in connection with
any such proceeding, suit or action.
(b) Restrictions. The holder hereof acknowledges that the Common Stock
------------
acquired upon the exercise of this Warrant, if not registered, may have
restrictions upon its resale imposed by state and federal securities laws.
<PAGE>
9
(c) Modification and Waiver. This Warrant and any provisions hereof may be
-----------------------
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
(d) Notices. Any notice, request or other document required or permitted
-------
to be given or delivered to the holders hereof or the Company shall be delivered
or shall be sent by certified or registered mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company at
the address set forth in the Agreement.
(e) Recovery of Attorney's Fees. Should any party bring an action to
---------------------------
enforce the terms of this Agreement then, if Investor prevails in such action,
it shall be entitled to recovery of its attorney's fees from the company and, if
the Company prevails in such action, it shall be entitled to recovery of its
attorney's fees from the Purchaser.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as a
Deed by its officers thereunto duly authorized.
Executed as a deed by
RADA ELECTRONIC INDUSTRIES LTD.
Acting by two of its officers
/s/ Meir Shariv /s/ Meir Hermel
- --------------------------- ---------------------------------
By: MEIR SHARIV By: MEIR HERMEL
Title: Director and Officer Title: CFO
<PAGE>
10
NOTICE OF EXERCISE
- ------------------
(1) The undersigned hereby elects to purchase ________________ shares of
Common Stock of RADA ELECTRONIC INDUSTRIES, LTD. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price in full,
together with all applicable transfer taxes, if any.
(2) Please issue a certificate of certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as specified
below:
Name: ____________________
Address: ____________________
____________________
<PAGE>
11
ASSIGNMENT FORM
---------------
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to
________________________________ whose address is _________________________
____________________________________________.
_____________________________________________________
Dated:_______________ , 199_.
Holder's Signature: ______________________
Holder's Address: ______________________
______________________
Signature Guaranteed: ______________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
<PAGE>
EXHIBIT 2
Schedule 2
- ----------
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION S PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"). THIS AGREEMENT SHALL NOT CONSTITUTE
AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE 1933 ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
STOCK PURCHASE WARRANT
To Purchase 180,000 Shares of Common Stock of
RADA ELECTRONIC INDUSTRIES, LTD.
THIS CERTIFIES that, for value received, __________ (the "Investor"), is
entitled, upon the terms and subject to the conditions hereinafter set forth, at
any time on or after the date hereof and on or prior to ______ , 200____, (the
"Termination Date") but not thereafter, to subscribe for and purchase from
RADA ELECTRONIC INDUSTRIES, LTD., an Israeli corporation with headquarters
situated at 12 Medinat Hayehudim St., Herzliya-Pituah Israel 4612 (the
"Company"), 180,000 Ordinary Shares of 0.02 NIS (New Israeli Shekels) each (the
"Warrant Shares"). The purchase price of one Warrant Share (the "Exercise
Price") under this Warrant shall be US $2.5 (two and a half US Dollars) per
share. This Warrant is being issued pursuant a Loan Agreement dated ____ May,
1998 (the "Agreement") between the Company and the Investor and is subject to
its terms. In the event of any conflict between the terms of this Warrant and
the Agreement, the Agreement shall prevail.
1. Interpretation and Title of Warrant. (a) In this Warrant the term
-----------------------------------
"Common Stock" shall mead Ordinary Share of 0.02 NIS (New Israeli Sekels) each
of the Company.
(b) Prior to the expiration hereof and subject to compliance with applicable
laws, this Warrant and all rights hereunder are transferable, in whole or in
part, at the office or agency of the Company, by the holder hereof in person or
by duly authorized attorney, upon surrender of this Warrant together with the
Assignment From annexed hereto properly endorsed.
2. Authorization of Shares. The Company covenants that all shares of
-----------------------
Common Stock which may be issued upon the exercise of rights represented by
this Warrant will, upon exercise of the rights represented by this Warrant, be
duly authorized, and be capable of being validly issued, as fully paid and
nonassessable and
<PAGE>
2
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).
3. Exercise of Warrant. Exercise of the purchase rights represented by
-------------------
this Warrant may be made at any time or times, in whole or in part, before the
close of business on the Termination Date, or such earlier date on which this
Warrant may terminate as provided on paragraph 11 below, by the surrender of
his Warrant and the Subscription From annexed hereto duly executed, at the
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the registered holder hereof at the address of
such holder appearing on the books of the Company) and upon payment of the
Exercise Price of the shares thereby purchased; whereupon the holder of this
Warrant shall be entitled to receive a certificate for the number of shares of
Common Stock so purchased immediately. Certificates for shares purchased
hereunder shall be delivered to the holder hereof within five business days
after the date on which this Warrant shall have been exercised as aforesaid.
Payment of the Exercise Price of the shares may be by certified check or
cashier's check or by wire transfer to an account designated by the Company in
an amount equal to the Exercise Price multiplied by the number of shares being
purchased.
4. No Fractional Shares or Scrip. No fractional shares or scrip
-----------------------------
representing fractional shares shall be issued upon the exercise of this
Warrant.
5. Charges, Taxes and Expenses. Issuance of certificates for shares of
---------------------------
Common Stock upon the exercise of this Warrant shall be made without charge to
the holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by
the holder of this Warrant. In the event certificates for shares of Common Stock
are to be issued in a name other than the name of the holder of this Warrant,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the holder hereof, together
with evidence reasonably satisfactory to the Company that such transfer or
assignment is being made in compliance with all applicable US federal and
state securities laws applicable to the Common Stock; and provided, that upon
--------
any such transfer or assignment, the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto.
6. Closing of Books. The Company will at no time close its shareholder
----------------
books or records in any manner which interferes with the timely exercise of this
Warrant.
7. No Rights as Shareholder until Exercise. This Warrant does not
---------------------------------------
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company prior to the exercise thereof. If, however, at the time of the
surrender of this Warrant and purchase the holder hereof shall be entitled to
exercise this Warrant, the shares so purchased shall be and be deemed to be
issued to such holder as the record owner of
<PAGE>
3
such shares as of the close of business on the date on which this Warrant shall
have been exercised
8. Assignment and Transfer of Warrant. This Warrant may be assigned by
----------------------------------
the surrender of this Warrant and the Assignment Form annexed hereto duly
executed at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the registered holder
hereof at the address of such holder appearing on the books of the Company);
provided, however, that this Warrant may not be resold or otherwise transferred
except (I) in a transaction registered under the 1933 Act, or (ii) in a
transaction pursuant to an exemption under the 1933 Act, if available, from
such registration and whereby, if requested by the Company, an opinion of
counsel reasonably satisfactory to the Company is obtained by the holder of
this Warrant to the effect that the transaction is so exempt.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
-------------------------------------------------
represents and warrants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction of any Warrant or stock
certificate, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the company will make and
deliver a new Warrant or stock certificate or like tenor and dated as of such
cancellation, in lieu of this Warrant or stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
---------------------------------
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not being legal
holiday.
11. Effect of Certain Events:
-------------------------
(a) If at any time the Company proposes (I) to sell or otherwise convey
all or substantially all of its assets or (ii) to effect a transaction (by
merger or otherwise) in which more than 50% of the voting power of the Company
is disposed of (collectively, a "Sale or Merger Transaction"), in which the
consideration to be received by the Company or its shareholders consists solely
of cash, the Company shall give the holder of this Warrant thirty (30) days'
notice of the proposed effective date of the transaction specifying that the
Warrant shall terminate if the Warrant has not been exercised by the effective
date of the transaction.
(b) In case the Company shall at any time effect a Sale or Merger
Transaction in which the consideration to be received by the Company or its
shareholders consists in part of consideration other than cash, the holder of
this Warrant shall have the right thereafter to purchase, by exercise of this
Warrant and payment of the aggregate Exercise Price in effect immediately prior
to such action, the kind and amount of shares and other securities and property
which it would have owned or have been entitled to receive after the happening
of such transaction had this Warrant been exercised immediately prior thereto.
<PAGE>
4
12. Registration Rights. If the Company shall determine to register any of
-------------------
its securities either for its own account or the account of a security holder or
holders exercising their respective demand registration rights (whether or not
this Warrant has been exercised at that time), other than a registration
relating solely to employee benefit plans, or a registration relating to a
corporate reorganization or other transaction under Rule 145, or a registration
on any registration form that does not permit secondary sales, then the Company
shall (a) promptly give the Investor written notice thereof and (b) use its best
efforts, solely at the expense of the Company, to include in such registration
(and any related qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all the Warrant Shares specified in a written
request made by the Investor and received by the Company within ten (10) days
after the written notice from the Company described in clause (a) above is
received by the Investor. Such written request may specify all or a part of the
Warrant Shares. In addition, the Company shall use its best efforts to qualify
for registration on Form S-3 or any comparable or successor form or forms. After
the Company has qualified for the use of Form S-3 or any comparable or successor
form or forms, the Investor shall have the right to request, and the Company
shall use its best efforts to effectuate (solely at the expense of the Company),
registrations on Form S-3 (or such other form), such requests to be in writing
and to state the number of Warrant Shares to be disposed of and the intended
methods of disposition of such Shares by the Investor. The rights granted to the
Investor under this Section 12 shall survive exercise of this Warrant and the
issuance of Common Stock to the Investor in connection herewith, but shall
terminate once all such Common Stock issued to the Investor pursuant hereto may
immediately be sold by the Investor under Rule 144 during any ninety (90) day
period.
13. Adjustments of Exercise Price and Number of Warrant Shares. The number and
----------------------------------------------------------
kind of securities purchasable upon the exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter set forth:
(a) In case the Company shall (i) declare or pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a smaller number of
shares of Common Stock or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, the number of Warrant Shares purchasable
upon exercise of this Warrant immediately prior thereto shall be adjusted so
that the holder of this Warrant shall be entitled to receive the kind and number
of Warrant Shares or other securities of the Company which he would have owned
or have been entitled to receive had such Warrant been exercised in advance
thereof. An adjustment made pursuant to this clause shall become effective
immediately after the effective date of such event.
(b) In case the Company shall issue rights, options or warrants to holders
of its outstanding Common Stock entitling them at any time prior to the exercise
of this Warrant, to subscribe for or purchase shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock at a
Price Per Share (as defined in paragraph (d) below) which is lower at the date
of issuance thereof than the then Current Market Price (as defined in paragraph
(e) below) per
<PAGE>
5
share of Common Stock at such date, the number of Warrant Shares hereafter
purchasable upon the exercise of this Warrant shall be determined by multiplying
the number of Warrant Shares theretofore purchasable upon exercise of this
Warrant by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding on the date of issuance of such rights, options or
warrants plus the number of additional shares of Common Stock actually
subscribed for and purchased, as a consequence of the issuance of such rights,
options or warrants, and of which the denominator shall be the number of shares
of Common Stock outstanding on the date of issuance of such rights, options or
warrants plus the number of shares which the aggregate Proceeds (as defined in
paragraph (d) below) received by the Company on exercise of such rights, options
and warrants would purchase at the Current Market Price per share of Common
Stock at the date of issuance of such rights, options or warrants. Such
adjustment shall be made whenever such rights, options or warrants are issued,
and shall become effective on the date of distribution retroactive to the
record date for the determination of stockholders entitled to receive such
rights, options or warrants.
(c) In case the Company shall distribute to holders of its shares of
Common Stock evidences of its indebtedness or assets (excluding dividends or
distributions referred to in paragraph (a) above or in the paragraph immediately
following this paragraph and excluding any dividend or distribution paid out of
the regained earnings of the Company) or rights, options or warrants, or
convertible or exchangeable securities containing the rights to subscribe for or
purchase shares of Common Stock (excluding those referred to in paragraph (b)
above), then in each case the number of Warrant Shares thereafter purchasable
upon the exercise of this Warrant shall be determined by multiplying the number
of Warrant Shares theretofore purchasable upon the exercise of this Warrant by a
fraction, of which the numerator shall be the then Current Market Price per
share of Common Stock on the date of such distribution, and of which the
denominator shall be such Current Market Price, less the then fair value (as
determined by the Board of Directors of the company, whose determination shall
be conclusive) of the portion of the assets or evidences of indebtedness so
distributed or of such subscription rights, options or warrants, or of such
convertible or exchangeable securities applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made, and shall
become effective on the date of distribution retroactive to the record date for
the determination of shareholders entitled to receive such distribution.
(d) For purposes of this Section 13, "Price Per Share" shall be defined
and determined according to the following formula:
R
P = ---------
N
Where
P = Price Per Share,
<PAGE>
6
R = the "Proceeds" received or receivable by the Company which (i) in the
case of shares of Common Stock is the total amount received or
receivable by the company in consideration for the sale and issuance
of such shares; (ii) in the case of rights, options or warrants to
subscribe for or purchase shares of Common Stock or of securities
convertible into or exchangeable or exercisable for shares of Common
Stock, is the total amount received or receivable by the company in
consideration for the sale and issuance of such rights, options,
warrants or convertible or exchangeable or exercisable securities,
plus the minimum aggregate amount of additional consideration, other
than the surrender of such convertible or exchangeable securities,
payable to the company upon exercise, conversion or exchange thereof;
and (iii) in the case of rights, options or warrants to subscribe for
or purchase convertible or exchangeable or exercisable securities, is
the total amount received or receivable by the Company in
consideration for the sale and issuance of such rights, options or
warrants, plus the minimum aggregate amount of additional
consideration other than the surrender of such convertible or
exchangeable securities, payable upon the exercise, conversion or
exchange of such rights, options or warrants and upon the conversion
or exchange or exercise of the convertible or exchangeable or
exercisable securities; provided that in each case the proceeds
--------
received or receivable by the Company shall be deemed to be the gross
cash proceeds without deducting therefrom any compensation paid or
discount allowed in the sale, underwriting or purchase thereof by
underwriters or dealers or other performing similar services or any
expenses incurred in connection therewith,
and
N = the "Number of Shares," which (i) in the case of Common Stock is the
number of shares issued; (ii) in the case of rights, options or
warrants to subscribe for or purchase shares of Common Stock or of
securities convertible into or exchangeable or exercisable for shares
of Common Stock, is the maximum number of shares of Common Stock
initially issuable upon exercise, conversion or exchange thereof; and
(iii) in the case of rights, options or warrants to subscribe for or
purchase convertible or exchangeable or exercisable securities, is the
maximum number of shares of Common Stock initially issuable upon
conversion, exchange or exercise of the convertible, exchangeable or
exercisable securities issuable upon the exercise of such rights,
options or warrants.
If the Company shall issue shares of Common Stock or rights, options,
warrants or convertible or exchangeable or exercisable securities for a
consideration consisting, in whole or in part, of property other than cash, the
amount of such consideration shall be determined in good faith by the Board of
Directors of the Company whose determination shall be conclusive.
<PAGE>
7
(e) For the purpose of any computation under paragraphs (b), (c) or (d)
of this Section 13, the "Current Market Price" per share of Common Stock at any
date shall be the average of daily bid and asked price on Nasdaq of the Common
Stock for the thirty (30) trading days commencing 30 trading days before the
date of determination.
(f) Whenever the number of Warrant Shares purchasable upon the exercise of
this Warrant is adjusted, as herein provided, the Exercise Price per Warrant
Share payable upon exercise of this Warrant shall be adjusted by multiplying
such Exercise Price immediately prior to such adjustment by a fraction, of which
the numerator shall be the number of Warrant Shares (to which such Exercise
Price relate) purchasable upon the exercise of this Warrant immediately prior
to such adjustment, and of which the denominator shall be the number of such
Warrant Shares purchasable immediately thereafter, it being understood however,
that no such adjustment shall; increase the aggregate Exercise Price payable
hereunder upon full exercise of this Warrant.
(g) No adjustment in the number of Warrant Shares purchasable hereunder
shall be required unless such adjustments, in the aggregate, would result in an
increase or decrease of at least one percent (1%) of the Exercise Price;
provided that any adjustments which by reason of this paragraph (g) are not
- --------
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest cent or to
the nearest one-thousandth of a share, as the case may be.
(h) No adjustment in the number of Warrant Shares purchasable upon the
exercise of this Warrant need be made under paragraph (b), (c) or (d) if the
Company issues or distributes to the holder of this Warrant the shares, rights,
options, warrants or convertible or exchangeable securities, or evidences of
indebtedness or assets referred to in those paragraphs which the holder of this
Warrant would have been entitled to receive had this Warrant been exercised
prior to the happening of such event or the record date with respect thereto. In
no event shall the Company be required or obligated to make any such
distribution otherwise than in its sole discretion. No adjustment in the number
of Warrant shares purchasable upon the exercise of this Warrant need be made for
sales of Common Stock pursuant to a Company plan for reinvestment of dividends
or interest. No adjustment need be made for a change in the par value of the
Common Stock.
(i) In the event that at any time, as a result of an adjustment made
pursuant to paragraph (a) above, the holder of this Warrant shall become
entitled to purchase any securities of the Company other than shares of Common
Stock, hereafter the number of such other shares so purchasable upon exercise of
this Warrant and the Exercise Price of such shares shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained in
paragraph (a) through (h), inclusive, above.
14. Voluntary Adjustment by the Company. The Company may at its option,
-----------------------------------
at any time during the term of this Warrant, reduce the then current Exercise
<PAGE>
8
Price to any amount and for any period of time deemed appropriate by the Board
of Directors of the Company.
15. Notice of Adjustment. Whenever the number of Warrant shares or number
--------------------
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly mail by registered or certified mail, return receipt requested, to the
transfer agent for the Common Stock and to the holder of this Warrant notice of
such adjustment or adjustments setting forth the number of Warrant Shares (and
other securities or property) purchasable upon the exercise of this Warrant and
the Exercise Price of such Warrant Shares after such adjustment, setting forth a
brief statement of the facts requiring such adjustment and setting forth
computation by which such adjustment was made. Such notice, in absence of
manifest error, shall be conclusive evidence of the correctness of such
adjustment.
16. Authorized Shares. The Company covenants that during the period the
-----------------
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of Common Stock
upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of the Company's Common
Stock upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
shares of Common Stock may be issued as provided therein without violation of
any applicable law or regulation, or of any requirements of Nasdaq or any
domestic securities exchange upon which the Common Stock may be listed.
17. Miscellaneous.
-------------
(a) Issue Date. The provisions of this Warrant shall be construed and
----------
shall be given effect in all respects as if it had been issued and delivered by
the Company on the date hereof. This Warrant shall be binding upon any
successors or assigns of the Company. This Warrant shall be governed by and
construed according to the laws of England and Wales and the Company and the
Investor hereby irrevocably submit to the jurisdiction of the English Courts
save that the Investor reserves the right to commence any proceedings, suit
and/or actions in any legal jurisdiction in order to assert, defend and/or
enforce its rights, obligations and/or remedies whether hereunder or otherwise.
Without limiting the generality of the foregoing, it is agreed and understood
that the Investor may elect to commence any proceedings, suits and/or actions in
the federal or state courts located in the State of New York in order to assert,
defend and/or enforce its rights, obligations and/or remedies under the
provisions hereof relating to the United States securities laws, and the Company
hereby irrevocably submits to the jurisdiction of such courts in connection with
any such proceeding, suit or action.
(b) Restrictions. The holder hereof acknowledges that the Common Stock
------------
acquired upon the exercise of this Warrant, if not registered, may have
restrictions upon its resale imposed by state and federal securities laws.
<PAGE>
9
(c) Modification and Waiver. This Warrant and any provisions hereof may
-----------------------
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
(d) Notices. Any notice, request or other document required or permitted
-------
to be given or delivered to the holders hereof or the Company shall be delivered
or shall be sent by certified or registered mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company at
the address set forth in the Agreement.
(e) Recovery of Attorney's Fees. Should any party bring an action to
---------------------------
enforce the terms of this Agreement then, if Investor prevails in such action,
it shall be entitled to recovery of its attorney's fees from the company and, if
the Company prevails in such action, it shall be entitled to recovery of its
attorney's fees from the Purchaser.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed as a
Deed by its officers thereunto duly authorized.
Executed as a deed by
RADA ELECTRONIC INDUSTRIES LTD.
Acting by two of its officers
_______________ _______________
By: By:
Title: Title:
<PAGE>
10
NOTICE OF EXERCISE
- ------------------
(1) The undersigned hereby elects to purchase ___________ shares of Common
Stock of RADA ELECTRONIC INDUSTRIES, LTD. pursuant to the terms of the attached
Warrant, and tenders herewith payment of the purchase price in full, together
with all applicable transfer taxes, if any.
(2) Please issue a certificate of certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as specified
below:
Name: _____________________
Address: _____________________
_____________________
<PAGE>
11
ASSIGNMENT FORM
---------------
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to
___________________________________ whose address is____________________________
___________________________________
___________________________________
Dated:_______ , 199_.
Holder's Signature:________________
Holder's Address: ________________
________________
Signature Guaranteed:_________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
<PAGE>
1
LOAN AGREEMENT
--------------
Made this 29 day of May, 1998
By and Between
HOWARD PING LEUNG YEUNG ("HY") OF 2202 Kodak House 11, 39 Healthy Street, North
Point, Hong Kong (the "Lender"); and
RADA ELECTRONIC INDUSTRIES Ltd., an Israeli company with headquarters located at
12 Medinat Hayehudim st, Herzliya-Pituch, Israel 4612 (the "Borrower").
RECITALS
- --------
(1) Borrower desires to receive a loan from the Lender, and the Lender desires
to extend a loan to the Borrower, in the principal amount of two million US
dollars (US $2,000,000), on the terms and conditions more fully set forth in
this Agreement; and
(2) Borrower further desires to receive a further loan from the Lender in the
principal amount of One Million US Dollars (US $1,000,000) if HY exercises his
option to advance such further sum, on the terms and conditions more fully set
forth in this Agreement.
OPERATIONAL PROVISIONS
- ----------------------
1. The Loan.
- -- --------
1.1. Subject to the terms and conditions hereof, the Lender shall lend
to the Borrower, and the Borrower shall borrow from the Lender, the
principal amount of two million dollars ($2,000,000) (the "First Loan").
1.2. Subject to the terms and conditions hereof the Lender shall lend to
the Borrower and the Borrower shall borrow from the Lender the principal
amount of One Million Dollars (US $1,000,000) (the "Second Loan") if, at
any time within a period of two years following the date of the advance
of the First Loan, the Lender determines, at his absolute discretion,
that he is prepared to advance the Second Loan to the Borrower pursuant
to the terms of this Agreement.
1.3. For the purpose of this Agreement the term the "Loan" shall mean
the aggregate principal amounts of the First Loan and Second Loan as
shall have been advanced from time by the Lender to the Borrower and
which remains outstanding from the Borrower to the Lender.
<PAGE>
2
1.4. If the Lender determines that he is prepared to advance the Second
Loan to the Borrower pursuant to the terms of this Agreement he shall
serve a notice in writing on the Borrower to that affect.
2. Advance.
- -- -------
2.1. The full principal amount of the First Loan shall be advanced to
the Borrower concurrently with the execution of this Agreement.
2.2. The full principal amount of the Second Loan shall be advanced to
the Borrower forthwith after the date (falling within the period of two
years after the advance of the First Loan) on which the Lender exercises
his discretion to advance the Second Loan to the Borrower.
2.3. Subject to Clause 1.2, nothing set out in this Agreement shall in
any way oblige the Lender to advance the Second Loan to the Borrower
either within the said period of two years after the date of the advance
of the First Loan or otherwise.
2.4. Monies advanced pursuant to the First Loan and the Second Loan are
to be used by the Borrower as working capital.
3. Maturity Date
- -- -------------
3.1. The Borrower shall repay to the Lender without setoff, deduction or
any form of withholding (in whatever form) the full outstanding
principal amount of the First Loan, together with all interest and
expenses accrued thereon, on April ___ 2000 (the "First Maturity Date").
The Borrower shall have the right to repay the outstanding principal
amount of the First Loan together with all interest accrued thereon at
any time prior to the First Maturity Date. If the Borrower shall repay
either in whole or in part the outstanding principal amount of the First
Loan prior to the First Maturity Date, the Borrower shall upon making
any such payment pay all interest accrued thereon to the Lender.
3.2. The Borrower shall repay to the Lender without set off, deduction
or any form of withholding (in whatever form) the full outstanding
principal amount of the Second Loan, together with all interest and
expenses accrued thereon, on the second anniversary of the date upon
which the Second Loan is advanced from the Lender to the Borrower (the
"Second Maturity Date"). The Borrower shall have the right to repay the
outstanding principal amount of the Second Loan together with all
interest accrued thereon at any time prior to the Second Maturity Date.
If the Borrower shall repay either in whole or in part the outstanding
principal of the Second Loan prior to the Second Maturity Date the
Borrower shall upon making any such payment pay all interest accrued
thereon to the Lender.
<PAGE>
3
4. Interest.
- -- --------
4.1. Rate; Computation. Interest shall accrue on the outstanding
-----------------
principal amount of the Loan at the rate of 11% per annum, based on a
year of 365 days, for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such
interest is payable. Subject to Clause 3.1, the Borrower shall pay all
accrued interest and expenses to the Lender on and in respect of the
First Loan on the First Maturity Date. Subject to Clause 3.2, the
Borrower shall pay accrued interest and expenses to the Lender on and in
respect of the Second Loan on the Second Maturity Date. "Business Day"
shall mean a day on which banks are not required or authorized to close
in London, England.
4.2. Arrears Rate. Anything herein to the contrary notwithstanding, any
------------
payment of principal, interest or expenses hereunder that is not made
when due shall bear interest, from the date on which such amount is due
until such amount is paid in full, payable on demand, at a rate per
annum equal to 4% above the rate otherwise in effect hereunder.
5. Payments.
- -- --------
5.1. Place and Time. The Borrower shall make all payments hereunder not
--------------
later than 11:00 A.M., London, England time, on the date when due, in
U.S. Dollars to the Lender at its address as set forth in Clause 9.5
below, in same day funds.
5.2. Taxes.
-----
5.2.1. All payments by the Borrower hereunder shall be made free and
clear of, and without any deduction for, any and all present or
future taxes, including levies, deductions, charges and
withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the income of the Lender by England or any
political subdivision thereof ("Taxes"). In the event that the
Borrower shall be required by law to deduct any Taxes from any
payment hereunder, the sum payable shall be increased as may be
necessary so that after making all required deductions, the
Lender shall receive the sum it would have received had no such
deductions been made.
5.2.2. In addition, the Borrower will pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges
or similar levies which arise from the execution, delivery,
registration of this Agreement, from any payment hereunder, or
otherwise with respect hereto ("Other Taxes").
<PAGE>
4
5.2.3. The Borrower will indemnify the Lender for the full amount of any
Taxes or Other Taxes imposed on the Lender and any liability
(including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted.
5.3. Expenses. All expenses incurred by the Lender in relation to the
--------
collection of the amounts payable to it pursuant to this agreement,
including but not limited to costs of court proceedings and legal fees,
will be reimbursed by the Borrower to the Lender on a fully indemnity
basis and will be considered part of the principal amount of the Loan.
5.4. Allocation. The Lender has the sole and exclusive discretion to
----------
allocate every amount received from the Borrower (whether or not the
date of the payment for such amount has arrived) to the account of
interest, and/or repayment of principal and/or expenses, and/or other
payments to which the Lender is entitled hereunder.
5.5. No Set-off. The Borrower shall not be entitled to deduct or set-
----------
off, against any payment hereunder, any present or future claims or
obligations which may be owing to it from the Lender.
6. Warrants.
- -- --------
6.1. The Borrower shall issue to the Lender, upon the execution of this
Agreement, warrants in the form set out in Schedule 1 to purchase three
hundred and sixty thousand (360,000) Ordinary Shares of 0.02 NIS (New
Israeli Shekels) of the Borrower exercisable at any time during the
period of two years following the date of the advance of the First Loan
at the following exercise price. Options to purchase one hundred and
twenty thousand shares at an exercise price of one and a half US Dollars
(US $1.5) per share. Options to purchase one hundred and twenty thousand
shares at an exercise price of two dollars ($2) per share. Options to
purchase one hundred and twenty thousand shares at an exercise price of
two and a half dollars ($2.5) per share.
6.2. If within the period of two years following the date of the advance
of the First Loan the Lender serves a notice on the Borrower pursuant to
Clause 1.4 by which he states that he is prepared to advance the Second
Loan, then the Borrower shall issue to the Lender, within five Business
Days after service of the said notice, a warrant in the form set out in
Schedule 2 to purchase One Hundred and Eighty Thousand (180,000)
Ordinary Shares of 0.02 NIS (New Israeli Shekels) of the Borrower
exercisable at any time during the period of two years after the date of
the advance of the Second Loan at an exercise price of Two and a half US
Dollars ($2.50) per Share. The "Termination Date" (as defied in the form
of the said warrant set out in Schedule 2) shall be the date falling two
years after the date upon which the Lender serves the aforesaid notice
on the Borrower pursuant to Clause 1.4.
<PAGE>
5
7. Negative Covenants. So long as any amount of the Loan including interest
- -- ------------------
and expenses payable thereon remains outstanding, the Borrower shall not,
without the prior consent of the Lender:
7.1. Debt. Create or suffer to exist, or permit any of its subsidiaries
----
to create or suffer to exist, any Debt if, immediately after giving
effect to such Debt and the receipt and application of any proceeds
thereof, the ratio of the consolidated Debt of the Borrower and its
subsidiaries to the aggregate consolidated tangible assets of the
Borrower and its subsidiaries would be greater than 1:1. "Debt" means
(i) indebtedness for money borrowed (ii) obligations evidenced by
bonds, debentures, notes or similar instruments, (iii) obligations to
pay the deferred purchase price of property or services, (iv)
obligations as lessee under leases which should be, in accordance with
generally accepted accounting principles, be recorded as capital leases
and (v) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clauses (i) through (iv) above.
7.2. Liens, etc. Create or suffer to exist, or permit any of its
----------
subsidiaries to create or suffer to exist, any lien, security interest
or other charge or encumbrance, or any other type of preferential
arrangement, upon or with respect to any of its properties, whether now
owned or hereafter acquired, or assign, or permit any of its
subsidiaries to assign, and right to receive income, in each case to
secure or provide for the payment of any Debt of any person, other than
(i) purchase money liens or purchase money security interests upon or in
any property acquired or held by the Borrower or any subsidiary in the
ordinary course of business to secure the purchase price of such
property or to secure indebtedness incurred solely for the purpose of
financing the acquisition of such property, or (ii) liens or security
interests existing on such property at the time of its acquisition
(other than any such lien or security interest created in contemplation
of such acquisition), provided, that the aggregate outstanding principal
amount of the indebtedness secured by the liens or security interests
referred to in clauses (i) and (ii) above shall not exceed US
$15,000,000 at any time.
7.3. Dividends, etc. Declare or make any dividend payment of cash, on
--------------
account of any shares of any class of capital stock of the Borrower in
excess of US $2,000,000 in a year for any financial year of the Borrower
in which the Loan is outstanding.
8. Events of Default
- -- -----------------
8.1. "Event of Default" means any of the following:
<PAGE>
6
8.1.1. If the Borrower shall fail to pay any principal or, interest on,
the Loan when the same becomes due and payable,
8.1.2. If any representation or warranty made by the Borrower herein or
by the Borrower (or any of its officers) in connection with this
Agreement shall prove to have been incorrect in any material respect
when made,
8.1.3. If the Borrower shall fail to perform or observe any term,
covenant or agreement contained in this Agreement on its part and such
failure shall remain unremedied for ten (10) days after written notice
thereof shall have been given to the Borrower by the Lender.
8.1.4. If any event shall occur or condition shall exist under any
agreement or instrument relating to any other Debt of the Borrower or
its subsidiaries, the effect of which is to accelerate, or to permit the
acceleration of, the maturity of such Debt, or any such Debt shall be
declared to be due and payable, or required to be prepaid, prior to the
stated maturity thereof.
8.1.5. If the Borrower or any of its subsidiaries shall not be able to
pay its debts when due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit
of creditors, or any proceeding shall be instituted by or against the
Borrower or any of is subsidiaries seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for the relief or
the appointment of a receiver, administrator, trustee, or other similar
official for it or for any part of its property, or the Borrower or any
of its subsidiaries shall take any corporate action to authorize any of
the action set forth in this subsection.
8.1.6. If any judgment or order for the payment of money in excess of
$500,000 (five hundred thousand US Dollars) shall be rendered against
the Borrower or any of its subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon which a stay
of enforcement of such judgement or order, by reason of a pending appeal
or otherwise, shall not be in effect.
8.1.7. If any material adverse change occurs in the financial condition,
results of operations of business of the Borrower, which in the
reasonable opinion of
<PAGE>
7
the Lender creates a suspicion that Borrower will not be able to fulfill
all its payment obligation under this Agreement.
8.1.8. If the Borrower and/or KST Corp. commit a material breach of the
Joint Venture Agreement dated 11th October 1996 made between the
Borrower (1), the Lender (2), New Reef Holdings Limited (3), KST Corp
(4) and Horsham Enterprises Limited (5) as amended and supplemented by a
Deed of Amendment dated 9th July 1997 made between such parties and a
Second Amendment dated 16 March 1998 between such parties.
8.2. In any Event of Default should occur and be continuing, the Lender
may, by notice to the Borrower, declare the principal amount of the
Loan, all interest and expenses thereon, and all other amount payable
under this Agreement to be immediately due and payable, whereupon the
same shall become immediately due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower.
9. Miscellaneous
- -- -------------
9.1. Further Assurances. Each of the parties hereto shall perform such
------------------
further acts and execute such further documents as may reasonably be
necessary to carry out and give full effect to the provisions of this
Agreement and the intentions of the parties as reflected thereby.
9.2. Governing Law; Jurisdiction. This Agreement shall be governed by
---------------------------
and construed according to the laws of England and Wales and the parties
hereby irrevocably submit to the jurisdiction of the English Courts save
that the Lender reserves the right to commence any proceedings, suit
and/or actions in any legal jurisdiction in order to assert, defend and
enforce its rights, obligations and/or remedies whether hereunder or
otherwise.
9.3. Successors and Assigns; Assignment. Except as otherwise expressly
----------------------------------
limited herein, the provisions hereof shall inure to the benefit of, and
be binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto. None of the rights, privileges, or
obligations set forth in, arising under, or created by this Agreement
may be assigned or transferred by the Borrower without the prior consent
in writing of the Lender.
9.4. Entire Agreement; Amendment and Waiver. This Agreement together
--------------------------------------
with and the Schedules and Exhibits hereto and thereto, constitute the
full and entire understanding and agreement between the parties with
regard to the subject matters hereof and thereof. Any term of this
Agreement may be amended and the observance of any term hereof may
<PAGE>
8
be waived (either prospectively or retroactively and either generally or
in a particular instance) only with the written consent of all of the
parties of this Agreement.
9.5. Notices, etc. All notices and other communications required or
-------------
permitted hereunder to be given to a party to this Agreement shall be in
writing and shall be faxed or mailed by registered or certified mail,
potage prepaid, or otherwise delivered by hand or by messenger,
addressed to such party's address as set forth below or at such other
address as the party shall have furnished to each other party in writing
in accordance with this provision:
if to the Lender: Roy K.C. Chan
2202 Kodak House II,
39 Healthy Street, North Point
Hong Kong
Fax: ____________________
if to the Borrower: Rada Electronic Industries Ltd.
12 Medinat Hayehudim St.
Herzliya- Pituch, Israel 4612
Fax: ____________________
or such other address with respect to a party as such party shall notify
each other party in writing as above provided. Any notice sent in
accordance with this section shall be effective (i) if mailed, seven (7)
business days after mailing, (ii) if sent by messenger, upon delivery,
and (iii) if sent by fax, upon transmission and electronic confirmation
of receipt or (if transmitted and received on a non-Business Day) on the
first Business Day following transmission and electronic confirmation of
receipt.
9.6. Delays or Omissions. No delay or omission to exercise any right,
--------------------
power, or remedy accruing to any party upon any breach or default under
this Agreement, shall be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver permit, consent, or
approval of any kind or character on the part of any party of any breach
or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing
and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or
otherwise afforded to any of the parties, shall be cumulative and not
alternative.
9.7. Severability. If any provision in this Agreement shall be found or
------------
be held to be invalid or unenforceable under applicable law, then the
meaning of said provision shall be construed, to the extent feasible, so
as to render the provision enforceable, and if no feasible
interpretation would save such provision, it shall be severed from the
remainder
<PAGE>
9
of this Agreement which shall remain in full force and effect unless the
severed provision is essential and material to the rights or benefits
received by any party hereto. In such event, the parties shall use best
efforts to negotiate, in good faith, a substitute, valid and enforceable
provision which most nearly effects the parties' intent in entering into
this Agreement.
9.8. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original and enforceable
against the parties actually executing such counterpart, and all of
which together shall constitute one and the same instrument.
9.9. Reference to Clauses and Schedules are references to Clauses and
Schedules of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as a deed as of the day and year first above written.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as a deed as of the day and year first above written.
Signed and Delivered
As a Deed by
HOWARD PING LEUNG
YEUNG in the presence of:
Signed and Delivered
As a Deed by
RADA ELECTRONIC INDUSTRIES LTD.
Acting by two of its officers
/s/ Meir Shariv /s/ Meir Hermel
____________________________ ____________________________
By: Meir Shariv By: Meir Hermel
Title: Director and Officer Title: CEO
<PAGE>
10
VARIATION OF LOAN AGREEMENT
---------------------------
Made this 29 day of May 1998
By and Between
HOWARD PING LEUNG YEUNG ("HY") of 2202 Kodak House II, 39 Healthy Street, North
Point, Hong Kong (the "Lender"); and
RADA ELECTRONIC INDUSTRIES LTD., an Israeli company with headquarters located at
12 Medinat Hayehudim St, Herzliya-Pituch, Israel 4612 (the "Borrower").
RECITALS
- --------
(1) This Agreement is supplemental to the Loan Agreement (the "Agreement") made
on the 29 day of May 1998 between the parties hereto
(2) The parties have agreed to vary certain terms of the Agreement, but
otherwise confirm all the other terms of the Agreement
OPERATIONAL PROVISIONS
- ----------------------
1. The Variations
- -- --------------
1.1. The following variations shall apply forthwith and take effect as
if they had been original terms of the Agreement:
1.1.1. In Clause 2.4 of the Agreement the words "working capital"
shall be deleted and replaced by the words "for repaying loans and
credit lines from Banks and other financial institutions."
1.1.2. The wording of Clause 4.1 of the Agreement shall be deleted
and replaced by the following wording:
"4.1 Rate: Computation: Payment Interest shall accrue on the
----------------------------
outstanding principal amount of the Loan at the rate of 11%
per annum, based on a year of 365 days, for the actual
number of days (including the first day but excluding the
last day) occurring in the period for which such interest is
payable. The Borrower shall pay all accrued interest and
expenses to the Lender on and in respect of the First Loan
quarterly in arrear on the first Business Day in each
<PAGE>
11
of June, September, December and March in each year the
first payment to be made on the first applicable Business
Day next following the date of making the First Loan. The
Borrower shall pay accrued interest and expenses to the
Lender on and in respect of the Second Loan quarterly in
arrear on the first Business Day in each of June, September,
December and March in each year the first payment to be on
the first applicable Business Day next following the date of
advance of the Second Loan. "Business Day" shall mean a day
on which banks are not required or authorised to close in
London, England."
2. Counterparts
- -- ------------
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and enforceable against the parties actually
executing such counterpart, and all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
as a deed as of the day and year first above written.
Signed and Delivered
As a Deed by
HOWARD PING LEUNG YEUNG
in the presence of:
Signed and Delivered
As a Deed by
RADA ELECTRONIC INDUSTRIES LTD.
Acting by two of its officers
/s/ Meir Shariv /s/ Haim Nissenson
____________________________ _______________________________
By: Meir Shariv By: Haim Nissenson
Title: Director and Officer Title: President & CEO
