<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5)*
RADA ELECTRONIC INDUSTRIES LIMITED
-------------------------------------------------------------
(Name of Issuer)
Ordinary Shares, Par Value NIS .002 Per Share
---------------------------------------------------
(Title of Class of Securities)
750115305
-----------------------------------------
(CUSIP Number)
Robert T. Burke
Mandel Buder & Verges
101 Vallejo Street
San Francisco, CA 94111
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications)
June 15 and 16, 1999 and July 15, 1999
----------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-(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 in 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).
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- ----------------------- ---------------------
CUSIP NO. 750115305 SCHEDULE 13D PAGE 2 OF 4 PAGES
- ----------------------- ---------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Horsham Enterprises Limited
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [X]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
WC
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) or 2(e) [_]
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
British Virgin Islands
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
2,697,675
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 2,188,225
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,697,675
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
12.4%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTION BEFORE FILLING OUT!
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This Amendment amends Items 4, 5, 6 and 7 of the Statement on Schedule
13D filed by Horsham Enterprises Limited, a British Virgin Islands corporation
("Horsham"), on June 12, 1997, as amended by a Schedule 13D ("A-1") filed on
June 18, 1997, a Schedule 13D ("A-2") filed on July 30, 1997, a Schedule 13D
("A-3") filed on August 14, 1997, and a Schedule 13D ("A-4") filed on December
5, 1997 (collectively, the "Schedule 13D"), relating to the Ordinary Shares, par
value NIS.002 per share (the "Ordinary Shares"), of Rada Electronic Industries
Limited, an Israeli corporation ("Rada"), by amending such items as set forth
below .
ITEM 4: PURPOSE OF TRANSACTION
----------------------
Item 4 of the Schedule 13D is amended by adding the following to the
disclosure already made under such item:
Although Horsham's primary reason for acquiring and holding its Ordinary
Shares has been and remains to make a profit on its investment, and while
Horsham has no specific plans or proposals that relate to or would result in any
of the events described in subsections (a) through (c) and (e) through (j) of
Item 4, Horsham, as a major shareholder of Rada, is in a position to exert
influence over Rada's corporate strategy and the decisions made by Rada's
management. In addition, Horsham has taken certain actions not ordinarily taken
by purely passive investors. Horsham has hired a United States attorney to
provide strategic recommendations to Rada, on Horsham's behalf, in Rada's
dealings with United States defense contractors and other U.S. companies who may
provide a market for Rada's products. Horsham has provided, and intends to
continue to provide, Rada with advice and assistance in locating companies that
are seen as potential customers of Rada.
Regarding the Shareholders' Agreement previously reported, Horsham has been
informed that one of the other parties to the agreement was terminated from the
executive position he held with Rada and is now involved in litigation with Rada
regarding the termination. It is possible that this person has disposed of all
or some of his Ordinary Shares. Until Horsham has confirmed any disposition by
such party of his shares in Rada, Horsham will continue to report the number of
shares it has the shared power to vote in Item 5(a) below on the assumption that
such party continues to own the number of shares previously reported.
On July 15, 1999, at the request of management of Rada, Horsham wrote a
letter to Rada, which Horsham understood would be presented to Rada's auditors
in connection with their review of Rada's 1998 financial statements. By such
letter, a copy of which is attached hereto as an Exhibit, Horsham indicated that
it was prepared to give favorable consideration to further investing in Rada, in
light of the circumstances then existing; however, the letter stated that it was
not intended to indicate that Horsham would be obligated to make an investment
under all circumstances. A similar letter was sent to Rada on the same date by
Howard P.L. Yeung, a fifty percent shareholder of Horsham.
As previously reported, Horsham has two representatives on Rada's board of
directors, Adrian Berg and Roy K. C. Chan. Mr. Berg is also acting as a
financial consultant to Rada and as such has assisted, and intends to continue
to assist, Rada in developing fundraising plans.
ITEM 5: INTEREST IN SECURITIES OF THE ISSUER
- ------ ------------------------------------
Item 5 of the Schedule 13D is amended by adding the following to the
disclosure already made under the indicated subparagraphs of Item 5:
(a) Horsham directly owns 2,089,215 Ordinary Shares, representing
approximately 9.7% of the outstanding Ordinary Shares. In addition, pursuant
to the Share Option Agreement described in Item 6 below, Horsham has the right
to acquire 99,010 additional Ordinary Shares. If Horsham were to exercise such
right, it would own a total of 2,188,225 Ordinary Shares, which would represent
approximately 10.1% of the outstanding Ordinary Shares. In addition, as a
consequence of the Shareholders' Agreement previously disclosed, Horsham has the
shared
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power to vote or direct the voting of an additional 509,450 Ordinary Shares (see
discussion of Shareholders' Agreement in Item 4 above). Consequently, Horsham
has the shared power to vote or direct the voting of 2,697,675 Ordinary Shares
(assuming full exercise of its right under the Share Option Agreement),
representing approximately 12.4% of the outstanding Ordinary Shares. These
percentages are based on 16,328,000 Ordinary Shares issued and outstanding as of
December 31, 1998, according to Rada's Form 20-F dated July 15, 1999, in
addition to the issuance of 3,400,000 Ordinary Shares in March of 1999, and the
issuance of 1,848,000 Ordinary Shares as partial payment for outstanding debt in
June of 1999, for a total of 21,576,000 issued and outstanding Ordinary Shares
as of the date hereof, to the best knowledge and belief of Horsham (any
percentages shown above that assume the full exercise of Horsham's right under
the Share Option Agreement include the number of shares acquired thereby in the
total number of Ordinary Shares outstanding).
(b) If Horsham were to exercise its right under the Share Option Agreement,
it would have the shared power to vote and the sole power to dispose of the
Ordinary Shares acquired thereby (see discussion of Shareholders' Agreement in
Item 4 above).
(c) On June 15 and June 16, 1999, Horsham disposed of 26,500 Ordinary
Shares in open market broker's transactions at an average per share price of
approximately $1.37.
(d) No amendment.
(e) Not applicable.
ITEM 6: CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
- ------ ---------------------------------------------------------------------
TO SECURITIES OF THE ISSUER.
---------------------------
Item 6 of the Schedule 13D is amended by adding the following to the
disclosure already made under such item:
As previously disclosed, Horsham and Rada are parties to a joint venture
involving the sale of certain Rada products in the United States and the Far
East. The name of the joint venture is New Reef Holdings Limited, a British
Virgin Islands company ("New Reef"). Horsham has invested $375,000 (US) for
equity in New Reef represented by Class "A" Shares (the "Shares"). In addition,
Horsham has loaned $1.1 million (US) to New Reef, which debt is represented by
1.1 million shares of loan stock (the "Loan Stock"). Rada and Horsham are also
parties to that certain Share Option Agreement and Share Call Option Exit
Agreement, giving Horsham the right to exchange its Shares in New Reef for
Ordinary Shares of Rada or to be paid in cash for such Shares in the event that
any required Rada shareholder approval of the exchange is not obtainable.
Horsham's right under the Share Option Agreement is exercisable at any time
during the seven-year period following October 11, 1996. Horsham may exercise
its right under the Share Option Agreement only with respect to all of the
Shares. Upon exercise of such right, Horsham would obtain that number of
Ordinary Shares that would be purchased by $375,000 (US) at a per share price of
$3.7875 (US) (the average closing price of the Ordinary Shares for the ten
working days prior to the date of the joint venture agreement). Rada and
Horsham are also parties to that certain Loan Stock Option Agreement and Loan
Stock Call Option Exit Agreement, giving Horsham the right to exchange its Loan
Stock for Ordinary Shares of Rada or to be paid in cash in the event that any
required Rada shareholder approval of the exchange is not obtainable. This
right is exercisable at any time during the seven-year period following October
11, 1996, provided that the market value of the Ordinary Shares at the time of
exercise equals or exceeds $5.00 (US). (So long as the market value of the
Ordinary Shares is less than $5.00 (US), this right is not exercisable.) The
number of Ordinary Shares Horsham would acquire upon
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exercise of its right under the Loan Stock Option Agreement would be equal to
the number of shares purchased by $1.1 million (US) plus any accrued interest
and expenses outstanding in respect of the Loan Stock, at a per share price to
be determined by a formula set forth in the Loan Stock Option Agreement.
Item 6 is also amended by incorporating by reference the discussion of the
Shareholders' Agreement in Item 4 above.
ITEM 7: EXHIBITS
- ------ --------
Item 7 of the Schedule 13D is amended to disclose the following:
5. Letter to Rada dated July 15, 1999;
6. Share Option Agreement;
7. Share Call Option Exit Agreement;
8. Loan Stock Option Agreement;
9. Loan Stock Call Option Exit Agreement;
10. Deed of Amendment of Share Option Agreement; and
11. Deed of Amendment of Loan Stock Option Agreement.
<PAGE>
SIGNATURE
- ---------
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
August 5, 1999
HORSHAM ENTERPRISES, LTD.
/s/ Roy K. C. Chan
- --------------------------------------
By: Roy K. C. Chan, Managing Director
<PAGE>
Exhibit Index
- -------------
Exhibit 5 Letter to Rada dated July 15, 1999
Exhibit 6 Share Option Agreement
Exhibit 7 Share Call Option Exit Agreement
Exhibit 8 Loan Stock Option Agreement
Exhibit 9 Loan Stock Call Option Exit Agreement
Exhibit 10 Deed of Amendment of Share Option Agreement
Exhibit 11 Deed of Amendment of Loan Stock Option Agreement
<PAGE>
EXHIBIT 5
HORSHAM ENTERPRISES LIMITED
15 July, 1999
Rada Electronic Industries Ltd
12 Medinat Hayehudim St.
Herzllya B. 46120
ISRAEL
For the attention of: Maj. General (Res.) Herzle Bodinger -- President & C.E.O.
---------------------------------------------------------
Dear General Bodinger
As one of the major shareholders of Rada Electronics Industries Limited (the
"Company"), we wish to express our confidence in the management of the Company,
and particularly in the Company's products. We are willing to consider assisting
the Company to achieve its future business goal. As the Company's management
addresses the difficult situation it is currently encountering, we are prepared
to give favorable consideration to further investing in the Company, in light of
the circumstances then existing; however, this letter is not intended to
indicate that we will be obliged to make such investment under all
circumstances.
Yours sincerely
/s/ Roy K.C. Chan
Roy K.C. Chan
<PAGE>
EXHIBIT 6
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(1) RADA ELECTRONIC INDUSTRIES LIMITED
(2) HORSHAM ENTERPRISES LIMITED
-------------------------------------
SHARE OPTION AGREEMENT
-------------------------------------
Neil Myerson
Solicitors
The Cottages
Regent Road
Altrincham
Cheshire WA14 1RX
Tel: 0161-928-2065
Fax: 0161-941-3719
- --------------------------------------------------------------------------------
0
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THIS OPTION AGREEMENT is made the 11th day of October 1996
B E T W E E N:-
(1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at
12 Medinat Hayehudin Street, P O Box 2059, Hezliya B, Israel, (the
"Grantor"); and
(2) HORSHAM ENTERPRISES LIMITED a company existing and operating under the laws
of the British Virgin Islands whose registered office is at Columbus Centre
Building, Wickams Cay Road, Road Town, Tortola, British Virgin Islands (the
"Grantee").
1. Interpretation
--------------
1.1. In this Agreement unless the context otherwise requires the following
words and expressions shall bear the meaning set opposite them:-
"A" Shares" means such "A" Ordinary Shares of $1 each of the
JVC which shall from time to time be registered
in the name of the Grantee and/or the Grantees
Associates;
"Exchange Value" means the mean average of the closing values for
the purchase of each Rada Share on NASDAQ for
the last 10 working days prior to the date of
Completion of the JVC Agreement;
"JVC" means NEW REEF HOLDINGS LIMITED, a company
existing and operating under the laws of the
British Virgin Islands whose registered office
is at Columbus
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Centre Building, Wickams Cay Road, Road Town,
Tortola, British Virgin Islands.
"Grantees Associates" means such person, company or other entity that
the Grantee shall nominate from time to time to
subscribe for or hold "A" Shares in accordance
with the JVC's Articles of Association;
"JVC Agreement" means the agreement dated 11th October 1996 made
between the Grantee (1) and Howard Ping Leung
Yeung (2), the JVC (3), KST Corp (4) and Horsham
(5);
"Option" means the right granted pursuant to Clause 2.1
to exchange the "A" Shares for Option Shares as
determined in accordance with Clause 3 to be
allotted as fully paid up by the Grantor to the
Grantee and/or the Grantees Associates upon the
Grantee exercising the Option;
"Option Period" means the period of 7 years from the date of
this Agreement;
"Option Shares" means the number of Rada Shares as determined in
accordance with Clause 3.2 to be allotted as
fully paid up by the Grantor to the Grantee
and/or Grantee's Associates upon the Grantee
exercising the Option;
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"NASDAQ" and "NASDAQ means the definitions ascribed to such terms in
Regulations" the JVC Agreement;
"Rada Shares" means Ordinary Shares of 0.002 NIS (New Israeli
Shekels) each of the Grantor which are for the
time being quoted on NASDAQ;
"working days" means those days of the year on which Rada
Shares are traded on NASDAQ.
1.2 References to statutory provisions shall be construed as references to any
statutory modification or re-enactment thereof (whether before on or after
the date hereof) for the time being in force and to any former statutory
provision replaced (with or without modification) by the provision referred
to and shall include all statutory instruments or orders from time to time
made pursuant thereto.
1.3 References to persons shall include references to bodies corporate and
unincorporated associations to the singular shall include references to the
plural and vice versa and to the masculine shall include references to the
feminine and neuter and vice versa.
1.4 References to Clause are to Clauses of this Agreement.
1.5 The headings in this Agreement and the use of underlining are included for
convenience only and shall not affect the interpretation or construction of
this Agreement.
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2. Option to exchange the "A" Shares into the Option Shares
--------------------------------------------------------
2.1 In consideration of the sum of one dollar ($1) paid by the Grantee
(receipt of which is acknowledged by the Grantor) the Grantor grants
to the Grantee the right exercisable at any time during the Option
Period to exchange the "A" Shares for Option Shares in accordance with
the terms and conditions of this Agreement.
2.2 The number of Rada Shares which shall constitute the Option Shares
shall be calculated in accordance with Clause 3.
2.3 The Option shall be exercisable only if the Grantee exercises the
Option to exchange all of the "A" Shares held by the Grantees or the
Grantees Associates on the date the Grantee exercises the Option.
2.4 The Option shall be exercisable at any time during the Option Period,
by notice in writing served upon the Grantor.
2.5 The parties shall be bound to complete the exchange of the "A" Shares
into the Option Shares as soon as reasonably practical but in any
event not later than one month after the date of service of the notice
of exercise (or on the next succeeding working day if completion would
otherwise fall on a non-working day).
3. Calculation of the number of Rada Shares into which the "A" Shares are to
-------------------------------------------------------------------------
be exchanged
------------
3.1 The value to be attributed to the "A" Shares for the purpose of their
exchange for Option Shares shall for the purposes of this Agreement
and the Option be deemed to be their aggregate nominal value of
$375,000 US Dollars.
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3.2 Applying the Exchange Value the "A" Shares shall be exchanged into
that number of Rada Shares the aggregate value of which represents a
value of $375,000 US Dollars.
4. Completion
----------
4.1 Completion of the allotment of the Option Shares to the Grantee and/or
the Grantees Associates as consideration for the Grantee transferring
the "A" Shares to the Grantor shall take place at the offices of the
JVC's Solicitors or at such other place as the parties shall mutually
agree not later than 3.00pm on the relevant date.
4.2 At Completion the Grantee shall deliver to the Grantor:
4.2.1 a letter requesting the Grantor to allot the Option Shares to
the Grantee as consideration for the Grantee and/or the
Grantees Associates transferring the "A" Shares to the Grantor;
4.2.2 The Grantee's and/or the Grantees Associates share certificate
for the "A" Shares.
4.3 At Completion the Grantor shall deliver to the Grantee:
4.3.1 a share certificate for the Option Shares; and
4.3.2 such other deeds and documents as may be necessary to allot to
the Grantee and/or the Grantees Associates or to such persons
as the Grantee and/or the Grantees Associates may direct the
unencumbered beneficial ownership of the Option Shares.
4.4 The Grantor shall procure that upon the Option Shares being allotted
to the Grantee that the
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Grantee and/or the Grantees Associates (as applicable) are approved
and registered as the members of the Grantor holding the Option
Shares.
5. Grantor's warranties
--------------------
5.1 The Grantor warrants to the Grantee that:-
5.1.1 the Grantor has and will have full power and authority to grant
the Option upon the terms and conditions of this Agreement;
5.1.2 the Grantor has obtained all necessary consents of its members,
directors and NASDAQ to enter into and complete this Agreement;
5.1.3 all information relating to the regulations by NASDAQ of share
options in respect of Rada Shares as is known to the Grantor
and which is material to be known by an allottee for value of
the Option Shares has been disclosed in writing to the Grantee
prior to the date of this Agreement and, upon the written
request of the Grantee during the Option Period, the Grantor
shall provide such further information of which the Grantor may
become aware;
5.1.4 this Agreement complies in all respect with the NASDAQ
Regulations and that the Grantor is not aware of any proposals
by any competent authority to alter, vary or modify any NASDAQ
Regulations;
5.1.5 None of the NASDAQ Regulations will directly or indirectly
apply so as to abrogate, vary, modify or otherwise render void
or voidable any of the terms and
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conditions of this Agreement;
5.1.6 No rule of Israeli law or rule of law of New York State or of
the United States of America will directly or indirectly apply
so as to abrogate, vary, modify, alter or otherwise render void
or voidable any of the terms and conditions of this Agreement;
5.1.7 The Grantor is lawfully able to enter into this Agreement;
5.1.8 The Grantor will issue and be responsible for issuing all
notices, circulars, resolutions, and press releases which are
required to be issued by NASDAQ Regulations upon:-
5.1.8.1 the Grantor and Grantee entering into this Agreement;
5.1.8.2 the Grantee serving a notice on the Grantor exercising
the Option;
5.1.8.3 Completion of the Option.
5.2 Each of the Warranties contained in each sub-clause of Clause 5.1
shall be separate and independent.
5.3 The Warranties contained in each sub-clause of Clause 5.1 shall
continue in full force and effect at and after the execution of this
Agreement.
6. Value of Rada Shares
--------------------
6.1 The Grantor will provide to the Grantee upon request written details
of the closing value for
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the purchase of each Rada Share for any particular previous days'
trading on NASDAQ. A statement issued by the Grantor stating the
closing value of Rada Shares for any particular previous days trading
(in the absence of manifest error) shall be conclusive evidence as to
the closing purchase value of Rada Shares.
7. Entire Agreement
----------------
This Agreement represents the entire agreement between the parties in
relation to the subject matter. No variation to this Agreement shall be
effective unless in writing and signed by or on behalf of each of the
parties hereto.
8. No Waiver
---------
No waiver of any breach of this Agreement, whether by conduct or otherwise,
nor any failure forbearance or delay in exercising any rights or remedies
in relation thereto shall be deemed a waiver of any such breach nor shall
it prevent any part from subsequently taking any action or
9. Announcements
-------------
No announcement concerning the matters herein provided for or referred to
or any ancillary matter shall be made by any party hereto other than as
required by law or the NASDAQ Regulations without the prior approval of the
other parties hereto (such approval not to be unreasonably withheld or
delayed).
10. Notices
-------
Any notice required to be given by any party hereto or to any other shall
be deemed validly served if delivered by hand or sent by first class
prepaid letter through the post or by facsimile to the address of the party
to be served herein given or (being a company) the registered office of
such party for the
8
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time being and any notice so served at the time of delivery or (as the case
may be) transmission and any notice so served through the post shall be
deemed to have been served forty eight hours after the time it was posed
and in proving such service it shall be sufficient to prove that the notice
was properly delivered, transmitted or (as the case may be) addressed
prepaid and posted.
11. Proper Law
----------
This Agreement and the documents to be entered into as provided herein
shall be governed and construed in accordance with English Law and the
parties hereto submit to the non-exclusive jurisdiction of the English
Courts.
12. Counterparts
------------
12.1 This Agreement may be executed in any number of counterparts, and by
the parties hereto on separate counterparts, but in the case shall
not be effective until each party has executed at least one
counterpart.
12.2 Each counterpart shall constitute the original of this Agreement, but
all the counterparts shall together constitute one and the same
instrument.
IN WITNESS whereof the parties have hereunto set their hands the day and year
first before written.
SIGNED by )
for and on behalf of RADA ) /s/ (SIGNATURE ILLEGIBLE)
ELECTRONIC INDUSTRIES )
LIMITED in the presence of: )
/s/ RICHARD N. TANNER
RICHARD N. TANNER
Solicitor
Clyde & Co., Hong Kong
9
<PAGE>
SIGNED by )
for and on behalf of ) /s/ (SIGNATURE ILLEGIBLE)
HORSHAM ENTERPRISES )
LIMITED in the presence of: )
/s/ RICHARD N. TANNER
RICHARD N. TANNER
Solicitor
Clyde & Co., Hong Kong
10
<PAGE>
EXHIBIT 7
- --------------------------------------------------------------------------------
(1) RADA ELECTRONIC INDUSTRIES LIMITED
(2) HORSHAM ENTERPRISES LIMITED
---------------------------------------
SHARE CALL OPTION EXIT AGREEMENT
---------------------------------------
Neil Myerson
Solicitors
The Cottages
Regent Road
Altrincham
Cheshire WA14 1RX
Tel: 0161-928-2065
Fax: 0161-941-3719
- --------------------------------------------------------------------------------
0
<PAGE>
THIS OPTION AGREEMENT is made the day of 1997
B E T W E E N:-
(1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at
12 Medinat Hayehudin Street, P O Box 2059, Hezliya B, Israel, (the
"Grantor"); and
(2) HORSHAM ENTERPRISES LIMITED a company existing and operating under the laws
of the British Virgin Islands whose registered office is at Columbus Centre
Building, Wickams Cay Road, Road Town, Tortola, British Virgin Islands (the
"Grantee").
1. Interpretation
--------------
1.1. In this Agreement unless the context otherwise requires the following
words and expressions shall bear the meaning set opposite them:-
"A" Shares" means such "A" Ordinary Shares of $1 each of
the JVC which shall from time to time be
registered in the name of the Grantee and/or
the Grantees Associates;
"Condition Precedent" means the meaning assigned to the term in the
Share Option Agreement;
"Consideration" means the total consideration to be paid by the
Grantor to the Grantee as calculated in
accordance with Clause 3.1 upon the completion
of the Option;
"JVC" means NEW REEF HOLDINGS LIMITED, a company
1
<PAGE>
existing and operating under the laws of the
British Virgin Islands whose registered office
is at Columbus Centre Building, Wickams Cay
Road, Road Town, Tortola, British Virgin
Islands.
"Grantees Associates" means such person, company or other entity that
the Grantee shall nominate from time to time to
subscribe for or hold "A" Shares in accordance
with the JVC's Articles of Association;
"JVC Agreement" means the agreement dated 11 October 1996 made
between the Grantee (1) and Howard Ping Leung
Yeung (2), the JVC (3), KST Corp (4) and the
Grantee (5);
"Long Stop Date" means the meaning ascribed to the term in the
Share Option Agreement;
"Market Value" means the average of all closing values for the
purchase of each Rada Share on NASDAQ on the 10
working days prior to the date upon which the
Grantor exercised the Share Option;
"Option" means the right granted pursuant to Clause 2.1
for the Grantee to call for the Grantor to
elect for either itself
2
<PAGE>
and/or the JVC to purchase the Option Shares
from the Grantee or the Grantees Associates
upon the Grantee exercising the Option;
"Option Period" means the period of 7 years from the date of
the JVC Agreement;
"NASDAQ" and "NASDAQ means the definitions ascribed to such
Regulations" terms in the JVC Agreement;
"Rada Shares" means Ordinary Shares of 0.002 NIS (New
Israeli Shekels) each of the Grantor which
are for the time being quoted on NASDAQ;
"Share Option Agreement" means the share option agreement dated 11
October 1996 made between the Grantor (1)
and the Grantee (2) a copy of which is
attached hereto in Part 1 of the Schedule as
varied, modified and altered in accordance
with a Deed of Amendment made between the
Grantor and the Grantee a copy of which is
set out in Part 2 of the Schedule;
"Share Option" means the option set out in the Share Option
Agreement;
3
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"working days" means those days of the year on which Rada
Shares are traded on NASDAQ.
1.2 References to statutory provisions shall be construed as references to
any statutory modification or re-enactment thereof (whether before on
or after the date hereof) for the time being in force and to any
former statutory provision replaced (with or without modification) by
the provision referred to and shall include all statutory instruments
or orders from time to time made pursuant thereto.
1.3 References to persons shall include references to bodies corporate and
unincorporated associations to the singular shall include references
to the plural and vice versa and to the masculine shall include
references to the feminine and neuter and vice versa.
1.4 References to Clauses and the Schedule are to Clauses and the Schedule
of this Agreement.
1.5 The headings in this Agreement and the use of underlining are included
for convenience only and shall not affect the interpretation or
construction of this Agreement.
2. Option for the Grantee to call for the Grantor and/or the JVC to purchase
-------------------------------------------------------------------------
the "A" Shares
--------------
2.1 In consideration of the sum of one dollar ($1) paid by the Grantee to
the Grantor (receipt of which is acknowledged by the Grantor) the
Grantor grants to the Grantee subject to Clause 2.2 the right
exercisable at any time during the Option Period to call subject to
Clause 2.3 for the Grantor to elect for either itself and/or the JVC
to purchase the Option Shares in accordance with the terms and
conditions of this Agreement.
2.2 The Option shall be exercisable only if the Grantee has validly
exercised the Share
4
<PAGE>
Option and the Grantor and the Grantee have been unable to fulfil the
Condition Precedent by the Long Stop Date or if the Grantor has failed
to complete the Share Option Agreement upon the fulfilment of the
Condition Precedent by the latest day provided for the completion of
the Share Option in the Share Option Agreement (in which case the
exercise of the Option by the Grantee shall be without prejudice to
any other right or remedy of the Grantee under the Share Option
Agreement).
2.3 The Grantee may only elect for the JVC to purchase that portion of the
"A" Shares the JVC is legally able to purchase (following the passing
of appropriate resolutions of the Company to authorize such purchase)
in cash by way of a legally valid purchase of own shares at the date
for completion of the Option as determined in accordance with Clause
2.5. The Grantee hereby acknowledges and agrees that it shall be
responsible for purchasing that portion of the "A" Shares the JVC is
unable or unwilling to purchase as at completion.
2.4 The Option shall be exercisable at any time during the Option Period,
by notice in writing served upon the Grantor.
2.5 The parties shall be bound to complete the sale and purchase of the
"A" Shares as soon as reasonably practical but in any event not later
than one month after the date of service of the notice of exercise (or
on the next succeeding working day if completion would otherwise fall
on a non-working day).
3. Calculation of the Consideration
--------------------------------
3.1 The total consideration for the sale of "A" Shares by the Grantor to
the Grantee shall be
5
<PAGE>
applying the Market Value, a sum equal to the aggregate value of each
Rada Share the Grantee would have been entitled to receive (applying
the calculation for the exchange of the "A" Shares into Rada Shares
set out in clause 3 of the Share Option Agreement) upon the completion
of the Share Option Agreement if the Grantor and the Grantee had been
able to complete the Share Option by the Long Stop Date following the
fulfilment of the Condition Precedent; or
4. Completion
----------
4.1 Completion of the sale of the "A" Shares to the Grantor shall take
place at the offices of the JVC's Solicitors or at such other place as
the parties shall mutually agree not later than 3:00 pm on the
relevant date.
4.2 At Completion the Grantee shall deliver to the Grantor:
4.2.1 a validly constituted transfer to transfer the "A" Shares to
the Grantor
4.2.2 The Grantee's and/or the Grantees Associates share certificate
for the "A" Shares.
4.4 The Grantee shall procure that upon the "A" Shares being transferred
to the Grantor that the Grantor is approved and registered as the
member of the JVC holding the "A" Shares
5. Grantor's warranties
--------------------
5.1 The Grantor warrants to the Grantee that:-
5.1.1 the Grantor has and will have full power and authority to grant
the Option upon the terms and conditions of this Agreement;
6
<PAGE>
5.1.2 the Grantor has obtained all necessary consents of its members,
directors and NASDAQ to enter into and complete this Agreement;
5.1.3 this Agreement complies in all respect with the NASDAQ
Regulations and that the Grantor is not aware of any proposals
by any competent authority to alter, vary or modify any NASDAQ
Regulations;
5.1.4 None of the NASDAQ Regulations will directly or indirectly
apply so as to abrogate, vary, modify or otherwise render void
or voidable any of the terms and conditions of this Agreement;
5.1.5 No rule of Israeli law or rule of law of New York State or of
the United States of America will directly or indirectly apply
so as to abrogate, vary, modify, alter or otherwise render void
or voidable any of the terms and conditions of this Agreement;
5.1.6 The Grantor is lawfully able to enter into this Agreement;
5.1.7 The Grantor will issue and be responsible for issuing all
notices, circulars, resolutions, and press releases which are
required to be issued by NASDAQ Regulations upon:-
5.1.7.1 the Grantor and Grantee entering into this Agreement;
5.1.7.2 the Grantee serving a notice on the Grantor exercising
the Option;
5.1.7.3 Completion of the Option.
7
<PAGE>
5.2 Each of the Warranties contained in each sub-clause of Clause 5.1
shall be separate and independent.
5.3 The Warranties contained in each sub-clause of Clause 5.1 shall
continue in full force and effect at and after the execution of this
Agreement.
6. Value of Rada Shares
--------------------
The Grantor will provide to the Grantee upon request written details of the
closing value for the purchase of each Rada Share for any particular
previous days' trading on NASDAQ. A statement issued by the Grantor stating
the closing value of Rada Shares for any particular previous days trading
(in the absence of manifest error) shall be conclusive evidence as to the
closing purchase value of Rada Shares.
7. Entire Agreement
----------------
This Agreement represents the entire agreement between the parties in
relation to the subject matter. No variation to this Agreement shall be
effective unless in writing and signed by or on behalf of each of the
parties hereto.
8. No Waiver
----------
No waiver of any breach of this Agreement, whether by conduct or otherwise,
nor any failure forbearance or delay in exercising any rights or remedies
in relation thereto shall be deemed a waiver of any such breach nor shall
it prevent any part from subsequently taking any action or
9. Announcements
--------------
No announcement concerning the matters herein provided for or referred to
or any ancillary
8
<PAGE>
matter shall be made by any party hereto other than as required by law or
the NASDAQ Regulations without the prior approval of the other parties
hereto (such approval not to be unreasonably withheld or delayed).
10. Notices
-------
Any notice required to be given by any party hereto or to any other shall
be deemed validly served if delivered by hand or sent by first class
prepaid letter through the post or by facsimile to the address of the party
to be served herein given or (being a company) the registered office of
such party for the time being and any notice so served at the time of
delivery or (as the case may be) transmission and any notice so served
through the post shall be deemed to have been served forty eight hours
after the time it was posed and in proving such service it shall be
sufficient to prove that the notice was properly delivered, transmitted or
(as the case may be) addressed prepaid and posted.
11. Proper Law
----------
This Agreement and the documents to be entered into as provided herein
shall be governed and construed in accordance with English Law and the
parties hereto submit to the non-exclusive jurisdiction of the English
Courts.
12. Counterparts
------------
12.1 This Agreement may be executed in any number of counterparts, and by
the parties hereto on separate counterparts, but in the case shall not
be effective until each party has executed at least one counterpart.
12.2 Each counterpart shall constitute the original of this Agreement, but
all the counterparts
9
<PAGE>
shall together constitute one and the same instrument.
IN WITNESS whereof the parties have hereunto set their hands the day and year
first before written.
10
<PAGE>
EXHIBIT 8
- --------------------------------------------------------------------------------
(1) RADA ELECTRONIC INDUSTRIES LIMITED
(2) HORSHAM ENTERPRISES LIMITED
---------------------------------------------
LOAN STOCK OPTION AGREEMENT
---------------------------------------------
Neil Myerson
Solicitors
The Cottages
Regent Road
Altrincham
Cheshire WA14 1RX
Tel: 0161-928-2065
Fax: 0161-941-3719
- --------------------------------------------------------------------------------
0
<PAGE>
THIS OPTION AGREEMENT is made the 11th day of October 1996
B E T W E E N:-
(1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at
12 Medinat Hayehudin Street, P O Box 2059, Herliya B, Israel, (the
"Grantor"); and
(2) HORSHAM ENTERPRISES LIMITED a Company existing and operated under the laws
of the British Virgin Islands whose registered office is at Columbus Centre
Building, Wickhams Cay, Road Town, Tortola, British Virgin Islands (the
"Grantee").
1. Interpretation
--------------
1.1. In this Agreement unless the context otherwise requires the following
words and expressions shall bear the meaning set opposite them:-
"Exchange Value" means the actual exchange value to be
attributed to Rada Shares when exchanging them
for Loan Stock to be determined in accordance
with Clause 3;
"the Initial Exchange means the closing value for the purchase of
Value" each Rada Share on NASDAQ on the working day
prior to the date upon which HY exercises the
Option;
"Grantees Associates" such person, company or other entity that the
Grantee
1
<PAGE>
shall nominate from time to time to subscribe
for or hold Initial Loan Stock;
"the Initial Loan means the secured Loan Stock of $4.625 million
Stock" US Dollars created by the Loan Stock
Instrument;
"JVC" means NEW REEF HOLDINGS LIMITED a company
existing and operated under the law of the
British Virgin Islands whose registered office
is at Columbus Centre Building, Wickhams Cay,
Road Town, Tortola, British Virgin Islands.
"JVC Agreement" means the agreement dated 11th October, 1996
made between the Grantor (1) Howard Ping Leung
Yeung (2) the JVC (3) and Horsham(s)(4);
"Loan Stock" means the Initial Loan Stock which is from time
to time in issue to and fully paid up by the
Grantee and/or the Grantees Associates;
"the Loan Stock means the Loan Stock Instrument constituting
Instrument" $4,625,000 US Dollars Secured Initial Loan
Stock of the JVC set out in the Schedule;
2
<PAGE>
"Option" means the right granted pursuant to Clause 2.1
to exchange the Initial Loan Stock for Option
Shares to be allotted as fully paid up by the
Grantor to the Grantee upon the Grantee and/or
Grantees Associates exercising the Option;
"Option Period" means the period of 7 years from the date of
this Agreement;
"Option Shares" means the number of Rada Shares as determined
in accordance with Clause 3.2 to be allotted as
fully paid up by the Grantor to the Grantee
and/or the Grantees Associates upon the Grantee
exercising the Option;
"NASDAQ" and "NASDAQ means the definitions ascribed to such terms in
Regulations" the JVC Agreement;
"Rada Shares" means Ordinary Shares of 0.002 NIS (New
Israeli Shekels) each of the Grantor which are
for the time being quoted on NASDAQ;
"working days" means those days of the year on which Rada
Shares are traded on NASDAQ.
1.2 References to statutory provisions shall be construed as references to any
statutory modification or
3
<PAGE>
re-enactment thereof (whether before on or after the date hereof) for the
time being in force and to any former statutory provision replaced (with or
without modification) by the provision referred to and shall include all
statutory instruments or orders from time to time made pursuant thereto.
1.3 References to persons shall include references to bodies corporate and
unincorporated associations to the singular shall include references to the
plural and vice versa and to the masculine shall include references to the
feminine and neuter and vice versa.
1.4 References to Clause are to Clauses of this Agreement.
1.5 The headings in this Agreement and the use of underlining are included for
convenience only and shall not affect the interpretation or construction of
this Agreement.
2. Option to exchange the Loan Stock into the Option Shares
--------------------------------------------------------
2.1 In consideration of the sum of one dollar ($1) paid by the Grantee
(receipt of which is acknowledged by the Grantor) the Grantor grants
to the Grantee the right exercisable at any time during the Option
Period to exchange the Loan Stock for Option Shares in accordance with
the terms and conditions of this Agreement.
2.2 The number of Rada Shares which shall constitute the Option Shares
shall be calculated in accordance with Clause 3.
2.3 The Option shall be exercisable only if:-
2.3.1 the Grantee exercises the Option to exchange all of the Loan
Stock; and
4
<PAGE>
2.3.2 the purchase value of each Rada Share at the close of business
on the working day prior to the date upon which the Grantee
exercises the Option, as quoted on NASDAQ is equal to or
exceeds $5 (five US Dollars).
2.4 The Option shall be exercisable at any time during the Option Period,
by notice in writing served upon the Grantor.
2.5 The parties shall be bound to complete the exchange of the Loan Stock
for the Option Shares as soon as reasonably practical but in no event
no later than one month after the date of service of the notice of
exercise (or on the next succeeding working day if completion would
otherwise fall on a non-working day).
3. Calculation of the number of Rada Shares for which the Loan Stock is to be
--------------------------------------------------------------------------
exchanged
---------
3.1 The value to be attributed to the Loan Stock for the purpose of its
exchange for Option Shares shall for the purposes of this Agreement
and the Option be deemed to be its aggregate nominal value plus any
accrued interest and expenses outstanding in respect of the Loan Stock
(the "Stock Value").
3.2 The Exchange Value to be attributed to Rada Shares shall be determined
as follows:-
3.2.1 if the Initial Exchange Value of each Rada Share is either
equal to or between $5 and $7.70, the Exchange Value shall be
the mean average closing purchase value of each Rada Share as
quoted on NASDAQ for the last 5 working days immediately prior
to the date upon which the Grantee exercises the Option less
10% thereof;
5
<PAGE>
or
3.2.2 if the Initial Exchange Value is greater than $7.70 the
Exchange Value of each Rada Share shall be $7 US Dollars.
3.3 Applying the Exchange Value, the Loan Stock, the value of which shall
be deemed to be the Stock Value, shall be exchanged for that number of
Rada Shares the aggregate value of which represent the Stock Value.
4. Completion
-----------
4.1 Completion of the allotment of the Option Shares to the Grantee as
consideration for the Grantee transferring the Loan Stock to the
Grantor shall take place at the offices of the JVC's Solicitors or
at such other place as the parties shall mutually agree not later than
3:00pm on the relevant date.
4.2 At Completion the Grantee shall deliver to the Grantor:
4.2.1 a letter requesting the Grantor to allot the Option Shares to
the Grantee and/or the Grantees Associates as consideration for
the Grantee and/or the Grantees Associates transferring the
Loan Stock to the Grantor;
4.2.2 The Grantee's certificate for the Loan Stock.
4.3 At Completion the Grantor shall deliver to the Grantee:
4.3.1 a share certificate for the Option Shares; and
6
<PAGE>
4.3.2 such other deeds and documents as may be necessary to allot to
the Grantee or to such persons as the Grantee including the
Grantees Associates may direct the unencumbered beneficial
ownership of the Option Shares.
4.4 The Grantor shall procure that upon the Option Shares being allotted
to the Grantee and/or the Grantees Associates that the Grantee and/or
the Grantees Associates (as applicable) is approved and registered as
the member of the Grantor holding the Option Shares.
5. Grantor's warranties
--------------------
5.1 The Grantor warrants to the Grantee that:-
5.1.1 the Grantor has and will have full power and authority to grant
the Option upon the terms and conditions of this Agreement;
5.1.2 the Grantor has obtained all necessary consents of its members,
directors and NASDAQ to enter into and complete this Agreement;
5.1.3 all information relating to the regulations by NASDAQ of share
options in respect of Rada Shares as is known to the Grantor
and which is material to be known by an allottee for value of
the Option Shares has been disclosed in writing to the Grantee
prior to the date of this Agreement and, upon the written
request of the Grantee during the Option Period, the Grantor
shall provide such further information of which the Grantor may
become aware;
7
<PAGE>
5.1.4 this Agreement complies in all respect with the NASDAQ
Regulations and that the Grantor is not aware of any proposals
by any competent authority to alter, vary or modify any NASDAQ
Regulations;
5.1.5 None of the NASDAQ Regulations will directly or indirectly
apply so as to abrogate, vary, modify or otherwise render void
or voidable any of the terms and conditions of this Agreement;
5.1.6 No rule of Israeli law or rule of law of New York State or of
the United States of America will directly or indirectly apply
so as to abrogate, vary, modify, alter or otherwise render void
or voidable any of the terms and conditions of this Agreement;
5.1.7 The Grantor is lawfully able to enter into this Agreement;
5.1.8 The Grantor will issue and be responsible for issuing all
notices, circulars, resolutions, and press releases which are
required to be issued by NASDAQ Regulations upon:-
5.1.8.1 the Grantor and Grantee entering into this Agreement;
5.1.8.2 the Grantee serving a notice on the Grantor exercising
the Option;
5.1.8.3 Completion of the Option.
5.2 Each of the Warranties contained in each sub-clause of Clause 5.1
shall be separate and independent.
8
<PAGE>
5.3 The Warranties contained in each sub-clause of Clause 5.1 shall
continue in full force and effect at and after the execution of this
Agreement.
6. Value of Rada Shares
--------------------
6.1 The Grantor will provide to the Grantee upon request written details
of the closing value for the purchase of each Rada Share for any
particular previous days' trading on NASDAQ. A statement issued by the
Grantor stating the closing value of Rada Shares for any particular
previous days trading shall (in the absence of manifest error) be
conclusive evidence as to the closing purchase value of Rada Shares.
7. Entire Agreement
----------------
This Agreement represents the entire agreement between the parties in
relation to the subject matter. No variation to this Agreement shall be
effective unless in writing and signed by or on behalf of each of the
parties hereto.
8. No Waiver
---------
No waiver of any breach of this Agreement, whether by conduct or otherwise,
nor any failure forbearance or delay in exercising any rights or remedies
in relation thereto shall be deemed a waiver of any such breach nor shall
it prevent any part from subsequently taking any action or
9. Announcements
-------------
No announcement concerning the matters herein provided for or referred to
or any ancillary matter shall be made by any party hereto other than as
required by law or the NASDAQ Regulations
9
<PAGE>
without the prior approval of the other parties hereto (such approval not
to be unreasonably withheld or delayed).
10. Notices
-------
Any notice required to be given by any party hereto or to any other shall
be deemed validly served if delivered by hand or sent by first class
prepaid letter through the post or by facsimile to the address of the party
to be served herein given or (being a company) the registered office of
such party for the time being and any notice so served at the time of
delivery or (as the case may be) transmission and any notice so served
through the post shall be deemed to have been served forty eight hours
after the time it was posed and in proving such service it shall be
sufficient to prove that the notice was properly delivered, transmitted or
(as the case may be) addressed prepaid and posted.
11. Proper Law
----------
This Agreement and the documents to be entered into as provided herein
shall be governed and construed in accordance with English Law and the
parties hereto submit to the non-exclusive jurisdiction of the English
Courts.
12. Counterparts
------------
12.1 This Agreement may be executed in any number of counterparts, and by
the parties hereto on separate counterparts, but in the case shall
not be effective until each party has executed at least one
counterpart.
10
<PAGE>
12.2 Each counterpart shall constitute the original of this Agreement, but
all the counterparts shall together constitute one and the same
instrument.
IN WITNESS whereof the parties have hereunto set their hands the day and year
first before written.
11
<PAGE>
THE SCHEDULE
------------
The Loan Stock Instrument
-------------------------
12
<PAGE>
Signed by Hiam Nissenson )
for and on behalf of RADA ) /s/ HIAM NISSENSON
ELECTRONIC INDUSTRIES LIMITED )
in the presence of:- )
/s/ RICHARD N. TANNER
RICHARD N. TANNER
Solicitor
Clyde & Co., Hong Kong
Signed by Roy Kui Chuen Chan )
for and on behalf of HORSHAM ) /s/ ROY KUI CHUEN CHAN
ENTERPRISES LIMITED in the )
presence of:- )
/s/ RICHARD N. TANNER
RICHARD N. TANNER
Solicitor
Clyde & Co., Hong Kong
13
<PAGE>
EXHIBIT 9
- --------------------------------------------------------------------------------
(1) RADA ELECTRONIC INDUSTRIES LIMITED
(2) HORSHAM ENTERPRISES LIMITED
-------------------------------------------
LOAN STOCK CALL OPTION EXIT AGREEMENT
-------------------------------------------
Neil Myerson
Solicitors
The Cottages
Regent Road
Altrincham
Cheshire WA14 1RX
Tel: 0161-928-2065
Fax: 0161-941-3719
- --------------------------------------------------------------------------------
0
<PAGE>
THIS OPTION AGREEMENT is made the day of 1997
B E T W E E N:-
(1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at
12 Medinat Hayehudin Street, P O Box 2059, Herliya B, Israel, (the
"Grantor"); and
(2) HORSHAM ENTERPRISES LIMITED a Company existing and operated under the laws
of the British Virgin Islands whose registered office is at Columbus Centre
Building, Wickhams Cay, Road Town, Tortola, British Virgin Islands (the
"Grantee").
1. Interpretation
--------------
1.1. In this Agreement unless the context otherwise requires the following
words and expressions shall bear the meaning set opposite them:-
"Consideration" means the total consideration to be
paid by the Grantor to the Grantee as
calculated in accordance with Clause
3.1 upon the completion of the Option;
"Grantees Associates" such person, company or other entity
that the Grantee shall nominate from
time to time to subscribe for or hold
Initial Loan Stock;
"Condition Precedent" the meaning assigned to the term in the
Loan Stock Option Agreement;
"the Initial Loan Stock" means the secured Loan Stock of $4.625
million US
1
<PAGE>
Dollars created by the Loan Stock
Instrument;
"JVC" means NEW REEF HOLDINGS LIMITED a
company existing and operated under the
law of the British Virgin Islands whose
registered office is at Columbus Centre
Building, Wickhams Cay, Road Town,
Tortola, British Virgin Islands;
"JVC Agreement" means the agreement dated 11 October
1996 made between the Grantor (1)
Howard Ping Leung Yeung (2) the JVC (3)
KTS Corp (4) and Grantee (5);
"Loan Stock" means the Initial Loan Stock which is
from time to time in issue to and fully
paid up by the Grantee and/or the
Grantees Associates;
"Loan Stock Option Agreement" means the loan stock option agreement
dated 11 October 1996 made between the
Grantor (1) and the Grantee (2) a copy
of which is attached hereto in Part 1
of the Schedule as varied, modified and
altered in accordance with a Deed of
Amendment made between the Grantor and
the Grantee a copy of which is set out
in Part 2 of the Schedule;
"the Loan Stock Instrument" means the Loan Stock Instrument
constituting
2
<PAGE>
$4,625,000 US Dollars Secured Initial
Loan Stock of the JVC set out in the
Schedule of the Loan Stock Agreement;
"Loan Stock Option" The option set out in the Loan Stock
Option Agreement;
"Long Stop Date" the meaning assigned to the term in the
Loan Stock Option Agreement;
"Market Value" the average of all closing values for
the purchase of each Rada Share on
NASDAQ on the 10 working days prior to
the date upon which the Loan Stock
Option is exercised;
"NASDAQ" and "NASDAQ
Regulations" means the definitions ascribed to such
terms in the JVC Agreement;
"Rada Shares" means Ordinary Shares of 0.002 NIS (New
Israeli Shekels) each of the Grantor
which are for the time being quoted on
NASDAQ;
"Option" means the right granted pursuant to
Clause 2.1 for the Grantee to call for
the Grantor to elect for either itself
and/or the JVC to purchase the Loan
Stock from the
3
<PAGE>
Grantee and/or the Grantee's Associates
upon the Grantee and/or Grantees
Associates exercising the Option;
"Option Period" means the period of 7 years from the
date of the JVC Agreement;
"working days" means those days of the year on which
Rada Shares are traded on NASDAQ.
1.2 References to statutory provisions shall be construed as references to
any statutory modification or re-enactment thereof (whether before on
or after the date hereof) for the time being in force and to any
former statutory provision replaced (with or without modification) by
the provision referred to and shall include all statutory instruments
or orders from time to time made pursuant thereto.
1.3 References to persons shall include references to bodies corporate and
unincorporated associations to the singular shall include references
to the plural and vice versa and to the masculine shall include
references to the feminine and neuter and vice versa.
1.4 References to Clauses and the Schedule are to Clauses and the Schedule
of this Agreement.
1.5 The headings in this Agreement and the use of underlining are included
for convenience only and shall not affect the interpretation or
construction of this Agreement.
4
<PAGE>
2. Option for the Grantee to call for the Grantor and/or the JVC to purchase
-------------------------------------------------------------------------
the Loan Stock
--------------
2.1 In consideration of the sum of one dollar ($1) paid by the Grantee to
the Grantor (receipt of which is acknowledged by the Grantor) the
Grantor grants to the Grantee subject to Clause 2.2 the right
exercisable at any time during the Option Period to call subject to
Clause 2.3 for the Grantor to elect for either itself and/or the JVC
to purchase the Loan Stock in accordance with the terms and conditions
of this Agreement.
2.2 The Option shall be exercisable only if the Grantee has validly
exercised the Loan Stock Option and the Grantor and the Grantee have
been unable to fulfil the Condition Precedent by the Long Stop Date or
if the Grantor has failed to complete the Loan Stock Option Agreement
upon the fulfillment of the Condition Precedent by the latest day
provided for the completion of the Loan Stock Option pursuant to the
terms of the Loan Stock Option Agreement (in which case the exercise
of the Option by the Grantee hereunder shall be without prejudice to
any of the rights or remedies under the Loan Stock Option Agreement).
2.3 The Grantee may only elect for the JVC to purchase that portion of the
Loan Stock the JVC is in funds to purchase in cash by way of
redemption of Loan Stock at the date for completion of the Option as
determined in accordance with Clause 2.5. The Grantee hereby
acknowledges and agrees that it shall be responsible for purchasing
that part of the Loan Stock which the JVC is unable or unwilling to
purchase as at completion.
2.4 The Option shall be exercisable at any time during the Option Period,
by notice in writing served upon the Grantor.
5
<PAGE>
2.5 The parties shall be bound to complete the purchase of the Loan Stock
as soon as reasonably practical but in no event no later than one
month after the date of service of the notice of exercise (or on the
next succeeding working day if completion would otherwise fall on a
non-working day).
3. The Consideration
-----------------
3.1 The Consideration payable by the Grantor to the Grantee for the Loan
Stock shall be, applying the Market Value, a sum equal to the
aggregate value of each Rada Share the Grantee would have been
entitled to receive (applying the calculation for the exchange of Loan
Stock into Rada Shares set out in clause 3 of the Loan Stock Option
Agreement) upon completion of the Loan Stock Option Agreement if the
Grantor and the Grantee had been able to complete the Loan Stock
Option by the Long Stop Date following the fulfilment of the
Condition Precedent (the "Consideration").
3.2 The Consideration shall be paid in accordance with Clause 4.3.
4. Completion
----------
4.1 Completion of the sale of the Loan Stock to the Grantor shall take
place at the offices of the JVC's Solicitors or at such other place as
the parties shall mutually agree not later than 3.00pm on the relevant
date.
4.2 At Completion the Grantee shall deliver to the Grantor and/or the JVC
(as applicable) the Grantee's certificate for the Loan Stock.
4.3 At Completion the Grantor shall procure that the Grantor and the JVC
either alone or
6
<PAGE>
together shall forthwith pay the Consideration by telegraphic transfer
to the Grantee.
4.4 The Grantee shall procure that the Grantor is registered as the holder
of that portion of the Loan Stock to be transferred to the Grantor
hereunder.
5. Grantor's warranties
--------------------
5.1 The Grantor warrants to the Grantee that:-
5.1.1 the Grantor has and will have full power and authority to
grant the Option upon the terms and conditions of this
Agreement;
5.1.2 the Grantor has obtained all necessary, consents of its
members, directors and NASDAQ to enter into and complete this
Agreement;
5.1.3 this Agreement complies in all respect with the NASDAQ
Regulations and that the Grantor is not aware of any proposals
by any competent authority to alter, vary or modify any NASDAQ
Regulations;
5.1.4 None of the NASDAQ Regulations will directly or indirectly
apply so as to abrogate, vary, modify or otherwise render void
or voidable any of the terms and conditions of this Agreement;
5.1.5 No rule of Israeli law or rule of law of New York State or of
the United States of America will directly or indirectly apply
so as to abrogate, vary, modify, alter or otherwise render
void or voidable any of the terms and conditions of this
7
<PAGE>
Agreement;
5.1.6 The Grantor is lawfully able to enter into this Agreement;
5.1.7 The Grantor will issue and be responsible for issuing all
notices, circulars, resolutions, and press releases which are
required to be issued by NASDAQ Regulations upon:-
5.1.7.1 the Grantor and Grantee entering into this Agreement;
5.1.7.2 the Grantee serving a notice on the Grantor
exercising the Option;
5.1.7.3 Completion of the Option.
5.2 Each of the Warranties contained in each sub-clause of Clause 5.1
shall be separate and independent.
5.3 The Warranties contained in each sub-clause of Clause 5.1 shall
continue in full force and effect at and after the execution of this
Agreement.
6. Value of Rada Shares
--------------------
6.1 The Grantor will provide to the Grantee upon request written details
of the closing value for the purchase of each Rada Share for any
particular previous days' trading on NASDAQ. A statement issued by the
Grantor stating the closing value of Rada Shares for any particular
previous days trading shall (in the absence of manifest error) be
conclusive evidence as to the closing purchase value of Rada Shares.
8
<PAGE>
7. Entire Agreement
----------------
This Agreement represents the entire agreement between the parties in
relation to the subject matter. No variation to this Agreement shall be
effective unless in writing and signed by or on behalf of each of the
parties hereto.
8. No Waiver
---------
No waiver of any breach of this Agreement, whether by conduct or otherwise,
nor any failure forbearance or delay in exercising any rights or remedies
in relation thereto shall be deemed a waiver of any such breach nor shall
it prevent any part from subsequently taking any action or
9. Announcements
-------------
No announcement concerning the matters herein provided for or referred to
or any ancillary matter shall be made by any party hereto other than as
required by law or the NASDAQ Regulations without the prior approval of the
other parties hereto (such approval not to be unreasonably withheld or
delayed).
10. Notices
-------
Any notice required to be given by any party hereto or to any other shall
be deemed validly served if delivered by hand or sent by first class
prepaid letter through the post or by facsimile to the address of the party
to be served herein given or (being a company) the registered office of
such party for the time being and any notice so served at the time of
delivery or (as the case may be) transmission and any notice so served
through the post shall be deemed to have been served forty eight hours
after the time it was posed and in proving such service it shall be
sufficient to prove that the notice was properly delivered, transmitted or
(as the case may be) addressed prepaid and posted.
9
<PAGE>
11. Proper Law
----------
This Agreement and the documents to be entered into as provided herein
shall be governed and construed in accordance with English Law and the
parties hereto submit to the non-exclusive jurisdiction of the English
Courts.
12. Counterparts
------------
12.1 This Agreement may be executed in any number of counterparts, and by
the parties hereto on separate counterparts, but in the case shall
not be effective until each party has executed at least one
counterpart.
12.2 Each counterpart shall constitute the original of this Agreement, but
all the counterparts shall together constitute one and the same
instrument.
IN WITNESS whereof the parties have hereunto set their hands the day and year
first before written.
10
<PAGE>
EXHIBIT 10
- --------------------------------------------------------------------------------
(1) RADA ELECTRONIC INDUSTRIES LIMITED
(2) HORSHAM ENTERPRISES LIMITED
---------------------------------------
DEED OF AMENDMENT
OF SHARE OPTION AGREEMENT
---------------------------------------
Neil Myerson
Solicitors
The Cottages
Regent Road
Altrincham
Cheshire WA14 1RX
Tel: 0161-928-2065
Fax: 0161-941-3719
- --------------------------------------------------------------------------------
0
<PAGE>
THIS DEED OF AMENDMENT is dated the day of 1997
B E T W E E N:-
(1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at
12 Medinat Hayehudin Street, P O Box 2059 Herzliya B, Israel ("Rada"); and
(2) HORSHAM ENTERPRISES LIMITED a company controlled by HY existing and
operated under the laws of the British Virgin Islands whose registered
office is situated at Columbus Centre Building, Wickams Cay, Road Town,
Tortola, British Virgin Islands ("Horsham").
RECITALS:
- ---------
(1) This Deed of Amendment is supplemental to a Share Option Agreement dated 11
October 1996 (the "Option Agreement") made between Rada (1), and Horsham
(2) and is made pursuant to clause 7 of the Option Agreement.
(2) It is the intention of the parties to vary the terms of the Option
Agreement as hereafter appears.
OPERATIVE PROVISIONS
- --------------------
1. Definitions
-----------
1.1 All other expressions contained in this Deed shall bear the same meaning
ascribed to them in the Option Agreement.
1.2 In this Deed any reference to a Clause, sub-Clause or Schedule is to a
Clause or sub-Clause hereof
1
<PAGE>
or a Schedule hereto.
1.3 In this Deed words importing the singular shall include the plural and vice
versa and words importing any gender shall include all genders.
1.4 The headings to Clauses are for convenience only and shall not affect the
construction thereof.
2. Amendments to the Option Agreement.
-----------------------------------
2.1 The parties hereby irrevocably agree the following amendments, additions,
modifications and variations shall be made to the Option Agreement with
effect from the date of this Deed:-
2.1.1 There shall be added to clause 1.1 of the Option Agreement the
following definitions:
""Condition Precedent" has the meaning assigned to that term in
Clause 2.5;"
""Long Stop Date" means the day falling [the number of days
which will be required to obtain
shareholders approval] days following the
date upon which the Option is exercised;"
2.1.2 Clause 2.5 of the Option Agreement shall be deleted and shall be
replaced by the following new clauses:
"2.5 Following the exercise of the Option the exchange of the "A"
Shares for the Option Shares shall be conditional upon the
Grantor's shareholders consenting to the exchange as required
by any applicable NASDAQ or SEC Regulations (the
2
<PAGE>
"Condition Precedent").
2.6 The Grantor shall use its best endeavours to fulfil or procure
the fulfilment of the Condition Precedent as soon as possible and
in any event by no later than the Long Stop Date.
2.7 If the Grantor does not fulfil the Condition Precedent by the
Long Stop Date, the Grantee may within 7 working days following
the expiry of the initial Long Stop Date extend the Long Stop
Date by such period of time as the Grantee in its absolute
discretion considers appropriate. If the Grantee does extend the
period for the fulfilment of the Condition Precedent in
accordance with the foregoing provisions of this Clause, the new
date by which the Condition Precedent must be fulfilled shall
thereafter be regarded as the "Long Stop Date" and the new
revised date by which the Condition Precedent must be fulfilled
shall for the purposes of this Agreement be deemed to replace the
date set out opposite the definition of the Long Stop Date in
Clause 1.1.
2.8 In the event that the Condition Precedent is not fulfilled by the
Long Stop Date, then subject to Clause 2.7 the Grantor and the
Grantee shall not be bound to make the exchange and this
Agreement shall immediately determine without prejudice to any
accrued rights or remedies of the Seller or the Purchaser.
2.9 Subject to fulfilment of the Condition Precedent, the parties
shall be bound to complete the exchange of the Loan Stock for the
Option Shares as soon as reasonably practical but in no event no
later than one month after the fulfilment
3
<PAGE>
of the Condition Precedent (or the next succeeding working day if
completion would otherwise fall on a non-working day).
3. Effects of this Deed
--------------------
3.1 Save where varied altered, modified or cancelled by the provisions of this
Deed, the Option Agreement shall remain in full force and continue to bind
the parties.
3.2 The parties hereby acknowledge that this Deed has the effect of validly
varying the Option Agreement and complies with all the formalities required
to be followed when varying the Option Agreement as set out in clause 7 of
the Option Agreement.
4. No Waiver
---------
No waiver of any breach of this Deed, whether by conduct or otherwise, nor
any failure forbearance or delay in exercising any rights or remedies in
relation thereto shall be deemed a waiver of any such breach nor shall it
prevent any part from subsequently taking any action or making any claim in
respect thereof.
5. Announcements
-------------
No announcement concerning the matters herein provided for or referred to
or any ancillary matter shall be made by any party thereto other than as
required by law and/or by any regulatory authority (including NASDAQ)
without the prior approval of the other parties hereto (such approval not
to be unreasonably withheld or delayed).
4
<PAGE>
6. Costs
-----
6.1 Each party hereto shall bear its own costs and expenses incurred in or in
connection with the preparation of this Deed and matters contemplated
hereby.
7. Proper Law
----------
7.1 This Deed and the documents to be entered into as provided herein shall be
governed and construed in accordance with English Law and the parties
hereto submit to the non-exclusive jurisdiction of the English Courts.
8. Counterparts
------------
8.1 This Deed may be executed in any number of counterparts, and by the parties
hereto on separate counterparts, but in that case shall not be effective
until each party has executed at least one counterpart.
8.2 Each counterpart shall constitute the original of this Deed, but all the
counterparts shall together constitute one and the same instrument.
IN WITNESS whereof the parties have hereunto executed this Deed the day and year
first before written.
5
<PAGE>
EXECUTED and DELIVERED as a DEED )
by RADA ELECTRONIC INDUSTRIES )
LIMITED acting by: )
Director:
Director/Secretary:
EXECUTED and DELIVERED as a DEED )
by HORSHAM ENTERPRISES LIMITED )
acting by: )
Director:
Director/Secretary:
6
<PAGE>
EXHIBIT 11
- --------------------------------------------------------------------------------
(1) RADA ELECTRONIC INDUSTRIES LIMITED
(2) HORSHAM ENTERPRISES LIMITED
----------------------------------------------
DEED OF AMENDMENT
OF LOAN STOCK OPTION AGREEMENT
----------------------------------------------
Neil Myerson
Solicitors
The Cottages
Regent Road
Altrincham
Cheshire WA14 1RX
Tel: 0161-928-2065
Fax: 0161-941-3719
- --------------------------------------------------------------------------------
0
<PAGE>
THIS DEED OF AMENDMENT is dated the day of 1997
B E T W E E N:-
(1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at
12 Medinat Hayehudin Street, P O Box 2059 Herzliya B, Israel ("Rada"); and
(2) HORSHAM ENTERPRISES LIMITED a company controlled by HY existing and
operated under the laws of the British Virgin Islands whose registered
office is situated at Columbus Centre Building, Wickams Cay, Road Town,
Tortola, British Virgin Islands ("Horsham").
RECITALS:
- ---------
(1) This Deed of Amendment is supplemental to a Loan Stock Option Agreement
dated 11 October 1996 (the "Option Agreement") made between Rada (1), and
Horsham (2) and is made pursuant to clause 7 of the Option Agreement.
(2) It is the intention of the parties to vary the terms of the Option
Agreement as hereafter appears.
OPERATIVE PROVISIONS
- --------------------
1. Definitions
-----------
1.1 All other expressions contained in this Deed shall bear the same meaning
ascribed to them in the Option Agreement.
1.2 In this Deed any reference to a Clause, sub-Clause or Schedule is to a
Clause or sub-Clause hereof
1
<PAGE>
or a Schedule hereto.
1.3 In this Deed words importing the singular shall include the plural and vice
versa and words importing any gender shall include all genders.
1.4 The headings to Clauses are for convenience only and shall not affect the
construction thereof.
2. Amendments to the Option Agreement.
-----------------------------------
2.1 The parties hereby irrevocably agree the following amendments, additions,
modifications and variations shall be made to the Option Agreement with
effect from the date of this Deed:-
2.1.1 There shall be added to clause 1.1 of the Option Agreement the
following definitions:
""Condition Precedent" has the meaning assigned to that term in
Clause 2.5;"
""Long Stop Date" means the day falling [the number of days
which will be required to obtain
shareholders approval] days following the
date upon which the Option is exercised;"
2.1.2 Clause 2.5 of the Option Agreement shall be deleted and shall be
replaced by the following new clauses:
"2.5 Following the exercise of the Option the exchange of the Loan
Stock for the Option Shares shall be conditional upon the
Grantor's shareholders consenting to the exchange as required
by any applicable NASDAQ or SEC Regulations (the
2
<PAGE>
"Condition Precedent").
2.6 The Grantor shall use its best endeavours to fulfil or procure
the fulfilment of the Condition Precedent as soon as possible and
in any event by no later than the Long Stop Date.
2.7 If the Grantor does not fulfil the Condition Precedent by the
Long Stop Date, the Grantee may within 7 working days following
the expiry of the initial Long Stop Date extend the Long Stop
Date by such period of time as the Grantee in its absolute
discretion considers appropriate. If the Grantee does extend the
period for the fulfilment of the Condition Precedent in
accordance with the foregoing provisions of this Clause, the new
date by which the Condition Precedent must be fulfilled shall
thereafter be regarded as the "Long Stop Date" and the new
revised date by which the Condition Precedent must be fulfilled
shall for the purposes of this Agreement be deemed to replace the
date set out opposite the definition of the Long Stop Date in
Clause 1.1.
2.8 In the event that the Condition Precedent is not fulfilled by the
Long Stop Date, then subject to Clause 2.7 the Grantor and the
Grantee shall not be bound to make the exchange and this
Agreement shall immediately determine without prejudice to any
accrued rights or remedies of the Seller or the Purchaser.
2.9 Subject to fulfilment of the Condition Precedent, the parties
shall be bound to complete the exchange of the Loan Stock for the
Option Shares as soon as reasonably practical but in no event no
later than one month after the fulfilment
3
<PAGE>
of the Condition Precedent (or the next succeeding working day if
completion would otherwise fall on a non-working day).
3. Effects of this Deed
--------------------
3.1 Save where varied altered, modified or cancelled by the provisions of this
Deed, the Option Agreement shall remain in full force and continue to bind
the parties.
3.2 The parties hereby acknowledge that this Deed has the effect of validly
varying the Option Agreement and complies with all the formalities required
to be followed when varying the Option Agreement as set out in clause 7 of
the Option Agreement.
4. No Waiver
---------
No waiver of any breach of this Deed, whether by conduct or otherwise, nor
any failure forbearance or delay in exercising any rights or remedies in
relation thereto shall be deemed a waiver of any such breach nor shall it
prevent any part from subsequently taking any action or making any claim in
respect thereof.
5. Announcements
-------------
No announcement concerning the matters herein provided for or referred to
or any ancillary matter shall be made by any party thereto other than as
required by law and/or by any regulatory authority (including NASDAQ)
without the prior approval of the other parties hereto (such approval not
to be unreasonably withheld or delayed).
4
<PAGE>
6. Costs
-----
6.1 Each party hereto shall bear its own costs and expenses incurred in or in
connection with the preparation of this Deed and matters contemplated
hereby.
7. Proper Law
----------
7.1 This Deed and the documents to be entered into as provided herein shall be
governed and construed in accordance with English Law and the parties
hereto submit to the non-exclusive jurisdiction of the English Courts.
8. Counterparts
------------
8.1 This Deed may be executed in any number of counterparts, and by the parties
hereto on separate counterparts, but in that case shall not be effective
until each party has executed at least one counterpart.
8.2 Each counterpart shall constitute the original of this Deed, but all the
counterparts shall together constitute one and the same instrument.
IN WITNESS whereof the parties have hereunto executed this Deed the day and year
first before written.
5
<PAGE>
EXECUTED and DELIVERED as a DEED )
by RADA ELECTRONIC INDUSTRIES )
LIMITED acting by: )
Director:
Director/Secretary:
EXECUTED and DELIVERED as a DEED )
by HORSHAM ENTERPRISES LIMITED )
acting by: )
Director:
Director/Secretary:
6
