AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 9, 1996
REGISTRATION NO. 33-75750
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 2
TO
REGISTRATION STATEMENT ON FORM S-1
ON FORM S-3
UNDER
THE SECURITIES ACT OF 1933
KELLSTROM INDUSTRIES, INC.
(formerly known as Israel Tech Acquisition Corp.)
(Exact name of registrant as specified in its charter)
Delaware 13-3753725
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
14000 N.W. 4th Street
Sunrise, Florida 33325
(954) 845-0427
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Zivi R. Nedivi
Chief Executive Officer
Kellstrom Industries, Inc.
14000 N.W. 4th Street
Sunrise, Florida 33325
(954) 845-0427
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Robert L. Winikoff, Esq. Michael Hirschberg, Esq.
Cooperman Levitt Winikoff Lester & Newman, P.C. Piper & Marbury L.L.P.
800 Third Avenue 1251 Avenue of the Americas
New York, New York 10022 New York, New York 10020
(212) 688-7000 (212) 835-6270
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this registration statement.
_____________________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
<PAGE>
_________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
<PAGE>
KELLSTROM INDUSTRIES, INC.
Cross Reference Sheet
<TABLE>
FORM S-3 CAPTION OR LOCATION IN PROSPECTUS
ITEM NO. ---------------------------------
- --------
<S> <C> <C>
1 Forepart of the Registration Statement and Outside Front Cover Page of Prospectus
Outside Front Cover Page of Prospectus
2 Inside Front and Outside Back Cover Pages Inside Front and Outside Back Cover Pages
of Prospectus of Prospectus
3 Summary Information and Risk Factors Outside Front Cover Page of Prospectus;
Risk Factors
4 Use of Proceeds Use of Proceeds
5 Determination of Offering Price Outside Front Cover Page of Prospectus
6 Dilution Not Applicable
7 Selling Security Holders Not Applicable
8 Plan of Distribution Outside Front Cover Page of Prospectus;
Plan of Distribution
9 Description of Securities to be Registered Not Applicable
10 Interests of Named Experts and Counsel Legal Matters; Experts
11 Material Changes Not Applicable
12 Incorporation of Certain Information Incorporation of Certain Documents by Reference
by Reference
13 Disclosure of Commission Position on Indemnification of Directors and Officers
Indemnification for Securities Act Liabilities
</TABLE>
<PAGE>
[Information contained herein is subject to completion or amendment. A
Registration Statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the Registration Statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.]
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 9, 1996
PROSPECTUS
KELLSTROM INDUSTRIES, INC.
(formerly known as Israel Tech Acquisition Corp.)
4,600,000 Shares of Common Stock
Underlying Redeemable Common Stock Purchase Warrants
This Prospectus relates to the issuance of a maximum of 4,600,000 shares of
common stock, par value $.001 per share (the "Common Stock"), of Kellstrom
Industries, Inc., a Delaware corporation (formerly known as Israel Tech
Acquisition Corp.) (the "Company"), upon the exercise of the Company's
outstanding Redeemable Common Stock Purchase Warrants (the "Warrants"). Each
Warrant entitles the holder thereof to purchase one share of Common Stock for
$5.00, subject to adjustment in certain circumstances, at any time through and
including April 11, 2001. The Warrants are redeemable by the Company, with the
consent of GKN Securities Corp. ("GKN") and Brean Murray, Foster Securities Inc.
("Brean Murray", and together with GKN, the "Underwriters") the underwriters of
ompany's initial public offering consummated in April 1994, upon notice
(the "Redemption Notice") of not less than 30 days, at a price of $.01 per
Warrant (the "Redemption Price"), provided that the last sale price of the
Common Stock on all 20 consecutive trading days ending on the third day prior to
the date on which the Redemption Notice is given has been at least 170% of the
then effective exercise price of the Warrants (currently $8.50 based on the
$5.00 exercise price, subject to adjustment). The Company intends to redeem the
Warrants in accordance with such terms and has obtained the consent of the
Underwriters to do so. Based upon the historical price per share of the Common
Stock, on the date of this Prospectus the Company does not have the ability to
redeem the Warrants. Any Warrants not exercised for shares of Common Stock prior
to the close of business on the date fixed for redemption (the "Expiration
Date") will be redeemed. From and after the Expiration Date, holders of Warrants
will be entitled only to the Redemption Price.
<PAGE>
The principal market for trading of the Common Stock and the Warrants is
the Nasdaq SmallCap Market under the symbols KELL and KELLW, respectively. On
September 6, 1996, the last sale price for the Common Stock was $8.13 and for
the Warrants was $3.19 as reported on the Nasdaq SmallCap Market.
___________________
PURCHASE OF THE COMMON STOCK IS SPECULATIVE,
INVOLVES A HIGH DEGREE OF RISK, AND SHOULD BE CONSIDERED
ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price to Underwriting Discounts
Public (1) and Commissions(2) Proceeds to Company (3)
-------- ---------------------- -------------------
Per Share.... $ 5.00 $ 0.25 $ 4.75
Total(4)..... $23,000,000.00 $ 1,150,000.00 $21,850,000.00
___________________
(1) Upon Exercise of each Warrant.
(2) The Underwriters are entitled to a commission of 5% of the exercise price
for each Warrant exercised which is solicited by the Underwriters (the
"Solitation Fee"). The Company has agreed to indemify the Underwiters
against certain liabilities, including liabilities under the Securties Act
of 1933. See "Plan of Distribution".
(3) Before deducting expenses payable by the Company, estimated at $50,000.
(4) Assuming exercise of all outstanding Warrants and the payment of the
Solicitation Fee on the exercise of all the Warrants.
___________________
The date of this Prospectus is September _____, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed with the Commission may be inspected and
copied at the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 as well as at the following Commission
regional offices: 500 West Madison Street, Chicago, Illinois 60661; Seven World
Trade Center, New York, New York 10048; and 1401 Brickell Avenue, Miami, Florida
33131. Copies of such material can be obtained from the Public Reference Section
of the Commission at prescribed rates by writing to the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. Such reports and other information can
also be reviewed through the Commission's Electronic Data Gathering, Analysis,
and Retrieval System which is publicly available through the Commission's Web
site (http://www.sec.gov).
This Prospectus constitutes a part of a Registration Statement on Form S-3 filed
by the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"), as Post-Effective Amendment No. 2 to the Company's
Registration Statement on Form S-1 (No. 33-75750) (herein, together with all
amendments and exhibits, referred to as the "Registration Statement"). This
Prospectus does not contain all the information set forth in the Registration
Statement, certain items of which are omitted in accordance with the rules and
regulations of the Commission. For further information with respect to the
Company and its Common Stock and Warrants, reference is hereby made to the
Registration Statement. Statements contained herein concerning the provisions of
any document are not necessarily complete, and in each instance reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement contained
herein is qualified in its entirety by such reference.
The Company furnishes annual reports to its stockholders which include
audited financial statements. The Company may also furnish quarterly financial
statements to its stockholders and such other reports as may be authorized by
its Board of Directors.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which are on file with the Commission (Exchange
Act File No. 0-23764), are incorporated in this Prospectus by reference and made
a part hereof:
(1) Annual Report on Form 10-KSB of the Company for the fiscal year ended
December 31, 1995;
(2) Quarterly Report on Form 10-QSB of the Company for the fiscal quarter ended
March 31, 1996;
(3) Current Report of the Company on Form 8-K filed on April 26, 1996; and
(4) Quarterly Report on Form 10-QSB of the Company for the fiscal quarter ended
June 30, 1996.
The Company's Registration Statement on Form 8-A (which contains
descriptions of the Common Stock and Warrants), which was declared effective by
the Commission on April 11, 1994, is also incorporated in this Prospectus by
reference and made a part hereof.
2
<PAGE>
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made hereby shall be
deemed to be incorporated by reference in this Prospectus and shall be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated by reference in this Prospectus and filed with the
Commission prior to the date of this Prospectus shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any other subsequently filed document which is deemed to
be incorporated by reference herein, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom this Prospectus is delivered, on the written or oral request of any such
person, a copy of any or all of the documents referred to above which have been
or may be incorporated in this Prospectus by reference (other than exhibits to
such documents unless such exhibits are specifically incorporated by reference
into such documents). Written or telephone requests for such copies should be
directed to 14000 N.W. 4th Street, Sunrise, Florida 33325, Attention: Investor
Relations (telephone number: (954) 845-0427).
No dealer, salesman or other person is authorized in connection with any
offering made hereby to give any information or to make any representation not
contained in this Prospectus, and if given or made, such information or
representation must not be relied upon as having been authorized by the Company.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the registered securities offered hereby
nor does it constitute an offer to sell or a solicitation of an offer to buy any
of the securities offered hereby to any person in any jurisdiction in which it
is unlawful to make such an offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create any
implication that the information contained herein is correct as of any date
subsequent to the date hereof.
TABLE OF CONTENTS
PAGE
Available Information...............................................2
Incorporation of Certain Documents by Reference.....................2
The Company ........................................................4
Risk Factors........................................................4
Use of Proceeds.....................................................6
Plan of Distribution................................................6
Description of Warrants.............................................7
Indemnification of Directors and Officers...........................8
Legal Matters.......................................................8
Experts.............................................................8
3
<PAGE>
THE COMPANY
Kellstrom Industries, Inc. ("Kellstrom" or the "Company"), which conducts
its business under the name "Westco International", engages in the purchasing,
refurbishing (through subcontractors), marketing and distributing of commercial
jet engines and jet engine parts. The Company's customers include major domestic
and international airlines, engine manufacturers, engine part distributors and
dealers and overhaul service suppliers throughout the world. The Company enables
customers to reduce their engine maintenance costs by providing Federal Aviation
Administration-approved engines and engine parts on a timely basis and at
competitive prices. Upon consummation by Israel Tech Acquisition Corp. ("ITAC")
of the acquisition of substantially all of the assets of Kellstrom in June 1995,
ITAC changed its name to Kellstrom. The Company's operations are conducted at
its facility located at 14000 N.W. 4th Street, Sunrise, Florida 33325, and its
telephone number is (954) 845-0427.
RISK FACTORS
The securities offered hereby are speculative and involve a high degree of
risk. Each prospective investor should consider carefully the following risk
factors in addition to the other information presented in, and incorporated by
reference into, this Prospectus before making an investment decision.
RISKS APPLICABLE TO THE AIRCRAFT ENGINE BUSINESS. An investment in
companies in the aircraft engine part distribution and refurbishing (through
third parties) business entails special considerations and risks. These
businesses are highly competitive and are characterized by price fluctuations in
inventories and the discontinuing of certain engine types due to airline
operational decisions.
DEPENDENCE UPON KEY PERSONNEL. The Company depends upon the efforts of the
officers and directors of the Company. The loss of the services of such key
personnel could have a material adverse effect on the Company's ability to
successfully achieve its business objectives. Although each of the executive
employees has executed an employment agreement which prohibits him from
competing against the Company for a specified period of time, there can be no
assurance that such remedy will be available to the Company or that such
protection will mitigate any losses incurred as a result of a termination of
employment.
DIVIDENDS UNLIKELY. The Company has not paid any dividends on its Common
Stock to date. The payment of dividends will be contingent upon the Company's
revenues and earnings, if any, capital requirements and general financial
condition. The payment of any dividends will be within the discretion of the
Board of Directors of the Company. It is the present intention of the Board to
retain all earnings, if any, for use in the Company's business operations and,
accordingly, the Board does not anticipate declaring any dividends in the
foreseeable future.
POSSIBLE VOLATILITY OF SECURITIES PRICES. The market price of the Company's
securities may be highly volatile. Factors such as the Company's operating
results or other announcements by the Company or its competitors may have a
significant effect on the market price of the Company's securities. In addition,
market prices for securities of many small capitalization companies have
experienced wide fluctuations in response to variations in quarterly operating
results and general economic indicators and conditions, as well as other factors
beyond the control of the Company.
SHARES ELIGIBLE FOR FUTURE SALE. Substantially all of the Company's
outstanding shares of Common Stock and Warrants have been registered for sale
under the Securities Act or are eligible for sale under an exemption therefrom.
In addition, the holders of other warrants are entitled to certain "piggyback"
registration rights upon the exercise of up to 400,000 shares of Common Stock,
and holders of certain options will be entitled, upon exercise thereof, to up to
200,000 shares of Common Stock and warrants to purchase up to 400,000 shares of
Common Stock with certain demand and "piggyback" registration rights. The
possibility that substantial amounts of Common Stock or Warrants
4
<PAGE>
may be sold in the public market may adversely affect prevailing market prices
for the Common Stock or the Warrants and could impair the Company's ability to
raise capital through the sale of its equity securities.
OUTSTANDING WARRANTS AND OPTIONS; POTENTIAL ADVERSE EFFECT ON MARKET PRICE
OF COMMON STOCK AND WARRANTS. The Company has 4,600,000 Warrants outstanding,
exercisable at a price of $5.00 per share. Additionally, the Company has
reserved an aggregate of 2,360,000 shares of Common Stock for issuance upon
exercise of other outstanding warrants and options. To the extent that
outstanding options and warrants are exercised, dilution of the percentage
ownership of the Company's stockholders will occur, and any sales in the public
market of the Common Stock underlying such options and warrants may adversely
affect prevailing market prices for the Common Stock and the Warrants. Moreover,
the terms upon which the Company will be able to obtain additional equity
capital may be adversely affected since the holders of outstanding options and
warrants can be expected to exercise them at a time when the Company would, in
all likelihood, be able to obtain any needed capital on terms more favorable to
the Company than those provided in the outstanding options and warrants.
POSSIBLE INABILITY TO EXERCISE WARRANTS. The Company intends to qualify the
sale of the Common Stock issuable upon exercise of the Warrants in a limited
number of states. Although certain exemptions in the securities laws of certain
states might permit Warrants to be transferred to purchasers in states other
than those in which the Warrants were initially qualified, the Company will be
prevented from issuing Common Stock in such other states upon the exercise of
the Warrants unless an exemption from qualification is available or unless the
issuance of Common Stock upon exercise of the Warrants is qualified. The Company
is under no obligation to seek, and may decide not to seek or may not be able to
obtain, qualification of the issuance of such Common Stock in all of the states
in which the ultimate purchasers of the Warrants reside. In such a case, the
Warrants held will expire and have no value if such Warrants cannot be sold.
POTENTIAL ADVERSE EFFECT OF REDEMPTION OF WARRANTS. The Warrants may be
redeemed by the Company, with the consent of the Underwriters, at any time upon
notice of not less than 30 days, at a price of $.01 per Warrant (the "Redemption
Price"), provided the closing sales price of the Common Stock on all 20
consecutive trading days ending on the third day prior to the day on which the
Company gives notice has been at least 170% of the then effective exercise price
($8.50 based upon the current exercise price, subject to adjustment). Redemption
of the Warrants could force the holders to exercise the Warrants and pay the
exercise price at a time when it may be disadvantageous for the holders to do
so, to sell the Warrants at the then current market price when they might
otherwise wish to hold the Warrants or to accept the Redemption Price, which is
likely to be substantially less than the market value of the Warrants at the
time of redemption.
AUTHORIZATION AND DISCRETIONARY ISSUANCE OF PREFERRED STOCK. The Company's
Restated Certificate of Incorporation, as amended, authorizes the issuance of up
to 1,000,000 shares of Preferred Stock with such rights and preferences as may
be determined from time to time by the Board of Directors. No shares of
Preferred Stock are currently outstanding. Accordingly, under the Restated
Certificate of Incorporation, as amended, the Board of Directors may, without
stockholder approval, issue Preferred Stock with dividend, liquidation,
conversion, voting, redemption or other rights which could adversely affect the
voting power or other rights of the holders of the Common Stock. The issuance of
any shares of Preferred Stock having rights superior to those of the Common
Stock may result in a decrease of the value or market price of the Common Stock
and could further be used by the Board as a device to prevent change in control
of the Company. Holders of the Preferred Stock may have the right to receive
dividends, certain preferences in liquidation and conversion rights. In
addition, the Preferred Stock could be utilized under certain circumstances, as
a method of discouraging, delaying or preventing a change in control of the
Company. Although the Company does not currently intend to issue any shares of
Preferred Stock, there can be no assurance that the Company will not do so in
the future.
5
<PAGE>
USE OF PROCEEDS
The Company will derive net proceeds of approximately $21,800,000 upon
exercise of all the Warrants, after payment of the costs of this offering and
the 5% Warrant solicitation fee payable to the Underwriters (assuming that such
fee is payable with respect to all such Warrants). The Company intends to apply
approximately $4,000,000 of such proceeds to reduce outstanding indebtedness
under the Company's working capital line of credit with BankAtlantic, a federal
savings bank ("BankAtlantic"). The remaining net proceeds will be used to
finance any future acquisitions, purchase additional inventory and for other
working capital and general corporate purposes. The working capital line bears
interest at the rate of 1% over the prime rate as announced from time to time by
BankAtlantic and matures on May 31, 1997. The Company anticipates that the
amounts repaid under the credit facility with such proceeds will eventually be
reborrowed in order to finance future purchases of inventory.
PLAN OF DISTRIBUTION
The shares of Common Stock covered by this Prospectus are issuable upon
exercise of the Warrants. The Company issued 4,300,000 of the Warrants in
April 1994 as part of its initial public offering (the "Public Offering") of
"Units", each consisting of one share of Common Stock and two Warrants. The
Common Stock and the Warrants comprising the Units were detachable and
separately transferable upon issuance. The remaining 300,000 Warrants, which
are identical to the Warrants issued in the Public Offering, were issued by the
Company in February 1994 upon consummation of a bridge financing.
The Common Stock offered hereby is offered pursuant to the terms and
conditions of the Warrants as described below. In connection with the Public
Offering, the Company agreed, with respect to the exercise of the Warrants, to
pay the Underwriters a fee of 5% of the exercise price for each Warrant
exercised, provided that upon exercise thereof, (i) the market price of the
Common Stock is greater than the exercise price of the Warrant; (ii) the
exercise of the Warrant is solicited by the Underwriters; (iii) the Warrant is
not held in a discretionary account; (iv) disclosure of compensation
arrangements is made both at the time of the original offering and at the time
of exercise (by delivery of a Prospectus or as otherwise required by applicable
law, rule or regulation) and (v) the solicitation of the exercise of the Warrant
was not in violation of Rule 10b-6 (as such rule or any successor rule may be in
effect as of such time of exercise) promulgated under the Exchange Act. The
Company agreed to indemnify the Underwriters against certain liabilities in
connection with any post-effective amendment to the Registration Statement under
the Securities Act.
6
<PAGE>
The Underwriters acted as the underwriters in connection with the Public
Offering, in which the Company raised approximately $11,321,000 of net proceeds.
In connection with the Public Offering, the Company paid the Underwriters
approximately $950,000 in commissions and expenses, granted the Underwriters
Unit Purchase Options ("Options") to purchase an aggregate of 200,000 shares of
Common Stock and 400,000 Warrants, and granted the Underwriters certain other
rights. The Options, which are exercisable at $7.62 per Unit at any time until
April 11, 1998, grant the holders thereof certain "piggyback" and demand
registration rights. The Company also agreed to indemnify the Underwriters
against certain liabilities in connection with the Public Offering under the
Securities Act. In February 1994, GKN acted as placement agent for the Company's
bridge financing.
How to Exercise the Warrants
Holders of the Warrants may exercise the Warrants by completing the form of
"Purchase Form To Be Executed Upon Exercise of Warrant Certificate" appearing on
the reverse side of the Warrant certificate, and forwarding the completed and
duly executed Warrant certificate, together with the payment provided for
therein, to Continental Stock Transfer & Trust Company (the "Warrant Agent"), 2
Broadway, New York, New York 10004, telephone (212) 509-4000. There are certain
instructions on the reverse of the Warrant certificate; please contact the
Warrant Agent in the event you have any further questions. In the event that the
Warrant certificates and payments for exercise of the Warrants are not hand
delivered to the Warrant Agent, registered mail or insured overnight delivery
are recommended. In the case of beneficial owners of Warrants who hold in
"street name" or "nominee name," please contact your broker or bank to arrange
exercise. The holders of the Warrants do not have the rights or privileges of
holders of the Common Stock prior to the exercise of the Warrants.
DESCRIPTION OF WARRANTS
The Warrants were issued subject to the terms and conditions of the
Warrant Agreement (the "Warrant Agreement") between the Company and the
Warrant Agent. The following description of the Warrants is not complete and is
qualified in all respects by reference to the Warrant Agreement, which is filed
as an exhibit to the Registration Statement of which this Prospectus is a part.
See "Available Information."
Each Warrant entitles the holder thereof to purchase one share of Common
Stock for $5.00, subject to adjustment in certain circumstances, at any time
through and including April 11, 2001. The Warrants are redeemable by the
Company, with the consent of the Underwriters, upon notice of not less than 30
days, at the Redemption Price, provided that the last sale price of the Common
Stock on all 20 consecutive trading days ending on the third day prior to the
date on which the Company gives notice has been at least 170% of the then
effective exercise price of the Warrants (currently $8.50, based upon the
$5.00 exercise price, subject to adjustment).
The exercise price and the number of shares of Common Stock issuable upon the
exercise of the Warrants are subject to adjustment in certain circumstances;
including a stock dividend, recapitalization, reorganization, merger or
consolidation of the Company. No fractional shares will be issued upon the
exercise of the Warrants. If a Warrant holder exercises all the Warrants then
owned of record, the Company will pay to such Warrant holder, in lieu of the
issuance of any fractional share which is otherwise issuable to such holder, an
amount in cash based on the market value of the Common Stock on the last trading
day prior to the date of exercise. The Warrants are not subject to adjustment
for issuances of Common Stock at a price below the exercise price of the
Warrants.
Any extension of the term of the Warrants will be subject to compliance
with Rule 13e-4 under the Exchange Act including the filing of a Schedule 13E-4.
Notice of any extension of the exercise period will be given to the Warrant
holders. The Company does not presently contemplate any extension of the
exercise period.
In certain cases, the sale of securities by the Company upon exercise of
Warrants could violate the securities laws of the United States, certain
states thereof or other jurisdictions. The Company has agreed to use its best
efforts to cause a registration statement with respect to such securities under
the Securities Act to be effective during the term of the Warrants and to take
such other actions under the laws of various states as may be required to cause
the sale of securities upon exercise of Warrants to be lawful. However, the
Company will not honor the exercise of the Warrants if, in the opinion of its
Board of Directors upon advice of counsel, the sale of securities upon such
exercise would be unlawful under federal or state securities laws or otherwise.
The Company has taken action to qualify the sale of Common Stock in certain
states where it has reason to believe that beneficial holders of Warrants
reside. The fact that the Company has commenced such actions, however, does not
mean that it will be able to successfully qualify the sales of Common Stock.
In addition, there are other states in which shares of Common Stock may be
purchased under an exemption from state securities laws and/or future action by
the Company.
7
<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The General Corporation Law of the State of Delaware (the "GCL") authorizes
Delaware corporations to eliminate or limit the personal liability of a director
to the corporation or a stockholder for monetary damages for breach of certain
fiduciary duties as a director, other than his duty of loyalty to the
corporation and its stockholders, or for acts or omissions not in good faith or
involving intentional misconduct or knowing violation of law, and the unlawful
purchase or redemption of stock or payment of unlawful dividends or the receipt
of improper benefits. The Company's Restated Certificate of Incorporation, as
amended (the "Certificate of Incorporation"), includes a provision eliminating
such personal liability. The Certificate of Incorporation, as well as the
By-Laws of the Company, provide for the indemnification of the officers and
directors of the Company to the fullest extent permitted under the GCL. In
addition, the Company has executed agreements with the officers and directors of
the Company that require the Company to indemnify such individuals for
liabilities incurred by them because of an act, omission, neglect or breach of
duty committed while acting in the capacity of an officer or director. Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to the foregoing provisions, the Company has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
LEGAL MATTERS
Certain legal matters with respect to the Common Stock offered hereby have
been passed upon for the Company by Gratch Jacobs & Brozman, P.C.
EXPERTS
The financial statements of the Company as of December 31, 1995 and 1994,
and for each of the years in the two-year period ended December 31, 1995 have
been incorporated herein by reference and in the registration statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated herein by reference, and upon the authority of said
firm as experts in accounting and auditing.
8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various costs and expenses expected to
be incurred by the Company in connection with the sale and distribution of the
securities being registered. All of the amounts are estimated except the
Commission registration fee.
Commission Registration Fee........................... $ -0-
Blue Sky Fees and Expenses (including counsel fees)... 2,000.00
Transfer Agent's Fees and Expenses.................... 1,000.00
Accounting Fees....................................... 30,000.00
Legal Fees and Expenses............................... 7,500.00
Printing Expenses..................................... 7,500.00
Miscellaneous Expenses................................ 2,000.00
Total................................................. $ 50,000.00
Item 15. Indemnification of Directors and Officers.
The Company is incorporated under the laws of the State of Delaware.
Section 145 of the General Corporation Law of the State of Delaware (the "DGCL")
provides that a Delaware corporation may indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action,
suit or proceedings, whether civil, criminal, administrative or investigative
(other than an action by or in the right of such corporation), by reason of the
fact that such person was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees) judgments, fines, and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interest and, with respect to any criminal action or
proceedings, had no reasonable cause to believe that his conduct was illegal. A
Delaware corporation may indemnify any person who is, or is threatened to be
made, a party to any threatened, pending or completed action or suit by or in
the right of the corporation by reason of the fact that such person was a
director, officer, employee or agent of such corporation, or is or was serving
at the request of such corporation as director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit, provided such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests except that no indemnification is
permitted without judicial approval if such person is adjudged to be liable to
the corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses which such officer or director has actually
and reasonably incurred.
The Company's Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation") provides for the indemnification of directors
and officers of the Company to the fullest extent permitted by Section 145 of
the DGCL. In that regard, ARTICLE TENTH, paragraph A of the Certificate of
Incorporation provides that the personal liability of a director or officer of
the Company to the Company or its stockholders for monetary damages for breach
of fiduciary duty as a director or officer shall be limited to the fullest
extent permitted
II-1
<PAGE>
by the DGCL, as it now exists or may hereafter be amended and that any repeal or
modification of ARTICLE TENTH, paragraph A of the Certificate of Incorporation
by the stockholders of the Company shall not adversely affect any right or
protection of a director or officer of the Company existing at the time of such
repeal or modification.
In addition, Article VIII of the By-laws of the Company provide
indemnification to the fullest extent permitted by the DGCL as follows:
Section 1. Indemnification Generally. The Company shall, to the fullest
extent permitted by the General Company Law of the State of Delaware (the
"GCL"), as amended from time to time, indemnify all persons whom it may
indemnify pursuant thereto.
Section 2. Good Faith Defined. For purposes of any determination under this
Article VIII, a person shall be deemed to have acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
the Company, or, with respect to any criminal action, or proceeding, to have had
no reasonable cause to believe his conduct was unlawful, if his action is based
on the records or books of account of the Company or another enterprise, or on
information supplied to him by the officers of the Company or another enterprise
in the course of their duties, or on the advice of legal counsel for the Company
or another enterprise or on information or records given or reports made to the
Company or another enterprise by an independent certified public accountant or
by an appraiser or other expert selected with reasonable care by the Company or
another enterprise. The term "another enterprise" as used in this Section 2
shall mean any other corporation or partnership, joint venture, trust or other
enterprise of which such person is or was serving at the request of the Company
as a director, officer, employee or agent. The provisions of this Section 2
shall not be deemed to be exclusive or to limit in any way the circumstances in
which a person may be deemed to have met the applicable standard of conduct.
Section 3. Indemnification by a Court. Notwithstanding any determination on
the part of the Company or its agents that indemnification of any director ,
officer, employee or agent is not proper, and notwithstanding the absence of any
determination, any director, officer, employee or agent may apply to any court
of competent jurisdiction in the State of Delaware for indemnification to the
extent otherwise permissible under this Article VIII. The basis of such
indemnification by a court shall be a determination by such court that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standards of conduct set forth
in this Article VIII or the GCL, as the case may be. Notice of any application
for indemnification pursuant to this Section 3 shall be given to the Company
promptly upon the filing of such application.
Section 4. Non-Exclusivity of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by or granted pursuant
to this Article VIII shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
any By-Law, agreement, contract, vote of stockholders or disinterested directors
or pursuant to the direction (howsoever embodied) of any court of competent
jurisdiction or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, it being the policy of the
Company that indemnification of any director, officer, employee or agent of the
Company or any director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise who is serving at the
request of the Company shall be made to the fullest extent permitted by law. The
provisions of this Article VIII shall not be deemed to preclude the
indemnification of any director, officer, employee or agent of the Company or
any director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise who is serving at the request of the
Company who is not specified in this Article VIII but whom the Company has the
power or obligation to indemnify under the provisions of the GCL, or otherwise.
Section 5. Insurance. The Company may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
II-2
<PAGE>
such, whether or not the Company would have the power or the obligation to
indemnify him against such liability under the provisions of this Article VIII.
Section 6. Meaning of "Company" for Purposes of Article VIII. For purposes
of this Article VIII, reference to "the Company" include, in addition to the
corporation resulting from any consolidation or merger, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have power and authority to indemnify its directors, officers, and employees or
agents of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article VIII with
respect to the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had continued.
Section 7. Survival of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this Article VIII shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
The Company has executed agreements with Messrs. Nedivi, Gleason, Motisi,
Steele, Rosenfeld, Stern and Mitchell that require the Company to indemnify
these individuals for liabilities incurred by them because of an act or omission
or neglect or breach of duty committed while acting in the capacity of an
officer or director of the Company. Certain actions, including acts for which
the individual is removed or terminated for cause, are excluded from the
coverage of the agreement.
Item 16. Exhibits.
EXHIBIT DESCRIPTION
NO.
- ------- -----------
1.1 Underwriting Agreement, dated April 11, 1994, between the Company and
GKN Securities Corp and Brean Murray, Foster Securities Inc.(1)
3.1 Restated Certificate of Incorporation(1)
3.2 Certificate of Amendment to the Restated Certificate of Incorporation
3.3 By-Laws(1)
4.1 Form of Common Stock Certificate(1)
4.2 Form of Warrant Certificate(1)
4.3 Form of Unit Purchase Option Granted to Underwriters(1)
4.4 Form of Warrant issued in Bridge Financing(1)
4.5 Warrant Agreement between Continental Stock Transfer & Trust Company
and the Company(1)
5.1 Opinion of Gratch Jacobs & Brozman, P.C. (1)
10.1 Asset Purchase Agreement, dated February 15, 1995, among the Company,
Rada Electronic Industries Limited, Tasco Electronics Inc. and KST
Corp.(2)
10.2 Marketing, Management and Consulting Agreement, dated February 3,
1995, between the Company and Rada Electronics Industries Limited
10.3 Employment Agreement, dated June 9, 1995, between Zivi R. Nedivi and
the Company(3)
10.4 Amendment No. 1 to Employment Agreement, dated as of April 18, 1996,
between Zivi R. Nedivi and the Company
10.5 Employment Agreement, dated May 18, 1995, between John S. Gleason and
the Company(3)
10.6 Amendment No. 1 to Employment Agreement, dated as of April 18, 1996,
between John S. Gleason and the Company
II-3
<PAGE>
10.7 Employment Agreement, dated June 2, 1995, between Anthony Motisi and
the Company (3)
10.8 Amendment No. 1 to Employment Agreement, dated as of April 18, 1996,
between Anthony Motisi and the Company
10.9 Employment Agreement, dated as of January 30, 1996, between Paul F.
Steele and the Company
10.10 Amendment No. 1 to Employment Agreement, dated April 18, 1996,
between Paul F. Steele and the Company
10.11 Indemnification Agreement, dated as of April 23, 1996, between the
Company and Joram D. Rosenfeld
10.12 Indemnification Agreement, dated as of April 23, 1996, between the
Company and Yoav Stern
10.13 Indemnification Agreement, dated as of April 23, 1996, between the
Company and David Jan Mitchell
10.14 Stockholders Agreement, dated August 24, 1995, among Zivi R. Nedivi,
Joram D. Rosenfeld and Yoav Stern(4)
10.15 Amendment to Stockholders Agreement, dated as of January 15 1996,
among Zivi R. Nedivi, Joram D. Rosenfeld and Yoav Stern
10.16 Stock Purchase Agreement, dated August 24, 1995, between the Company
and Zivi R. Nedivi(4)
10.17 Amendment to Stock Purchase Agreement, dated as of January 15, 1996,
between the Company and Zivi R. Nedivi
10.18 1995 Stock Option Plan(5)
10.19 Warrant issued to Allen & Company
10.20 Form of Warrant issued to J.W. Charles Securities Inc.
10.21 Warrant issued to John Gleason
10.22 1996 Stock Option Plan(6)
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Gratch Jacobs & Brozman, P.C.
(included as Exhibit 5.1)
24.1 Power of Attorney (included as part of signature page)
__________________
(1) Incorporated by reference to Amendment No. 1 to Registration Statement on
Form S-1, Number 33-75750, filed with the Commission on April 1, 1994.
(2) Incorporated by reference to the Current Report on From 8-K/A filed with
the Commission on March 14, 1994.
(3) Incorporated by reference to Post-Effective Amendment No. 1 to
Registration Statement on Form S-1, Number 33-75750, filed with the
Commission on October 13, 1995.
(4) Incorporated by reference to the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1995.
(5) Incorporated by reference to the Company's Proxy Statement for Special
Meeting dated May 12, 1995.
(6) Incorporated by reference to the Company's Proxy Statement for Annual
Meeting dated July 23, 1996.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the registration statement; and
(iii) To include any additional or changed material information on
the plan of distribution;
II-4
<PAGE>
(2) For determining liability under the Securities Act of 1933, to
treat each such post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering.
(3) To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
(b) That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of the
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant under Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this Registration Statement as
of the time it was declared effective.
(2) For the purpose of determining liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Post-Effective Amendment No. 2 to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Sunrise, State of Florida, on the 9th day of
September 1996.
KELLSTROM INDUSTRIES, INC.
By: /s/ ZIVI R. NEDIVI
-----------------------
Zivi R. Nedivi
Chief Executive Officer and President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Zivi R. Nedivi and/or John Gleason his true and
lawful attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, including post-effective amendments, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the Securities
and Exchange Commission and any state securities commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, and hereby ratifies and confirms all that said
attorneys-in-fact and agents, each acting alone, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s ZIVI R. NEDIVI Chief Executive Officer, President September 9, 1996
- ------------------ and Director
Zivi R. Nedivi (Principal Executive Officer)
/s/ YOAV STERN Co-Chairman of the Board of Directors September 9, 1996
- ------------------
Yoav Stern
/s/ JORAM D. ROSENFELD Co-Chairman of the Board of Directors September 9, 1996
- ------------------
Joram D. Rosenfeld
/s/ DAVID J. MITCHELL Director September 9, 1996
- ------------------
David J. Mitchell
/s/ JOHN GLEASON Chief Financial Officer and Treasurer September 9, 1996
- ------------------ (Principal Financial Officer and
John Gleason Principal Accounting Officer)
</TABLE>
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT DESCRIPTION PAGE
1.1 Underwriting Agreement, dated April 11, 1996, between
the Company and GKN Securities Corp. and Brean
Murray, Foster Securities Inc.(1)
3.1 Restated Certificate of Incorporation(1)
3.2 Certificate of Amendment to the Restated
Certificate of Incorporation
3.3 By-Laws(1)
4.1 Form of Common Stock Certificate(1)
4.2 Form of Warrant Certificate(1)
4.3 Form of Unit Purchase Option Granted to
Underwriters(1)
4.4 Form of Warrant issued in Bridge Financing(1)
4.5 Warrant Agreement between Continental Stock
Transfer & Trust Company and the Company(1)
5.1 Opinion of Gratch Jacobs & Brozman, P.C.(1)
10.1 Asset Purchase Agreement dated February 15,
1995, among the Company, Rada Electronic
Industries Limited, Tasco Electronics Inc.
and KST Corp.(2)
10.2 Marketing, Management and Consulting Agreement,
dated February 3, 1995, between the Company and
Rada Electronic Industries, Ltd.
10.3 Employment Agreement, dated June 9, 1995, between
Zivi R. Nedivi and the Company(3)
10.4 Amendment No. 1 to Employment Agreement, dated
as of April 18, 1996, between Zivi R. Nedivi and
the Company
10.5 Employment Agreement, dated May 18, 1995, between
John S. Gleason and the Company(3)
10.6 Amendment No. 1 to Employment Agreement, dated
as of April 18, 1996, between John S. Gleason
and the Company
10.7 Employment Agreement, dated June 2, 1995, between
Anthony Motisi and the Company(3)
10.8 Amendment No. 1 to Employment Agreement, dated as
of April 18, 1996, between Anthony Motisi and the
Company
10.9 Employment Agreement, dated as of January 30,
1996, between Paul F. Steele and the Company
10.10 Amendment No. 1 to Employment Agreement, dated as
of April 18, 1996, between Paul F. Steele and the
Company
10.11 Indemnification Agreement, dated as of April 23,
1996, between the Company and Joram D. Rosenfeld
<PAGE>
EXHIBIT NO. EXHIBIT DESCRIPTION PAGE
10.12 Indemnification Agreement, dated as of April 23,
1996, between the Company and Yoav Stern
10.13 Indemnification Agreement, dated as of April 23,
1996, between the Company and David Jan Mitchell
10.14 Stockholders Agreement, dated August 24, 1995,
among Zivi R. Nedivi, Joram D. Rosenfeld and Yoav
Stern(4)
10.15 Amendment to Stockholders Agreement, dated as of
January 15, 1996, among Zivi R. Nedivi, Joram D.
Rosenfeld and Yoav Stern
10.16 Stock Purchase Agreement, dated August 24, 1995,
between the Company and Zivi R. Nedivi(4)
10.17 Amendment to Stock Purchase Agreement, dated as of
January 15, 1996, between the Company and Zivi R.
Nedivi
10.18 1995 Stock Option Plan(5)
10.19 Warrant issued to Allen & Company
10.20 Form of Warrant issued to J. W. Charles
Securities Inc.
10.21 Warrant issued to John Gleason
10.22 1996 Stock Option Plan(6)
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Gratch Jacobs & Brozman, P.C
(included as Exhibit 5.1)
24.1 Power of Attorney (included as part of signature page)
- --------------------------------------
(1) Incorporated by reference to Amendment No. 1 to Registration Statement
on Form S-l, Number 33-75750, filed with the Commission on April 1,
1994.
(2) Incorporated by reference to the Current Report on Form 8-K/A filed
with the Commission on March 14, 1994.
(3) Incorporated by reference to Post-Effective Amendment No. 1 to
Registration Statement on Form S-1, Number 33-75750, filed with the
Commission on October 13, 1995.
(4) Incorporated by reference to the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1995. (5) Incorporated by
reference to the Company's Proxy Statement for Special Meeting dated
May 12, 1995.
(5) Incorporated by reference to the Company's Proxy Statement for Special
Meeting dated May 12, 1995.
(6) Incorporated by reference to the Company's Proxy Statement for Annual
Meeting dated July 23, 1996
EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE
OF INCORPORATION OF
ISRAEL TECH ACQUISITION CORP.
UNDER SECTION 242 OF THE GENERAL CORPORATION LAW
Israel Tech Acquisition Corp., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY:
FIRST: Pursuant to Section 242 of the Delaware General Corporation Law,
the Board of Directors of the Corporation, pursuant to a Meeting on May 10,
1995, duly adopted the following resolution which was duly approved by the
stockholders owning a majority of the outstanding stock of the Corporation
entitled to vote thereon on June 22, 1995.
RESOLVED, that it is hereby proposed and declared advisable that Articles
First and Sixth of the Restated Certificate of Incorporation of the
Corporation be amended to read their entirety as follows:
"FIRST: The Name of the Corporation is Kellstrom Industries, Inc."
"SIXTH: Directors shall be divided into two classes. At each annual
meeting of stockholders, directors elected to succeed those directors whose
terms expire shall be elected for a term of office to expire at the second
succeeding annual meeting of stockholders after their election. Except as the
GCL may otherwise require, in the interim between annual meetings of
stockholders or of special meetings of stockholders called for the election of
directors and/or for the removal of one or more directors and for the filling
of any vacancy in that connection, newly created directorships and any
vacancies in the Board of Directors, including unfilled vacancies resulting
from the removal of directors for cause, may be filled by the vote of a
majority of the remaining Directors then in office, although less than a quorum,
or by the sole remaining Director. All Directors shall hold office until the
expiration of their respective terms of office and until their successors shall
have been elected and qualified."
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Amendment to be signed, under penalties
of perjury by YOAV STERN, its CO-CHIEF EXECUTIVE OFFICER and attested to by
David Jan Mitchell, its Secretary, this 22nd day of June, 1995.
ISRAEL TECH ACQUISITION CORP.
ATTEST: By: /s/ YOAV STERN
------------------------
Name: Yoav Stern
Title: Co-Chief Executive Officer
By: /s/ DAVID JAN MITCHELL
----------------------
David Jan Mitchell
Secretary
(CORPORATE SEAL)
EXHIBIT 10.2
MARKETING, MANAGEMENT AND CONSULTING SERVICES
AGREEMENT
MARKETING, MANAGEMENT AND CONSULTING SERVICES AGREEMENT, dated February 3,
1995, between Israel Tech Acquisition Corp., a Delaware corporation with
offices at 101 E. 52ND ST., NY, NY 10022 ("ITAC"), and Rada Electronic
Industries Ltd., an Israeli corporation with offices at Medinat Hayehudim 12,
P.O.B. 2059, Herzlia, Israel ("Rada").
RECITALS
A. Concurrently herewith, ITAC is entering into an agreement in principle
("Agreement in Principle") which contemplates the preparation, delivery and
execution of a definitive purchase agreement with Rada and/or one more of Rada's
affiliated entities (the "Purchase Agreement") pursuant to which ITAC would
acquire the business of Kellstrom Industries, Inc. ("Kellstrom"), an indirect
subsidiary of Rada which is engaged in the trade of jet engines and jet
engine parts.
B. One of ITAC's business objectives is to establish operations in
Israel which would be compatible with, and complementary to, Kellstrom's
business.
C. Towards that end, ITAC intends to explore the possibility of
establishing, among others, jet engine refurbishing facilities in Israel,
desires to market Kellstrom's services as a broader based business, and has
requested that Rada use its best efforts to assist ITAC and Kellstrom with
respect to such contemplated Israeli operations and marketing efforts.
D. Rada is in need of, and desires to retain ITAC to provide it with,
certain management and consulting services, and ITAC is prepared to provide
Rada with such services, as more particularly described herein.
The parties agree as follows:
1. MARKETING ASSISTANCE TO BE PROVIDED BY RADA. From time to time
as shall be requested by the Board of Directors of ITAC or by its Chief
Executive Officer, Rada shall provide ITAC and Kellstrom with advice and
assitance in marketing Kellstrom's services in the United States, Israel and
other countries. Compensation payable to Rada for such marketing advice and
assistance, and the payment terms thereof, shall be agreed to by the parties on
an AD HOC basis at the time of each such request for services.
<PAGE>
2. MANAGEMENT AND CONSULTING SERVICES TO BE PROVIDED BY ITAC.
(a) From time to time as shall be requested by the Board of
Directors of Rada, ITAC shall provide Rada with management and consulting
services on matters relating to strategic and financial planning.
(b) In connection with the foregoing, ITAC shall use its best
efforts to make available to Rada the personal services of Joram Rosenfeld,
Yoav Stern and Zivi Nedivi, on a part time basis and on an "as available" basis.
The parties acknowledge and agree that ITAC shall be in compliance with the
foregoing if the services of any one of such individuals are made available to
Rada by ITAC for such purposes.
(c) In consideration for ITAC making its personnel available to
Rada pursuant to this Agreement, Rada shall pay ITAC an annual fee (the
"Management Fee") of Two Hundred Thousand Dollars ($200,000). Such Management
Fee shall be payable as follows:
(i) Ten Thousand Dollars ($10,000), to be credited to the
initial Management Fee, shall be paid by Rada to ITAC upon the
execution of this Agreement.
(ii) One Hundred Ninety Thousand Dollars ($190,000),
representing the balance of the initial Management Fee, shall be paid
by Rada to ITAC upon the closing of the transactions contemplated by
the Purchase Agreement.
(iii) Each subsequent Management Fee shall be paid in full by
Rada to ITAC in advance on each anniversary of this Agreement.
3. TERM.
(a) The term of this Agreement shall commence on the date hereof
and expire at the close of business on February ____, 2000.
(b) Notwithstanding the foregoing, if the transactions
contemplated by the Agreement in Principle and, if executed, the Purchase
Agreement, shall not close, this Agreement shall terminate as of the effective
date of the termination of the Agreement in Principle or the Purchase Agreement,
as the case may be and the portion of the initial Management Fee theretofore
paid to ITAC shall be refunded by ITAC to Rada.
-2-
<PAGE>
4. DESIGNATION OF RADA DIRECTOR NOMINEES. For so long as this
Agreement is in effect, ITAC shall have the right to designate for nomination
by Rada's Board of Directors, for election by Rada's shareholders, two (2)
members of the Board of Directors of Rada. The initial designees of ITAC on
Rada's Board of Directors (the "Initial Designees") shall be Joram Rosenfeld
and Yoav Stern. Should either Initial Designee resign from such position, ITAC
shall thereafter have the right to so designate only one (1) director for
election to Rada's Board of Directors, which designee shall be selected by ITAC
in its sole discretion, and Rada shall not unreasonably withhold its consent to
the selection of said nominee. Any director(s) so nominated by ITAC to the Board
of Directors of Rada who are elected to so service shall be entitled to the same
benefits as any other director of Rada who is not a "public shareholder
representative" (as defined under Israeli law).
5. VOTING OF RADA SHARES. For so long as this Agreement is in
effect, ITAC shall vote any shares of Rada capital stock then hold by ITAC in
support of any Rada shareholder action recommended by the Board of Directors
of Rada.
6. RELATIONSHIP OF PARTIES. ITAC and Rada acknowledge and agree that
each party is an independent contractor and not a joint venturer with, or
partner of, the other and that the relationship between the parties is not
intended to be that of joint venture or partnership.
7. NON-DISCLOSURE. Neither party shall disclose or furnish to any
other person, firm or corporation, except to the extent required by law or by
order of any court or govermental agency, (a) any information relating to any
confidential process, technique or procedure used by the other party which is
not a matter of public record or generally known by competing entities; or (b)
any information relating to the operations or financial status of the other
party, including, without limitation, all financial data and sources of
financing, which is not specifically a matter of public record; or (c) any
information of a confidential nature obtained as a result of any prior, present
of future relationship with the other party, which is not specifically a matter
of public record and not generally known by competing entities; or (d) any trade
secrets of the other party.
In the event that either party shall breach any of the provisions
of this Section 7, or in the event that any such breach is threatened by either
party, in addition to and without limiting or waiving any other remedies
available to the other party at law or in equity, the other party shall be
entitled to immediate injunctive relief in any court, domestic or foreign,
having the capacity to grant such relief, to restrain any such breach or
threatened breach and to enforce the provisions of this
-3-
<PAGE>
Section 7. Each party acknowledges and agrees that there is no adequate remedy
at law for any such breach or threatened breach and, in the event that any
proceeeding is brought seeking injunctive relief, such party shall not use as a
defense thereto that there is an adequate remedy at law.
8. ASSIGNMENT. The rights and obligations of either party under this
Agreement may not be assigned without the prior written consent of the other
party.
9. BINDING EFFECT. This Agreement shall extend to and be binding
upon the parties and shall inure to the benefit of their respective successors
and permitted assigns.
10. NOTICES. Any notice required or permitted to be given under this
Agreement to either party shall be sufficient if in writing and if sent by
telecopier or by registered or certified mail, postage prepaid, return receipt
requested, to the address of such party hereinabove set forth, or to such other
address as such party may hereafter designate by a notice given to the other
party in the manner provided in this Section.
11. WAIVER. A waiver by a party hereto of a breach of any term,
covenant or condition of this Agreement by the other party hereto shall not
operate or be construed as a waiver of any other or subsequent breach by such
party of the same or any other term, covenant or condition hereof.
12. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the parties with respect to the subject matter hereof and no waiver,
modification, change or amendment of any of its provisions shall be valid
unless in writing and signed by the party against whom such claimed waiver,
modification, change or amendment is sought to be enforced.
13. AUTHORITY. Each party represents and warrants to the other party
that it has the power, authority and right to enter into this Agreement and to
carry out and perform the terms, covenants and conditions hereof.
14. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of New York
without giving effect to principles relating to conflicts of law.
15. SEVERABILITY. In the event that any of the provisions of this
Agreement, or any portion thereof, shall be held to be invalid or unenforceable,
the validity and enforceability of the remaining provisions hereof shall not be
affected or impaired but shall remain in full force and effect.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ISRAEL TECH ACQUISITION CORP.
By: /s/ J. ROSENFELD
------------------------------
Name: Joram D. Rosenfeld
----------------------------
Title: CO-CHIEF EXECUTIVE OFFICER
---------------------------
RADA ELECTRONIC INDUSTRIES LTD.
By: /s/ HAIM NISSENSON
------------------------------
Name: Haim Nissenson
----------------------------
Title: Chairman
---------------------------
-5-
EXHIBIT 10.4
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
AMENDMENT NO. 1, dated as of April 18, 1996, to the Employment Agreement,
dated as of June 9, 1995 (the "Employment Agreement"), between Kellstrom
Industries, Inc. , a Delaware corporation (the "Company"), and Zivi R. Nedivi
(the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is employed by the Company as its President and Chief
Executive Officer pursuant to the terms and provisions contained in the
Employment Agreement;
WHEREAS, the Company desires to indemnify the Executive in order to assure the
Executive that he will not, pursuant to the terms and conditions contained
herein, incur personal liability for actions taken in carrying out his corporate
responsibilities;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Company and the Executive hereby agree as follows:
1. INDEMNIFICATION. If the Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and the Executive had no reasonable cause to believe that his conduct
was unlawful or detrimental to the Company, the Company shall indemnify and hold
harmless the Executive and his heirs and legal representatives from and against
any and all claims, losses, liabilities, damages, costs, demands, causes of
action (whether legal, equitable, administrative, civil or criminal) ,
judgments, settlements (subject to the last sentence of paragraph 3 hereof) ,
fines, court costs and other expenses of any kind or nature whatsoever,
including, without limitation, attorneys' fees and disbursements (collectively,
"Losses"), which may be threatened against, incurred or suffered by the
Executive or his heirs and legal representatives in connection with, relating to
or arising out of, directly or indirectly, the Executive's performance, duties
and responsibilities to, for and on behalf of, the Company, including, without
limitation, (i) the Employment Agreement and all actions or omissions taken
thereunder and (ii) any acts, omissions or alleged acts or omissions arising out
of the Executive's activities on behalf of the Company or in furtherance of the
interests of the Company.
2. EXCEPTIONS. Notwithstanding anything contained herein or in the By-Laws
of the Company, the Company shall have no obligation to indemnify the Executive
if the Loss incurred by the Executive (i) arises out of an action brought
directly by the Company against the Executive or (ii) arises, directly or
indirectly, as a result of the Executive being terminated for cause (as such
term is defined in the Employment Agreement).
<PAGE>
3. NOTIFICATION OF CLAIM. Promptly after receipt by the Company of notice
of any claim against the Executive pursuant to which the Executive is entitled
to indemnification, the Company shall have the right to assume the defense of
such claim, including the employment of counsel of its choice. Although the
Executive shall have the right to employ his own counsel, the fees and expenses
of such counsel shall be at the expense of the Executive. The Company shall not
be liable for any settlement of any claim or action effected without its written
consent, PROVIDED that such consent was not unreasonably withheld.
4. PAYMENT OF INDEMNITY AMOUNTS. The Company agrees to pay all amounts
payable in respect of Losses immediately upon its receipt of a statement with
respect thereto rendered by the Executive, together with appropriate supporting
documentation thereof. It is the express intention of the parties hereto that
all such amounts shall be paid by the Company on or before the date payment
thereof is due, and that the Executive shall not be required at any time to bear
any costs or expenses on account of Losses.
5. SUCCESSORS AND ASSIGNS. The provisions of this Amendment No. 1 shall
inure to the benefit of and be binding upon the Company and its successors and
assigns and the heirs and legal representatives of the Executive. The Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform the terms and
conditions contained herein in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. As
used herein, the "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes this
Amendment by operation of law, or otherwise.
6. EFFECT OF AMENDMENT. Except as expressly set forth herein, the
provisions contained herein shall not constitute an amendment of any term or
provision of the Employment Agreement, and all such terms and conditions shall
remain in full force and effect and are hereby ratified and confirmed in all
respects.
7. AMENDMENT. This Amendment No. 1 may not be amended or modified otherwise
than by a written agreement executed by the parties hereto.
8. COUNTERPARTS. This Amendment No. 1 may be executed in counterparts, each
of which shall be an original and all of which, taken together, shall constitute
one and the same agreement.
9. CAPTIONS. The captions of this Amendment No. 1 are not part of the
provisions hereof and shall have no force and effect.
10. GOVERNING LAW. This Amendment No. 1 shall be governed by and construed
in accordance with the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to
the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first written above.
KELLSTROM INDUSTRIES, INC.
By: /s/ ANTHONY MOTISI
-------------------------
Name: Anthony Motisi
Title: Vice President
EXECUTIVE
/s/ ZIVI R. NEDIVI
------------------------
EXHIBIT 10.6
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
AMENDMENT NO. 1, dated as of April 18, 1996, to the Employment Agreement,
dated as of May 18, 1995 (the "Employment Agreement"), between Kellstrom
Industries, Inc. , a Delaware corporation (the "Company"), and John S. Gleason
(the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is employed by the Company as its Chief Financial Officer
pursuant to the terms and provisions contained in the Employment Agreement;
WHEREAS, the Company desires to indemnify the Executive in order to assure the
Executive that he will not, pursuant to the terms and conditions contained
herein, incur personal liability for actions taken in carrying out his corporate
responsibilities;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Company and the Executive hereby agree as follows:
1. INDEMNIFICATION. If the Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and the Executive had no reasonable cause to believe that his conduct
was unlawful or detrimental to the Company, the Company shall indemnify and hold
harmless the Executive and his heirs and legal representatives from and against
any and all claims, losses, liabilities, damages, costs, demands, causes of
action (whether legal, equitable, administrative, civil or criminal),
judgments, settlements (subject to the last sentence of paragraph 3 hereof),
fines, court costs and other expenses of any kind or nature whatsoever,
including, without limitation, attorneys' fees and disbursements (collectively,
"Losses") , which may be threatened against, incurred or suffered by the
Executive or his heirs and legal representatives in connection with, relating to
or arising out of, directly or indirectly, the Executive's performance, duties
and responsibilities to, for and on behalf of, the Company, including, without
limitation, (i) the Employment Agreement and all actions or omissions taken
thereunder and (ii) any acts, omissions or alleged acts or omissions arising out
of the Executive's activities on behalf of the Company or in furtherance of the
interests of the Company.
2. EXCEPTIONS. Notwithstanding anything contained herein or in the By-Laws
of the Company, the Company shall have no obligation to indemnify the Executive
if the Loss incurred by the Executive (i) arises out of an action brought
directly by the Company against the Executive or (ii) arises, directly or
indirectly, as a result of the Executive being terminated for cause (as such
term is defined in the Employment Agreement).
<PAGE>
3. NOTIFICATION OF CLAIM. Promptly after receipt by the Company of notice
of any claim against the Executive pursuant to which the Executive is entitled
to indemnification, the Company shall have the right to assume the defense of
such claim, including the employment of counsel of its choice. Although the
Executive shall have the right to employ his own counsel, the fees and expenses
of such counsel shall be at the expense of the Executive. The Company shall not
be liable for any settlement of any claim or action effected without its written
consent, PROVIDED that such consent was not unreasonably withheld.
4. PAYMENT OF INDEMNITY AMOUNTS. The Company agrees to pay all amounts
payable in respect of Losses immediately upon its receipt of a statement with
respect thereto rendered by the Executive, together with appropriate supporting
documentation thereof. It is the express intention of the parties hereto that
all such amounts shall be paid by the Company on or before the date payment
thereof is due, and that the Executive shall not be required at any time to bear
any costs or expenses on account of Losses.
5. SUCCESSORS AND ASSIGNS. The provisions of this Amendment No. 1 shall
inure to the benefit of and be binding upon the Company and its successors and
assigns and the heirs and legal representatives of the Executive. The Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform the terms and
conditions contained herein in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. As
used herein, the "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes this
Amendment by operation of law, or otherwise.
6. EFFECT OF AMENDMENT. Except as expressly set forth herein, the
provisions contained herein shall not, constitute an amendment of any term or
provision of the Employment Agreement, and all such terms and conditions shall
remain in full force and effect and are hereby ratified and confirmed in all
respects.
7. AMENDMENT. This Amendment No. 1 may not be amended or modified otherwise
than by a written agreement executed by the parties hereto.
8. COUNTERPARTS. This Amendment No. 1 may be executed in counterparts, each
of which shall be an original and all of which, taken together, shall constitute
one and the same agreement.
9. CAPTIONS. The captions of this Amendment No. 1 are not part of the
provisions hereof and shall have no force and effect.
10. GOVERNING LAW. This Amendment No. 1 shall be governed by and construed
in accordance with the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant
to the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first written above.
KELLSTROM INDUSTRIES, INC.
By:/s/ ZIVI R. NEDIVI
---------------------------
Name: Zivi R. Nedivi
Title: President and Chief
Executive Officer
EXECUTIVE
/s/ JOHN S. GLEASON
------------------------------
EXHIBIT 10.8
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
AMENDMENT NO. 1, dated as of April 18, 1996, to the Employment Agreement,
dated as of June 2, 1995, (the "Employment Agreement"), between Kellstrom
Industries, Inc. , a Delaware corporation (the "Company"), and Anthony Motisi
(the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is employed by the Company as its Vice President -
Operations pursuant to the terms and provisions contained in the Employment
Agreement;
WHEREAS, the Company desires to indemnify the Executive in order to assure the
Executive that he will not, pursuant to the terms and conditions contained
herein, incur personal liability for actions taken in carrying out his corporate
responsibilities;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Company and the Executive hereby agree as follows:
1. INDEMNIFICATION. If the Executive acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and the Executive had no reasonable cause to believe that his conduct
was unlawful or detrimental to the Company, the Company shall indemnify and hold
harmless the Executive and his heirs and legal representatives from and against
any and all claims, losses, liabilities, damages, costs, demands, causes of
action (whether legal, equitable, administrative, civil or criminal),
judgments, settlements (subject to the last sentence of paragraph 3 hereof),
fines, court costs and other expenses of any kind or nature whatsoever,
including, without limitation, attorneys, fees and disbursements (collectively,
"Losses"), which may be threatened against, incurred or suffered by the
Executive or his heirs and legal representatives in connection with, relating to
or arising out of, directly or indirectly, the Executive's performance, duties
and responsibilities to, for and on behalf of, the Company, including, without
limitation, (i) the Employment Agreement and all actions or omissions taken
thereunder and (ii) any acts, omissions or alleged acts or omissions arising out
of the Executive's activities on behalf of the Company or in furtherance of the
interests of the Company.
2. EXCEPTIONS. Notwithstanding anything contained herein or in the By-Laws
of the Company, the Company shall have no obligation to indemnify the Executive
if the Loss incurred by the Executive (i) arises out of an action brought
directly by the Company against the Executive or (ii) arises, directly or
indirectly, as a result of the Executive being terminated for cause (as such
term is defined in the Employment Agreement).
<PAGE>
3. NOTIFICATION OF CLAIM. Promptly after receipt by the Company of notice
of any claim against the Executive pursuant to which the Executive is entitled
to indemnification, the Company shall have the right to assume the defense of
such claim, including the employment of counsel of its choice. Although the
Executive shall have the right to employ his own counsel, the fees and expenses
of such counsel shall be at the expense of the Executive. The Company shall not
be liable for any settlement of any claim or action effected without its written
consent, provided that such consent was not unreasonably withheld.
4. PAYMENT OF INDEMNITY AMOUNTS. The Company agrees to pay all amounts
payable in respect of Losses immediately upon its receipt of a statement with
respect thereto rendered by the Executive, together with appropriate supporting
documentation thereof. It is the express intention of the parties hereto that
all such amounts shall be paid by the Company on or before the date payment
thereof is due, and that the Executive shall not be required at any time to bear
any costs or expenses on account of Losses.
5. SUCCESSORS AND ASSIGNS. The provisions of this Amendment No. 1 shall
inure to the benefit of and be binding upon the Company and its successors and
assigns and the heirs and legal representatives of the Executive. The Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform the terms and
conditions contained herein in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. As
used herein, the "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes this
Amendment by operation of law, or otherwise.
6. EFFECT OF AMENDMENT. Except as expressly set forth herein, the
provisions contained herein shall not constitute an amendment of any term or
provision of the Employment Agreement, and all such terms and conditions shall
remain in full force and effect and are hereby ratified and confirmed in all
respects.
7. AMENDMENT. This Amendment No. 1 may not be amended or modified otherwise
than by a written agreement executed by the parties hereto.
8. COUNTERPARTS. This Amendment No. 1 may be executed in counterparts, each
of which shall be an original and all of which, taken together, shall constitute
one and the same agreement.
9. CAPTIONS. The captions of this Amendment No. 1 are not part of the
provisions hereof and shall have no force and effect.
10. GOVERNING LAW. This Amendment No. 1 shall be governed by and construed
in accordance with the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant
to the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first written above.
KELLSTROM INDUSTRIES, INC.
By:/s/ ZIVI R. NEDIVI
-------------------------
Name: Zivi R. Nedivi
Title: President and Chief
Executive Officer
EXECUTIVE
/s/ ANTHONY MOTISI
----------------------------
EXHIBIT 10.9
EMPLOYMENT AGREEMENT
This Agreement is entered into as of January 30, 1996 between Kellstrom
Industries, Inc. (formerly Israel Tech Acquisition Corp.), a Delaware
corporation, having its principal place of business at Sawgrass International
Corporate Park, 14000 Northwest Fourth Street, Sunrise, Florida 33325 (the
"Company"), and Paul F. Steele, residing at 9203B Boca Garden Circle South, Boca
Raton, Florida, 33496 (the "Executive").
WITNESSETH:
WHEREAS, the Executive has assumed duties of a responsible nature to the
benefit of the Company and its Board of Directors; and
WHEREAS, the Board of Directors of the Company believes it to be in the
best interests of the Company to enter into this Agreement to assure the
Executive's continuing services to the Company and to diminish any distraction
on the part of the Executive resulting from personal uncertainties and risks
associated with assuming this position;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the Company and the Executive hereby agree as follows:
1. DEFINITIONS.
(a) The "Agreement" shall mean this Employment Agreement between the
Company and the Executive.
(b) The "Board" shall mean the Board of Directors of the Company.
(c) A "Change of Control" shall mean (i) any transaction that has the
result that stockholders of the Company immediately before such transaction
cease to own at least 51% of (x) the voting stock of the Company or (y) of any
entity that results from the participation of the Company in a reorganization,
liquidation or any other form of corporate transaction; (ii) a merger,
consolidation, reorganization, liquidation or dissolution in which the Company
does not survive; or (iii) a sale, lease, exchange or other disposition of all
or substantially all the property and assets of the Company.
<PAGE>
(d) The "Company" shall mean Kellstrom Industries, Inc. (formerly Israel
Tech Acquisition Corp.), a Delaware corporation.
(e) "Dependents" shall mean the Executive's spouse and children, if any.
(f) The "Effective Date" shall mean January 1, 1996.
(g) The "Employment Period" shall mean the period commencing on the
Effective Date and ending on the fifth anniversary of the Effective Date.
(h) The "Executive" shall mean Paul F. Steele.
(i) The "Health Insurance" shall mean such health insurance as is
available to other contract employees of the Company.
(j) The "Loan" shall have the meaning set forth Section 3(d) of this
Agreement.
(k) The "Pension Plan" shall have the meaning set forth is Section 3(c)
(i) of this Agreement.
(l) The "Salary" shall mean the amount set forth in Section 3(b) of
this Agreement.
2. EMPLOYMENT PERIOD. The Company hereby agrees to continue the Executive
in his employ, and the Executive hereby agrees to remain in the employ of the
Company, for the duration of the Employment Period under the terms and
conditions provided herein. This Agreement shall terminate at the end of the
Employment Period, unless it is terminated prior to the end of the Employment
Period by virtue of one of the provisions of Section 5 of this Agreement.
3. TERMS OF EMPLOYMENT
(a)POSITION AND DUTIES. During the Employment Period the Executive's
position shall be the Vice President - Purchasing. The Executive's services
shall be performed at the Company's headquarters or a location where a
substantial activity for which the Executive has responsibility is located.
(b) COMPENSATION.
2
<PAGE>
(i) BASE SALARY. As of the Effective Date of the Agreement, the
Executive's annual salary (the "Salary") shall be $130,000. During the
Employment Period, the Executive's Salary may be reviewed and changed; however,
the Company shall not pay the Executive a Salary less than $130,000 during the
Employment Period. Any increase in the Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement.
(ii) ANNUAL BONUS. For each calendar year commencing with the year
ending December 31, 1996, at the end of which the Executive is employed by the
Company as its Vice-President:
(A) if the Company has Net Income (as defined below) for such year
of an amount equal to the target net income before taxes (such net
income to be determined by eliminating the effect of any intercompany
transactions prior to the closing date of the Acquisition and any
deductions from net income in respect of transaction expenses related to
the Acquisition), determined in accordance with generally accepted
accounting principles in the U.S. as in effect from time to time (the
"Net Income") as approved by the board of directors of the Company (or
the Executive Committee of the Board, if one exists) for such year (the
"Target"), the Executive shall be entitled to a bonus in an amount equal
to $50,000.
(B) if the Company has Net Income for such year of more than the
Target and less than 150% of the Target, the Executive shall be entitled
to a bonus as calculated below;
B = $50,000 + $50,000 X (NI - T)
--------
T
where:
B = the bonus earned in such year.
T = the Target for such year.
NI = the actual Net income for such year.
(C) if the company has Net Income for such year of 150% of the
Target or more, the Executive shall be entitled to a bonus of $75,000.
3
<PAGE>
(D) if the Company has Net Income for such year of less than 50% of
the Target, the Executive shall not be entitled to a bonus.
(E) if the Company has Net Income for such year of at least 50% of
the Target but less than the Target, the Executive shall be entitled to
a bonus as calculated below:
B = $50,000 - ($50,000 x 2 X (T - NI))
-------------
T
where:
B = the bonus earned in such year.
T = the Target for such year.
NI = the actual Net Income for such year.
(c) BENEFITS. In addition to the compensation payable to the Executive
as set forth in Section 3(b) above, during the Employment Period the Executive
shall be eligible to participate in the following:
(i) PENSION PLAN. The Company has established and continue for the
Executive an accumulating life insurance plan/pension plan to which
the Company shall contribute $11,000 annually (the "Pension Plan"). The
Executive hereby agrees to assign the benefits of the Pension Plan to
the Company, which assignment shall terminate at such time as the Loan
has been paid in full, or until November 1, 1996, whichever is earlier.
(ii) HEALTH INSURANCE. The Company shall provide the Health
Insurance for the Executive and his Dependents that it provides to other
contract employees of the Company. The provision of the Health Insurance
shall be subject to acceptance by the insurance company of the Executive
and his Dependents to the Company's current program or whatever other
program the Company's Board of Directors may decide to elect. The
Executive shall be solely responsible for all deductible and copayment
amounts due according to the Health Insurance. Upon termination of this
Agreement, all payments under this Section 3(c)(ii) shall cease,
PROVIDED, HOWEVER, that the Executive shall be entitled to payments for
periods prior to the date of the
4
<PAGE>
termination and for which the Executive has not yet been paid.
(iii) OTHER BENEFITS. The Executive shall be eligible to all other
incentive, savings, welfare (including without limitation medical and
dental, disability and salary continuance insurance) plans, practices,
policies and programs applicable on or after the Effective Date to other
contract employees of the Company.
(d) LOANS. (1) The Executive hereby acknowledges that he has received a
loan in the amount of $25,000 (the "Loan") from the Company on November 1, 1993.
The Loan shall bear 10% annual interest, which will be accumulated annually and
will be added to the principal of the Loan. This Loan is due immediately upon
(i) termination for cause under Section 5(e) of this Agreement at any time or
(ii) termination by the Executive of this Agreement at any time before November
1, 1996; provided further that if such Loan is not so due immediately prior to
November 1, 1996, then the entire principle and interest due on the Loan shall
be forgiven.
(2) The Company hereby acknowledges that Executive may borrow, at
one time, up to $50,000 (the "Residence Loan") from the Company until January 1,
1997 for the purpose of purchasing a residence in the Sunrise, Florida area. The
Residence Loan shall bear 8% annual interest, which will be accumulated annually
and will be added to the principal of the Residence Loan. Within 30 days of the
closing of the purchase of the residence by Executive, Executive will execute
and deliver to the Company a second mortgage on such residence securing the
Residence Loan in form and substance satisfactory to the Company (and Executive
shall take all other actions necessary or desirable in the opinion of the
Company to perfect such mortgage). This Residence Loan is due immediately upon
the earliest of (i) five years from the date which the Company makes the
Residence Loan pursuant to this subsection (3), (ii) termination for cause under
Section 5(e) of this Agreement at any time, (iii) termination by the Executive
of this Agreement at any time (other than for "good reason" as defined in
section 5(g)), and (iv) sale of the residence. The Executive agrees that he
shall repay the Residence Loan in an amount of at least 50% of the bonus by the
Company to Executive paid pursuant to Section 3(b)(ii).
5
<PAGE>
(3) The Company hereby acknowledges that Executive may borrow, at
one time, up to $15,000 (the "Other Loan") from the Company until January 1,
1997 for the purpose of purchasing stock of the Company. The Other Loan shall
bear 9% annual interest, which will be accumulated annually and will be added to
the principal of the Other Loan. At the time of the closing of the purchase of
the Company stock, Executive will execute and deliver to the Company a first
priority pledge of such stock securing the Other Loan in form and substance
satisfactory to the Company (and Executive shall take all other actions
necessary or desirable in the opinion of the Company to perfect such pledge).
This Other Loan is due immediately upon the earliest of (i) three years from the
date which the Company makes the Other Loan pursuant to this subsection (3),
(ii) termination for cause under Section 5(e) of this Agreement at any time,
(iii) termination by the Executive of this Agreement at any time before
November 1, 1996 (other than for "good reason" as defined in Section 5(g)), and
(iv) sale of such stock. The Executive agrees that he shall repay the Other Loan
in an amount of at least 50% of the bonus by the Company to Executive paid
pursuant to Section 3(b)(ii).
(e) OTHER BUSINESS EXPENSES. During the Employment Period the Executive
shall be entitled to receive prompt reimbursement from the Company for all
reasonable business expenses incurred by the Executive, itemized in accordance
with the Company's existing policies, practices and procedures.
(f) FRINGE BENEFITS. During the Employment Period, the Executive shall
be entitled to all fringe benefits applicable on or after the Effective Date to
other contract employees of the Company.
(g) VACATION. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the policies and practices
applicable on or after the Effective Date to the executives of the Company,
PROVIDED that the Executive shall be entitled to a minimum of three weeks of
paid vacation per calendar year. If during the Employment Period the Executive
serves for less than a full calendar year, the minimum three weeks shall be
prorated for the period of the year in which the Executive served. Vacation
accrued but unused at the end of a calendar year may be carried over into the
following calendar year or years, PROVIDED that unused vacation days shall be
accrued up to at maximum of six weeks.
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<PAGE>
(h) HOLIDAYS AND SICK LEAVE. The Executive shall be entitled to all
holidays that are prescribed by the Company's policies and practices. The
Executive shall be entitled to 5 days paid sick leave per year. Unused sick
leave days may not be carried over to the following calendar year or years.
(i) AUTOMOBILE. During the Employment Period, the Company shall make
available to the Executive an automobile commensurate with his position and
shall pay for all expenses related thereto including, without limitation, gas
and insurance.
4. EXECUTIVE'S OBLIGATIONS. During the Employment Period, and excluding
any periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote substantially all of his attention and time during
normal business hours to the business and affairs of the Company and to perform
faithfully and efficiently the responsibilities assigned to the Executive.
S. TERMINATION.
(a) NOTICE. During the Employment Period, the Executive's employment
hereunder may be terminated upon sixty (60) days prior notice by either
Executive or the Company. Any such termination shall be evidenced by a written
document signed by the party providing notice. If the Executive's employment is
terminated by reason of the Executive's death, the Company shall have no further
obligations to the Executive's legal representatives under this Agreement, other
than those obligations accrued, earned or vested by the Executive as of the date
of his death. In addition, the Executive's family shall be entitled to receive
benefits at least equal to the most favorable benefits provided by the Company
to surviving families of other contract employees of the Company based on the
terms of the benefit plans referenced in Section 3(c) of this Agreement as in
effect on the date of the Executive's death.
(b) DEATH. This Agreement shall terminate automatically upon the
Executive's death. If the Executive's employment is terminated by reason of the
Executive's death, the Company shall have no further obligations to the
Executive's legal representatives under this Agreement, other than those
obligations accrued, earned or vested by the Executive as of the date of his
death. In addition, the Executive's family shall be entitled to
7
<PAGE>
receive benefits at least equal to the most favorable benefits provided by the
Company to surviving families of other contract employees of the Company based
on the terms of the benefit plans referenced in section 3(c) of this Agreement
as in effect on the date of the Executive's death.
(c) DISABILITY. If the Company determines in good faith that the
Executive has a "disability" (as defined below), it may give the Executive
written notice of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective on
the 60th day after receipt by the Executive of such notice. No such notice of
termination by reason of disability shall be given until the Executive has
experienced a period of three consecutive months of disability and the
disability is continuing. The notice of termination shall not be effective if
the Executive returns to full-time performance of his duties prior to the
expiration of the 60-day notice period. For purposes of this Agreement,
"disability" shall mean a physical or mental condition which, three months after
its commencement, is determined to be total and permanent by a physician
selected by the Company. The Executive shall be entitled to all compensation and
benefits provided for under this Agreement during the three-month waiting period
for the disability determination and during the 60-day notice of termination
period. In the event that the Company provides long-term disability benefits for
the Executive, such benefits shall not commence until after the employment of
the Executive has been terminated and the Company has ceased paying the
Executive compensation pursuant to the foregoing sentence. If the Executive's
employment is terminated by reason of the Executive's disability, this Agreement
shall terminate without further obligations to the Executive or the Executive's
legal representatives under this Agreement, other than those obligations
accrued, earned or vested by the Executive as of the date of the termination. In
addition, the Executive and the Executive's family shall be entitled to receive
benefits including without limitation disability benefits, at least equal to the
most favorable benefits provided by the Company to other contract employees of
the Company based on the terms of the benefit plans referenced in Section 3(c)
of this Agreement as in effect on the date the Executive's disability commenced.
(d) VOLUNTARY TERMINATION OR RETIREMENT. If the Executive shall elect to
voluntarily terminate his employment (other than for "good reason" as defined in
8
<PAGE>
section 5(g) below) or to retire during the Employment Period, this Agreement
shall terminate automatically and the Company shall have no further obligations
to the Executive under this Agreement, other than those obligations accrued,
earned or vested by the Executive as of the date of the termination or
retirement.
(e) CAUSE. During the Employment Period, the Company may terminate the
Executive's employment for "cause," as defined below. For purposes of this
Agreement, "cause," shall mean:
(i) an act or acts of personal dishonesty taken by the Executive at
the expense of or against the interests of the Company;
(ii) repeated violations by the Executive of his obligations under
Section 4 of this Agreement which are not remedied within a reasonable
period of time after receipt of written notice from the Company of such
violations;
(iii) any direct or indirect disclosure of any confidential
information or other special knowledge of the finances, business or
other affairs of the Company;
(iv) the conviction of the Executive of a felony; or
(v) the conviction of the Executive of a serious misdemeanor
involving illegal use, possession or sale of drugs, larceny, crimes of
violence or sex offenses.
If the Executive's employment is terminated for cause, this Agreement shall
terminate without further obligations to the Executive under this Agreement,
other than those obligations accrued, earned or vested by the Executive as of
the date of the termination. The Executive shall not be entitled to any Bonus in
respect of the year of termination in the event the Executive's employment is
terminated for cause pursuant to this Section 5(e).
(f) INVOLUNTARY TERMINATION. If during the Employment Period the
Company terminates the Executive's employment other than for reasons set forth
in Sections 5(a) through 5(e) above, it shall be deemed to be an involuntary
termination and the Company shall pay to the Executive the following amounts:
9
<PAGE>
(i) to the extent not theretofore paid, the Company shall pay the
Executive's Salary through the date of such involuntary termination;
(ii) the Company shall pay the Executive on the date of such
involuntary termination an amount equal to six months of the Executive's
Base Salary; provided that if such involuntary termination occurs as a
result of a Change of Control, such payment shall be in an amount equal
to eight months of the Executive's Base Salary; and
(iii) the Company shall pay in one cash lump sum any vacation days
accrued but unused as of the date of termination to be paid within 30
days of such involuntary termination.
(g) GOOD REASON. During the Employment Period, the Executive may
terminate his employment for "good reason" as defined below. For purposes of
this Agreement, "good reason" shall mean:
(i) the assignment to the Executive of any duties inconsistent in
any respect with Executive's position, duties and responsibilities as
set forth in Section 3(a) of this Agreement or any action by the
Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose any isolated,
insubstantial and inadvertent action by the Company which is not taken
in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the provisions
of Sections 3(b) through 3(g) of this Agreement regarding the
Executive's compensation, benefits, expenses, fringe benefits, vacation
and office staff, other than an isolated, insubstantial and inadvertent
action by the Company which is not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given
by the Executive;
(iii) the Company's requiring the Executive to be based at any
office or location other than that described in Section 3(a) of this
Agreement, except for travel reasonably required in the performance of
the Executive's responsibilities; or
10
<PAGE>
(iv) any failure by the Company to comply with and satisfy Section
10 of this Agreement with respect to successors.
In the event that the Executive terminates his employment for good reason as
defined in this Section 5(g), it shall be deemed to be an "involuntary
termination" as set forth in Section 5(f) above and the Executive shall be
entitled to all payments and obligations set forth in Sections 5(f)(i) through
5(f)(v) of this Agreement as if the Executive's employment had been
involuntarily terminated.
6. NOTICE OF TERMINATION. Any termination by the Company for any reason
or by the Executive for any reason shall be communicated by a written notice
which indicates (i) the specific termination provision in this Agreement relied
upon, (ii) the facts and circumstances claimed to provide a basis for such
termination, and (iii) the date of termination.
7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Executives continuing or future participation in any benefit,
incentive or other plans, programs, policies or practices provided by the
Company and for which the Executive may otherwise qualify. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of the Company at or subsequent to the
termination of the Executive's employment shall be payable in accordance with
such plan, policy, practice or program.
8. FULL SETTLEMENT. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment or
other claim, right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement. The Company agrees to
pay, to the full extent permitted by law, all legal fees and expenses, as
incurred by the Company, the Executive and others, which the Executive may
reasonably incur as a result of any contest by the Company or others of the
validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof, plus in each case interest at
the applicable Federal rate provided
11
<PAGE>
for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended
(the "Code").
9. CONFIDENTIALITY.
(a) The Executive shall hold in a fiduciary capacity for the benefit of
the Company all secret, proprietary or confidential information, knowledge or
data relating to the Company and its business, including without limitation
financial information and customer lists, which shall have been obtained by the
Executive during his employment with the Company and which shall not be or
become public knowledge (other than by acts by the Executive or his
representatives in violation of this Agreement). Notwithstanding the foregoing,
the Executive may disclose any such information if such information is compelled
by legal process, provided that if Executive is so compelled, he shall provide
the Company with prompt notice so that it may seek a protective order or other
remedy. In any event, the Executive shall furnish only that portion of the
confidential information that is legally required to be disclosed.
(b) In the event that the Executive breaches any provision of this
Section 9, any payments or other benefits promised under this Agreement shall be
forfeited. In addition, the Company shall be entitled to apply to any court of
competent jurisdiction for an injunction restraining the Executive from
committing or continuing any violation of this Agreement.
10. NON COMPETITION. The Executive agrees that (a) during the Employment
Period and (b) unless the Executive terminates his employment for "good reason"
or his employment is involuntarily terminated, for two years thereafter, he will
not, within the continental United States, Israel or any other country in which
the Company has operations, directly or indirectly, engage or participate or
make any financial investments in or become employed by or render advisory or
other services to or for any person, firm or corporation, or in connection with
any business activity, other than that of the Company and its subsidiaries,
directly or indirectly in competition with any of the business operations or
activities of the Company and its subsidiaries as at the date of termination of
his employment, whether such companies are presently existing or hereafter
acquired. Nothing herein contained, however,
12
<PAGE>
shall restrict the Executive from making any investments in any company whose
stock is listed on a national securities exchange or actively traded in the
over-the counter market, so long as such investment does not give him the right
to control or influence the policy decisions of any such business or enterprise
which is or might be directly or indirectly in competition with any of such
business operations or activities of the Company or any of its subsidiaries.
11. RESTRICTIONS ON SOLICITATION. The Executive agrees that during the
Employment Period and for two years thereafter, he will not:
(i) directly or indirectly solicit, raid, entice or induce any
employee of the Company or any of its subsidiaries to become an employee
of any person, firm or corporation which is, directly or indirectly, in
competition with the business or activities of the Company or any of its
subsidiaries;
(ii) directly or indirectly approach any such employee for these
purposes;
(iii) authorize or knowingly approve the taking of such actions by
other persons on behalf of any such person, firm or corporation, or
assist any such person, firm or corporation in taking such action; or
(iv) directly or indirectly solicit, raid, entice or induce any
person, firm or corporation who or which on the date hereof is, or at
the time during the term of his employment with the Company shall be, a
customer of the Company or of any of its subsidiaries to become a
customer for the same or similar products which it purchased from the
Company or any of its subsidiaries, of any other person, firm or
corporation, and the Executive shall not approach any such customer for
such purpose or authorize or knowingly approve the taking of such
actions by any other person.
12. SUCCESSORS. This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This
13
<PAGE>
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes this Agreement by
operation of law, or otherwise.
13. BINDING ARBITRATION. In the event that the Company and the Executive
cannot agree on an interpretation of any provision of this Agreement, or in the
event that the Company fails to make any payments or otherwise fulfill any
obligations required by the terms of this Agreement, the Company and the
Executive agree to resolve any such dispute through binding arbitration. Any
request for such arbitration shall be served on the other party by written
notice. The parties shall agree upon and select an arbitrator within 20 days
after written demand is made by either party for such arbitration. The
arbitrator shall set a time for hearing within 60 days of his/her selection.
Each party shall have an opportunity to present evidence on the issues in
dispute before the arbitrator and each party may be represented by legal counsel
if either so desires. The decision of the arbitrator shall be rendered in
writing to both parties within 30 days of the close of the hearing. The decision
of the arbitrator shall be final and binding upon both parties. Any legal fees,
expenses or other costs incurred by the Company and the Executive in connection
with such arbitration shall be borne by the Company.
14. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
(b) The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
14
<PAGE>
(c) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
IF TO THE EXECUTIVE: IF TO THE COMPANY:
9203B Boca Garden Circle South,
Boca Raton, Florida, 33496
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(d) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(e) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(f) A party's failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such provision or any
other provision thereof.
(g) This Agreement supersedes any prior employment agreement between the
Company and the Executive and contains the entire understanding of the Company
and the Executive with respect to the subject matter hereof.
(h) This Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which, together, shall constitute one and the
same instrument.
15
<PAGE>
IN WITNESS WHERELF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
KELLSTROM INDUSTRIES, INC. (formerly
Israel Tech Aquisition Corp.);
/s/ ZIVI R. NEDIVI
------------------
Zivi R. Nedivi
Date of Signature: 1/30/96
EXECUTIVE
/s/ PAUL F. STEELE
------------------
Paul F. Steele
Date of Signature: 1/30/96
16
Exhibit 10.10
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
AMENDEMENT NO. 1, dated as of April 18, 1996, to the Employment Agreement,
dated as of January 30, 1996 (the "Employment Agreement"), between Kellstrom
Industries, Inc., a Delaware corporation (the "Company"), and Paul F. Steele
(the "Executive").
W I T N E S S E T H
WHEREAS, the Executive is employed by the Company as its Vice President pursuant
to the terms and provisions contained in the Employment Agreement;
WHEREAS, the Company desires to indemnify the Executive in order to assure the
Executive that he will not, pursuant to the terms and conditions contained
herein, incur personal liability for actions taken in carrying out his corporate
responsibilities;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Company and the Executive hereby agree as follows:
1. INDEMNIFICATION. If the Executive acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, and the Executive had no reasonable cause to believe that his
conduct was unlawful or detrimental to the Company, the Company shall indemnify
and hold harmless the Executive and his heirs and legal representatives from and
against any and all claims, losses, liabilities, damages, costs, demands, causes
of action (whether legal, equitable, administrative, civil or criminal) ,
judgments, settlements (subject to the last sentence of paragraph 3 hereof) ,
fines, court costs and other expenses of any kind or nature whatsoever,
including, without limitation, attorneys, fees and disbursements (collectively,
"Losses") , which may be threatened against, incurred or suffered by the
Executive or his heirs and legal representatives in connection with, relating to
or arising out of, directly or indirectly, the Executive's performance, duties
and responsibilities to, for and on behalf of, the Company, including, without
limitation, (i) the Employment Agreement and all actions or omissions taken
thereunder and (ii) any acts, omissions or alleged acts or omissions arising out
of the Executive's activities on behalf of the Company or in furtherance of the
interests of the Company.
2. EXCEPTIONS. Notwithstanding anything contained herein or in the
By-Laws of the Company, the Company shall have no obligation to indemnify the
Executive if the Loss incurred by the Executive (i) arises out of an action
brought directly by the Company against the Executive or (ii) arises, directly
or indirectly, as a result of the Executive being terminated for cause (as such
term is defined in the Employment Agreement).
<PAGE>
3. NOTIFICATION OF CLAIM. Promptly after receipt by the Company of
notice of any claim against the Executive pursuant to which the Executive is
entitled to indemnification, the Company shall have the right to assume the
defense of such claim, including the employment of counsel of its choice.
Although the Executive shall have the right to employ his own counsel, the fees
and expenses of such counsel shall be at the expense of the Executive. The
Company shall not be liable for any settlement of any claim or action effected
without its written consent, provided that such consent was not unreasonably
withheld.
4. PAYMENT OF INDEMNITY AMOUNTS. The Company agrees to pay all
amounts payable in respect of Losses immediately upon its receipt of a statement
with respect thereto rendered by the Executive, together with appropriate
supporting documentation thereof. It is the express intention of the parties
hereto that all such amounts shall be paid by the Company on or before the date
payment thereof is due, and that the Executive shall not be required at any time
to bear any costs or expenses on account of Losses.
5. SUCCESSORS AND ASSIQNS. The provisions of this Amendment No. 1
shall inure to the benefit of and be binding upon the Company and its successors
and assigns and the heirs and legal representatives of the Executive. The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform the terms
and conditions contained herein in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place.
As used herein, the "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes this
Amendment by operation of law, or otherwise.
6. EFFECT OF AMENDMENT. Except as expressly set forth herein, the
provisions contained herein shall not constitute an amendment of any term or
provision of the Employment Agreement, and all such terms and conditions shall
remain in full force and effect and are hereby ratified and confirmed in all
respects.
7. AMENDMENT. This Amendment No. 1 may not be amended or modified
otherwise than by a written agreement executed by the parties hereto.
8. COUNTERPARTS. This Amendment No. 1 may be executed in
counterparts, each of which shall be an original and all of which, taken
together, shall constitute one and the same agreement.
9. CAPTIONS. The captions of this Amendment No. 1 are not part of the
provisions hereof and shall have no force and effect.
10. GOVERNING LAW. This Amendment No. 1 shall be governed by and
construed in accordance with the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to
the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first written above.
KELLSTROM INDUSTRIES, INC.
By: /s/ ZIVI R. NEDIVI
-------------------
Name: Zivi R. Nedivi
Title: President and Chief
Executive Officer
EXECUTIVE
/s/ PAUL F. STEELE
------------------
EXHIBIT 10.11
INDEMNIFICATION AGREEMENT
INDEMNIFICATION, dated as of April 23, 1996, between Kellstrom Industries,
Inc., a Delaware corporation (the "Company"), and Joram D. Rosenfeld (the
"Director").
W I T N E S S E T H:
WHEREAS, the Director is acting as a member of the Board of Directors to the
Company;
WHEREAS, the Company desires to indemnify the Director in order to assure the
Director that he will not, pursuant to the terms and conditions contained
herein, incur personal liability for actions taken in carrying out his corporate
responsibilities;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Company and the Director hereby agree as follows:
1. INDEMNIFICATION. If the Director acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and the Director had no reasonable cause to believe that his conduct
was unlawful or detrimental to the Company, the Company shall indemnify and hold
harmless the Director and his heirs and legal representatives from and against
any and all claims, losses, liabilities, damages, costs, demands, causes of
action (whether legal, equitable, administrative, civil or criminal), judgments,
settlements (subject to the last sentence of paragraph 3 hereof), fines, court
costs and other expenses of any kind or nature whatsoever, including, without
limitation, attorneys' fees and disbursements (collectively, "Losses"), which
may be threatened against, incurred or suffered by the Director or his heirs and
legal representatives in connection with, relating to or arising out of,
directly or indirectly, the Director's performance, duties and responsibilities
to, for and on behalf of, the Company, including, without limitation, any acts,
omissions or alleged acts or omissions arising out of the Director's activities
on behalf of the Company or in furtherance of the interests of the Company.
2. EXCEPTIONS. Notwithstanding anything contained herein or in the By-Laws
of the Company, the Company shall have no obligation to indemnify the Director
if the Loss incurred by the Director (i) arises out of an action brought
directly by the Company against the Director or (ii) arises, directly or
indirectly, as a result of the Director being removed for cause, as determined
by the stockholders of the Company or in good faith by the other members of the
Board of Directors of the Company.
3. NOTIFICATION OF CLAIM. Promptly after receipt by the Company of notice
of any claim against the Director pursuant to
<PAGE>
which the Director is entitled to indemnification, the Company shall have the
right to assume the defense of such claim, including the employment of counsel
of its choice. Although the Director shall have the right to employ his own
counsel, the fees and expenses of such counsel shall be at the expense of the
Director. The Company shall not be liable for any settlement of any claim or
action effected without its written consent, provided that such consent was not
unreasonably withheld.
4. PAYMENT OF INDEMNITY AMOUNTS. The Company agrees to pay all amounts
payable in respect of Losses immediately upon its receipt of a statement with
respect thereto rendered by the Director, together with appropriate supporting
documentation thereof. It is the express intention of the parties hereto that
all such amounts shall be paid by the Company on or before the date payment
thereof is due, and that the Director shall not be required at any time to bear
any costs or expenses on account of Losses.
5. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns
and the heirs and legal representatives of the Director. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform the terms and
conditions contained herein in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. As
used herein, the "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes this
Agreement by operation of law, or otherwise.
6. AMENDMENT. This Agreement may not be amended or modified otherwise than
by a written agreement executed by the parties hereto.
7. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be an original and all of which, taken together, shall constitute
one and the same agreement.
8. CAPTIONS. The captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Director has hereunto set his hand and, pursuant to
the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first written above.
KELLSTROM INDUSTRIES, INC.
By: /s/ ZIVI R. NEDIVI
-------------------------
Name: Zivi R. Nedivi
Title: President and Chief
Executive Officer
DIRECTOR
/s/ JORAM D. ROSENFELD
----------------------------
EXHIBIT 10.12
INDEMNIFICATION AGREEMENT
INDEMNIFICATION, dated as of April 23, 1996, between Kellstrom Industries,
Inc. , a Delaware corporation (the "Company") , and Yoav Stern (the
"Director").
W I T N E S S E T H:
WHEREAS, the Director is acting as a member of the Board of Directors to the
Company;
WHEREAS, the Company desires to indemnify the Director in order to assure the
Director that he will not, pursuant to the terms and conditions contained
herein, incur personal liability for actions taken in carrying out his corporate
responsibilities;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Company and the Director hereby agree as follows:
1. INDEMNIFICATION. If the Director acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and the Director had no reasonable cause to believe that his conduct
was unlawful or detrimental to the Company, the Company shall indemnify and hold
harmless the Director and his heirs and legal representatives from and against
any and all claims, losses, liabilities, damages, costs, demands, causes of
action (whether legal, equitable, administrative, civil or criminal), judgments,
settlements (subject to the last sentence of paragraph 3 hereof), fines, court
costs and other expenses of any kind or nature whatsoever, including, without
limitation, attorneys' fees and disbursements (collectively, "Losses"), which
may be threatened against, incurred or suffered by the Director or his heirs and
legal representatives in connection with, relating to or arising out of,
directly or indirectly, the Director's performance, duties and responsibilities
to, for and on behalf of, the Company, including, without limitation, any acts,
omissions or alleged acts or omissions arising out of the Director's activities
on behalf of the Company or in furtherance of the interests of the Company.
2. EXCEPTIONS. Notwithstanding anything contained herein or in the By-Laws
of the Company, the Company shall have no obligation to indemnify the Director
if the Loss incurred by the Director (i) arises out of an action brought
directly by the Company against the Director or (ii) arises, directly or
indirectly, as a result of the Director being removed for cause, as determined
by the stockholders of the Company or in good faith by the other members of the
Board of Directors of the Company.
3. NOTIFICATION OF CLAIM. Promptly after receipt by the Company of notice
of any claim against the Director pursuant to
<PAGE>
which the Director is entitled to indemnification, the Company shall have the
right to assume the defense of such claim, including the employment of counsel
of its choice. Although the Director shall have the right to employ his own
counsel, the fees and expenses of such counsel shall be at the expense of the
Director. The Company shall not be liable for any settlement of any claim or
action effected without its written consent, provided that such consent was not
unreasonably withheld.
4. PAYMENT OF INDEMNITY AMOUNTS. The Company agrees to pay all amounts
payable in respect of Losses immediately upon its receipt of a statement with
respect thereto rendered by the Director, together with appropriate supporting
documentation thereof. It is the express intention of the parties hereto that
all such amounts shall be paid by the Company on or before the date payment
thereof is due, and that the Director shall not be required at any time to bear
any costs or expenses on account of Losses.
5. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns
and the heirs and legal representatives of the Director. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform the terms and
conditions contained herein in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. As
used herein, the "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes this
Agreement by operation of law, or otherwise.
6. AMENDMENT. This Agreement may not be amended or modified otherwise than
by a written agreement executed by the parties hereto.
7. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be an original and all of which, taken together, shall constitute
one and the same agreement.
8. CAPTIONS. The captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Director has hereunto set his hand and, pursuant to
the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first written above.
KELLSTROM INDUSTRIES, INC.
By: /s/ ZIVI R. NEDIVI
--------------------------
Name: Zivi R. Nedivi
Title: President and Chief
Executive Officer
DIRECTOR
/s/ YOAV STERN
--------------------------
EXHIBIT 10.13
INDEMNIFICATION AGREEMENT
INDEMNIFICATION, dated as of April 23, 1996, between Kellstrom Industries,
Inc., a Delaware corporation (the "Company"), and David Jan Mitchell (the
"Director").
W I T N E S S E T H:
WHEREAS, the Director is acting as a member of the Board of Directors to the
Company;
WHEREAS, the Company desires to indemnify the Director in order to assure the
Director that he will not, pursuant to the terms and conditions contained
herein, incur personal liability for actions taken in carrying out his corporate
responsibilities;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
Company and the Director hereby agree as follows:
1. INDEMNIFICATION. If the Director acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and the Director had no reasonable cause to believe that his conduct
was unlawful or detrimental to the Company, the Company shall indemnify and hold
harmless the Director and his heirs and legal representatives from and against
any and all claims, losses, liabilities, damages, costs, demands, causes of
action (whether legal, equitable, administrative, civil or criminal), judgments,
settlements (subject to the last sentence of paragraph 3 hereof), fines, court
costs and other expenses of any kind or nature whatsoever, including, without
limitation, attorneys' fees and disbursements (collectively, "Losses"), which
may be threatened against, incurred or suffered by the Director or his heirs and
legal representatives in connection with, relating to out of, directly or
indirectly, the Director's duties and responsibilities to, for and on behalf of,
including, without limitation, any acts, omissions or alleged acts arising out
of the Director's activities on behalf of the Company or in furtherance of the
interests of the Company.
2. EXCEPTIONS. Notwithstanding anything contained herein or in the By-Laws
of the Company, the Company shall have no obligation to indemnify the Director
if the Loss incurred by the Director (i) arises out of an action brought
directly by the Company against the Director or (ii) arises, directly or
indirectly, as a result of the Director being removed for cause, as determined
by the stockholders of the Company or in good faith by the other members of the
Board of Directors of the Company.
3. NOTIFICATION OF CLAIM. Promptly after receipt by the Company of notice
of any claim against the Director pursuant to
<PAGE>
which the Director is entitled to indemnification, the Company shall have the
right to assume the defense of such claim, including the employment of counsel
of its choice. Although the Director shall have the right to employ his own
counsel, the fees and expenses of such counsel shall be at the expense of the
Director. The Company shall not be liable for any settlement of any claim or
action effected without its written consent, provided that such consent was not
unreasonably withheld.
4. PAYMENT OF INDEMNITY AMOUNTS. The Company agrees to pay all amounts
payable in respect of Losses immediately upon its receipt of a statement with
respect thereto rendered by the Director, together with appropriate supporting
documentation thereof. It is the express intention of the parties hereto that
all such amounts shall be paid by the Company on or before the date payment
thereof is due, and that the Director shall not be required at any time to bear
any costs or expenses on account of Losses.
5. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns
and the heirs and legal representatives of the Director. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to assume expressly and agree to perform the terms and
conditions contained herein in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place. As
used herein, the "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes this
Agreement by operation of law, or otherwise.
6. AMENDMENT. This Agreement may not be amended or modified otherwise than
by a written agreement executed by the parties hereto.
7. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be an original and all of which, taken together, shall constitute
one and the same agreement.
8. CAPTIONS. The captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Director has hereunto set his hand and, pursuant to
the authorization from its Board of Directors, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first written above.
KELLSTROM INDUSTR6ES, INC.
By: /s/ ZIVI R. NEDIVI
--------------------------
Name: Zivi R. Nedivi
Title: President and Chief
Executive Officer
DIRECTOR
/s/ DAVID JAN MITCHELL
-----------------------------
EXHIBIT 10.15
AMENDMENT
AMENDMENT, dated as of January 15, 1996, among Zivi R. Nedivi, Joram D.
Rosenfeld and Yoav Stern (each a "Stockholder" and collectively, the
"Stockholders").
W I T N E S S E T H:
WHEREAS, the Stockholders are parties to a Stockholders Agreement dated
August 24, 1995 (the "Stockholders Agreement") pursuant to which the
Stockholders agreed, among other things, to restrict the disposition of the
Shares owned by them (capitalized terms used herein not otherwise defined shall
have the meanings given to them in the Stockholders Agreement);
WHEREAS, on the date hereof, the Stockholders have formed Helix Capital
Corporation, L.L.C., a Delaware limited liability company ("Helix");
WHEREAS, the Stockholders desire to contribute capital to Helix in the form
of the promissory notes attached hereto as EXHIBIT A (the "Notes") and Helix is
desirous of accepting such capital contribution on the condition that the Shares
are pledged as collateral for the Notes;
WHEREAS, in connection therewith, the Stockholders have agreed to amend the
Stockholders Agreement pursuant to the terms and provisions contained herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DISPOSITION OF SHARES. Section 3(a) of the Stockholders Agreement
is hereby amended by adding at the end thereof the following phrase:
"and the issuance of, and in accordance with the terms of, the Secured
Non-Recourse Promissory Notes issued by each Stockholder to Helix
Capital Corporation, L.L.C. on the date hereof, which Notes are
secured by, among other things, the Shares."
2. EXERCISE BY HELIX. The Stockholders agree that notwithstanding
anything contained in the Stockholders Agreement to the contrary, any exercise
by Helix of the rights granted to it pursuant to the Notes shall not constitute
a violation or breach of the Stockholders Agreement, including without
limitation, the right
<PAGE>
to purchase the Shares in accordance with the terms of the Notes and the right,
upon a default of the Notes, to exercise all ownership rights to the Shares.
3. STOCKHOLDER CAPACITY. Each Stockholder executing this Amendment
does not make any agreement or understanding herein in his capacity as an
officer or director of the Company. Each Stockholder signs solely in his
capacity as the record and beneficial owner of, or the trustee of a trust whose
beneficiaries are the beneficial owners of, such Stockholder's Shares.
4. GOVERNING LAW. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York, without giving effect to
the principles of conflicts of laws thereunder.
5. EFFECT OF AMENDMENT. Except as expressly set forth herein, the
amendments contained herein shall not constitute a waiver or amendment of any
term or provision of the Stockholders Agreement, and all such terms and
provisions shall remain in full force and effect and are hereby ratified and
confirmed in all respects.
6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed being deemed an original and all of
which taken together constituting one and the same agreement.
7. SECTION HEADINGS. The section headings contained herein are for the
purpose of convenience only and are not intended to define or limit the contents
thereof.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
as of the date first above written.
/s/ ZIVI R. NEDIVI
-------------------------------
Zivi R. Nedivi
/s/ JORAM D. ROSENFELD
------------------------------
Joram D. Rosenfeld
/s/ YOAV STERN
------------------------------
Yoav Stern
EXHIBIT 10.17
AMENDMENT TO STOCK PURCHASE AGREEMENT
Amendment, dated as of January 15, 1996 (this "Amendment"), between
Kellstrom Industries, Inc., a Delaware corporation (the Company), and Zivi R.
Nedivi (the "Stockholder").
W I T N E S S E T H:
WHEREAS, the Company and the Stockholder are parties to a Stock Purchase
Agreement, dated as of August 24, 1995 (the "Stock Purchase Agreement"),
pursuant to which the Stockholder purchased 181,818 shares of common stock, par
value $.001 per share (the "Shares"), of the Company;
WHEREAS in connection with such purchase, the Stockholder agreed to
restrict the disposition of the Shares;
WHEREAS, the Stockholder has requested that the Company amend the Stock
Purchase Agreement on the terms and conditions contained herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. PLEDGE OF THE SHARES. (a) Notwithstanding Section 2 of the Stock
Purchase Agreement, the Stockholder shall be entiled to pledge the Shares to
Helix Capital Corporation, L.L.C., a Delaware limited liability company
("Helix"), as collateral for the Secured Non-Recourse Promissory Note issued by
the Stockholder to Helix as of the date hereof (the "Note"), a copy of which is
annexed hereto as EXHIBIT A.
(b) The Company agrees that any exercise by Helix of its rights
under the Note shall not constitute a violation or breach by the Stockholder of
Section 2 of the Stock Purchase Agreement.
2. EFFECT OF AMENDMENT. Except as expressly set forth herein, the
amendments contained herein shall not constitute a waiver or amendment of any
term or provision of the Stock Purchase Agreement, and all such terms and
provisions shall remain in full force and effect and are hereby ratified and
confirmed in all respects.
3. GOVERNING LAW. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
principles of conflicts of laws thereunder.
<PAGE>
4. COUNTERPARTS. This Amendment may be executed in counterparts, each
of which when so executed being deemed an original and both of which taken
together constituting one and the same agreement.
5. SECTION HEADINGS. The section headings contained herein are for the
purpose of convenience only and are not intended to define or limit the contents
thereof.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed as of the date first written above.
KELLSTROM INDUSTRIES INC.
By: /s/ ANTHONY MOTISI
-------------------------
Name: Tony Motisi
------------------------
Title: V.P. Operations
-----------------------
/s/ ZIVI R. NEDIVI
----------------------------
Zivi R. Nedivi
- 2-
EXHIBIT 10.19
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS THEREUNDER OR
THE PROVISIONS OF THIS WARRANT.
No. of Shares of Common Stock: 300,000
WARRANT
To Purchase Common Stock of
KELLSTROM INDUSTRIES INC.
THIS IS TO CERTIFY THAT Allen & Company, or registered assigns, is
entitled, at any time and from time to time prior to April 11, 2001, to purchase
from KELLSTROM INDUSTRIES, INC., a Delaware corporation (the "Company"), 300,000
shares of the Common Stock, par value $.001 per share, of the Company ("Common
Stock") at a purchase price of $5.00 per share, all on the terms and conditions
and pursuant to the provisions hereinafter set forth.
This Warrant shall be exercisable, in whole or in part, at any time and
from time to time prior to its expiration by its surrender to the Company at the
principal office thereof (wherever then located), with the exercise form
attached hereto completed and executed and accompanied by payment in full of the
exercise price for the number of shares to be purchased.
If after the date hereof, and subject to the provisions with respect to
fractional shares set forth below, the number of outstanding shares of Common
Stock is increased by a stock dividend payable in shares of Common Stock or by a
split-up of shares of Common Stock or other similar event, then, on the
effective day of such stock dividend or split-up, the number of shares issuable
on exercise of this Warrant ("Warrant Shares") shall be increased in proportion
to such increase in outstanding shares of Common Stock and the then applicable
Exercise Price shall be correspondingly decreased. If after the date hereof, and
subject to the provisions with respect to fractional shares set forth below, the
number of outstanding shares of Common Stock is decreased by a consolidation,
combination or reclassification of shares of Common Stock or other similar
<PAGE>
event, then, after the effective date of such of consolidation, combination or
reclassification, the number of Warrant Shares shall be decreased in proportion
to such decrease in outstanding shares and the then applicable Exercise Price
shall be correspondingly increased. If after the date hereof any capital
reorganization or reclassification of the Common Stock of the Company, or
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation or other similar
event shall be affected, then, as a condition of such reorganization,
reclassification, consolidation, merger, or sale, lawful and fair provision
shall be made whereby the holder of this Warrant shall thereafter have the right
to purchase and receive, upon the basis and upon the terms and conditions
specified in this Warrant and in lieu of the shares of Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented thereby, such shares of stock, securities, or assets as
may be issued or payable with respect to or in exchange for the number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by this Warrant, had such reorganization,
reclassification, consolidation, merger, or sale not taken place and in such
event appropriate provision shall be made with respect to the rights and
interests of the holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Exercise Price
and of the number of Warrants Shares) shall thereafter be applicable, as nearly
as may be in relation to any share of stock, securities, or assets thereafter
deliverable upon the exercise hereof. Upon every adjustment of the Exercise
Price or the number of Warrant Shares, the Company shall give written notice
thereof to the holder of this Warrant, which notice shall state the Exercise
Price resulting from such adjustment and the increase or decrease, if any, in
the number of Warrant Shares purchasable at such price, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Upon the occurrence of any event specified in the first,
second or third sentence of this paragraph, then, in any such event, the Company
shall give written notice in the manner set forth above of the record date for
such dividend, distribution, or subscription rights, or the effective date of
such reorganization, reclassification, consolidation, merger, sale, dissolution
liquidation, winding up or issuance. Such notice shall also specify the date as
of which the holders of Com-
2
<PAGE>
mon Stock of record shall participate in such dividend, distribution, or
subscription rights, or shall be entitled to exchange their Common Stock for
stock, securities or other assets deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding up or issuance. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such event. Notwithstanding any
provision contained in this Warrant to the contrary, the Company shall not issue
fractional shares upon exercise of this Warrant. If, by reason of any adjustment
made pursuant to this paragraph, the holder of this Warrant would be entitled,
upon the exercise of this Warrant, to receive a fractional interest in a share,
the Company shall, upon such exercise, purchase such fractional interest,
determined as follows:
(i) if the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such exchange or listed for
trading on the Nasdaq National Market or Nasdaq SmallCap Market or the OTC
Bulletin Board, the current value shall be the last reported sale price of the
Common Stock on such exchange on the last business day prior to the date of
exercise of this Warrant or if no such sale is made on such day, the average of
the closing bid and asked prices for such day on such exchange; or
(ii) if the Common Stock is not listed or admitted to unlisted
trading privileges, the current value shall be the mean of the last reported bid
and asked prices reported by the National Quotation Bureau, Inc. on the last
business day prior to the date of the exercise of this Warrant; or
(iii) if the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the current
value shall be an amount determined in such reasonable manner prescribed by the
Board of Directors of the Company.
This Warrant may be redeemed, at the option of the Company as a whole and
not in part from to its expiration, at the office of the Company, upon the
notice specified below, at the price of $.01 per Warrant ("Redemption Price"),
provided that the last sales price of the Common Stock has been at least 170% of
the then effective Exercise Price on each of the twenty (20) consecutive trading
days ending on the third business day prior to the date on which notice of
redemption is given. In the event
3
<PAGE>
the Company shall elect to redeem all or any part of this Warrant, the Company
shall fix a date for the redemption. Notice of redemption shall be mailed by the
first class mail, postage prepaid, by the Company not less than 30 days from the
date fixed for redemption to the holder of this Warrant at their last address
specified by such holder to the Company in writing as they shall appear on the
registration books. Any notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the registered
holder received such notice. This Warrant may be exercised in accordance with
the terms hereof at any time after notice of redemption shall have been given by
the Company pursuant hereto and prior to the time and date fixed for redemption.
On and after the redemption date, the record holder of this Warrant shall have
no further rights except to receive, upon surrender of this Warrant, the
redemption price. This Warrant does not entitle the holder hereof to any of the
rights of a stockholder of the Company, including, without limitation, the right
to receive dividends, or other distributions, exercise any preemptive rights to
vote or to consent or to receive notice as stockholders in respect of the
meetings of stockholders or the election of directors of the Company or any
other matter.
Neither this Warrant nor the Warrant Shares may be sold, assigned or
otherwise transferred by the holder hereof until April 11, 1997 without the
prior written consent of the Company.
In the event that, at any time following the exercise (in whole or in part)
of this Warrant, the Company shall undertake to register under the federal
securities laws any shares of Common Stock pursuant to a registration statement
appropriate for the registration of Warrant Shares and for the subsequent public
offering and sale of Warrant Shares by the holder thereof, the Company shall
provide such holder with adequate prior written notice of such registration to
enable such holder to have Warrant Shares included in such registration. The
Company shall pay all of the costs of such registration of Warrant Shares, but
shall have no responsibility of any nature whatsoever for the costs or expenses
of the holder thereof with respect to the offer or sale of Warrant Shares
(including, but not limited to, sales or brokerage commissions and underwriting
fees or discounts). As a condition to the inclusion of Warrant Shares in any
registration statement of the Company, the holder of such Warrant Shares shall
execute and deliver to the Company a registration agreement, in such form as the
Company may reasonably require, containing such terms and conditions as are
customary in the circumstances. Notwithstanding anything to the contrary set
forth in this paragraph, in the event that the Company's undertaking to register
shares of
4
<PAGE>
its Common Stock is in connection with a proposed underwritten public offering
of such shares and the proposed underwriter shall request that no Warrant Shares
(or a limited number of Warrant Shares) be included in such registration, the
right of any holder of Warrant Shares to have Warrant Shares of such holder
included in such registration shall be limited in accordance with such request.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed.
Dated as of June 2, 1996
KELLSTROM INDUSTRIES INC.
By: /s/ ZIVI R. NEDIVI
----------------------------
Zivi R. Nedivi
5
<PAGE>
SUBSCRIPTION FORM
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of _____________ Shares of the Common Stock, par
value $.00l per share, of KELLSTROM INDUSTRIES, INC. and herewith makes payment
therefor, all at the price and on the terms and conditions specified in this
Warrant and requests that certificates for the shares of Common Stock hereby
purchased (and any securities or other property issuable upon such exercise)
be issued in the name of and delivered to ______________________________ whose
address is _________________________________ and, if such shares of Common Stock
shall not include all of the shares of Common Stock issuable as provided in this
Warrant, that a new Warrant of like tenor and date for the balance of the shares
of Common Stock issuable hereunder be delivered to the undersigned.
________________________________
(Name of Registered Owner)
________________________________
(Signature of Registered Owner)
________________________________
(Street Address)
________________________________
(City) (State) (Zip Code)
6
EXHIBIT 10.20
THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS THEREUNDER OR
THE PROVISIONS OF THIS WARRANT.
No. of Shares of Common Stock: 100,000
WARRANT
To Purchase Common Stock of
KELLSTROM INDUSTRIES INC.
THIS IS TO CERTIFY THAT J. W. Charles Securities Inc. or registered
assigns, is entitled, at any time and from time to time prior to April 11, 2001,
to purchase from KELLSTROM INDUSTRIES, INC., a Delaware corporation (the
"Company"), 100,000 shares of the Common Stock, par value $.001 per share, of
the Company ("Common Stock") at a purchase price of $8.75 per share, all on the
terms and conditions and pursuant to the provisions hereinafter set forth.
This Warrant shall be exercisable, in whole or in part, at any time and
from time to time prior to its expiration by its surrender to the Company at the
principal office thereof (wherever then located), with the exercise form
attached hereto completed and executed and accompanied by payment in full of the
exercise price for the number of shares to be purchased.
If after the date hereof, and subject to the provisions with respect to
fractional shares set forth below, the number of outstanding shares of Common
Stock is increased by a stock dividend payable in shares of Common Stock or by a
split-up of shares of Common Stock or other similar event, then, on the
effective day of such stock dividend or split-up, the number of shares issuable
on exercise of this Warrant ("Warrant Shares") shall be increased in proportion
to such increase in outstanding shares of Common Stock and the then applicable
Exercise Price shall be correspondingly decreased. If after the date hereof, and
subject to the provisions with respect to fractional shares set forth below, the
number of outstanding shares of Common Stock is decreased by a consolidation,
combination or reclassification of shares of Common Stock or other similar
<PAGE>
event, then, after the effective date of such of consolidation, combination or
reclassification, the number of Warrant Shares shall be decreased in proportion
to such decrease in outstanding shares and the then applicable Exercise Price
shall be correspondingly increased. If after the date hereof any capital
reorganization or reclassification of the Common Stock of the Company, or
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation or other similar
event shall be affected, then, as a condition of such reorganization,
reclassification, consolidation, merger, or sale, lawful and fair provision
shall be made whereby the holder of this Warrant shall thereafter have the right
to purchase and receive, upon the basis and upon the terms and conditions
specified in this Warrant and in lieu of the shares of Common Stock of the
Company immediately theretofore purchasable and receivable upon the exercise of
the rights represented thereby, such shares of stock, securities, or assets as
may be issued or payable with respect to or in exchange for the number of
outstanding shares of such Common Stock equal to the number of shares of such
stock immediately theretofore purchasable and receivable upon the exercise of
the rights represented by this Warrant, had such reorganization,
reclassification, consolidation, merger, or sale not taken place and in such
event appropriate provision shall be made with respect to the rights and
interests of the holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Exercise Price
and of the number of Warrants Shares) shall thereafter be applicable, as nearly
as may be in relation to any share of stock, securities, or assets thereafter
deliverable upon the exercise hereof. Upon every adjustment of the Exercise
Price or the number of Warrant Shares, the Company shall give written notice
thereof to the holder of this Warrant, which notice shall state the Exercise
Price resulting from such adjustment and the increase or decrease, if any, in
the number of Warrant Shares purchasable at such price, setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Upon the occurrence of any event specified in the first,
second or third sentence of this paragraph, then, in any such event, the Company
shall give written notice in the manner set forth above of the record date for
such dividend, distribution, or subscription rights, or the effective date of
such reorganization, reclassification, consolidation, merger, sale, dissolution
liquidation, winding up or issuance. Such notice shall also specify the date as
of which the holders of Com-
2
<PAGE>
mon Stock of record shall participate in such dividend, distribution, or
subscription rights, or shall be entitled to exchange their Common Stock for
stock, securities or other assets deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation,
winding up or issuance. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such event. Notwithstanding any
provision contained in this Warrant to the contrary, the Company shall not issue
fractional shares upon exercise of this Warrant. If, by reason of any adjustment
made pursuant to this paragraph, the holder of this Warrant would be entitled,
upon the exercise of this Warrant, to receive a fractional interest in a share,
the Company shall, upon such exercise, purchase such fractional interest,
determined as follows:
(i) if the Common Stock is listed on a national securities exchange
or admitted to unlisted trading privileges on such exchange or listed for
trading on the Nasdaq National Market or Nasdaq SmallCap Market or the OTC
Bulletin Board, the current value shall be the last reported sale price of the
Common Stock on such exchange on the last business day prior to the date of
exercise of this Warrant or if no such sale is made on such day, the average of
the closing bid and asked prices for such day on such exchange; or
(ii) if the Common Stock is not listed or admitted to unlisted
trading privileges, the current value shall be the mean of the last reported bid
and asked prices reported by the National Quotation Bureau, Inc. on the last
business day prior to the date of the exercise of this Warrant; or
(iii) if the Common Stock is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not so reported, the current
value shall be an amount determined in such reasonable manner prescribed by the
Board of Directors of the Company.
This Warrant may be redeemed, at the option of the Company as a whole and
not in part from to its expiration, at the office of the Company, upon the
notice specified below, at the price of $.01 per Warrant ("Redemption Price"),
provided that the last sales price of the Common Stock has been at least 170% of
the then effective Exercise Price on each of the twenty (20) consecutive trading
days ending on the third business day prior to the date on which notice of
redemption is given. In the event
3
<PAGE>
the Company shall elect to redeem all or any part of this Warrant, the Company
shall fix a date for the redemption. Notice of redemption shall be mailed by the
first class mail, postage prepaid, by the Company not less than 30 days from the
date fixed for redemption to the holder of this Warrant at their last address
specified by such holder to the Company in writing as they shall appear on the
registration books. Any notice mailed in the manner herein provided shall be
conclusively presumed to have been duly given whether or not the registered
holder received such notice. This Warrant may be exercised in accordance with
the terms hereof at any time after notice of redemption shall have been given by
the Company pursuant hereto and prior to the time and date fixed for redemption.
On and after the redemption date, the record holder of this Warrant shall have
no further rights except to receive, upon surrender of this Warrant, the
redemption price. This Warrant does not entitle the holder hereof to any of the
rights of a stockholder of the Company, including, without limitation, the right
to receive dividends, or other distributions, exercise any preemptive rights to
vote or to consent or to receive notice as stockholders in respect of the
meetings of stockholders or the election of directors of the Company or any
other matter.
Neither this Warrant nor the Warrant Shares may be sold, assigned or
otherwise transferred by the holder hereof until April 11, 1997 without the
prior written consent of the Company.
In the event that, at any time following the exercise (in whole or in part)
of this Warrant, the Company shall undertake to register under the federal
securities laws any shares of Common Stock pursuant to a registration statement
appropriate for the registration of Warrant Shares and for the subsequent public
offering and sale of Warrant Shares by the holder thereof, the Company shall
provide such holder with adequate prior written notice of such registration to
enable such holder to have Warrant Shares included in such registration. The
Company shall pay all of the costs of such registration of Warrant Shares, but
shall have no responsibility of any nature whatsoever for the costs or expenses
of the holder thereof with respect to the offer or sale of Warrant Shares
(including, but not limited to, sales or brokerage commissions and underwriting
fees or discounts). As a condition to the inclusion of Warrant Shares in any
registration statement of the Company, the holder of such Warrant Shares shall
execute and deliver to the Company a registration agreement, in such form as the
Company may reasonably require, containing such terms and conditions as are
customary in the circumstances. Notwithstanding anything to the contrary set
forth in this paragraph, in the event that the Company's undertaking to register
shares of
4
<PAGE>
its Common Stock is in connection with a proposed underwritten public offering
of such shares and the proposed underwriter shall request that no Warrant Shares
(or a limited number of Warrant Shares) be included in such registration, the
right of any holder of Warrant Shares to have Warrant Shares of such holder
included in such registration shall be limited in accordance with such request.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed.
Dated as of January 1996
KELLSTROM INDUSTRIES INC.
By: /s/ ZIVI R. NEDIVI
----------------------------
Zivi R. Nedivi
5
<PAGE>
SUBSCRIPTION FORM
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for the purchase of _____________ Shares of the Common Stock, par
value $.00l per share, of KELLSTROM INDUSTRIES, INC. and herewith makes payment
therefor, all at the price and on the terms and conditions specified in this
Warrant and requests that certificates for the shares of Common Stock hereby
purchased (and any securities or other property issuable upon such exercise)
be issued in the name of and delivered to ______________________________ whose
address is _________________________________ and, if such shares of Common Stock
shall not include all of the shares of Common Stock issuable as provided in this
Warrant, that a new Warrant of like tenor and date for the balance of the shares
of Common Stock issuable hereunder be delivered to the undersigned.
________________________________
(Name of Registered Owner)
________________________________
(Signature of Registered Owner)
________________________________
(Street Address)
________________________________
(City) (State) (Zip Code)
6
EXHIBIT 10.21
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE LAWS OF ANY STATE. THEY MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
10,000 Warrants
KELLSTROM INDUSTRIES, INC.
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received John Gleason or registered assigns ("the Holder") is the owner of
the number of warrants ("Warrants") specified above, each of which entitles the
Holder thereof to purchase, at any time on or before the Expiration Date
(hereinafter defined), one fully paid and nonassessable share of Common Stock,
$.OO1 par value ("Common Stock"), of Kellstrom Industries, Inc., a Delaware
corporation (the "Company"), at a purchase price of $5.00 per share of Common
Stock in lawful money of the United States of America in cash or by certified
of cashier's check or a combination of cash and certified or cashier's check
(subject to adjustment as hereinafter provided).
1. WARRANT; PURCHASE PRICE
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the warrants (the "Purchase Price") shall initially be $5.00 per share of Common
Stock. The Purchase Price and number of shares of Common Stock issuable upon
exercise of each warrant are subject to adjustment as provided in Article 6. The
shares of Common Stock issuable upon exercise of the Warrants (and/or other
shares of common stock so issuable by reason of any adjustments pursuant to
Article 6) are sometimes referred to herein as the "Warrant Shares".
2. EXERCISE, EXPIRATION DATE, REDEMPTION
2.1 The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after issuance and on or
before the Expiration Date, upon
<PAGE>
surrender of this Warrant Certificate to the Company together with a duly
completed Notice of Exercise, in the form attached hereto as Exhibit A, and
payment of an amount equal to the Purchase Price times the number of Warrants to
be exercised. In the case of exercise of less than all the Warrants represented
by this Warrant Certificate, the Company shall cancel the Warrant Certificate
upon the surrender thereof and shall execute and deliver a new Warrant
Certificate for the balance of such Warrants.
2.2 The term "Expiration Date" shall mean 5:00 p.m. New York time on
April 11, 2001, or if such day shall in the State of New York be a holiday or a
day on which banks are authorized to close, then 5:00 p.m. New York time the
next following day which in the State of New York is not a holiday or a day on
which banks are authorized to close.
2.3 The Company may redeem the Warrants at a price of $0.01 per
Warrant upon not less than 30 days' prior written notice if the last sale price
of the Common Stock has been at least $8.50 per share for the 20 consecutive
trading days ending on the third day prior to the date on which the notice of
redemption is given.
3. REGISTRATION AND TRANSFER ON COMPANY BOOKS
3.1 The Company shall maintain books for the registration and transfer
of the Warrants and the registration and transfer of the Warrant Shares.
3.2 Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
3.3 Neither this Warrant Certificate, nor the Warrants represented
hereby, may be sold, assigned or otherwise transferred voluntarily by the
Holder, other than to an Affiliate, as defined herein, of such Holder (a
"Permitted Transfer"), without the consent of the Company, such consent not to
be unreasonably withheld. The Company shall register upon its books any
Permitted Transfer of a Warrant Certificate, upon surrender of same to the
Company with a written instrument of transfer duly executed by the registered
Holder or by a duly authorized attorney. Upon any such registration of Permitted
Transfer, new Warrant Certificate(s) shall be issued to the transferees and the
surrendered Warrant certificate shall be canceled by the Company. A Warrant
Certificate may also be exchanged, at the
2
<PAGE>
option of the Holder, for new Warrant Certificates of different denominations
representing in the aggregate the number of Warrants evidenced by the Warrant
Certificate surrendered. For the purposes of this Section 3.3, the term
"Affiliate" of a person as used herein shall mean (i) any trust, beneficiary of
a trust of which such person is the sole trustee and (ii) any lineal
descendents, ancestors, spouse or former spouse(s) (as part of a marital
dissolution) (or any trust for the benefit of or a family partnership whose
partners shall be such person and/or any lineal descendents, ancestors, spouse
or former spouses (as part of a marital dissolution)) of such person.
4. RESERVATION OF SHARES
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares of capital stock as shall
then be issuable upon the exercise of all outstanding Warrants. The Company
covenants that all shares of capital stock which shall be issuable upon
exercise of the Warrants shall be duly and validly issued and fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issue thereof, and that upon issuance such shares shall be listed on each
national securities exchange, if any, on which the other shares of such
outstanding capital stock of the Company are then listed.
5. LOSS OR MUTILATION
Upon receipt by the Company of reasonable evidence of the ownership of and
the loss, theft, destruction or mutilation of any Warrant Certificate and, in
the case of loss, theft or destruction, of indemnity reasonably satisfactory to
the Company, or, in the case of mutilation, upon surrender and cancellation of
the mutilated Warrant Certificate, the Company shall execute and deliver in lieu
thereof a new Warrant Certificate representing an equal number of Warrants.
6. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES DELIVERABLE
6.1 The number of Warrant Shares purchasable upon the exercise of each
Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares
3
<PAGE>
of Common Stock through stock split or otherwise, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock, or (iv) issue by reclassification its Common Stock
(including any reclassification in connection with a consolidation or
merger in which the Company is the continuing corporation) other
securities of the Company, the number and/or nature of Warrant Shares
purchasable upon exercise of each Warrant immediately prior thereto shall
be adjusted so that the Holder 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 after the happening of any of
the events described above, had such Warrant been exercised immediately
prior to the happening of such event or any record date with respect
thereto. Any adjustment made pursuant to this paragraph (a) shall become
effective retroactively as of the record date of such event.
(b) In case the Company shall issue rights, options or warrants or
securities convertible into Common Stock to the holders of its shares of
Common Stock generally, entitling them (for a period expiring within 45
days after the record date referred to below in this paragraph (b))
to subscribe for or purchase shares of Common Stock at a price per share
which (together with the value of the consideration, if any, payable for
such rights, options, warrants or convertible securities) is lower on the
record date referred to below than the then Market Price Per Share of such
Common Stock (as determined pursuant to Section 9.2) the number of
Warrant Shares thereafter purchasable upon the exercise of each Warrant
shall be determined by multiplying the number of Warrant Shares immediately
theretofore purchasable upon exercise of each Warrant by a fraction, of
which the numerator shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of
Common Stock offered for subscription or purchase, and of which the
denominator shall be the number of shares of Common Stock outstanding on
such record date plus the number of shares which the aggregate offering
price of the total number of shares of Common Stock so offered would
purchase at the then Market Price Per Share of such Common Stock. Such
adjustment shall be made whenever such rights, options, warrants or
convertible securities are issued, and shall become effective retroactively
as of the record date for the determination of shareholders entitled to
receive such rights, options, warrants or convertible securities. In the
event such subscription price may be paid in consideration some or all of
which is in a form
4
<PAGE>
other than cash, the value of such consideration shall be determined in
good faith by the Board of Directors of the Company.
(c) In case the Company shall distribute to all holders of its shares
of Common Stock, or all holders of Common Stock shall otherwise become
entitled to receive, shares of capital stock of the Company (other than
dividends or distributions on its Common Stock referred to in paragraph (a)
above), evidences of its indebtedness or rights, options, warrants or
convertible securities providing the right to subscribe for or purchase any
shares of the Company's capital stock or evidences of its indebtedness,
then in each case the number of Warrant Shares thereafter purchasable upon
the exercise of each Warrant shall be determined by multiplying the number
of Warrant Shares theretofore purchasable upon the exercise of each
Warrant, by a fraction, of which the numerator shall be the then Market
Price Per Share of the Warrant Shares (as determined pursuant to Section
9.2) on the record date mentioned below in this paragraph (c), and of which
the denominator shall be the then Market Price Per Share of the Warrant
Shares on such record date, less the then fair value (as determined by the
Board of Directors of the Company, in good faith) of the portion of the
shares of the Company's capital stock other than Common Stock, evidences
of indebtedness, or of such rights, options, warrants or convertible
securities, distributable with respect to each Warrant Share. Such
adjustment shall be made whenever any such distribution is made, and shall
become effective retroactively as of the record date for the determination
of shareholders entitled to receive such distribution.
(d) In the event of any capital reorganization or any reclassification
of the capital stock of the Company, or in case of the consolidation or merger
of the Company with another corporation (other than a consolidation or merger in
which the outstanding shares of the Company's Common Stock are not converted
into or exchanged for other rights or interests), or in the case of any sale,
transfer or other disposition to another corporation of all or substantially all
the properties and assets of the Company, the Holder of each Warrant shall
thereafter be entitled to purchase (and it shall be a condition to the
consummation of any such reorganization, reclassification, consolidation,
merger, sale, transfer or other disposition that appropriate provisions shall be
made so that such Holder shall thereafter be entitled to purchase) the kind and
amount of
5
<PAGE>
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6.1(d) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
(e) Whenever the number of Warrant Shares, purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6.1, the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
6.2 In the event the Company shall declare a dividend, or make a
distribution to the holders of its Common Stock generally, whether in cash,
property or assets of any kind, including any dividend payable in stock or
securities of any other issuer owned by the Company (excluding regularly payable
cash dividends declared from time to time by the Company's Board of Directors or
any dividend or distribution referred to in Section 6.1(a) or (c) above), the
Purchase Price of each Warrant shall be reduced, without any further action by
the parties hereto, by the Per Share Value (as hereinafter defined) of the
dividend. For purposes of this Section 6.2, the "Per Share Value" of a cash
dividend or other distribution shall be the dollar amount of the distribution on
each share of Common Stock and the "Per Share Value" of any dividend or
distribution other than cash shall be equal to the fair market value of such
non-cash distribution on each share of Common Stock as determined in good faith
by the Board of Directors of the Company.
6.3 No adjustment in the number of Warrant Shares purchasable under
the Warrants, or in the Purchase Price with respect to the Warrant Shares, shall
be required unless such
6
<PAGE>
adjustment would require an increase or decrease of at least 1% in the number of
Warrant Shares issuable upon the exercise of such Warrant, or in the Purchase
Price thereof, provided, however, that any adjustments which by reason of this
Section 6.4 are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All final results of adjustments to the
number of Warrant Shares and the Purchase Price thereof shall be rounded to the
nearest one thousandth of a share or the nearest cent, as the case may be.
Anything in this Section 6 to the contrary notwithstanding, the Company shall be
entitled, but shall not be required, to make such changes in the number of
Warrant Shares purchasable upon the exercise of each Warrant, or in the Purchase
Price thereof, in addition to those required by such Section, as it in its
discretion shall determine to be advisable in order that any dividend or
distribution in shares of Common Stock, subdivision, reclassification or
combination of shares of Common Stock, issuance of rights, warrants or options
to purchase Common Stock, or distribution of shares of stock other than Common
Stock, evidences of indebtedness or assets (other than distributions of cash out
of retained earnings) or convertible or exchangeable securities hereafter made
by the Company to the holders of its Common Stock shall not result in any tax to
the holders of its Common Stock or securities convertible into Common Stock.
6.4 Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant or the Purchase Price of such Warrant Shares is
adjusted, as herein provided, the Company shall mail to the Holder, at the
address of the Holder shown on the books of the Company, a notice of such
adjustment or adjustments, prepared and signed by the Chief Financial officer or
Secretary of the Company, which sets forth the number of Warrant Shares
purchasable upon the exercise of each Warrant and the Purchase Price of such
Warrant Shares after such adjustment, a brief statement of the facts requiring
such adjustment and the computation by which such adjustment was made.
6.5 In the event that at any time prior to the expiration of the
Warrants and prior to their exercise:
(a) the Company shall declare any distribution (other than a cash
dividend or a dividend payable in securities of the Company with respect to
the Common Stock); or
(b) the Company shall offer for subscription to the holders of the
Common Stock any additional shares of stock of any class or any other
securities convertible into Common Stock or any rights to subscribe
thereto; or
7
<PAGE>
(c) the Company shall declare any stock split, stock dividend,
subdivision, combination, or similar distribution with respect to the Common
Stock, regardless of the effect of any such event on the outstanding number
of shares of Common Stock; or
(d) the Company shall declare a dividend, other than a dividend
payable in shares of the Company's own Common Stock; or
(e) there shall be any capital change in the Company as set forth in
Section 6.1(d); or
(f) there shall be a voluntary or involuntary dissolution,
liquidation, or winding up of the Company (other than in connection with a
consolidation, merger, or sale of all or substantially all of its property,
assets and business as an entity);
(each such event hereinafter being referred to as a "Notification Event"), the
Company shall cause to be mailed to the Holder, not less than 20 days prior to
the record date, if any, in connection with such Notification Event (provided,
however, that if there is no record date, or if 20 days prior notice is
impracticable, as soon as practicable) written notice specifying the nature of
such event and the effective date of, or the date on which the books of the
Company shall close or a record shall be taken with respect to, such event. Such
notice shall also set forth facts indicating the effect of such action (to the
extent such effect may be known at the date of such notice) on the Purchase
Price and the kind and amount of the shares of stock or other, securities or
property deliverable upon exercise of the Warrants.
6.6 The form of Warrant Certificate need not be changed because of any
change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may
state the same Purchase Price, the same number of Warrants, and the same number
of Warrant Shares issuable upon exercise of Warrants as are stated in the
Warrant Certificates theretofore issued pursuant to this Agreement. The Company
may, however, at any time, in its sole discretion, make any change in the form
of Warrant Certificate that it may deem appropriate and that does not affect
the substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
8
<PAGE>
7. CONVERSION RIGHTS
7.1 In lieu of exercise of any portion of the Warrants as provided in
Section 2.1 hereof, the Warrants represented by this Warrant Certificate (or any
portion thereof) may, at the election of the Holder, be converted into the
nearest whole number of shares of Common Stock equal to: (1) the product of (a)
the number of Warrants to be so converted, (b) the number of shares of Common
Stock then issuable upon the exercise of each Warrant and (c) the excess, if
any, of (i) the Market Price Per Share (as determined pursuant to Section 9.2)
with respect to the date of conversion over (ii) the Purchase Price in effect
on the business day next preceding the date of conversion, divided by (2) the
Market Price Per Share with respect to the date of conversion.
7.2 The conversion rights provided under this Section 7 may be
exercised in whole or in part and at any time and from time to time while any
Warrants remain outstanding. In order to exercise the conversion privilege, the
Holder shall surrender to the Company, at its offices, this Warrant Certificate
accompanied by a duly completed Notice of Conversion in the form attached hereto
as Exhibit B. The Warrants (or so much thereof as shall have been surrendered
for conversion) shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Warrant Certificate for
conversion in accordance with the foregoing provisions. As promptly as
practicable on or after the conversion date, the Company shall issue and shall
deliver to the Holder (i) a certificate or certificates representing the number
of shares of Common Stock to which the Holder shall be entitled as a result of
the conversion, and (ii) if the Warrant Certificate is being converted in part
only, a new certificate of like tenor and date for the balance of the
unconverted portion of the Warrant Certificate.
8. VOLUNTARY ADJUSTMENT BY THE COMPANY
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants.
9. FRACTIONAL SHARES AND WARRANTS; DETERMINATION OF MARKET PRICE
PER SHARE
9.1 Anything contained herein to the contrary notwithstanding, the
Company shall not be required to issue any fraction of a share of Common Stock
in connection with the
9
<PAGE>
exercise of Warrants. Warrants may not be exercised in such number as would
result (except for the provisions of this paragraph) in the issuance of a
fraction of a share of Common Stock unless the Holder is exercising all Warrants
then owned by the Holder. In such event, the Company shall, upon the exercise of
all of such Warrants, issue to the Holder the largest aggregate whole number of
shares of Common Stock called for thereby upon receipt of the Purchase Price for
all of such Warrants and pay a sum in cash equal to the remaining fraction of a
share of Common Stock, multiplied by its Market Price Per Share (as determined
pursuant to section 9.2 below) as of the last business day, preceding the date
on which the Warrants are presented for exercise.
9.2 As used herein, the "Market Price Per Share" with respect to any
class of series of Common Stock on any date shall mean the closing price per
share of Company's Common Stock for the trading day immediately preceding such
date. The closing price for each such day shall be the last sale price regular
way or, in case no such sale takes place on such day, the average of the closing
bid and asked prices regular way, in either case on the principal securities
exchange on which the shares of such Common Stock of the Company are listed or
admitted to trading or, if applicable, the last sale price, or in case no sale
takes place on such day, the average of the closing bid and asked prices of such
Common Stock on NASDAQ or any comparable system, or if such Common Stock is not
reported on NASDAQ, or a comparable system, the average of the closing bid and
asked prices as furnished by two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose. If such bid and asked prices are not available, then "Market Price Per
Share, shall be equal to the fair market value of such Common Stock as
determined in good faith by the Board of Directors of the Company.
10. GOVERNING LAW
This Warrant Certificate shall be governed by and construed in
accordance with the laws of the State of New York.
10
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed by its officers thereunto duly authorized and its corporate seal
to be affixed hereon, as of this 17TH day of 0CTOBER, 1995.
KELLSTROM INDUSTRIES, INC.
By: /s/ ZIVI R. NEDIVI
----------------------------
Name: Zivi R. Nedivi
Title: President and Chief
Executive Officer
SEAL
Attest:
/s/ JOHN GLEASON
- ---------------------------
John Gleason
11
<PAGE>
EXHIBIT A
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to Section
2 of the Warrant Certificate accompanying this Notice of Exercise, Warrants of
the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate, and herewith makes payment of the Purchase
Price of such shares in full.
________________________________
Name of Holder
________________________________
Signature
Address:
________________________________
________________________________
________________________________
12
<PAGE>
EXHIBIT B
NOTICE OF CONVERSION
The undersigned hereby irrevocably elects to convert, pursuant to Section 7 of
the Warrant Certificate accompanying this Notice of Conversion, _______ Warrants
of the total number of Warrants owned by the undersigned pursuant to the
accompanying Warrant Certificate into shares of the Common Stock of the Company
(the "Shares").
The number of Shares to be received by the undersigned shall be calculated in
accordance with the provisions of Section 7.1 of the accompanying Warrant
Certificate.
________________________________
Name of Holder
________________________________
Signature
Address:
________________________________
________________________________
________________________________
13
EXHIBIT 24.1
The Board of Directors
Kellstrom Industries, Inc.
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Miami, Florida
September 9, 1996
