-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AKNlVRums0cTHMQGukjQh/t/zIPTQr2GJgGZxd3g/DkqjhP2QgqXGbqEb2nUKenU Sl0UD288rptLJTM7lWhP/w== 0000929624-99-001499.txt : 19990812 0000929624-99-001499.hdr.sgml : 19990812 ACCESSION NUMBER: 0000929624-99-001499 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19990811 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RADA ELECTRONIC INDUSTRIES LTD CENTRAL INDEX KEY: 0000761238 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-51105 FILM NUMBER: 99683954 BUSINESS ADDRESS: STREET 1: MEDINAT HAYEHIDIM 12 STREET 2: P O BOX 2059 CITY: HERZLIYA ISRAEL 4612 STATE: L3 BUSINESS PHONE: 2127348340 MAIL ADDRESS: STREET 1: MEDINAT HAYEHIDIM 12 STREET 2: P O BOX 2059 CITY: HERZLIYA ISRAEL 461 STATE: L3 ZIP: 10021 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HORSHAM ENTERPRISES LTD CENTRAL INDEX KEY: 0001040659 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: COLUMBUS CENTRE BUILDING STREET 2: WICKAMS CAY ROADTOWN TORTOLA CITY: BRITISH VIRGIN ISLAN MAIL ADDRESS: STREET 1: COLUMBUS CENTRE BUILDING STREET 2: WICKAMS CAY ROADTOWN TORTOLA CITY: BRITISH VIRGIN ISLAN SC 13D/A 1 AMENDMENT #5 TO SCHEDULE 13-D UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 5)* RADA ELECTRONIC INDUSTRIES LIMITED ------------------------------------------------------------- (Name of Issuer) Ordinary Shares, Par Value NIS .002 Per Share --------------------------------------------------- (Title of Class of Securities) 750115305 ----------------------------------------- (CUSIP Number) Robert T. Burke Mandel Buder & Verges 101 Vallejo Street San Francisco, CA 94111 (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications) June 15 and 16, 1999 and July 15, 1999 ---------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-(b) (3) or (4), check the following box [_]. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page should be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). - ----------------------- --------------------- CUSIP NO. 750115305 SCHEDULE 13D PAGE 2 OF 4 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Horsham Enterprises Limited - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [_] (b) [X] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS 4 WC - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO 5 ITEMS 2(d) or 2(e) [_] - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 British Virgin Islands - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF 0 SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 2,697,675 OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING 2,188,225 PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 0 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 2,697,675 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 12.4% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 CO - ------------------------------------------------------------------------------ *SEE INSTRUCTION BEFORE FILLING OUT! This Amendment amends Items 4, 5, 6 and 7 of the Statement on Schedule 13D filed by Horsham Enterprises Limited, a British Virgin Islands corporation ("Horsham"), on June 12, 1997, as amended by a Schedule 13D ("A-1") filed on June 18, 1997, a Schedule 13D ("A-2") filed on July 30, 1997, a Schedule 13D ("A-3") filed on August 14, 1997, and a Schedule 13D ("A-4") filed on December 5, 1997 (collectively, the "Schedule 13D"), relating to the Ordinary Shares, par value NIS.002 per share (the "Ordinary Shares"), of Rada Electronic Industries Limited, an Israeli corporation ("Rada"), by amending such items as set forth below . ITEM 4: PURPOSE OF TRANSACTION ---------------------- Item 4 of the Schedule 13D is amended by adding the following to the disclosure already made under such item: Although Horsham's primary reason for acquiring and holding its Ordinary Shares has been and remains to make a profit on its investment, and while Horsham has no specific plans or proposals that relate to or would result in any of the events described in subsections (a) through (c) and (e) through (j) of Item 4, Horsham, as a major shareholder of Rada, is in a position to exert influence over Rada's corporate strategy and the decisions made by Rada's management. In addition, Horsham has taken certain actions not ordinarily taken by purely passive investors. Horsham has hired a United States attorney to provide strategic recommendations to Rada, on Horsham's behalf, in Rada's dealings with United States defense contractors and other U.S. companies who may provide a market for Rada's products. Horsham has provided, and intends to continue to provide, Rada with advice and assistance in locating companies that are seen as potential customers of Rada. Regarding the Shareholders' Agreement previously reported, Horsham has been informed that one of the other parties to the agreement was terminated from the executive position he held with Rada and is now involved in litigation with Rada regarding the termination. It is possible that this person has disposed of all or some of his Ordinary Shares. Until Horsham has confirmed any disposition by such party of his shares in Rada, Horsham will continue to report the number of shares it has the shared power to vote in Item 5(a) below on the assumption that such party continues to own the number of shares previously reported. On July 15, 1999, at the request of management of Rada, Horsham wrote a letter to Rada, which Horsham understood would be presented to Rada's auditors in connection with their review of Rada's 1998 financial statements. By such letter, a copy of which is attached hereto as an Exhibit, Horsham indicated that it was prepared to give favorable consideration to further investing in Rada, in light of the circumstances then existing; however, the letter stated that it was not intended to indicate that Horsham would be obligated to make an investment under all circumstances. A similar letter was sent to Rada on the same date by Howard P.L. Yeung, a fifty percent shareholder of Horsham. As previously reported, Horsham has two representatives on Rada's board of directors, Adrian Berg and Roy K. C. Chan. Mr. Berg is also acting as a financial consultant to Rada and as such has assisted, and intends to continue to assist, Rada in developing fundraising plans. ITEM 5: INTEREST IN SECURITIES OF THE ISSUER - ------ ------------------------------------ Item 5 of the Schedule 13D is amended by adding the following to the disclosure already made under the indicated subparagraphs of Item 5: (a) Horsham directly owns 2,089,215 Ordinary Shares, representing approximately 9.7% of the outstanding Ordinary Shares. In addition, pursuant to the Share Option Agreement described in Item 6 below, Horsham has the right to acquire 99,010 additional Ordinary Shares. If Horsham were to exercise such right, it would own a total of 2,188,225 Ordinary Shares, which would represent approximately 10.1% of the outstanding Ordinary Shares. In addition, as a consequence of the Shareholders' Agreement previously disclosed, Horsham has the shared 1 power to vote or direct the voting of an additional 509,450 Ordinary Shares (see discussion of Shareholders' Agreement in Item 4 above). Consequently, Horsham has the shared power to vote or direct the voting of 2,697,675 Ordinary Shares (assuming full exercise of its right under the Share Option Agreement), representing approximately 12.4% of the outstanding Ordinary Shares. These percentages are based on 16,328,000 Ordinary Shares issued and outstanding as of December 31, 1998, according to Rada's Form 20-F dated July 15, 1999, in addition to the issuance of 3,400,000 Ordinary Shares in March of 1999, and the issuance of 1,848,000 Ordinary Shares as partial payment for outstanding debt in June of 1999, for a total of 21,576,000 issued and outstanding Ordinary Shares as of the date hereof, to the best knowledge and belief of Horsham (any percentages shown above that assume the full exercise of Horsham's right under the Share Option Agreement include the number of shares acquired thereby in the total number of Ordinary Shares outstanding). (b) If Horsham were to exercise its right under the Share Option Agreement, it would have the shared power to vote and the sole power to dispose of the Ordinary Shares acquired thereby (see discussion of Shareholders' Agreement in Item 4 above). (c) On June 15 and June 16, 1999, Horsham disposed of 26,500 Ordinary Shares in open market broker's transactions at an average per share price of approximately $1.37. (d) No amendment. (e) Not applicable. ITEM 6: CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT - ------ --------------------------------------------------------------------- TO SECURITIES OF THE ISSUER. --------------------------- Item 6 of the Schedule 13D is amended by adding the following to the disclosure already made under such item: As previously disclosed, Horsham and Rada are parties to a joint venture involving the sale of certain Rada products in the United States and the Far East. The name of the joint venture is New Reef Holdings Limited, a British Virgin Islands company ("New Reef"). Horsham has invested $375,000 (US) for equity in New Reef represented by Class "A" Shares (the "Shares"). In addition, Horsham has loaned $1.1 million (US) to New Reef, which debt is represented by 1.1 million shares of loan stock (the "Loan Stock"). Rada and Horsham are also parties to that certain Share Option Agreement and Share Call Option Exit Agreement, giving Horsham the right to exchange its Shares in New Reef for Ordinary Shares of Rada or to be paid in cash for such Shares in the event that any required Rada shareholder approval of the exchange is not obtainable. Horsham's right under the Share Option Agreement is exercisable at any time during the seven-year period following October 11, 1996. Horsham may exercise its right under the Share Option Agreement only with respect to all of the Shares. Upon exercise of such right, Horsham would obtain that number of Ordinary Shares that would be purchased by $375,000 (US) at a per share price of $3.7875 (US) (the average closing price of the Ordinary Shares for the ten working days prior to the date of the joint venture agreement). Rada and Horsham are also parties to that certain Loan Stock Option Agreement and Loan Stock Call Option Exit Agreement, giving Horsham the right to exchange its Loan Stock for Ordinary Shares of Rada or to be paid in cash in the event that any required Rada shareholder approval of the exchange is not obtainable. This right is exercisable at any time during the seven-year period following October 11, 1996, provided that the market value of the Ordinary Shares at the time of exercise equals or exceeds $5.00 (US). (So long as the market value of the Ordinary Shares is less than $5.00 (US), this right is not exercisable.) The number of Ordinary Shares Horsham would acquire upon 2 exercise of its right under the Loan Stock Option Agreement would be equal to the number of shares purchased by $1.1 million (US) plus any accrued interest and expenses outstanding in respect of the Loan Stock, at a per share price to be determined by a formula set forth in the Loan Stock Option Agreement. Item 6 is also amended by incorporating by reference the discussion of the Shareholders' Agreement in Item 4 above. ITEM 7: EXHIBITS - ------ -------- Item 7 of the Schedule 13D is amended to disclose the following: 5. Letter to Rada dated July 15, 1999; 6. Share Option Agreement; 7. Share Call Option Exit Agreement; 8. Loan Stock Option Agreement; 9. Loan Stock Call Option Exit Agreement; 10. Deed of Amendment of Share Option Agreement; and 11. Deed of Amendment of Loan Stock Option Agreement. SIGNATURE - --------- After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 5, 1999 HORSHAM ENTERPRISES, LTD. /s/ Roy K. C. Chan - -------------------------------------- By: Roy K. C. Chan, Managing Director Exhibit Index - ------------- Exhibit 5 Letter to Rada dated July 15, 1999 Exhibit 6 Share Option Agreement Exhibit 7 Share Call Option Exit Agreement Exhibit 8 Loan Stock Option Agreement Exhibit 9 Loan Stock Call Option Exit Agreement Exhibit 10 Deed of Amendment of Share Option Agreement Exhibit 11 Deed of Amendment of Loan Stock Option Agreement EX-5 2 LETTER TO RADA DATED JULY 15, 1999 EXHIBIT 5 HORSHAM ENTERPRISES LIMITED 15 July, 1999 Rada Electronic Industries Ltd 12 Medinat Hayehudim St. Herzllya B. 46120 ISRAEL For the attention of: Maj. General (Res.) Herzle Bodinger -- President & C.E.O. --------------------------------------------------------- Dear General Bodinger As one of the major shareholders of Rada Electronics Industries Limited (the "Company"), we wish to express our confidence in the management of the Company, and particularly in the Company's products. We are willing to consider assisting the Company to achieve its future business goal. As the Company's management addresses the difficult situation it is currently encountering, we are prepared to give favorable consideration to further investing in the Company, in light of the circumstances then existing; however, this letter is not intended to indicate that we will be obliged to make such investment under all circumstances. Yours sincerely /s/ Roy K.C. Chan Roy K.C. Chan EX-6 3 SHARE OPTION AGREEMENT EXHIBIT 6 - -------------------------------------------------------------------------------- (1) RADA ELECTRONIC INDUSTRIES LIMITED (2) HORSHAM ENTERPRISES LIMITED ------------------------------------- SHARE OPTION AGREEMENT ------------------------------------- Neil Myerson Solicitors The Cottages Regent Road Altrincham Cheshire WA14 1RX Tel: 0161-928-2065 Fax: 0161-941-3719 - -------------------------------------------------------------------------------- 0 THIS OPTION AGREEMENT is made the 11th day of October 1996 B E T W E E N:- (1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at 12 Medinat Hayehudin Street, P O Box 2059, Hezliya B, Israel, (the "Grantor"); and (2) HORSHAM ENTERPRISES LIMITED a company existing and operating under the laws of the British Virgin Islands whose registered office is at Columbus Centre Building, Wickams Cay Road, Road Town, Tortola, British Virgin Islands (the "Grantee"). 1. Interpretation -------------- 1.1. In this Agreement unless the context otherwise requires the following words and expressions shall bear the meaning set opposite them:- "A" Shares" means such "A" Ordinary Shares of $1 each of the JVC which shall from time to time be registered in the name of the Grantee and/or the Grantees Associates; "Exchange Value" means the mean average of the closing values for the purchase of each Rada Share on NASDAQ for the last 10 working days prior to the date of Completion of the JVC Agreement; "JVC" means NEW REEF HOLDINGS LIMITED, a company existing and operating under the laws of the British Virgin Islands whose registered office is at Columbus 1 Centre Building, Wickams Cay Road, Road Town, Tortola, British Virgin Islands. "Grantees Associates" means such person, company or other entity that the Grantee shall nominate from time to time to subscribe for or hold "A" Shares in accordance with the JVC's Articles of Association; "JVC Agreement" means the agreement dated 11th October 1996 made between the Grantee (1) and Howard Ping Leung Yeung (2), the JVC (3), KST Corp (4) and Horsham (5); "Option" means the right granted pursuant to Clause 2.1 to exchange the "A" Shares for Option Shares as determined in accordance with Clause 3 to be allotted as fully paid up by the Grantor to the Grantee and/or the Grantees Associates upon the Grantee exercising the Option; "Option Period" means the period of 7 years from the date of this Agreement; "Option Shares" means the number of Rada Shares as determined in accordance with Clause 3.2 to be allotted as fully paid up by the Grantor to the Grantee and/or Grantee's Associates upon the Grantee exercising the Option; 2 "NASDAQ" and "NASDAQ means the definitions ascribed to such terms in Regulations" the JVC Agreement; "Rada Shares" means Ordinary Shares of 0.002 NIS (New Israeli Shekels) each of the Grantor which are for the time being quoted on NASDAQ; "working days" means those days of the year on which Rada Shares are traded on NASDAQ. 1.2 References to statutory provisions shall be construed as references to any statutory modification or re-enactment thereof (whether before on or after the date hereof) for the time being in force and to any former statutory provision replaced (with or without modification) by the provision referred to and shall include all statutory instruments or orders from time to time made pursuant thereto. 1.3 References to persons shall include references to bodies corporate and unincorporated associations to the singular shall include references to the plural and vice versa and to the masculine shall include references to the feminine and neuter and vice versa. 1.4 References to Clause are to Clauses of this Agreement. 1.5 The headings in this Agreement and the use of underlining are included for convenience only and shall not affect the interpretation or construction of this Agreement. 3 2. Option to exchange the "A" Shares into the Option Shares -------------------------------------------------------- 2.1 In consideration of the sum of one dollar ($1) paid by the Grantee (receipt of which is acknowledged by the Grantor) the Grantor grants to the Grantee the right exercisable at any time during the Option Period to exchange the "A" Shares for Option Shares in accordance with the terms and conditions of this Agreement. 2.2 The number of Rada Shares which shall constitute the Option Shares shall be calculated in accordance with Clause 3. 2.3 The Option shall be exercisable only if the Grantee exercises the Option to exchange all of the "A" Shares held by the Grantees or the Grantees Associates on the date the Grantee exercises the Option. 2.4 The Option shall be exercisable at any time during the Option Period, by notice in writing served upon the Grantor. 2.5 The parties shall be bound to complete the exchange of the "A" Shares into the Option Shares as soon as reasonably practical but in any event not later than one month after the date of service of the notice of exercise (or on the next succeeding working day if completion would otherwise fall on a non-working day). 3. Calculation of the number of Rada Shares into which the "A" Shares are to ------------------------------------------------------------------------- be exchanged ------------ 3.1 The value to be attributed to the "A" Shares for the purpose of their exchange for Option Shares shall for the purposes of this Agreement and the Option be deemed to be their aggregate nominal value of $375,000 US Dollars. 4 3.2 Applying the Exchange Value the "A" Shares shall be exchanged into that number of Rada Shares the aggregate value of which represents a value of $375,000 US Dollars. 4. Completion ---------- 4.1 Completion of the allotment of the Option Shares to the Grantee and/or the Grantees Associates as consideration for the Grantee transferring the "A" Shares to the Grantor shall take place at the offices of the JVC's Solicitors or at such other place as the parties shall mutually agree not later than 3.00pm on the relevant date. 4.2 At Completion the Grantee shall deliver to the Grantor: 4.2.1 a letter requesting the Grantor to allot the Option Shares to the Grantee as consideration for the Grantee and/or the Grantees Associates transferring the "A" Shares to the Grantor; 4.2.2 The Grantee's and/or the Grantees Associates share certificate for the "A" Shares. 4.3 At Completion the Grantor shall deliver to the Grantee: 4.3.1 a share certificate for the Option Shares; and 4.3.2 such other deeds and documents as may be necessary to allot to the Grantee and/or the Grantees Associates or to such persons as the Grantee and/or the Grantees Associates may direct the unencumbered beneficial ownership of the Option Shares. 4.4 The Grantor shall procure that upon the Option Shares being allotted to the Grantee that the 5 Grantee and/or the Grantees Associates (as applicable) are approved and registered as the members of the Grantor holding the Option Shares. 5. Grantor's warranties -------------------- 5.1 The Grantor warrants to the Grantee that:- 5.1.1 the Grantor has and will have full power and authority to grant the Option upon the terms and conditions of this Agreement; 5.1.2 the Grantor has obtained all necessary consents of its members, directors and NASDAQ to enter into and complete this Agreement; 5.1.3 all information relating to the regulations by NASDAQ of share options in respect of Rada Shares as is known to the Grantor and which is material to be known by an allottee for value of the Option Shares has been disclosed in writing to the Grantee prior to the date of this Agreement and, upon the written request of the Grantee during the Option Period, the Grantor shall provide such further information of which the Grantor may become aware; 5.1.4 this Agreement complies in all respect with the NASDAQ Regulations and that the Grantor is not aware of any proposals by any competent authority to alter, vary or modify any NASDAQ Regulations; 5.1.5 None of the NASDAQ Regulations will directly or indirectly apply so as to abrogate, vary, modify or otherwise render void or voidable any of the terms and 6 conditions of this Agreement; 5.1.6 No rule of Israeli law or rule of law of New York State or of the United States of America will directly or indirectly apply so as to abrogate, vary, modify, alter or otherwise render void or voidable any of the terms and conditions of this Agreement; 5.1.7 The Grantor is lawfully able to enter into this Agreement; 5.1.8 The Grantor will issue and be responsible for issuing all notices, circulars, resolutions, and press releases which are required to be issued by NASDAQ Regulations upon:- 5.1.8.1 the Grantor and Grantee entering into this Agreement; 5.1.8.2 the Grantee serving a notice on the Grantor exercising the Option; 5.1.8.3 Completion of the Option. 5.2 Each of the Warranties contained in each sub-clause of Clause 5.1 shall be separate and independent. 5.3 The Warranties contained in each sub-clause of Clause 5.1 shall continue in full force and effect at and after the execution of this Agreement. 6. Value of Rada Shares -------------------- 6.1 The Grantor will provide to the Grantee upon request written details of the closing value for 7 the purchase of each Rada Share for any particular previous days' trading on NASDAQ. A statement issued by the Grantor stating the closing value of Rada Shares for any particular previous days trading (in the absence of manifest error) shall be conclusive evidence as to the closing purchase value of Rada Shares. 7. Entire Agreement ---------------- This Agreement represents the entire agreement between the parties in relation to the subject matter. No variation to this Agreement shall be effective unless in writing and signed by or on behalf of each of the parties hereto. 8. No Waiver --------- No waiver of any breach of this Agreement, whether by conduct or otherwise, nor any failure forbearance or delay in exercising any rights or remedies in relation thereto shall be deemed a waiver of any such breach nor shall it prevent any part from subsequently taking any action or 9. Announcements ------------- No announcement concerning the matters herein provided for or referred to or any ancillary matter shall be made by any party hereto other than as required by law or the NASDAQ Regulations without the prior approval of the other parties hereto (such approval not to be unreasonably withheld or delayed). 10. Notices ------- Any notice required to be given by any party hereto or to any other shall be deemed validly served if delivered by hand or sent by first class prepaid letter through the post or by facsimile to the address of the party to be served herein given or (being a company) the registered office of such party for the 8 time being and any notice so served at the time of delivery or (as the case may be) transmission and any notice so served through the post shall be deemed to have been served forty eight hours after the time it was posed and in proving such service it shall be sufficient to prove that the notice was properly delivered, transmitted or (as the case may be) addressed prepaid and posted. 11. Proper Law ---------- This Agreement and the documents to be entered into as provided herein shall be governed and construed in accordance with English Law and the parties hereto submit to the non-exclusive jurisdiction of the English Courts. 12. Counterparts ------------ 12.1 This Agreement may be executed in any number of counterparts, and by the parties hereto on separate counterparts, but in the case shall not be effective until each party has executed at least one counterpart. 12.2 Each counterpart shall constitute the original of this Agreement, but all the counterparts shall together constitute one and the same instrument. IN WITNESS whereof the parties have hereunto set their hands the day and year first before written. SIGNED by ) for and on behalf of RADA ) /s/ (SIGNATURE ILLEGIBLE) ELECTRONIC INDUSTRIES ) LIMITED in the presence of: ) /s/ RICHARD N. TANNER RICHARD N. TANNER Solicitor Clyde & Co., Hong Kong 9 SIGNED by ) for and on behalf of ) /s/ (SIGNATURE ILLEGIBLE) HORSHAM ENTERPRISES ) LIMITED in the presence of: ) /s/ RICHARD N. TANNER RICHARD N. TANNER Solicitor Clyde & Co., Hong Kong 10 EX-7 4 SHARE CALL OPTION EXIT AGREEMENT EXHIBIT 7 - -------------------------------------------------------------------------------- (1) RADA ELECTRONIC INDUSTRIES LIMITED (2) HORSHAM ENTERPRISES LIMITED --------------------------------------- SHARE CALL OPTION EXIT AGREEMENT --------------------------------------- Neil Myerson Solicitors The Cottages Regent Road Altrincham Cheshire WA14 1RX Tel: 0161-928-2065 Fax: 0161-941-3719 - -------------------------------------------------------------------------------- 0 THIS OPTION AGREEMENT is made the day of 1997 B E T W E E N:- (1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at 12 Medinat Hayehudin Street, P O Box 2059, Hezliya B, Israel, (the "Grantor"); and (2) HORSHAM ENTERPRISES LIMITED a company existing and operating under the laws of the British Virgin Islands whose registered office is at Columbus Centre Building, Wickams Cay Road, Road Town, Tortola, British Virgin Islands (the "Grantee"). 1. Interpretation -------------- 1.1. In this Agreement unless the context otherwise requires the following words and expressions shall bear the meaning set opposite them:- "A" Shares" means such "A" Ordinary Shares of $1 each of the JVC which shall from time to time be registered in the name of the Grantee and/or the Grantees Associates; "Condition Precedent" means the meaning assigned to the term in the Share Option Agreement; "Consideration" means the total consideration to be paid by the Grantor to the Grantee as calculated in accordance with Clause 3.1 upon the completion of the Option; "JVC" means NEW REEF HOLDINGS LIMITED, a company 1 existing and operating under the laws of the British Virgin Islands whose registered office is at Columbus Centre Building, Wickams Cay Road, Road Town, Tortola, British Virgin Islands. "Grantees Associates" means such person, company or other entity that the Grantee shall nominate from time to time to subscribe for or hold "A" Shares in accordance with the JVC's Articles of Association; "JVC Agreement" means the agreement dated 11 October 1996 made between the Grantee (1) and Howard Ping Leung Yeung (2), the JVC (3), KST Corp (4) and the Grantee (5); "Long Stop Date" means the meaning ascribed to the term in the Share Option Agreement; "Market Value" means the average of all closing values for the purchase of each Rada Share on NASDAQ on the 10 working days prior to the date upon which the Grantor exercised the Share Option; "Option" means the right granted pursuant to Clause 2.1 for the Grantee to call for the Grantor to elect for either itself 2 and/or the JVC to purchase the Option Shares from the Grantee or the Grantees Associates upon the Grantee exercising the Option; "Option Period" means the period of 7 years from the date of the JVC Agreement; "NASDAQ" and "NASDAQ means the definitions ascribed to such Regulations" terms in the JVC Agreement; "Rada Shares" means Ordinary Shares of 0.002 NIS (New Israeli Shekels) each of the Grantor which are for the time being quoted on NASDAQ; "Share Option Agreement" means the share option agreement dated 11 October 1996 made between the Grantor (1) and the Grantee (2) a copy of which is attached hereto in Part 1 of the Schedule as varied, modified and altered in accordance with a Deed of Amendment made between the Grantor and the Grantee a copy of which is set out in Part 2 of the Schedule; "Share Option" means the option set out in the Share Option Agreement; 3 "working days" means those days of the year on which Rada Shares are traded on NASDAQ. 1.2 References to statutory provisions shall be construed as references to any statutory modification or re-enactment thereof (whether before on or after the date hereof) for the time being in force and to any former statutory provision replaced (with or without modification) by the provision referred to and shall include all statutory instruments or orders from time to time made pursuant thereto. 1.3 References to persons shall include references to bodies corporate and unincorporated associations to the singular shall include references to the plural and vice versa and to the masculine shall include references to the feminine and neuter and vice versa. 1.4 References to Clauses and the Schedule are to Clauses and the Schedule of this Agreement. 1.5 The headings in this Agreement and the use of underlining are included for convenience only and shall not affect the interpretation or construction of this Agreement. 2. Option for the Grantee to call for the Grantor and/or the JVC to purchase ------------------------------------------------------------------------- the "A" Shares -------------- 2.1 In consideration of the sum of one dollar ($1) paid by the Grantee to the Grantor (receipt of which is acknowledged by the Grantor) the Grantor grants to the Grantee subject to Clause 2.2 the right exercisable at any time during the Option Period to call subject to Clause 2.3 for the Grantor to elect for either itself and/or the JVC to purchase the Option Shares in accordance with the terms and conditions of this Agreement. 2.2 The Option shall be exercisable only if the Grantee has validly exercised the Share 4 Option and the Grantor and the Grantee have been unable to fulfil the Condition Precedent by the Long Stop Date or if the Grantor has failed to complete the Share Option Agreement upon the fulfilment of the Condition Precedent by the latest day provided for the completion of the Share Option in the Share Option Agreement (in which case the exercise of the Option by the Grantee shall be without prejudice to any other right or remedy of the Grantee under the Share Option Agreement). 2.3 The Grantee may only elect for the JVC to purchase that portion of the "A" Shares the JVC is legally able to purchase (following the passing of appropriate resolutions of the Company to authorize such purchase) in cash by way of a legally valid purchase of own shares at the date for completion of the Option as determined in accordance with Clause 2.5. The Grantee hereby acknowledges and agrees that it shall be responsible for purchasing that portion of the "A" Shares the JVC is unable or unwilling to purchase as at completion. 2.4 The Option shall be exercisable at any time during the Option Period, by notice in writing served upon the Grantor. 2.5 The parties shall be bound to complete the sale and purchase of the "A" Shares as soon as reasonably practical but in any event not later than one month after the date of service of the notice of exercise (or on the next succeeding working day if completion would otherwise fall on a non-working day). 3. Calculation of the Consideration -------------------------------- 3.1 The total consideration for the sale of "A" Shares by the Grantor to the Grantee shall be 5 applying the Market Value, a sum equal to the aggregate value of each Rada Share the Grantee would have been entitled to receive (applying the calculation for the exchange of the "A" Shares into Rada Shares set out in clause 3 of the Share Option Agreement) upon the completion of the Share Option Agreement if the Grantor and the Grantee had been able to complete the Share Option by the Long Stop Date following the fulfilment of the Condition Precedent; or 4. Completion ---------- 4.1 Completion of the sale of the "A" Shares to the Grantor shall take place at the offices of the JVC's Solicitors or at such other place as the parties shall mutually agree not later than 3:00 pm on the relevant date. 4.2 At Completion the Grantee shall deliver to the Grantor: 4.2.1 a validly constituted transfer to transfer the "A" Shares to the Grantor 4.2.2 The Grantee's and/or the Grantees Associates share certificate for the "A" Shares. 4.4 The Grantee shall procure that upon the "A" Shares being transferred to the Grantor that the Grantor is approved and registered as the member of the JVC holding the "A" Shares 5. Grantor's warranties -------------------- 5.1 The Grantor warrants to the Grantee that:- 5.1.1 the Grantor has and will have full power and authority to grant the Option upon the terms and conditions of this Agreement; 6 5.1.2 the Grantor has obtained all necessary consents of its members, directors and NASDAQ to enter into and complete this Agreement; 5.1.3 this Agreement complies in all respect with the NASDAQ Regulations and that the Grantor is not aware of any proposals by any competent authority to alter, vary or modify any NASDAQ Regulations; 5.1.4 None of the NASDAQ Regulations will directly or indirectly apply so as to abrogate, vary, modify or otherwise render void or voidable any of the terms and conditions of this Agreement; 5.1.5 No rule of Israeli law or rule of law of New York State or of the United States of America will directly or indirectly apply so as to abrogate, vary, modify, alter or otherwise render void or voidable any of the terms and conditions of this Agreement; 5.1.6 The Grantor is lawfully able to enter into this Agreement; 5.1.7 The Grantor will issue and be responsible for issuing all notices, circulars, resolutions, and press releases which are required to be issued by NASDAQ Regulations upon:- 5.1.7.1 the Grantor and Grantee entering into this Agreement; 5.1.7.2 the Grantee serving a notice on the Grantor exercising the Option; 5.1.7.3 Completion of the Option. 7 5.2 Each of the Warranties contained in each sub-clause of Clause 5.1 shall be separate and independent. 5.3 The Warranties contained in each sub-clause of Clause 5.1 shall continue in full force and effect at and after the execution of this Agreement. 6. Value of Rada Shares -------------------- The Grantor will provide to the Grantee upon request written details of the closing value for the purchase of each Rada Share for any particular previous days' trading on NASDAQ. A statement issued by the Grantor stating the closing value of Rada Shares for any particular previous days trading (in the absence of manifest error) shall be conclusive evidence as to the closing purchase value of Rada Shares. 7. Entire Agreement ---------------- This Agreement represents the entire agreement between the parties in relation to the subject matter. No variation to this Agreement shall be effective unless in writing and signed by or on behalf of each of the parties hereto. 8. No Waiver ---------- No waiver of any breach of this Agreement, whether by conduct or otherwise, nor any failure forbearance or delay in exercising any rights or remedies in relation thereto shall be deemed a waiver of any such breach nor shall it prevent any part from subsequently taking any action or 9. Announcements -------------- No announcement concerning the matters herein provided for or referred to or any ancillary 8 matter shall be made by any party hereto other than as required by law or the NASDAQ Regulations without the prior approval of the other parties hereto (such approval not to be unreasonably withheld or delayed). 10. Notices ------- Any notice required to be given by any party hereto or to any other shall be deemed validly served if delivered by hand or sent by first class prepaid letter through the post or by facsimile to the address of the party to be served herein given or (being a company) the registered office of such party for the time being and any notice so served at the time of delivery or (as the case may be) transmission and any notice so served through the post shall be deemed to have been served forty eight hours after the time it was posed and in proving such service it shall be sufficient to prove that the notice was properly delivered, transmitted or (as the case may be) addressed prepaid and posted. 11. Proper Law ---------- This Agreement and the documents to be entered into as provided herein shall be governed and construed in accordance with English Law and the parties hereto submit to the non-exclusive jurisdiction of the English Courts. 12. Counterparts ------------ 12.1 This Agreement may be executed in any number of counterparts, and by the parties hereto on separate counterparts, but in the case shall not be effective until each party has executed at least one counterpart. 12.2 Each counterpart shall constitute the original of this Agreement, but all the counterparts 9 shall together constitute one and the same instrument. IN WITNESS whereof the parties have hereunto set their hands the day and year first before written. 10 EX-8 5 LOAN STOCK OPTION AGREEMENT EXHIBIT 8 - -------------------------------------------------------------------------------- (1) RADA ELECTRONIC INDUSTRIES LIMITED (2) HORSHAM ENTERPRISES LIMITED --------------------------------------------- LOAN STOCK OPTION AGREEMENT --------------------------------------------- Neil Myerson Solicitors The Cottages Regent Road Altrincham Cheshire WA14 1RX Tel: 0161-928-2065 Fax: 0161-941-3719 - -------------------------------------------------------------------------------- 0 THIS OPTION AGREEMENT is made the 11th day of October 1996 B E T W E E N:- (1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at 12 Medinat Hayehudin Street, P O Box 2059, Herliya B, Israel, (the "Grantor"); and (2) HORSHAM ENTERPRISES LIMITED a Company existing and operated under the laws of the British Virgin Islands whose registered office is at Columbus Centre Building, Wickhams Cay, Road Town, Tortola, British Virgin Islands (the "Grantee"). 1. Interpretation -------------- 1.1. In this Agreement unless the context otherwise requires the following words and expressions shall bear the meaning set opposite them:- "Exchange Value" means the actual exchange value to be attributed to Rada Shares when exchanging them for Loan Stock to be determined in accordance with Clause 3; "the Initial Exchange means the closing value for the purchase of Value" each Rada Share on NASDAQ on the working day prior to the date upon which HY exercises the Option; "Grantees Associates" such person, company or other entity that the Grantee 1 shall nominate from time to time to subscribe for or hold Initial Loan Stock; "the Initial Loan means the secured Loan Stock of $4.625 million Stock" US Dollars created by the Loan Stock Instrument; "JVC" means NEW REEF HOLDINGS LIMITED a company existing and operated under the law of the British Virgin Islands whose registered office is at Columbus Centre Building, Wickhams Cay, Road Town, Tortola, British Virgin Islands. "JVC Agreement" means the agreement dated 11th October, 1996 made between the Grantor (1) Howard Ping Leung Yeung (2) the JVC (3) and Horsham(s)(4); "Loan Stock" means the Initial Loan Stock which is from time to time in issue to and fully paid up by the Grantee and/or the Grantees Associates; "the Loan Stock means the Loan Stock Instrument constituting Instrument" $4,625,000 US Dollars Secured Initial Loan Stock of the JVC set out in the Schedule; 2 "Option" means the right granted pursuant to Clause 2.1 to exchange the Initial Loan Stock for Option Shares to be allotted as fully paid up by the Grantor to the Grantee upon the Grantee and/or Grantees Associates exercising the Option; "Option Period" means the period of 7 years from the date of this Agreement; "Option Shares" means the number of Rada Shares as determined in accordance with Clause 3.2 to be allotted as fully paid up by the Grantor to the Grantee and/or the Grantees Associates upon the Grantee exercising the Option; "NASDAQ" and "NASDAQ means the definitions ascribed to such terms in Regulations" the JVC Agreement; "Rada Shares" means Ordinary Shares of 0.002 NIS (New Israeli Shekels) each of the Grantor which are for the time being quoted on NASDAQ; "working days" means those days of the year on which Rada Shares are traded on NASDAQ. 1.2 References to statutory provisions shall be construed as references to any statutory modification or 3 re-enactment thereof (whether before on or after the date hereof) for the time being in force and to any former statutory provision replaced (with or without modification) by the provision referred to and shall include all statutory instruments or orders from time to time made pursuant thereto. 1.3 References to persons shall include references to bodies corporate and unincorporated associations to the singular shall include references to the plural and vice versa and to the masculine shall include references to the feminine and neuter and vice versa. 1.4 References to Clause are to Clauses of this Agreement. 1.5 The headings in this Agreement and the use of underlining are included for convenience only and shall not affect the interpretation or construction of this Agreement. 2. Option to exchange the Loan Stock into the Option Shares -------------------------------------------------------- 2.1 In consideration of the sum of one dollar ($1) paid by the Grantee (receipt of which is acknowledged by the Grantor) the Grantor grants to the Grantee the right exercisable at any time during the Option Period to exchange the Loan Stock for Option Shares in accordance with the terms and conditions of this Agreement. 2.2 The number of Rada Shares which shall constitute the Option Shares shall be calculated in accordance with Clause 3. 2.3 The Option shall be exercisable only if:- 2.3.1 the Grantee exercises the Option to exchange all of the Loan Stock; and 4 2.3.2 the purchase value of each Rada Share at the close of business on the working day prior to the date upon which the Grantee exercises the Option, as quoted on NASDAQ is equal to or exceeds $5 (five US Dollars). 2.4 The Option shall be exercisable at any time during the Option Period, by notice in writing served upon the Grantor. 2.5 The parties shall be bound to complete the exchange of the Loan Stock for the Option Shares as soon as reasonably practical but in no event no later than one month after the date of service of the notice of exercise (or on the next succeeding working day if completion would otherwise fall on a non-working day). 3. Calculation of the number of Rada Shares for which the Loan Stock is to be -------------------------------------------------------------------------- exchanged --------- 3.1 The value to be attributed to the Loan Stock for the purpose of its exchange for Option Shares shall for the purposes of this Agreement and the Option be deemed to be its aggregate nominal value plus any accrued interest and expenses outstanding in respect of the Loan Stock (the "Stock Value"). 3.2 The Exchange Value to be attributed to Rada Shares shall be determined as follows:- 3.2.1 if the Initial Exchange Value of each Rada Share is either equal to or between $5 and $7.70, the Exchange Value shall be the mean average closing purchase value of each Rada Share as quoted on NASDAQ for the last 5 working days immediately prior to the date upon which the Grantee exercises the Option less 10% thereof; 5 or 3.2.2 if the Initial Exchange Value is greater than $7.70 the Exchange Value of each Rada Share shall be $7 US Dollars. 3.3 Applying the Exchange Value, the Loan Stock, the value of which shall be deemed to be the Stock Value, shall be exchanged for that number of Rada Shares the aggregate value of which represent the Stock Value. 4. Completion ----------- 4.1 Completion of the allotment of the Option Shares to the Grantee as consideration for the Grantee transferring the Loan Stock to the Grantor shall take place at the offices of the JVC's Solicitors or at such other place as the parties shall mutually agree not later than 3:00pm on the relevant date. 4.2 At Completion the Grantee shall deliver to the Grantor: 4.2.1 a letter requesting the Grantor to allot the Option Shares to the Grantee and/or the Grantees Associates as consideration for the Grantee and/or the Grantees Associates transferring the Loan Stock to the Grantor; 4.2.2 The Grantee's certificate for the Loan Stock. 4.3 At Completion the Grantor shall deliver to the Grantee: 4.3.1 a share certificate for the Option Shares; and 6 4.3.2 such other deeds and documents as may be necessary to allot to the Grantee or to such persons as the Grantee including the Grantees Associates may direct the unencumbered beneficial ownership of the Option Shares. 4.4 The Grantor shall procure that upon the Option Shares being allotted to the Grantee and/or the Grantees Associates that the Grantee and/or the Grantees Associates (as applicable) is approved and registered as the member of the Grantor holding the Option Shares. 5. Grantor's warranties -------------------- 5.1 The Grantor warrants to the Grantee that:- 5.1.1 the Grantor has and will have full power and authority to grant the Option upon the terms and conditions of this Agreement; 5.1.2 the Grantor has obtained all necessary consents of its members, directors and NASDAQ to enter into and complete this Agreement; 5.1.3 all information relating to the regulations by NASDAQ of share options in respect of Rada Shares as is known to the Grantor and which is material to be known by an allottee for value of the Option Shares has been disclosed in writing to the Grantee prior to the date of this Agreement and, upon the written request of the Grantee during the Option Period, the Grantor shall provide such further information of which the Grantor may become aware; 7 5.1.4 this Agreement complies in all respect with the NASDAQ Regulations and that the Grantor is not aware of any proposals by any competent authority to alter, vary or modify any NASDAQ Regulations; 5.1.5 None of the NASDAQ Regulations will directly or indirectly apply so as to abrogate, vary, modify or otherwise render void or voidable any of the terms and conditions of this Agreement; 5.1.6 No rule of Israeli law or rule of law of New York State or of the United States of America will directly or indirectly apply so as to abrogate, vary, modify, alter or otherwise render void or voidable any of the terms and conditions of this Agreement; 5.1.7 The Grantor is lawfully able to enter into this Agreement; 5.1.8 The Grantor will issue and be responsible for issuing all notices, circulars, resolutions, and press releases which are required to be issued by NASDAQ Regulations upon:- 5.1.8.1 the Grantor and Grantee entering into this Agreement; 5.1.8.2 the Grantee serving a notice on the Grantor exercising the Option; 5.1.8.3 Completion of the Option. 5.2 Each of the Warranties contained in each sub-clause of Clause 5.1 shall be separate and independent. 8 5.3 The Warranties contained in each sub-clause of Clause 5.1 shall continue in full force and effect at and after the execution of this Agreement. 6. Value of Rada Shares -------------------- 6.1 The Grantor will provide to the Grantee upon request written details of the closing value for the purchase of each Rada Share for any particular previous days' trading on NASDAQ. A statement issued by the Grantor stating the closing value of Rada Shares for any particular previous days trading shall (in the absence of manifest error) be conclusive evidence as to the closing purchase value of Rada Shares. 7. Entire Agreement ---------------- This Agreement represents the entire agreement between the parties in relation to the subject matter. No variation to this Agreement shall be effective unless in writing and signed by or on behalf of each of the parties hereto. 8. No Waiver --------- No waiver of any breach of this Agreement, whether by conduct or otherwise, nor any failure forbearance or delay in exercising any rights or remedies in relation thereto shall be deemed a waiver of any such breach nor shall it prevent any part from subsequently taking any action or 9. Announcements ------------- No announcement concerning the matters herein provided for or referred to or any ancillary matter shall be made by any party hereto other than as required by law or the NASDAQ Regulations 9 without the prior approval of the other parties hereto (such approval not to be unreasonably withheld or delayed). 10. Notices ------- Any notice required to be given by any party hereto or to any other shall be deemed validly served if delivered by hand or sent by first class prepaid letter through the post or by facsimile to the address of the party to be served herein given or (being a company) the registered office of such party for the time being and any notice so served at the time of delivery or (as the case may be) transmission and any notice so served through the post shall be deemed to have been served forty eight hours after the time it was posed and in proving such service it shall be sufficient to prove that the notice was properly delivered, transmitted or (as the case may be) addressed prepaid and posted. 11. Proper Law ---------- This Agreement and the documents to be entered into as provided herein shall be governed and construed in accordance with English Law and the parties hereto submit to the non-exclusive jurisdiction of the English Courts. 12. Counterparts ------------ 12.1 This Agreement may be executed in any number of counterparts, and by the parties hereto on separate counterparts, but in the case shall not be effective until each party has executed at least one counterpart. 10 12.2 Each counterpart shall constitute the original of this Agreement, but all the counterparts shall together constitute one and the same instrument. IN WITNESS whereof the parties have hereunto set their hands the day and year first before written. 11 THE SCHEDULE ------------ The Loan Stock Instrument ------------------------- 12 Signed by Hiam Nissenson ) for and on behalf of RADA ) /s/ HIAM NISSENSON ELECTRONIC INDUSTRIES LIMITED ) in the presence of:- ) /s/ RICHARD N. TANNER RICHARD N. TANNER Solicitor Clyde & Co., Hong Kong Signed by Roy Kui Chuen Chan ) for and on behalf of HORSHAM ) /s/ ROY KUI CHUEN CHAN ENTERPRISES LIMITED in the ) presence of:- ) /s/ RICHARD N. TANNER RICHARD N. TANNER Solicitor Clyde & Co., Hong Kong 13 EX-9 6 LOAN STOCK CALL OPTION EXIT AGREEMENT EXHIBIT 9 - -------------------------------------------------------------------------------- (1) RADA ELECTRONIC INDUSTRIES LIMITED (2) HORSHAM ENTERPRISES LIMITED ------------------------------------------- LOAN STOCK CALL OPTION EXIT AGREEMENT ------------------------------------------- Neil Myerson Solicitors The Cottages Regent Road Altrincham Cheshire WA14 1RX Tel: 0161-928-2065 Fax: 0161-941-3719 - -------------------------------------------------------------------------------- 0 THIS OPTION AGREEMENT is made the day of 1997 B E T W E E N:- (1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at 12 Medinat Hayehudin Street, P O Box 2059, Herliya B, Israel, (the "Grantor"); and (2) HORSHAM ENTERPRISES LIMITED a Company existing and operated under the laws of the British Virgin Islands whose registered office is at Columbus Centre Building, Wickhams Cay, Road Town, Tortola, British Virgin Islands (the "Grantee"). 1. Interpretation -------------- 1.1. In this Agreement unless the context otherwise requires the following words and expressions shall bear the meaning set opposite them:- "Consideration" means the total consideration to be paid by the Grantor to the Grantee as calculated in accordance with Clause 3.1 upon the completion of the Option; "Grantees Associates" such person, company or other entity that the Grantee shall nominate from time to time to subscribe for or hold Initial Loan Stock; "Condition Precedent" the meaning assigned to the term in the Loan Stock Option Agreement; "the Initial Loan Stock" means the secured Loan Stock of $4.625 million US 1 Dollars created by the Loan Stock Instrument; "JVC" means NEW REEF HOLDINGS LIMITED a company existing and operated under the law of the British Virgin Islands whose registered office is at Columbus Centre Building, Wickhams Cay, Road Town, Tortola, British Virgin Islands; "JVC Agreement" means the agreement dated 11 October 1996 made between the Grantor (1) Howard Ping Leung Yeung (2) the JVC (3) KTS Corp (4) and Grantee (5); "Loan Stock" means the Initial Loan Stock which is from time to time in issue to and fully paid up by the Grantee and/or the Grantees Associates; "Loan Stock Option Agreement" means the loan stock option agreement dated 11 October 1996 made between the Grantor (1) and the Grantee (2) a copy of which is attached hereto in Part 1 of the Schedule as varied, modified and altered in accordance with a Deed of Amendment made between the Grantor and the Grantee a copy of which is set out in Part 2 of the Schedule; "the Loan Stock Instrument" means the Loan Stock Instrument constituting 2 $4,625,000 US Dollars Secured Initial Loan Stock of the JVC set out in the Schedule of the Loan Stock Agreement; "Loan Stock Option" The option set out in the Loan Stock Option Agreement; "Long Stop Date" the meaning assigned to the term in the Loan Stock Option Agreement; "Market Value" the average of all closing values for the purchase of each Rada Share on NASDAQ on the 10 working days prior to the date upon which the Loan Stock Option is exercised; "NASDAQ" and "NASDAQ Regulations" means the definitions ascribed to such terms in the JVC Agreement; "Rada Shares" means Ordinary Shares of 0.002 NIS (New Israeli Shekels) each of the Grantor which are for the time being quoted on NASDAQ; "Option" means the right granted pursuant to Clause 2.1 for the Grantee to call for the Grantor to elect for either itself and/or the JVC to purchase the Loan Stock from the 3 Grantee and/or the Grantee's Associates upon the Grantee and/or Grantees Associates exercising the Option; "Option Period" means the period of 7 years from the date of the JVC Agreement; "working days" means those days of the year on which Rada Shares are traded on NASDAQ. 1.2 References to statutory provisions shall be construed as references to any statutory modification or re-enactment thereof (whether before on or after the date hereof) for the time being in force and to any former statutory provision replaced (with or without modification) by the provision referred to and shall include all statutory instruments or orders from time to time made pursuant thereto. 1.3 References to persons shall include references to bodies corporate and unincorporated associations to the singular shall include references to the plural and vice versa and to the masculine shall include references to the feminine and neuter and vice versa. 1.4 References to Clauses and the Schedule are to Clauses and the Schedule of this Agreement. 1.5 The headings in this Agreement and the use of underlining are included for convenience only and shall not affect the interpretation or construction of this Agreement. 4 2. Option for the Grantee to call for the Grantor and/or the JVC to purchase ------------------------------------------------------------------------- the Loan Stock -------------- 2.1 In consideration of the sum of one dollar ($1) paid by the Grantee to the Grantor (receipt of which is acknowledged by the Grantor) the Grantor grants to the Grantee subject to Clause 2.2 the right exercisable at any time during the Option Period to call subject to Clause 2.3 for the Grantor to elect for either itself and/or the JVC to purchase the Loan Stock in accordance with the terms and conditions of this Agreement. 2.2 The Option shall be exercisable only if the Grantee has validly exercised the Loan Stock Option and the Grantor and the Grantee have been unable to fulfil the Condition Precedent by the Long Stop Date or if the Grantor has failed to complete the Loan Stock Option Agreement upon the fulfillment of the Condition Precedent by the latest day provided for the completion of the Loan Stock Option pursuant to the terms of the Loan Stock Option Agreement (in which case the exercise of the Option by the Grantee hereunder shall be without prejudice to any of the rights or remedies under the Loan Stock Option Agreement). 2.3 The Grantee may only elect for the JVC to purchase that portion of the Loan Stock the JVC is in funds to purchase in cash by way of redemption of Loan Stock at the date for completion of the Option as determined in accordance with Clause 2.5. The Grantee hereby acknowledges and agrees that it shall be responsible for purchasing that part of the Loan Stock which the JVC is unable or unwilling to purchase as at completion. 2.4 The Option shall be exercisable at any time during the Option Period, by notice in writing served upon the Grantor. 5 2.5 The parties shall be bound to complete the purchase of the Loan Stock as soon as reasonably practical but in no event no later than one month after the date of service of the notice of exercise (or on the next succeeding working day if completion would otherwise fall on a non-working day). 3. The Consideration ----------------- 3.1 The Consideration payable by the Grantor to the Grantee for the Loan Stock shall be, applying the Market Value, a sum equal to the aggregate value of each Rada Share the Grantee would have been entitled to receive (applying the calculation for the exchange of Loan Stock into Rada Shares set out in clause 3 of the Loan Stock Option Agreement) upon completion of the Loan Stock Option Agreement if the Grantor and the Grantee had been able to complete the Loan Stock Option by the Long Stop Date following the fulfilment of the Condition Precedent (the "Consideration"). 3.2 The Consideration shall be paid in accordance with Clause 4.3. 4. Completion ---------- 4.1 Completion of the sale of the Loan Stock to the Grantor shall take place at the offices of the JVC's Solicitors or at such other place as the parties shall mutually agree not later than 3.00pm on the relevant date. 4.2 At Completion the Grantee shall deliver to the Grantor and/or the JVC (as applicable) the Grantee's certificate for the Loan Stock. 4.3 At Completion the Grantor shall procure that the Grantor and the JVC either alone or 6 together shall forthwith pay the Consideration by telegraphic transfer to the Grantee. 4.4 The Grantee shall procure that the Grantor is registered as the holder of that portion of the Loan Stock to be transferred to the Grantor hereunder. 5. Grantor's warranties -------------------- 5.1 The Grantor warrants to the Grantee that:- 5.1.1 the Grantor has and will have full power and authority to grant the Option upon the terms and conditions of this Agreement; 5.1.2 the Grantor has obtained all necessary, consents of its members, directors and NASDAQ to enter into and complete this Agreement; 5.1.3 this Agreement complies in all respect with the NASDAQ Regulations and that the Grantor is not aware of any proposals by any competent authority to alter, vary or modify any NASDAQ Regulations; 5.1.4 None of the NASDAQ Regulations will directly or indirectly apply so as to abrogate, vary, modify or otherwise render void or voidable any of the terms and conditions of this Agreement; 5.1.5 No rule of Israeli law or rule of law of New York State or of the United States of America will directly or indirectly apply so as to abrogate, vary, modify, alter or otherwise render void or voidable any of the terms and conditions of this 7 Agreement; 5.1.6 The Grantor is lawfully able to enter into this Agreement; 5.1.7 The Grantor will issue and be responsible for issuing all notices, circulars, resolutions, and press releases which are required to be issued by NASDAQ Regulations upon:- 5.1.7.1 the Grantor and Grantee entering into this Agreement; 5.1.7.2 the Grantee serving a notice on the Grantor exercising the Option; 5.1.7.3 Completion of the Option. 5.2 Each of the Warranties contained in each sub-clause of Clause 5.1 shall be separate and independent. 5.3 The Warranties contained in each sub-clause of Clause 5.1 shall continue in full force and effect at and after the execution of this Agreement. 6. Value of Rada Shares -------------------- 6.1 The Grantor will provide to the Grantee upon request written details of the closing value for the purchase of each Rada Share for any particular previous days' trading on NASDAQ. A statement issued by the Grantor stating the closing value of Rada Shares for any particular previous days trading shall (in the absence of manifest error) be conclusive evidence as to the closing purchase value of Rada Shares. 8 7. Entire Agreement ---------------- This Agreement represents the entire agreement between the parties in relation to the subject matter. No variation to this Agreement shall be effective unless in writing and signed by or on behalf of each of the parties hereto. 8. No Waiver --------- No waiver of any breach of this Agreement, whether by conduct or otherwise, nor any failure forbearance or delay in exercising any rights or remedies in relation thereto shall be deemed a waiver of any such breach nor shall it prevent any part from subsequently taking any action or 9. Announcements ------------- No announcement concerning the matters herein provided for or referred to or any ancillary matter shall be made by any party hereto other than as required by law or the NASDAQ Regulations without the prior approval of the other parties hereto (such approval not to be unreasonably withheld or delayed). 10. Notices ------- Any notice required to be given by any party hereto or to any other shall be deemed validly served if delivered by hand or sent by first class prepaid letter through the post or by facsimile to the address of the party to be served herein given or (being a company) the registered office of such party for the time being and any notice so served at the time of delivery or (as the case may be) transmission and any notice so served through the post shall be deemed to have been served forty eight hours after the time it was posed and in proving such service it shall be sufficient to prove that the notice was properly delivered, transmitted or (as the case may be) addressed prepaid and posted. 9 11. Proper Law ---------- This Agreement and the documents to be entered into as provided herein shall be governed and construed in accordance with English Law and the parties hereto submit to the non-exclusive jurisdiction of the English Courts. 12. Counterparts ------------ 12.1 This Agreement may be executed in any number of counterparts, and by the parties hereto on separate counterparts, but in the case shall not be effective until each party has executed at least one counterpart. 12.2 Each counterpart shall constitute the original of this Agreement, but all the counterparts shall together constitute one and the same instrument. IN WITNESS whereof the parties have hereunto set their hands the day and year first before written. 10 EX-10 7 DEED OF AMENDMENT OF SHARE OPTION AGREEMENT EXHIBIT 10 - -------------------------------------------------------------------------------- (1) RADA ELECTRONIC INDUSTRIES LIMITED (2) HORSHAM ENTERPRISES LIMITED --------------------------------------- DEED OF AMENDMENT OF SHARE OPTION AGREEMENT --------------------------------------- Neil Myerson Solicitors The Cottages Regent Road Altrincham Cheshire WA14 1RX Tel: 0161-928-2065 Fax: 0161-941-3719 - -------------------------------------------------------------------------------- 0 THIS DEED OF AMENDMENT is dated the day of 1997 B E T W E E N:- (1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at 12 Medinat Hayehudin Street, P O Box 2059 Herzliya B, Israel ("Rada"); and (2) HORSHAM ENTERPRISES LIMITED a company controlled by HY existing and operated under the laws of the British Virgin Islands whose registered office is situated at Columbus Centre Building, Wickams Cay, Road Town, Tortola, British Virgin Islands ("Horsham"). RECITALS: - --------- (1) This Deed of Amendment is supplemental to a Share Option Agreement dated 11 October 1996 (the "Option Agreement") made between Rada (1), and Horsham (2) and is made pursuant to clause 7 of the Option Agreement. (2) It is the intention of the parties to vary the terms of the Option Agreement as hereafter appears. OPERATIVE PROVISIONS - -------------------- 1. Definitions ----------- 1.1 All other expressions contained in this Deed shall bear the same meaning ascribed to them in the Option Agreement. 1.2 In this Deed any reference to a Clause, sub-Clause or Schedule is to a Clause or sub-Clause hereof 1 or a Schedule hereto. 1.3 In this Deed words importing the singular shall include the plural and vice versa and words importing any gender shall include all genders. 1.4 The headings to Clauses are for convenience only and shall not affect the construction thereof. 2. Amendments to the Option Agreement. ----------------------------------- 2.1 The parties hereby irrevocably agree the following amendments, additions, modifications and variations shall be made to the Option Agreement with effect from the date of this Deed:- 2.1.1 There shall be added to clause 1.1 of the Option Agreement the following definitions: ""Condition Precedent" has the meaning assigned to that term in Clause 2.5;" ""Long Stop Date" means the day falling [the number of days which will be required to obtain shareholders approval] days following the date upon which the Option is exercised;" 2.1.2 Clause 2.5 of the Option Agreement shall be deleted and shall be replaced by the following new clauses: "2.5 Following the exercise of the Option the exchange of the "A" Shares for the Option Shares shall be conditional upon the Grantor's shareholders consenting to the exchange as required by any applicable NASDAQ or SEC Regulations (the 2 "Condition Precedent"). 2.6 The Grantor shall use its best endeavours to fulfil or procure the fulfilment of the Condition Precedent as soon as possible and in any event by no later than the Long Stop Date. 2.7 If the Grantor does not fulfil the Condition Precedent by the Long Stop Date, the Grantee may within 7 working days following the expiry of the initial Long Stop Date extend the Long Stop Date by such period of time as the Grantee in its absolute discretion considers appropriate. If the Grantee does extend the period for the fulfilment of the Condition Precedent in accordance with the foregoing provisions of this Clause, the new date by which the Condition Precedent must be fulfilled shall thereafter be regarded as the "Long Stop Date" and the new revised date by which the Condition Precedent must be fulfilled shall for the purposes of this Agreement be deemed to replace the date set out opposite the definition of the Long Stop Date in Clause 1.1. 2.8 In the event that the Condition Precedent is not fulfilled by the Long Stop Date, then subject to Clause 2.7 the Grantor and the Grantee shall not be bound to make the exchange and this Agreement shall immediately determine without prejudice to any accrued rights or remedies of the Seller or the Purchaser. 2.9 Subject to fulfilment of the Condition Precedent, the parties shall be bound to complete the exchange of the Loan Stock for the Option Shares as soon as reasonably practical but in no event no later than one month after the fulfilment 3 of the Condition Precedent (or the next succeeding working day if completion would otherwise fall on a non-working day). 3. Effects of this Deed -------------------- 3.1 Save where varied altered, modified or cancelled by the provisions of this Deed, the Option Agreement shall remain in full force and continue to bind the parties. 3.2 The parties hereby acknowledge that this Deed has the effect of validly varying the Option Agreement and complies with all the formalities required to be followed when varying the Option Agreement as set out in clause 7 of the Option Agreement. 4. No Waiver --------- No waiver of any breach of this Deed, whether by conduct or otherwise, nor any failure forbearance or delay in exercising any rights or remedies in relation thereto shall be deemed a waiver of any such breach nor shall it prevent any part from subsequently taking any action or making any claim in respect thereof. 5. Announcements ------------- No announcement concerning the matters herein provided for or referred to or any ancillary matter shall be made by any party thereto other than as required by law and/or by any regulatory authority (including NASDAQ) without the prior approval of the other parties hereto (such approval not to be unreasonably withheld or delayed). 4 6. Costs ----- 6.1 Each party hereto shall bear its own costs and expenses incurred in or in connection with the preparation of this Deed and matters contemplated hereby. 7. Proper Law ---------- 7.1 This Deed and the documents to be entered into as provided herein shall be governed and construed in accordance with English Law and the parties hereto submit to the non-exclusive jurisdiction of the English Courts. 8. Counterparts ------------ 8.1 This Deed may be executed in any number of counterparts, and by the parties hereto on separate counterparts, but in that case shall not be effective until each party has executed at least one counterpart. 8.2 Each counterpart shall constitute the original of this Deed, but all the counterparts shall together constitute one and the same instrument. IN WITNESS whereof the parties have hereunto executed this Deed the day and year first before written. 5 EXECUTED and DELIVERED as a DEED ) by RADA ELECTRONIC INDUSTRIES ) LIMITED acting by: ) Director: Director/Secretary: EXECUTED and DELIVERED as a DEED ) by HORSHAM ENTERPRISES LIMITED ) acting by: ) Director: Director/Secretary: 6 EX-11 8 DEED OF AMENDMENT OF LOAN STOCK OPTION AGREEMENT EXHIBIT 11 - -------------------------------------------------------------------------------- (1) RADA ELECTRONIC INDUSTRIES LIMITED (2) HORSHAM ENTERPRISES LIMITED ---------------------------------------------- DEED OF AMENDMENT OF LOAN STOCK OPTION AGREEMENT ---------------------------------------------- Neil Myerson Solicitors The Cottages Regent Road Altrincham Cheshire WA14 1RX Tel: 0161-928-2065 Fax: 0161-941-3719 - -------------------------------------------------------------------------------- 0 THIS DEED OF AMENDMENT is dated the day of 1997 B E T W E E N:- (1) RADA ELECTRONIC INDUSTRIES LIMITED whose registered office is situated at 12 Medinat Hayehudin Street, P O Box 2059 Herzliya B, Israel ("Rada"); and (2) HORSHAM ENTERPRISES LIMITED a company controlled by HY existing and operated under the laws of the British Virgin Islands whose registered office is situated at Columbus Centre Building, Wickams Cay, Road Town, Tortola, British Virgin Islands ("Horsham"). RECITALS: - --------- (1) This Deed of Amendment is supplemental to a Loan Stock Option Agreement dated 11 October 1996 (the "Option Agreement") made between Rada (1), and Horsham (2) and is made pursuant to clause 7 of the Option Agreement. (2) It is the intention of the parties to vary the terms of the Option Agreement as hereafter appears. OPERATIVE PROVISIONS - -------------------- 1. Definitions ----------- 1.1 All other expressions contained in this Deed shall bear the same meaning ascribed to them in the Option Agreement. 1.2 In this Deed any reference to a Clause, sub-Clause or Schedule is to a Clause or sub-Clause hereof 1 or a Schedule hereto. 1.3 In this Deed words importing the singular shall include the plural and vice versa and words importing any gender shall include all genders. 1.4 The headings to Clauses are for convenience only and shall not affect the construction thereof. 2. Amendments to the Option Agreement. ----------------------------------- 2.1 The parties hereby irrevocably agree the following amendments, additions, modifications and variations shall be made to the Option Agreement with effect from the date of this Deed:- 2.1.1 There shall be added to clause 1.1 of the Option Agreement the following definitions: ""Condition Precedent" has the meaning assigned to that term in Clause 2.5;" ""Long Stop Date" means the day falling [the number of days which will be required to obtain shareholders approval] days following the date upon which the Option is exercised;" 2.1.2 Clause 2.5 of the Option Agreement shall be deleted and shall be replaced by the following new clauses: "2.5 Following the exercise of the Option the exchange of the Loan Stock for the Option Shares shall be conditional upon the Grantor's shareholders consenting to the exchange as required by any applicable NASDAQ or SEC Regulations (the 2 "Condition Precedent"). 2.6 The Grantor shall use its best endeavours to fulfil or procure the fulfilment of the Condition Precedent as soon as possible and in any event by no later than the Long Stop Date. 2.7 If the Grantor does not fulfil the Condition Precedent by the Long Stop Date, the Grantee may within 7 working days following the expiry of the initial Long Stop Date extend the Long Stop Date by such period of time as the Grantee in its absolute discretion considers appropriate. If the Grantee does extend the period for the fulfilment of the Condition Precedent in accordance with the foregoing provisions of this Clause, the new date by which the Condition Precedent must be fulfilled shall thereafter be regarded as the "Long Stop Date" and the new revised date by which the Condition Precedent must be fulfilled shall for the purposes of this Agreement be deemed to replace the date set out opposite the definition of the Long Stop Date in Clause 1.1. 2.8 In the event that the Condition Precedent is not fulfilled by the Long Stop Date, then subject to Clause 2.7 the Grantor and the Grantee shall not be bound to make the exchange and this Agreement shall immediately determine without prejudice to any accrued rights or remedies of the Seller or the Purchaser. 2.9 Subject to fulfilment of the Condition Precedent, the parties shall be bound to complete the exchange of the Loan Stock for the Option Shares as soon as reasonably practical but in no event no later than one month after the fulfilment 3 of the Condition Precedent (or the next succeeding working day if completion would otherwise fall on a non-working day). 3. Effects of this Deed -------------------- 3.1 Save where varied altered, modified or cancelled by the provisions of this Deed, the Option Agreement shall remain in full force and continue to bind the parties. 3.2 The parties hereby acknowledge that this Deed has the effect of validly varying the Option Agreement and complies with all the formalities required to be followed when varying the Option Agreement as set out in clause 7 of the Option Agreement. 4. No Waiver --------- No waiver of any breach of this Deed, whether by conduct or otherwise, nor any failure forbearance or delay in exercising any rights or remedies in relation thereto shall be deemed a waiver of any such breach nor shall it prevent any part from subsequently taking any action or making any claim in respect thereof. 5. Announcements ------------- No announcement concerning the matters herein provided for or referred to or any ancillary matter shall be made by any party thereto other than as required by law and/or by any regulatory authority (including NASDAQ) without the prior approval of the other parties hereto (such approval not to be unreasonably withheld or delayed). 4 6. Costs ----- 6.1 Each party hereto shall bear its own costs and expenses incurred in or in connection with the preparation of this Deed and matters contemplated hereby. 7. Proper Law ---------- 7.1 This Deed and the documents to be entered into as provided herein shall be governed and construed in accordance with English Law and the parties hereto submit to the non-exclusive jurisdiction of the English Courts. 8. Counterparts ------------ 8.1 This Deed may be executed in any number of counterparts, and by the parties hereto on separate counterparts, but in that case shall not be effective until each party has executed at least one counterpart. 8.2 Each counterpart shall constitute the original of this Deed, but all the counterparts shall together constitute one and the same instrument. IN WITNESS whereof the parties have hereunto executed this Deed the day and year first before written. 5 EXECUTED and DELIVERED as a DEED ) by RADA ELECTRONIC INDUSTRIES ) LIMITED acting by: ) Director: Director/Secretary: EXECUTED and DELIVERED as a DEED ) by HORSHAM ENTERPRISES LIMITED ) acting by: ) Director: Director/Secretary: 6 -----END PRIVACY-ENHANCED MESSAGE-----