EXHIBIT 1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "AGREEMENT"), dated as of the 2nd day of
June, 1997, by and between HORSHAM ENTERPRISES LIMITED, a British Virgin Islands
corporation ("PURCHASER") having offices at Columbus Centre Building, Wickams
Cay, Road Town, Tortola, British Virgin Islands, and XXXXXXXXX INDUSTRIES, INC.,
a Delaware corporation ("SELLER") having offices at 00000 X.X. 0xx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000.
WHEREAS, Seller owns 100,000 ordinary shares, NIS 0.002 par value per share
(the "FIRST ORDINARY SHARES"), of Rada Electronic Industries Limited (the
"COMPANY"); and
WHEREAS, by a stock purchase agreement to be entered into between the
Company and the Seller, the Seller will exercise its rights of first refusal
granted to it pursuant to a First Refusal Agreement dated June 22, 1995 so as to
call for the Company to issue to the Seller 1,298,000 Ordinary Shares, NIS 0.002
par value per share (the "SECOND ORDINARY SHARES"), of the Company upon the
exercise by Purchaser of the Option (as defined below); and
WHEREAS, subject to the exercise of the Option and the fulfillment or
satisfaction of the Condition Precedent (as defined below) the Seller desires to
sell, and Purchaser desires to purchase, the First Ordinary Shares and the
Second Ordinary Shares (together the "SHARES") subject to the terms and
conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions herein contained, Seller and Purchaser hereby agree as follows:
SECTION 1
INTERPRETATION
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1.1 DEFINITIONS. In this Agreement unless the context otherwise requires
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the following words and expressions shall bear the meaning set opposite them:
"LONG STOP DATE" means July 11, 1997;
"CONDITION PRECEDENT" means the definition assigned to the term in
Section 4.1;
"OPTION" means the right granted by the Seller to the
Purchaser pursuant to Section 2.1 for the
Purchaser
to call for the Seller to subscribe for the
Second Ordinary Shares and thereafter for
the Seller to sell to the Purchaser the
Shares upon the Condition Precedent being
fulfilled;
"OPTION PERIOD" means the period of commencing on the date
of this Agreement and terminating on the
Long Stop Date;
"OPTION NOTICE" means the notice in the form set out in
Exhibit A to be served on the Seller by the
Purchaser upon the Purchaser exercising the
Option in accordance with Section 2.2; and
"WORKING DAYS" means those days of the year on which the
Company's ordinary shares are traded on the
Nasdaq National Market.
SECTION 2
OPTION
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2.1 OPTION. In consideration of the sum of one dollar ($1) paid by the
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Purchaser (receipt of which is acknowledged by the Seller), the Seller grants
irrevocably and unconditionally to the Purchaser the right exercisable at any
time during the Option Period to require the Seller to subscribe for the Second
Ordinary Shares and, following the fulfillment of the Condition Precedent, to
sell the Shares to the Purchaser for the Purchase Price (as defined in Section
3.1 below) in accordance with the terms and conditions of this Agreement.
2.2 OPTION TERM. The Option shall be exercisable at any time during the
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Option Period by the Purchaser serving the Option Notice upon the Seller.
SECTION 3
SALE AND PURCHASE OF SHARES
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3.1 SALE AND PURCHASE OF THE SHARES. The Seller and the Purchaser agree
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that following the exercise of the option by the service of the Option Notice by
the Purchaser on the Seller and the fulfillment of the Condition Precedent and
upon and subject to the terms and conditions of this Agreement and in reliance
upon the representations, warranties and agreements contained herein, Seller
shall sell to Purchaser, and Purchaser shall purchase from Seller, the Shares.
The aggregate purchase price for the Shares sold pursuant to this Agreement
shall be $3,473,512.00 (the "PURCHASE PRICE"), which Purchase Price shall
consist of $301,000.00 as
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payment for the First Ordinary Shares and $3,172,512.00 as payment for the
Second Ordinary Shares.
SECTION 4
CONDITION PRECEDENT FOR PURCHASE OF THE SHARES
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4.1 CONDITION PRECEDENT. Following the service of the Option Notice on
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the Seller by the Purchaser, the sale and purchase of the Shares shall be
conditional upon the Seller applying for, paying for in full and being issued
the Second Ordinary Shares (the "CONDITION PRECEDENT") for an aggregate purchase
price of $3,172,512.00. It being understood that, notwithstanding anything to
the contrary contained herein, Seller shall have no obligation or liability
under this Agreement, or in connection with the transactions contemplated
hereby, if Seller is unable to subscribe for or purchase the Second Ordinary
Shares for an aggregate purchase price of $3,172,512.00 for any reason beyond
the control of Seller.
SECTION 5
SATISFACTION OF THE CONDITION PRECEDENT
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5.1 OPTION EXERCISE. Following the service of the Option Notice and
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deposit into escrow of the Purchase Price, and subject to Section 4.1, Seller
shall use its best endeavours to fulfill or procure the fulfillment of the
Condition Precedent as soon as possible and in any event by no later than the
Long Stop Date.
5.2 EXTENSION OF OPTION PERIOD. If the Seller does not fulfill the
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Condition Precedent by the Long Stop Date, the Purchaser and Seller may within 7
working days following the expiration of the initial Long Stop Date extend the
Long Stop Date by such period of time as the Purchaser and Seller consider
appropriate. If the Purchaser and Seller extend the period for the fulfillment
of the Condition Precedent in accordance with the foregoing provisions of this
Section, 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 Section 1.1.
5.3 CONDITION PRECEDENT NOT SATISFIED. In the event that the Condition
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Precedent is not fulfilled by the Long Stop Date, then subject to Sections 4.1
and 5.2, the Purchaser shall not be bound to purchase the Shares and the Seller
shall not be bound to sell the Shares, and this Agreement shall immediately
terminate without prejudice to any accrued rights or remedies of the Seller or
the Purchaser.
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SECTION 6
CLOSING, PAYMENT, DELIVERY AND ASSIGNMENT OF WARRANTIES
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6.1 CLOSING DATE. The closing (the "CLOSING") of the sale and purchase of
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the Shares hereunder shall be held following the exercise of the Option on the
date (the "CLOSING DATE") falling 14 working days immediately following the
fulfillment or satisfaction of the Condition Precedent (provided always that,
subject to Section 4.1, the Condition Precedent is fulfilled in its entirety by
the Long Stop Date) or such other date as shall have been agreed to by Seller
and Purchaser.
6.2 PLACE OF CLOSING. The place of the Closing (including the place of
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delivery to Purchaser by Seller of the certificates evidencing the Shares and
the place of payment to Seller by Purchaser of the Purchase Price therefor)
shall be at the offices of Fulbright & Xxxxxxxx L.L.P. ("ESCROW AGENT"), 000
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 or such other place as shall have been agreed
to by Seller and Purchaser.
6.3 CLOSING PAYMENT AND DELIVERY. Upon service of the Option Notice, the
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Purchaser will pay to Seller, by certified check or wire transfer (to an account
designated by Seller), an amount equal to the Purchase Price, and prior to the
closing Seller will deliver to Purchaser a certificate or certificates
registered in Purchaser's name (or in such name or names as otherwise designated
by Purchaser) or a certificate or certificates accompanied by appropriate stock
powers, executed in blank, for the Shares, in accordance with, and subject to,
the terms and conditions of that certain Escrow Agreement (the "ESCROW
AGREEMENT"), to be executed by and among Seller, Purchaser, the Company and
Escrow Agent and in substantially the form attached as Exhibit B hereto.
6.4 ASSIGNMENT OF WARRANTIES. The Seller hereby agrees that at Closing it
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will assign to the Purchaser the benefit of all warranties and written
representations given by the Company to the Seller in any agreement entered into
by such parties by which the Company agrees to issue the Second Ordinary Shares
to the Seller as are capable of being assigned in conjunction with the transfer
of the Second Ordinary Shares, and the Seller shall execute such documents and
take such other reasonable steps as shall be required by the Purchaser,
including without limitation entering into a Deed of Assignment, to vest the
benefit of such warranties and written representations in the Purchaser.
SECTION 7
REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller represents and warrants to Purchaser as follows:
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7.1 ORGANIZATION AND STANDING. Seller is a corporation duly organized,
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validly existing and in good standing under the laws of its state of
organization and is qualified to do business as a foreign corporation in
Florida.
7.2 CORPORATE POWER. Seller has all requisite corporate power to enter
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into this Agreement and the Escrow Agreement, to sell the Shares and to carry
out and perform its obligations under the terms of this Agreement and the Escrow
Agreement.
7.3 AUTHORIZATION. This Agreement and the Escrow Agreement have been
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duly authorized by and are valid and binding obligations of Seller, enforceable
against Seller in accordance with their terms subject to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general
application affecting enforcement of creditors' rights generally.
7.4 THE FIRST ORDINARY SHARES. Subject to consummation of the
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transactions contemplated hereby and by the Escrow Agreement, Seller will
transfer to Purchaser, and Purchaser will acquire, good, valid and marketable
title to the First Ordinary Shares, free and clear of any mortgage, debenture,
charge, pledge, lien or other encumbrance, other than restrictions under
applicable Israeli or United States federal and state securities laws.
7.5 THE SECOND ORDINARY SHARES. Subject to consummation of the
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transactions contemplated hereby and by the Escrow Agreement, Seller will
transfer to Purchaser, and Purchaser will acquire, such title to the Second
Ordinary Shares as Seller shall have acquired from the Company.
7.6 NO OTHER REPRESENTATIONS OR WARRANTIES. Except as specifically stated
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in this Section 7, Seller makes no other representations or warranties to
Purchaser about the Shares or the Company.
SECTION 8
REPRESENTATIONS AND WARRANTIES OF PURCHASER
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Purchaser represents and warrants to Seller as follows:
8.1 ORGANIZATION AND STANDING. Purchaser is a corporation duly organized,
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validly existing and in good standing under the laws of its state of
organization.
8.2 CORPORATE POWER. Purchaser has all requisite corporate power to enter
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into this Agreement and the Escrow Agreement and to carry out and perform its
obligations under the terms of this Agreement and the Escrow Agreement.
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8.3 EXPERIENCE. Purchaser (i) is experienced in evaluating and investing
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in companies such as the Company, (ii) understands that it may lose its entire
investment in the Company and can afford to sustain such loss and (iii) is an
"accredited investor" within the meaning of Rule 501 of Regulation D promulgated
under the Securities Act of 1933, as amended (the "SECURITIES ACT").
8.4 FOREIGN PERSON. Purchaser is not a "U.S. Person" (as such term is
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defined in Rule 902(o) of Regulation S promulgated under the Securities Act).
8.5 INVESTMENT. Purchaser is acquiring the Shares for investment for its
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own account, not for the account or benefit of a U.S. Person and not with the
view to, or for resale in connection with, any distribution thereof, including,
without limitation, immediate resale or distribution into the United States,
except in compliance with U.S. federal and state securities laws. As of the date
hereof, Purchaser has no present plan or intention to sell all or a portion of
the Shares in the United States at any predetermined time, and Purchaser has
made no predetermined arrangements to sell all or a portion of the Shares.
8.6 RULE 144. Purchaser acknowledges that the Shares must be held
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indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. Purchaser has been advised or
is aware of the provisions of Rule 144 promulgated under the Securities Act,
which permits limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions (which conditions cannot presently be
satisfied).
8.7 AUTHORIZATION. This Agreement and the Escrow Agreement have been duly
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authorized by and are valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their terms subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws of
general application affecting enforcement of creditors' rights generally.
8.8 INDEPENDENT INVESTIGATION. In making its investment decision to
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purchase the Shares, Purchaser has relied solely upon an independent
investigation made by it and its representatives, if any, of the Company, and
Purchaser is not relying on any oral or written representations, warranties or
other assurances from Seller or any of Seller's representatives with respect to
the Company or its business, operations, prospects, management or financial
affairs. Prior to the Closing Date, Purchaser has been afforded access and
opportunity to examine all publicly available books and records of the Company
and all other publicly available documents relating to the Company. Purchaser
has had an opportunity to discuss the Company's business, operations, prospects,
management and financial affairs with the Company's management, and the Company
has furnished Purchaser with copies of all documents which Purchaser has
requested.
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SECTION 9
RESTRICTIONS ON TRANSFERABILITY OF
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SECURITIES; COMPLIANCE WITH SECURITIES ACT
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9.1 RESTRICTIONS ON TRANSFERABILITY. The Shares shall not be
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transferable except in compliance with U.S. federal and state securities laws.
9.2 RESTRICTIVE LEGEND. Each certificate representing the Shares, or any
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other securities issued in respect of the Shares upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event, shall
(unless otherwise permitted or unless the securities evidenced by such
certificate shall have been registered under the Securities Act) be stamped or
otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW
OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER SAID ACT.
SECTION 10
INDEMNIFICATION
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10.1 INDEMNIFICATION. Purchaser agrees to indemnify and hold harmless
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Seller, and the Seller agrees to indemnify and hold harmless the Purchaser, from
and against any losses, claims, damages or liabilities (or actions, claims or
proceedings in respect thereof) to which the other party may become subject
arising out of or based upon any breach of any representation, warranty or
agreement of the other party herein contained, and Purchaser and Seller agree to
reimburse each other for any legal or other expenses reasonably and properly
incurred by the applicable party hereto in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement shall be in addition to any liabilities or remedies which the parties
hereto may otherwise have.
10.2 PROCEDURE. Promptly after receipt by an indemnified party under this
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Section 10.2 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 10, notify the indemnifying party in writing of the
commencement thereof but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section 10. In case any such action is brought
against any indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it
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shall elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of the indemnifying party's election to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 10 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more than
one separate counsel (together with appropriate local counsel) approved by the
indemnifying party representing all the indemnified parties who are parties to
such action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. In no event shall any
indemnifying party be liable in respect of any amounts paid in settlement of any
action unless the indemnifying party shall have approved the terms of such
settlement, which consent shall not be unreasonably withheld. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnification could have
been sought hereunder by such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from any and all liability on
any and all claims that are the subject matter of such proceeding.
SECTION 11
MISCELLANEOUS
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11.1 GOVERNING LAW. This Agreement shall be governed by, and construed and
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enforced in accordance with, the laws of the State of Florida.
11.2 CONSENT TO SERVICE AND JURISDICTION. Purchaser, by the execution and
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delivery of this Agreement, designates and appoints CT Corporation System as the
authorized agent of Purchaser upon whom process may be served in any suit,
proceeding or other action against Purchaser instituted by Seller or by any
person controlling Seller as to which Seller or any such controlling person is a
party and based upon this Agreement, or in any other action against Purchaser in
any United States federal or state court sitting in the County of Broward,
arising out of the transactions contemplated by this Agreement and the Escrow
Agreement, and
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Purchaser expressly accepts jurisdiction of any such court in respect of any
such suit, proceeding or other action and, without limiting other methods of
obtaining jurisdiction, expressly submits to personal jurisdiction of any such
court in respect of any such suit, proceeding or other action. Such designation
and appointment shall be irrevocable, unless and until a successor authorized
agent in the United States reasonably acceptable to Seller shall have been
appointed by Purchaser, such successor shall have accepted such appointment and
written notice thereof shall have been given to Seller. Purchaser further agrees
that service of process upon its authorized agent or successor shall be deemed
in every respect personal service of process upon Purchaser in any such suit,
proceeding or other action. In the event that service of any process or notice
or motion or other application to any such court in connection with any such
action or proceeding cannot be made in the manner described above, such service
may be made in the manner set forth in conformance with the Hague Convention on
the Service Abroad of Judicial and Extrajudicial Documents of Civil and
Commercial Matters or any successor convention or treaty. Purchaser hereby
irrevocably waives any objection that it may have or hereafter have to the
laying of venue of any such action or proceeding arising out of or based on the
Shares, this Agreement or the Escrow Agreement, or otherwise relating to the
sale of the Shares in any United States federal or state court sitting in the
County of Broward, and each hereby further irrevocably waives any claim that any
such action or proceeding in any such court has been brought in an inconvenient
forum. Purchaser agrees that any final judgment after exhaustion of all appeals
or the expiration of time to appeal in any appeals or proceeding arising out of
the sale of the Shares, this Agreement or the Escrow Agreement rendered by any
such federal court or state court shall be conclusive and may be enforced in any
other jurisdiction by suit on the judgment or in any other manner provided by
law. Nothing contained in this Agreement shall affect or limit the right of
Seller to serve any process or notice of motion or other application in any
other manner permitted by law or limit or affect the right of Seller to bring
any action or proceeding against Purchaser or any of its property in the courts
of any other jurisdiction. Purchaser further agrees to take any and all action,
including the execution and filing of all such instruments and documents, as may
be necessary to continue such designation and appointment or such substitute
designation and appointment in full force and effect. Purchaser and Seller
hereby agree to the exclusive jurisdiction of the courts of the State of
Florida, or the federal courts sitting in the County of Broward, in connection
with any action brought by either party.
11.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
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herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
11.4 ENTIRE AGREEMENT. This Agreement and the other documents delivered
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pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subject hereof and thereof. Except as
otherwise expressly provided herein, neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated, except by written instrument
signed by Seller and Purchaser.
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11.5 NOTICES, ETC.
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(a) All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by first-class,
registered or certified mail, postage prepaid, or delivered either by hand
or by messenger, or sent via telex, telecopier, computer mail or other
electronic means, addressed (A) if to Purchaser, at Xxxx Xxxxxxx,
Solicitors, Xxx Xxxxxxxx, Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx, XX00 0XX,
Xxxxxxx (Ref: NEM) (facsimile number: 0161 941 3719) or at such other
address as Purchaser shall have furnished to Seller in writing, or (B) if
to any other holder of any Shares, at such address as such holder shall
have furnished to Seller in writing, or, until any such holder so furnishes
an address to Seller, then to and at the address of the last holder thereof
who has so furnished an address to Seller, or (C) if to Seller, at 00000
X.X. 0xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, Attention: President, (facsimile
no.: 954-845-0428), or at such other address as Seller shall have furnished
to Purchaser and each such other holder in writing.
(b) Any notice or other communications so addressed and mailed,
postage prepaid, by registered or certified mail (in each case, with return
receipt requested) shall be deemed to be given when so mailed. Any notice
so addressed and otherwise delivered shall be deemed to be given when
actually received by the addressee.
11.6 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
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power or remedy accruing hereunder, upon any breach or default under this
Agreement, shall impair any such right, power or remedy nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character of any breach or default under this
Agreement, or any waiver of any provisions or conditions of this Agreement must
be made in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement or by law,
shall be cumulative and not alternative.
11.7 RIGHTS; SEPARABILITY. In case any provision of this Agreement shall
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be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
11.8 FURTHER ASSURANCE. The Seller shall take all necessary and reasonable
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steps and co-operate fully with the Purchaser to ensure that it obtains the full
benefit of the Shares and shall execute such documents and take such other
reasonable steps (or procure other necessary parties so to do) as are necessary
or appropriate for vesting in the Purchaser all its rights and interests in the
Shares.
11.9 BROKER. Except for fees owed by the Company to Helix Capital
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Services, L.L.C. (as set forth in the Escrow Agreement), each of Seller and
Purchaser represents and warrants that it has retained no finder or broker or
other person or firm in connection with the transactions contemplated by this
Agreement.
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11.10 LEGAL FEES AND EXPENSES. Each party shall bear the expenses and
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legal fees incurred on its behalf with respect to this Agreement, the Escrow
Agreement and the transactions contemplated hereby and thereby.
11.11 TITLES AND SUBTITLES. The titles of the Sections and subsections of
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this Agreement are for convenience or reference only and are not to be
considered in construing this Agreement.
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11.12 COUNTERPARTS. This Agreement may be executed in counterparts, each
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of which when so executed and delivered shall constitute a complete and original
instrument but all of which together shall constitute one and the same
agreement, and it shall not be necessary when making proof of this Agreement or
any counterpart thereof to account for any other counterpart.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first written above.
XXXXXXXXX INDUSTRIES, INC.
/s/ Zivi X. Xxxxxx
By:______________________________________________
Name: Zivi X. Xxxxxx
Title: Chief Executive Officer and President
HORSHAM ENTERPRISES
/s/ Xxxx Xxxxxxx
By:______________________________________________
Name: Xxxx Xxxxxxx
Title:
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EXHIBIT A
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FORM OF OPTION NOTICE
TO: Xxxxxxxxx Industries, Inc.
00000 X.X. 0xx Xxxxxx
Xxxxxxx, XX 00000
XXX
Dear Sirs:
Option Notice to call for Xxxxxxxxx Industries, Inc. to subscribe for [the
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applicable number of] Ordinary Shares of 0.002 NIS (New Israeli Shekels) each of
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Rada Electronic Industries Limited (the "Second Ordinary Shares").
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Pursuant to Section 2.1 of the stock purchase agreement made between us dated
June 1, 1997 (the "Stock Purchase Agreement"), we hereby give you irrevocable
notice that we hereby exercise the Option (as defined in the Stock Purchase
Agreement).
We accordingly require fulfillment of the Condition Precedent (as defined in the
Stock Purchase Agreement) by the Long Stop Date (as defined in the Stock
Purchase Agreement) subject to Section 4.1 of the Stock Purchase Agreement.
Dated:
__________________________________________________
For and on behalf of Horsham Enterprises Limited
EXHIBIT B
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FORM OF ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "ESCROW AGREEMENT"), dated as of the ___ day of
_____, 1997, by and among RADA ELECTRONIC INDUSTRIES LIMITED, an Israeli
corporation ("RADA") having offices at Medinat Xxxxxxxxx 00, Xxxxxxx-Xxxxxxx,
Xxxxxx 00000, HORSHAM ENTERPRISES LIMITED, a British Virgin Islands corporation
("HORSHAM") having offices at Columbus Centre Building, Wickams Cay, Road Town,
Tortola, British Virgin Islands, XXXXXXXXX INDUSTRIES, INC., a Delaware
corporation ("XXXXXXXXX") having offices at 00000 X.X. 0xx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000, and FULBRIGHT & XXXXXXXX L.L.P., a Texas limited liability
partnership ("ESCROW AGENT") having offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
WHEREAS, pursuant to a certain stock purchase agreement (the "XXXX-
XXXXXXXXX AGREEMENT"), of even date, by and between Rada and Xxxxxxxxx, Xxxx
agrees to sell to Xxxxxxxxx, and Xxxxxxxxx agrees to buy from Rada, _________
ordinary shares, NIS 0.002 par value per share (the "SECOND ORDINARY SHARES"),
of Rada;
WHEREAS, pursuant to a certain stock purchase agreement (the "XXXXXXXXX-
HORSHAM AGREEMENT" and, together with the Xxxx-Xxxxxxxxx Agreement, the
"AGREEMENTS"), dated June 1, 1997, by and between Xxxxxxxxx and Horsham,
Xxxxxxxxx granted to Horsham an option (the "OPTION") to require Xxxxxxxxx to
sell to Horsham the Second Ordinary Shares upon satisfaction of certain
conditions, which Option has been exercised and which conditions have been
satisfied;
WHEREAS, pursuant to the Xxxxxxxxx-Horsham Agreement, Xxxxxxxxx further
agreed to sell to Horsham an additional 100,000 Ordinary Shares of Rada (the
"FIRST ORDINARY SHARES" and, together with the Second Ordinary Shares, the
"SHARES") upon satisfaction of certain conditions, which conditions have been
satisfied;
WHEREAS, pursuant to each of the Agreements, the delivery of the Shares and
the payment therefor is to be performed in accordance with, and subject to, the
terms and conditions set forth herein; and
WHEREAS, the parties hereto desire that Fulbright & Xxxxxxxx L.L.P. serve
as Escrow Agent in connection with the consummation of the transactions
contemplated by the Agreements, the date of such consummation hereafter referred
to as the "CLOSING DATE";
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions contained herein, the parties hereto agree as follows:
(A) ESCROWED PROPERTY. On or prior to the Closing Date, Escrow Agent
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shall receive, and hold in escrow pursuant to this Escrow Agreement, the
following (collectively, the "ESCROWED PROPERTY"):
certificate(s) representing the Second Ordinary Shares from Rada,
representing delivery of the Second Ordinary Shares issued and sold by
Rada to Xxxxxxxxx pursuant to the Xxxx-Xxxxxxxxx Agreement and sold by
Xxxxxxxxx to Horsham pursuant to the Xxxxxxxxx-Horsham Agreement;
certificate(s) representing the First Ordinary Shares from Xxxxxxxxx,
representing delivery of the First Ordinary Shares sold by Xxxxxxxxx
to Horsham pursuant to the Xxxxxxxxx-Horsham Agreement;
U.S. $__________ from Horsham, representing payment by Horsham to
Xxxxxxxxx of the purchase price for the Shares;
four (4) executed original signature pages to the Xxxx-Xxxxxxxxx
Agreement from Rada;
four (4) executed original signature pages to the Xxxx-Xxxxxxxxx
Agreement from Xxxxxxxxx;
four (4) executed original signature pages to the Xxxxxxxxx-Horsham
Agreement from Horsham;
four (4) executed original signature pages to the Xxxxxxxxx-Horsham
Agreement from Xxxxxxxxx;
seven (7) executed original signature pages to this Escrow Agreement
from Rada;
seven (7) executed original signature pages to this Escrow Agreement
from Horsham;
seven (7) executed original signature pages to this Escrow Agreement
from Xxxxxxxxx; and
seven (7) executed original signature pages to this Escrow Agreement
from Escrow Agent.
(B) DEPOSIT OF FUNDS. To the extent the funds identified in Section
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1(iii) above are received by Escrow Agent prior to the Closing Date, Escrow
Agent shall deposit such funds into an interest bearing escrow account
maintained by Escrow Agent at Citibank, N.A. (the "Account"). Horsham shall be
entitled to all interest earned on such funds deposited into the Account prior
to the Closing Date.
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(C) INVESTMENT OF ESCROWED PROPERTY. Other than the deposit of the above-
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described funds into the Account, Escrow Agent shall be under no obligation to
invest the Escrowed Property.
(D) DISBURSEMENT OF ESCROWED PROPERTY. Upon receipt by Escrow Agent of
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all Escrowed Property identified in Section 1 above and confirmation to proceed
[via facsimile] from each of the other parties hereto, Escrow Agent shall
distribute the Escrowed Property as follows:
certificates representing the Shares to Horsham on behalf of
Xxxxxxxxx, including the Second Ordinary Shares delivered by Rada to
Xxxxxxxxx pursuant to the Xxxx-Xxxxxxxxx Agreement;
U.S. $301,000.00 to Xxxxxxxxx on behalf of Horsham, representing
payment of the purchase price for the First Ordinary Shares owed
pursuant to the Xxxxxxxxx-Horsham Agreement;
U.S. [$130,000.00] to Helix Capital Services, L.L.C. on behalf of
Rada, representing payment of a financial advisory fee;
U.S. $_________ to Escrow Agent on behalf of Rada, representing
payment of legal fees and expenses incurred by Xxxxxxxxx in connection
with the transactions contemplated by the Agreements and reimbursed by
Rada;
U.S. $_________ to Rada on behalf of Xxxxxxxxx, representing payment
of the purchase price for the Second Ordinary Shares sold by Rada to
Xxxxxxxxx pursuant to the Xxxx-Xxxxxxxxx Agreement, less the amounts
described in items (iii) and (iv) above;
one (1) fully-executed original of each of the Xxxx-Xxxxxxxxx
Agreement and this Escrow Agreement to each of Rada and its counsel;
one (1) fully-executed original of each of the Xxxxxxxxx-Horsham
Agreement and this Escrow Agreement to each of Horsham and its
counsel;
one (1) fully-executed original of each of the Agreements and this
Escrow Agreement to Xxxxxxxxx; and
one (1) fully-executed original of each of the Agreements and this
Escrow Agreement to Escrow Agent.
(E) NO IMPLIED DUTIES OF ESCROW AGENT. It is expressly agreed and
---------------------------------
understood that (i) Escrow Agent is serving solely as an accommodation to the
other parties hereto and Escrow Agent shall not be liable to any of the other
parties hereto or any other person for any error of judgment, mistake or act of
omission hereunder or any matter or thing arising out of its conduct
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hereunder, except for Escrow Agent's willful misconduct or gross negligence,
(ii) Escrow Agent shall have, and be under, no other duties or obligations and
shall not be required to perform any tasks other than those expressly described
herein, (iii) Escrow Agent is acting hereunder as a depository only and is not
responsible or liable in any manner whatsoever for the identity, authority or
rights of any person claiming to have rights to the Escrowed Property or for the
terms and conditions of any instrument pursuant to which the other parties
hereto may act and (iv) Escrow Agent is acting, and may continue to act, as
counsel to Xxxxxxxxx in connection with various legal matters, including but not
limited to, any dispute which may arise as to the proper application of the
Escrowed Property and/or the Agreement and any disputes or litigation which may
arise with respect thereto and/or thereunder.
(F) RELIANCE OF ESCROW AGENT ON DOCUMENTS. Escrow Agent may (i) act in
-------------------------------------
reliance upon any writing or instrument or signature which it, in good faith,
believes to be genuine, (ii) assume the validity and accuracy of any statement
or assertion contained in such a writing or instrument and (iii) assume that any
person purporting to give any writing, notice, advice, or instructions in
connection with the provisions of this Escrow Agreement has been duly authorized
to do so. Escrow Agent shall not be liable in any manner for the sufficiency or
correctness as to form, execution or validity of any instrument or copy of any
instrument deposited in escrow, nor as to the identity, authority or right of
any person executing the same, and its duties shall be limited to those
specifically provided in this Escrow Agreement.
(G) INDEMNIFICATION OF ESCROW AGENT. Unless Escrow Agent discharges any
-------------------------------
of its duties under this Escrow Agreement in a grossly negligent manner or is
guilty of willful misconduct with regard to its duties under this Escrow
Agreement, Escrow Agent shall not be liable to any person for any action taken
or loss suffered by such person, nor for any mistake of fact, error of judgment,
or for any actions or omissions of any kind. The other parties hereto shall,
jointly and severally, indemnify Escrow Agent and hold it harmless from any and
all claims, liabilities, losses, actions, suits or proceedings, or other
expenses, fees, or charges of any character or nature, public or private, which
it may incur or with which it may be threatened by reason of its acting as
Escrow Agent under this Escrow Agreement, and shall indemnify Escrow Agent
against any and all expenses, including reasonable attorneys' fees and the cost
of defending any action, suit or proceeding or resisting any claim in such
capacity, both at the trial and appellate levels.
(H) DISPUTES AND INTERPLEADER. In the event of any dispute between any of
-------------------------
the parties hereto relating to delivery of the Escrowed Property by Escrow Agent
or to any other matter arising out of this Escrow Agreement, Escrow Agent may
submit the matter to a court of competent jurisdiction in the State of New York
in an interpleader or similar action. Escrow Agent shall perform any acts
ordered by any court of competent jurisdiction, without any liability or
obligation to any party hereunder by reason of such act.
(I) CONSULTATION WITH COUNSEL. Escrow Agent may consult with counsel of
-------------------------
its own choice and shall have full and complete authorization and protection to
act in accordance with the opinion of such counsel as to any matters in
connection with this Escrow Agreement to the extent that any act or failure to
act undertaken on the advice of counsel is undertaken in good
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faith and is not contrary to the specific provisions of this Escrow Agreement.
Escrow Agent shall not be liable for (i) any action taken in reliance upon the
advice of counsel and in good faith or (ii) any mistakes of fact or errors of
judgment, or for any acts or omissions of any kind, unless any of such actions,
omissions or mistakes are caused by its gross negligence or willful misconduct.
(J) RESIGNATION OF ESCROW AGENT. The term of this Escrow Agreement shall
---------------------------
begin on the effective date hereof and still continue as long as Escrow Agent
holds the Escrowed Property hereunder. Escrow Agent may resign by notice given
to the other parties hereto at least 30 days prior to the effective date of
resignation. If a successor escrow agent is not appointed by the other parties
hereto within a reasonable period of time after receipt of such notice, Escrow
Agent may petition a court of competent jurisdiction to name a successor. Upon
the effective date of its resignation hereunder, Escrow Agent shall be released
from any further obligations hereunder.
(K) NOTICES.
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(a) All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by first-class, registered
or certified mail, postage prepaid, or delivered either by hand or by
messenger, or sent via telex, telecopier, computer mail or other electronic
means, addressed (A) if to Rada, at Medinat Xxxxxxxxx 00, Xxxxxxx-Xxxxxxx,
Xxxxxx 00000, Attention: ___________, (facsimile no.: _____________), or at
such other address as Rada shall have furnished to the other parties hereto
in writing, or (B) if to Xxxxxxxxx, at 00000 X.X. 0xx Xxxxxx, Xxxxxxx,
Xxxxxxx 00000, Attention: President, (facsimile no.: 954-845-0428), or at
such other address as Xxxxxxxxx shall have furnished to the other parties
hereto in writing, or (C) if to Horsham, at Xxxx Xxxxxxx Solicitors, Xxx
Xxxxxxxx, Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx, XX00 0XX, Xxxxxxx (Ref: NEM)
(facsimile no.: 0161 941 3719), or at such other address as Horsham shall
have furnished to the other parties hereto in writing, or (D) if to Escrow
Agent, at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxxxx, (facsimile no.: 212/752-5958), or at such other address as Escrow
Agent shall have furnished to the other parties hereto in writing.
(b) Any notice or other communications so addressed and mailed,
postage prepaid, by registered or certified mail (in each case, with return
receipt requested) shall be deemed to be given when so mailed. Any notice so
addressed and otherwise delivered shall be deemed to be given when actually
received by the addressee.
(L) ENTIRE AGREEMENT. This Escrow Agreement and the other documents
----------------
delivered pursuant hereto, including the Agreements, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof. Except as otherwise expressly provided herein,
neither this Escrow Agreement nor any term hereof may be amended, waived,
discharged or terminated, except by a written instrument signed by the parties
hereto.
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(M) GOVERNING LAW. This Escrow Agreement shall be governed by, and
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construed and enforced in accordance with, the laws of the State of New York.
(N) COUNTERPARTS. This Escrow Agreement may be executed in counterparts,
------------
each of which when so executed and delivered shall constitute a complete and
original instrument but all of which together shall constitute one and the same
agreement, and it shall not be necessary when making proof of this Escrow
Agreement or any counterpart thereof to account for any other counterpart.
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first written above.
RADA ELECTRONIC INDUSTRIES LIMITED
By:_____________________________________________
Name:
Title:
HORSHAM ENTERPRISES
By:_____________________________________________
Name:
Title:
XXXXXXXXX INDUSTRIES, INC.
By:_____________________________________________
Name:
Title:
FULBRIGHT & XXXXXXXX L.L.P., solely in its
capacity as Escrow Agent
By:_____________________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Partner
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