EXHIBIT 4.4
AMENDMENT AND EXCHANGE AGREEMENT
AMENDMENT AND EXCHANGE AGREEMENT (the "AGREEMENT"), dated as of June 29, 2007,
by and among RADA Electronic Industries Ltd., a corporation organized under the
laws of the State of Israel, with headquarters located at 0 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000, Xxxxxx (the "COMPANY") and each of the investors listed
in SCHEDULE I hereto (each an "INVESTOR" and collectively the "INVESTORS"):
WHEREAS:
A. In the framework of a private placement of the Company's securities that
took place on June 2002 the Investors purchased Ordinary Shares of the Company,
NIS 0.15 nominal value per share (the "SHARES") and warrants to acquire
additional Shares of (the "EXISTING WARRANTS" and the "WARRANT SHARES"), all
pursuant to terms and conditions detailed in the letter of agreement dated 13
May 2002 (the "EXISTING AGREEMENTS").
B. Pursuant to the provisions of the Existing Agreements, the Company
agreed to provide certain registration rights with respect to the Shares and the
Warrant Shares under the Securities Act of 1933, as amended (the "1933 ACT"),
and the rules and regulations promulgated thereunder, and applicable state
securities laws.
C. The Company and the Investors desire to enter into this Agreement,
pursuant to which, among other things, the Investors shall: (a) exchange their
Existing Warrants for the Amended and Restated Warrant in the form attached
hereto as EXHIBIT A (the "RESTATED WARRANT(S)"), each exercisable into Shares
(the Restated Warrants, as exercised, the "RESTATED WARRANT SHARES"), or, as
listed opposite certain Investors' name in SCHEDULE I the Extended Warrants in
the form attached as EXHIBIT B hereto (the "EXTENDED WARRANT(S)", and together
with the Restated Warrant(s) the "AMENDED WARRANT(s)"), each exercisable into
Shares (the Extended Warrants, as exercised, together with the Restated
Warrants, as exercised, the "AMENDED WARRANT SHARES") all as detailed opposite
each Investor's name in SCHEDULE I and (b) grant a loan to the Company in the
aggregate principal amount of US$ 400,000 (the "PRINCIPAL") pursuant to the
terms and subject to the conditions set forth below. Each Investor shall provide
the Company, at the Closing (as such term is defined below) the portion of the
Principal listed opposite each Investor's name in SCHEDULE I. The Amended
Warrants and the Amended Warrant Shares shall be collectively referred to herein
as the "SECURITIES"/
D. The exchanges of (i) the Existing Warrant for the Amended Warrant is
being made in reliance upon the exemption from registration provided by Section
3(a)(9) of the US Securities Act of 1933 (the "SECURITIES ACT").
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the Company and the Investors hereby agree as
follows:
1. EXCHANGE OF WARRANTS
1.1. EXCHANGE. At the Closing, the Investors' Warrants shall be exchanged
for the Amended Warrants. In connection therewith, at the closing
contemplated by this Agreement (the "CLOSING"), each Investor shall
surrender the Existing Warrant, and the Company shall issue and
deliver to each Investor the Amended Warrant.
1.2. CLOSING DATE. The date and time of the Closing (the "CLOSING DATE")
shall be 10:00 a.m., Israel Time, on the date hereof, or such later
date as is mutually agreed to by the Company and the Investors
granting the majority of the Principal to the Company (the "MAJORITY
INVESTORS"). The Closing shall occur on the Closing Date at the
offices of the Company.
2. GRANT OF LOAN
2.1. At the Closing each Investor shall transfer the portion of the
Principal listed opposite each Investor's name in SCHEDULE I to the
Company's bank account whose details will be delivered by the Company
prior to Closing.
2.2. The outstanding Principal shall bear interest ("INTEREST") at the rate
of 8% per annum (the "INTEREST RATE").
2.3. Interest shall commence accruing on the date in which each Investor
has actually delivered such Investor's portion of the Principal (the
"EFFECTIVE DATE"), and shall be computed on the basis of a 365-day
year and actual days elapsed and shall be payable in arrears on the
first business day of each consecutive 6 months period, during the
period beginning on the Effective Date and ending on, and including,
the Repayment Date (as defined below) (each, an "INTEREST DATE") with
the first Interest Date being January 1, 2008. Interest shall be
payable on each Interest Date in cash. VAT, if applicable, shall be
added to any Interest payment, and shall be paid, together with the
Interest, against a duly issued invoice to be delivered to the Company
by each applicable Investor prior to each such VAT payment.
The Principal, the Interest and the VAT accrued thereupon shall be
collectively referred to herein as the "LOAN".
2.4. Subject to the provisions of this Agreement, the Principal and all
accrued and unpaid Interest shall be due and payable on June 30, 2010
(the "REPAYMENT DATE") in one (1) installment.
2.5. If any Interest Date or Repayment Date is not a Business Day, the
applicable payment due hereunder shall be delayed and effected on the
first Business Day immediately thereafter.
For the purpose of this Agreement "BUSINESS DATE" means any day in
which the majority of the banks in Israel and NY are conducting
business.
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2.6. Notwithstanding anything to the contrary in this Agreement, the Loan
will immediately become due and payable (except with respect to any
Investors that have waived such right in writing) upon the occurrence
of any of the following events prior to conversion of the Loan: (i)
The commencement by the Company of any liquidation proceedings or the
adoption of a winding up resolution by the Company, or the appointment
of a receiver or trustee over the whole or any material part of the
Company's assets, or the calling by the Company of a meeting of
creditors for the purpose of entering into a scheme or arrangement
with them; (ii) The commencement by third parties of any liquidation
proceedings, which have not been terminated within 45 days thereafter;
(iii) The levy of an attachment or the institution of execution
proceedings against all or substantially all of the Company's assets,
which have not been terminated or removed within 45 days thereafter;
or (iv) A material default or material breach by the Company of the
undertakings set forth in this Agreement, which was not amended within
14 days following the receipt of a written demand to do so.. The
Company shall notify the Investors promptly of any such event.
3. REPRESENTATIONS
3.1. Company Representations and Warranties.
The Company hereby represents and warrants to the Invetors, and
acknowledges that the Investors are entering into this Agreement in
reliance thereon, as follows:
3.1.1. ORGANIZATION. The Company is duly organized and validly
existing under the laws of the State of Israel, and has full
corporate power and authority to own, lease and operate its
properties and assets and to conduct its business as now being
conducted. The Company has all requisite power and authority to
execute and deliver this Agreement.
3.1.2. AUTHORIZATION; APPROVALS. All corporate action on the part of
the Company necessary for the authorization, execution, delivery,
and performance of all of Company's obligations under this
Agreement, have been taken, This Agreement, when executed and
delivered by or on behalf of the Company, shall constitute the
valid and legally binding obligations of the Company, legally
enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by general
principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
3.1.3. NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby (including, without
limitation, the issuance of the Amended Warrants and reservation
for issuance and issuance of the Amended Warrant Shares) will not
(i) result in a violation of the Articles of Association or the
Memorandum of Association of the Company, or (ii) conflict with,
or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which
the Company is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations and the rules
and regulations of The Nasdaq SmallCap Market (the "PRINCIPAL
MARKET")) applicable to the Company or by which any property or
asset of the Company is bound or affected.
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3.2. Investor's Representations and Warranties
Each of the Investors hereby represents and warrants to the Company as
of the date hereof as follows:
3.2.1. STATUS OF INVESTOR. The Investor either: (a) is an "accredited
investor" within the meaning of Securities and Exchange
Commission ("SEC") Rule 501 of Regulation D promulgated under the
Securities Act, as presently in effect; and/or (b) (i) is not a
"U.S. Person" (within the meaning of SEC Rule 902 of Regulation S
promulgated under the Securities Act ("Regulation S"), as
presently in effect) and is not making this loan on behalf of or
acquiring any shares for the account or benefit of any "U.S.
Person"; (ii) will purchase the shares in an "offshore
transaction" (within the meaning of SEC Rule 902 of Regulation S,
as presently in effect); (iii) will not resell the shares except
in accordance with the provisions Regulation S, pursuant to
registration under the Securities Act, or pursuant to an
available exemption from registration under the Securities Act;
and (iv) will not engage in hedging transactions with regard to
the Shares unless in compliance with the Securities Act.
3.2.2. NO PUBLIC SALE OR DISTRIBUTION. Such Investor is acquiring the
Amended Warrants and upon the exercise of the Amended Warrants,
will acquire the Amended Warrant Shares, for its own account and
not with a view towards, or for resale in connection with, the
public sale or distribution thereof, except pursuant to sales
registered or exempted under the Securities Act; PROVIDED,
HOWEVER, that by making the representations herein, such Investor
does not agree to hold any of such Securities for any minimum or
other specific term and reserves the right to dispose of such
Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act.
Such Investor does not presently have any agreement or
understanding, directly or indirectly, with any Person to
distribute any of such Securities.
3.2.3. RELIANCE ON EXEMPTIONS. Such Investor understands that the
Securities are being offered and sold to it in reliance on
specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and such
Investor's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Investor
set forth herein in order to determine the availability of such
exemptions and the eligibility of such Investor to acquire the
Securities.
3.2.4. INFORMATION. Such Investor and its advisors, if any, have been
furnished with all materials relating to the business, finances
and operations of the Company and materials relating to the offer
and sale of the Securities which have been requested by such
Investor. Such Investor and its advisors, if any, have been
afforded the opportunity to ask questions of the Company and have
received to their satisfaction answers to such questions. Neither
such inquiries nor any other due diligence investigations
conducted by such Investor or its advisors, if any, or its
representatives shall modify, amend or affect such Investor's
right to rely on the Company's representations and warranties
contained herein. Such Investor understands that its investment
in the Securities involves a high degree of risk. Such Investor
has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.
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3.2.5. NO GOVERNMENTAL REVIEW. Such Investor understands that no
United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or
endorsement of the Securities or the fairness or suitability of
the investment in the Securities nor have such authorities passed
upon or endorsed the merits of the offering of the Securities.
3.2.6. VALIDITY; ENFORCEMENT. This Agreement has been duly and validly
authorized, executed and delivered on behalf of such Investor and
shall constitute the legal, valid and binding obligations of such
Investor enforceable against such Investor in accordance with its
terms, except as such enforceability may be limited by general
principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
3.2.7. EXCHANGE OF EXISTING WARRANTS. Such Investor is familiar with
the details included in SCHEDULE I, acknowledges the amount of
the Amended Warrants that each Investor is allocated and agrees
to such allocation. Such Investor has no claim or demand against
the Company with respect to the amount of Amended Warrants
exchanged with, and allocated to, such Investor and in connection
with the exchange of, and the allocation of, the Amended Warrants
to all other Investors, and such Investor hereby waives any
claims it/he may have against the Company in connction with the
Existing Agreements, the Existing Warrants, the Amended Warrants
and the transactions contemplated hereby or thereby.
3.2.8. RESIDENCY. Such Investor is a resident of that jurisdiction
specified below its address on the SCHEDULE I.
4. MISCELLANEOUS
4.1. PROSPECTUS SUPPLEMENT. As soon as practicable after the Closing, but
in no event later than July 30, 2007, the Company shall file a
prospectus supplement to Registration Statement No. 333- 115598 to
reflect the transactions contemplated hereby including change in the
Expiration Date and the Exercise Price (as such terms are defined in
the Amended Warrants) of the Amended Warrant.
4.2. GOVERNING LAW; JURISDICTION;. All questions concerning the
construction, validity, enforcement and interpretation of this
Agreement shall be governed by the laws of the State of Israel,
without giving effect to any choice of law or conflict of law
provision or rule thereof. Each party hereby irrevocably submits to
the exclusive jurisdiction of the competent courts sitting in Tel
Aviv, Israel, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or
discussed herein.
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4.3. COUNTERPARTS. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party; provided that a
facsimile signature shall be considered due execution and shall be
binding upon the signatory thereto with the same force and effect as
if the signature were an original, not a facsimile signature.
4.4. HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of,
this Agreement.
4.5. SEVERABILITY. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of the remainder of
this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.
4.6. NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
4.7. FURTHER ASSURANCES. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
4.8. ENTIRE AGREEMENT, AMENDMENT. This Agreement and the Schedules and
Exhibits hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof
and thereof and supersedes all other prior oral or written agreements
between the the parties hereto, their affiliates and Persons acting on
their behalf with respect to the matters discussed herein, and this
Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered
herein and therein. Except as specifically set forth herein or
therein, neither the Company nor any Investor makes any
representation, warranty, covenant or undertaking with respect to such
matters.. The preamble, Schedules and Exhibits hereto constitutes an
integral part hereof. Any term of this Agreement may be amended and
the observance of any term hereof may be waived (either prospectively
or retroactively and either generally or in a particular instance)
only with the written consent of the company and the Majority
Investors. This Agreement
4.9. HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of,
this Agreement.
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4.10. NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied
against any party.
4.11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of the Amended Warrants. The
Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Majority Investors.
The Investor may assign some or all of its rights hereunder without
the consent of the Company in connection with a transfer by the
Investor of any of the Securities, in which event such assignee shall
be deemed to be the Investor hereunder with respect to such assigned
rights.
4.12. NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered: (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or
(iii) Three (3) Business Day after mailing in registered mail. The
addresses and facsimile numbers for such communications shall be:
If to the Company:
RADA Electronic Industries Ltd.
0 Xxxxxxx Xxxxxx Xxxxxx
Xxxxxxx 00000
Xxxxxx
Telephone: (000) 000-0-000-0000
Facsimile: (000) 000-0-000-0000
Attention: Xxxx Xxxxx, Chief Financial Officer
Copy to:
X. Xxxxxxxx & Co, Advocates and Notaries
Xxxxxx-Xxxxxx Xxxxx
0 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxx
Telephone: + 000-0-000 1931
Facsimile: + 000-0-000 1930
Attention: Xxxxx Xxxxxx, Adv.
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If to the Investor
x/x Xxxxxx Xxxxxxxx
00 Xxxxx Xxxxxx,
Xxx-Xxx, Xxxxxxxxx, Xxxxxx
Telephone: + 000-0-0000000
Email: xxxxxx@xxxxxxxxx.xxx.xx
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each Investor and the Company have caused their respective
signature page to this Amendment and Exchange Agreement to be duly executed as
of the date first written above.
RADA ELECTRONIC INDUSTRIES LTD.:
BY:_______________________
NAME: _____________________
TITLE:
SCHEDULE I
SCHEDULE OF INVESTORS
ISRAELI BANK PRINCIPAL AMOUNT NUMBER AND TYPE
INVESTOR INFORMATION (US$) OFF AMENDED WARRANTS SIGNATURE
----------------------- ------------- --------------------- ----------------------------- ------------------------
Xxxx Xxxxxxxx 68,207 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Ben-Zion Xxxxxx 34,014 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Yekotel Zeit 127,551 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Xxxxx Xxxxxxxxxxx 76,531 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Xxxxx Xxxxxxxxx 102,041 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Xxx Xxxx 17,007 Extended Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Xxxxxxx Xxxx Deutsch 100,000 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Xxxxx Xxxxxxxxx 100,000 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
The Shaar Fund 136,054 Extended Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
EXHIBIT I
FORM OF RESTATED WARRANT
EXHIBIT II
FORM OF EXTENDED WARRANT
