20-F











Exhibit 4.6  



LICENSE AGREEMENT 



This License Agreement
(“Agreement”) is entered into as of 2 July 2008, 2008 (“Effective
Date”) by and between RADA ELECTRONICS INDUSTRIES LTD.
(“RADA”), a company incorporated under the laws of the State of Israel,
with offices at 7 Giborei Israel St., Netanya 42504 and Faith Content Development Limited
(“Licensee”), a company organized under the laws of Hong Kong. RADA and Licensee
are collectively referred to herein as the “Parties”.  



Whereas    RADA has developed and
is developing certain Inertial Navigation Systems (“INS”) as further
detailed herein; and 



Whereas    Licensee desires to
license from RADA, and RADA desires to License to Licensee, certain intellectual property
rights relating to INS, as more fully detailed herein. 



NOW THEREFORE, the Parties
agree as follows: 



	1  	Definitions.  






When used in this Agreement, the
following terms shall have the following meaning: 



	 	1.1 	“Source
Code” shall mean the human-readable source code of the “INS” product,
together with such development tools and detail design documents as may be reasonably
required by Licensee, fully documented in a manner that is sufficient to allow a
reasonably skilled programmer to understand the design, logic, structure, functionality,
operation and features and to use, operate, maintain, modify, support and diagnose
errors. The Source Code shall be deemed to include any and all additional functionality
extensions to the INS, developed by RADA or any of its affiliates. 






	 	1.2 	“Updates” shall
mean any bug fixes, enhancements, improvements, new developments or other modifications
to the Source Code and/or to the System that RADA and/or any of its affiliates and/or any
third party with which RADA has contracted may develop, make or create from time to time. 






	 	1.3 	“System” shall
mean the Source Code, hardware and electronics that comprise the INS product as further
detailed in Exhibit I, including all Updates and any related
Documentation thereto as well as any revisions thereto and all future Derivative Works
thereof developed by RADA and/or its affiliates and/or any third party with which RADA
has contracted, and all Intellectual Property embodied in or related to the foregoing. 






	 	1.4 	“Licensed
Technology” shall mean the Source Code, the specifications and configurations of
the System, all Updates and Derivative Works, and the Documentation relating to all of
the foregoing and all Intellectual Property rights associated therewith. 






	 	1.5 	“Derivative
Work(s)” shall mean: (i) for copyrightable or copyrighted material, any
translation, abridgment, revision or other form in which an existing work is transformed
or modified; (ii) for patentable or patented material, any improvement thereon which is
worthy of patent; and (iii) for material which is protected by trade secret, any new
material derived from such existing trade secret material, including new material which
may be protected by copyright, patent and/or trade secret. 






	 	1.6 	“Confidential
Information” shall mean (a) all of RADA’s proprietary information and
related materials of whatever nature comprising or concerning the System or Derivative
Works thereof made by RADA; and (b) information related to RADA’s proprietary
technology; know-how; and products. Without limiting the previous sentence, Confidential
Information shall comprise all such information disclosed by whatever means, whether
directly or indirectly, by or on behalf of RADA to Licensee at any time, whether
disclosed in writing or in machine-readable or other form. Confidential Information does
not include information that is or becomes generally known to the public, that is
disclosed to Licensee by a third party without a confidentiality obligation, that is
developed independently by the Licensee or that Licensee is required to disclose by law
or regulation. 
















	 	1.7 	“Intellectual
Property” shall mean (a) works of authorship, copyrights, including moral
rights, registrations and applications for registration thereof; (b) patents, patent
applications and all related continuations, divisional, reissue, utility models,
applications and registrations thereof, inventions (whether patentable or not), designs
and domain names; (c) trademark and trade name rights (whether registered or not,
including applications) and similar rights; (d) trade secrets and Confidential
Information, know-how, manufacturing information, system process and techniques, designs,
prototypes, enhancements, improvements, customization, work-in-progress, research and
development information; and (e) other proprietary rights relating to the foregoing. 






	 	1.8 	“Licensee
Property” shall mean all products, Intellectual Property and Intellectual
Property rights, developed, made or created by Licensee or on its behalf, that do not
constitute Derivative Works of the System. 






	 	1.9 	“Documentation” shall
mean the list of configurations and specifications of the System, production file, user
manuals, service manuals, instructions, programming manuals, technical notes and
drawings, charts, schematics and models. 






	2  	Grant
and Scope of License; Delivery; Support.  






	 	2.1 	Grant
of License. For good and valuable consideration, the sufficiency of which
is hereby acknowledged, and subject to receipt of the approvals pursuant to Section 8.1,
RADA will grant to Licensee a perpetual, non-exclusive, transferable (subject to the
terms herein), worldwide, sub-licensable license for non-military purposes only (the
“License”): (i) to commercially use and exploit the Licensed Technology
and any part thereof; (ii) to create or have created Derivative Works of the Licensed
Technology, (iii) to modify, enhance, amend and/or make compatible, the Licensed
Technology and any part thereof, and (iv) to sub-license, distribute, manufacture and
market the Licensed Technology, the System and/or any Derivative Works thereof on a
stand-alone basis or as incorporated into avionics systems or other systems or products
to third parties; each subject to the terms and conditions of this Agreement. In the
event of default by RADA under that certain Loan Agreement between the Parties or
affiliates thereof dated July 1st , 2008 (the “Loan  Agreement” and
a “Default” respectively), the License granted hereunder will become an
exclusive worldwide license. The License may only be transferred or assigned by the
Licensee in accordance with the provisions of this Agreement. The Licensee may exercise
its rights pursuant to the License directly or via subcontractors and/or other third
party service providers. 






	 	2.2 	Scope
of License. The License granted hereunder by RADA to Licensee expressly
permits the Licensee to sub-license, distribute and market the System and/or Derivative
Works thereof, provided, however, that the software code component of the System and/or
Derivative Works thereof as distributed by Licensee shall be expressed in object/binary
code only, and may not contain the System in Source Code form without the prior consent
of RADA. Notwithstanding the foregoing, the Licensee may deposit the Source Code
component of the System in escrow for release to a distributor, reseller or customer of
the Licensee upon the occurrence of certain events, for the purposes of such distributor,
reseller or customer continuing to support the System purchased and/or licensed, as the
case may be, by the applicable distributor, reseller or customer following the occurrence
of such events, upon reasonable terms and conditions standard in the industry, provided
however that any such escrow undertaking will be subject to obtaining RADA’s prior
approval, which shall not be unreasonably withheld and all the required approvals as set
forth in Section 8 below prior to any such undertaking. In addition, Licensee may not
license or otherwise distribute the Licensed Technology, the System and/or Derivative
Works thereof to any entity which is a Competitor (as defined below) of RADA, without
obtaining RADA’s prior written consent. For the purpose of this Agreement, a “Competitor” shall
mean a company which is engaged in the design, development and production of inertial
navigation systems whether as stand-alone products or as incorporated into avionics
systems or any other definition as may be agreed upon by the Parties from time to time. 






2









	 	2.3 	Delivery.
Subject to receipt of the approvals pursuant to Section 8.1, and immediately following
completion of each of the milestones described on Exhibit II hereto
(the “Milestones” and each a “Milestone”), RADA will
deliver to Licensee all Licensed Technology, including without limitation the
corresponding Documentation, available at such time. The media on which the Licensed
Technology and Documentation will be delivered shall be as specified on Exhibit II hereto. 






	 	2.4 	Updates.
RADA will deliver to the Licensee, on the media specified in Section 2.3 above, any
Update and/or Derivative Work, as shall be developed from time to time during the term
hereof, within a reasonable time from the development thereof, including any Source Code
of such Update and Derivative Work and will deliver to Licensee a copy thereof and all
Documentation related thereto. RADA will upon the release of each new version and/or
revision of the Documentation and any new Documentation relating to the System and/or to
any Derivative Works thereof, deliver a copy of such Documentation to the Licensee on the
media specified in Section 2.3 above. 






	 	2.5 	Support
and Maintenance Services. RADA and the Licensee may enter into a separate
agreement for the provision of support and maintenance services for the Licensed
Technology. 






	3  	Ownership.  






	 	3.1 	The
Licensed Technology is owned and copyrighted by RADA and is licensed, not sold. Licensee
acknowledges that all right, title and interest in and to the Licensed Technology are and
shall remain with RADA, unless provided otherwise herein. 






	 	3.2 	All
Intellectual Property, Intellectual Property rights and other proprietary rights in and
to Derivative Works to the Licensed Technology, which shall be made by Licensee or on its
behalf (including all works done by RADA on behalf of the Licensee, to the extent made) (“Licensee
Inventions”), and all Licensee Property shall be solely owned by
Licensee; provided in the case of Licensee Inventions that (i) Licensee may not use such
Licensee Inventions for INS military purposes and (ii) Licensee will grant an exclusive
license to such Licensee Inventions to RADA for use for military purposes, subject to
agreement between RADA and Licensee on the commercial terms of such license. 






	 	3.3 	Except
as expressly provided in this Agreement, RADA does not grant Licensee any rights or
licenses under RADA’ patents, copyrights or other Intellectual Property rights. This
Agreement does not grant Licensee the right to use any RADA trademark or name. 






3









	4  	Representations
and Warranties.  






	 	4.1 	RADA
represents and warrants that: (i) to the best of its knowledge it is the sole owner of
and/or has acquired the rights (and/or has all the requisite rights to grant the License
granted hereunder) without any royalty obligation to all copyright, patent rights, and
any and all other intellectual property and proprietary rights to and in the Licensed
Technology and the Derivative Works thereof made by RADA and the use thereof will not, to
its best knowledge, infringe the intellectual property or other proprietary rights of any
third party; (ii) the Licensed Technology will conform to the Documentation in all
material aspects; (iii) it has no knowledge of any pending or threatened infringement
claims relating to the Licensed Technology or of any allegations or circumstances which
might reasonably give rise to any such claim; (iv) the Licensed Technology does not
contain any spy-ware, ‘trojan horses’, time-bomb, virus or other similar
malicious code; (v) it has not incorporated in the Licensed Technology any ‘open
source’, ‘copyleft’ or similar code subject to open source licensing such
as GNU GPL version 1, version 2, version 2.1 or version 3 or other licenses approved by
the Open Source Initiative, such that it or the Licensee would be obligated to disclose
the Source Code or any part thereof of the Licensed Technology and/or of any Derivative
Work thereof or; (vi) it is not party or subject to any agreement, undertaking,
instrument, indenture, lease, order, decree, judgment, law or regulation that could
adversely affect its ability fully and freely grant to Licensee the License granted
hereunder, except as set forth in Section 8 herein; and (vii) it has duly obtained all
corporate approvals necessary for the execution, delivery and performance by it of this
Agreement and that this Agreement constitutes a valid and binding obligation of its,
enforceable against it in accordance with its terms. 






	 	4.2 	RADA
will use commercially reasonable efforts to correct the Licensed Technology so that it
conforms with the above mentioned representations and warranties, all with the
understanding that the foregoing representations and warranties are given based on the
acknowledgement by Licensee that the Licensed Technology is in the development stage
commensurate with the Milestone at which it is delivered. 






	 	4.3 	Notwithstanding
anything to the contrary herein, Licensee acknowledges that the Licensed Technology is
still being developed and that nothing herein shall be construed as a guarantee and/or
undertaking by RADA for the successful development of the Licensed Technology and/or the
System and its actual fitness for any particular purposes. 






	5  	Intellectual
Property Rights Infringement.  






	 	
If
the Licensed Technology, the System, the Derivative Works thereof created by RADA, and/or
any part thereof, becomes, or in RADA’s reasonable opinion may become, the subject of
any claim, suit or other action for infringement of any third party patent, copyright,
know-how, trade secret or other intellectual property right or if the distribution or use
of the System, the Derivative Works thereof, and/or any part thereof, is enjoined, then,
RADA will, at RADA’s option and expense: (i) procure for Licensee, its distributors,
channels and their customers the right to continue to distribute or use the Licensed
Technology, System and Derivative Works thereof; (ii) replace the Licensed Technology, the
System and/or Derivative Works thereof with other functionally equivalent technology; or
(iii) suitably modify the Licensed Technology, the System and Derivative Works thereof to
be non-infringing while retaining the same functionality; RADA shall have no obligation
under this Section 5, however, if the alleged infringement arises from Derivative Works to
the Licensed Technology or the System made by Licensee and/or its affiliates and/or its
customers and/or subcontractors without RADA’s consent if the System would not have
infringed but for those Derivative Works. 






	6  	Confidentiality.  






	 	6.1 	Confidentiality
obligations of the Parties regarding the maintenance of Confidential Information, shall
be governed by the non disclosure agreement attached hereto as Exhibit III,
which shall be executed together with this Agreement and shall be deemed an integral part
hereof (the “NDA”). 






4









	 	6.2 	The
obligations set forth in the NDA shall survive termination of this Agreement in
accordance with the terms and conditions set therein. 






	7  	Special
Purpose Vehicle.  






	 	7.1 	Unless
a Default has occurred prior to such time, upon the formation of a special purpose
vehicle (the “SPV”) pursuant to the SPV undertaking attached to the Loan
Agreement, the Licensee shall sublicense the License hereunder to the SPV (the “SPV
Sublicense”) and together with such sublicense shall license to the SPV, on the
same terms as the sublicense, all Licensee Inventions made prior to such time (the “SPV
Licensee Inventions License”). Following and pursuant to the SPV Sublicense, the
SPV will have all of the rights granted to the Licensee hereunder as if it were the
Licensee hereunder. In the event of the occurrence of a Default, (a) the SPV Sublicense
and SPV Licensee Inventions License will terminate and the License hereunder will revert
to the Licensee, and (b) the SPV will grant to the Licensee a license under the same
terms as the License to all Intellectual Property and Intellectual Property rights
derived or created by the SPV, including those Derivative Works that fall within the
definition of Licensee Inventions under the terms of the SPV Sublicense. Upon the
satisfaction by RADA of all of its obligations and undertakings pursuant to the Loan
Agreement and the exhibits and schedules thereto, the SPV Sublicense shall become
irrevocable. 






	 	7.2 	Notwithstanding
the aforesaid, in the event that Licensee will have entered into any licensing or other
commercial agreements prior to the formation of the SPV (the “Prior Obligations”)
and such agreements cannot be assigned to the SPV then the SPV Sublicense will not
derogate from the Licensee’s right to fully exercise the License granted hereunder
which shall continue to remain in effect to the extent required in order to allow
Licensee to fulfill and comply with its Prior Obligations. 






	8  	Licenses
and Authorizations.  






	 	8.1 	The
grant of the License hereunder is subject to the approval of the Israeli Ministry of
Defense (the “MOD Approval”). Therefore, the License shall become
effective only upon the grant of such approval and subject to the terms and conditions
set forth in the MOD Approval. RADA undertakes to use its best efforts in good faith in
order to receive the MOD Approval. 






	 	8.2 	Licensee
acknowledges that the export of the System and/or any Derivative Works and related
materials and technical data licensed under this Agreement may be subject to Israeli
export control laws and may be subject to export or import regulations in other
countries. Without derogating from Licensee’s undertaking to strictly comply with
all such laws and regulations, RADA undertakes to use it best efforts in good faith to:
(i) obtain any required export licenses for the exploitation by the Licensee of its
rights hereunder; and (ii) to advise the Licensee as to any laws and regulations known to
it to be applicable to the exploitation of the Licensee’s rights hereunder as
aforesaid.






5









	9  	Miscellaneous.  







	 	9.1 	Assignment. The
rights and liabilities of the Parties hereto will bind and inure to the benefit of their
respective successors, executors and administrators, as the case may be; provided that
neither party hereto may assign or delegate its obligations under this Agreement either
in whole or in part, without the prior written consent of the other Party hereto other
than (i) as expressly permitted by the terms of the License, (ii) as set forth in Section
7.1 above and/or (iii) an assignment by the Licensee to another person or entity that
controls, is controlled by or is under common control, directly or indirectly, with the
Licensee. Notwithstanding the above, both parties may freely assign this Agreement and
any of its rights and/or obligations under this Agreement in connection with a corporate
reorganization, acquisition, merger, or sale of or substantially all of the assets
relating to the subject matter of this Agreement. Any attempted assignment in violation
of the provisions of this Section 9.1 will be void. 






	 	9.2 	Severability. Should
any court of competent jurisdiction declare any term of this Agreement void or
unenforceable, such declaration shall have no effect on the remaining terms of this
Agreement. 






	 	9.3 	No
Waiver. The failure of either party to enforce any rights granted hereunder or to
take action against the other party in the event of any breach hereunder shall not be
deemed a waiver by that party as to subsequent enforcement of such rights or subsequent
actions in connection with the same breach or in the event of future breaches. 






	 	9.4 	Notices. Notices
and other communications provided for herein shall be in writing and shall be delivered
by hand or courier service and sent by telecopy as follows (or to such other address or
addresses as any party shall have specified to the other in writing): 






	 		
	 		
	 		
	 		
	 		
	 	(a)     if to RADA, to:	RADA Electronic Industries Ltd.
	 	 	7 Giborei Israel Street
	 	 	Netanya
	 	 	42504
	 	 	Israel
	 	 	Telephone: + 972-9-892-1109
	 	 	Facsimile: + 972-9-885-5885
	 	 	Attention: Zvika Alon and Shiri Lazarovich







	 	
with
a copy (which shall not constitute notice) to S. Friedman & Co, Advocates and
Notaries, Europe – Israel Tower, 2 Weitzman Street, Tel Aviv, Israel Fax: +
972-3-693-1930 Attention: Sarit Molcho, Adv.; 






	 		
	 		
	 		
	 		
	 		
	 	(b)     if to the Licensee, to :	Faith Content Development Limited
	 	 	1/F King Fook Building
	 	 	30-32 Des Voeux Road C
	 	 	Hong Kong
	 	 	Telephone: [   ]
	 	 	Fax: [   ]
	 	 	Attention: [   ]







	 	
with
a copy (which shall not constitute notice) to Gross, Kleinhendler, Hodak, Halevy,
Greenberg & Co., 1 Azrieli Center, Tel Aviv 67021, Fax: + 972-3-607 4590, Attention:
Lilian Safran Shaked, Adv. 






		9.5 	
Headings and References. The headings and captions used in this Agreement
are used for convenience only and are not to be considered in construing or interpreting
this Agreement. 






		9.6 	
Force Majeure. Neither party shall be liable for any failure or delay in its
performance under this Agreement due to causes, including, but not limited to, acts of
God, acts of civil or military authority, acts of terror, fires, epidemics, floods,
earthquakes, riots, wars, sabotage, labor disputes, and governmental actions, which are
beyond its reasonable control; provided that the delayed party: (i) gives the other party
written notice of such cause promptly, and in any event within fifteen (15) days of
discovery thereof; and (ii) uses its reasonable efforts to correct such failure or delay
in its performance. The delayed party’s time for performance or cure under this
Section shall be extended for a period equal to the shorter of (a) the duration of the
cause or (b) sixty (60) days. 






6









		9.7 	
Relationship of the Parties. RADA and Licensee are independent parties.
Neither party nor its employees, consultants, contractors or agents, are agents, employees
or joint venturers of the other party, nor do they have any authority to bind the other
party by contract or otherwise to any obligation. They will not represent to the contrary,
either expressly, implicitly, by appearance or otherwise. Each party will determine, in
its sole discretion, the manner and means by which its obligations under this Agreement
are accomplished, subject to the express condition that each will at all times comply with
applicable law. 






		9.8 	
Governing Law; Arbitration. This Agreement shall be governed
exclusively by the laws of the State of Israel, without regard to the conflict of laws
provisions thereof. Any dispute, controversy or claim, arising from or otherwise
concerning the subject matter of this Agreement shall be resolved through final and
binding arbitration. The arbitration will take place in Tel Aviv-Jaffa Israel and the
arbitration will be conducted in accordance with the Israel Arbitration Law, 1968. The
arbitration tribunal shall consist of 1 arbitrator to be appointed by a retired District
Court Judge determined by the “defendant” party. The language of the arbitration
shall be English. Any competent court having jurisdiction over the matter may enter
judgment on the award of the arbitrator. The provisions of this Section 9.8 shall
constitute an “Arbitration Agreement” as such term is defined in the Israel
Arbitration Law, 1968. 






		9.9 	
Entire Agreement. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof and supersedes all prior
negotiations, agreements and understandings. 






7









IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed in counterpart originals by their authorized
representatives. 



	 	 
	 	 
	 	 
	 	 
	 	 
	For: RADA Electronics Industries Ltd. 	For: Licensee 
	  
	By: ________________ 	By: ________________ 
	  
	Name: ______________ 	Name: ______________ 
	  
	Title:________________ 	Title:________________ 






8










EXHIBIT I  



THE SYSTEM  



An Inertial Navigation System (INS)
provides three-dimensional (spatial) data regarding the position, velocity and direction
of the vehicle in which it is installed. It is achieved by selecting an appropriate set
of sensors (gyroscopes, accelerometers, magnetic heading sensor) that are able to measure
physical phenomena such as angular and axial accelerations and magnetic direction,
assembling these on electronic boards that enable a processor to read the sensors’ measurements,
and by implementing sophisticated algorithms and computations (through software
processing) that blend all this data together to provide the navigation solutions.  













EXHIBIT II  



MILESTONES AND MEDIA  



Milestones:  



The Milestone Schedule for the
transfer of the Licensed Technology from RADA to Licensee shall be as follows: 






	MILESTONE DESCRIPTION	DESCRIPTION OF MATERIALS BEING
TRANSFERRED
	1.	Delivery of a prototype following successful acceptance testing by RADA	Engineering data that is available at RADA on "as is" basis
	2.	Completion of a detailed Manufacturing File	Manufacturing file
	3.	Product ready for commercial release (to the extent applicable)	Updated manufacturing file









Licensee acknowledges that the
transfer as aforesaid is subject to receipt of required governmental consents. In addition
Licensee may be required to expressly identify intended use for which the transfers are
being made to enable RADA application for said governmental consents. 



Media:  



The Licensed technology will be
provided in the form of tangible documents and/or magnetic media. 













EXHIBIT III  



NDA