Document:

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 7 Giborei Israel
Street, Netanya 42504, Israel (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.

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     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.

                                       3
<PAGE>

     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.

                                       4
<PAGE>

          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.

                                       5
<PAGE>

     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.

                                       6
<PAGE>

     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.
                       7 Giborei Israel Street
                       Netanya 42504
                       Israel
                       Telephone: (011) 972-9-892-1129
                       Facsimile: (011) 972-9-885-5885
                       Attention: Elan Sigal, Chief Financial Officer

                       Copy to:
                       S. Friedman & Co, Advocates and Notaries
                       Europe-Israel Tower
                       2 Weitzman Street
                       Tel Aviv, Israel
                       Telephone: + 972-3-693 1931
                       Facsimile: + 972-3-693 1930
                       Attention: Sarit Molcho, Adv.

                                       7
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                 If to the Investor

                       c/o Hillel Schwartz
                       25 Agasi Street,
                       Har-Nof, Jerusalem, Israel
                       Telephone:  + 972-2-6514837
                       Email: schfam@netvision.net.il

                            [SIGNATURE PAGE FOLLOWS]

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<PAGE>

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:

<PAGE>

                                   SCHEDULE I

                              SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>
                        ISRAELI BANK   PRINCIPAL AMOUNT         NUMBER AND TYPE
INVESTOR                 INFORMATION        (US$)            OFF AMENDED WARRANTS               SIGNATURE
----------------------- ------------- --------------------- ----------------------------- ------------------------
<S>                     <C>           <C>                   <C>                           <C>
Paul Schwartz                                               68,207 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Ben-Zion Gruber                                             34,014 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Yekotel Zeit                                                127,551 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Chaim Hershkovitz                                           76,531 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Henri Lefkovitz                                             102,041 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Zvi Oren                                                    17,007 Extended Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Yisrael Meir Deutsch                                        100,000 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
Maury Greenspan                                             100,000 Restated Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
The Shaar Fund                                              136,054 Extended Warrants
----------------------- ------------- --------------------- ----------------------------- ------------------------
</TABLE>

<PAGE>

                                    EXHIBIT I

                            FORM OF RESTATED WARRANT

<PAGE>

                                   EXHIBIT II

                            FORM OF EXTENDED WARRANTEXHIBIT 4.5

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD,
PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION
WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT.

VOID AFTER EXPIRATION DATE

                                     WARRANT

                     To Purchase 136,054 Ordinary Shares of

                         RADA ELECTRONIC INDUSTRIES LTD.

     THIS CERTIFIES that, for value received, The Shaar Fund (the "Holder") is
entitled, upon the terms and subject to the conditions set forth in this Warrant
at any time on or after the date hereof and on or prior to the close of business
on June 30, 2010 (the "Termination Date") but not thereafter, to subscribe for
and purchase from RADA Electronic Industries Ltd., a company incorporated under
the laws of the State of Israel (the "Company"), up to 136,054 Ordinary Shares
of the Company, nominal value NIS 0.15 each (the "Warrant Shares") at a purchase
price as detailed in Section 2 hereof (the "Exercise Price"). The Exercise Price
and the number of shares for which the Warrant is exercisable shall be subject
to adjustment as provided herein.

     This Warrant amends, supplements, modifies and completely restates the
Warrant, effective as of June 30, 2002 (the "EXISTING WARRANT"), issued by the
Company to the Holder. This Warrant is one of the series of Extended Warrants
(as defined in the Exchange Agreement, as defined below) to purchase Warrant
Shares (together with the Restated Warrants (as defined in the Exchange
Agreement), the "SPA WARRANTS") issued pursuant to the Amendment and Exchange
Agreement dated as of June 29, 2007, by and among the Company and each of the
other Investors detailed therein (the "EXCHANGE AGREEMENT").

          1. TITLE TO WARRANT. Prior to the Termination Date and subject to
     compliance with applicable laws and the provisions of Section 8 hereof,
     this Warrant and all rights hereunder are transferable, in whole or in
     part, at the office or agency of the Company by the holder hereof in person
     or by duly authorized attorney, upon surrender of this Warrant together
     with the Assignment Form annexed hereto properly endorsed.

                                       1
<PAGE>

          2. EXERCISE PRICE. This Warrant this Warrant shall be exercisable, in
     whole or in part, at an exercise price equal to the higher of: (i) $6.0 per
     share or (ii) 50% of the average closing price during the ten (10) trading
     days prior to an exercise date (the "Exercise Price").

          3. AUTHORIZATION OF SHARES. The Company covenants that all shares
     issuable upon the exercise of rights represented by this Warrant will, upon
     exercise of the rights represented by this Warrant, be duly authorized and
     be capable of being validly issued as fully paid and non-assessable and
     free from all taxes, liens and charges in respect of the issue thereof
     (other than taxes in respect of any transfer occurring contemporaneously
     with such issue).

          4. EXERCISE OF WARRANT. Exercise of the purchase rights represented by
     this Warrant may be made at any time or times in whole or in part and
     before the close of business on the Termination Date by the surrender of
     this Warrant and the Notice of Exercise Form annexed hereto duly executed,
     at the office of the Company (or such other office or agency of the Company
     as it may designate by notice in writing to the registered holder hereof at
     the address of such holder appearing on the books of the Company) and upon
     payment of the Exercise Price of the shares thereby purchased by wire
     transfer or cashier's check , whereupon the holder of this Warrant shall be
     entitled to receive a certificate for the number of Warrant Shares
     purchased. Certificates for Warrant Shares purchased hereunder shall be
     delivered to the holder hereof within reasonable time after the date on
     which this Warrant shall have been exercised as aforesaid. This Warrant
     shall be deemed to have been exercised and such certificate or certificates
     shall be deemed to have been issued, and Holder or any other person so
     designated to be named therein shall be deemed to have become a holder of
     record of such shares for all purposes, as of the date the Warrant has been
     exercised by payment to the Company of the Exercise Price and all taxes
     required to be paid by Holder, if any, pursuant to Section 5 prior to the
     issuance of such shares, have been paid. If this Warrant shall have been
     exercised in part, the Company shall, at the time of delivery of the
     certificate or certificates representing Warrant Shares, deliver to Holder
     a new Warrant evidencing the rights of Holder to purchase the unpurchased
     Warrant Shares called for by this Warrant, which new Warrant shall in all
     other respects be identical with this Warrant.

          5. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
     representing fractional shares shall be issued upon the exercise of this
     Warrant. As to any fraction of a share that the Holder would otherwise be
     entitled to purchase upon such exercise, the Company shall round the number
     of Warrant Shares issuable upon such exercise to next whole number.

          6. CHARGES, TAXES AND EXPENSES. Issuance of certificates for Warrant
     Shares upon the exercise of this Warrant shall be made without charge to
     the holder hereof for any issue or transfer tax or other incidental expense
     in respect of the issuance of such certificate, all of which taxes and
     expenses shall be paid by the Company, and such certificates shall be
     issued in the name of the holder of this Warrant or in such name or names
     as may be directed by the holder of this Warrant; provided, however, that
     in the event certificates are to be issued in a name other than the name of
     the Holder, this Warrant when surrendered for exercise shall be accompanied
     by the Assignment Form attached hereto duly executed by the Holder hereof;
     and the Company may require, as a condition thereto, the payment of a sum
     sufficient to reimburse it for any transfer tax incidental thereto.

                                       2
<PAGE>

          7. CLOSING OF BOOKS. The Company will not close its shareholder books
     or records in any manner that prevents the timely exercise of this Warrant.

          8. TRANSFER, DIVISION AND COMBINATION. (a) Subject to compliance with
     any applicable securities laws, transfer of this Warrant and all rights
     hereunder, in whole or in part, shall be registered on the books of the
     Company to be maintained for such purpose, upon surrender of this Warrant
     at the principal office of the Company, together with he Assignment Form
     attached hereto duly executed by Holder or its agent or attorney and funds
     sufficient to pay any transfer taxes payable upon the making of such
     transfer. Upon such surrender and, if required, such payment, the Company
     shall execute and deliver a new Warrant or Warrants in the name of the
     assignee or assignees and in the denomination or denominations specified in
     such instrument of assignment, and shall issue to the assignor a new
     Warrant evidencing the portion of this Warrant not so assigned, and this
     Warrant shall promptly be cancelled. A new holder for the purchase of
     Warrant Shares, if properly assigned, may exercise a Warrant, without
     having a new Warrant issued.

               (b) This Warrant may be divided or combined with other Warrants
          upon presentation hereof at the aforesaid office of the Company,
          together with a written notice specifying the names and denominations
          in which new Warrants are to be issued, signed by Holder or its agent
          or attorney. Subject to compliance with Section 8(a), as to any
          transfer which may be involved in such division or combination, the
          Company shall execute and deliver a new Warrant or Warrants in
          exchange for the Warrant or Warrants to be divided or combined in
          accordance with such notice.

                                       3
<PAGE>

               (c) The Company shall prepare, issue and deliver at its own
          expense (other than transfer taxes) the new Warrant or Warrants under
          this Section 8.

          9. NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does not
     entitle the holder hereof to any voting rights or other rights as a
     shareholder of the Company prior to the exercise hereof. Upon the surrender
     of this Warrant and the payment of the aggregate Exercise Price, the
     Warrant Shares so purchased shall be and be deemed to be issued to such
     holder as the record owner of such shares as of the close of business on
     the later of the date of such surrender or payment.

          10. LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company
     covenants that upon receipt by the Company of evidence reasonably
     satisfactory to it of the loss, theft, destruction or mutilation of this
     Warrant or any share certificate relating to the Warrant Shares, and in
     case of loss, theft or destruction, of indemnity or security reasonably
     satisfactory to it (which shall not include the posting of any bond), and
     upon surrender and cancellation of such Warrant or share certificate, if
     mutilated, the Company will make and deliver a new Warrant or share
     certificate of like tenor and dated as of such cancellation, in lieu of
     such Warrant or stock certificate.

          11. SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day
     for the taking of any action or the expiration of any right required or
     granted herein shall not be a business day including' without limitation,
     Saturday, Sunday or a legal holiday in Israel or in the US, then such
     action may be taken or such right may be exercised on the next succeeding
     day not a Saturday, Sunday or legal holiday.

          12. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. (a)
     The number and kind of securities purchasable upon the exercise of this
     Warrant and the Exercise Price shall be subject to adjustment from time to
     time upon the happening of any of the following: (i) In case the Company
     shall declare or pay a dividend in shares or make a distribution in shares
     to holders of its outstanding Ordinary Shares, (ii) In case the Company
     shall subdivide its outstanding Ordinary Shares into a greater number of
     shares, or (iii) combine its outstanding Ordinary Shares into a smaller
     number of shares, then the number of Warrant Shares purchasable upon
     exercise of this Warrant immediately prior thereto shall be adjusted so
     that the holder of this Warrant shall be entitled to receive the kind and
     number of Warrant Shares or other securities of the Company which he would
     have owned or have been entitled to receive had such Warrant been exercised
     in advance thereof. Upon each such adjustment of the kind and number of
     Warrant Shares or other securities of the Company which are purchasable
     hereunder, the holder of this Warrant shall thereafter be entitled to
     purchase the number of Warrant Shares or other securities resulting from
     such adjustment at an Exercise Price per Warrant Share or other security
     obtained by multiplying the Exercise Price in effect immediately prior to
     such adjustment by the number of Warrant Shares purchasable pursuant hereto
     immediately prior to such adjustment and dividing by the number of Warrant
     Shares or other securities of the Company resulting from such adjustment.
     An adjustment made pursuant to this paragraph shall become effective
     immediately after the effective date of such event retroactive to the
     record date, if any, for such event.

                                       4
<PAGE>

               (b) In case the Company shall reorganize its capital, reclassify
          its capital, consolidate or merge with or into another corporation
          (where the Company is not the surviving corporation or where there is
          a change in or distribution with respect to the Ordinary Shares of the
          Company), or sell, transfer or otherwise dispose of all or
          substantially all its property, assets or business to another
          corporation and, pursuant to the terms of such reorganization,
          reclassification, merger, consolidation or disposition of assets,
          Ordinary Shares or shares of common stock of the successor or
          acquiring corporation, or any cash, shares of stock or other
          securities or property of any nature whatsoever (including warrants or
          other subscription or purchase rights) in addition to or in lieu of
          common stock of the successor or acquiring corporation ("Other
          Property"), are to be received by or distributed to the holders of
          Ordinary Shares of the Company, then Holder shall have the right
          thereafter to receive, upon exercise of this Warrant, the number of
          shares of common stock of the successor or acquiring corporation or of
          the Company, if it is the surviving corporation, and Other Property
          receivable upon or as a result of such reorganization,
          reclassification, merger, consolidation or disposition of assets by a
          holder of the number of Ordinary Shares for which this Warrant is
          exercisable immediately prior to such event. In case of any such
          reorganization, reclassification, merger, consolidation or disposition
          of assets, the successor or acquiring corporation (if other than the
          Company) shall expressly assume the due and punctual observance and
          performance of each and every covenant and condition of this Warrant
          to be performed and observed by the Company and all the obligations
          and liabilities hereunder, subject to such modifications as may be
          deemed appropriate (as determined in good faith by resolution of the
          Board of Directors of the Company) in order to provide for adjustments
          of Warrant Shares for which this Warrant is exercisable which shall be
          as nearly equivalent as practicable to the adjustments provided for in
          this Section 11. For purposes of this Section 12, "common stock of the
          successor or acquiring corporation" shall include stock of such
          corporation of any class which is not preferred as to dividends or
          assets over any other class of stock of such corporation and which is
          not subject to redemption and shall also include any evidences of
          indebtedness, shares of stock or other securities which are
          convertible into or exchangeable for any such stock, either
          immediately or upon the arrival of a specified date or the happening
          of a specified event and any warrants or other rights to subscribe for
          or purchase any such stock.

               (c) Whenever the number of Warrant Shares or number or kind of
          securities or other property purchasable upon the exercise of this
          Warrant or the Exercise Price is adjusted, as herein provided, the
          Company shall promptly mail by registered or certified mail, to the
          holder of this Warrant notice of such adjustment or adjustments
          setting forth the number of Warrant Shares (and other securities or
          property) purchasable upon the exercise of this Warrant and the
          Exercise Price of such Warrant Shares (and other securities or
          property) after such adjustment, setting forth a brief statement of
          the facts requiring such adjustment and setting forth the computation
          by which such adjustment was made. Such notice, in the absence of
          manifest error, shall be exclusive evidence of the correctness of such
          adjustment.

               (d) In the event that, at any time, as a result of an adjustment
          made pursuant to this Section, the holder of this Warrant shall become
          entitled to purchase any securities of the Company other than Ordinary
          Shares, hereafter the number of such other shares so purchasable upon
          exercise of this Warrant and the Exercise Price of such shares shall
          be subject to adjustment from time to time in a manner and on terms as
          nearly equivalent as practicable to the provisions with respect to the
          Warrant Shares contained in paragraph (a) through (c) inclusive, of
          this Section 12.

                                       5
<PAGE>

          13. REGISTRATION RIGHTS; RULE 144. (a) This Warrant and the Warrant
     Shares shall be restricted securities pursuant to Rule 144 of Regulation D
     for a period of 12 months following the date hereof. As soon as practicable
     after the date hereof, 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 of this Extended
     Warrant.

               (b) At all times during which any Warrant Shares are outstanding,
          the Company agrees to:

                    (i) Make and keep available adequate current public
               information as described in Rule 144(c) under the Securities Act;

                    (ii) File with the U.S. Securities and Exchange Commission
               in a timely manner all reports and other documents required of
               the Company under the Securities Act and the Securities Exchange
               Act of 1934; and

                    (iii) Furnish to the Holder upon request (A) a written
               statement by the Company as to its compliance with the
               requirements of subparagraphs (i) and (ii) above, (B) a copy of
               the most recent annual report of the Company, and (C) such other
               reports and documents of the Company as the Holder may reasonably
               request to avail himself of Rule 144 or any similar rule or
               regulation of the Securities and Exchange Commission allowing him
               to sell any such securities without registration.

          14. NOTICE OF CORPORATE ACTION. If at any time:

               (a) the Company shall take a record of the holders of its
          Ordinary Shares for the purpose of entitling them to receive a
          dividend or other distribution, or any right to subscribe for or
          purchase any evidences of its indebtedness, any shares of stock of any
          class or any other securities or property, or to receive any other
          right, or

               (b) there shall be any capital reorganization of the Company, any
          reclassification or recapitalization of the share capital of the
          Company or any consolidation or merger of the Company with, or any
          sale, transfer or other disposition of all or substantially all the
          property, assets or business of the Company to, another corporation
          or,

               (c) there shall be a voluntary or involuntary dissolution,
          liquidation or winding up of the Company;

                                       6
<PAGE>

then, in any one or more of such cases, the Company shall give to Holder (i) at
least 14 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 14
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Ordinary Shares shall be
entitled to exchange their shares for securities or other property deliverable
upon such disposition, dissolution, liquidation or winding up. Each such written
notice shall be sufficiently given if addressed to Holder at the last address of
Holder appearing on the books of the Company and delivered in accordance with
this Warrant.

          15. AUTHORIZED SHARES. The Company covenants that within 180 days of
     the date hereof, it will reserve from its authorized and unissued Ordinary
     Shares, and keep available free from preemptive rights, a sufficient number
     of Ordinary Shares to provide for the issuance of the Warrant Shares upon
     the exercise of any purchase rights under this Warrant and will, at its
     expense, procure such listing of such Ordinary Shares (subject to issuance
     or notice of issuance) as then may be required on all stock exchanges on
     which the Ordinary Shares are then listed or on NASDAQ. The Company further
     covenants that its issuance of this Warrant shall constitute full authority
     to its officers who are charged with the duty of executing stock
     certificates to execute and issue the necessary certificates for the
     Warrant Shares upon the exercise of the purchase rights under this Warrant.
     The Company will take all such reasonable action as may be necessary to
     assure that such Warrant Shares may be issued as provided herein without
     violation of any applicable law or regulation, or of any requirements of
     all stock exchanges upon which the Ordinary Shares may be listed or on
     NASDAQ.

          The Company shall not by any action, including, without limitation,
     amending its certificate of incorporation or through any reorganization,
     transfer of assets, consolidation, merger, dissolution, issue or sale of
     securities or any other voluntary action, avoid or seek to avoid the
     observance or performance of any of the terms of this Warrant, but will at
     all times in good faith assist in the carrying out of all such terms and in
     the taking of all such actions as may be necessary or appropriate to
     protect the rights of Holder against impairment.

          16. MISCELLANEOUS.

               (a) JURISDICTION. This Warrant shall be binding upon any
          successors or assigns of the Company. This Warrant shall constitute a
          contract under the laws of State of Israel without regard to its
          conflict of law, principles or rules, and be subject to the exclusive
          jurisdiction of the competent court in Tel Aviv.

               (b) RESTRICTIONS. The holder hereof acknowledges that the Warrant
          Shares acquired upon the exercise of this Warrant, if not registered,
          will have restrictions upon resale imposed by state and federal
          securities laws.

               (c) WAIVER. No course of dealing or any delay or failure to
          exercise any right hereunder on the part of Holder shall operate as a
          waiver of such right or otherwise prejudice Holder's rights, powers or
          remedies, notwithstanding all rights hereunder terminate on the
          Termination Date.

                                       7
<PAGE>

               (d) LIMITATION OF LIABILITY. No provision hereof, in the absence
          of affirmative action by Holder to purchase Warrant Shares, and no
          enumeration herein of the rights or privileges of Holder hereof, shall
          give rise to any liability of Holder for the purchase price of any
          Ordinary Share or as a shareholder of the Company, whether such
          liability is asserted by the Company or by creditors of the Company.

               (e) SUCCESSORS AND ASSIGNS. Subject to applicable securities
          laws, this Warrant and the rights and obligations evidenced hereby
          shall inure to the benefit of and be binding upon the successors of
          the Company and the successors and permitted assigns of Holder. The
          provisions of this Warrant are intended to be for the benefit of all
          Holders from time to time of this Warrant and shall be enforceable by
          any such Holder or holder of Warrant Shares and all references to the
          "Holder" shall include a reference to his assigns, personal
          representatives and successors in title.

               (f) AMENDMENT. This Warrant may be modified or amended or the
          provisions hereof waived with the written consent of the Company and
          the Holder.

               (g) SEVERABILITY. Wherever possible, each provision of this
          Warrant shall be interpreted in such manner as to be effective and
          valid under applicable law, but if any provision of this Warrant shall
          be prohibited by or invalid under applicable law, such provision shall
          be ineffective to the extent of such prohibition or invalidity,
          without invalidating the remainder of such provisions or the remaining
          provisions of this Warrant.

               (h) HEADINGS. The headings used in this Warrant are for the
          convenience of reference only and shall not, for any purpose, be
          deemed a part of this Warrant.

               (i) DEFINITION OF ORDINARY SHARES. For the purpose of this
          Warrant the term "Ordinary Shares" shall mean the ordinary shares of
          0.015 NIS (New Israeli Shekels) of the Company.

                  REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK

                                       8
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.

Dated: June 30, 2007
                                     RADA Electronic Industries Ltd.

                                     By: _______________________________________
                                         Herzle Bodinger, President and Chairman

                                       9
<PAGE>

                               NOTICE OF EXERCISE

To:  RADA Electronic Industries Ltd.

     (1)The undersigned hereby elects to purchase ________ Ordinary Shares (the
"Shares"), of RADA Electronic Industries Ltd. pursuant to the terms of the
attached Warrant, and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

     (2)Please issue a certificate or certificates representing said Shares in
the name of the undersigned or in such other name as is specified below:

               ________________________________________
               (Name)

               ________________________________________
               (Address)
               ________________________________________

Dated:

                                                  ______________________________
                                                  Signature

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

     FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

                                                Dated:  ______________, _______

               Holder's Signature: _____________________________

               Holder's Address:   _____________________________

                                   _____________________________

Signature Guaranteed: ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.

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