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8/14/2019 RADA Electronic Industries Lowe-Order

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SUPREMPR SENT:

NEWYORKCOUNTYPART {UtntzYf -e,7Lsf6al

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HeplyingAff idavitsCross-Motion: l- --Upon he forogoingpapers, t

Yes i.-"1 oi s ordered hat thls motion

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DISPOSITION I-in DoNorPosrJ.S.C.

NON.FINAL ISPOSITIONr REFERENCE

qglt^ (* c trr'r"r Ln out- l''1r'The o l lowing apers , umbered to - wre eadon th is mot ion o/ fo r

Not i ce o f M o t ion Orde rAnswer ing A f f i dav i t s -

ro Show Cause Af f idav i t s Exh ib i te, .Exh ib l t s

i f appropriate:


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.SUPREMECOUIt'fOF, l f , STATEOF NEW YORKCOLNTYOF NEW YOITK IASPART56 ------xDAVID KINIG.fndexNrr. 19128l}6PlaintiIl,

- againstRADAELEC'|ITONICNDTJSTIIIh,S,td.,

:*it1 ..-....______.xHON. I I I ( ]HNRD B. LOWI I I I I , . I . :

Defcndant, lada llcctronic ndustrics.,td, ("Rada"),nlovcs,pursuanto C:I'YS.)41,l32ll (aX5),7),and 8), odisurissheComplaintl ledbyplaint i l l ,DavidKenig "Kurig"), rose, cckingo rcceverompcnsationorhisscrviccssa nlcnlbcr f thcboard f directorsfItacla.

BN CKGROUNI.)Th epleaclingsncluclehe bllowing factual rllegations. enig s a Ncw York resideut.

Rada s an sraelicorporation ngagedn the business -r fnnnufircturinglectronic ystctrtsorairplattes nd trmored ehicles.Kenigbegan ervingas a memberol theboardof dircctrlrs fI tada n 1995. rr 1996,Rada's.sharcholderspprovcdhc grantof 30,()00 tockopt ions o eaclrboard rrcnrber. errig esigned rorn heboardon Jauuary , 1999 . On Novenrbcr J, 1999,Rada'sshareholderspploved hegrantof'additional tockoptions o boardmenrbcrs ho weresen'ingat thc tirnc, Kcnig assertshc Radashareholderspecificallyprornisedirn 300,000stockopt ions t $1.05pershare, ursuanto theconlpany's ylaws ndotherboard esolut ions,

Kenigal,so sscr lshathe s cnt i t lcd o an addit ional 00,000 tockopt ions t $ I 05pershare, sa resultof rnatching alt rc, lu 'sLlanto an rrcrcascdl locat ion f stockopt ions,Kcnigclaiuis


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thathewouldhavc calizcd 1,800,000n comperrsationl hehadbeen ble o exercisehcstockoptions etween 000and2003.

ln 2(X), Kcnigcommcnccd nact ion n lsracl ccking eclaratolyel iefor specif icper lbmrancel l ' thestockopt ions hatwereal legedly ronrisedo hirn n 1999. lc asscr ls,ht'lwcvcr,hat he declaratoryelief andspecilicperlbmralrccclicJbccanrc bsolctc ue o ailecline n ltada'sshare alues. He furthera.ssertsha this counsel n the Isrirel tctiottshouldhavenot i f ied (ada hathe volLrntar i lyiscont inuedaidact ionorlNovember 0. 2006.

OnDecember7,2006, enig ommeucerlhisactiorrcckirrgo rccover npaiclconrpcnsatiorror hisscrryiccsadircctor f Rada. n he irstcause f action, outrdingubreach f'corrtract,enigseekso recover olnperlsatoryrrd urritivc anragcsasecln hcallcgcd rcach f a pronriscy Rada's hareholdcrso grant irn600,000 tock ptions. hesecondause f action ssentiallyllcgesha tRadawasuniustly nricheclsa result f thcfailurcogrant cnig lrc600,000tock pticlns. he hird ause f action llcgcshatKenig sentitleclo recovern quantum eruit scomlrensatiorrbr his scrviccsts director f Racla.

I tadanow -scckso disrnissheComplaint n var ious rounds,ncluding ackof personal

.jurisdictiorr;br-unr on convenien.s,tatutc f lirrritations; nd ailure o state causc f action.DISCUSSION

l 'e rsonal lur isd ic t ionCll 'LI t302(a)(l),New York's " long arnrstatute," ovems ersonaljur isdict ionver

nondonr ic i l iar ics,uclr sRada.Thc statute rovides,trpat t , hata courtmay excrciscjurisdictionovcr anynondonriciliary llo "trarrsactsnybusiness ithiu the state"as o I causc

of actionarising roln thatbusincss.l' o

transact usinessn New York, a party nustpurposcfi.rllyvail tsclf of thc privilcgcof conducting usiness,ltus rtvoking hebcncfitsan d


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protcctions f Ncw York law (Kreuttct'vMc:Fadden il Corp.,7l NY2d 460, 467U 988]).Furthernrore,br a claint o ariseout of a busil lcssransactionn Ncw York, thcrcnrustbc asubstatttialelationship e[weenha tbusinessransaction nd hc cause f actionsuecl pon irI.).CIPLR 02(a)( ) is a singleact statutc, ucl rool'of orrc ransactiorrn New York is suflicient oinvokc ur isdict ion, vcl l hough hedefe dant cvcrenters ew York, scl c lng s hc dcfcndant 'sactivities crc ,vere urpo.$efirlnd herewasa substantiirlclatiorrshipctween he ransactionand heplaintiff s claim(id.). l-unherrnorc, hile the ultirrrate uldenof proof rcst.s ith thcpartyassert ingur isdict ion,hcplaint i f f , n opposing nrot iono disur iss ursuanto CPLR32Ll(aX8),nccdonly ntakea pritna acicshowing hat he defendant as sub.jecto thejurisdictiouol tlte coutt (AldenPersorutel,nc. v Dat,id,38AD3d 697,698 [2 d Dcpt 2007)).

I tadaargueshat heact inn gainstt should e disrnissedincc t is an sracl icorporaliott, liich doesnot transact nybr.rsincssn New York, and hat he November17, 1999stockoptiongrant s wholly unrslatcd o New Yr-rrk.

In oppositiotr,towcvcr,Kcnig assertshat tacla assufficicnt ics o Ncw York for thcCourt o propcrlycxcrcise ersonaljurisdiction gainst t. Irrparticular, enig assertshathc wasrecruitcd s a directorbecause f his location n New York, and ha tmostof his work as adireclorwa spcrfonncd n New York. Kenig alsoasscrtshat shares f Radahavebeenpubliclytradcd n New York's NASDAQ stockexchangeince1985, nd hatnrostof Rada'.s.shareholdersire n I ong Kong anclNew York. Kcnig furthcrassertshat someof Racla'ssharehcllclersrectings reconvene(ln New York, In addition,Kenig maintains hut tadaoncehad a subsidiaryn N ew Yurk, and rctains ccouutantsrndattorncys crc. Kcnig furtbcrargucsthatmany ofllada's clicntsare n New York; that a Ncw York law fi rnr hirsan open lowerofttttorncyo rcpresentts busincssntcrcsts ere;and hat a April 12,2007Sccuritics nd


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- ExchangcCotnmission rospectusrrevocably ppoirrts Ncw York agcnt o receive.servicefprocessn New York. Kenigassettsha t he powerof attorncy asncgotiatcd ertain lealsorRadirwith UniteclStiltes ompanies.Kenig alsoassertshat Radasolicitccllvestmelts n itsstock ronl New York lrusincssc.s.enig furthercontenclsha tRarJamaintainsNcw York balkaccounts .

The CourtdctcrmincsKcnig's presencerrNe w York, wherehe performcdmostof lriswork asa ll1et1lbcrf thc boardof dircctors f l{ada,aswell as Racla's therbusincs.sealingsnNer,vYork, includingshareholclertteetings,hc appoirrtmcnt f an agent o receive ervicc fproccss, nd hc nraintenattcef bankaccourtts,resutlicicnt o cstablishhat Ladaransactcclbusinessn this State.Furthernrorc,o thc cxtcnt hat Kenigbrings hi saction o rccovercompensationsbr services eperformcd n NcrvYork as a ntelnber f theboardof directors fRada, ltc court may propcrlycxercise ersonaljurisclictionvc r it. Thus, he branch f thctttotion ha tsccks o disnrisshc Cunrplaint or lackof personalurisdiction s dcniecl.Foru lnNon Convcniens

Rada lsosccks o disr l iss hisact ionon he ground har hemattcr hould e adludicatcdin the coutls rt Israel,where nostof theevidence ndwitncsscs rc ocated.Th edoctrincoffontnr non cor)vcnicns cnllit.s court o sLay r disnriss nactionwhcn,although t ltay haycjurisdictionovcr a clainr, he coutl dctcrnrinesha t"in the nterest l substantialjusticehe action.sftould e heard n another ort:nl" (CPLR 327[a)),Tbc burden estsu[)on he lef'endantchailenginghe fbruur o dernonstratcclcvantprivateor public ntelest actorswhich militateagainst cceptinghe itigation 1slamir:Republic .[ ran v Paltlavi,62NY2d 474,479 1984]).'l' ltecout1, fterconsidering ncl alarrcingarious ompeting actors nustdetenliric n thecxcrcisc f i ts sounddiscrct ion hether o retainur isdict ion( ir l , ) , nrong he actorso bc


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constdered rc he burdenott lteNew York courts, he potentjal ardsltip o thc dcfcndant, ndth c unavailability f an altemativebrurn n whiclr lr cplaintiff rlay bring suit (id.). 'i'hecourtmay al.so onsidcrwhether hepartieso theactionar c tomcsitlcnts ndwfietfter lre rapsactignout o1'which hc causc f actionaro.seccurrcd rirnarily n a foreign urisclictittn id.). No onefactor s control ing (id.\.

Ilere, lada ntaintainshattlrcundcrlying ransaction ccurredn Israel,all of the relevantcvidet :ce nd vitt tcsscsle ocatednlsrael,and srael i i rwgovernshe Novenr l ler 7,1999stockoptiongrattt. Iladaalsonotcs ltatKcnig comnlenced n sraelactionallegingclaimsbaseclon the sanlcunderlying irctsas n this actionand sccking s.scntiallyhc saltlc cnrcdy.

However,Kcnig contcnd.sha the s a New York resident, nd hat his work as a director,fo r which he seeks onlpensation, aspcrformcd n New York. Kenig alsoassertsha tmaltypotentiaIwitne,sscs,ncludingRadashareho]ciers,re ocated n New York. Kenig urtherarguesthat hcapplicat ion f Israel i aw should otbc an rnpcdimcnto maintainingheact ion rrNcwYork, In additicru, enig rrraintainshat Radawa snotified hathc abandoneclhe sraeliactionott Novetnber20,2006,artd hat he irnitations eriod or refiling hatactionhasexpired.

The Court,alter colt.sideringhevarions actors, oncludcsha t hc comrncnccrncntf thisNew York act iot t y Kenig,coupled i th theabi l i ty o adequatelyesolvehepart ies' isputerrtiris Statc's ourtsancl he nabilityof Kenig o rcfilc thc Isracliactiorr,wanants hedenialof thcbranchof thc trrotion hat seeks o d isrnisshc actionbascdon the doctrirre f forum norrcofrvcnlel ls.Statuteof Lirnitat ions

Itada urtlrcrconteudshat he clairns n this actionshouldbc disrnisscd s imc-barrcd.As stated, cnigconrnenceclhisact ion l leging hathewasdcpr ivcd f thcbencf i tof a stock


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optiongrantc(l ll Novctuber17.,gL)L). he pleaclilrgn tftisaction,whichwas lleclor rDeccntber J,2006, alleges auscs f action or breach f contract, njustenrichmerrt,ndquattfttttt reruit, [t is uncontcstcdha teachof thcse lairns s subjcct o a six-year tatute fl i r t r i t a t ions (CPL l t2 I3 l l J ;t2 ] ) . Asagencra l ru le ,acausco fc t ion f rcc rueswhena l lf t he fhc rsIrece'ssaryo sustain hc clairlrhaveocctttred, o hata partycanoblain elicf iu colrt (lnsuran


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clainrs n thisaction, CIPLR 0a(a) tatesha t"[w]here he comrnenoementf an actionha sbcenstaycd ry a courtor-bystatutory rohitrition,he clurati


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nrustai l since unititve amagesrenotavailableo redressprivatcwrong seeNewYorlcUntv. Continentuln,s. o., 7NY2d308, 5-3 6 U995]).

Accordingly,t isOltDh,Rllf) that he rrrotiono disrnisss granted nd hc C)ornplaints disrnissecl ith

costancl isbursenrentso defendant s axedby thc Cllcrk f theCourt;and t i.s trrthcrORDERED hat hc Clerk s directeclo enterudgmcntaccordingly.

Dated: Dccct'nber 8,2007I lNTER:

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