EXHIBIT 2.2
AMENDMENT NO. 1 TO
ASSET PURCHASE AGREEMENT
This Amendment No 1, dated as of March 25, 2002, amends and modifies
the Asset Purchase Agreement (the "Purchase Agreement") dated as of March 21,
2002, by and between Digi International Inc., a Delaware corporation ("Digi"),
and Communications Systems, Inc., a Minnesota corporation ("CSI"). Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed to
them in the Purchase Agreement.
The Purchase Agreement is hereby amended as follows:
1. Section 2.3(b) of the Purchase Agreement is hereby amended and
restated in its entirety as follows:
"(b) The amount determined under this Section 2.3
shall be paid at Closing as follows:
(i) $8,058,932.00 less the Escrow Amount shall be paid in cash
or by wire transfer of funds to Seller; and
(ii) $200,000.00 shall be paid in cash or by wire transfer of
funds to an escrow account pursuant to the terms of Section 2.6 (the
"Escrow Amount")."
2. Section 2.4 of the Purchase Agreement is hereby amended and restated
in its entirety as follows:
"(a) The Recent Accounts Receivable and Recent
Inventory reports attached to this Agreement, as amended by Amendment
No. 1, as Schedule 1.23 and Schedule 1.24 reflect Seller's
determination of the Accounts Receivable and Inventory as of the
Closing Date, including any applicable reserves. Following the Closing
Date, Seller and Buyer shall jointly conduct a review of Accounts
Receivable and Inventory, including, at the request of either party, a
physical inventory of the Inventory.
(b) Buyer must, as soon as reasonably practicable
after the Closing Date but not later than ten (10) days after the
Closing Date, prepare a statement with respect to the Closing Date
Valuations (the "Closing Statement") setting forth Buyer's calculation
as of the Closing Date, in reasonable detail, of the value of the
Accounts Receivable and Inventory as of the Closing Date as compared to
the value of the Recent Accounts Receivable and Recent Inventory
determined in accordance with the procedures and methodologies set
forth on Schedule 2.4 hereto, as well as a final determination set
forth on an amended Schedule 1.7 of those Category II Employees it
intends to terminate on or before June 30, 2002.
(c) Within ten (10) days after receipt of the Closing
Statement, Seller must give Buyer written notice of any exceptions to
Buyer's calculation of the Closing Date Valuations.
(i) If Seller has not given Buyer such
written notice within that ten-day period, then the values set forth in
the Closing Statement will be conclusive and binding on the parties.
(ii) If Seller gives Buyer such written
notice within that ten-day period, then Buyer and Seller shall promptly
endeavor to resolve any disputes. If Seller and Buyer fail to reach an
agreement with respect to such matters on or before ten (10) days after
Seller has delivered written notice to Buyer of exceptions to the
Closing Statement, then, as to such matters remaining in dispute, the
Seller and the Buyer shall promptly retain an accounting firm ("Firm")
acceptable to Buyer and Seller, which has not rendered accounts or
other services to either Buyer or Seller for at least three years. The
Firm shall make an independent determination of any matters in dispute
and deliver an opinion to Buyer and Seller within 45 days of the Firm's
retention, which determination will be conclusive and binding on the
parties. If, following any determinations made by the Firm, the Closing
Date Valuations shall be within $50,000 of the Closing Statement
prepared by Buyer, Seller shall be responsible for all fees and
expenses of the Firm. If, following any determinations made by the
Firm, the Closing Date Valuations are not within $50,000 of the Closing
Statement prepared by Buyer, Buyer shall be responsible for all fees
and expenses of the Firm."
3. Sections 4.10 and 4.11 of the Purchase Agreement are hereby amended
and restated in their entireties as follows:
"4.10 Inventory. The Inventory consists of items of a
quality and condition that are usable in the ordinary course of
business for the purposes for which intended. The quantity of each item
of Inventory as of the Closing Date is that number respectively stated
on Schedule 1.24.
4.11 Accounts. All Accounts Receivable set forth on
Schedule 1.23 have arisen in the ordinary course of the MiLAN Business
and represent valid obligations due Seller as of the Closing Date."
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4. The following schedules to the Purchase Agreement are amended and
restated in their entireties in the forms attached to this Amendment No.1:
Schedule 1.8 - Category II Employees and Assumed Severance
Cost Compilation
Schedule 1.9 - Category III Employees
Schedule 1.23 - Recent Accounts Receivable Statement
Schedule 1.24 - Recent Inventory Statement
Schedule 2.4 - Criteria for Evaluation of Inventory and
Receivables
5. Except as amended as set forth above, the Purchase Agreement shall
continue in full force and effect.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Purchase Agreement to be duly executed as of the date first written
above.
DIGI INTERNATIONAL INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its President and CEO
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COMMUNICATIONS SYSTEMS, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its CFO
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