FIRST AMENDMENT TO THE SHARE AND ASSET PURCHASE AND SALE AGREEMENT
Exhibit
10.3
FIRST
AMENDMENT TO THE
This
First Amendment (this “Amendment”)
to the
Share and Asset Purchase and Sale Agreement, dated as of December 21, 2005
(the
“Purchase
Agreement”),
is
made as of this 24th day of February, 2006 by and among Xxxxxx Systems, Inc.,
Xxxxxx Systems International, Inc., and Xxxxxx U.K. Limited (each a
“Seller”
and,
collectively, the “Sellers”)
and
Simclar Group Limited, Simclar Interconnect Technologies Limited, Simclar,
Inc.,
and Simclar Interconnect Technologies, Inc. (each a “Buyer”
and
collectively, the “Buyers”).
W
I T N E
S S E T H:
WHEREAS,
the Sellers and the Buyers are parties to the Purchase Agreement;
and
WHEREAS,
the Sellers and the Buyer desire to amend the Purchase Agreement in accordance
with the requirements of Section 9.11 therein upon the terms and conditions
set
forth herein.
NOW,
THEREFORE, for good and valuable consideration the receipt and sufficiency
of
which are hereby acknowledged, the parties hereto hereby agree as
follows:
| 1. |
Capitalized
terms used but not otherwise defined in this Amendment shall have the
meanings set forth in the Purchase Agreement.
|
| 2. |
Section
1.8 of the Purchase Agreement is hereby amended by adding the following
after Section 1.8(b):
|
(c) Notwithstanding
the foregoing, in the event that Sellers are not able to transfer or assign
(i)
the Proprietary Software License Agreement with Ansoft Corporation (the
“Ansoft
License”),
or
(ii) the Mentor Graphics Customer Agreement for Xxxxxx Interconnection Products
Limited, dated March 25, 1997 (the “Mentor
Graphics Agreement”)
prior
to the Closing, Buyers and Sellers agree to cooperate to effect the transfer
or
assignment of the Ansoft License and the Mentor Graphics Agreement as promptly
as practicable after Closing. If in connection with the transfer, assignment
or
replacement of the Ansoft License and the Mentor Graphics Agreement, Buyers
incur out-of-pocket costs in addition to the costs they would have incurred
had
Ansoft and Mentor Graphics consented to the assignment and assumption of the
Ansoft License and the Mentor Graphics Agreement (the “Incremental
Costs”),
then,
Sellers agree to pay, in connection with the transfer, assignment or replacement
of such agreements, up to $200,000 of such Incremental Costs. In the event
that
the Incremental Costs in connection with the transfer, assignment or replacement
of the Ansoft License or the Mentor Graphics Agreement exceed $200,000, Sellers
agree to pay one half of any additional Incremental Costs up to an additional
$100,000, provided,
however,
that
the provision of this Section 1.8(c) shall be the sole and exclusive remedy
of
Buyers with respect to any fees or payments in connection with the transfer,
assignment or replacement of the Ansoft License or the Mentor Graphics Agreement
and that Sellers shall not be required to pay any amounts in connection with
the
transfer, assignment or replacement of the Ansoft License or the Mentor Graphics
Agreement in excess of an aggregate of $300,000.
| 3. |
Section
5.5 of the Purchase Agreement is hereby amended by adding the following
after Section 5.5(f):
|
(g)
The
Sellers will indemnify the Buyers in full against termination payments actually
made consisting of: (i) redundancy payments based on the statutory formula
but
with no salary capitation; (ii) payment in lieu of notice, and (iii) an ex
gratia payment equal to two weeks actual salary, each of the foregoing
obligations only in respect of any of the UK Business Employees listed on
Schedule 5.5(a) that is terminated for reason of redundancy (as defined by
the
Employment Rights Act of 1996) and only if the date of dismissal of such UK
Business Employee is within six (6) months after the Closing Date.
| 4. |
Section
5.7 of the Purchase Agreement is hereby amended by adding the following
after Secttion 5.7(c):
|
(d) After
the
Closing, at the request of the Sellers the Buyers shall, and shall cause the
Company to, provide to the Sellers such timely assistance as is required by
the
Sellers for the purpose of determining and paying the Seller’s (or their
Affiliates’) liability for any Taxes in the PRC. Without limiting the generality
of the foregoing, the Buyers (or their Affiliates, including the Company) shall
assist the Sellers in filing any Tax Returns and/or withholding and paying
any
Taxes for which the Sellers may be liable in respect of the transactions
contemplated under the LESC Equity Purchase Agreement, which assistance shall
include providing documents and communicating with the PRC Tax authorities.
Sellers shall reimburse the Buyers’ reasonable out-of-pocket third party
expenses incurred in performing the covenants contained in this Section 5.7(d).
| 5. |
The
Purchase Agreement is hereby amended by deleting Section 5.18(c) in
its
entirety.
|
| 6. |
The
Purchase Agreement shall be amended by adding the following after Section
5.19:
|
SECTION
5.20 Technology
License Royalties.
(a) After
the
Closing, Buyers and their Affiliates shall cause the Company to use its
reasonable best efforts to take all actions necessary and required to obtain
the
approval of the application made by the Company to the relevant PRC approving
authorities to pay royalties to LUK with respect to the second half of 2005
under the Licensing Agreement entered into by and between the Interconnect
Technologies Division of Xxxxxx UK Limited and the Company, dated June 28,
2004
(the "Technology
License").
Within ten (10) Business Days of the receipt by the Company of such approval,
Buyers will remit to LUK, an amount of cash (which amount shall not be subject
to offset against any other amounts which may be due from Sellers to Buyers
under the terms of this Agreement) equal to that amount that the PRC approving
authorities approve for payment under such application less any reasonable
third
party out of pocket expenses of Buyers in connection with effectuating the
approval and remittance of such royalties.
-2-
(b) After
the
Closing, Buyers and their Affiliates shall cause the Company to use its
reasonable best efforts take all actions necessary and required to file with
the
relevant PRC approving authorities an application, including any supporting
or
accompanying documentation requested by the relevant PRC approving authorities
with respect to such application, requesting the approval of the payment of
royalties to LUK under the Technology License for the period from January 1,
2006 through the Closing Date. Buyers and their Affiliates shall cause the
Company to use its reasonable best efforts take all actions necessary and
required to obtain the approval by the relevant PRC approving authorities of
such application. Within ten (10) Business days of the receipt by the Company
of
such approval, Buyers will remit to LUK, an amount of cash (which amount shall
not be subject to offset against any other amounts which may be due from Sellers
to Buyers under the terms of this Agreement) equal to that amount that the
PRC
approving authorities approve for payment under such application less any
reasonable third party out of pocket expenses of Buyers in connection with
effectuating the approval and remittance of such royalties.
SECTION
5.21 Post-Closing
Remittances by Buyers.
In
no
event shall the total amount remitted to Sellers by Buyers pursuant to Sections
5.7(d), 5.18, and 5.20 exceed, in the aggregate, the total amount of cash on
the
Company's balance sheet as of the Closing Date, less $1,800,000.
| 7. |
Other
Provisions.
Except as expressly amended and modified hereby, all other provisions
of
the Purchase Agreement shall remain in full force and effect. If any
term
or provision of this Amendment shall be inconsistent with any term
or
provision in the Purchase Agreement, the term or provision set forth
herein shall control in all respects.
|
| 8. |
Governing
Law; Consent to Jurisdiction.
This
Amendment shall be governed by, and construed in accordance with, the
Law
of the State of New York applicable to contracts to be fully performed
therein. Each of the Parties hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the
United States District Court for the Southern District of New York,
for
any litigation arising out of or relating to this Amendment and the
transactions contemplated hereby, and further agrees that service of
any
process, summons, notice or document by U.S. registered mail to its
respective address set forth herein shall be effective service of process
for any litigation brought against it in such court. Each of the Parties
hereby irrevocably and unconditionally waives any objection to the
laying
of venue of any litigation arising out of this Amendment and the
transactions contemplated hereby in the United States District Court
for
the Southern District of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such
court
that any such litigation brought in any such court has been brought
in an
inconvenient forum.
|
-3-
| 9. |
Counterparts.
This Amendment may be executed and delivered in one or more counterparts,
and by the Parties in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same
agreement.
|
[signature
page follows]
-4-
IN
WITNESS WHEREOF, the Sellers and the Buyers have caused this Amendment to be
executed and delivered as of the date first written above.
SIMCLAR
GROUP LIMITED
By:
/s/
Xxxx Xxx Xxxxx
Name:
X.X. Xxxxx
Title:
Director
SIMCLAR
INTERCONNECT TECHNOLOGIES LIMITED
By:
/s/
Xxxx Xxx Xxxxx
Name:
X.X. Xxxxx
Title:
Director
By:
/s/
Xxxxx Xxxxxx
Name:
Xxxxx Xxxxxx
Title:
President
SIMCLAR
INTERCONNECT TECHNOLOGIES,
INC.
By:
/s/
Xxxxx Xxxxxx
Name:
Xxxxx Xxxxxx
Title:
President
First
Amendment to the Share and Asset Purchase and Sale Agreement
XXXXXX
SYSTEMS, INC.
By:
/s/
Xxxxx Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Assistant Treasurer
XXXXXX
U.K. Limited
By:
/s/
Xxxxx Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Assistant Treasurer
XXXXXX
SYSTEMS INTERNATIONAL, INC.
By:
/s/
Xxxxx Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Assistant Treasurer
