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AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS AMENDMENT dated as of April 20, 1998 (this "Amendment"), among Tadiran
Limited, an Israeli corporation ("Tadiran"), Tadiran Microwave Networks, Inc., a
Delaware corporation ("TMN"), and California Microwave, Inc., a Delaware
corporation ("Seller"). Capitalized terms used herein, but not otherwise defined
herein, shall have the meanings ascribed to them in the Purchase Agreement (as
defined below).
R E C I T A L S
A. Tadiran and Seller have entered into and executed an Asset Purchase
Agreement dated as of March 1, 1998 (the "Purchase Agreement").
B. Section 10.5(g) of the Purchase Agreement permits Tadiran to assign its
rights under the Purchase Agreement to any of its Subsidiaries.
C. Tadiran wishes to assign all of its rights under the Purchase Agreement
to TMN and TMN wishes to accept and receive such rights from Tadiran.
D. The parties also desire to amend the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
agreements, representations and warranties made herein and in the Purchase
Agreement, and of the mutual benefits to be derived hereby and thereby, the
parties agree that the Purchase Agreement shall be amended, and the same hereby
is amended, as follows:
1. Assignment and Assumption. Tadiran hereby conveys, bargains, transfers,
sets over and assigns to TMN, its successors and assigns, all of Tadiran's
rights under the Purchase Agreement, as amended hereby, including, without
limitation, the right to acquire the Assets. TMN hereby assumes and agrees to
perform all of Tadiran's covenants and agreements under the Purchase Agreement,
as amended hereby. For purposes of the Closing under the Purchase Agreement, as
amended hereby, and thereafter, TMN shall be substituted for Tadiran as the
"Buyer" thereunder.
2. Joint and Several Liability. Tadiran shall be jointly and severally
liable with TMN in respect of the covenants and agreements assumed by TMN
hereunder.
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3. Amendments to the Purchase Agreement.
(a) Recital A of the Purchase Agreement hereby is amended by adding
immediately after the words "unincorporated division" the following words: "and
the Seller Foreign Subsidiaries".
(b) Section 2.1 of the Purchase Agreement hereby is amended by deleting the
word "15th" and replacing it with the word "21st".
(c) Section 5.1 of the Purchase Agreement hereby is amended by adding a new
paragraph (n) at the end thereof as follows:
"(n) Seller Foreign Subsidiaries. For purposes of this Section 5.1 and
Section 6.2, through the Closing Date, the term Seller shall include, where
applicable, the Seller Foreign Subsidiaries."
(d) Clause (v) of Section 9.1 of the Purchase Agreement hereby is
amended by: (1) adding immediately after the word "Seller" the following
words: "or any of the Seller Foreign Subsidiaries"; and (2) adding at the
end thereof the following: "; "
(e) Section 9.1 of the Purchase Agreement hereby is amended by adding
new clauses (vi), (vii) and (viii) at the end thereof as follows:
"(vi) any debt, claim, liability, obligation or commitment of any
of the Seller Foreign Subsidiaries (including Losses resulting from or
arising out of the non-performance or non-compliance by any Seller
Foreign Subsidiary of any agreement or condition of any contract,
agreement, license, lease, Governmental Approval, commitment, order or
other instrument or arrangement to which it is a party or by which it
or any of its property is bound, which agreement or condition was
required thereby to be performed or complied with by such Seller
Foreign Subsidiary prior to or on the Closing Date), except to the
extent the same constitutes an Assumed Liability;
(vii) any termination of, or any acceleration of any of the
obligations or liabilities under, the Discretionary Grant Agreement,
dated January 3, 1995, between the Industry Research and Development
Board and Microwave Networks Australia Pty. Ltd., including any costs,
charges and expenses incurred in connection with a demand by the
Industry Research and Development Board that Microwave Networks
Australia Pty. Ltd. repay all or any portion of the grant monies that
have been provided to Microwave Networks Australia Pty. Ltd., which
termination or acceleration is
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the result of the execution, delivery or performance of this Agreement
or the consummation of the transactions contemplated hereby; and
(viii) any termination by California Microwave S.A. de C.V. (or
its successor), whether before or after the Closing, of the employment
of or any consulting or similar arrangement or agreement with Sr.
Xxxxxxxx Vallarta Xxxxxxx (including the agreement referred to in Item
No. 10 of Schedule 3.11(a))."
(f) Clause (vi) of Section 9.2 hereby is amended to read as follows:
"(vi) the operation of the Business by Buyer or Buyer's ownership,
operation or use of the Assets (including the assets of the Seller Foreign
Subsidiaries) following the Closing Date except to the extent such Loss is
the result of any action of Seller or any of the Seller Foreign
Subsidiaries prior to the Closing."
(g) The definition of "Business" contained in Section 10.1 of the Purchase
Agreement hereby is amended by adding immediately after the words "MN Division"
the words: "(including the Seller Foreign Subsidiaries)".
(h) The definition of "Seller Foreign Subsidiaries" in Section 10.1 hereby
is amended to read as follows:
"Seller Foreign Subsidiaries: Microwave Networks (Phils.), Inc., a
registered Philippine company; California Microwave S.A. de C.V., a
registered Mexican company; and Microwave Networks Australia Pty. Ltd., a
registered Australian company."
(i) Clause (i) of Section 10.4 of the Purchase Agreement hereby is amended
by: (1) adding immediately after the words "if to Buyer, to:" the following
words:
"Tadiran Microwave Networks, Inc.
0000 Xxxxxxxxxx
Xxxxxxxx, Xxxxx 00000
Attention: President
Facsimile: 281/263-6413
with copies to:"
; and (2) deleting the words "with a copy to:" and replacing such deleted words
with the word "and".
(j) Section 2.3 of the Purchase Agreement hereby is amended by adding a new
paragraph at the end thereof as follows:
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"An aggregate amount of $434,000 of the Cash Portion shall be
allocated to the purchase of the Shares included in the Assets as follows:
(a) $354,000 for the purchase of the capital stock of California Microwave
S.A. de C.V.; (b) $50,000 for the purchase of the capital stock of
California Microwave (Phils.), Inc.; and (c) $30,000 for the purchase of
the capital stock of Microwave Networks Australia Pty. Ltd."
(k) The first sentence of the fourth paragraph of Section 3.10(a) of the
Purchase Agreement hereby is amended to read as follows:
"The capitalization of each of the Seller Foreign Subsidiaries
immediately prior to the Closing is set forth on Schedule 3.10A attached
hereto; immediately prior to the Closing, the Persons set forth on Schedule
3.10A will be the owners, beneficially and of record, of all the issued and
outstanding Shares of the Seller Foreign Subsidiaries set forth opposite
their respective names, which represent all the issued and outstanding
Shares, and each such Person will have good and valid title to the Shares
listed opposite such Person's name, free and clear of all Liens."
(l) Section 5.2 of the Purchase Agreement hereby is amended by adding a new
paragraph (i) at the end thereof:
"(i) IRDB. Buyer shall use commercially reasonable efforts after the
Closing to cause the Industry Research and Development Board to waive any
right of termination that it may have under the Discretionary Grant
Agreement with Microwave Networks Australia Pty. Ltd. as a result of the
consummation of the transactions contemplated by this Agreement."
(m) Article X of the Purchase Agreement hereby is amended by adding a new
Section 10.10 at the end thereof:
"Section 10.10 China and Singapore Facilities. For the period
commencing on the Closing Date and ending on the 180th day after the
Closing Date, (a) Buyer may occupy and continue to conduct the operations
of the Business at, and exercise Seller's rights and otherwise utilize, the
facility of Seller at 0000 Xxxx Xxxxx Xxxxxx, 24A, Xxxx Xxx Men Xxx Da Jie,
Beijing, China (the "China Facility"), in a manner substantially similar to
that conducted by Seller prior to the Closing; and (b) Seller may occupy
and continue to conduct its non-Business operations at, and exercise
Seller's rights and otherwise utilize, the facility of Buyer at 00 Xxxxxxx
Xxxx No. 13-08, Ocean Building, Singapore (the "Singapore Facility"), in a
manner
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substantially similar to that conducted by Seller prior to the Closing. In
the case of the China Facility, Buyer promptly shall reimburse Seller for
any reasonable out-of-pocket expenses (including a pro rata share of rental
expense) incurred and paid to non-Affiliate third parties in connection
with the utilization by Buyer of the China Facility pursuant to this
Section. In the case of the Singapore Facility, Seller promptly shall
reimburse Buyer for any reasonable out-of-pocket expenses (including a pro
rata share of rental expense) incurred and paid to non-Affiliate third
parties in connection with the utilization by Seller of the Singapore
Facility pursuant to this Section. The allocation of out-of-pocket expenses
between the operations of the Business by Buyer and Seller's non-Business
operations at each of the China Facility and the Singapore Facility,
respectively, for purposes of reimbursement pursuant to this Section, shall
be made on a reasonable basis, taking into account the number of employees
of Buyer and Seller, respectively, at each such facility and the square
footage used thereat by Buyer and Seller, respectively."
(n) Clause (f) of Section 2.4 of the Purchase Agreement hereby is amended
by adding immediately after the words "on Schedule 3.5" the following words:
"(other than the claim described in Item No. 3 of Schedule 3.5)"
(o) Section 2.5 of the Purchase Agreement hereby is amended by: (1) adding
at the end of paragraph (o) thereof the following word "; or"; and (2) adding
new paragraphs (p) and (q) at the end thereof as follows:
"(p) the claim described in Item No. 3 of Schedule 3.5; or
(q) the agreement between California Microwave S.A. de C.V. and Sr.
Xxxxxxxx Vallarta Xxxxxxx referred to in Item No. 10 of Schedule 3.11(a)."
(p) The definition of "Affiliate" in Section 10.1 of the Purchase Agreement
hereby is amended by adding the following new sentence at the end thereof:
"Following the Closing, each of the Seller Foreign Subsidiaries shall be an
Affiliate of Buyer.
(q) Section 10.2 of the Purchase Agreement hereby is amended by adding the
following new sentence at the end thereof: "Seller shall reimburse Buyer for a
reasonable portion of the legal fees and expenses of Buyer's counsel in
Australia and the Philippines with respect to the consummation of the
transactions contemplated by this Agreement."
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(r) Section 3.27 of the Purchase Agreement hereby is amended by deleting
the second and third sentences thereof.
4. Amendments to the Schedules to the Purchase Agreement.
(a) Item 1 of Schedule 1.2 to the Purchase Agreement hereby is amended by:
(1) deleting in the first paragraph thereof clause (v) in its entirety; (2)
deleting in the sixth line of the second paragraph thereof the word "and"; and
(3) adding at the end of the second paragraph thereof the following words: ";
and 0000 Xxxx Xxxxx Xxxxxx, 00X, Xxxx Xxx Men Xxx Da Jie, Beijing, China."
(b) Attachment A to Schedule 3.11(a) to the Purchase Agreement hereby is
amended by deleting the attachments referred to in Attachment A to Schedule
3.11(a) in its entirety. An amended attachment to Attachment A to Schedule
3.11(a), a copy of which is attached hereto as Exhibit A ("Attachment to
Attachment A to Schedule 3.11(a)") and incorporated herein by reference, shall
be substituted therefor, and all references in Attachment A to Schedule 3.11(a)
to attachments shall, from and after the date hereof, mean and refer to such
amended Attachment to Attachment A to Schedule 3.11(a).
(c) Schedule 3.14(a) to the Purchase Agreement hereby is amended by
deleting the Attachment to Schedule 3.14(a) in its entirety. An amended
Attachment to Schedule 3.14(a), a copy of which is attached hereto as Exhibit B
("Attachment to Schedule 3.14(a)") and incorporated herein by reference, shall
be substituted therefor, and all references in Schedule 3.14(a) to an attachment
shall, from and after the date hereof, mean and refer to such amended Attachment
to Schedule 3.14(a).
(d) Schedule 3.17 to the Purchase Agreement hereby is amended by deleting
the Attachment to Schedule 3.17 in its entirety. An amended Attachment to
Schedule 3.17, a copy of which is attached hereto as Exhibit C ("Attachment to
Schedule 3.17") and incorporated herein by reference, shall be substituted
therefor, and all references in Schedule 3.17 to an attachment shall, from and
after the date hereof, mean and refer to such amended Attachment to Schedule
3.17.
(e) Schedule 3.23 to the Purchase Agreement hereby is amended by deleting
the Attachment to Schedule 3.23 in its entirety. An amended Attachment to
Schedule 3.23, a copy of which is attached hereto as Exhibit D ("Attachment to
Schedule 3.23") and incorporated herein by reference, shall be substituted
therefor, and all references in Schedule 3.23 to an attachment shall, from and
after the date hereof, mean and refer to such amended Attachment to Schedule
3.23.
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(f) Schedule 3.24 to the Purchase Agreement hereby is amended by deleting
the Attachment to Schedule 3.24 in its entirety. An amended Attachment to
Schedule 3.24, a copy of which is attached hereto as Exhibit E ("Attachment to
Schedule 3.24") and incorporated herein by reference, shall be substituted
therefor, and all references in Schedule 3.24 to an attachment shall, from and
after the date hereof, mean and refer to such amended Attachment to Schedule
3.24.
(g) Schedule 5.2(e) to the Purchase Agreement hereby is amended by deleting
the Attachment to Schedule 5.2(e) in its entirety. An amended Attachment to
Schedule 5.2(e), a copy of which is attached hereto as Exhibit F ("Attachment to
Schedule 5.2(e)") and incorporated herein by reference, shall be substituted
therefor, and all references in Schedule 5.2(e) to an attachment shall, from and
after the date hereof, mean and refer to such amended Attachment to Schedule
5.2(e).
(h) Schedule 7.1 to the Purchase Agreement hereby is amended by deleting
the Attachment to Schedule 7.1 in its entirety. An amended Attachment to
Schedule 7.1, a copy of which is attached hereto as Exhibit G ("Attachment to
Schedule 7.1") and incorporated herein by reference, shall be substituted
therefor, and all references in Schedule 7.1 to an attachment shall, from and
after the date hereof, mean and refer to such amended Attachment to Schedule
7.1.
(i) A new Schedule 3.10A to the Purchase Agreement hereby is added to the
Purchase Agreement, a copy of which is attached hereto as Exhibit H and
incorporated herein by reference, and all references to Schedule 3.10A in the
Purchase Agreement shall mean and refer to such Schedule 3.10A.
(j) Schedule 3.5 to the Purchase Agreement hereby is amended by adding a
new Item No. 3 at the end thereof:
"3. On or about April 16, 1998, Xxxxxxxx Vallarta Xxxxxxx telephoned
Xxxxxx Xxxxxxxx of Seller and claimed that he was owed U.S. $146,000 by
California Microwave S.A. de C.V."
(k) Schedule 3.11(a) to the Purchase Agreement hereby is amended by adding
a new Item No. 10 at the end thereof:
"10. VALLARTA AGREEMENT. Independent Professional Services Agreement,
dated January 1, 1997, between California Microwave S.A. de C.V. and
Xxxxxxxx Vallarta Xxxxxxx."
5. Agreement in Full Force. As expressly amended hereby, the Purchase
Agreement shall remain in full force and effect, and the parties hereby ratify
and confirm the same.
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6. Counterparts. This Amendment may be executed (including by facsimile
transmission) by the parties with counterpart signature pages or in one or more
counterparts, each of which shall be deemed to be an original.
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IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the
date first above written.
TADIRAN LIMITED
By:
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Name: Xxxxxx Xxxxx
Title: President
By:
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Name: Xxxxxx Xxx Xxxxxx
Title: Chief Financial Officer
TADIRAN MICROWAVE NETWORKS, INC.
By:
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Name: Xxxxxx Xxxxx
Title: Director
By:
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Name: Xxxxxx Xxxxxxxxx
Title: Secretary
CALIFORNIA MICROWAVE, INC.
By:
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Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Secretary
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