Document:

lhcommscope10_1.htm

    AMENDMENT
      NO. 3 TO PURCHASE AND SALE AGREEMENT

     

    This
      AMENDMENT NO. 3 TO PURCHASE AND SALE AGREEMENT (this “Third
      Amendment”) dated as of January 31, 2008, is by and among ASC Signal
      Corporation, a corporation incorporated under the laws of Delaware (the “Purchaser”), Andrew
      Corporation, a Delaware corporation (“Andrew”), and Andrew
      Canada Inc., Andrew Limited, Andrew Holdings (Germany) GmbH, (each a “Seller”, and
      collectively with Andrew, the “Sellers”).  Purchaser
      and Sellers may be referred to individually as a “Party”
and
      collectively as the “Parties.”

     

    WHEREAS,
      the Parties have
      previously entered into that certain Purchase and Sale Agreement (the “Original
      Agreement”), made as of November 5, 2007;

     

    WHEREAS,
      the Parties have
      previously entered into that certain Amendment No. 1 to Purchase and Sale
      Agreement, made as of December 20, 2007, and that certain Amendment No. 2 to
      Purchase and Sale Agreement, made as of December 28, 2007, in each case amending
      the Original Agreement; and

     

    WHEREAS,
      the Parties desire to
      further amend the Original Agreement, as permitted by Section 13.2
      thereof;

     

    NOW,
      THEREFORE, in
      consideration of the premises and the mutual agreements and covenants set forth
      herein, the Parties agree as follows:

     

    
      	
              1.  

            	
              Amendment
                to Section
                1.1.  Section
                1.1 of
                the Original Agreement is hereby amended and restated to include
                or amend
                and restate, as the case may be, the following
                definitions:

            

    

     

    “Actual
      Accrued Vacation
      Payment” shall have the meaning set forth in Section 11.8.

     

    “Andrew
      China” shall
      have the meaning set forth in Section 6.24.

     

    “Australian
      Margin”
shall have the meaning set forth in Section
      6.21(b).

     

    “Brazilian
      Customers”
shall mean Star One, Globo Comunicacao e Participacoes and Siemens and
      any other
      customer doing business in Brazil, in each case solely with respect to the
      Business.

     

    “Brazilian
      Margin”
shall have the meaning set forth in Section
      6.22(b).

     

    “Brazilian
      Purchase
      Orders” shall have the meaning set forth in Section
      6.22(a).

     

    “Broadcast
      Australia”
shall have the meaning set forth in Section
      6.21(a).

     

    “Broadcast
      Australia Purchase
      Orders” shall have the meaning set forth in Section
      6.21(a).

     

    “Chinese
      Assets” shall
      have the meaning set forth in Section 6.24.

     

    “Deferred
      Transaction
      Assets” is amended to include the phrase “and excluding any reserves
      taken against Inventory that are related to the sale of the Business”
immediately after “Calculation Principles” in subsection (ii) of this
      definition.

     

    “Employee
      Wages” shall
      have the meaning set forth in Section 6.26.

     

    “ESA
      Agreement” shall
      mean the Purchase Agreement between Andrew and Purchaser for the supply by
      Andrew to Purchaser of earth station antennas and accessories.

     

    “Estimated
      Accrued Vacation
      Payment” shall have the meaning set forth in Section 11.8.

     

    “Final
      Deferred Inventory
      Value” shall replace the term “Final Deferred Asset Value”.

     

    “Hwadar”
shall
      have
      the meaning set forth in Section 6.24.

     

    “Initial
      Deferred Inventory
      Value” shall replace the term “Initial Deferred Asset Value”.

     

    “Lathe
      Operational
      Actions” shall have the meaning set forth in Section 6.17.

     

    “Net
      Inventory Amount”
shall mean the aggregate value (excluding any reserves taken against
      Inventory
      that are related to the sale of the Business) of the Inventory, including the
      Reserved Inventory, as of the Closing Date, net of reserves, in each case as
      determined in accordance with the Calculation Principles.

     

    “Other
      Letters of
      Credit” shall mean those certain letters of credit set forth on Schedule
      4.12 (k),
Items1,
2,
4
      and 5.

     

    “Purchaser
      SAP System”
shall have the meaning set forth in Section 6.26.

     

    “Reserved
      Inventory”
shall mean the Inventory set forth on Schedule
      2.5(s) under
      the subsection Reserved
      Inventory listed by item and location that (i) is retained by the Sellers
      post-Closing and not transferred to the Purchaser pursuant to the terms of
      this
      Agreement; and (ii) shall be included for purposes of calculating the Net
      Inventory Amount; provided, however,
      that
      notwithstanding the foregoing, in no event shall the inclusion of any items
      set
      forth on Schedule
      2.5(s) that do not constitute Inventory be included for purposes of
      calculating the Net Inventory Amount.

     

    “SAP
      Delivery Period”
shall have the meaning set forth in Section 6.26.

     

    “Shin”
shall
      have the
      meaning set forth in Section 6.25.

     

    “Shin
      Letter of
      Credit” shall have the meaning set forth in Section 6.25.

     

    “Targeted
      Completion
      Date” shall have the meaning set forth in Section 6.17.

     

    “Work
      Stoppage Day”
shall have the meaning set forth in Section 6.26.

     

    
      	
              2.  

            	
              Amendment
                to Section
                3.1(e).  Section
                3.1(e)
                of the Original Agreement is hereby amended and restated as
                follows:

            

    

     

    On
      the
      Deferred Transaction Date, the Purchaser shall issue to Andrew the Second Seller
      Promissory Note in exchange for the Deferred Transaction Assets, which such
      assets shall be usable in the ordinary course; provided, however,
      that (i) if
      the value of the Inventory, excluding any reserves taken against Inventory
      that
      are related to the sale of the Business, that is part of the Deferred
      Transaction Assets transferred to Purchaser on the Deferred Transaction Date,
      as
      calculated consistent with the Calculation Principles (the “Final Deferred Inventory
      Value”), is less than the value of the Inventory located at the Reynosa,
      Mexico facility (such value to exclude any reserves taken against Inventory
      that
      are related to the sale of the Business) as reflected in the Closing Statement
      as finally determined in accordance with Section 3.2 (the
“Initial
      Deferred
      Inventory Value”), then Andrew shall pay Purchaser an amount in cash
      equal to such deficiency; and (ii) if the Final Deferred Inventory Value is
      greater than the Initial Deferred Inventory Value, then, in addition to the
      Second Seller Promissory Note, the Purchaser shall pay Andrew an amount in
      cash
      equal to the value of the Inventory attributable to such excess as such value
      is
      determined in accordance with the terms of the ESA Agreement; provided, however,
      that Andrew
      shall use its reasonable best efforts to cause the Final Deferred Inventory
      Value not to exceed the Initial Deferred Inventory Value, except to the extent
      such excess is a result of performing its obligations in the ordinary course
      or
      instructions made by or received from the Purchaser pursuant to the ESA
      Agreement.  Between the Closing Date and the Deferred Transaction
      Date, Andrew shall keep the Purchaser apprised of the value of the Deferred
      Transaction Assets (estimated in a manner consistent with the Calculation
      Principles and excluding any reserves taken against Inventory that are related
      to the sale of the Business) as often as reasonably practicable, but in no
      event
      less than on a monthly basis.  To the extent that there is a dispute
      with the calculation of the Final Deferred Inventory Value, then the parties
      shall follow the procedures outlined in Section
      3.2(c).

     

    
      	
              3.  

            	
              Amendment
                to Section
                3.2(a).  Section
                3.2(a)
                of the Original Agreement is hereby amended and restated to insert
“and
                shall exclude any reserves taken against Inventory made that are
                related
                to the sale of the Business” immediately after “Calculation Principles” in
                the last sentence of this Section.

            

    

     

    
      	
              4.  

            	
              Amendments
                to Section
                3.4.

            

    

     

    (a)           
      Section
      3.4(a)(iii) of the Original Agreement is hereby amended and restated as
      follows:

     

    (iii) 
              For the purposes of calculating
      Cumulative EBITDA, the Parties hereby agree that EBITDA shall:

     

    
      	
               

            	
              (A)

            	
              not
                include the appropriate financial items for any Person or business
                unit of
                a Person (including product lines), that has been directly or indirectly
                acquired by the Purchaser or Skyware during such relevant period;
providedhowever,
                if
                such Person or business unit of a Person (including product lines),
                so
                acquired manufactures or sells products that would be reasonably
                expected
                to result in a material reduction of Cumulative EBITDA to be derived
                from
                the manufacture and sale of products manufactured and sold by the
                Business
                as it is conducted by the Sellers and Skyware immediately prior to
                Closing
                (the “Existing
                Products”) that would not have occurred but for such acquisition,
                and the aggregate amount of the trailing twelve month EBITDA (the
“TTM EBITDA”)
                derived from the manufacture and sale of the applicable Existing
                Products
                was an amount greater than zero, the EBITDA Target Amount shall be
                (1)
                decreased by an amount equal to:  (x) the aggregate amount of
                the TTM EBITDA derived from such applicable Existing Products multiplied
                by (y) a fraction, the numerator of which is the number of months
                that
                remain in the Earnout Period at the time of such acquisition and
                the
                denominator of which is twelve (12), and (2) increased by an amount
                equal
                to the lesser of (x) the amount by which the EBITDA Target Amount
                was
                decreased in accordance with Section
                3.4(a)(iii)(A)(1) above or (y) the amount of actual EBITDA derived
                from the manufacture and sale of the applicable Existing Product
                after
                such acquisition; 

            

    

     

    
      	
               

            	
              (B)

            	
              not
                include the appropriate financial items for any Person or business
                unit of
                a Person (including product lines), that Purchaser or Skyware has
                ceased
                to operate, or that has been directly or indirectly disposed of by
                Purchaser or Skyware, in each case for the period beginning on the
                date of
                such cessation or disposition and ending at the end of the Earnout
                Period;
                provided however, if the Person or business unit of a Person (including
                product lines), so ceased or disposed of had a positive impact on
                EBITDA
                as determined by review of its TTM EBITDA prior to such cessation
                or
                disposition, the EBITDA Target Amount shall be decreased by an amount
                equal to: (x) the aggregate amount of the TTM EBITDA derived from
                such
                Person or business unit of a Person (including product lines), multiplied
                by (y) a fraction, the numerator of which is the number of months
                that
                remain in the Earnout Period at the time of the cessation or disposition
                and the denominator of which is twelve (12); and
                

            

    

     

    
      	
               

            	
              (C)

            	
              not
                include the recognition of that portion of any income attributable
                to the
                sale of any Inventory to the extent that such portion of any income
                resulted from such Inventory being accounted for on the balance sheet
                of
                Purchaser immediately after Closing in an amount less than the amount
                such
                Inventory was accounted for on the balance sheet of Andrew immediately
                prior to Closing. 

            

    

     

    (b)           
      The Original Agreement is hereby amended and restated to include the following
      Section 3.4(e)
      and the end of Section
      3.4:

     

    Allocation
      of the Earnout
      Payment.  For purposes of the allocation contemplated in Section 3.3 of
      this
      Agreement, any Earnout Payment made by the Purchaser to Sellers shall be
      allocated among the parties as if the total amount of such Earnout Payment
      was
      paid to Andrew Corporation by ASC Signal Corporation.

     

    
      	
              5.  

            	
              Amendment
                to Section
                4.11.  The Original Agreement is hereby amended and
                restated to insert the following sentence at the end of Section
                4.11:

            

    

     

    For
      purposes of this Section 4.11 only,
      Andrew AG shall be deemed to be a Seller.

     

    
      	
              6.  

            	
              Amendment
                to Section
                6.3(b).  Section
                6.3(b)
                of the Original Agreement is hereby amended and restated to delete
                “Governmental Required Consents” from this Section and replace such term
                with “Consents of Governmental
                Authorities.”

            

    

     

    
      	
              7.  

            	
              Amendments
                to Section
                6.11.

            

    

     

    (a)           
      Section 6.11(a)
      of the Original Agreement is hereby amended and restated to include the phrase
      “Except as provided in Section 6.21 and
Section
      6.22,”
at the very beginning of Section
      6.11(a).

     

    (b)          
      The last paragraph of Section 6.11 of the
      Original Agreement is hereby amended and restated as follows:

     

    Notwithstanding
      anything to the contrary, Section 6.11(a) shall
      not apply to (i) PCT International, Inc. or its Subsidiaries; (ii) any Minor
      Competing Business, so long as Seller and its Affiliates have complied with
      the
      terms of Section
      6.11(c) hereof with respect to such Minor Competing Business; provided
      that Section
      6.11 shall apply to any acquisition made by such Minor Competing
      Business; and (iii) any Contract under which Sellers manufacture products on
      behalf of, or supply products to, Purchaser or any of its Affiliates, including,
      without limitation, the (x) Purchase Agreement, dated January 31, 2008, between
      Andrew Corporation and ASC Signal Corporation for the supply of earth station
      antennas and accessories, (y) Purchase Agreement, dated January 31, 2008,
      between Andrew Corporation and ASC Signal Corporation for the supply of Andrew
      steel products and accessories and (z) Purchase Agreement, dated January 31,
      2008, between Andrew Corporation and ASC Signal Corporation for the supply
      of
      precision antennas and spares.

     

    
      	
              8.  

            	
              Amendment
                of Section
                6.14.  Section
                6.14 of
                the Original Agreement is hereby amended and restated as
                follows:

            

    

     

    Upon
      the
      expiration or termination of the ESA Agreement (such date, the “Deferred Transaction
      Date”), each Seller shall sell, assign, transfer and deliver to the
      Purchaser, and the Purchaser shall purchase and acquire from such Seller, and
      take assignment and delivery from such Seller of, all of such Seller’s right,
      title and interest in and to the Deferred Transaction Assets, free and clear
      of
      all Liens (other than Permitted Liens) in exchange for the payment provided
      in
Section 3.1(e)
      hereof.

     

    
      	
              9.  

            	
              Amendment
                to Section
                6.15.  Section
                6.15 of
                the Original Agreement is hereby amended and restated as
                follows:

            

    

     

    With
      respect to any of the Transferred Intellectual Property that is or should have
      been listed on Schedule 1.1H or
Schedule
      1.1K
      and, as of the date hereof, appears on any public records as being owned by
      any
      Person other than Andrew, Andrew shall promptly record in such public record(s)
      evidence, in a form reasonably satisfactory to Purchaser, of Andrew’s ownership
      of all right, title and interest therein free and clear of all
      Liens.  Andrew shall use reasonable best efforts to complete such
      recording activities before the Closing; provided, however,
      that without
      waiving any rights of the Purchaser arising herein, in the event Andrew does
      not, for any reason, complete such recording activities before the Closing,
      Andrew shall be responsible for any related fees and expenses necessary to
      complete such recording activities after the Closing.

     

    
      	
              10.  

            	
              Amendment
                to Section
                6.17.  Section
                6.17 of
                the Original Agreement is hereby amended and restated as
                follows:

            

    

     

    At
      a time
      following the Closing reasonably agreed to in good faith by Purchaser and
      Andrew, Purchaser shall inspect the spin lathe transferred to the Purchaser
      and
      located at Sellers’ Brownsville, Texas facility and related assorted equipment
      located at Sellers’ other facilities (collectively, the “Brownsville Spin
      Lathe”) to determine whether such equipment is in good working order and
      possesses the same production capabilities (including quality and quantity)
      with
      respect to products currently produced for the Business as currently possessed
      by the spin lathe located in Reynosa, Mexico (the “Reynosa Spin
      Lathe”).  In the event that the Brownsville Spin Lathe is not
      in good working order or is missing any component parts or equipment, Sellers
      shall reimburse Purchaser for the costs to repair the Brownsville Spin Lathe
      or
      purchase such missing component parts or equipment, to the extent such costs
      exceed $10,000 (except with respect to any costs related to missing
      parts).  In the event that the Brownsville Spin Lathe does not possess
      the production capabilities (including quality and quantity) with respect to
      products currently produced for the Business as currently possessed by the
      Reynosa Spin Lathe, Sellers, at their discretion, shall either (i) make such
      capital expenditures to the Brownsville Spin Lathe (including the purchase
      of
      additional equipment) to conform the Brownsville Spin Lathe to substantially
      the
      same production capabilities (including quality and quantity) relating to
      products produced for the Business as the Reynosa Spin Lathe; or (ii) replace
      the Brownsville Spin Lathe with a spin lathe in good working order that is
      capable of producing products currently produced by the Business in
      substantially the same quantity and quality produced by the Reynosa Spin Lathe
      for the Business (collectively, the “Lathe Operational
      Actions”), until such time as Sellers have fulfilled the Lathe
      Operational Actions, Sellers shall provide to Purchaser at the cost incurred
      by
      Sellers to produce, product of the same quality and quantity as currently
      produced for the Business by the Reynosa Spin Lathe; provided, further,
      that
      notwithstanding the foregoing, in the event that the Lathe Operational Actions
      are not completed within 90 days from Closing Date (the “Targeted Completion
      Date”), Sellers shall, at the election of the Purchaser, continue to
      provide such products on the terms set forth above until such date that is
      the
      one year anniversary of the Closing Date, plus the number
      of
      days past the Targeted Completion Date on which the Lathe Operational Actions
      were completed.  Purchaser shall use reasonable best efforts to
      facilitate Sellers’ delivery and installation of a spin lathe consistent with
      the terms of this Section 6.17 by the
      Targeted Completion Date, including allowing Sellers reasonable access to
      Purchaser’s facilities.

     

    
      	
              11.  

            	
              Addition
                of Section
                6.21 to Original Agreement.  The Original Agreement is
                hereby amended and restated to insert the following Section
                6.21 at
                the end of Article
                VI:

            

    

     

    6.21        
      Open Broadcast
      Australia Purchase Orders.

     

    
      	
               

            	
              (a)

            	
              From
                and after Closing, Sellers shall continue to perform under the Andrew
                sales orders numbered 1668247 and 1671173 (the “Broadcast
                Australia
                Purchase Orders”) with Broadcast Australia Party Ltd. (“Broadcast
                Australia”) and shall provide the products and services to
                Broadcast Australia pursuant to the terms thereof; provided,
however,
                that,
                except for Sellers’ fraud, gross negligence or willful misconduct, the
                Purchaser shall assume and shall agree to pay, as Assumed Obligations
                hereunder, any and all obligations and liabilities arising with respect
                to
                the products or services provided under the Broadcast Australia Purchase
                Orders, whether sold or provided prior to or after the Closing, and
                whether arising under warranty, contract, equity, tort, strict liability,
                product liability, statute or otherwise, including all obligations
                and
                liabilities arising with respect to any pending recalls of products
                that
                have been sold pursuant to such Broadcast Australia Purchase
                Orders.  Any Inventory related to or required for the
                fulfillment of the Broadcast Australia Purchase Orders shall be retained
                by Sellers following Closing and such Inventory shall not be transferred
                to the Purchaser pursuant to the terms of this Agreement; provided,
however,
                that
                such retained Inventory shall be included for purposes of calculating
                the
                Net Inventory Amount pursuant to Section
                3.2
                hereof.  Sellers and Purchaser agree that any Australian Margin
                collected by Sellers on account of the post-Closing sale of products
                and
                services under the Broadcast Australia Purchase Orders shall be allocated
                between the Sellers and Purchaser such that 1/3 of such Australian
                Margin
                shall be retained by the Sellers and 2/3 of such Australian Margin
                shall
                be paid to the Purchaser.  The Parties acknowledge and agree
                that the provisions of Section
                6.11
                hereof shall not apply to the Sellers’ performance of the Broadcast
                Australia Purchase Orders. 

            

    

     

    
      	
               

            	
              (b)

            	
              For
                purposes of this Section
                6.21,
                “Australian Margin” shall apply only to products and services invoiced
                after the Closing and shall be equal to (i) all cash collected by
                Sellers
                from Broadcast Australia under the Broadcast Australia Purchase Orders,
                less (ii) the Sellers’ cost of goods sold under such Broadcast Australia
                Purchase Orders (which calculation will be consistent with the manner
                by
                which cost of goods sold historically has been calculated by the
                Sellers
                for sales of goods of these sort), plus (iii) the net book value
                of
                Reserved Inventory on hand at Closing used by Sellers to satisfy
                such
                Broadcast Australia Purchase Orders.

            

    

     

    
      	
               

            	
              (c)

            	
              Except
                for the Broadcast Australia Purchase Orders, any products or services
                due
                under any other purchase orders issued after the Closing with Broadcast
                Australia relating to the Business shall be the sole obligation of
                Purchaser and such purchase orders shall be fulfilled by the Purchaser
                in
                accordance with the terms thereof. 

            

    

     

    
      	
              12.  

            	
              Addition
                of Section
                6.22 to Original Agreement.  The Original Agreement is
                hereby amended and restated to insert the following Section
                6.22 at
                the end of Article
                VI:

            

    

     

    6.22        
      Brazilian Purchase
      Orders.

     

    
      	
               

            	
              (a)

            	
              From
                and after Closing, Sellers shall perform under the Andrew sales orders
                numbered 1704175, 1727452, 1727360 and 1727362 with certain Brazilian
                Customers (collectively, the “Brazilian
                Purchase
                Orders”) and shall provide the products and services to the
                Brazilian Customers pursuant to the respective terms thereof; provided,
                however, that, except for Sellers’ fraud, gross negligence or willful
                misconduct, the Purchaser shall assume and shall agree to pay, as
                Assumed
                Obligations or otherwise, any and all obligations and liabilities
                arising
                with respect to the products or services provided under the Brazilian
                Purchase Orders, whether sold or provided prior to or after the Closing,
                and whether arising under warranty, contract, equity, tort, strict
                liability, product liability, statute or otherwise, including all
                obligations and liabilities arising with respect to any pending recalls
                of
                products that have been sold pursuant to such Brazilian Purchase
                Orders.  Any Inventory related to or required for the
                fulfillment of the Brazilian Purchase Orders shall be retained by
                Sellers
                following Closing and such Inventory shall not be transferred to
                the
                Purchaser pursuant to the terms of this Agreement; provided, however,
                that
                such retained Inventory shall be included for purposes of calculating
                the
                Net Inventory Amount pursuant to Section 3.2 hereof.  Sellers
                and Purchaser agree that any Brazilian Margin collected by Sellers
                on
                account of the post-Closing sale of products and services under the
                Brazilian Purchase Orders shall be allocated between the Sellers
                and
                Purchaser such that 1/3 of such Brazilian Margin shall be retained
                by the
                Sellers and 2/3 of such Brazilian Margin shall be paid to the
                Purchaser.  The Parties acknowledge and agree that the
                provisions of Section
                6.11
                hereof shall not apply to the Sellers’ performance of the Brazilian
                Purchase Orders. 

            

    

     

    
      	
               

            	
              (b)

            	
              For
                purposes of this Section
                6.22,
                “Brazilian Margin” shall apply only to products and services invoiced
                after the Closing and shall be equal to (i) all cash collected by
                Sellers
                from the Brazilian Customers under the Brazilian Purchase Orders,
                less
                (ii) the Sellers’ cost of goods sold under such Brazilian Purchase Orders
                (which calculation will be consistent with the manner by which cost
                of
                goods sold historically has been calculated by the Sellers for sales
                of
                goods of these sort), plus (iii) the net book value of Reserved Inventory
                on hand at Closing used by Sellers to satisfy such Brazilian Purchase
                Orders. 

            

    

     

    
      	
               

            	
              (c)

            	
              Except
                for the Brazilian Purchase Orders, any products or services due under
                any
                other purchase orders issued after the Closing to Brazilian Customers
                relating to the Business shall be the sole obligation of Purchaser
                and
                such purchase orders shall be fulfilled by the Purchaser in accordance
                with the terms thereof. 

            

    

     

    
      	
              13.  

            	
              Addition
                of Section
                6.23 to Original Agreement.  The Original Agreement is
                hereby amended and restated to insert the following Section
                6.23 at
                the end of Article
                VI:

            

    

     

    6.23        
      Transfer of Anatel
      Certifications of Conformity.  Subject to all necessary
      approvals (governmental or otherwise) required for the transfer of and
      assignment of the Anatel Certifications of Conformity, when requested by
      Purchaser, provided that such request shall be made within 90 days after the
      Closing or such other time as mutually agreed to by both Purchaser and Sellers,
      Andrew shall assign and transfer to Purchaser or its designee, and the Purchaser
      or such designee shall take assignment of, all of Andrew’s right, title and
      interest in and to the Anatel Certifications of Conformity set forth on Schedule
      6.23.  Any costs or expenses incurred in the transfer of and
      assignment of the Anatel Certifications of Conformity to Purchaser or its
      designee as provided herein shall be paid by the Purchaser.

     

    
      	
              14.  

            	
              Addition
                of Section
                6.24 to Original Agreement.  The Original Agreement is
                hereby amended and restated to insert the following Section
                6.24 at
                the end of Article
                VI:

            

    

     

    6.24.       
      Transfer of Certain
      Chinese Assets.  Upon the request of the Purchaser, as soon as
      practicable after the Closing Date, the Sellers and their Affiliates shall
      reasonably assist the Purchaser, at Purchaser’s cost and expense (other than any
      legal expenses incurred by Sellers relating to subsection (i) below), in (i)
      entering into an assignment agreement by and among Andrew Telecommunications
      (China) Co. (“Andrew
      China”), Hwadar SMC & Communication Products Co. Ltd. (“Hwadar”)
      and the
      Purchaser or its designee, whereby Andrew China assigns its interest in any
      Assets located in the People’s Republic of China (the “Chinese Assets”) to
      Purchaser or its designee, (ii) completing a new export processing contract
      with
      Hwadar related to the Chinese Assets, and (iii) making any regulatory filings
      with any Governmental Authority in the People’s Republic of China related to the
      Chinese Assets.

     

    
      	
              15.  

            	
              Addition
                of Section
                6.25 to the Original Agreement.  The Original Agreement
                is hereby amended and restated to insert the following Section
                6.25 at
                the end of Article
                VI:

            

    

     

    6.25         Shin
      Letter of
      Credit.  From and after the Closing Date, in the event that
      Shin Satellite Public Co. Ltd. (“Shin”) requests
      that
      the Sellers allow Shin to reduce the face amount of that certain letter of
      credit issued on behalf of Shin in favor of Sellers or their Affiliates (the
      “Shin Letter of
      Credit”) to an amount not less than the amount of Accounts Receivable
      owed by Shin to Sellers or their Affiliates, Sellers shall agree to such request
      and shall execute such documents as are provided to Sellers and reasonably
      necessary to allow for such reduction.  Further, upon the written
      request of Purchaser, Sellers and their Affiliates shall use their reasonable
      best efforts to (i) assign the Other Letters of Credit to Purchaser or its
      designee, (ii) replace the beneficiary under such Other Letters of Credit with
      Purchaser or its designee, or (iii) cancel or terminate the Other Letters of
      Credit, in each case to the extent (A) such action has been negotiated and
      agreed to between Purchaser and the applicable counterparty to which the
      applicable Other Letter of Credit applies, (B) permitted by the Other Letters
      of
      Credit or under applicable law and (C) at Purchaser’s expense.

     

    
      	
              16.  

            	
              Addition
                of Section
                6.26 to the Original Agreement.  The Original Agreement
                is hereby amended and restated to insert the following Section
                6.26 at
                the end of Article
                VI:

            

    

     

    6.26         Purchaser
      SAP
      System.

     

    
      	
               

            	
              (a)

            	
              As
                promptly as practicable after the date hereof, Seller shall use reasonable
                best efforts to create a SAP accounting and information system (the
“Purchaser
                SAP
                System”) for use by the Purchaser and its Affiliates in the
                operation of the Business after the Closing Date.  The Purchaser
                SAP System shall be based upon that portion of the current SAP accounting
                and information system used by the Sellers in connection with the
                operation of the Business.  The parties hereby acknowledge that
                the establishment of the Purchaser SAP System shall not be completed
                by
                Seller until after the Closing. 

            

    

     

    
      	
               

            	
              (b)

            	
              From
                the Business Day immediately following the Closing until the date
                on which
                the Purchaser SAP System is delivered by Sellers to Purchaser in
                accordance with this Section
                6.26
                (the “SAP
                Delivery Period”), if Purchaser or its Affiliates are unable to
                operate the Business in all material respects for the majority of
                any
                Business Day (as measured from 8:00 a.m. to 5 p.m. EST) as a direct
                result
                of Sellers’ failure to deliver the Purchaser SAP System in good working
                order (a “Work
                Stoppage Day”), the parties hereby agree that Purchaser or its
                Affiliates, as applicable, shall be reimbursed or credited by Sellers
                or
                its Affiliates with respect to employee wages (and other payments,
                if any,
                required to be made to Governmental Authorities by the payer of wages
                that
                are attributable to such wages) (the “Employee
                Wages”) incurred by the Purchaser or its Affiliates with respect
                to
                any Transferred US Employee, Transferred Canadian Employee, Transferred
                UK
                Employee or Skyware Employee for such Work Stoppage Day, as follows:
                (i)
                100% of Employee Wages for the first Work Stoppage Day following
                Closing;
                (ii) 25% of Employee Wages for the second Work Stoppage Day following
                Closing; (iii) 50% of Employee Wages for the third Work Stoppage
                Day
                following Closing; (iv) 75% of Employee Wages for the fourth Work
                Stoppage
                Day following Closing; and (v) 100% of Employee Wages for the fifth
                Work
                Stoppage Day following Closing and each Work Stoppage Day thereafter
                until
                the Purchaser SAP System is delivered by Sellers to Purchaser in
                good
                working order in all material respects.  The parties hereby
                agree to settle any such undisputed reimbursements or credits, in
                each
                case as more specifically set forth above, as a credit against amounts
                due
                and owing by Purchaser for Transition Services (as such term is defined
                in
                the Transition Services Agreement) provided by Sellers to Purchaser
                or its
                Affiliates.  For purposes of this Section
                6.26,
                except for the first Work Stoppage Day immediately following the
                Closing
                Date, the Purchaser shall use reasonable best efforts to operate
                the
                Business on each Business Day during the SAP Delivery Period even
                if the
                Purchaser SAP System is not fully available or fully functioning
                on such
                Business Day.  The parties further acknowledge and agree that
                beginning on the second Business Day after Closing, Sellers or its
                Affiliates will begin to charge Purchaser or its Affiliates for any
                fees
                or expenses relating to Transition Services rendered to the Purchaser
                or
                its Affiliates.  For the avoidance of doubt, the foregoing
                obligations of Sellers or its Affiliates, including any reimbursements
                or
                credits to Purchaser or its Affiliates on account of Employee Wages,
                shall
                terminate upon the delivery by the Sellers to the Purchaser of the
                Purchaser SAP System in good working order in all material respects.
                

            

    

     

    
      	
              17.  

            	
              Amendment
                to Section
                11.1(c).  Section
                11.1(c)
                of the Original Agreement is hereby amended and restated as
                follows:

            

    

     

    Offers
      of Employment to
      Current Other Employees. The Purchaser shall offer employment to each
      Current Other Employee, other than the Current Other Employee listed on Schedule 11.1(c)(i).
      Such offers of employment shall be on terms and conditions substantially similar
      to the terms and conditions (including geographic work location) on which such
      employees are employed by the Sellers or their Affiliates, as applicable, on
      the
      Closing Date. Without limiting the foregoing, the Purchaser’s offers of
      employment shall be at substantially the same position and level of compensation
      and benefits as applied to such employees immediately prior to the Closing,
      shall also be subject to the terms and conditions of this Article XI with
      respect to Current Other Employees and shall in any event comply with applicable
      Law. Such offers of employment shall be effective as of a date to be mutually
      agreed upon by the Sellers and the Purchaser, but in no event later than 60
      days
      after the Closing Date; provided, however,
      that with
      respect to the Current Other Employees listed on Schedule 11.1(c)(ii),
      such offers of employment shall be effective no later than 120 days after the
      Closing Date (any such date, the “Other Employees’ Transfer
      Date”).  Each such Current Other Employee who accepts the
      Purchaser’s offer of employment shall become an employee of the Purchaser and
      its Affiliates as of the Other Employees’ Transfer Date and shall, from and
      after such date, be a “Transferred Other
      Employee,” and the Purchaser shall assume, bear and discharge all
      employment liabilities with respect to such Transferred Other Employee from
      and
      after such date.  Notwithstanding the foregoing, the Purchaser will be
      under no obligation to continue to employ any Transferred Other Employee for
      any
      period of time; provided, however,
      that the
      Purchaser shall satisfy the severance obligations described in Section 11.13.

     

    
      	
              18.  

            	
              Addition
                of Section
                6.27 to the Original Agreement.  The Original Agreement
                is hereby amended and restated to insert the following Section
                6.27 at
                the end of Article
                VI:

            

    

     

    6.27         Garner
      Landlord
      Waiver.  As soon as practicable after the Closing Date, upon
      the written request of Purchaser, Sellers and their Affiliates shall execute
      and
      deliver to Purchaser a landlord waiver agreement, in a form reasonably
      acceptable to PNC Bank, N.A. and customary for transactions of this type, with
      respect to the Garner Property.

     

    
      	
              19.  

            	
              Amendment
                to Section
                11.8.  Section
                11.8 of
                the Original Agreement is hereby amended and restated as
                follows:

            

    

     

    11.8         Vacation
      for Transferred
      Canadian Employees. Subject to this Section 11.8,
      with
      respect to any accrued but unused paid vacation time and/or unpaid vacation
      pay
      (as applicable) to which any Transferred Canadian Employee is entitled as of
      the
      Closing Date pursuant to applicable Law or the vacation policy of the Sellers
      and their Affiliates applicable to such Transferred Canadian Employee
      immediately prior to the Closing Date (the “Canadian Vacation
      Policy”), the Sellers and their Affiliates shall pay to the Purchaser (by
      way of a reduction to the Cash Payment) an amount equal to $439,048 at Closing,
      which amount shall equal the Sellers’ good faith estimate of the total wages
      (and total payments, if any, required to be made to Governmental Authorities
      by
      the payer of wages that are attributable to such wages) relating to such unused
      vacation time and/or unused vacation pay (as applicable) (the “Estimated Accrued
      Vacation
      Payment”).  Within thirty (30) days after the Closing,
      Purchaser shall provide Andrew with a statement setting forth the Purchaser’s
      good faith determination of the total amount of wages (and total payments,
      if
      any, required to be made to Governmental Authorities by the payer of wages
      that
      are attributable to such wages) attributable to accrued but unused paid vacation
      time and/or unpaid vacation pay (as applicable) to which any Transferred
      Canadian Employee was actually entitled as of the Closing Date pursuant to
      applicable Law or the Canadian Vacation Policy (the “Actual Accrued Vacation
      Payment”), together with reasonable supporting
      documentation.  In the event that Andrew agrees with Purchaser’s
      determination of the Actual Accrued Vacation Payment, then (i) to the extent
      that the Estimated Accrued Vacation Payment exceeds the amount of the Actual
      Accrued Vacation Payment, the Purchaser shall reimburse such excess to the
      Sellers within five (5) Business Days of Andrew’s agreement regarding the amount
      of the Actual Accrued Vacation Payment, or (ii) to the extent that the Actual
      Accrued Vacation Payment exceeds the amount of the Estimated Accrued Vacation
      Payment, Andrew shall pay the amount of such excess in cash to Purchaser within
      five (5) Business Days of Andrew’s agreement regarding the amount of the Actual
      Accrued Vacation Payment.  In the event that Andrew disagrees with
      Purchaser’s determination of the amount of the Actual Accrued Vacation Payment,
      Andrew and Purchaser shall work together in good faith to resolve such
      disagreement, and Purchaser shall provide Andrew with reasonable access to
      the
      books and records of Purchaser and its Affiliates relevant to the determination
      of the Actual Accrued Vacation Payment.  If the parties are unable to
      resolve any such disagreement within thirty (30) days, the parties shall resolve
      such disagreement in a manner consistent with the procedures established to
      resolve adjustments in the Purchase Price as set forth in Section 3.2(c)
      hereof.  The Purchaser covenants that it will pay vacation pay to the
      Transferred Canadian Employees in a cumulative amount not less than the Actual
      Accrued Vacation Payment either at the times of their vacations or upon
      termination of employment, or otherwise as required or permitted by Law (such
      as
      by agreement between employer and employee).  For greater clarity, no
      part of the Estimated Accrued Vacation Payment or the Actual Accrued Vacation
      Payment will be used by the Purchaser to satisfy its obligations to Transferred
      Canadian Employees in respect of vacation time or vacation pay earned by
      Transferred Canadian Employees after the Closing Date.  The
      Purchaser’s offers of employment to Current Canadian Employees as described in
Section 11.1(b)
      shall provide such employees with the opportunity to elect (in a manner that
      complies with Section
      36(4) of the Ontario Employment Standards
      Act,
      2000) to receive from the Purchaser a lump sum payment of the employee’s portion
      of the Actual Accrued Vacation Payment no later than thirty (30) days after
      the
      Closing Date.  Upon the Seller’s request, the Purchaser shall promptly
      disclose to the Sellers each Current Canadian Employee’s election and, no later
      than thirty (30) days after the Closing Date, the Purchaser shall
      make to
      each Transferred Canadian Employee who elects to receive such Actual Accrued
      Vacation Payment early in accordance with the election provided by the Purchaser
      a lump sum payment equal to such employee’s portion of the Actual Accrued
      Vacation Payment.  To the extent the Purchaser fails to make payment,
      on or before thirty (30) days after the Closing Date, to any such electing
      Transferred Canadian Employee of the employee’s portion of the Actual Accrued
      Vacation Payment and Andrew makes such payment to such employee, the Purchaser
      shall reimburse Andrew dollar-for-dollar for the amount of payments Andrew
      makes
      in accordance with this Section 11.8.

     

    
      	
              20.  

            	
              Amendment
                to Section
                13.6.  Section
                13.6 of
                the Original Agreement is hereby amended and restated as
                follows:

            

    

     

    This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective successors and permitted assigns; provided, that,
      except with the written consent of the other parties, no assignment of this
      Agreement or any rights or obligations hereunder, by operation of law or
      otherwise, may be made by any party, other than to an Affiliate or lender of
      such party (but no such assignment shall relieve the assigning party of its
      obligations hereunder).  Without diminishing the foregoing, (i) in the
      event that any Seller (directly or indirectly) enters into a sale, lease, pledge
      or disposal of all or substantially all of its respective assets, or the sale
      of
      all or substantially all of its respective capital stock or other equity
      securities, or enters into a merger, consolidation or other acquisition with
      any
      other party, or any transaction similar to the foregoing in format or purpose,
      such Seller shall require as a condition to the consummation of such
      transaction, the other party’s written agreement to be liable for such Seller’s
      obligations hereunder (including such Seller’s joint and several liability under
Article XII
      herein), and (ii) the Purchaser may designate the Parent or any Person that
      is a
      wholly-owned subsidiary of the Parent as a designee for purposes of receiving
      title to the Transferred Shares, the Assets or any portion of the Assets.

     

    
      	
              21.  

            	
              Effect
                of Amendment;
                Entire Agreement.  Except as and to the extent expressly
                modified by this Third Amendment or by previous amendments, the Original
                Agreement shall remain in full force and effect in all
                respects.  The Original Agreement, as amended, contains the
                entire agreement of the Parties on the subject matter of the Original
                Agreement and neither Purchaser nor Sellers shall have any rights
                or
                obligations to each other except as explicitly provided for in the
                Original Agreement, as amended.  Each reference to “hereof,”
                “herein,” “hereby,” and “this Third Agreement” in the Original Agreement
                shall from and after the date hereof refer to the Original Agreement,
                as
                amended.  Notwithstanding anything to the contrary herein, the
                date of the Original Agreement, as amended hereby, shall in all instances
                remain as November 5, 2007, and references in the Original Agreement
                to
                “the date first above written,” “the date of this Agreement,” and similar
                references shall continue to refer to November 5,
                2007.

            

    

     

    
      	
              22.  

            	
              Miscellaneous.  The
                construction, interpretation, and performance of this Third Amendment
                shall be governed by the internal laws of Illinois.  This Third
                Amendment may be executed in one or more counterparts, each of which
                independently shall share the same effect as if it were the original,
                and
                all of which taken together shall constitute one and the same Third
                Amendment.

            

    

     

    (Signature
      Page Follows)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Parties have caused this Third Amendment to be executed
      as
      of the date first written above.

     

     

    
      
        	 	ASC
                SIGNAL
                CORPORATION	 
	 	 	 	 
	
                 

              	
                By:
                  

              	/s/ Bassem
                A. Mansour	 
	 	 	Name: 
                Bassem A. Mansour	  
	 	 	Title:   
                President	 
	 	 	 	 

      

    

     

    
       

      
        
          	 	ANDREW
                  CORPORATION	 
	 	 	 	 
	
                   

                	
                  By:
                    

                	/s/ Frank
                  B. Wyatt, II	 
	 	 	Name: 
                  Frank B. Wyatt, II	  
	 	 	Title:   
                  Senior Vice President, General Counsel and Secretary	 
	 	 	 	 

        

      

       

    

    
      
         

        
          
            	 	ANDREW
                    CANADA, INC.	 
	 	 	 	 
	
                     

                  	
                    By:
                      

                  	/s/ Jude
                    Panetta 	 
	 	 	Name:
                     Jude Panetta	  
	 	 	Title:   
                    President	 
	 	 	 	 

          

        

         

        
          
             

            
              
                	 	ANDREW
                        LIMITED	 
	 	 	 	 
	
                         

                      	
                        By:
                          

                      	/s/ Mark
                        Olson	 
	 	 	Name: 
                        Mark Olson	  
	 	 	Title:   
                        Chairman	 
	 	 	 	 

              

            

             

            
              
                 

                
                  
                    	 	ANDREW
                            HOLDINGS (GERMANY) GMBH	 
	 	 	 	 
	
                             

                          	
                            By:
                              

                          	/s/ F.
                            Willis Caruso, Jr. 	 
	 	 	Name:  F.
                            Willis Caruso, Jr.	  
	 	 	Title:   
                            Managing DirectorExhibit 10.1 to AVAX Tecnologies, Inc. Form 8-k/A dated December 1, 2007

Exhibit 10.1 

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), effective as of this 1st day of December, 2007, is entered into by AVAX Technologies, Inc., a Delaware corporation with its principal place of business at 2000 Hamilton Street, Suite 204, Philadelphia, PA (the “Company”), and Francois Martelet, M.D. (“Employee”).

The Company desires to employ the Employee, and the Employee desires to be employed by the Company.  In consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree that the following terms of this Employment Agreement shall supersede in all respects any prior agreements governing employment between the parties:

	
            1.0
 	
            Term of Employment.  The Company hereby agrees to employ the Employee, and the Employee hereby accepts employment with the Company, upon the terms set forth in this Agreement, for the period commencing on December 1st, 2007 (the “Commencement Date”) and ending on December 1st, 2010 unless sooner terminated in accordance with the provisions of Section 4 (the “Employment Period”).  
 

 

Page 1 of 25

	
            2.0
 	
            Position Title & Capacity.
 

 

	
             
  	
            2.1
 	
            The Employee shall serve as President and Chief Executive Officer, with responsibilities consistent with this position and as the Company’s Board of
Directors (the “Board”) may determine from time to time, with powers and duties as may be determined, from time to time, by the Board, consistent with the Employee’s position. The Employee shall report to the Company’s Board of Directors.  The Employee shall be based at a Company office, which shall be based in the greater Bridgewater/Somerville, New Jersey area.  The Employee shall also be available for travel at such times and to such places as may be reasonably necessary in connection with the performance of his duties hereunder.

 

	
             
  	
            2.2
 	
            The Employee may serve as an employee director on the Board as determined and approved by the Board during the Employment Period and for no additional compensation; however, upon termination of employment for any reason, the Employee will no longer serve as a member of the Company’s Board of Directors and will take any and all actions necessary to effectuate such resignation as may be reasonably requested by the Company.  
 

 

	
             
  	
            2.3
 	
            The Employee hereby accepts such employment and agrees to undertake the duties and responsibilities inherent in such position and such other duties and responsibilities as the Board shall from time to time reasonably assign to him.  The Employee agrees to devote substantially all of his business time, attention and energies to the business and interests of the Company during the Employment Period.  The Employee agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Company.  
 

 

Page 2 of 25

	
             
  	
            2.4
 	
            The Employee specifically covenants, warrants and represents to the Company that he has the full, complete and entire right and authority to enter into this Agreement, that he has no agreement, duty, commitment or responsibility of any kind or nature whatsoever with any corporation, partnership, firm, company, joint venture or other entity or other person which would conflict in any manner whatsoever with any of his duties, obligations or responsibilities to the Company pursuant to this Agreement, that he is not in possession of any document or other tangible property of any corporation, partnership, firm, company, joint venture or other entity or other person of a confidential or proprietary nature which would conflict in any manner whatsoever with any of his duties, obligations or responsibilities to the Company pursuant to his Agreement, and
that he is fully ready, willing and able to perform each and all of his duties, obligations and responsibilities to the Company pursuant to this Agreement including having and providing all required legal documentation to carry out his duties to the Company in the United States.
 

 

	
            3.0
 	
            Compensation and Benefits.  During the Employment Period, unless sooner terminated in accordance with the provisions of Section 4, the Employee shall receive the following compensation and benefits:
 

 

Page 3 of 25

	
             
  	
            3.1
 	
            Salary.  The Company shall pay the Employee, in equal semi-monthly installments or otherwise in accordance with the Company’s standard payroll policies as such policies may exist from time to time, an annual base salary of $450,000.  Such salary shall be subject to review, as determined by the Company’s Compensation Committee, on an annual basis, but the Compensation Committee shall not decrease the Employee’s annual base salary at any such annual review. 
 

 

	
             
  	
            3.2
 	
            Discretionary Performance Bonus.  Employee shall be entitled to participate in the Company’s annual discretionary bonus program, which shall have a target range of up to 50% of Employee’s Base Salary based on milestones to be mutually agreed on between the Compensation Committee and the Employee and prior to the beginning of each bonus period.  For the first year of the Employment Period, Employee shall receive a minimum bonus of 30% of the Employee’s Base Salary, which bonus shall be paid no later than thirty (30) days after the first anniversary date of the Employment Period.  After the first year of the Employment Period, the Employee shall not be entitled to a minimum bonus amount.
 

 

	
             
  	
            3.3
 	
            Cash Performance Bonus.  The Company shall pay Employee the following bonuses upon the satisfaction of the following conditions: (a) the Company shall pay Employee a cash bonus in the amount of $500,000 if the Company’s market capitalization is equal to or greater than $250 million within forty-two (42) months of the effective date of this Agreement and such valuation is maintained for a period of thirty (30) consecutive days; and (b) the Company shall pay 
 

 

Page 4 of 25

Employee a cash bonus in the amount of $750,000 if the Company’s market capitalization is equal to or greater than $500 million within forty-two (42) months of the effective date of this Agreement and such valuation is maintained for a period of thirty (30) consecutive days.  In either event of the occurrence of (a) and/or (b) herein, the bonus, if any, shall be payable, less applicable payroll withholdings, within thirty (30) days after the 31st day of achievement of the goals set forth herein.  The bonuses set forth herein shall be paid, unless the Employee has been terminated for Cause (as defined herein) or has voluntarily terminated his employment in accordance with paragraph 4.6, on the date such milestones are achieved and regardless of whether this Agreement is still in effect.

 

	
             
  	
            3.4
 	
            Equity Compensation.  As additional compensation for services rendered, the Company shall grant to the Employee the right and option to purchase shares of the Company’s common stock as set forth below in this Section 3.4 and in the future may grant additional equity to purchase shares of the Company’s common stock to the Employee in accordance with the terms of the Company’s equity plan then in effect.  
 

 

(a)   The Company shall grant to the Employee stock options and restricted stock units pursuant to the terms and conditions of the Company’s 2006 Equity Incentive Plan (the “Plan”) and standard form agreements to purchase such number of shares of common stock as is equal to 5% of the Outstanding Shares of the Company (as defined below) on the date of grant (“Equity Grant A”).  The stock options shall be incentive stock options to the extent allowed pursuant to 

 

Page 5 of 25

Section 422 of the Code and the remainder of the stock options shall be non-qualified stock options.  In accordance with Section 6 of the Plan, the grant of stock options may not exceed 1,000,000 shares.  The stock options shall be granted on the Commencement Date with an exercise price equal to the fair market value of the common stock on the Commencement Date, and shall vest in four equal annual installments over the four (4) years following the Commencement Date and, except as otherwise provided in this Agreement, subject to such other terms and conditions as set forth in the Company’s standard form of option agreement.  The restricted stock units shall vest in four equal annual installments over the four (4) years following the Commencement Date and, except as otherwise provided in this Agreement, subject to such other terms and conditions as set forth in the
Company’s standard form of restricted stock unit agreement.  Outstanding Shares shall mean the number of Common Outstanding Shares (as defined in (b) below) plus the number of Converted Warrant Equivalents.  Converted Warrant Equivalents shall mean the number of in-the-money warrants as converted into common shares using the treasury method as of the date of grant.

 

(b)   If at any time during the 12 months following the date of this Agreement the Company’s valuation reaches or exceeds $75,000,000 (as calculated below) for a period of 30 consecutive days, the Company shall grant to the Employee additional equity grants pursuant to the equity plan then in effect (“Equity Grant B”).  Equity Grant B shall be issued as a combination of stock 

 

Page 6 of 25

options and restricted stock units pursuant to the same terms and conditions as set forth inp paragraph (a) above for Equity Grant A.  The amount of shares comprising Equity Grant B shall be determined using the following formula; provided however, that if it the formula calculates Equity Grant B to be equal to 0 or a negative number of shares, the number of shares to be issued as Equity Grant B shall be determined by the Compensation Committee of the Board:

 

	
             
 	
            Equity Grant B = (0.035 x Common Outstanding Shares) – Equity Grant A
Common Outstanding Shares is the number of shares of common stock outstanding as of the date of determination plus the number of shares of common stock as to which any shares of preferred stock are then convertible. 

 

(c)   Any portion of Equity Grant A or Equity Grant B that is not vested as of the Date of Termination (as defined in Section 6) shall immediately vest as of the Date of Termination, except in the case of termination: (i) for Cause (as defined in Section 6) or (ii) at the election of the Employee pursuant to Section 4.6 and on such event all of such options shall expire on the first to occur of: (i) 24 months following the Employee’s Date of Termination; (ii) the expiration date of the option as set forth in the applicable option agreement; or (iii) as otherwise provided in the applicable equity plan in the event of the dissolution or liquidation of the Company, or a merger, reorganization or consolidation in which the Company is not the surviving corporation.  Any portion of Equity Grant A or Equity Grant B
that is not vested upon a Change in Control (as defined in Section 

 

Page 7 of 25

6) shall immediately vest as of the Change in Control and on such event all of such options shall expire on the first to occur of: (i) 24 months following the Change in Control; (ii) the expiration date of the option as set forth in the applicable option agreement; or (iii) as otherwise provided in the applicable equity plan in the event of the dissolution or liquidation of the Company, or a merger, reorganization or consolidation in which the Company is not the surviving corporation.

 

	
             
  	
            3.5
 	
            Fringe Benefits.  The Employee shall be entitled to participate in all benefit programs that the Company establishes and makes available to its employees, if any, to the extent that the Employee’s position, tenure, salary, age, health and other qualifications make him eligible to participate.  The Employee shall also be entitled to holiday leave in accordance with the Company’s policy as it exists from time to time.  Employee shall be entitled to take four (4) weeks vacation, which shall not carry over from year to year. 
 

 

	
             
  	
            3.6
 	
            Reimbursement of Expenses.  The Company shall reimburse the Employee for all reasonable travel, entertainment and other expenses incurred or paid by the Employee in connection with, or related to, the performance of his duties, responsibilities or services under this Agreement, upon presentation by the Employee of documentation, expense statements, vouchers and/or such other supporting information as the Company may request, provided however, that the amount available for such travel, entertainment and other expenses may be fixed in advance by the Board. If a business expense reimbursement is not exempt from 
 

 

Page 8 of 25

Section 409A of the Code, any reimbursement in one calendar year shall not affect the amount that may be reimbursed in any other calendar year and a reimbursement (or right thereto) may not be exchanged or liquidated for another benefit or payment.  Any business expense reimbursements subject to Section 409A of the Code shall be made no later than the end of the calendar year following the calendar year in which such business expense is incurred by the Employee.

 

	
             
  	
            3.7
 	
            Insurance and Indemnification.  The Employee will be covered under the Company’s Directors’ and Officers’ liability insurance to the same extent the Company’s directors and other officers are covered.  Employee shall also be indemnified to the same extent as the Company currently indemnifies its directors and other officers in accordance with Delaware law. 
 

 

	
             
  	
            3.8
 	
            The Company is aware that Employee is presently a Foreign National and subject to United States Labor Law and Immigration regulations and is presently subject to an H1-B Visa Petition.  The Company shall support Employee’s necessary petition and/or applications to transfer his current H1-B Visa to the Company in the ordinary course.  Failure by the Employee to obtain an H1-B Visa within 60 days of the Commencement Date of this Agreement shall permit the Company to terminate the Agreement without consequences to the Company.
 

 

 

 

Page 9 of 25

	
            4.0
 	
            Employment Termination.  The employment of the Employee by the Company pursuant to this Agreement shall terminate upon the occurrence of any of the following:
 

 

	
             
  	
            4.1
 	
            Expiration of the Employment Period in accordance with Section 1, unless the Company and Employee agree to extend the Agreement term or otherwise continue Employee’s employment on mutually agreeable terms.
 

 

	
             
  	
            4.2
 	
            At the election of the Company, for Cause (as defined in Section 6), immediately upon written notice by the Company to the Employee, which notice of termination shall have been approved by a majority of the Board.
 

 

	
             
  	
            4.3
 	
            Immediately upon the death or determination of Disability (as defined in Section 6) of the Employee.
 

 

	
             
  	
            4.4
 	
            At the election of the Employee, for Good Reason (as defined in Section 6), immediately upon written notice of not less than sixty (60) days prior to termination by the Employee to the Company.
 

 

	
             
  	
            4.5
 	
            At the election of the Company upon or within twelve (12) months following a Change in Control (as defined in Section 6), or at the election of the Employee for Good Reason (as defined in Section 6) upon or within twelve (12) months following a Change in Control (as defined in Section 6), immediately upon written notice of termination.
 

 

	
             
  	
            4.6
 	
            At the election of either party, upon written notice of termination.
 

 

 

Page 10 of 25

	
            5.0
 	
            Effect of Termination. 
 

 

	
             
  	
            5.1
 	
            Compensation & Benefits. 
 

 

	
             
  	
            (a)
 	
            As referenced in this section, compensation following the Employee’s termination shall be in the form of severance. Severance will be based on the employee’s base salary in effect as of the employee’s last day of employment, and will be paid in installments in accordance with the Company’s regular payroll schedule in effect on the Date of Termination (provided that such installments shall be made at least monthly) except as set forth in subparagraph (e) below. 
 

 

	
             
  	
            (b)
 	
            Severance is not considered compensation for purposes of employee and employer matching contributions under the 401(k) plan.
 

 

	
             
  	
            (c)
 	
            As referenced in this section, upon termination of the Employee’s employment with the Company, medical and dental benefits will be available to the Employee, at his election, solely pursuant to the provisions of COBRA with the Company paying the full cost of insurance coverage for a period up to 20 months if employment is terminated for any reason except an Employee resignation without Good Reason (as defined in Section 6) and a Company discharge for Cause (as defined in Section 6).  If the Employee is discharged for Cause or the Employee resigns without Good Reason, the Employee will be required to remit the COBRA cost (102% of total benefit cost) of coverage.
 

 

	
             
  	
            (d)
 	
            Upon termination of the Employee’s employment with the Company, apart from the Employee’s election under COBRA to continue medical and dental benefits (as described in Section 5.1(c)), the Employee will cease to 
 

 

Page 11 of 25

be eligible for participation in the Company’s health and welfare insurance and any other fringe benefit programs that pursuant to their contracts or Company policy require an active employee status.

 

	
             
  	
            (e)
 	
            Notwithstanding any other provision with respect to the timing of severance payments under this Agreement, if, on the Date of Termination, the Employee is deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code limited only to the extent necessary to comply with the requirements of Section 409A of the Code, any severance payments to which the Employee may become entitled under this Agreement which are subject to Section 409A of the Code (and not otherwise exempt from its application) will be withheld until the first business day of the seventh month following the Date of Termination, at which time the Employee shall be paid an aggregate amount equal to the accumulated, but unpaid, six months of payments otherwise due to the Employee.  After the first business day of the seventh month following
the Date of Termination and continuing each month thereafter, the Employee shall be paid the regular payments otherwise due to the Employee in accordance with the terms of this Agreement. 
 

 

	
             
  	
            5.2
 	
            Termination By The Company or at Election of the Employee (other than for Good Reason).
 

 

	
             
  	
            (a)
 	
            If the Employee elects to terminate his employment (other than for Good Reason) pursuant to Section 4.6, no severance and/or benefits shall be 
 

 

Page 12 of 25

paid, and the Employee shall be entitled only to receive payment of his earned but unpaid salary, and accrued vacation, as of his last day of actual employment by the Company;

 

	
             
  	
            (b)
 	
            If the Company elects to terminate the Employee (other than for Cause) pursuant to Section 4.6, or, within sixty (60) days prior to the expiration of this Agreement, the Company and Executive fail to agree to extend this Agreement or otherwise reach a mutually acceptable agreement to continue Executive’s employment, the Company shall pay to the Employee his salary in effect on the Date of Termination for a twenty (20) month period following the Date of Termination, plus medical and dental benefits and any pro rata portion of any non-discretionary bonus (as described in Section 5.1(c)); 
 

 

	
             
  	
            (c)
 	
            If the Company terminates the Employee for Cause pursuant to Section 4.2, no severance and/or benefits shall be paid, and the Employee shall be entitled only to receive payment of his earned but unpaid salary, and accrued vacation, as of the Date of Termination.  Employee may elect COBRA medical and dental benefits, in which case the Employee will be required to remit the COBRA cost (102% of total benefit cost) of coverage.
 

 

	
             
  	
            5.3
 	
            Termination By Employee Election For Good Reason.  If the Employee terminates employment at his election for Good Reason pursuant to Section 4.4, other than as provided for in Section 5.4, the Company shall pay to the Employee 
 

 

Page 13 of 25

his salary in effect at that time for a twenty (20) month period following the Date of Termination plus medical and dental benefits and pro rata portion of any non-discretionary bonus (as described in Section 5.1(c)).

 

	
             
  	
            5.4
 	
            Termination Following a Change In Control.  If the Company terminates the employment relationship upon or following a Change In Control pursuant to Section 4.5, or if the Employee terminates employment at his election for Good Reason upon or following a Change in Control pursuant to Section 4.5, the Company shall pay to the Employee his annual salary in effect at that time in a lump sum amount, calculated at two (2.0) times such annual salary, within ten (10) business days following the Date of Termination plus medical/dental care benefits and the pro rata portion of any non-discretionary bonus (as described in Section 5.1(c)).
 

 

	
             
  	
            5.5
 	
            Termination by Reason of the Employee’s Death or Disability.  If, prior to the expiration of the Employment Period, the Employee’s employment is terminated by the Employee’s death or Disability pursuant to Section 4.3, the Company shall pay to the Employee, twenty (20) month period in the case of the Employee’s death, to the estate of the Employee, and a six (6) month period in the case of Disability, following the Date of Termination plus medical and dental benefits plus any pro rata portion of any non-discretionary bonus (as described in Section 5.1(c)).
 

 

Page 14 of 25

	
             
  	
            5.6
 	
            Withholding and Deductions. 
 

 

	
             
  	
            (a)
 	
            All payments hereunder shall be subject to withholding and to such other deductions as shall at the time of such payment be required pursuant to any income tax or other law, whether of the United States or any other jurisdiction, and, in the case of payments to the executors or administrators to the Employee's estate, the delivery to the Company of all necessary tax waivers and other documents.
 

 

	
             
  	
            (b)
 	
            In the event the Employee is required pursuant to Section 4999 of the Code to pay (through withholding or otherwise) an excise tax on “excess parachute payments” (as defined in Section 280G(b) of the Code) made by the Company pursuant to Section 5.4 of this Agreement, the Company shall pay the Employee within thirty (30) days of the date such payment is made such additional amounts as are necessary to place the Employee in the same after tax financial position that he would have been in if he had not incurred any tax liability under Section 4999 of the Code. 
 

 

	
             
  	
            5.7
 	
            Release of Claims.  The Employee’s entitlement to severance, payment of COBRA premiums, and accelerated vesting of options, is contingent upon the Employee’s execution of a general release of claims in a form prepared by the Company and presented to the Employee upon termination of his employment hereunder, as well as the Employee’s compliance with the provisions of Section 7 hereof.
 

 

	
            6.0
 	
            Definitions. For purposes of this Agreement the following definitions apply:
 

 

	
             
  	
            6.1
 	
            “Cause” shall mean the occurrence of any of the following circumstances:
 

 

Page 15 of 25

	
             
  	
            (a)
 	
            (i) the Employee’s material breach of, or habitual neglect or failure to perform the material duties which he is required to perform under, the terms of this Agreement; (ii) the Employee’s willful and intentional failure to follow the reasonable directives or policies established by or at the direction of the Board; or (iii) the Employee’s engaging in conduct that is materially detrimental to the interests of the Company such that the Company sustains a material loss or injury as a result thereof, provided that the breach or failure of performance by the Employee under subparagraphs (i) through (iii) hereof is not cured, to the extent cure is possible, within thirty (30) days of the delivery to the Employee of written notice thereof;
 

 

	
             
  	
            (b)
 	
            the willful breach by the Employee of Section 7 of this Agreement or any provision of any confidentiality, invention and non-disclosure, non-competition or similar agreement between the Employee and the Company; or 
 

 

	
             
  	
            (c)
 	
            the conviction of the Employee of, or the entry of a pleading of guilty or nolo contendere by the Employee to, any crime involving moral turpitude or any felony.
 

 

	
             
  	
            6.2
 	
            “Code” shall mean the Internal Revenue Code of 1986, as amended and with respect to any particular section referenced in this Agreement any successor statute, regulation and guidance thereto.
 

 

Page 16 of 25

	
             
  	
            6.3
 	
            “Date of Termination” shall mean the Employee’s last day of actual employment by the Company (or its successor) for any reason including death or Disability.
 

 

	
             
  	
            6.4
 	
            “Disability” shall mean the inability of the Employee, by reason of illness, accident or other physical or mental disability, for a period of 90 consecutive days or 180 days in the aggregate during any 360-day period, to perform the services contemplated under this Agreement.  A determination of disability shall be made by a physician satisfactory to both the Employee and the Company; provided, however, that if the Employee and the Company do not agree on a physician, the Employee and the Company shall each select a physician and these two together shall select a third physician, whose determination as to disability shall be binding on all parties. Notwithstanding the foregoing, if and only to the extent that Employee’s disability is a trigger for the payment of
deferred compensation, as defined in Section 409A of the Code, “disability” shall have the meaning set forth in Section 409A(a)(2)(C) of the Code.
 

 

	
             
  	
            6.5
 	
            “Good Reason” shall mean the occurrence of any of the following circumstances, and the Company’s failure to cure such circumstances within thirty (30) days of the delivery to the Company of written notice by the Employee of such circumstances:
 

 

	
             
  	
            (a)
 	
            any material adverse change in the Employee’s duties, authority or responsibilities as described in Section 2.1 hereof which causes the Employee’s position with the Company to become of significantly less 
 

 

Page 17 of 25

responsibility or assignment of duties, responsibilities or title inconsistent with the Employee’s position;

 

	
             
  	
            (b)
 	
            a reduction in the Employee’s salary as in effect on the Commencement Date or as the same may be increased from time to time except if such reduction affects all executive officers similarly;
 

 

	
             
  	
            (c)
 	
            the failure of the Company to continue in effect any material compensation or benefit plan in which the Employee participates as in effect on the Commencement Date, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Employee’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Employee’s participation relative to other participants, as in effect on the Commencement Date;
 

 

	
             
  	
            (d)
 	
            the failure by the Company to continue to provide the Employee with the same benefits to those enjoyed by the Employee under any of the Company’s health and welfare insurance, retirement and other fringe-benefit plans insurance, which the Employee was participating as in effect on the Commencement Date except if such change affects all executive officers similarly, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits, or the failure by the Company to provide the Employee with the number of paid 
 

 

Page 18 of 25

vacation days to which he is entitled in accordance with the Company’s normal vacation policy in effect on the Commencement Date or in accordance with any agreement between the Employee and the Company existing at that time; or

 

	
             
  	
            (e)
 	
            the relocation of the Employee to a location which is greater than 60 miles from the Company’s New Jersey office. 
 

 

	
             
  	
            (f)
 	
            For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it will not cause adverse tax consequences for either party with respect to Section 409A of the Code.
 

 

	
             
  	
            6.6
 	
            “Change in Control” shall mean the occurrence of any of the following events:  
 

 

	
             
  	
            (a)
 	
            any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities;
 

 

Page 19 of 25

	
             
  	
            (b)
 	
            the date the individuals who, during any twelve month period, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director during the twelve month period whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board;
 

 

	
             
  	
            (c)
 	
            a merger or consolidation of the Company approved by the stockholders of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) 50% or more of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (ii) a merger or consolidation effected to implement a re-capitalization of the Company (or similar transaction) in which no “person” (as defined in Section 6.6(a)) 
 

 

Page 20 of 25

acquires more than 50% of the combined voting power of the Company’s then outstanding securities; or

 

	
             
  	
            (d)
 	
            a sale of all or substantially all of the assets of the Company.
 

 

	
            7.0
 	
            Restrictive Covenants.
 

 

	
             
  	
            (a)
 	
            For the purposes of this Agreement:
 

 

	
             
  	
            (i)
 	
            “Competing Products” means any products or processes in the autologous cancer cell vaccine area in the indications AVAX is commercializing or developing.
 

 

	
             
  	
            (ii)
 	
            “Competing Organization” means any person or organization engaged in, or with definitive plans to become engaged in, research or development, production, distribution, marketing or selling of a Competing Product.
 

 

	
             
  	
            (b)
 	
            Employee agrees that during the Employment Period and after the termination of the Employment Period for any reason, he will not render services of any nature, directly or indirectly, to any Competing Organization in connection with any Competing Product within any geographical territory as the Company and such Competing Organization are or would be in actual competition, for a period of twenty (20) months, commencing on the Date of Termination.
 

 

	
             
  	
            (c)
 	
            The Employee agrees that he will not, during the Employment Period and for a period of twenty (20) months commencing on the Date of Termination, directly or indirectly employ, solicit for employment, or 
 

 

Page 21 of 25

advise or recommend to any other person that they employ or solicit for employment, any person whom he knows to be an employee of the Company or any parent, subsidiary or affiliate of the Company.

 

	
             
  	
            (d)
 	
            In the event a court of competent jurisdiction should find any provision in this Section 7 to be unfair or unreasonable, such finding shall not render such provision unenforceable, but, rather, this provision shall be modified as to subject matter, time and geographic area so as to render the entire section valid and enforceable.
 

 

	
            8.0
 	
            Notices.  All notices required or permitted under this Agreement shall be in writing and shall be deemed effective upon either:  (a) personal delivery; or (b) three (3) days following deposit with the United States Postal Service for delivery by registered or certified mail, postage prepaid, or one (1) day following deposit with a reputable overnight courier service, addressed to the other party at the address shown above, or at such other address or addresses as either party shall designate to the other in accordance with this Section 8.
 

 

	
            9.0
 	
            Pronouns.  Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa.
 

 

	
            10.0
 	
            Entire Agreement.  This Agreement, together with the Confidentiality Agreement, constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.
 

 

Page 22 of 25

	
            11.0
 	
            Amendment.  This Agreement may be amended or modified only by a written instrument executed by both the Company and the Employee. Any such amendment shall comply with the requirements of Section 409A of the Code, if applicable.  It is the intent of the Company and the Employee to comply with Section 409A of the Code.  If this Agreement or any other policies referred to herein, do not comply with Section 409A of the Code, then said policies and this Agreement shall be automatically amended, but only to the extent reasonably necessary to comply with Section 409A of the Code and shall be, as amended, incorporated herein by reference.
 

 

	
            12.0
 	
            Governing Law.  This Agreement shall be construed, interpreted and enforced in accordance with the laws of New Jersey, without regard to its principles of conflict of laws.
 

 

	
            13.0
 	
            Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business; provided, however, that the obligations of the Employee are unique and personal and shall not be assigned by him.
 

 

	
            14.0
 	
            Waiver of Breach.
 

 

	
             
  	
            14.1
 	
            Waiver by the Company.  No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right.  A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.  No waiver by the Company shall be valid unless in writing 
 

 

Page 23 of 25

signed by an authorized officer of the Company and approved by a majority of the Board.

 

	
             
  	
            14.2
 	
            Waiver by the Employee.  No delay or omission by the Employee in exercising any right under this Agreement shall operate as a waiver of that or any other right.  A waiver or consent given by the Employee on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.  No waiver by the Employee shall be valid unless in a writing signed by the Employee.
 

 

	
            15.0
 	
            Miscellaneous.
 

 

	
             
  	
            15.1
 	
            The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.
 

 

	
             
  	
            15.2
 	
            In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.
 

 

	
            16.0
 	
            Survival.  The provisions of Sections 7 and 8 shall survive the termination of this Agreement.
 

 

 

 

 

Page 24 of 25

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as an instrument under seal effective as of the day and year set forth above.

 

 

	
            AVAX TECHNOLOGIES, INC.
 	
             
	
            EMPLOYEE
 
	 
	 
	
            /s/   John K.A. Prendergast
 	
             
	
            /s/   Francois Martelet, M.D.
 
	
            Name:   John K.A. Prendergast, Ph.D.
Title:     Chairman of the Board of Directors
 	
             
	
            Francois Martelet, M.D.

 

 

 

Page 25 of 25

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