Eltek ASA : ELTEK ASA - LAWSUIT INITIATED WITH CLAIM FOR DAMAGES FOLLOWING THE DIVESTMENT OF NERA NETWORKS AS

Eltek ASA : ELTEK ASA - LAWSUIT INITIATED WITH CLAIM FOR DAMAGES FOLLOWING THE
                        DIVESTMENT OF NERA NETWORKS AS

Eltek completed  on 19  January 2011  the divestment  of Nera  Networks AS  to 
Ceragon (UK)  Limited,  a wholly  owned  subsidiary of  Ceragon  Networks  Ltd 
(together, "Ceragon") pursuant to a share purchase agreement of same date (the
"Share Purchase Agreement"). The purchase price was USD 48.5 million on a cash
and debt free basis. For further details on the transaction reference is  made 
to the stock exchange announcement made on 19 January 2011 and the Information
Memorandum of 15 February 2011 (as announced on 22 February 2011). Pursuant to
the terms of the Share Purchase Agreement, Eltek provided an extensive set  of 
representations and warranties for a period of  18 months, i.e. up to 19  July 
2012, except for representation and warranties  relating to title and tax  for 
which the survival period is  up to 10 years. USD  10 million of the  purchase 
price was paid  in escrow for  18 months  to cover potential  breaches of  the 
representations and warranties as mentioned above.

On 17 July 2012, Eltek announced that it on 16 July 2012, had received a claim
from Ceragon for alleged breaches of representations and warranties under  the 
Share Purchase Agreement. The claim consisted of several items that have  been 
aggregated into one claim notice and set out alleged losses for which  damages 
is sought of approximately USD 18.6 million. In addition, Ceragon in the claim
notice referred to  additional exposure  related to tax,  which allegedly  may 
become a  loss for  which a  claim will  be made.  Based on  the very  limited 
information and documentation  provided in  the claim notice,  Eltek found  it 
difficult to consider whether there was at all any merits in the claims.

Ceragon has on 24  June 2013 filed  a writ of summons  with the Oslo  district 
court  (NO:  Oslo  tingrett)  for  alleged  breaches  of  representations  and 
warranties under the Share Purchase  Agreement. The claim consists of  several 
items  and  sets  out  alleged  losses   for  which  damages  are  sought   of 
approximately USD 21.5 million.

Eltek has not  yet received  the exhibits  to the  writ of  summons. When  the 
exhibits are received Eltek  will further review the  writ of summons and  the 
documentation provided to Eltek  to determine whether there  is any basis  for 
any of the alleged breaches of representations and warranties under the  Share 
Purchase Agreement pursuant to which valid  claims under the Agreement may  be 
made.

Eltek underlines that the total liability  for Eltek under the Share  Purchase 
Agreement is  limited upwards  to USD  22 million,  except for  the  liability 
relating to title, tax and illegal payments, which is limited to the  purchase 
price, USD 48.5 million. These limitations can  only be set aside if there  is 
gross negligence, wilful misrepresentation or  wilful misconduct, or fraud  on 
Eltek's side, which Eltek denies is the case.

Eltek will also note that according  to the Share Purchase Agreement,  Ceragon 
shall not have the right to be  compensated unless and until a single loss  or 
the sum of related  losses in the  aggregate is/are in  excess of USD  200,000 
(the Mini Basket Amount). Several items of the claim are below the Mini Basket
Amount, and consequently not recoverable under the Share Purchase Agreement.

Finally, several of the claims  apparently relate to contingent claims,  i.e., 
claims where no  loss yet have  been suffered by  Ceragon. Eltek rejects  that 
there is any basis for liability for such claims.

For further information, please contact:

Erik Thorsen
Chairman of the Board of Eltek ASA
+47 907 56 685

This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.

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Source: Eltek ASA via Thomson Reuters ONE
HUG#1711714