Exhibit 2.4
FIRST AMENDMENT TO SHARE PURCHASE AGREEMENT
This First Amendment to Share Purchase Agreement (the "Amendment") is
made and entered into as of the 8th day of April, 2002, by and among ClearOne
Communications Inc. (formerly, Xxxxxxx Communications Corporation), a Utah
corporation ("ClearOne"), Xxxxxxx Ventures, Inc., a Utah corporation
("Purchaser"), and those other persons set forth on the Signature Pages hereof
(collectively, the "Sellers").
WHEREAS, the parties are party to that certain Share Purchase Agreement
relating to the purchase by Purchaser of all of the issued and outstanding share
capital of Ivron Systems, Ltd., dated October 3, 2001 (the "Agreement");
WHEREAS, the parties recognize that certain of the intended benefits of
the Agreement have not materialized, and have therefore agreed to the following
amendments to the Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each of the parties, the parties hereby agree as follows:
1. Terms not defined herein have the meanings set forth in the Agreement.
2. All references to Xxxxxxx or Xxxxxxx Communications Corporation are
hereby changed to ClearOne, or ClearOne Communications, Inc.
3. Paragraphs (b), (c), (d), (e), (f), (g), and (h) of Clause 2.3 of the
Agreement are hereby deleted in their entirety, and replaced with the
following new paragraphs in Clause 2.3:
(b) If and when the conditions set forth in the succeeding paragraphs
of this clause 2.3(b) have been met, then promptly thereafter the
Purchaser will deliver to the Seller an aggregate of up to 109,000
shares (the "Periodic Shares") of ClearOne's common stock (as may be
adjusted for any split, combination, subdivision, or any other similar
adjustment after the date hereof) which shares will be issued to the
Sellers on the basis set forth in the "Amended Shareholder Matrix", to
be separately delivered to the Purchaser within five (5) days of the
date of execution of this Amendment.
(c) In the event that gross profits (the "Profit Targets") set forth
below are achieved by ClearOne computed from March 15, 2002 and prior
to or by the dates set forth below (each, a "Target Date") for sales of
its "V-There"/"Vu-Link" set-top videoconferencing products,
technologies, and variants and sub-elements thereof (including license
products) (collectively, the "Product"), then the Sellers shall be
entitled to receive the number of the Shares adjacent to a Target Date
(the "Periodic Shares"), allocated in accordance with the Amended
Shareholder Matrix. ClearOne hereby agrees that it shall deliver within
fifteen (15) days following each Target Date (and within fifteen days
of the end of each subsequent calendar quarter pursuant to Clause
(d)(1), below) a statement showing the actual profits from the sale of
Product during the preceding period (or calendar quarter, as
applicable). The parties agree that Purchaser may deliver such
statement to Xxxxxxx Xxxxxx on behalf of all Sellers.
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Profit Targets from
Target Date Periodic Shares Product Sales for Period
March 15, 2002 through:
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July 31, 2002 27,250 US$1,687,500
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January 15, 2003 27,250 US$3,375,000
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April 15, 2003 27,250 US$5,062,500
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July 15, 2003 27,250 US$6,750,000
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(d) The following conditions shall apply to the issuance of Shares:
(i) To the extent that ClearOne exceeds Profit Targets by or
prior to a Target Date, no additional Periodic Shares will
be issued for exceeding such Profit Targets by or prior to
a Target Date (i.e. if by July 31, 2002, US$3,000,000 in
Profit Targets is achieved, 27,250 Periodic Shares will be
issued as set forth in subsection (ii), below. However, the
gross profits amounts in excess of the Profit Targets for
July 15, 2002 will be applied to achieving the Profit
Targets for succeeding Target Dates. Consistent with the
preceding sentences of this subsection, the parties agree
that the Profit Targets are aggregate targets such that the
amount applied in reaching a Profit Targets is also
credited towards the next Profit Targets. For example,
amounts applied in achieving the Profits Target for July
31, 2002 (e.g. US$1,687,500) will be counted towards the
Targets for January 15, 2003 (e.g. US$3,375,000), and
towards each successive Profit Target, thereafter. In
addition, if all Periodic Shares are not issued by July 15,
2003, but prior to June 30, 2005, then the parties shall
measure within fifteen (15) days following the end of each
calendar quarter, Profit Targets. If, during the preceding
calendar quarter, Profit Targets are achieved, then
corresponding Periodic Shares will be issued as set forth
above. Any Shares that are unissued as of June 30, 2005
will not, thereafter, be issued to the Sellers;
(ii) All Periodic Shares will be issued within thirty (30) days
of each Target Date, assuming that Profit Targets are
achieved; and
(iii) for purposes hereof, "Target Gross Profits" shall mean
Product revenues minus Product costs of goods sold, as such
terms are contemplated in U.S. generally accepted
accounting principles.
(e) ClearOne hereby covenants and agrees that it will use all
commercially reasonable efforts to sell the Products.
(f) As soon as practicable following their issuance, the Periodic
Shares will be registered for resale at the expense of ClearOne on
an applicable registration form selected by ClearOne, under the
Securities Act of 1933 (currently contemplated to be Form S-3).
(g) A number of Periodic Shares may be withheld by ClearOne for
purposes of the payment of any taxes which may be assessed by any
taxing authorities against ClearOne or the Purchaser, or other
affiliated company, in connection with the payment of the Periodic
Shares. The parties agree that each share will be deemed to have a
value equal to the greater of (i) $12, or (ii) the closing price
for ClearOne common stock on the last trading date prior the
issuance of any Periodic Shares.
4. Clause 5.4(a) is amended to read as follows, and renumbered as Clause
5.4:
The Shares will be issued in a private placement pursuant to Section
4(2) of the Securities Act of 1933 to the Sellers. As soon as
practicable following the issuance of the Shares, such shares will be
registered for resale on an applicable registration form, under the
Securities Act of 1933, currently contemplated to be Form S-3.
5. Clause 5.4(b) is deleted in its entirety.
6. References to "July Shares" appearing in the Agreement are amended by
replacing each such reference with "Periodic Shares".
7. Clause 7.9 of the Agreement is deleted in its entirety and replaced
with the following new Clause 7.9:
The liability of the Seller (if any) under the Warranties shall be
limited to the total amount that may be paid hereunder as the Purchase
Price, including any Periodic Shares (whether paid or unpaid). For
purposes of this limitation, the value of such shares at the time of
issuance shall be used to determine the extent of the limitation on
liability.
8. Clauses 7.10 (a) and (b) are deleted in their entirety and replaced
with the following:
(a) For purposes of satisfying the indemnification obligations of the
Sellers set forth in Clause 13.1, Purchaser shall have the right to
set-off against amounts or Periodic Shares owing pursuant to the
Periodic Shares, allocated against each Shareholder in accordance with
his/her/its pro-rata interest in the Periodic Shares.
(b) The Purchaser shall have the option of recouping all or any part of
any Adverse Consequences it may suffer by notifying the Sellers in
writing of such Adverse Consequences (the "Set-Off Claim") stating (i)
the amount of such Adverse Consequences, and (ii) the basis for such
claim of Adverse Consequences in sufficient details for Sellers to
evaluate the Set-Off Claim; Sellers shall have ten (10) days to
evaluate and respond to Buyer's Set-Off Claim in writing. If the
Sellers do not dispute Purchaser's Set-Off Claim, Purchaser shall be
entitled to set off such claim against the Periodic Shares. In the
event of a dispute regarding a Set-Off Claim, the parties will agree on
an a mutually acceptable independent firm of chartered accountants who
shall act as an expert and not an arbitrator and whose decision shall
be final and binding (save in the case of manifest error). The number
of Periodic Shares and shall be determined using a quotient, the
numerator of which is the amount of the Set-Off Claim, and the
denominator of which is the average closing price for the ten trading
days prior to the date of the Set-Off Claim.
9. Schedule 5.1 (11) is deleted in its entirety and replaced with the
following:
(11) Calculation of Profit Targets
In relation to the calculation of Profit Targets in Clause 2.3 of the
Agreement, ClearOne will act in good faith in accordance with U.S.
generally accepted accounting principles in making the calculation of
Targets.
10. Schedule 5.1 (13) is deleted in its entirety.
11. Schedule 5.2 (10) is deleted in its entirety and replaced with the
following:
(10) Calculations of Profit Targets
In relation to the calculation of Profit Targets in Clause 2.3 of the
Agreement, Purchaser will act in good faith in accordance with U.S.
generally accepted accounting principles in making the calculation of
Targets.
12. Schedule 5.2 (12) is deleted in its entirety.
13. Each Seller (i) understands that issuance of the Periodic Shares have
not been, and will not be, registered under the Securities Act of 1933
(the "Securities Act"), or under any state securities laws, and that
they are being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering, (ii) is
acquiring the Periodic Shares solely for its own account for investment
purposes, and not with a view to the distribution thereof, and (iii) is
an "Accredited Investor" as defined in the rules promulgated pursuant
to the Securities Act, or is a sophisticated investor with knowledge
and experience in business and financial matters.
14. Except as provided in above, the Agreement shall remain in full force
and effect with no amendment or modification.
15. This Amendment shall be governed by and construed in accordance with
the laws of Ireland.
16. This Amendment may be executed in counterparts, all of which together
shall constitute one and the same instrument.
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SIGNED SEALED AND DELIVERED by the said Xxxx Xxxxxx in /s/Xxxxxxx Xxxxxx
the presence of:
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SIGNED SEALED AND DELIVERED by the said Xxx Xxxxxxxx in /s/Xxx Xxxxxxxx
the presence of:
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SIGNED SEALED AND DELIVERED by the said Xxxxx Xxxxx in /s/Xxxxx Xxxxx
the presence of:
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SIGNED SEALED AND DELIVERED by Xxxx Xxxxxx in the /s/Xxxx Xxxxxx
presence of:
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SIGNED SEALED AND DELIVERED by Xxxx Xxxxxx in the /s/Xxxxxxx Xxxxxx,
presence of: attorney in fact for
Xxxx Xxxxxx
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PRESENT when the common seal of Mentor Capital, Ltd.
was affixed hereto: /s/Xxxxxxx Xxxxxx
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Executed as a Deed By Xxxxxxx Ventures, Inc.
By:/s/Xxxxxxx X. Xxxxxxxxx
Vice President
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Executed as a Deed By ClearOne Communications, Inc.
By: /s/Xxxxxxx Xxxxx
President and Chief
Executive Officer
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