AMENDMENT NO. 1
TO
SHARE PURCHASE AGREEMENT
This Amendment is made as of June 29, 2000, by and among by and among
COM21, INC., a Delaware corporation ("Purchaser"), GADLINE, LTD., a
company organized under the laws of Israel (the "Company"), and Ofir
Zemer as Sellers' Representative (the "Sellers' Representative").
WHEREAS, the parties to this Amendment entered into a Share Purchase
Agreement (the "Share Purchase Agreement") dated as of April 18, 2000,
and wish to amend the Share Purchase Agreement as herein provided. Terms
used herein without definition are as defined in the Share Purchase
Agreement.
WHEREAS, Section 9.3 of the Share Purchase Agreement provides that the
Share Purchase Agreement may be amended by the parties thereto at any
time by execution of an instrument in writing signed on behalf of each of
the parties thereto, and that any amendment of the Share Purchase
Agreement signed by the Sellers' Representative shall be binding upon and
effective against the Sellers whether or not they have signed such
amendment.
NOW, THEREFORE, in consideration of the covenants and representations set
forth herein, and for other good and valuable consideration, the parties
hereto agree as follows:
1. Amendments to Share Purchase Agreement.
(a) Section 1.1 of the Share Purchase Agreement is hereby amended as
follows:
(i) The following proviso shall be added at the end of the second
sentence thereof: "provided, however, that in no event shall the Closing
Date occur prior to July 1, 2000".
(ii) Clause (i) of the third sentence thereof is hereby amended and
restated in its entirety to read as follows: "the number of shares of
Purchaser Common Stock reserved for issuance upon exercise of all
outstanding Company Options which are vested as of June 28, 2000 and
fifty percent (50%) of all outstanding Company Options which are unvested
as of June 28, 2000 (the "Reserved Option Shares") in accordance with the
column in Schedule B captioned "Initial Consideration" and"
(b) Section 1.2 of the Share Purchase Agreement is hereby amended as
follows:
(i) The date "September 30, 2000" in the first sentence of
Section 1.2(a) is hereby revised in its entirety to be "November 30,
2000".
(c) The second paragraph of the legend in Section 1.11 of the Share
Purchase Agreement is hereby amended and restated in its entirety to read
as follows:
"THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
OF A SHARE PURCHASE AGREEMENT DATED AS OF APRIL 18, 2000 [AND AN
AMENDED AND RESTATED PRINCIPAL SELLER SHAREHOLDER AGREEMENT DATED AS
OF JUNE __, 2000], A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY."
(d) Section 1.12 of the Share Purchase Agreement is hereby amended as
follows:
(i) The proviso to subsection (a) thereof is hereby amended and restated
in its entirety to read as follows: "provided that fifty percent (50%)
of the sum of the Purchaser Shares received by such Purchaser and the
Escrow Shares applicable to such Purchaser Shares shall be released from
this restriction on the effective date of the Registration Statement."
(ii) Subsection (b) thereof is hereby amended and restated in its entirety
to read as follows: "Each Seller that is not an Employee Seller (a "Non-
Employee Seller") agrees that it will not directly or indirectly, offer,
sell, assign, transfer, or otherwise dispose of, other than by operation
of law, more than fifty percent (50%) of the sum of the Purchaser Shares
received by such Purchaser and the Escrow Shares applicable to such
Purchaser Shares, whether any such transaction is to be settled by
delivery of Purchaser Shares, such other securities, in cash or
otherwise, until the earlier to occur of (x) the date that is six months
after the effective date of the Registration Statement (as defined below)
and (y) the eight (8) month anniversary of the Closing Date."
(e) Section 1.13 of the Share Purchase Agreement is hereby amended by
adding the following paragraph at the end thereof:
(i) "As used in this Agreement, and in every other agreement entered
into in connection herewith or referred to herein, and in every
certificate, opinion, document, schedule or other instrument delivered
pursuant hereto, the name "GADline, Ltd.", "GADLINE, LTD.", "Gadline,
Ltd.", "GADline Ltd.", "Gad Line Ltd.", "GAD Line Ltd.", "Gad-Line Ltd.",
and any other variation thereof used herein or in any such other
agreement, certificate, opinion, document, schedule or instrument
(without regard to capitalization, spacing and commas), shall be deemed
to refer to the company identified in the registration certificate
attached hereto as Schedule C, which name may be translated into English
as "GADline, Ltd.""
(f) Section 2.12 of the Share Purchase Agreement is hereby amended as
follows:
(i) The date "September 30, 2000" in clause (iii) of Section 2.12(o) is
hereby revised in its entirety to be "November 30, 2000"; and
(ii) The date "September 30, 2000" in clause (iv) of Section 2.12(o) is
hereby revised in its entirety to be "November 30, 2000".
(g) Section 6.3 of the Share Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
(i) "Whether or not the Share Purchase is consummated, all fees and
expenses incurred in connection with the Share Purchase including,
without limitation, all legal, accounting, financial advisory, consulting
and all other fees and expenses of third parties ("Third Party Expenses")
incurred by a party in connection with the negotiation and effectuation
of the terms and conditions of this Agreement and the transactions
contemplated hereby, shall be the obligation of the respective party
incurring such fees and expenses; provided that, in the event the Share
Purchase is consummated, Purchaser agrees to pay, or to cause the Company
to pay, up to $2,350,000 of fees payable to Cowen and for such other
documented Third Party Expenses incurred by the Company, and any Third
Party Expenses incurred by the Company in excess of the foregoing
amounts, shall be paid out of the Escrow Fund and shall not be limited by
the Basket Amount. The Company shall provide Purchaser with a statement
of an estimate of Third Party Expenses incurred by the Company three (3)
business days prior to the Closing Date (the "Statement of Expenses")."
(h) The first sentence of Section 6.9 of the Share Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
(i) "At the Closing, Purchaser shall grant options (the "Purchaser
Options") to purchase an aggregate of 200,000 shares of Purchaser Common
Stock under the Purchaser Option Plan to selected key employees and
consultants of the Company, including each of the Key Employees and
Larry Rubin, as shall be agreed by Purchaser and the Company prior to the
Closing Date, which options will be subject to Purchaser's standard terms
and conditions, except that the Purchaser Options shall vest as follows:
one fourth (1/4) shall vest on the first anniversary of the Closing Date,
and three forty-eighths (3/48) shall vest on the last day of each of the
next twelve months after such first anniversary date."
(i) The first sentence of Section 6.11(a) of the Share Purchase
Agreement is hereby amended and restated in its entirety to read as
follows:
(i) "Subject to certain limitations set forth in the Registration Rights
Agreement attached hereto as Exhibit D (the "Registration Rights
Agreement"), Purchaser shall, at Purchaser's own expense, file, as soon
as practicable, but in no event (except as provided below, but
notwithstanding anything set forth in the Registration Rights Agreement
to the contrary) later than ten (10) days, after the Closing Date (the
"Registration Statement") under the Securities Act to provide for the
resale by the Sellers of the shares of Purchaser Common Stock
constituting the Initial Consideration (including the Escrow Shares
constituting a part of the Initial Consideration), and shall use its
commercially reasonable efforts to cause such Registration Statement to
become effective as promptly as reasonably practicable thereafter."
(j) Section 6.17 of the Share Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
(i) "The Company shall use commercially reasonable efforts to cooperate
with Purchaser and to encourage each of the employees of the Company to
execute and deliver to Purchaser an Invention Assignment Agreement in the
form attached hereto as Exhibit F-1 and an Electronic and Telephonic
Communications System Policy Agreement in the form attached hereto as
Exhibit F-2."
(k) Section 7.2(f) of the Share Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
(i) "Resignation of Directors; Removal of Authority to Bind Company.
Purchaser shall have received a written resignation from each of the
directors of the Company effective as of the Closing. The Company's
Board of Directors shall have passed resolutions (and taken any further
action necessary under applicable law or as otherwise reasonably
requested by Purchaser) providing that, effective as of the Closing, no
director, officer, employee, consultant, agent or affiliate of the
Company or the Subsidiary, other than Larry Rubin and Gidon Tahan, shall
be authorized to write or endorse any checks or other negotiable
instruments on behalf of the Company or the Subsidiary or otherwise enter
into any Contract to which the Company or the Subsidiary or any of their
respective properties or assets (including intangible assets) is
subject."
(l) The Share Purchase Agreement is hereby amended by adding a new
Schedule C thereto as set forth in Schedule C hereto.
(m) Exhibit A-2 of the Share Purchase Agreement is hereby amended and
restated in its entirety to read as set forth in Exhibit A-2 hereto.
(n) Exhibit A-3 of the Share Purchase Agreement is hereby amended and
restated in its entirety to read as set forth in Exhibit A-3 hereto.
(o) Exhibit B of the Share Purchase Agreement is hereby amended and
restated in its entirety to read as set forth in Exhibit B hereto.
(p) Exhibit C of the Share Purchase Agreement is hereby amended as
follows:
(i) The date "September 30, 2000" in paragraph 11 of Exhibit C is hereby
revised in its entirety to be "November 30, 2000"; and
(ii) The date "September 30, 2000" in paragraph 12 of Exhibit C is hereby
revised in its entirety to be "November 30, 2000".
(q) Exhibit E of the Share Purchase Agreement is hereby amended and
restated in its entirety to read as set forth in Exhibit E hereto.
(r) Exhibit F-1 of the Share Purchase Agreement is hereby amended and
restated in its entirety to read as set forth in Exhibit F-1 hereto.
(s) Exhibit F-2 of the Share Purchase Agreement is hereby amended and
restated in its entirety to read as set forth in Exhibit F-2 hereto.
2. Miscellaneous.
(a) Except as set forth above, the Share Purchase Agreement remains in
full force and effect.
(b) This Amendment may be executed in any number of counterparts and
delivered by facsimile, each of which shall be an original, but all of
which together shall constitute one instrument.
IN WITNESS WHEREOF, Purchaser, the Company the Sellers' Representative
have caused this Amendment to be signed, all as of the date first written
above.
COM21, INC. GADLINE, LTD.
By: ___________________ By: ___________________
Name: _________________ Name: _________________
Title: ________________ Title: ________________
SELLERS' REPRESENTATIVE:
_______________________
OFIR ZEMER
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO SHARE PURCHASE AGREEMENT]
Schedule C Company Registration Certificate
Exhibit A-2 Form of Founder/Executive Employment and Non-Competition
Agreement
Exhibit A-3 Form of Employment and Non-Competition Agreement
Exhibit B Form of Amended and Restated Principal Seller Shareholder
Agreement
Exhibit E Form of Escrow Agreement
Exhibit F-1 Form of Invention Assignment Agreement
Exhibit F-2 Form of Electronic and Telephonic Communications System
Policy Agreement