SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(D) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of
report (Date of earliest event reported):
August
1, 2005
ClearOne
Communications, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Utah
(State
or
Other Jurisdiction of Incorporation)
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0-17219
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87-0398877
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1825
Research Way,
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Salt
Lake City, Utah
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84119
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(801)
975-7200
(Registrant’s
Telephone Number, Including Zip Code)
Not
applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communication pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive
Agreement
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On
August
1, 2005, ClearOne Communications, Inc. (the “Company”) entered into a
Manufacturing Agreement with Inovar, Inc., a Utah-based electronics
manufacturing services provider (“Inovar”), pursuant to which the Company agreed
to outsource its Salt Lake City manufacturing operations to Inovar. The
agreement is for an initial term of three years, which shall automatically
be
extended for successive and additional terms of one year each unless terminated
by either party upon 120 days’ advance notice at any time after the second
anniversary of the agreement.
The
agreement generally provides, among other things, that Inovar shall: (i) furnish
the necessary personnel, material, equipment, services and facilities to be
the
exclusive manufacturer of substantially all the Company’s products that were
previously manufactured at its Salt Lake City, Utah manufacturing facility,
and
the non-exclusive manufacturer of a limited number of products, provided that
the total cost to the Company (including price, quality, logistic cost and
terms
and conditions of purchase) is competitive; (ii) provide repair service and
warranty support and proto-type services for new product introduction on terms
to be agreed upon by the parties; (iii) purchase certain items of the Company’s
manufacturing equipment; (iv) lease certain other items of the Company’s
manufacturing equipment and have a one-year option to purchase such leased
items; (v) have the right to lease the Company’s former manufacturing employees
from a third party employee leasing company; and (vi) purchase the Company’s
parts and materials on hand and in transit at the Company’s cost for such items
with the purchase price payable on a monthly basis when and if such parts and
materials are used by Inovar. The parties also entered into a one-year sublease
for approximately 12,000 square feet of manufacturing space located in the
Company’s headquarters in Salt Lake City, Utah, which sublease may be terminated
by either party upon ninety days’ notice. The agreement provides that products
shall be manufactured by Inovar pursuant to purchase orders submitted by the
Company at purchase prices to be agreed upon by the parties, subject to
adjustment based upon such factors as volume, long range forecasts, change
orders etc. The Company also granted Inovar a right of first refusal to
manufacture new products developed by the Company at cost to the Company
(including price, quality, logistic cost and terms and conditions of purchase)
that is competitive.
The
foregoing summary is qualified in its entirety by reference to the Manufacturing
Agreement and related agreements.
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remainder of this page has been left blank intentionally]
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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CLEARONE
COMMUNICATIONS, INC.
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Date:
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August
3, 2005
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By:
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/s/
Zeynep Hakimoglu
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Zeynep
Hakimoglu
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Chief
Executive Officer and President
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