AGREEMENT
EXHIBIT 10.1
AGREEMENT
This Agreement, dated as of January 8, 2009 (the “Agreement”), is by and between
Telular Corporation, a Delaware corporation (the “Company”), and Simcoe Partners, L.P.,
Simcoe Management Company, LLC and Xxxxxxx Xxxxxxxxxx (collectively referred to herein as “The
Simcoe Group”).
WHEREAS, the Simcoe Group has filed a preliminary proxy statement on Schedule 14A with the
Securities and Exchange Commission (the “SEC”) for the election of two nominees to the
Board of Directors of the Company at the Company’s 2009 Annual Meeting of Shareholders (including
any adjournment or postponement thereof, the “2009 Annual Meeting”) and conducting a proxy
contest in respect thereof;
WHEREAS, the Company and the Simcoe Group have agreed that it is in their mutual interests and
in the best interests of Company shareholders to enter into this Agreement, which, among other
things, terminates the pending proxy contest for the election of directors at the 2009 Annual
Meeting (the “Proxy Contest”);
WHEREAS, the Company has agreed that, in connection with the 2009 Annual Meeting, the Board
(i) will withdraw the nomination of Xxxx X. Xxxxxx for election as a member of the Board and (ii)
will nominate for election as a member of the Board, and recommend that the shareholders vote to
elect as a director of the Company, Xxxxxxx Xxxxxxxxxx, founder of Simcoe Partners, L.P. (the
“Simcoe Nominee”);
WHEREAS, the Simcoe Group has agreed to refrain from submitting any director nominations and
to vote for the election of the Company’s nominees for directors at the 2009 Annual Meeting.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
DEFINITIONS
Section 1.1 Defined Terms. For purposes of this Agreement:
(a) The term “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated by
the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
shall include persons who become Affiliates of any party to this Agreement subsequent to the date
hereof.
(b) The term “Board” means the board of directors of the Company.
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(c) The term “Common Stock” shall mean the Company’s common stock, par value $.01 per
share.
Section 1.2 Interpretation. When reference is made in this Agreement to a Section,
such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the
words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation.” The words “hereof,” “herein,” “hereby” and “hereunder”
and words of similar import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement. The word “or” shall not be exclusive. This
Agreement shall be construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be drafted.
ARTICLE II
COVENANTS
COVENANTS
Section 2.1 Board of Directors, Annual Meeting and Related Matters.
(a) 2009 Annual Meeting. The Company shall use all reasonable best efforts to cause
the 2009 Annual Meeting to be held and the election of directors thereat to be conducted on the
scheduled date of February 3, 2009, and shall not delay or postpone such meeting date or election,
unless a quorum is not obtained, in which case the Company shall hold the meeting as promptly
thereafter as practicable.
(b) Nomination of Directors. The Company agrees that at or in connection with the 2009
Annual Meeting, the Board will:
(1) withdraw and not present the nomination of Xxxx X. Xxxxxx as a director of the
Company;
(2) nominate the Simcoe Nominee as a director of the Company for a term expiring at the
2010 annual meeting of shareholders and upon the election and qualification of his
successor;
(3) recommend that the shareholders of the Company vote to elect the Simcoe Nominee and
the other Company nominees for the Board; and
(4) cause all proxies received by the Company to be voted in the manner specified by
such proxies for election of directors and generally in favor of the Simcoe Nominee and the
other Company nominees where such proxies do not specify how they should be cast.
(c) Efforts. The Company shall use all reasonable best efforts to ensure that the
Simcoe Nominee is elected by the shareholders at the 2009 Annual Meeting.
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(d) Role of Simcoe Nominee. The Simcoe Nominee, upon election to the Board, will
serve as an integral member of the Board and will be governed by the same protections and
obligations regarding confidentiality, conflicts of interests, fiduciary duties, trading and
disclosure policies and other governance guidelines and shall have the same rights and benefits,
including with respect to insurance, indemnification, compensation and fees, as are applicable to
all independent directors of the Company.
(e) Proxy Solicitation Materials. The Company and the Board agree that the Company’s
proxy statement and proxy cards for the 2009 Annual Meeting and all other solicitation materials to
be delivered to shareholders in connection with the 2009 Annual Meeting (in each case excepting any
materials delivered prior to the date hereof) shall be prepared in accordance with, and in
furtherance of, this Agreement. The Company will provide the Simcoe Group with copies of any
portion of proxy materials or other solicitation materials that contain statements relating to the
Simcoe Group, the Simcoe Nominee or this Agreement a reasonable period (and, in any event, at least
one business day) in advance of filing such materials with the SEC or disseminating the same in
order to permit the Simcoe Group a reasonable opportunity to review and comment on such materials.
The Simcoe Group will provide, as promptly as reasonably practicable, all information relating to
the Simcoe Nominee (and other information, if any) to the extent required under applicable law to
be included in the Company’s proxy statement and any other solicitation materials to be delivered
to shareholders in connection with the 2009 Annual Meeting.
The Company’s proxy statement for the 2009 Annual Meeting shall contain the same type and
tenor of information concerning the Simcoe Nominee as provided for the Company’s other director
nominees.
(f) Committees. To the extent permitted by law and the Nasdaq listing standards, the
Simcoe Nominee shall be eligible and shall be considered for Committee memberships on the Board to
the same extent as other members of the Board. The Simcoe Nominee shall complete a 2009 Company
Director and Officer Questionnaire to enable the Company to evaluate the Simcoe Nominee’s
independence under applicable independence standards and eligibility to serve on Board committees.
(g) Expenses. Within ten business days of receiving reasonable documentation with
respect to such expenses, the Company shall reimburse the Simcoe Group an amount equal to the
Simcoe Group’s actual out-of-pocket expenses incurred prior to the date of this Agreement in
connection with the Proxy Contest, including the preparation of related filings with the SEC and
the fees and disbursements of counsel and other advisors, up to a maximum reimbursement of $50,000,
and the Simcoe Group hereby agrees that such payment shall be in full satisfaction of any claims or
rights it may have as of the date hereof for reimbursement of fees, expenses or costs in connection
with the Proxy Contest.
Section 2.2 Voting Provisions. The Simcoe Group, together with its Affiliates, will
cause all shares of Common Stock for which they have the right to vote as of the record date for
the 2009 Annual Meeting to be present for quorum purposes and to be voted at such meeting or at any
adjournments or postponements thereof, (x) in favor of each director nominated and recommended by the Board for election at such meeting and (y) against any stockholder
nominations for director which are not approved and recommended by the Board for election at such
meeting.
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Section 2.4 Termination of the Proxy Contest; Additional Filings.
(a) The Simcoe Group.
(1) By executing this Agreement, the Simcoe Group hereby irrevocably agrees to
terminate the pending Proxy Contest. Within two business days of the date of this
Agreement, the Simcoe Group shall file with the SEC an amendment to its Schedule 13D with
respect to the Common Stock disclosing the material contents of this Agreement, amending
applicable items to conform to the obligations of the parties hereunder and appending this
Agreement and the Press Release as exhibits thereto.
(2) From the date hereof, the Simcoe Group shall not make, and shall cause its
Affiliates not to make, any objection to the election of any of the Company’s nominees at
the 2009 Annual Meeting or any other statement inconsistent with the provisions of this
Agreement.
(3) The Simcoe Group hereby irrevocably withdraws its December 26, 2008, request to
inspect certain of the Company’s books and records pursuant to Section 220 of the Delaware
General Corporation Law, and shall promptly return to the Company or destroy, in its sole
discretion, all materials and summaries or duplicates thereof that have been delivered to
the Simcoe Group or its representatives pursuant such request prior to the date hereof.
(4) Promptly following the issuance of the press release referred to in Section 2.5,
the Simcoe Group shall notify the SEC that it is withdrawing the preliminary proxy
statement on Schedule 14A it filed with the SEC.
(5) The Simcoe Group agrees not to allege that the Company’s definitive proxy
statement or any additional soliciting materials filed with the SEC in connection with the
2009 Annual Meeting, so long as they conform to the terms of this Agreement (including
Schedule A) and the information furnished by The Simcoe Group to the Company pursuant to
Section 2.1(e), violate any of the rules or regulations promulgated under the Exchange Act,
or contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statement not misleading.
(6) The Simcoe Group agrees not to seek, alone or in concert with others, (a) to call
a meeting of shareholders or solicit consents from shareholders, (b) to obtain
representation on the Board except as otherwise set forth in this Agreement, or (c) to
effect the removal of any member of the Board, in each case prior to the earlier of (i) the
2010 annual meeting of the Company’s shareholders or (ii) March 3, 2010.
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(7) The Simcoe Group shall not prior to the 2009 Annual Meeting, sell, assign,
transfer, grant an option with respect to or otherwise dispose of any interest in
(or enter into an agreement or understanding with respect to the foregoing)
(collectively, a “Disposition”) any shares of Common Stock; provided, however, that
the foregoing limitation shall not prohibit any Permitted Disposition. A “Permitted
Disposition” shall mean (i) a Disposition pursuant to a tender offer, an exchange
offer, a merger, sale or any other transaction in which all shareholders of the Company
have a right to participate; or (ii) any Disposition by any member of the Simcoe Group to
any other member of the Simcoe Group.
(b) The Company.
(1) Within four business days of the execution of this Agreement, the Company shall
file with the SEC a current report on Form 8-K disclosing the material contents of this
Agreement.
(2) From the date hereof, the Company shall not make, and shall cause its Affiliates
not to make, any objection to the election of the Simcoe Nominee at the 2009 Annual Meeting
or any other statement inconsistent with the provisions of this Agreement.
(3) The Company agrees not to allege that the preliminary proxy materials filed by the
Simcoe Group with the SEC in connection with the 2009 Annual Meeting violated any of the
rules or regulations promulgated under the Exchange Act, or contained any untrue statement
of a material fact or omit to state a material fact necessary to make the statement not
misleading.
Section 2.5 Publicity. Promptly after the execution of this Agreement, the Company
and the Simcoe Group will issue a joint press release in the form attached hereto as Schedule
A, it being understood, however, that the Company is solely responsible for the information and
quotations in the release concerning the Company, and the Simcoe Group is responsible for the
information and quotations concerning the Simcoe Group.
ARTICLE III
OTHER PROVISIONS
OTHER PROVISIONS
Section 3.1 Representations and Warranties.
(a) Representations and Warranties of the Company. The Company hereby represents and
warrants that this Agreement and the performance by the Company of its obligations hereunder
(1) has been duly authorized, executed and delivered by it, and is a valid and binding
obligation of the Company, enforceable against the Company in accordance with its terms;
(2) does not require the approval of the shareholders of the Company; and
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(3) does not and will not violate any law, any order of any court or other agency of
government, the Certificate of Incorporation of the Company, as amended, or the By-Laws of
the Company, as amended, or any provision of any indenture, agreement or other instrument to
which the Company or any of its properties or assets is bound, or conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or result in the creation or imposition of, or
give rise to, any lien, charge, restriction, claim, encumbrance or adverse penalty of any
nature whatsoever pursuant to any such indenture, agreement or other instrument.
(b) Representations and Warranties of the Simcoe Group. The Simcoe Group represents
and warrants that this Agreement and the performance by the Simcoe Group of its obligations
hereunder
(1) has been duly authorized, executed and delivered by the Simcoe Group, and is a
valid and binding obligation of the Simcoe Group, enforceable against the Simcoe Group in
accordance with its terms;
(2) does not require approval by any owners or holders of any equity interest in the
Simcoe Group (except as has already been obtained); and
(3) does not and will not violate any law, any order of any court or other agency of
government, the charter or other organizational documents of the Simcoe Group, as amended,
or any provision of any agreement or other instrument to which the Simcoe Group or any of
its properties or assets is bound, or conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any such agreement or other
instrument, or result in the creation or imposition of, or give rise to, any lien, charge,
restriction, claim, encumbrance or adverse penalty of any nature whatsoever pursuant to any
such agreement or instrument.
Section 3.2 Release.
(a) By the Simcoe Group. The Simcoe Group hereby agrees for the benefit of the Company, and each
Affiliate, officer, director, shareholder, agent, employee, attorney, assigns, predecessor and
successor, past and present, of the Company (the Company and each such Person being a “Company
Released Person”) as follows: the Simcoe Group, for itself and for its members, officers,
directors, assigns, agents and successors, past and present, hereby agrees and confirms that,
effective from and after the date of this Agreement, it hereby acknowledges full and complete
satisfaction of, and covenant not to xxx, and forever fully release and discharge each Company
Released Person of, and hold each Company Released Person harmless from, any and all claims of any
nature whatsoever (“Claims”), whether known or unknown, suspected or unsuspected,
including, but not limited to, those arising in respect of or in connection with the nomination and
election of directors or other actions to be taken at the 2009 Annual Meeting, occurring any time
or period of time on or prior to the date of this Agreement (including the future effects of such
occurrences, conditions, acts or omissions).
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(b) By the Company. The Company hereby agrees for the benefit of the Simcoe Group, and each
Affiliate, officer, director, member, partner, manager, shareholder, agent, employee, attorney,
assigns, predecessor and successor, past and present, of each member of the Simcoe Group (the
Simcoe Group and each such Person being a “Simcoe Released Person”) as follows: the
Company, for itself and for its officers, directors, assigns, agents and successors, past and
present, hereby agrees and confirms that, effective from and after the date of this Agreement, it
hereby acknowledges full and complete satisfaction of, and covenants not to xxx, and forever fully
releases and discharges each Simcoe Released Person of, and holds each Simcoe Released Person
harmless from, any and all Claims, whether known or unknown, suspected or unsuspected, including,
but not limited to, those arising in respect of or in connection with the nomination and election
of directors or other actions to be taken at the 2009 Annual Meeting, occurring any time or period
of time on or prior to the date of this Agreement (including the future effects of such
occurrences, conditions, acts or omissions).
Section 3.3 Remedies.
(a) Each party hereto hereby acknowledges and agrees, on behalf of itself and its Affiliates,
that irreparable harm would occur in the event any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It is accordingly
agreed that the parties will be entitled to specific relief hereunder, including an injunction or
injunctions to prevent and enjoin breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any state or federal court in New York County in
the State of New York, in addition to any other remedy to which they may be entitled at law or in
equity. Any requirements for the securing or posting of any bond with such remedy are hereby
waived.
(b) Each party hereto agrees, on behalf of itself and its Affiliates, that any actions, suits
or proceedings arising out of or relating to this Agreement or the transactions contemplated hereby
will be brought solely and exclusively in any state or federal court in New York County in the
State of New York (and the parties agree not to commence any action, suit or proceeding relating
thereto except in such courts), and further agrees that service of any process, summons, notice or
document by U.S. registered mail to the respective addresses set forth in Section 3.5 will be
effective service of process for any such action, suit or proceeding brought against any party in
any such court. Each party, on behalf of itself and its Affiliates, irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby, in the state or federal courts in New York
County in the State of New York, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an improper or inconvenient forum.
Section 3.4 Entire Agreement. This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof and may be amended only by an agreement in
writing executed by the parties hereto.
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Section 3.5 Notices. All notices, consents, requests, instructions, approvals and
other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (x) given by telecopy, when such
telecopy is transmitted to the telecopy number set forth below and the appropriate confirmation is
received or (y) if given by any other means, when actually received during normal business hours at
the address specified in this subsection:
if to the Company:
Telular Corporation
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxxx
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxxx
with a copy to:
Xxxxxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
0000 Xxxxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
if to the Simcoe Group:
Simcoe Partners, L.P.
00 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxxx
00 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxxx
with a copy to:
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Section 3.6 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
Section 3.7 Further Assurances. Each party agrees to take or cause to be taken such
further actions, and to execute, deliver and file or cause to be executed, delivered and filed such
further documents and instruments, and to obtain such consents, as may be reasonably required or
requested by the other party in order to effectuate fully the purposes, terms and conditions of
this Agreement.
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Section 3.8 Third-Party Beneficiaries. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and assigns, and nothing in
this Agreement is intended to confer on any person other than the parties hereto or their
respective successors and assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
Section 3.9 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument.
[Signature page follows]
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same
to be executed by its duly authorized representative as of the date first above written.
| TELULAR CORPORATION | ||||
| By: | /s/ | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | CEO | |||
| SIMCOE PARTNERS, L.P. By: Simcoe Management Company, LLC, its general partner |
||||
| By: | /s/ | |||
| Name: | Xxxxxxx Xxxxxxxxxx | |||
| Title: | Manager of Simcoe Management Company, LLC | |||
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