EXHIBIT 10.1
AGREEMENT
This Agreement is dated as of October 4, 2006 and is by and between Interlink
Electronics, Inc., a Delaware corporation, ("Interlink") on the one hand and
Xxxxxx X. Xxxxxx ("Xxxxxx"), BC Advisors, LLC, a Texas limited liability
company, SRB Management, L.P., a Texas limited partnership, SRB Greenway
Capital, L.P., a Texas limited partnership, SRB Greenway Capital (Q.P.), L.P., a
Texas limited partnership, SRB Greenway Offshore Operating Fund, L.P., a Cayman
Islands limited partnership, Xxx Xxxxxx ("Xxxxxx") and Xxxxxxxx X. Xxxxxx
("Xxxxxx") on the other. The persons and entities listed above, other than
Interlink are herein referred to as the Xxxxxx Parties.
Interlink is a reporting company under the Securities Exchange Act of 1934, as
amended, (the "Exchange Act") and has issued and outstanding a single class of
publicly traded stock, its common stock ("Common Stock"). Interlink has filed a
Proxy Statement relating to its Annual Stockholders Meeting scheduled for
October 18, 2006 (the "2006 Annual Meeting"). The Xxxxxx Parties collectively
beneficially own 1,287,315 shares of Common Stock. On September 19, 2006, the
Xxxxxx Parties filed a report on Form 13D under the Exchange Act in which they
state their intention to nominate Xxxxxx and Xxxxxx to Interlink's Board of
Directors. On September 21, 2006, the Xxxxxx Parties filed a Proxy Statement
under the Exchange Act pursuant to which they seek to solicit proxies in favor
of the election of Xxxxxx and Xxxxxx. The Xxxxxx Parties' Proxy Statement stands
in opposition to Interlink's Proxy Statement which recommends the election of
Xxxx Xxxxxxx ("Xxxxxxx") and Xxxxxxx Xxxx ("Xxxx").
NOW, THEREFORE, wishing to resolve the dispute between Interlink and the Xxxxxx
Parties with respect to the directors to be elected at the 2006 Annual Meeting,
the parties agree as follows:
1. IMMEDIATE ACTIONS OF THE PARTIES
Promptly upon execution of this Agreement:
(a) The Interlink Board of Directors will create a special
committee consisting of its existing directors other than
Xxxxxxx and Xxxx (the "Special Committee") and will empower
the Special Committee to adopt the resolutions set forth in
Exhibit A, attached hereto (the "Resolutions") and the Special
Committee will consider and act upon the Resolutions. If the
Special Committee does not adopt the Resolutions on or prior
to 5:00, p.m., Pacific time on the day following the date of
this Agreement, this Agreement shall be null and void and of
no effect.
(b) The Xxxxxx Parties will amend or withdraw their Proxy
Statement and will take such other action as Interlink may
reasonably request to terminate their solicitation of proxies
in favor of the election of Xxxxxx and Xxxxxx as soon as
practicable after the adoption of the Resolutions.
(c) Interlink will release a press release (which shall also be
filed under Form 8-K) in the form substantially as set forth
in Exhibit B, attached hereto as soon as practicable after the
adoption of the Resolutions. Interlink acknowledges that
certain of the Xxxxxx Parties are responsible to amend a
report on Schedule 13D they have filed and will attach a copy
of this Agreement and the press release attached hereto to
such filing.
2. ACTIONS OF THE PARTIES BETWEEN THE DATE HEREOF AND THE 2006 ANNUAL
MEETING Between the date of this Agreement and the conclusion of the
2006 Annual Meeting:
(a) The Xxxxxx Parties shall not, directly or indirectly, take any
action in opposition to the election at the 2006 Annual
Meeting of the director candidates nominated by Interlink, as
such nominees may be constituted from time to time or solicit,
support or encourage the taking of any such action by any
other person.
(b) To the extent permitted by law and the fiduciary duties of
Interlink's directors , Interlink will not, without the
consent of Xxxxxx, take any action to amend, modify or rescind
the adoption of the Resolutions as set forth in Section 1(a),
expand its Board of Directors to include more than 8
directors, or take any action designed to prevent this
Agreement from becoming and remaining effective.
3. ACTIONS OF THE PARTIES FOLLOWING THE 2006 ANNUAL MEETING
(a) Promptly following the 2006 Annual Meeting, Interlink shall
take such action as may be necessary or desirable to implement
the Resolutions.
(b) Interlink shall not, without the consent of Xxxxxx, expand its
Board of Directors to include more than 8 directors until the
conclusion of its Annual Stockholders Meeting for 2008.
4. CERTAIN UNDERSTANDINGS OF THE PARTIES
(a) It is the present intention of Interlink's Nominating
Committee to re-nominate Xx. Xxxxxx as an Interlink director
at Interlink's 2007 Annual Stockholders Meeting, provided,
however, that nothing in this Agreement shall be construed as
creating an obligation of Interlink, its Board of Directors or
any Committee thereof to act in derogation of its fiduciary
obligations.
(b) The Xxxxxx Parties understand and confirm that Xxxxxx and
Thimot will act as directors of Interlink in accordance with
the fiduciary obligations of directors and in the interest of
the stockholders and others to which such obligations are owed
and will not act as the representatives of any particular
stockholder or group of stockholders. In particular, and
without limiting the generality of the foregoing, the Xxxxxx
parties are aware of (1) the obligations of Interlink, its
officers and its directors under Regulation FD under the
Exchange Act and (2) Interlink's policy with respect to the
confidentiality of its proprietary information and agree that
they will not take any action designed or reasonably expected
to cause a breach of any such obligations or policy.
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(c) Each of the Xxxxxx Parties appoints Xxxxxx as its
representative, empowers Xxxxxx to agree to any and all
waivers and amendments to this Agreement on behalf of the
Xxxxxx Parties and agrees to be bound by Xxxxxx'x actions with
respect to any such waivers or amendments.
(d) If Xxxxxxx and Xxxx (or replacement nominees acceptable to the
Company's incumbent directors in the event either Xxxxxxx or
Xxxx becomes unavailable to serve), are not elected directors
of the Company at the 2006 Annual Meeting, or if any action or
event occurs which would result in the appointment of Xxxxxx
and Thimot pursuant to the Resolutions not becoming effective
promptly following the 2006 Annual Meeting as provided or
contemplated herein, or if the 2006 Annual Meeting is not held
and concluded prior to October 31, 2006, this Agreement shall
be null and void and of no effect; provided, however, that if
any such election or appointment does not occur as a result of
the breach of this Agreement by any party hereto, then this
Agreement shall continue in effect solely as to the right of
the non-breaching party to seek damages or other relief for
such breach.
5. MISCELLANEOUS
(a) ENTIRE AGREEMENT. No representation, warranty, inducement,
promise, understanding or condition not set forth in this
Agreement has been made or relied upon by any of the parties
to this Agreement. This Agreement (including the Exhibits
hereto) constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the
subject matter hereof.
(b) GOVERNING LAW. This Agreement and all matters arising out of
or relating hereto, including its validity, construction and
interpretation, shall be governed by the laws of the State of
California, without regard to the laws as to choice or
conflict of laws, except to the extent that the Delaware
General Corporation Law shall govern certain corporate
matters.
(c) SPECIFIC PERFORMANCE. The parties hereby acknowledge and agree
that the failure of Interlink, on the one hand, or any of the
Xxxxxx Parties, on the other, to perform its agreements and
covenants hereunder, including its failure to take all actions
as are necessary on its part, in accordance with and subject
to the terms and conditions of this Agreement, to cause
Interlink's Board of Directors to be constituted as provided
herein, will cause irreparable injury to the Xxxxxx Parties or
to Interlink, respectively, for which damages, even if
available, will not be an adequate remedy. Accordingly, each
of Interlink and the Xxxxxx Parties hereby consents, to the
extent that such consent is permitted by law, to the issuance
of injunctive relief by any court of competent jurisdiction to
compel performance of their respective obligations and to the
granting by any court of the remedy of specific performance of
their obligations hereunder.
(d) COUNTERPARTS. This Agreement may be executed by facsimile in
one or more counterparts, each of which shall be deemed to be
an original, but all of which shall constitute one and the
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same agreement. This Agreement shall become effective when
each party to this Agreement shall have received counterparts
signed by all of the other parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.
Interlink Electronics, Inc.
By: /s/ E. Xxxxxxx Xxxxxx, III
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E. Xxxxxxx Xxxxxx, III, Chairman and CEO
BC Advisors, LLC
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Member
SRB Management, L.P.
By: BC Advisors, LLC, its General Partner
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Member
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
SRB Greenway Capital, L.P.
By: SRB Management, L.P., its General Partner
By: BC Advisors, LLC, its General Partner
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Member
SRB Greenway Capital (Q.P.), L.P.
By: SRB Management, L.P., its General Partner
By: BC Advisors, LLC, its General Partner
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Member
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SRB Greenway Offshore Operating Fund, L.P.
By: SRB Management, L.P., its General Partner
By: BC Advisors, LLC, its General Partner
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Member
/s/ Xxx Xxxxxx
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Xxx Xxxxxx
/s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
The following Exhibits to the Agreement have been omitted and will be provided
to the Securities and Exchange Commission upon request:
Exhibit A Resolutions of the Special Committee of the Board of Directors
of Interlink Electronics, Inc.
Exhibit B Text of Joint Press Release
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