UNITED STATES
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
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Date of Report (Date of earliest event reported): March 2, 1998
ORA ELECTRONICS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-21903 95-4607830
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(State or other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
9410 Owensmouth Avenue, Chatsworth, California 91311
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (818) 772-2700
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(Former names or former address, if changed from last report)
Exhibit Index on Page 4
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Item 5. OTHER EVENTS
ORA Electronics, Inc. (the "Company") and Telular Corporation ("Telular")
have settled their law suit titled ALLIANCE RESEARCH CORPORATION v. TELULAR
CORPORATION, which has been described in previous filings of the Company
under the Securities Exchange Act of 1934, including its Form 8-K filed on
December 20, 1996 and its Form 10-K filed on June 30, 1997. Pursuant to
such settlement, the lawsuit will be dismissed with prejudice, although the
Company will remain enjoined from selling its CDL line of products. The
Company has had no sales of such product line since before April 1, 1996.
Pursuant to the terms of such settlement, Telular will receive from ORA cash
payments totaling $1,500,000 over a two year period and 300,000 shares of ORA
Electronics' common stock and may receive additional shares of common stock on
February 1, 2000 if necessary to ensure that the total shares of such common
stock received by Telular have a market value of $1,500,000 as of such date.
Such settlement is governed by a Settlement Agreement and Mutual General Release
dated March 2, 1998 (the "Release") between the Company and Telular, which is an
exhibit to this report. The foregoing summary is qualified in its entirety by
the Release.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99 Settlement Agreement and Mutual General Release dated
March 2, 1998 between ORA Electronics, Inc. and Telular
Corporation.
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Pursuant to the requirement of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: March 3, 1998
ORA ELECTRONICS, INC.
By: /s/ Gershon N. Cooper
------------------------------------
Gershon N. Cooper
Chief Executive Officer and President
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EXHIBIT INDEX
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Exhibit No. Description Page Number
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99 Settlement Agreement and Mutual General 5
Release dated March 2, 1998 between
ORA Electronics, Inc. and Telular
Corporation.
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EXHIBIT 99
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
-----------------------------------------------
1. PARTIES. The parties ("Parties") to this Settlement Agreement
and Mutual General Release ("Agreement") are ORA Electronics, Inc., a
Delaware corporation and successor of Alliance Research Corporation
("ORA"), and Telular Corporation, a Delaware corporation ("Telular").
2. RECITALS. This Agreement is made with reference to the
following facts:
2.1 Certain controversies have arisen between Telular and ORA.
2.2 Such disputes include, but are not limited to, the claims,
demands and claims for relief set forth in the following civil
actions, collectively referred to at times in this Agreement as the
"Lawsuits," pending in the United States District Court for the
Central District of California ("District Court"):
2.2.1 ALLIANCE RESEARCH CORPORATION V. TELULAR CORPORATION,
including the counterclaims entitled TELULAR CORPORATION V.
ALLIANCE RESEARCH CORPORATION, pending as Case No. CV 94-1065-JSL.
(a) On February 2, 1996 the District Court entered
an order granting partial summary judgement in favor of
Telular and finding that the Cellular Data Link ("CDL")
marketed and sold by ORA infringed certain claims under
Telular's United States patent nos '517 and '997. The
District Court entered a permanent injunction against
further infringing activity, and its ruling was affirmed
on appeal.
(b) On January 16, 1998, the District Court entered
an amended order granting partial summary judgement in
favor of Telular and finding that the infringement by ORA
was willful, that the case was exceptional, that actual
damages should be trebled, and that Telular was entitled
to an award of reasonable attorneys' fees.
(c) Pursuant to the injunction entered by the
District Court, ORA has, among other things, ceased
infringing activity and turned over all infringing
inventory to Telular.
2.2.2 TELULAR CORPORATION V. ALLIANCE CORPORATION,
Case No. CV 97-1078-JSL.
2.3 It is the intention of the Parties to settle and dispose
of, fully and completely, any and all claims, demands, claims for
relief and causes of actions heretofore or hereafter arising out of,
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connected with or incidental to the dealings between the Parties
hereto prior to the effective date hereof, including, without
limitation on the generality of the foregoing, any and all claims,
demands and claims for relief reflected in or covered by the
Lawsuits.
3. CONSIDERATION: In consideration of the mutual general releases
contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties
agree as follows:
3.1 PAYMENT OF MONEY. ORA shall pay to Telular the sum of
$1,500,000 pursuant to the following payment schedule:
AMOUNT OF
PAYMENT DATE PAYMENT
------------ -------
Execution of Agreement $500,000
May 1, 1998 25,000
June 1, 1998 25,000
July 1, 1998 25,000
August 3, 1998 25,000
September 1, 1998 25,000
October 1, 1998 25,000
November 2, 1998 25,000
December 1, 1998 25,000
January 4, 1999 25,000
February 1, 1999 25,000
March 1, 1999 250,000
April 1, 1999 25,000
May 3, 1999 25,000
June 1, 1999 25,000
July 1, 1999 25,000
August 2, 1999 25,000
September 1, 1999 25,000
October 1, 1999 25,000
November 1, 1999 25,000
December 1, 1999 25,000
January 3, 2000 25,000
February 1, 2000 250,000
3.1.1 The $500,000 paid upon the execution and
delivery of this Agreement (the "Initial Payment") shall be
payable in cash, by certified or cashier's check, or by wire
transfer in immediately available funds. Each subsequent
payment (a "Payment") shall be made by electronic transfer from
an ORA bank account to a Telular bank account specified in
writing by Telular. In the event that any electronic transfer
of a Payment cannot be successfully executed for any reason,
ORA shall make such Payment in cash, by certified or cashier's
check, or by wire transfer in immediately available funds.
3.1.2 In order to secure ORA's obligations to make the
Payments hereunder, a second deed of trust, in the form
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attached as Exhibit "A" to this Agreement (the "Deed of
Trust"), will be recorded with the Los Angeles County
Recorders' Office encumbering real property owned by ORA on
which its headquarters are located in Chatsworth, California,
and more particularly described in the Deed of Trust. Telular
cannot exercise its rights under the Deed of Trust unless:
(a) ORA fails to make any Payment on the applicable
Payment Date (a "Payment Default");
(b) Telular delivers to ORA, by registered United
States mail, a written demand that ORA cure the Payment
Default ("Payment Demand") within fifteen days from the
date of delivery of the Payment Demand; and
(c) ORA fails to make the Payment by the close of
business on the fifteenth day following receipt of the
Payment Demand; however, if a Payment Default occurs and
Telular has on at least three prior occasions delivered a
Payment Demand following a Payment Default, then Telular
need not deliver a Payment Demand prior to exercising its
rights under the Deed of Trust.
3.2 DELIVERY OF SHARES OF STOCK. ORA shall issue to Telular
300,000 shares of ORA common stock, $.001 par value, pursuant to the
Stock Agreement attached as Exhibit "B" of this Agreement (the
"Stock Agreement"). Such shares shall be validly issued, fully paid
and non-assessable.
3.3 STIPULATION FOR JUDGEMENT.
3.3.1 ORA shall execute and deliver to Telular a
stipulation for the entry of judgement in the form attached as
Exhibit "C" to this Agreement (the "Stipulated Judgement").
3.3.2 The Stipulated Judgement shall be held by
Telular, and shall not be filed with any Court unless:
(a) A Payment Default occurs or ORA fails to perform
any other obligation on its part to be performed under
this Agreement or the Stock Agreement (collectively, a
"Default");
(b) Telular delivers to ORA, by registered United
States Mail, a written demand that ORA cure the Default (a
"Demand") within 15 days from the date of delivery of the
Demand; and
(c) ORA fails to cure the Default before the close
of business on the fifteenth day following receipt of the
Demand.
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3.4 DISMISSALS. Upon Telular's receipt of the Initial
Payment, the parties shall cause the Lawsuits to be dismissed with
prejudice as follows, and each party to this Agreement shall cause
to be prepared and filed such documents as are reasonably necessary
and required to effect such dismissals:
3.4.1 The lawsuit described in paragraph 2.2.1 shall
be dismissed with prejudice, except that all determinations of
the Court made prior to the date of this Agreement shall remain
in full force and effect and the District Court shall retain
jurisdiction to enforce the terms of this Agreement.
3.4.2 The lawsuit described in paragraph 2.2.2 shall
be dismissed with prejudice.
3.5 MUTUAL GENERAL RELEASES.
3.5.1 Except as to such rights or claims as may be
created by this Agreement and the rights enumerated in
paragraph 3.5.3, each Party hereby severally generally releases
and forever discharges the other Party, and its respective
agents, attorneys, employees (except as specifically excluded
by Paragraph 3.5.2 of this Agreement), spouses,
representatives, officers, directors, parent companies,
divisions, subsidiaries, affiliates, assigns, heirs, successors
in interest and shareholders, from any and all claims, demands,
claims for relief and causes of action heretofore or hereafter
arising out of, connected with or incidental to the dealings
between the Parties prior to the effective date hereof,
including, without limitation on the generality of the
foregoing, any and all claims and demands and claims for relief
reflected in or covered by the Lawsuits.
3.5.2 This Agreement, and the releases it contains, is
not and shall not be construed to be a settlement or release of
Telular's claims against Arthur Serrano and Andrew Holman under
the judgement rendered by the United States District Court for
the Central District of California in the action entitled
ARTHUR SERRANO AND ANDREW HOLMAN V. TELULAR CORPORATION
(including the counterclaims entitled TELULAR CORPORATION V.
ARTHUR SERRANO AND ANDREW HOLMAN), United States District Court
Case No. CV-94-1272-JSL.
3.5.3 This Agreement, and the releases it contains, is
not and shall not be construed to be a settlement or release of
Telular's rights under the permanent injunction entered by the
District Court against ORA on February 1, 1996 and reinstated
on June 17, 1997, which injunction shall remain in full force
and effect.
3.5.4 Each Party specifically waives the benefit of
the provisions of California Civil Code Sec. 1542 (and any
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similar statute in any other jurisdiction), which provides as
follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
Each Party acknowledges that Section 1542 and any equivalent provisions
in any other jurisdiction, if they exist, are designed to protect a party
from waiving claims which it does not know exist or may exist.
Nonetheless, each Party agrees that the waiver of Section 1542 and its
equivalents is a material portion of the releases intended by this
Agreement, and each Party, therefore, intends to waive all protection
provided by Section 1542 and its equivalents.
4. CONFIDENTIALITY. This Agreement and the settlement terms set
forth herein are confidential and are intended to remain confidential
following the execution and delivery of this Agreement and each Party
represents and covenants that it will not disclose the terms of this
Agreement or such settlement to any third party, except as necessary to
inform accountants and bankers of such Party's financial condition, and
as required by applicable securities laws and the regulations promulgated
thereunder, as determined in good faith by such Party's counsel;
provided, that any such disclosure is approved in advance by the other
Party, such approval not to be unreasonably withheld. Each Party agrees
that such disclosure will include a public filing by ORA of this
Agreement and a related description of the settlement terms set forth
herein on a Form 8-K.
5. REPRESENTATIONS AND WARRANTIES. Each Party represents,
warrants and agrees as follows:
5.1 Such Party has received independent legal advice from its
attorneys with respect to the advisability of making the settlement
provided for herein, with respect to the advisability of executing
this Agreement, and with respect to the meaning of California Civil
Code Section 1542.
5.2 Neither Party (nor any officer, agent, employee,
representative or attorneys of or for any Party) has made any
statement or representation to the other Party regarding any fact
relied upon in entering into this Agreement, and each Party does not
rely upon any statement, representation or promise of the other
Party (or of any officer, agent, employee, representative or
attorney for the other Party) in executing this Agreement, or in
making the settlement provided for herein, except as expressly
stated in this Agreement.
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5.3 Such Party has made such investigation of the facts
pertaining to this settlement and this Agreement and of all the
matters pertaining thereto as it deems necessary.
5.4 Such Party or a responsible officer thereof has read this
Agreement and understands the contents hereof. Each of the officers
executing this Agreement on behalf of their respective corporations
is empowered to do so and thereby binds his respective corporation.
5.5 Such Party has not heretofore assigned, transferred or
granted, or purported to assign, transfer or grant, any of the
claims, demands and cause or causes of action disposed of by this
Agreement.
5.6 Each term of this Agreement is contractual and not merely
a recital.
5.7 Such Party is aware that it may hereafter discover claims
or facts in addition to or different from those it now knows or
believes to be true with respect to the matters related herein.
Nevertheless, it is the intention of the Parties to fully, finally
and forever settle and release all such matters, and all claims
relative thereto, which do now exist, may exist or heretofore have
existed between them. In furtherance of such intention, the
releases given herein shall be and remain in effect as full and
complete mutual releases of all such matters, notwithstanding the
discovery or existence of any additional or different claims or
facts relative thereto.
6. MISCELLANEOUS
6.1 This Agreement shall be deemed to have been executed and
delivered within the State of California, and the rights and
obligations of the parties hereunder shall be construed and enforced
in accordance with and governed by the laws of the State of
California.
6.2 All notices, requests and other communications required or
permitted to be given hereunder shall be in writing and shall be
deemed given (a) upon receipt, if given by personal delivery,
(b) upon confirmation of delivery, if given by electronic facsimile,
or (c) upon the next business day following deposit, if deposited
with an overnight courier for overnight delivery, addressed as
follows:
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If to ORA: ORA Electronics, Inc.
9410 Owensmouth Avenue
Chatsworth, California 91311
Attn: Chief Financial Officer
Fax: (818) 718-8626
If to Telular: Telular Corporation
647 North Lakeview Parkway
Vernon Hills, Illinois 60061
Attn: Chief Executive Officer
Fax: (847) 247-1242
With a copy to: Marvin N. Benn, Esquire
Hamman & Benn
10 South LaSalle Street
Suite 3300
Chicago, Illinois 60603-1002
Either party may change its address or fax number by providing notice of
such change to the other party in accordance herewith.
6.3 This Agreement represents a settlement and compromise of
disputed claims, and nothing stated herein is intended or shall be
construed as an addition or averment of liability or fault by or
concerning any party.
6.4 The titles of the sections of this Agreement are for
convenience of reference only and are not to be considered in
construing this Agreement. The exhibits to this Agreement are
incorporated herein as part of this Agreement.
6.5 This Agreement is the entire agreement among the parties
with respect to the subject matter hereof and it replaces all prior
and contemporaneous oral and/or written agreements and discussions.
This Agreement may be amended only by an agreement in writing.
6.6 This Agreement is binding upon and shall inure to the
benefit of the Parties and/or their respective agents, affiliates,
subsidiaries, officers, directors, employees, attorneys,
representatives, assigns, heirs, predecessors-in-interest and
successors-in-interest.
6.7 Each party has cooperated in the drafting and preparation
of this Agreement. Hence, any construction to be made of this
Agreement shall not be construed against any party.
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6.8 Each of the Parties shall promptly execute and deliver or
file such additional documents and shall appear at and cooperate in
such proceedings as may be necessary or expedient to effectuate the
terms and provisions of this Agreement.
6.9 This Agreement may be executed in counterparts, and which
each Party has signed and delivered at least one such counterpart,
each counterpart shall be deemed an original and shall be binding
upon and effective as to all parties as of March 2, 1998.
ORA ELECTRONICS, INC.
By /s/ Gershon N. Cooper
---------------------------------
Gershon N. Cooper, President
TELULAR CORPORATION
By /s/ Kenneth E. Millard
---------------------------------
Kenneth E. Millard, Chief
Executive Officer
Approved as to form:
SHEPPARD, MULLIN, RICHTER & HAMPTON
By /s/ James F. McShane
---------------------------------
James F. McShane
Attorneys for
ORA Electronics, Inc.
HAMMAN & BENN
By /s/ Marvin Benn
---------------------------------
Marvin Benn
Attorneys for
Telular Corporation
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EXHIBIT A TO EXHIBIT 99
Sheppard, Mullin, Richter & Hampton LLP
333 S. Hope Street, 48th floor
Los Angeles, California 90071
Attn: Jon W. Newby, Esq.
and when recorded mail to
Mr. John Burris
Chief Financial Officer
Ora Electronics, Inc.
9410 Owensmouth Avenue
Chatsworth, Ca. 91313
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Space above this line for recorder's use
SHORT FORM DEED OF TRUST AND
ASSIGNMENT OF RENTS (CORPORATION)
______________________ ALL Title No.__________________
______________________ PIN Escrow No._________________
This Deed of Trust made this 2nd day of March, 1998, between ORA
ELECTRONICS, INC., a corporation organized under the State of Delaware,
herein called Trustor, whose address is 9410 Owensmouth Avenue, Chatsworth,
California 91313, Continental Lawyers Title Company, a California
corporation, herein called TRUSTEE, and TELULAR CORPORATION, a Delaware
corporation, herein called Beneficiary,
Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO
TRUSTEE IN TRUST, WITH POWER OF SALE, that property in Los Angeles County,
California, described as:
SEE EXHIBIT A ATTACHED HERETO AND INCORPORATED BY REFERENCE HEREIN.
NOTICE: THIS DEED OF TRUST IS JUNIOR AND SUBORDINATE TO THAT CERTAIN DEED
OF TRUST, FINANCING STATEMENT AND SECURITY AGREEMENT WITH
ASSIGNMENT OF RENTS DATED FEBRUARY 1, 1989, AS RECORDED THAT SAME
DAY IN THE OFFICIAL RECORDS OF THE LOS ANGELES COUNTY RECORDER AS
INSTRUMENT NO. 89-174077.
TOGETHER WITH the rents, issues and profits thereof, SUBJECT, HOWEVER, to
the right, power and authority given to and conferred upon Beneficiary by
paragraph (10) of the provisions incorporated herein by reference to
collect and apply such rents, issues and profits. For the Purpose of
Securing: 1. Performance of each agreement of Trustor incorporated by
reference or contained herein. 2. Payment of the indebtedness set forth in
Section 3.1 of that certain Settlement Agreement and Mutual General Release
between Trustor and Beneficiary of even date herewith, and any extension of
renewal thereof, in the principal sum of $1,000,000.00 executed by Trustor
in favor of Beneficiary or order. 3. Payment of such further sums as the
then record owner of said property may borrow from Beneficiary, when
evidenced by another note (or notes) reciting it is so secured.
Page 13 of 34
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To Protect the Security of This Deed of Trust, Trustor Agrees: By the
execution and delivery of this Deed of Trust and the note secured hereby,
that provisions (1) to (14), inclusive, of the fictitious deed of trust
recorded in Santa Barbara County and Sonoma County October 18, 1961, and in
all other counties October 23, 1961, in the book and at the page of
Official Records in the office of the county recorder of the county where
said property is located, noted below opposite the name of such county,
viz:
COUNTY BOOK PAGE COUNTY BOOK PAGE
Alameda 435 684 Placer 895 301
Alpine 1 250 Plumas 151 5
Amador 104 348 Riverside 3005 523
Butte 1145 1 Sacramento 4331 62
Calaveras 145 152 San Benito 271 383
Colusa 296 617 San Bernardino 5567 61
Contra Costa 3978 47 San Francisco A332 905
Del Norte 78 414 San Joaquin 2470 311
El Dorado 568 456 San Luis Obispo 1151 12
Fresno 4626 572 San Mateo 4078 420
Glenn 422 184 Santa Barbara 1878 860
Humboldt 657 527 Santa Clara 5336 341
Imperial 1091 501 Santa Cruz 1431 494
Inyo 147 598 Shasta 684 528
Kern 3427 60 San Diego Series 2
Kings 792 833 Book 1961,
Lake 362 39 Page 183887
Lassen 171 471 Sierra 29 335
Los Angeles 12055 899 Siskiyou 468 181
Madera 810 170 Solano 1105 182
Marin 1508 339 Sonoma 1851 689
Mariposa 77 292 Stanislaus 1715 456
Mendocino 579 530 Sutter 572 297
Merced 1547 538 Tehama 401 289
Modoc 184 851 Trinity 93 366
Mono 52 429 Tulare 2294 275
Monterey 2194 538 Tuolumne 135 47
Napa 639 86 Ventura 2062 386
Nevada 305 320 Yolo 653 245
Orange 5889 611 Yuba 334 486
(which provisions, identical in all counties, are printed on the reverse
hereof) hereby are adopted and incorporated herein and made a part hereof
as fully as though set forth herein at length; that he will observe and
perform said provisions; and that the references to property, obligations
and parties in said provisions shall be construed to refer to the property,
obligations, and parties set forth in this Deed of Trust.
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The undersigned Trustor requests that a copy of any Notice of Default
and of any Notice of Sale hereunder be mailed to him at his address
hereinbefore set forth.
ORA ELECTRONICS, INC., a
Delaware corporation
State of California )
) ss.
County of Los Angeles ) By: /s/ Gershon N. Cooper
----------------------
Its: President
On 3/02/98 before me, Krasi Ringler, ---------------------
------- -------------
Notary Public, personally appeared
Gershon Cooper, personally known to me
- --------------
(or proved to me on the basis of
satisfactory evidence) to be the
person(s) whose name(s) is/are
subscribed to the within instrument and [seal]
acknowledged to me that he/she/they
executed the same in his/her/their
authorized capacity(ies), and that by
his/her/their signature(s) on the
instrument the person(s), or the entity
upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Krasi Ringler
----------------------
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EXHIBIT A
LEGAL DESCRIPTION
-----------------
THOSE PORTIONS OF LOTS 5, 11 AND 13 OF TRACT NO. 33150, IN THE CITY OF
LOS ANGELES, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS SHOWN ON
MAP RECORDED IN BOOK 910, PAGES 63-65 INCLUSIVE OF MAPS, IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT IN THE WESTERLY LINE OF SAID LOT 5, DISTANT NORTHERLY,
THEREON 209.01 FEET FROM THE SOUTHWESTERLY CORNER THEREOF; THENCE SOUTH
89(degree) 59' 39" EAST 350.00 FEET; THENCE NORTH 00(degree) 00' 21" EAST
348.00 FEET; THENCE NORTH 89(degree) 59' 39" WEST 355.91 FEET TO A POINT IN
THE WESTERLY LINE OF SAID LOT 11; DISTANT SOUTHERLY, THEREON, 70.50 FEET
FROM THE NORTHWEST CORNER THEREOF; THENCE SOUTHERLY ALONG THE WESTERLY LINE
OF LAST SAID LOT 128.14 FEET; THENCE CONTINUING SOUTHERLY ALONG LAST SAID
WESTERLY LINE AND ALONG THE WESTERLY LINE OF SAID LOT 5, A DISTANCE OF
220.04 FEET TO THE POINT OF BEGINNING.
EXCEPT FROM THAT PORTION OF SAID LAND LYING WESTERLY OF THE WESTERLY LINE
OF LOT 5 OF TRACT NO. 22917, AS PER MAP RECORDED IN BOOK 638, PAGES 63 TO
66 INCLUSIVE OF MAPS, ALL OIL, ASPHALTUM, PETROLEUM, NATURAL GAS, AND OTHER
HYDROCARBONS AND OTHER VALUABLE MINERAL SUBSTANCES AND PRODUCTS AND ALL
OTHER MINERALS, WHETHER OR NOT OF THE SAME CHARACTER HEREINBEFORE DESCRIBED
GENERALLY IN, UNDER OR UPON SAID LAND, TOGETHER WITH THE RIGHT TO ENTER IN
AND UPON THE WHOLE OF THE HEREINABOVE DESCRIBED REAL PROPERTY AND EVERY
PART THEREOF AND THEREON, THEREIN AND THEREUNDER, TO MINE, EXCAVATE, BORE,
DRILL AND SINK AND OTHERWISE COLLECT AND DEVELOP SAID OILS, PETROLEUM,
ASPHALTUM, NATURAL GAS OR OTHER HYDROCARBONS OR OTHER VALUABLE MINERAL
SUBSTANCES AND PRODUCTS OR ANY OTHER MINERAL OR MINERALS (WHETHER OF THE
SAME CHARACTER HEREINABOVE DESCRIBED GENERALLY OR NOT) AND ALSO TO REMOVE
AND SELL SAID OILS, ASPHALTUM, NATURAL GAS OR OTHER HYDROCARBONS OR OTHER
VALUABLE MINERAL SUBSTANCES AND PRODUCTS OR OTHER MINERAL OR MINERALS, WITH
THE FURTHER RIGHT TO CONSTRUCT, MAINTAIN AND USE SUCH BUILDINGS, MACHINERY
AND FIXTURES AS MAY BE NEEDED OR CONVENIENT IN THE CARRYING ON OF SAID
BUSINESS AND MINING OPERATION AND TO CONSTRUCT AND MAINTAIN OVER, ALONG AND
ACROSS SAID REAL PROPERTY SUCH TELEPHONE LINES, PIPE LINES, DITCHES AND
HIGHWAYS AS MAY BE NEEDED OR CONVENIENT, AND ALSO, TOGETHER WITH THE RIGHT
OF WAY OVER AND ALONG SAID REAL PROPERTY FOR THE PASSAGE AND CONVEYANCE OF
SAID SECOND PARTY OR ANY OF THEM, THEIR AGENTS AND EMPLOYEES, TOGETHER WITH
SUPPLIES AND MACHINERY FOR THE PURPOSES OF COMMENCING, CARRYING AND
MAINTAINING SAID BUSINESS AND MINING OPERATION, AS GRANTED TO PORTER
SESNON, BARBARA SESNON CARTAN, WILLIAM T. SESNON, JR., TO EACH AND
UNDIVIDED ONE-THIRD INTEREST, AS TENANTS IN COMMON, AS THE SEPARATE
PROPERTY, OF EACH, BY DEED RECORDED DECEMBER 14, 1951 IN BOOK 37855, PAGE 1,
OFFICIAL RECORDS AND RECORDED NOVEMBER 3, 1952 IN BOOK 40220, PAGE 377,
OFFICIAL RECORDS BY DEED DATED SEPTEMBER 2,1959, EXECUTED BY PORTER SESNON,
BARBARA SESNON CARTAN AND WILLIAM T. SESNON, JR., RECORDED SEPTEMBER 14,
1959 IN BOOK D600, PAGE 923, OFFICIAL RECORDS, AS INSTRUMENT NO. 3561, ALL
RIGHTS TO ENTER UPON THE SURFACE OF SAID LAND AND THE SUBSURFACE LYING
Page 1 of 2
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ABOVE A DEPTH OF 500 FEET BELOW THE SURFACE THEREOF WERE QUITCLAIMED TO THE
THEN RECORD OWNER.
ALSO EXCEPT FROM THAT PORTION OF SAID LAND WITHIN LOTS 5 AND 7 OF TRACT
22917, AS PER MAP RECORDED IN BOOK 638, PAGES 63 TO 66 INCLUSIVE OF MAPS,
ALL OIL, GAS, WATER OR MINERAL RIGHTS NOW VESTED IN THE CITY OF LOS
ANGELES, WITHOUT HOWEVER, THE RIGHT TO USE THE SURFACE OF SAID LAND FOR THE
EXTRACTION OF SAID OIL, GAS, WATER OR MINERALS, AS EXCEPTED AND RESERVED BY
THE CITY OF LOS ANGELES IN DEED RECORDED MAY 6,1968 IN BOOK D3993, PAGE
458, OFFICIAL RECORDS AND IN THE DEED RECORDED JULY 13,1978 AS INSTRUMENT
NO. 78-762577, OFFICIAL RECORDS.
Page 2 of 2
Page 17 of 34
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EXHIBIT B TO EXHIBIT 99
STOCK AGREEMENT
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THIS STOCK AGREEMENT (the "Agreement") is made as of March 2,
1998 among ORA ELECTRONICS, INC., a Delaware corporation and successor to
Alliance Research Corporation ("ORA"), and TELULAR CORPORATION, a
Delaware corporation ("Telular"), with reference to the following facts:
A. ORA and Telular are parties to that certain Settlement
Agreement and Mutual General Release of even date herewith (the
"Release").
B. The execution and delivery of this Agreement is a condition to
the execution and delivery of the Release.
NOW, THEREFORE, IN CONSIDERATION OF the above recitals and the
covenants and promises hereinafter set forth, the parties hereto hereby
agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the following respective meanings:
"Additional Shares" shall mean any shares of Common Stock
issued pursuant to Section 5 hereof.
"Board" shall mean ORA's Board of Directors.
"Commission" shall mean the Securities and Exchange
Commission.
"Common Stock" shall mean ORA's common stock, $.001 par
value.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated
thereunder.
"Fair Market Value" shall mean for any given day (i) the
average closing price of a share of Common Stock on the
previous 20 days on which a share of Common Stock was traded as
reported on the principal securities exchange on which such
shares of Common Stock are then listed or admitted to trading,
or as reported on the National Association of Securities
Dealers Automated Quotation ("Nasdaq") National Market System,
or (ii) if not so reported, the average of the average of the
bid and ask prices on the previous 20 days on which a share of
Common Stock was traded as reported on the Nasdaq System
published in the Wall Street Journal or (iii) if no such
quotations are available, as determined by an independent
appraiser selected by the Board in good faith in its absolute
discretion.
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"Initial Shares" shall mean the 300,000 shares of Common
Stock issued by ORA to Telular pursuant to Section 3.2 of the
Release.
"NASD" means the National Association of Securities
Dealers, Inc.
"Prospectus" means the prospectus included in any
Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering
of any portion of the Registrable Securities covered by the
Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such
prospectus.
"Registrable Securities" shall mean the Shares; provided,
that "Registrable Securities" shall not mean any Shares
(a) disposed of pursuant to an effective registration
statement under the Securities Act, (b) that have leased to be
outstanding or (c) that may be sold without registration
pursuant to Rule 144 promulgated by the Commission under the
Securities Act.
"Registration Statement" means any registration statement
of the Company which covers Registrable Securities pursuant to
the provisions of this Agreement, including the Prospectus,
amendments and supplements to such Registration Statement,
including post-effective amendments, and all exhibits and all
material incorporated by reference in such Registration
Statement.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Sell," as to any Shares, shall mean to sell, or in any
other way directly or indirectly transfer, assign, distribute,
pledge, hypothecate or otherwise dispose of, either voluntarily
or involuntarily, including, without limitation, pursuant to
bankruptcy or similar proceedings.
"Shares" shall mean the Initial Shares and the Additional
Shares, if any, issued by ORA to Telular pursuant to the
Release and this Agreement, plus any stock dividend, stock
split or other distribution on any such shares as well as any
new or additional securities substituted for any such shares.
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2. LIMITATIONS ON SALES. Until February 1, 2000, Telular
hereby agrees that it shall not Sell, or contract or otherwise agree to
Sell, any Shares except in accordance with the terms of Section 3. On
and after February 1, 2000, the restrictions of Section 3 shall not
apply.
3. RIGHT OF FIRST REFUSAL. Telular may sell Shares pursuant
to a bona fide third party written offer to purchase Shares (a "Bona Fide
Offer") or in an open market transaction through a broker or in a
registered transaction pursuant to Section 7 below (a "Market
Transaction") in compliance with the following procedures:
(a) When Telular proposes to Sell any Shares
pursuant to a Bona Fide Offer or in a Market Transaction, it
shall give written notice thereof to ORA. Such notice shall
specify the number of Shares it intends to Sell, and, in the
case of a Bona Fide Offer, the intended purchaser of such
shares and the price per share and other terms of such sale.
For a period of 10 days after receipt of such notice, ORA shall
have the right and option to purchase all of such Shares at, in
the case of a Bona Fide Offer, the same price and terms of the
written offer to purchase or, in the case of a Market
Transaction, at the Fair Market Value on the date of receipt of
such notice. Exercise of such option shall be made by
delivering to Telular a written notice specifying the number of
shares ORA has elected to purchase within such 10-day period;
(b) Sales of Shares to ORA under the terms hereof
shall be made at the offices of ORA within 10 days after the
expiration of the aforementioned offering period. Delivery of
certificates or other instruments evidencing such Shares duly
endorsed for transfer to ORA shall be made on such date against
payment of the purchase price therefor in cash or by certified
or cashiers' check; and
(c) If all of the Shares offered pursuant to
Section 3(a) above are not purchased by ORA, Telular may sell
the Shares so offered at any time within 120 days after the
expiration of the period set forth in Section 3(a) herein at
the price, on the terms and to the purchaser specified in the
original written notice of the Bona Fide Offer or in a Market
Transaction, as applicable. If the Shares offered are not sold
by then, the right of Telular to Sell such Shares shall expire
and the obligations of this Section 3 shall be reinstated.
4. REPURCHASE OF SHARES.
4.1 REPURCHASE RIGHT. ORA shall have the right and
option, at any time after the date hereof, to require Telular to sell
some or all of the Shares then held by Telular to ORA at a purchase
price equal to the greater of $5.00 per share (subject to equitable
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adjustment in the case of stock splits, stock combinations,
recapitalizations and similar events) and Fair Market Value. ORA shall
exercise its right to repurchase Shares hereunder by delivering written
notice of its election to Telular.
4.2 PAYMENT AND DELIVERY. If ORA elects to purchase
Shares hereunder, then the purchase price will be paid in cash, by
cashier's or certified check, or by wire transfer of immediately
available funds against delivery by Telular of a certificate or
certificates representing the Shares being purchased, duly endorsed in
blank, granting ORA good and marketable title thereto, free and clear of
any liens, encumbrances or adverse claims.
5. ADDITIONAL SHARES. If the average of the Fair Market
Value of the Common Stock on February 1, 2000 is less than $5.00 and
subject to Telular's compliance with Section 6 below, ORA shall be
obligated to issue, for no additional consideration, to Telular such
number of additional shares of Common Stock (i.e., "Additional Shares")
as determined by the following formula:
($5.00 X Number of Initial Shares) - Aggregate FMV of Initial Shares
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FMV of a share of Common Stock
"Number of Initial Shares" shall be the number of Initial Shares held by
Telular on February 1, 2000. Such Additional Shares shall be validly
issued, fully paid and non-assessable as of the date of their issuance in
accordance with the terms hereof, and shall receive the benefit of, and
be subject to, all of the rights and restrictions set forth in this
Agreement. In the event of any stock dividend, stock split or other
distribution of Common Stock or a recapitalization, merger, or
consolidation of ORA, or similar event, the foregoing provisions shall be
equitably adjusted in order to preserve their economic effect.
6. STANDSTILL. Until February 1, 2000, Telular shall not,
directly or indirectly, and shall use its best efforts to cause its
directors, officers, employees, representatives, affiliates or agents not
to, purchase any equity securities of ORA or enter into any agreement or
option to purchase, Sell (including short sales) or otherwise effect such
securities or the market therefore, without the prior approval of the
Board, except for a Sale of the Shares subject to, and made in compliance
with, Section 3 above.
7. REGISTRATION RIGHTS.
7.1 DEMAND REGISTRATIONS. ORA shall, as promptly as
practicable, but in no event later than 60 days after the issuance of the
Initial Shares and the Additional Shares (if any), as applicable, file
and shall use its reasonable best efforts to cause to be declared
effective as soon as possible thereafter a Registration Statement on
Form S-3 under the Securities Act for the Initial Shares and a second
such Registration Statement for the Additional Shares covering the sale
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of such Shares by Telular as long as they constitute Registrable
Securities in accordance with the intended method or methods of
distribution as specified in writing by Telular. ORA agrees to use its
reasonable best efforts to keep the Registration Statements continuously
effective and usable for resale of Registrable Securities for a period of
two years from the date of the issuance of the Initial Shares or
Additional Shares, as applicable, or such shorter period which will
terminate when all the Registrable Securities covered by either such
Registration Statement have been sold pursuant to such Registration
Statement. At its option, ORA may choose to amend the Registration
Statement for the Initial Shares to register the Additional Shares (if
any). ORA shall not be obligated to file more than the two Registration
Statements hereunder.
7.2 REGISTRATION EXPENSES. ORA shall pay its own general
legal and accounting fees and all of its printing fees and other costs in
connection with the Registration Statements incurred hereunder. Telular
shall pay the expenses of its own counsel and all underwriting discounts,
commissions and expenses of underwriters or brokers incurred in
connection with the offering and sale of the Shares.
7.3 REGISTRATION PROCEDURES. In connection with any
registration of Registrable Securities under the Securities Act pursuant
to Section 7 hereof, ORA will use its best efforts to effect such
registration, and pursuant thereto ORA will as expeditiously as possible:
(a) prepare and file with the Commission a
Registration Statement with respect to such securities;
(b) prepare and file with the Commission such
amendments and supplements to such Registration Statement and
the Prospectus used in connection therewith as may be necessary
to keep such Registration Statement effective and the
Prospectus current and to comply with the provisions of the
Securities Act with respect to the sale of all securities
covered by such Registration Statement;
(c) furnish to Telular such numbers of copies of
preliminary prospectuses and Prospectuses and each supplement
or amendment thereto and such other documents as it may
reasonably request in order to facilitate the sale or other
disposition of the securities owned by Telular in conformity
with (i) the requirements of the Securities Act and
(ii) Telular's proposed method of distribution;
(d) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and
make available to its security holders as soon as reasonably
practicable, but not later than 16 months after the effective
date of the registration statement, an earnings statement
covering a period of at least 12 months beginning after the
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effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the
Securities Act; and
(e) notify Telular at any time when a Prospectus
relating to the registration is required to be delivered under
the Securities Act, upon discovery that, or upon the happening
of any event as a result of which, the Prospectus included in
such Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made, at the request of
Telular promptly prepare and furnish to Telular a reasonable
number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made.
7.4 OBLIGATIONS OF TELULAR. In connection with either
Registration Statements referred to in Section 7.1(a), Telular shall:
(a) OTHER DOCUMENTS AND INFORMATION. Complete,
execute, acknowledge and/or deliver such questionnaires and
other documents, certificates and instruments as reasonably
required by ORA or are otherwise necessary in connection with
the registration and offering. Telular shall promptly provide
to ORA such information concerning Telular, its ownership of
ORA securities, the intended method of distribution and such
other information as may be required by applicable law or
regulation or as may be reasonably requested by ORA.
(b) CESSATION OF OFFERING. Upon receipt of any
notice from ORA with respect to any event of the kind described
in Section 7.3(e) or Section 7.5, Telular shall immediately
discontinue the disposition of the Shares pursuant to the
Registration Statement covering such Shares until Telular's
receipt of the copies of the supplement or amended Prospectus
contemplated by Sections 7.3(e) and 7.5, and, if so directed by
ORA, Telular shall deliver to ORA all copies of the Prospectus
in Telular's possession at the time of receipt of such notice.
7.5 OTHER TRANSACTIONS. ORA shall not be obligated to
file any amendment or supplement to any Registration Statement hereunder,
and may suspend Telular's right to make sales pursuant to any such
Registration Statement, at any time when ORA, in the good faith judgment
of the Board, reasonably believes that the filing thereof at the time
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required, or the offering of securities pursuant thereto, would materially
and adversely affect a pending or proposal material acquisition, merger,
recapitalization, consolidation, securities offering, reorganization or
similar transaction, or negotiations, discussions or pending proposals
related thereto. ORA shall notify Telular if any of the events described in
Section 7.3(e) or in this Section 7.5 (herein a "Black-Out-Event") are
applicable, in which case Telular shall be prohibited from (x) disclosing
to any person or entity the existence of the Black-Out-Event or any of the
information related thereto, and (y) during the pendency of a Black-Out-
Event, trading the Shares held by any of them until (I) receipt by them of
the supplemental amended Prospectus contemplated by Section 7.3(e) hereof
or (II) they are advised in writing by ORA that the use of the applicable
Prospectus may be resumed, and they have received copies of any additional
or supplemented filings that are incorporated or deemed to be incorporated
by reference in such Prospectus. ORA shall use its reasonable efforts to
ensure that the use of the Prospectus may be resumed as soon as practical.
No Black-Out-Event shall exceed 45 days and there shall be no more than two
Black-Out-Events in any twelve month period. This provision shall not be
enforceable after February 1, 2000, if no Additional Shares are issued, and
February 1, 2002, if Additional Shares are issued.
7.6 INDEMNIFICATION.
(a) INDEMNIFICATION BY ORA.
(i) ORA agrees to indemnify and hold harmless
Telular, its officers, directors, employees and agents and
each person who controls Telular within the meaning of
either Section 15 of the Securities Act or Section 20 of
the Exchange Act and each other person who participates as
an underwriter in the offering or sale of Registrable
Securities (each such person being sometimes hereinafter
referred to as an "Indemnified Holder") from and against
all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation and legal
expenses) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus or
in any amendment or supplement thereto, or arising out of
or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which made, not misleading, except
insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any such untrue
statement or omission or allegation thereof based upon
information furnished in writing to ORA by Telular
expressly for use therein; provided, further, that ORA
shall not be liable in any such case to the extent that
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any such loss, claim, damage, liability or expense arises
out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in
any preliminary prospectus if (i) Telular failed to send
or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale of
Registrable Securities and (ii) the Prospectus would have
corrected such untrue statement or omission; and provided,
further, that ORA shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged
omission in the Prospectus, if such untrue statement or
alleged untrue statement, omission or alleged omission is
corrected in an amendment or supplement to the Prospectus
and if, having previously been furnished by or on behalf
of ORA with copies of the Prospectus as so amended or
supplemented, Telular thereafter fails to deliver such
Prospectus as so amended or supplemented, prior to or
concurrently with the sale of a Registrable Security to
the person asserting such loss, claim, damage, liability
or expense who purchased such Registrable Security which
is the subject thereof from such holder.
(ii) If any action or proceeding (including any
governmental investigation or inquiry) shall be brought or
asserted against an Indemnified Holder in respect of which
indemnity may be sought from ORA, such Indemnified Holder
shall promptly notify ORA in writing, and ORA shall assume
the defense thereof, including the employment of counsel
satisfactory to such Indemnified Holder and the payment of
all expenses. Such Indemnified Holder shall have the
right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and
expenses of such counsel shall be the expense of such
Indemnified Holder unless (i) ORA has agreed to pay such
fees and expenses or (ii) ORA shall have failed to assume
the defense of such action or proceeding or (iii) the
named parties to any such action or proceeding (including
any impleaded parties) include both such Indemnified
Holder and ORA, and such Indemnified Holder shall have
been advised by counsel that there may be one or more
legal defenses available to such Indemnified Holder which
are different from or additional to those available to ORA
(in which case, if such Indemnified Holder notifies ORA in
writing that it elects to employ separate counsel at the
expense of ORA, ORA shall not have the right to assume the
defense of such action or proceeding on behalf of such
Indemnified Holder, it being understood, however, that ORA
shall not, in connection with any one such action or
proceeding or separate but substantially similar or
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related actions or proceedings in the same jurisdiction
arising out of the same general allegations or
circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at
any time for such Indemnified Holder and any other
Indemnified Holders, which firm shall be designated in
writing by such Indemnified Holders). ORA shall not be
liable for any settlement of any such action or proceeding
effected without its written consent, but if settled with
its written consent, or if there be a final judgment for
the plaintiff in any such action or proceeding, ORA agrees
to indemnify and hold harmless such Indemnified Holders
from and against any loss or liability by reason of such
settlement or judgment, except as limited above.
(b) INDEMNIFICATION BY TELULAR. Telular agrees to
indemnify and hold harmless each person identified in
clauses (i)-(iii) of Section 11(a) of the Securities Act, ORA,
its directors and officers, the underwriters and each person,
if any, who controls ORA within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the foregoing indemnity from ORA to
such holder, but only with respect to information relating to
such holder furnished in writing by such holder expressly for
use in any Registration Statement or Prospectus, or any
amendment or supplement thereto, or any preliminary prospectus.
In case any action or proceeding shall be brought against ORA
or its directors or officers or any such controlling person, in
respect of which indemnity may be sought against Telular,
Telular shall have the rights and duties given ORA and ORA or
its directors or officers or such controlling person shall have
the rights and duties given to each holder by the preceding
paragraph. ORA shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the
distribution, to the same extent as provided above with respect
to information so furnished in writing by such persons
specifically for inclusion in any Prospectus or Registration
Statement, or any amendment or supplement thereto, or any
preliminary prospectus.
(c) CONTRIBUTION.
(i) If the indemnification provided for in this
Section 7.6 is unavailable to an indemnified party under
Section 7.6(a) or Section 7.6(b) hereof (other than by
reason of exceptions provided in those Sections) in
respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each applicable
indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or
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payable by such indemnified party as a result of such
losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault
of ORA on the one hand and of the Indemnified Holder on
the other in connection with the statements or omissions
which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of ORA on
the one hand and of the Indemnified Holder on the other
shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state
a material fact relates to information supplied by ORA or
by the Indemnified Holder and the parties' relative
intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred
to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of
Section 7.6(a), any legal or other fees or expenses
reasonably incurred by such party in connection with
investigating or defending any action or claim.
(ii) ORA and Telular agree that it would not be
just and equitable if contribution pursuant to this
Section 7.6(c) were determined by pro rata allocation or
by any other method of allocation which does not take
account of the equitable considerations referred to in the
immediately preceding paragraph. No person guilty of
fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
8. INVESTMENT REPRESENTATION; LEGEND.
8.1 INVESTMENT REPRESENTATIONS.
(a) Telular represents that it is purchasing the
Shares solely for its own account and not as nominee or agent
for any other person and not with a view to, or for offer or
sale in connection with, any distribution thereof (within the
meaning of the Securities Act) that would be in violation of
the securities laws of the United States of America, any state
thereof, or any foreign jurisdiction without prejudice,
however, to its right at all times to sell or otherwise dispose
of all or any part of the Shares under a registration under the
Securities Act or under an exemption from such registration
available under such Act.
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(b) Telular further represents that it is an
"accredited investor" within the meaning of Rule 501(a)
promulgated by the Commission under the Securities Act; that it
is knowledgeable, sophisticated and experienced in business and
financial matters; that it has previously invested in
securities similar to the Shares and fully understands the
limitations on transfer described herein; that it is able to
bear the economic risk of its investment in the Shares and is
presently able to afford the complete loss of such investment;
and that it has reviewed ORA's Commission filings pursuant to
the Exchange Act.
(c) Telular also understands that ORA will rely upon
the accuracy and truth of the foregoing representations and
Telular hereby consents to such reliance. Telular agrees to
deliver certification as to the continued accuracy of the
foregoing representations in connection with the issuance of
Additional Shares, if any, as a condition to such issuance.
8.2 LEGEND. All certificates representing any of the
Shares shall be subject to appropriate stop transfer instructions and
shall have endorsed on the face thereof a legend substantially as
follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THEY MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND
LAWS. ORA MAY REQUIRE AN OPINION OF COUNSEL, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO IT, AS A CONDITION TO
TRANSFER OF ANY SUCH SECURITIES PURSUANT THERETO. THE
SECURITIES ARE ALSO SUBJECT TO RESTRICTIONS ON TRANSFER,
INCLUDING ANY PLEDGE OR HYPOTHECATION, WHICH ARE SET FORTH
IN A STOCK AGREEMENT. A COPY OF SUCH AGREEMENT IS ON
FILE AND MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE
CORPORATION."
9. GENERAL PROVISIONS.
9.1 NOTICE. All notices, requests and other
communications required or permitted to be given hereunder shall be in
writing and shall be deemed given (a) upon receipt, if given by personal
delivery, (b) upon confirmation of delivery, if given by electronic
facsimile, or (c) upon the next business day following deposit, if
deposited with an overnight courier for overnight delivery, addressed as
follows:
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If to ORA: ORA Electronics, Inc.
9410 Owensmouth Avenue
Chatsworth, California 91311
Attn: Chief Financial Officer
Fax: (818) 718-8626
With a copy to: Sheppard, Mullin, Richter & Hampton LLP
333 South Hope Street
Los Angeles, CA 90071
Attn: Jon W. Newby, Esquire
Fax: (213) 620-1398
If to Telular: Telular Corporation
647 North Lakeview Parkway
Vernon Hills, Illinois 60061
Attn: Chief Executive Officer
Fax: (847) 247-1242
With a copy to: Marvin N. Benn, Esquire
Hamman & Benn
10 S. La Salle Street, Suite 3300
Chicago, IL 60603-1002
Fax: (312) 772-7762
Either party may change its address or fax number by providing notice of
such change to the other party in accordance herewith.
9.2 MODIFICATION, AMENDMENT, WAIVER. No modification,
amendment or waiver of any provision of this Agreement shall be effective
unless approved in writing by each of the parties hereto. Any failure at
any time to enforce any of the provisions of this Agreement will in no
way be construed as a waiver of such provision and will not affect the
right of any party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
9.3 SEVERABILITY. The invalidity or unenforceability of
any provision or provisions (or portion thereof) of this Agreement shall
not affect the validity or enforceability of any other provision (or
portion thereof) of this Agreement, which shall remain in full force and
effect.
9.4 COUNTERPARTS. This Agreement may be executed as
separate counterparts, each of which shall be an original and all of
which taken together shall constitute one and the same Agreement.
9.5 SUCCESSORS AND ASSIGNS. Neither party may assign any
of its rights or obligations hereunder except as consented to in writing
by the other party. This Agreement shall bind and inure to the benefit
of, and be enforceable by, ORA and Telular, and the respective permitted
successors and assigns of each of them.
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9.6 CHOICE OF LAW; JURISDICTION. All questions
concerning this Agreement shall be governed by, and interpreted in
accordance with, the internal laws of the State of California.
9.7 ENTIRE AGREEMENT. This Agreement and the Release are
intended by the parties as a final expression of such agreements and a
complete and exclusive statement of the agreement and understanding of
the parties hereto in respect to the subject matter contained herein and
therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and
therein. This Agreement and the Release supersede all prior agreements
and understandings between the parties with respect to such subject
matter.
9.8 CONSTRUCTION. The titles of the sections of this
Agreement are for convenience of reference only and are not to be
considered in construing this Agreement. The language of this Agreement
shall be construed as to its fair meaning and not strictly for or against
any party.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date and year first written above.
ORA ELECTRONICS, INC.
By: /s/ Gershon N. Cooper
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Its: President
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TELULAR CORPORATION
By: /s/ Kenneth E. Millard
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Its: Chief Executive Officer
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EXHIBIT C TO EXHIBIT 99
DON T. HIBNER, Cal. Bar No. 33444
JAMES F. MCSHANE, Cal. Bar No. 123178
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
333 South Hope Street, 48th Floor
Los Angeles, California 90071-1448
Telephone: (213) 620-1780
Attorneys for
Alliance Research Corporation
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
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ALLIANCE RESEARCH CORPORATION, ) Case No. 94-1065 JSL (CTx)
a California Corporation, )
) STIPULATION FOR ENTRY OF
Plaintiff, ) JUDGMENT
)
v. )
)
TELULAR CORPORATION, an )
Illinois Corporation, )
)
Defendant. )
)
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)
AND RELATED COUNTERCLAIMS )
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TO THE COURT, AND TO ALL PARTIES AND ATTORNEYS OF RECORD:
1. This Stipulation for Entry of Judgment ("Stipulation")
is entered into by Ora Electronics, Inc., formerly known as
Alliance Research Corporation ("ORA"), and Telular Corporation
("Telular") in connection with a Settlement Agreement and Mutual
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General Release ("Settlement Agreement") and a Stock Agreement
("Stock Agreement") executed concurrently herewith.
2. This Stipulation may be filed only as provided
herein.
3. Under the Settlement Agreement, ORA and Telular have
agreed, among other things, that ORA shall pay to Telular the sum
of $1,500,000 as follows:
a. ORA shall pay Telular $500,000 concurrently
with the execution of the Settlement Agreement;
b. ORA shall pay Telular $1,000,000 by delivering
the following sums on or before the following dates:
Amount of
Payment Date Payment
------------ -------
May 1, 1998 25,000
June 1, 1998 25,000
July 1, 1998 25,000
August 3, 1998 25,000
September 1, 1998 25,000
October 1, 1998 25,000
November 2, 1998 25,000
December 1, 1998 25,000
January 4, 1999 25,000
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February 1, 1999 25,000
March 1, 1999 250,000
April 1, 1999 25,000
May 3, 1999 25,000
June 1, 1999 25,000
July 1, 1999 25,000
August 2, 1999 25,000
September 1, 1999 25,000
October 1, 1999 25,000
November 1, 1999 25,000
December 1, 1999 25,000
January 3, 2000 25,000
February 1, 2000 250,000
4. ORA and Telular stipulate that in the event this
Stipulation is duly filed (a) Telular may request the immediate
entry of judgment in the amount of $1,000,000, less any amounts
that have theretofore been paid by ORA under paragraph 3(b) of this
Stipulation, (b) the Court may enter judgment forthwith in the
amount requested, including Telular's reasonable attorneys' fees and
costs and (c) except as provided in this Stipulation ORA may not
oppose, seek reconsideration, or appeal the entry of any judgment
under this Stipulation;
5. Nothing contained herein shall be deemed a waiver of
ORA's right to assert that the conditions precedent described in
paragraph 6 of this Stipulation have not been met or to dispute the
amount of any judgment requested by Telular hereunder.
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6. ORA and Telular have further agreed under the
Settlement Agreement that this Stipulated Judgement shall be held
by Telular, and shall not be filed with any Court unless:
a. ORA fails to make any payment due on or before
the applicable payment date or fails to perform any other
obligation on its part to be performed under the Settlement
Agreement or the Stock Agreement (collectively a "Default"); and
b. Telular delivers to ORA, by registered United
States Mail, a written demand that ORA cure the Default (a
"Demand") within 15 days from the date of delivery of the Demand;
and
c. ORA fails to cure the Default before the close
of business on the fifteenth day following receipt of the Demand.
Dated: March 2, 1998
SHEPPARD, MULLIN, RICHTER & HAMPTON
By /s/ James F. McShane
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JAMES F. MCSHANE
Attorneys for
ORA ELECTRONICS, INC.
Dated: March 2, 1998
HAMMAN & BENN
By /s/ Marvin N. Benn
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MARVIN N. BENN
Attorneys for
TELULAR CORPORATION
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