Exhibit 10.1


 


DITECH NETWORKS, INC.


825 E.
MIDDLEFIELD ROAD


MOUNTAIN VIEW, CA. 94043


 


September 2,
2009


 


Lamassu Holdings,
LLC


21 Whitesands Drive
Newport Coast, CA  92657


Attn:  Timothy Leehealey


 


Samuel Healey


21 Whitesands
Drive


Newport Coast,
CA  92657


 


Frank J. Sansone


2933 Arboridge
Court


Fullerton, CA  92835


 


The following sets
forth the agreement (the “Agreement”)
between Lamassu Holdings L.L.C. and each of its affiliates listed in the
signature blocks below (collectively, “Lamassu”),
and Ditech Networks, Inc. (“Ditech”):


 


1.                                       Ditech hereby covenants and agrees that
each of Mr. Alan Howe and Mr. Frank J. Sansone will be nominated by
the Ditech Board of Directors (the “Board”) for
election at the 2009 annual meeting of stockholders (the “2009
Annual Meeting”), to the class the term of office of which will
expire at the 2012 annual meeting of stockholders.  Mr. Howe and Mr. Sansone will
replace Mr. Avis and Mr. Manoliu, each of whom will cease to be
members of the Board at such time.


 


2.                                       Prior to the 2009 Annual Meeting, (i) the
Board shall recommend that Ditech’ stockholders vote in favor of Mr. Howe
and Mr. Sansone at the 2009 Annual Meeting and (ii) Ditech shall
solicit proxies for the election of Mr. Howe and Mr. Sansone at the
2009 Annual Meeting.


 


3.                                       For so long as Lamassu continues to
beneficially own not less than 5% of the outstanding shares of Ditech common
stock:  if the Lamassu Designee (as
defined below) is unable or unwilling to continue to serve on the Board and as
a result there is a vacancy created on the Board, the Board shall, consistent
with its fiduciary duties, appoint a replacement director designated by Lamassu
Holdings L.L.C. (other than Timothy Leehealey, who shall not be designated by
Lamassu Holdings L.L.C.) to fill the resulting vacancy, provided that
such replacement director is reasonably acceptable to Ditech (and the Board
will not unreasonably withhold acceptance of any such replacement director);
and Ditech will use its commercially reasonable efforts to secure the election to
the Board of such replacement director; provided, however, that 


 


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the Board may determine, in its sole discretion, that
a replacement director is not reasonably acceptable if such replacement
director shall not have signed a conditional resignation as a director of
Ditech in the form attached here to as Schedule A.  Ditech hereby confirms that Mr. Sansone
is reasonably acceptable to the Nominating and Corporate Governance Committee (“NCGC”) and the Board (provided that
he has signed a conditional resignation as a director of Ditech in the form
attached here to as Schedule A),
and his nomination to the Board in satisfaction of the requirement of paragraph
1 meets the requirements of this paragraph 3.  
For purposes of this Agreement, Mr. Sansone and any replacement
director for Mr. Sansone shall each be deemed a “Lamassu
Designee”.


 


4.                                       Lamassu shall use its best efforts to
cause each Lamassu Designee to tender to Ditech a conditional resignation as a
director of Ditech in the form attached here to as Schedule
A.  If Lamassu shall cease
to beneficially own at least 5% of the outstanding shares of Ditech common
stock, the Board may accept the Lamassu Designee conditional resignation as a
director of Ditech referred to above.


 


5.                                       Lamassu will vote all of the shares it
beneficially owns in support of the slate of Directors nominated by the Board
for the 2009 Annual Meeting (and will not support or participate in any “withhold
the vote” or similar campaign, or support any other nominees other than the
slate of Directors nominated by the Board).


 


6.                                       For a period beginning on the date of
this letter agreement and continuing until 90 days from the date of the 2009
Annual Meeting, Lamassu will not (i) make any public statement
regarding Ditech, the Board or any of Ditech’s officers, directors or
employees, except for the press release attached hereto as Schedule A, or as
may be required by law, or (ii) disparage Ditech, the Board, or any of
Ditech’s officers, directors or employees, in any manner, including in any
manner which could be harmful to Ditech or its business, the Board or its
reputation, or the business reputation or personal reputation of any officer,
director or employee of Ditech.


 


7.                                       Subject to the nominations of Mr. Howe
and Mr. Sansone as specified in paragraph 1 as directors of Ditech,
Lamassu hereby withdraws its previously announced notice of its intent to
nominate directors with respect to the 2009 Annual Meeting.


 


8.                                      Promptly after the execution of this
Agreement, Ditech and Lamassu will issue a joint press release in the form
attached hereto as Schedule B.


 


9.                                       Each of Lamassu Holdings L.L.C. and the
other entities included within Lamassu agrees that it will cause its controlled
affiliates, current and future, to comply with the terms of this Agreement as
if a party hereto.


 


10.                                 This Agreement may only be modified
through a written agreement signed by Ditech and by Lamassu Holdings
L.L.C.  This Agreement contains the
entire agreement between the parties with respect to the subject matter hereof
and thereof and supersedes all prior and contemplated arrangements and
understandings with respect 


 


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thereto.  This
Agreement may be signed in counterparts, each of which shall constitute an
original and all of which together shall constitute one and the same Agreement.


 


11.                                 This Agreement and the legal relations
hereunder between the parties hereto shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and performed therein, without giving effect to the principles of conflicts of
law thereof.  Each of the parties hereto
hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of Delaware and of the United States of
America, in each case located in the County of New Castle, for any action,
proceeding or investigation in any court or before any governmental authority
arising out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any action, proceeding or investigation
relating thereto except in such courts), and further agrees that service of any
process, summons, notice or document by registered mail to its respective
address set forth in this Agreement shall be effective service of process for
any action, proceeding or investigation brought against it in any such court.
Each of the parties hereto hereby irrevocably and unconditionally waives any objection
to the laying of venue of any action, proceeding or investigation arising out
of this Agreement or the transactions contemplated hereby in the courts of the
State of Delaware or the United States of America, in each case located in the
County of New Castle, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action,
proceeding or investigation brought in any such court has been brought in an
inconvenient forum.


 


12.                                 Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.


 


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If you are in
agreement please sign below.


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  DITECH
  NETWORKS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd Simpson

  
	
   

  	
   

  	
  Todd Simpson

  
	
   

  	
   

  	
  Chief Executive
  Officer and President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  825 E.
  Middlefield Road

  
	
   

  	
   

  	
   

  	
  Mountain View,
  CA 94043

  
	
   

  	
   

  	
  Telephone:

  
	
   

  	
   

  	
  Facsimile:

  
					



 


Accepted and agreed as of the date set forth above.


 


LAMASSU
HOLDINGS L.L.C.


 


 


	
  By:

  	
  /s/ Timothy
  Leehealey

  	
   

  
	
   

  	
  Timothy
  Leehealey

  	
   

  
	
   

  	
  Managing Member

  	
   

  
	
   

  	
  Address:

  	
  21 Whitesands
  Dr.

  	
   

  
	
   

  	
   

  	
  Newport Coast,
  CA  92657

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Timothy
  Leehealey

  	
   

  
	
   

  	
  Timothy
  Leehealey

  	
   

  
	
   

  	
  Address:

  	
  21 Whitesands
  Dr.

  	
   

  
	
   

  	
   

  	
  Newport Coast,
  CA  92657

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Samuel
  Leehealey

  	
   

  
	
   

  	
  Samuel Healey

  	
   

  
	
   

  	
  Address:

  	
  21 Whitesands
  Dr.

  	
   

  
	
   

  	
   

  	
  Newport Coast,
  CA  92657

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  



 


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  /s/ Frank J.
  Sansone

  	
   

  
	
   

  	
  Frank J. Sansone

  	
   

  
	
   

  	
  Address:

  	
  2933 Arboridge
  Court

  	
   

  
	
   

  	
   

  	
  Fullerton, CA
  92835

  	
   

  
	
   

  	
  Telephone:

  	
   

  
	
   

  	
  Facsimile:

  	
   

  



 


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SCHEDULE
A


 


CONDITIONAL
RESIGNATION


 


September 2, 2009


 


Secretary


Ditech Networks, Inc.


825 E. Middlefield Road


Mountain View, CA 
94043


 


Dear Secretary:


 


I hereby tender my resignation as a member of the Board of
Directors of Ditech Networks, Inc., which shall be effective only in the
event that both (a) Lamassu Holdings L.L.C. and its affiliates shall cease
to beneficially own, collectively, at least 5% of the outstanding shares of
Ditech Networks, Inc., and (b) the Board of Directors of Ditech
Networks, Inc. accepts this resignation.


 


Very truly yours,


 


 


	
   

  	
   

  
	
  [Name]

  	
   

  



 


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SCHEDULE
B


 


PRESS
RELEASE


 


Ditech
Networks and Lamassu Holdings LLC Settle Proxy Contest


 


Parties
Reach an Agreement Related to Board Nominees for Ditech’s 2009 Annual Meeting


 


Mountain
View, CA – (BusinessWire – September 2, 2009) - Ditech Networks (NASDAQ:
DITC), a global leader in mobile voice processing solutions, today announced
that it has settled with Lamassu Holdings LLC on nominees to the company’s
Board of Directors.  Under the terms of
the settlement, the company has agreed to nominate Frank Sansone, Lamassu
Holding’s candidate and Alan B. Howe, an experienced industry veteran as new
directors.


 


In
view of the settlement agreement with Lamassu and the termination of the proxy
contest, Mr. Greg Avis, who has served on the company’s board of directors
since 1997, and Mr. Andrei Manoliu, who has served on the company’s board
of directors since 2000, have announced they will retire from the board of
directors and will not stand for re-election.


 


About Ditech Networks


 


Ditech
Networks is revolutionizing modern communications with advanced voice
processing solutions that perform tasks spanning from voice-enabled Web 2.0 and
unified communications services to voice quality enhancement. Ditech believes
in the power and simplicity of human speech; its solutions deliver high-quality
voice communication and will enable compelling voice capabilities to new
communications methods like social networking and text messaging, allowing
consumers to use voice in ways that make sense in today’s Web 2.0-savvy world.


 


	
  Press
  Contact:

  	
  Investor
  Contact:

  
	
  Rob Adler

  	
  Bill Tamblyn

  
	
  415 984 1970

  	
  650-623-1309

  



 


Ditech Networks,
Voice Quality Assurance, Quad Voice Processor, and Broadband Voice Processor
are trademarks or registered trademarks of Ditech Networks, Inc. All other
trademarks are the property of their respective owners.


 


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