Exhibit 99.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated as of May 17,
2007, is made by and between Xxxxxx Xxxxxxxxx, solely in his capacity as
receiver (the "Receiver") for Wood River Capital Management, L.L.C., Wood River
Associates, L.L.C., Wood River Partners, L.P. and Wood River Partners Offshore,
Ltd. (the "Wood River Entities"), and Endwave Corporation (the "Company").
RECITALS
WHEREAS, the Company and the Receiver have entered into a Settlement
Agreement, dated as of May 17, 2007 (the "Settlement Agreement");
WHEREAS, pursuant to the terms of the Settlement Agreement, the Company has
agreed to enter into a registration rights agreement with respect to certain
shares of Common Stock, par value $0.001 per share, of the Company ("Common
Stock") held by the Wood River Entities;
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements contained herein and in the Settlement Agreement, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
Article I.
Definitions
For purposes of this Agreement, the following terms have the following
meanings:
"Agreement" has the meaning given to that term in the introductory
paragraph hereof.
"Anniversary Date" means the date one year following the date on which the
Shelf Registration Statement becomes effective.
"Approval Order" means the order of the Court granting the Receiver's
application to approve the Settlement Agreement and related relief (Docket No.
[_____]) or such other order or orders of the Court that approves this
Agreement.
"Business Day" means any day, other than a Saturday or Sunday, on which
national banking institutions in New York, New York, are open.
"Common Stock" has the meaning given to that term in the recitals hereto.
"Company" has the meaning given to that term in the introductory paragraph
hereof.
"Court" means the United States District Court for the Southern District of
New York having jurisdiction over the SEC Action.
"Effective Date" means each effective date or deemed effective date under
the Securities Act of the Shelf Registration Statement or any post-effective
amendment thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Extension Period" means a period, not to exceed 90 days, during which, in
accordance with Article IV hereof, the Company is not required to effect the
filing of the Shelf Registration Statement or is entitled to postpone the
preparation, filing or effectiveness or suspend the effectiveness of the Shelf
Registration Statement or the consummation of an Underwritten Offering or
Registered Direct Offering.
"Free Writing Prospectus" means a free writing prospectus as defined in
Rule 405 under the Securities Act.
"Issuer Free Writing Prospectus" means an issuer free writing prospectus as
defined in Rule 433(h) under the Securities Act.
"Lock-Up" has the meaning given to that term in Section 3.3(c) of this
Agreement.
"Lock-Up Period" has the meaning given to that term in Section 3.3(c) of
this Agreement.
"Minimum Number" means a number of shares of WR Common Stock to be sold
such that, after giving effect to such sale, the Wood River Entities would
beneficially hold in the aggregate less than 10% of the then-outstanding Common
Stock.
"NASD" has the meaning given to that term in Section 5.1(l) of this
Agreement.
"NASDAQ" means the NASDAQ Global Market.
"Other Stockholders" means any Person (other than the Receiver or the Wood
River Entities) having rights to demand or participate in a registration of
Common Stock of the Company.
"Person" means any individual, corporation, general or limited partnership,
limited liability company, joint venture, trust or other entity or association,
including without limitation any governmental authority.
"Prospectus" means the prospectus relating to the proposed resale of WR
Common Stock included in the Shelf Registration Statement, and any such
prospectus as supplemented by any and all prospectus supplements and as amended
by any and all amendments (including post-effective amendments) and including
all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.
"Receiver" has the meaning given to that term in the introductory paragraph
hereof.
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"Registered Direct Offering" means an offering pursuant to the Shelf
Registration Statement in which shares of WR Common Stock are sold in a
negotiated trade in which one or more investment banking firms engaged for such
purpose will attempt to sell the shares of WR Common Stock as agent but may
position and resell a portion of the block as principal to facilitate the
transaction.
"Registration Expenses" has the meaning given to that term in Section
5.3(a) of this Agreement.
"Required Period" means, with respect to the Shelf Registration Statement,
the period beginning on date on which the Shelf Registration Statement becomes
effective and ending on the earlier of (a) the Anniversary Date, as such period
may be extended pursuant to Section 3.2(b), Article IV or Section 5.2 and (b)
the date on which the Wood River Entities have sold at least the Minimum Number
of shares of WR Common Stock.
"Rule 144" means Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
"SEC" means the United States Securities and Exchange Commission and any
successor United States federal agency or governmental authority having similar
powers.
"SEC Action" means the action captioned Securities and Exchange Commission
x. Xxxx River Capital Management, L.L.C., et al., Civ. Action No. 05-CV-8713
(NRB), filed by the SEC against the Wood River Entities and Xxxx Xxxxxxx
Whittier in the Court.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Settlement Agreement" has the meaning given to that term in the recitals
hereto.
"Shelf Registration Statement" means a shelf registration statement on Form
S-3 to be filed by the Company pursuant to Rule 415 of the Securities Act
relating to the offering and sale of shares of WR Common Stock pursuant to
Article III hereof, including the related Prospectus, all amendments and
supplements to such registration statement (including post-effective
amendments), and all exhibits and all materials incorporated by reference or
deemed to be incorporated by reference in such registration statement.
"Underwritten Offering" means an offering pursuant to the Shelf
Registration Statement in which shares of WR Common Stock are sold to one or
more underwriters for reoffering to the public.
"Wood River Entities" has the meaning given to that term in the
introductory paragraph hereof.
"WR Common Stock" means the shares of Common Stock that are held by the
Wood River Entities and any additional shares of Common Stock received by the
Wood River Entities by way of a stock dividend, stock split or distribution, or
in connection with a combination of shares, recapitalization, reorganization,
merger or consolidation, or otherwise.
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Article II.
Representations and Warranties of the Parties
2.1 Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Receiver as set forth below, as of the
date hereof and as of each Effective Date:
(a) Incorporation and Qualification. The Company has been duly
organized and is validly existing and in good standing under the laws of the
State of Delaware, with the requisite power and authority to own its properties
and conduct its business as currently conducted.
(b) Corporate Power and Authority. The Company has the requisite
corporate power and authority to enter into, execute and deliver this Agreement
and to perform its obligations hereunder. The Company has taken all necessary
corporate action required for the due authorization, execution and delivery of
this Agreement and the Company's performance of its obligations hereunder
through and up to such Effective Date.
(c) Execution and Delivery; Enforceability. This Agreement has been
duly and validly executed and delivered by the Company, and constitutes the
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
(d) No Conflict. The execution and delivery by the Company of this
Agreement and compliance by the Company with all of the provisions hereof and
the consummation of the transactions contemplated herein will not (i) conflict
with or result in a breach or violation of, any of the terms or provisions of,
or constitute a default under (with or without notice or lapse of time, or
both), or result in the acceleration of, or the creation of any lien under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, or (ii)
violate the Certificate of Incorporation or Bylaws of the Company.
(e) Eligibility. To the Company's knowledge, the Company is eligible
under the Securities Act and applicable regulations to use Form S-3 for the
Shelf Registration Statement.
2.2 Representations and Warranties of the Receiver. The Receiver represents
and warrants to, and agrees with, the Company as set forth below, as of the date
hereof and as of each Effective Date:
(a) Power and Authority. The Receiver has the requisite power and
authority to enter into, execute and deliver this Agreement on his own behalf
and on behalf of the Wood River Entities, to perform his obligations hereunder
and to cause the Wood River Entities to perform their obligations hereunder. The
Wood River Entities have taken all necessary corporate, partnership or limited
liability company action required for the Receiver's due authorization,
execution and delivery of this Agreement and the Receiver's and the Wood River
Entities' performance of their obligations hereunder through and up to such
Effective Date.
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(b) Execution and Delivery; Enforceability. This Agreement has been
duly and validly executed and delivered by the Receiver, and constitutes the
valid and binding obligation of the Receiver and the Wood River Entities,
enforceable against the Receiver and the Wood River Entities in accordance with
its terms.
(c) No Conflict. The execution and delivery by the Receiver of this
Agreement and compliance by the Receiver and the Wood River Entities with all of
the provisions hereof and the consummation of the transactions contemplated
herein will not (i) conflict with or result in a breach or violation of, any of
the terms or provisions of, or constitute a default under (with or without
notice or lapse of time, or both), or result in the acceleration of, or the
creation of any lien under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Receiver or any of the
Wood River Entities is a party or by which the Receiver or any of the Wood River
Entities is bound or to which any of the property or assets of any of the Wood
River Entities is subject, or (ii) violate the charter documents, partnership
agreement or operating agreement of any of the Wood River Entities or any
similar document governing any of the Wood River Entities.
Article III.
Shelf Registration
3.1 Shelf Registration Statement. Subject to the terms and conditions set
forth in this Agreement, the Company shall use its reasonable best efforts to
cause the Shelf Registration Statement to be filed with the SEC as promptly as
practicable after the date hereof and use its reasonable best efforts to cause
it to be declared effective by the SEC as promptly as practicable thereafter.
The Company shall include in the Shelf Registration Statement a plan of
distribution that includes possible distribution under an Underwritten Offering,
a Registered Direct Offering and such other method of sale or distribution as is
reasonably requested by the Receiver and not otherwise prohibited by this
Agreement.
3.2 Continuous Effectiveness of Shelf Registration Statement.
(a) The Company shall use its reasonable best efforts, and take all
steps reasonably requested by the Receiver or any underwriters or placement
agents selected pursuant to Section 3.3, to cause the Shelf Registration
Statement to remain continuously effective, and not subject to any stop order,
injunction or other similar order or requirement of the SEC, including the
filing of any required amendments or supplements, until the expiration of the
Required Period; provided, however, that if the Receiver has requested an
Underwritten Offering or a Registered Direct Offering prior to the Anniversary
Date, the Company shall cause the Shelf Registration Statement to remain
continuously effective until such Underwritten Offering or Registered Direct
Offering has been fully consummated; and provided further, however, that in no
event shall such period of effectiveness expire prior to the expiration of the
applicable period referred to in Section 4(3) of the Securities Act and Rule 174
promulgated thereunder.
(b) In the event of any stop order, injunction or other similar order
or requirement of the SEC relating to the Shelf Registration Statement, the
Required Period for such Shelf Registration Statement shall be extended by the
number of days during which such stop order, injunction or similar order or
requirement is in effect.
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3.3 Underwritten or Registered Direct Offering.
(a) In the event that the Receiver desires to engage in an
Underwritten Offering or Registered Direct Offering, (i) the Receiver shall give
written notice thereof to the Company, (ii) the Receiver shall with the consent
of the Company (which consent shall not be unreasonably withheld) select an
investment banking firm of national standing to be an underwriter or placement
agent for the Underwritten Offering or Registered Direct Offering and (iii) the
Company shall with the consent of the Receiver (which consent shall not be
unreasonably withheld) select one or more investment banking firms of national
standing to be an underwriter or underwriters or placement agent or agents for
the Underwritten Offering or Registered Direct Offering as the case may be.
Unless otherwise agreed to by the Receiver and the Company, the investment bank
selected by the Receiver shall receive 50% of the aggregate underwriting
commissions or placement fees from the Underwritten Offering or Registered
Direct Offering, and the investment bank or investment banks selected by the
Company shall receive, in the aggregate, 50% of the aggregate underwriting
commissions or placement fees from the Underwritten Offering or Registered
Direct Offering. Unless otherwise agreed to by the Receiver and the Company, the
underwriter or placement agent chosen by the Receiver on the one hand and the
Company on the other shall be joint bookrunners for the Underwritten Offering or
Registered Direct Offering, with the underwriter or placement agent chosen by
the Receiver to have 50% of the decision-making authority among the joint
bookrunners.
(b) If so requested by the underwriters for an Underwritten Offering
or placement agents for a Registered Direct Offering, the Company, shall (i) not
effect any underwritten public sale or distribution or registered direct
offering, of any securities for its own account or the account of any Person not
a party hereto that are the same as, or similar to, the WR Common Stock, or any
securities convertible into, or exchangeable or exercisable for, any securities
of the Company that are the same as, or similar to, the WR Common Stock, during
a period (the "Lock-Up Period") beginning on the date of the initial due
diligence or drafting session held pursuant to Section 5.1(i) in connection with
such Underwritten Offering or Registered Direct Offering and ending not later
than 90 days after the date of closing of the Underwritten Offering or
Registered Direct Offering, provided, however, that if (1) during the last 17
days of the Lock-Up Period, the Company releases earnings results or announces
material news or a material event or (2) prior to the expiration of the Lock-Up
Period, the Company announces that it will release earnings results during the
15-day period following the last day of the Lock-Up Period, then pursuant to
Rule 2711(f)(4) of the NASD the Lock-Up Period will be automatically extended
until the expiration of the 18-day period beginning on the date of release of
the earnings results or the announcement of the material news or material event,
as applicable and (ii) use its reasonable best efforts to cause its executive
officers and directors and any beneficial owners of more than 10% of the issued
and outstanding Common Stock to enter into a Lock-Up similar to that described
in Section 3.3(c).
(c) If so requested by the underwriters for any Underwritten Offering
or the placement agents for any Registered Direct Offering, the Receiver on
behalf of the Wood River Entities, shall agree with such underwriters (such
agreement, a "Lock-Up"), that during the Lock-Up Period the Wood River Entities
shall not sell or otherwise transfer or dispose of any shares of WR Common
Stock, provided, however, that if (1) during the last 17 days of the Lock-Up
Period, the Company releases earnings results or announces material news or a
material event
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or (2) prior to the expiration of the Lock-Up Period, the Company announces that
it will release earnings results during the 15-day period following the last day
of the Lock-Up Period, then pursuant to Rule 2711(f)(4) of the NASD the Lock-Up
Period will be automatically extended until the expiration of the 18-day period
beginning on the date of release of the earnings results or the announcement of
the material news or material event, as applicable.
(d) The Receiver shall use his reasonable best efforts to take all
actions reasonably requested by the Company and the underwriters for any
Underwritten Offering or the placement agents for any Registered Direct Offering
to effectuate such offering. The Receiver shall furnish to the Company such
information regarding itself, the Wood River Entities and the WR Common Stock as
shall be required or reasonably requested to effect the registration of the WR
Common Stock, provided, however, that the Receiver and the Wood River Entities
shall not be required to consummate any Underwritten Offering or Registered
Direct Offering if the pricing under such Underwritten Offering or Registered
Direct Offering would be unacceptable to the Receiver, in the Receiver's sole
discretion. The Receiver, on his own behalf and that of the Wood River Entities,
shall enter into and comply with an underwriting agreement or placement agency
agreement, in usual and customary form, with the underwriters or placement
agents in connection with such Underwritten Offering or Registered Direct
Offering (provided, however, that in no event shall the Receiver or the Wood
River Entities be obligated to enter into an underwriting or placement agency
agreement that requires either the Receiver or the Wood River Entities to
indemnify the Company).
3.4 Number of Offerings. Notwithstanding anything contained in this Article
III to the contrary, the Receiver on behalf of the Wood River Entities shall be
entitled to request only one offering hereunder, which may be either an
Underwritten Offering or a Registered Direct Offering. For purposes hereof,
neither an Underwritten Offering nor a Registered Direct Offering shall be
considered consummated until at least the Minimum Number of shares of WR Common
Stock have been sold pursuant to such Underwritten Offering or Registered Direct
Offering or otherwise.
3.5 Termination. In the event that any person other than the Company, the
Receiver or any of the Wood River Entities appeals the Approval Order and the
Approval Order is reversed or vacated, then this Agreement shall terminate in
all respects. If the Approval Order is entered by the Court but its
effectiveness is thereafter stayed by a court of competent jurisdiction (a
"Stay"), then the effectiveness of this Agreement and the Parties' obligations
hereunder shall be stayed until such Stay is vacated.
Article IV.
Extension Period
4.1 Offering Extension Period. Notwithstanding any other provision of this
Agreement to the contrary, if the Board of Directors of the Company determines
in good faith that the registration and distribution of WR Common Stock would
materially impede, delay or interfere with, or require premature disclosure of,
any material acquisition, merger, corporate reorganization, or any negotiations,
discussions or pending proposals with respect thereto involving the Company or
any of its subsidiaries, then subject to Section 4.2, the Company shall be
entitled to postpone or suspend the preparation, filing or effectiveness, of the
Shelf
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Registration Statement and/or the use of any Prospectus with respect to an
Underwritten Offering or a Registered Direct Offering for a period not to exceed
90 days from the date of receipt of such written request from the Receiver,
provided, however, that such request may be exercised by the Company no more
than once.
4.2 Extension Period Certificate. The Company's right to an Extension
Period pursuant to Section 4.1 is subject to the receipt by the Receiver of a
certificate signed by the Chief Executive Officer of the Company certifying that
the Board of Directors of the Company has made the determination referred to in
Section 4.1.
4.3 Extension Period Limits. Notwithstanding anything contained in this
Article IV to the contrary, the Company shall not be entitled to more than one
Extension Period and in no event shall the Company be entitled to postpone or
suspend the preparation, filing or effectiveness or suspend the effectiveness of
the Shelf Registration Statement and/or the use of any resale Prospectus
included in the Shelf Registration Statement pursuant to this Article IV unless
it postpones or suspends during the Extension Period the effectiveness of any
registration statements required pursuant to the registration rights of the
Other Stockholders. In the event of the occurrence of any Extension Period
during the Required Period, the Required Period shall be extended by the number
of days during which such Extension Period is in effect.
Article V.
Procedures and Expenses
5.1 Registration Procedures. In connection with the Company's registration
obligations pursuant to Article III, the Company shall use its reasonable best
efforts to take such actions as are necessary or appropriate to permit the sale
of the WR Common Stock by the Wood River Entities in accordance with plan of
distribution set forth in the Shelf Registration Statement, and pursuant thereto
the Company shall use its reasonable best efforts to, as promptly as reasonably
practicable:
(a) prepare and file with the SEC the Shelf Registration Statement;
provided, however, that the Company shall (i) furnish to the Receiver and one
firm of legal counsel selected by the Receiver, a sufficient time prior to the
filing thereof with the SEC to afford to the Receiver and his counsel a
reasonable opportunity for review, copies of the Shelf Registration Statement
proposed to be filed, and (ii) reflect in the Shelf Registration Statement, when
so filed with the SEC, such comments as the Receiver and its counsel may
reasonably propose;
(b) after the Receiver shall have requested an Underwritten or
Registered Direct Offering in compliance with Section 3.3 and the underwriters
or placement agents therefor have been selected in accordance with said Section,
prepare and file with the SEC the Prospectus; provided, however, that the
Company shall (i) furnish to the Receiver and one firm of legal counsel selected
by the Receiver, and to the underwriters or placement agents selected pursuant
to Section 3.3 and one firm of legal counsel selected by them, a sufficient time
prior to the filing thereof with the SEC to afford to the Receiver, the
underwriters or placement agents and their respective counsel a reasonable
opportunity for review, copies of the Prospectus proposed to be filed, and (ii)
reflect in the Prospectus, when so filed with the SEC, such
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comments as the Receiver, such underwriter or placement agents and their
respective counsel may reasonably propose;
(c) furnish to the Receiver and the underwriters or placement agents
such number of conformed copies of the Shelf Registration Statement and each
amendment thereto, of the Prospectus and each supplement thereto, and of such
other documents as they reasonably may request in writing from time to time;
(d) subject to Section 3.2 and Article IV, prepare and file with the
SEC any amendments and post-effective amendments to the Shelf Registration
Statement as may be necessary and any supplements to the Prospectus as may be
required or appropriate, in the view of the Company and its counsel, by the
rules, regulations or instructions applicable to the Shelf Registration
Statement or by the Securities Act to keep the Shelf Registration Statement
effective until the termination of the Required Period (giving effect to any
extensions thereof pursuant to Section 3.2(b), Section 4.3 or Section 5.2);
(e) promptly following its gaining actual knowledge thereof (but in
any event within two Business Days), notify the Receiver and (if selected) the
underwriters or placement agents, in writing:
(i) when a Shelf Registration Statement, Prospectus, Issuer Free
Writing Prospectus or any supplement or amendment has been filed and, with
respect to a Shelf Registration Statement or any post-effective amendment, when
the same has become effective;
(ii) of any request by the SEC or any other governmental
authority for amendments or supplements to a Shelf Registration Statement,
Prospectus or Issuer Free Writing Prospectus or for additional information;
(iii) of the issuance by the SEC or any other governmental
authority of any stop order suspending the effectiveness of the Shelf
Registration Statement or the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company of any written notification
with respect to the suspension of the qualification or exemption from
qualification of the WR Common Stock for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose;
(v) of the occurrence of any event during the period the Shelf
Registration Statement is effective that makes any statement made in the Shelf
Registration Statement or the Prospectus or any Issuer Free Writing Prospectus
untrue in any material respect or that requires the making of any changes in
such Shelf Registration Statement, Prospectus or Issuer Free Writing Prospectus
so that such Shelf Registration Statement, Prospectus or Issuer Free Writing
Prospectus shall not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading (provided, however, that no notice by the Company shall be
required pursuant to this Section 5.1(e)(v) in the event that the Company either
promptly files a Prospectus supplement to update the Prospectus or an
appropriate Exchange Act report that is incorporated by reference into the Shelf
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Registration Statement, that, in either case, contains the requisite information
that results in the Shelf Registration Statement no longer containing any untrue
statement of a material fact or omitting to state a material fact necessary to
make the statements therein or in light of the circumstances under which they
were made, not misleading); and
(vi) of the Company's reasonable determination that a
post-effective amendment to the Shelf Registration Statement would be required
by applicable law (in which case the Company shall file the same as soon as
practicable after such determination and use its reasonable best efforts to
cause the same to become effective as soon as practicable following filing);
(f) prevent the issuance of or obtain the withdrawal of any order
suspending the effectiveness of the Shelf Registration Statement, or the lifting
of any suspension of the qualification or exemption from qualification of any
shares of the WR Common Stock for sale in any jurisdiction, at the earliest
practicable date or, if any such order or suspension is made effective during
any Extension Period, at the earliest practicable date after the Extension
Period;
(g) prior to any Underwritten Offering or Registered Direct Offering,
use reasonable efforts to register or qualify, or cooperate with the Receiver,
the underwriters or placement agents, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of the WR Common Stock for offer and sale under
the securities or blue sky laws of such jurisdictions within the United States
as such counsel for the Receiver or the underwriters or placement agents
reasonably requests in writing and do such other acts and things as may be
reasonably necessary to maintain each such registration or qualification (or
exemption therefrom) effective during the Required Period for the Shelf
Registration Statement; provided, however, that the Company shall not be
required to qualify generally to do business or as a dealer in securities in any
jurisdiction in which it is not then so qualified or take any action which would
subject it to general service of process or taxation in any jurisdiction in
which it is not then so subject;
(h) subject to Article IV, as promptly as reasonably practicable after
the occurrence of any event contemplated by Sections 5.1(e)(v) or 5.1(e)(vi)
hereof, use its reasonable best efforts to prepare (and furnish, subject to any
notice by the Company in accordance with Section 5.1(e), to the Receiver on
behalf of the Wood River Entities a reasonable number of copies of) a supplement
or post-effective amendment to the Shelf Registration Statement or a supplement
to the related Prospectus (including by means of an Issuer Free Writing
Prospectus), or file any other required document so that, as thereafter
delivered to the purchasers of the WR Common Stock being sold thereunder, such
Prospectus or Issuer Free Writing Prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(i) enter into and comply with an underwriting agreement or
placement agency agreement, in usual and customary form, with the underwriters
or placement agents, in connection with such Underwritten Offering or Registered
Direct Offering (provided, however, that in no event shall the Company be
obligated to enter into an underwriting or
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placement agency agreement that requires the Company to indemnify the Receiver
or the Wood River Entities;
(i) after the Receiver shall have requested an Underwritten Offering
or a Registered Direct Offering in accordance with Section 3.3, upon reasonable
notice and at reasonable times during normal business hours, make reasonably
available for inspection by a representative of the Receiver, one firm of
counsel for the Receiver, the underwriters or placement agents, as applicable,
if any, participating in any Underwritten Offering or Registered Direct Offering
and their legal counsel and any single accounting firm retained by the Receiver
or any such underwriter or placement agent, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
appropriate officers, directors and employees of the Company (x) to make
reasonably available for such inspection all such relevant information
reasonably requested by them in connection with the Underwritten Offering or
Registered Direct Offering as is customary for "due diligence" investigations
for an Underwritten Offering or a Registered Direct Offering, as applicable, and
(y) to participate with such underwriters or placement agents, the Receiver, and
their respective legal counsel and accountants in such due diligence and
drafting sessions as are customary for such Underwritten Offering or Registered
Direct Offering, as applicable; provided, however, that prior to providing any
such information or materials, the Company and the Receiver shall have entered
into a confidentiality agreement in a form reasonably acceptable to each of
them;
(j) comply with all applicable rules and regulations of the SEC
relating to such registration and make generally available to its
securityholders earning statements satisfying the provisions of Section 11(a) of
the Securities Act, provided that the Company shall be deemed to have complied
with this Section 5.1(j) if it has satisfied the provisions of Rule 158 under
the Securities Act (or any similar rule promulgated under the Securities Act);
(k) procure the cooperation of the Company's transfer agent in
settling the sale of WR Common Stock in the Underwritten Offering or Registered
Direct Offering;
(l) provide such information as may be reasonably required for any
filings required to be made by the Receiver, the Wood River Entities or
underwriters or placement agents, if any, with the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the offering under the
Shelf Registration Statement of the WR Common Stock (including, without
limitation, such as may be required by NASD Rule 2710 or 2720), and, shall use
reasonable best efforts to cooperate in connection with any filings required to
be made with the NASD in that regard on or prior to the filing of the Shelf
Registration Statement; and
(m) assist the underwriters or placement agents, as applicable, in the
marketing of the WR Common Stock in connection with an Underwritten Offering or
Registered Direct Offering, as applicable, including without limitation, causing
appropriate officers of the Company to attend "road shows" and analyst or
investor presentations and such other selling or informational activities
reasonably requested by the underwriters or placement agents and customary for
an Underwritten Offering or a Registered Direct Offering, as applicable;
provided, however, that the Company's obligations to cause its officers to
attend "road shows" shall be limited to presentations in the United States and
further limited, (i) in the case of an Underwritten Offering, to a road show
with a duration of two weeks, and (ii) in the case of a
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Registered Direct Offering, to a road show with a duration of one week, in each
case plus such additional number of days as may be reasonably requested by the
underwriters or placement agents.
5.2 Suspension of Disposition.
(a) The Receiver agrees that, upon receipt of any written notice from
the Company of the occurrence of any event of the type described in Sections
5.1(e)(ii), 5.1(e)(iii), 5.1(e)(iv), 5.1(e)(v) or 5.1(e)(vi), the Receiver and
the Wood River Entities shall discontinue disposition of the shares of WR Common
Stock covered by a Shelf Registration Statement, Prospectus or Free Writing
Prospectus and suspend use of such Prospectus or Free Writing Prospectus until
the Receiver receives copies of the supplemented or amended Prospectus
contemplated by Section 5.1(h) or until is advised by the Company in writing
that the use of the applicable Prospectus or Free Writing Prospectus may be
resumed and have received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus or
Free Writing Prospectus. In the event the Company shall give any such notice,
the period of time for which the Shelf Registration Statement must remain
effective pursuant to this Agreement shall be extended by the number of days
during the time period from and including the date of the giving of such notice
to and including the date when the Receiver has received (i) the copies of the
supplemented or amended Prospectus or Issuer Free Writing Prospectus
contemplated by Section 5.1(h) or (ii) the advice referenced in this Section
5.2(b).
(b) The Receiver agrees that, upon receipt of the certificate from the
chief executive officer of the Company contemplated by Section 4.2, the Wood
River Entities shall discontinue disposition of the shares of WR Common Stock
covered by a Shelf Registration Statement, Prospectus or Free Writing Prospectus
and suspend use of such Prospectus or Free Writing Prospectus until the earlier
to occur of the Receiver's receipt of (i) copies of a supplemented or amended
Prospectus or Issuer Free Writing Prospectus and (ii)(A) written notice from the
Company that the use of the applicable Prospectus or Issuer Free Writing
Prospectus may be resumed and (B) copies of any additional or supplemental
filings that are incorporated or deemed to be incorporated by reference in such
Prospectus or Issuer Free Writing Prospectus. In the event the Company gives any
such certificate contemplated by Section 4.2, the period of time for which the
Shelf Registration Statement must remain effective pursuant to this Agreement
shall be extended by the number of days during the time period from and
including the date of giving of such notice to and including the date when the
Receiver receives (i) the supplemented or amended Prospectus or Issuer Free
Writing Prospectus or (ii) written notice from the Company that use of the
applicable Prospectus or Issuer Free Writing Prospectus may resume.
5.3 Registration Expenses.
(a) Subject to Section 5.3(c), all out-of-pocket fees and expenses
incurred by the Company in complying with Article III and Section 5.1
("Registration Expenses") shall be borne by the Wood River Entities. These fees
and expenses shall include without limitation (i) all registration, filing and
qualification fees, including fees for filings made with the SEC, NASDAQ and
NASD, (ii) documented printing, duplicating and delivery expenses,
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(iii) reasonable and documented fees and disbursements of one counsel for the
Company (plus any other counsel of the Company from whom the underwriters or
placement agents request "due diligence" materials or information or a legal
opinion in connection with the offering), (iv) fees and expenses of complying
with state securities or "blue sky" laws, (v) reasonable and documented fees and
expenses of the independent certified public accountants of the Company
pertaining specifically to the offering (including fees and expenses relating to
any special audit or "comfort" letters required by or incident to the offering);
(vi) fees and expenses in connection with quoting WR Common Stock on the NASDAQ
or any other exchange or automated trading system on which the Company's Common
Stock shall be listed or quoted, and (vii) documented "road show" expenses. The
Registration Expenses may be paid (a) in cash or (b) if mutually agreed by
Endwave and the Receiver, in WR Common Stock or a combination of cash and WR
Common Stock; provided, however, that in the event the Company commences a
Registered Direct Offering or an Underwritten Offering pursuant to this
Agreement but the Receiver subsequently terminates such offering, the
Registration Expenses may be paid, at the Receiver's discretion, by returning to
the Company such number of WR Common Stock as is obtained by dividing the
Registration Expenses by the average closing price of Endwave common stock over
the 20 trading days ending immediately prior to the date the Receiver notifies
Endwave of his intent to terminate the offering.
(b) The obligations of the Wood River Entities to pay the amounts
described in Section 5.3(a) are subject to the following caps: (i) in the case
of an Underwritten Offering, $750,000.00, (ii) in the case of a Registered
Direct Offering, $550,000.00.
(c) Notwithstanding anything contained herein to the contrary, all
underwriting and placement agent fees, discounts, selling commissions and stock
transfer taxes applicable to the sale of the WR Common Stock shall be borne by
the Wood River Entities.
5.4 Withdrawal of Offering. If the Receiver gives written notice pursuant
to Section 3.3(a) that the Receiver wishes to engage in a Registered Direct
Offering or Underwritten Offering, and subsequently determines that he wishes to
terminate such offering, he shall promptly request in writing that the Company
terminate its efforts with respect to such Registered Direct Offering or
Underwritten Offering, and the Receiver shall pay to the Company within 10 days
of written request from the Company, the Registration Expenses accrued prior to
such written request in accordance with the "provided, however" clause of
Section 5.3.
Article VI.
Free Writing Prospectuses
Except for a Prospectus, an Issuer Free Writing Prospectus or other
materials prepared by the Company, the Receiver represents and agrees that it
(i) shall not make any offer relating to the WR Common Stock that would
constitute an Issuer Free Writing Prospectus or that would otherwise constitute
a Free Writing Prospectus, and (ii) has not distributed and will not distribute
any written materials in connection with the offer or sale of WR Common Stock,
in each case without the prior written consent of the Company and, in connection
with any Underwritten Offering or Registered Direct Offering, the underwriters
or the placement agents, as the case may be. The Company represents and agrees
that it shall not make any offer relating to the WR Common Stock that would
constitute an Issuer Free Writing Prospectus or that would otherwise
13
constitute a Free Writing Prospectus in connection with the offer or sale of WR
Common Stock without the prior written consent of the Receiver, and, in
connection with any Underwritten Offering or Registered Direct Offering, the
underwriters or the placement agents, as the case may be.
Article VII.
Rule 144
With a view to making available the benefits of certain rules and
regulations of the SEC which may permit the sale of WR Common Stock to the
public without registration, the Company agrees to (a) use its reasonable best
efforts to file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; (b) upon
written request of the Receiver, furnish to the Receiver promptly a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144 and of the Securities Act and the Exchange Act, and such other reports
and documents as the Receiver reasonably may request in availing itself of any
rule or regulation of the SEC allowing the Wood River Entities to sell any
shares of the WR Common Stock without registration; and (c) take such other
actions as may be reasonably required by the Company's transfer agent to
consummate any distribution of WR Common Stock that may be permitted in
accordance with the terms and conditions of Rule 144.
Article VIII.
Limits on Sale
8.1 Limits on Sale. The Receiver and the Wood River Entities shall not
sell, distribute or otherwise dispose of any of the WR Common Stock until the
consummation of an Underwritten Offering or a Registered Direct Offering
resulting in the sale of at least the Minimum Number of shares of WR Common
Stock; provided, however, that this restriction shall not apply to public
resales of WR Common Stock pursuant to Rule 144 under the Securities Exchange
Act or to any transfer by any Wood River Entity to another Wood River Entity.
The Receiver shall comply with all reporting requirements of the SEC with
respect to any sale of WR Common Stock including, without limitation, filing any
reports or amendments to reports required under Sections 13 and 16 of the
Securities Exchange Act and will give a copy of each such report or amendment to
the Company no later than the date and time such report or amendment is filed
with the SEC or is required to be filed with the SEC, whichever comes first.
Article IX.
Miscellaneous
9.1 Notices. All notices and other communications in connection with this
Agreement shall be in writing and shall be deemed given by (and shall be deemed
to have been duly given) as follows: (i) at the time delivered by hand, if
delivered personally; (ii) when sent via facsimile (with confirmation); (iii)
five Business Days after being deposited in the mail, if sent postage prepaid,
by registered or certified mail (return receipt requested); or (iv) on the next
Business Day, if timely delivered to an express courier guaranteeing overnight
delivery (with confirmation). Notices shall be directed to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
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(a) If to the Company:
Endwave Corporation
000 Xxxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxx Godward Kronish LLP
000 Xxxxxxxxxx Xxxxxx, 0xx xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
(b) If to the Receiver:
Xxxxxx X. Xxxxxxxxx, Esq.
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
9.2 Survival. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by the Receiver or the Company
and the closing of the transactions contemplated hereby.
9.3 Severability. If any provision of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not affect the validity
and enforceability of the remaining provisions of this Agreement.
9.4 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto.
9.5 Entire Agreement. This Agreement (including the documents and
instruments referred to in this Agreement) constitutes the entire agreement of
the parties and supersedes all prior agreements and understandings, whether
written or oral, between the parties with respect to the subject matter of this
Agreement.
15
9.6 Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions of this
Agreement may be waived, only by a written instrument signed by the Company and
the Receiver or in the case of a waiver, by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege
pursuant to this Agreement shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right, power or privilege pursuant to
this Agreement, nor shall any single or partial exercise of any right, power or
privilege pursuant to this Agreement, preclude any other or further exercise
thereof or the exercise of any other right, power or privilege pursuant to this
Agreement. The rights and remedies provided pursuant to this Agreement are
cumulative and are not exclusive of any rights or remedies which any party
otherwise may have at law or in equity.
9.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the parties
and delivered to the other party (including via facsimile or other electronic
transmission), it being understood that each party need not sign the same
counterpart.
9.8 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of New York without giving effect to principles of conflicts
of law that would result in the application of the laws of a different
jurisdiction.
9.9 Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
9.10 Specific Performance. The parties acknowledge and agree that any
breach of the terms of this Agreement would give rise to irreparable harm for
which money damages would not be an adequate remedy, and, accordingly, the
parties agree that, in addition to any other remedies, each will be entitled to
enforce the terms of this Agreement by a decree of specific performance without
the necessity of proving the inadequacy of money damages as a remedy and without
the necessity of posting bond.
9.11 No Conflicting Rights. The Company shall not, on or after the date
hereof, grant any registration or similar rights to any Person which conflict
with or impair the rights granted hereby.
[Signature Page Follows]
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IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date first written above.
ENDWAVE CORPORATION
By:
------------------------------------
Name:
Title:
XXXXXX X. XXXXXXXXX, ESQ., solely in his
capacity as the Receiver of Wood River
Capital Management, L.L.C., Wood River
Associates, L.L.C., Wood River Partners,
L.P. and Wood River Partners Offshore,
Ltd., and not in his individual capacity
------------------------------------------
Xxxxxx X. Xxxxxxxxx
Receiver
