Exhibit 4.6
CO-SALE/REDEMPTION RIGHTS AGREEMENT
CO-SALE/REDEMPTION RIGHTS AGREEMENT, dated as of July 25, 2000 (the
"AGREEMENT"), by and among FOX XXXXX CAPITAL FUND, L.P., a Delaware limited
partnership, FPC INVESTORS, L.P., a Delaware limited partnership, WJ
COINVESTMENT FUND I, LLC, a Delaware limited liability company, WJ COINVESTMENT
FUND II, LLC, a Delaware limited liability company, WJ COINVESTMENT FUND III,
LLC, a Delaware limited liability company, WJ COINVESTMENT FUND IV, LLC, a
Delaware limited liability company (collectively, the foregoing entities are
referred to herein as "SHAREHOLDER"), INVESTOR INTERNATIONAL (CAYMAN) LIMITED,
(the "INVESTOR"), and WJ Communications, Inc., a California corporation (the
"COMPANY").
RECITALS
WHEREAS, the Company and Investor have entered into that certain Stock
Purchase Agreement dated as July 25, 2000 (the "STOCK PURCHASE AGREEMENT"),
pursuant to which Investor is, subject to the terms and conditions thereof,
purchasing shares of the Company's Series A Convertible Preferred Stock (such
shares, together with the Common Stock of the Company issuable upon conversion
thereof, the "INVESTOR STOCK");
WHEREAS, pursuant to the terms of the Stock Purchase Agreement, the
Company and Investor are entering into an Investor's Rights Agreement dated as
of even date herewith (the "INVESTOR'S RIGHTS AGREEMENT");
WHEREAS, in order to induce Investor to make such investment, and to
fulfill a condition to Investor's obligation to do so, Shareholder has agreed to
enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and of the terms and
conditions contained herein, the parties hereto agree as follows (capitalized
terms used herein without definition shall have the same meanings given in the
Investor's Rights Agreement):
SECTION 1. CO-SALE RIGHTS
Shareholder agrees that Investor shall have co-sale rights on proposed
sales by Shareholder of shares of the Company's capital stock owned by
Shareholder as follows:
(a) NOTICE OF PROPOSED SALE. Shareholder agrees that if it proposes to
sell to an unrelated third party, in a single transaction or series of related
transactions, shares of the Company's Common Stock owned by Shareholder
representing at least ten percent (10%) of the shares of Common Stock
outstanding (calculated on a fully-diluted basis at the time of the proposed
sale), other than pursuant to (i) an offering registered with the SEC under the
Securities Act, or (ii) a non-directed Rule 144 sale in the open market, then
Shareholder
shall first give written notice (the "SALE NOTICE") to Investor, stating that
Shareholder desires to make such sale, referring to this Section 1(a),
specifying the number of shares of Common Stock proposed to be sold by
Shareholder pursuant to the offer (the "OFFER SHARES"), and specifying the
price, the form of consideration and the material terms pursuant to which such
sale is proposed to be made.
(b) CO-SALE ELECTION. Within seven (7) business days of the date that
the Sale Notice is given, Investor shall deliver to Shareholder a written notice
stating whether it elects to sell a pro rata portion of its Investor Stock
(equal to the result of MULTIPLYING (A) the number of Offer Shares (after giving
effect to any co-sale, tag-along or similar rights any other third parties may
have) by (B) a fraction, the numerator of which is the total number of shares of
Investor Stock, calculated on a fully converted basis, and the denominator is
the total number of shares of Common Stock owned by Shareholder (the fraction
described in this clause (B) being referred to as Investor's "PRO RATA
PORTION")) to such proposed transferee on the same terms and conditions as
Shareholder (with respect to the Investor, its "CO-SALE SHARES"). An election
pursuant to this Section 1(b) shall constitute an irrevocable commitment by
Investor to sell such Investor Stock to the proposed transferee if the sale of
Offer Shares to the proposed transferee occurs on the terms contemplated by the
Sale Notice. In order to participate in such sale with respect to its Co-Sale
Shares, Investor shall be required to execute and deliver the agreement or
agreements governing such transaction on the same terms and conditions as
Shareholder; Investor shall execute and deliver such agreement or agreements
within three (3) business days of being requested by Shareholder to do so
(provided, that the expiration of such period shall not be earlier than ten (10)
business days following the date that the Sale Notice is given as provided
above), or shall lose its co-sale rights with respect to the transaction
contemplated by the Sale Notice. If Investor properly elects to sells Co-Sale
Shares pursuant to this Section 1(b), then Shareholder shall not sell any Offer
Shares unless the proposed transferee (or Shareholder, at Shareholder's
election) purchases the Co-Sale Shares from Investor on the terms specified in
the Sale Notice. If Investor does not properly elect to sell Co-Sale Shares
pursuant to this Section 1(b), then Shareholder shall be free to sell the Offer
Shares on terms no more favorable to Shareholder than those specified in the
Sale Notice for a period of ninety (90) days following the expiration of the
seven-day period referred to in the first sentence of this paragraph. In the
event that Investor is in breach of the foregoing provisions with respect to a
transaction identified in a particular Sale Notice, the Company agrees that it
will refuse to transfer the applicable Offer Shares on its stock ledger records
pursuant to such transaction until the Investor has fully complied with such
provisions.
(c) NO LIABILITY. Notwithstanding any other provision contained in this
Section 1, there shall be no liability on the part of Shareholder in the event
that the transaction contemplated by a Sale Notice is not consummated for any
reason whatsoever. The decision whether to effect a sale pursuant to this
Section 1 shall be in the sole and absolute discretion of Shareholder.
(d) PERMITTED TRANSFERS. Notwithstanding anything in this Agreement to
the contrary, this Section 1 shall not apply to any distribution or other
transfer of shares by Shareholder to any shareholder, member, partner or owner
of Shareholder, or any Affiliate thereof.
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SECTION 2. RIGHTS IN CONNECTION WITH REDEMPTIONS
Shareholder agrees to cause Investor to be afforded the following
rights in connection with any actual or proposed redemption by the Company of
shares of the capital stock of the Company owned by Shareholder:
(a) REDEMPTION RIGHT. Shareholder and the Company agree that in the
event the Company redeems any of the shares of capital stock of the Company held
by Shareholder, then Investor shall have a right to participate in the
redemption of such shares (in a substantially contemporaneous transaction) in
accordance with its Pro Rata Portion. In the event the Board of Directors of the
Company determines to redeem any of the shares of capital stock of the Company
owned by Shareholder, the Company shall deliver written notice (the "REDEMPTION
NOTICE") to Investor, stating that the Company intends to make such redemption,
referring to this Section 2(a), specifying the number of shares of stock
proposed to be redeemed by the Company pursuant to the redemption (the
"REDEMPTION SHARES"), and specifying the price, the form of consideration and
the material terms pursuant to which such redemption will be made.
(b) REDEMPTION ELECTION. Within seven (7) business days of the date of
receipt of the Redemption Notice, Investor shall deliver to Shareholder a
written notice stating whether it elects to have its Pro Rata Portion of the
Redemption Shares redeemed (its "ELECTION SHARES"). If Investor properly elects
to have its Election Shares redeemed pursuant to this Section 2(b), then the
Company shall redeem the Election Shares from Investor or, alternatively,
Shareholder shall purchase the Election Shares from Investor at the same price
paid in the redemption transaction (in the case of preferred shares, calculated
on an as-converted basis) and otherwise on the terms specified in the Redemption
Notice.
SECTION 3. GENERAL PROVISIONS
(a) NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission (provided that a
confirmation copy is sent by another approved means) to the telecopier number
specified below:
If to Shareholder:
Fox Xxxxx Capital Fund, L.P.
FPC Investors, L.P.
WJ Coinvestment Fund I, LLC
WJ Coinvestment Fund II, LLC
WJ Coinvestment Fund III, LLC
WJ Coinvestment Fund IV, LLC
c/o Fox Xxxxx & Company, LLC
000 Xxxxx Xxxx
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Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.:
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Irell & Xxxxxxx LLP
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to Investor:
Investor International (Cayman) Limited
P.O. Box 309
Xxxxxx House
South Church Street
Grand Cayman
Cayman Islands
British West Indies
Attention: Alain Andrey
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(b) HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(c) SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
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(d) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties and supersedes all prior agreements and undertakings, both
written and oral, between the parties, or any of them, with respect to the
subject matter hereof, except as otherwise specifically provided in this
Agreement.
(e) ASSIGNMENT; PARTIES IN INTEREST. This Agreement shall bind and
inure to the benefit of the parties hereto and their respective successors and
assigns, but shall not be assignable by any party hereto without the prior
written consent of the other parties. Nothing contained in this Agreement,
express or implied, is intended to confer upon any person, other than the
parties to this Agreement and their respective permitted successors and assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
(f) FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure
or delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
(g) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without regard to rules
respecting conflicts of law.
(h) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
(i) CONSTRUCTION. All Section references are to this Agreement, unless
otherwise expressly provided. As used in this Agreement, (a) "HEREOF",
"HEREUNDER", "HEREIN" and words of like import shall be deemed to refer to this
Agreement in its entirety and not just a particular Section of this Agreement
and (b) unless the context otherwise requires, words in the singular number or
in the plural number shall each include the singular number or the plural
number, words of the masculine gender shall include the feminine and neuter,
and, when the sense so indicates, words of the neuter gender shall refer to any
gender.
(j) TERM OF AGREEMENT. This Agreement shall remain in force until the
earlier of (i) three years following the date hereof, or (ii) the date that
Investor ceases to own at least twenty-five percent (25%) of the Investor Stock
owned by Investor as of the date of this Agreement. After such time, the rights
of Investor and other terms herein shall terminate and be of no further force or
effect.
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IN WITNESS WHEREOF, Shareholder and Investor have caused this Agreement
to be executed as of the date first written above by their respective officers
and representatives thereunto duly authorized.
FOX XXXXX CAPITAL FUND, L.P.
By: Fox Xxxxx Capital, LLC, its General Partner
By:__________________________________
W. Xxxxxx Xxxxx, III
FPC INVESTORS, L.P.
By: Fox Xxxxx Capital, LLC, its General Partner
By:__________________________________
W. Xxxxxx Xxxxx, III
WJ COINVESTMENT FUND I, LLC
By: Fox Xxxxx Capital, LLC
Its: Manager
By:__________________________________
W. Xxxxxx Xxxxx, III
WJ COINVESTMENT FUND II, LLC
By: Fox Xxxxx Capital, LLC
Its: Manager
By:__________________________________
W. Xxxxxx Xxxxx, III
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WJ COINVESTMENT FUND III, LLC
By: Fox Xxxxx Capital, LLC
Its: Manager
By:__________________________________
W. Xxxxxx Xxxxx, III
WJ COINVESTMENT FUND IV, LLC
By: Fox Xxxxx Capital, LLC
Its: Manager
By:__________________________________
W. Xxxxxx Xxxxx, III
INVESTOR INTERNATIONAL (CAYMAN) LIMITED
By: _________________________________
Name: _______________________________
Title: _______________________________
WJ COMMUNICATIONS, INC.
By:______________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: President & Chief Executive Officer
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