EXHIBIT 4.2
STOCKHOLDERS' AGREEMENT
among
WESTERN MULTIPLEX CORPORATION,
WMC HOLDING CORP.,
GTI ACQUISITION CORP.
and
GLENAYRE TECHNOLOGIES, INC.
dated as of
October 31, 1999
TABLE OF CONTENTS
Page
I. INTRODUCTORY MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Construction . . . . . . . . . . . . . . . . . . . . . . . 4
II. TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1. Limitations on Transfer . . . . . . . . . . . . . . . . . 4
2.2. Right of First Refusal . . . . . . . . . . . . . . . . . . 5
2.3. Transfers to Affiliates . . . . . . . . . . . . . . . . . 6
2.4. Tag-Along Rights . . . . . . . . . . . . . . . . . . . . . 6
2.5. Drag-Along Rights . . . . . . . . . . . . . . . . . . . . 8
III. REGISTRATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1. Piggyback Rights . . . . . . . . . . . . . . . . . . . . . 9
3.2. Other Registration Related Matters. . . . . . . . . . . . 10
3.3. Indemnification . . . . . . . . . . . . . . . . . . . . . 12
IV. ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1. Right to Purchase Additional Common Stock . . . . . . . . 15
4.2 Transactions With Affiliates . . . . . . . . . . . . . . . 16
4.3 Restrictions on Certain Fees. . . . . . . . . . . . . . . 17
V. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.1. Additional Securities Subject to Agreement . . . . . . . . 17
5.2. Covenant by GTI . . . . . . . . . . . . . . . . . . . . . 17
5.3. Termination . . . . . . . . . . . . . . . . . . . . . . . 17
5.4. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5. Further Assurances . . . . . . . . . . . . . . . . . . . . 18
5.6. Non-Assignability . . . . . . . . . . . . . . . . . . . . 18
5.7. Amendment; Waiver . . . . . . . . . . . . . . . . . . . . 18
5.8. Third Parties . . . . . . . . . . . . . . . . . . . . . . 18
5.9. Governing Law . . . . . . . . . . . . . . . . . . . . . . 18
5.10. Specific Performance . . . . . . . . . . . . . . . . . . . 18
5.11. Entire Agreement . . . . . . . . . . . . . . . . . . . . . 18
5.12. Titles and Headings . . . . . . . . . . . . . . . . . . . 19
5.13. Severability . . . . . . . . . . . . . . . . . . . . . . . 19
5.14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 19
5.15. Reporting Requirements . . . . . . . . . . . . . . . . . . 19
5.16. Representations . . . . . . . . . . . . . . . . . . . . . 20
EXHIBIT 4.2
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of October 31, 1999 (this
"Agreement"), among Western Multiplex Corporation, a Delaware corporation
(the "Company"), WMC Holding Corp., a Delaware corporation (together with its
successors, "WMC Holding"), GTI Acquisition Corp., a Delaware corporation
(together with its successors, "Glenayre") and Glenayre Technologies, Inc., a
Delaware corporation (together with its successors, "GTI").
RECITALS:
A. The Company, WMC Holding, Glenayre and GTI are parties to an
Acquisition Agreement, dated as of September 30, 1999, as amended and
restated on October 31, 1999 (the "Acquisition Agreement"), pursuant to
which, among other things, the Company will redeem 42,000,000 shares of Class
B Common Stock, par value $.01 per share ("Class B Common Stock"), from
Glenayre (the "Redemption") and WMC Holding will purchase 35,955,000 shares
of Class B Common Stock from Glenayre (the "Stock Purchase");
B. Immediately following the Transactions (as defined herein),
Glenayre will hold 2,045,000 shares of Class B Common Stock and WMC Holding
will hold 35,955,000 shares of Class B Common Stock, and no shares of Class A
Common Stock, par value $.01 per share, will be outstanding; and
C. The parties hereto wish to provide for certain matters
relating to Glenayre's holdings of Class B Common Stock.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
I. INTRODUCTORY MATTERS
1.1. Defined Terms. In addition to the terms defined elsewhere
herein, the following terms have the following meanings when used herein with
initial capital letters:
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such
specified Person; provided, that officers, directors or employees of
the Company will not be deemed to be Affiliates of a stockholder of the
Company for purposes hereof solely by reason of being officers,
directors or employees of the Company.
"Agreement" means this Agreement, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
the terms hereof.
"Assumption Agreement" means a writing reasonably satisfactory in
form and substance to Glenayre and the Company whereby a Permitted
Transferee of shares of Common Stock becomes a party to, and agrees to
be bound by, to the same extent as its transferor by the terms of, this
Agreement.
"Board" means the Board of Directors of the Company.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in the State of North Carolina or the
State of New York are authorized or required by law to close.
"Class A Common Stock" means the Class A Common Stock of the
Company, par value $.01 per share.
"Class B Common Stock" means the Class B Common Stock of the
Company, par value $.01 per share.
"Common Stock" means the shares of Class A Common Stock and Class B
Common Stock of the Company and any Common Stock issued as (or issuable
upon the conversion or exercise of any warrant, right, option or other
convertible security which is issued as) a dividend or other
distribution with respect to, or in exchange for, or in replacement of,
or by way of a stock split of, such Common Stock.
"Fully Diluted Shares" means the aggregate of (i) the number of
shares of Common Stock issued and outstanding (other than shares of
Common Stock held in the treasury of the Company or held by any
Subsidiary) and (ii) the number of shares of Common Stock issuable upon
(x) the exercise of any then exercisable in-the-money outstanding
options, warrants or similar instruments (other than such instruments
held by the Company or any Subsidiary) and (y) the exercise of any then
exercisable conversion or exchange rights with respect to any
outstanding securities or instruments (other than such securities or
instruments held by the Company or any Subsidiary).
"IPO" means the completion of an initial Public Offering and the
sale to the public of Common Stock by the Company.
"Permitted Transferees" means any Person to whom shares of Common
Stock are Transferred in a Transfer in accordance with Section 2.2 or
2.3 or otherwise not in violation of this Agreement and who is required
to, and does, enter into an Assumption Agreement, and includes any
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Person to whom a Permitted Transferee of Glenayre (or a Permitted
Transferee of a Permitted Transferee) so further Transfers shares of
Common Stock and who is required to, and does, become bound by the terms
of this Agreement.
"Person" means any individual, corporation, limited liability
company, partnership, trust, joint stock company, business trust,
unincorporated association, joint venture, governmental authority or
other legal entity of any nature whatsoever.
"Public Offering" means the sale of shares of any class of the
Common Stock to the public pursuant to an effective registration
statement (other than a registration statement on Form S-4 or S-8 or any
similar or successor form) filed under the Securities Act.
"Registrable Securities" means (i) any Common Stock held by
Glenayre or its Permitted Transferees following the Transactions, (ii)
any Common Stock issued as (or issuable upon the conversion or exercise
of any warrant, right, option or other convertible security which is
issued as) a dividend or other distribution with respect to, or in
exchange for, or in replacement of, such Common Stock, and (iii) any
Common Stock issued by way of a stock split of the Common Stock referred
to in clauses (i) or (ii) or this clause (iii). For purposes of this
Agreement, any Registrable Securities will cease to be Registrable
Securities when (A) a registration statement covering such Registrable
Securities has been declared effective and such Registrable Securities
have been disposed of pursuant to such effective registration statement,
(B) all Registrable Securities may be offered and sold pursuant to Rule
144 (or any similar provision then in effect) under the Securities Act
in a single transaction or series of transactions over a 90-day period,
(C) such Registrable Securities are sold by a Person in a transaction in
which rights under the provisions of this Agreement are not assigned in
accordance with this Agreement, or (D) such Registrable Securities cease
to be outstanding.
"Registration Expenses" means any and all expenses incident to the
performance by the Company of its obligations under Sections 3.1 or 3.2,
including (i) all SEC, stock exchange, National Association of
Securities Dealers, Inc. and other comparable regulatory agencies,
registration and filing fees, (ii) all fees and expenses of the Company
in complying with securities or blue sky laws (including fees and
disbursements of counsel for the underwriters in connection with blue
sky qualifications), (iii) all printing, messenger and delivery expenses
of the Company, (iv) the fees and disbursements of counsel for the
Company and of its independent accountants, including the expenses of
any "cold comfort" letters required by or incident to such performance
and compliance, and (v) fees and disbursements customarily paid by
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issuers of securities (but not underwriters' or sales agents' discounts
or similar compensation).
"Ripplewood" means Ripplewood Holding L.L.C. (or its successor) and
its Affiliates (other than WMC Holding or any employee, officer or
director of WMC Holding or the Company).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder, as the same may be
amended from time to time.
"Stockholders" means each of the holders of Common Stock.
"Transactions" means the Redemption and the Stock Purchase.
"Transfer" means a transfer, sale, assignment, pledge,
hypothecation or other disposition, whether directly or indirectly
pursuant to the creation of a derivative security, the grant of an
option or other right, the imposition of a restriction on disposition or
voting or transfer by operation of law, or, in the case of GTI, any
change in the beneficial ownership of Glenayre or any other Affiliate of
GTI that is a Stockholder so that such Stockholder is no longer a
wholly-owned Affiliate of GTI.
"WMC Holding Common Stock" means common stock issued by WMC Holding
or issuable upon the conversion or exercise of any warrant, right,
option or other convertible security of WMC Holding or as a dividend or
other distribution with respect to, or in exchange for, or in
replacement of, or by way of a stock split of, such WMC Holding Common
Stock.
1.2. Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.
Unless the context otherwise requires: (a) "or" is not exclusive, (b) words
in the singular include the plural, and in the plural include the singular,
(c) the words "hereof", "herein", and "hereunder" and words of similar import
when used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section references are to this
Agreement unless otherwise specified, and (d) references to "includes" or
"including" shall mean "includes without limitation" or "including without
limitation."
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II. TRANSFERS
2.1. Limitations on Transfer. (a) Prior to an IPO, Glenayre and
its Permitted Transferees may not Transfer any shares of Common Stock other
than (i) in connection with a Public Offering effected in accordance with
Section 3.1(a), (ii) in accordance with Section 2.3, 2.4 or 2.5 or (iii)
following the second anniversary hereof, in accordance with Section 2.2.
(b) In the event of any purported Transfer by Glenayre or any of
its Permitted Transferees of any shares of Common Stock in violation of the
provisions of this Agreement, such purported Transfer will be void and of no
effect and the Company will not give effect to such Transfer.
(c) Each certificate representing shares of Common Stock issued to
Glenayre or any of its Permitted Transferees will bear a legend on the face
thereof substantially to the following effect (with such additions thereto or
changes therein as the Company may be advised by counsel are required by law
or necessary to give full effect to this Agreement, the "Legend"):
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO A STOCKHOLDERS' AGREEMENT AMONG WESTERN MULTIPLEX CORPORATION ("THE
COMPANY"), WMC HOLDING CORP., GTI ACQUISITION CORP. AND GLENAYRE
TECHNOLOGIES, INC., A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH STOCKHOLDERS'
AGREEMENT. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS
CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE PROVISIONS OF SUCH
STOCKHOLDERS' AGREEMENT.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT
OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
The Legend will be removed by the Company by the delivery of substitute
certificates without such Legend in the event of (i) a Transfer permitted by
this Agreement and in which the Transferee is not required to enter into an
Assumption Agreement or (ii) the termination of Article II pursuant to the
terms hereof, provided however, that the second paragraph of Legend will only
be removed if at such time it is no longer required for purposes of the
Securities Act and other applicable securities laws.
(d) Except as permitted by Section 2.3, each of Glenayre and its
Permitted Transferees shall have no right to Transfer, and the Company shall
have no obligation to record any purported Transfer, of Class B Common Stock.
The Company shall instead cause all such shares of Class B Common Stock
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proposed to be Transferred to be converted into or exchanged for an equal
number of shares of Class A Common Stock immediately prior to such Transfer
(after giving effect to any adjustment that may be necessary or appropriate
as a result of any conversion or exercise of any warrant, right, option or
other convertible security issuable in respect of Class A Common Stock or
Class B Common Stock or as a dividend or other distribution with respect to,
or in exchange for, or in replacement of, or by way of a stock split of, such
Common Stock). References in Section 2.2 to Transfer Stock, references in
Section 2.4 to Common Stock of the Tagging Stockholder and references in
Section 2.5(a) to Common Stock of Glenayre and its Permitted Transferees
shall be deemed references to Class A Common Stock converted or exchanged
pursuant to this paragraph (d).
2.2. Right of First Refusal. (a) Each of Glenayre and its
Permitted Transferees agrees that, if, following the second anniversary
hereof, such Stockholder (the "Offeree") receives a bona fide offer (a
"Transfer Offer") to purchase all or any portion of the Common Stock (the
"Transfer Stock") then owned by such Offeree from any Person (the "Offeror"),
other than an Affiliate of such Offeree, which such Offeree wishes to accept,
such Offeree shall cause the Transfer Offer to be reduced to writing and
shall provide a written notice (the "Transfer Notice") of such Transfer Offer
to the Company and WMC Holding; provided that, there shall not be more than
three Permitted Transferees pursuant to this Section 2.2. The Transfer
Notice shall also contain an irrevocable offer to sell the Transfer Stock to
the Company for cash and, if the Company shall decline to accept such offer,
WMC Holding or Ripplewood (in the manner set forth below) at a price equal to
the price contained in, and upon the same terms and conditions as the terms
and conditions contained in, the Transfer Offer and shall be accompanied by a
true and complete copy of the Transfer Offer (which shall identify the
Offeror, the Transfer Stock, the price contained in the Transfer Offer and
the other material terms and conditions of the Transfer Offer); provided that
none of Glenayre or any Permitted Transferee shall be entitled to accept any
offer pursuant to this Section 2.2 which provides for any consideration other
than cash, cash equivalents, marketable securities, securities with
registration rights similar to those contemplated in Section 3.1 or
securities which may be Transferred pursuant to Rule 144 or 145 (or any
successor rules) under the Securities Act. At any time within 30 days after
the date of the receipt by the Company and WMC Holding of the Transfer
Notice, the Company shall have the option to exercise its right to purchase
(or assign its right to one of its subsidiaries) or, if the Company and its
subsidiaries shall decline to exercise such option, WMC Holding shall have
the right to exercise such option to purchase (or assign its right to any
party) all of the Transfer Stock covered by the Transfer Offer at the same
price and on the same terms and conditions as the Transfer Offer. If such
election is made, within 15 days after such election, the Company or WMC
Holding or one of their aforementioned assignees shall deliver a certified
bank check or checks in the appropriate amount to such Offeree against
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delivery of certificates or other instruments representing the Transfer
Stock, appropriately endorsed by such Offeree. If the Company or WMC Holding
or one of their aforementioned assignees has not given notice of its
intention to exercise such right to purchase within such 30 day period or has
not tendered the purchase price for such Transfer Stock in the manner set
forth above within such 15 day period, such Offeree shall be free for a
period of 90 days from the end of such 30 day or 15 day period, as the case
may be, to transfer the Transfer Stock to the Offeror on terms which are no
more favorable in any material respect to the Offeror than the terms and
conditions set forth in the Transfer Notice. If for any reason such Offeree
does not Transfer the Transfer Stock to the Offeror on such terms and
conditions, the provisions of this Section 2.2 shall again be applicable to
the Transfer Stock.
(b) The closing of the purchase of the Transfer Stock upon
exercise of the option pursuant to Section 2.2(a) shall take place at the
principal office of the Company on a date specified by the buyer no later
than the last day of the 15 day period after the election is made.
2.3. Transfers to Affiliates. Glenayre and its Permitted
Transferees may Transfer any or all of the shares of Common Stock held by any
of them to any of their respective wholly-owned Affiliates who duly executes
and delivers an Assumption Agreement, provided that in connection therewith
the Company has been furnished with an opinion in form and substance
reasonably satisfactory to the Company of counsel reasonably satisfactory to
the Company that such Transfer is exempt from or not subject to the
provisions of Section 5 of the Securities Act and any other applicable
securities laws.
2.4. Tag-Along Rights. (a) So long as this Agreement remains in
effect, with respect to (i) any proposed Transfer by WMC Holding of shares of
Common Stock owned by WMC Holding to any Person not an Affiliate or officer,
director or employee of WMC Holding or the Company, other than in a Public
Offering or as contemplated by Section 4.2(c), or (ii) any proposed Transfer
by Ripplewood of shares of WMC Holding Common Stock to any Person not an
Affiliate or officer, director or employee of WMC Holding or the Company,
other than in a Public Offering or as contemplated by Section 4.2(c), in each
case whether pursuant to a stock sale, a tender or exchange offer or any
other sale transaction (any such transaction, a "WMC Holding Sale"), WMC
Holding will have the obligation, and each of Glenayre and its Permitted
Transferees will have the right, to require the proposed transferee (a
"Proposed Transferee") to purchase from each of Glenayre and its Permitted
Transferees who exercises its rights under Section 2.4(b) (a "Tagging
Stockholder") a number of shares of Common Stock up to the product (rounded
up to the nearest whole number) of (i) the quotient determined by dividing
(A) the aggregate number of shares of Common Stock owned by such Tagging
Stockholder by (B) the aggregate number of shares of Common Stock owned by
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WMC Holding, the Tagging Stockholder and any other Stockholder entitled to
participate in the WMC Holding Sale, and (ii) in the case of a sale of Common
Stock, the total number of shares of Common Stock proposed to be directly or
indirectly Transferred to the Proposed Transferee or in the case of a sale of
WMC Holding Common Stock, the product of (x) the quotient determined by
dividing the number of shares of WMC Holding Common Stock being Transferred
divided by the total number of shares of WMC Holding Common Stock owned by
Ripplewood at such time, times (y) the aggregate number of shares of Common
Stock of the Company owned by WMC Holding or Ripplewood at such time), upon
the same terms and conditions (including time of payment and form of
consideration) as to be paid and given to WMC Holding (or Ripplewood, as the
case may be); provided, that in order to be entitled to exercise its right to
sell shares of Common Stock to the Proposed Transferee pursuant to this
Section 2.4, each Tagging Stockholder must agree to make to the Proposed
Transferee the same representations, warranties, covenants, indemnities and
agreements as WMC Holding agrees to make in connection with the proposed WMC
Holding Sale so long as they are made severally and not jointly; and
provided, further, that no Tagging Stockholder shall be required to make
representations, warranties or covenants or provide indemnification with
respect to any matter other than its ownership of the shares of Common Stock
to be Transferred, its ability to Transfer such shares free and clear of all
encumbrances and its authority and due authorization to Transfer such shares.
Each Tagging Stockholder will be responsible for its proportionate share of
the costs incurred in connection with the WMC Holding Sale to the extent not
paid or reimbursed by the Company or the Proposed Transferee.
(b) WMC Holding will give notice to each Tagging Stockholder of
each proposed WMC Holding Sale at least 15 Business Days prior to the
proposed consummation of such WMC Holding Sale, setting forth the number of
shares of Common Stock or WMC Holding Common Stock, as the case may be,
proposed to be so Transferred, the name and address of the Proposed
Transferee, the proposed amount and form of consideration (and if such
consideration consists in part or in whole of property other than cash, WMC
Holding will provide such information, to the extent reasonably available to
WMC Holding, relating to such consideration as the Tagging Stockholder may
reasonably request in order to evaluate such non-cash consideration) and
other terms and conditions of payment offered by the Proposed Transferee, and
a representation that the Proposed Transferee has been informed of the
tag-along rights provided for in this Section 2.4. WMC Holding will deliver
or cause to be delivered to each Tagging Stockholder copies of all
transaction documents relating to the proposed WMC Holding Sale as the same
become available. The tag-along rights provided by this Section 2.4 must be
exercised by each Tagging Stockholder within 10 days following receipt of the
notice required by the preceding sentence by delivery of a written notice to
WMC Holding indicating the desire of such Tagging Stockholder to exercise its
rights and specifying the number of shares of Common Stock it desires to
sell. The Tagging Stockholder will be entitled under this Section 2.4 to
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Transfer to the Proposed Transferee the number of shares of Common Stock
calculated in accordance with Section 2.4(a).
(c) If any Tagging Stockholder exercises his, her or its rights
under Section 2.4(a), the closing of the purchase of the Common Stock with
respect to which such rights have been exercised will take place concurrently
with the closing of the sale of Common Stock or WMC Holding Common Stock, as
the case may be, to the Proposed Transferee.
2.5. Drag-Along Rights. (a) So long as this Agreement remains in
effect, if WMC Holding or its stockholders receives an offer from a Person
other than an Affiliate of WMC Holding (a "Third Party") to purchase (other
than in a Public Offering) either (i) at least a majority of the shares of
Common Stock then outstanding or (ii) at least a majority of the shares of
WMC Holding Common Stock then outstanding, and, in either case, such offer is
accepted by WMC Holding or its stockholders, then each of Glenayre and its
Permitted Transferees hereby agrees that, if requested by WMC Holding, it
will Transfer to such Third Party on the same terms and conditions (including
time of payment and form of consideration) as to be paid and given to WMC
Holding or its stockholders, the number of shares of Common Stock equal to
the number of shares of Common Stock owned by it multiplied by the percentage
of the then outstanding shares of Common Stock to which the Third Party offer
is applicable.
(b) WMC Holding will give notice (the "Drag-Along Notice") to each
of Glenayre and its Permitted Transferees of any proposed Transfer giving
rise to the rights of WMC Holding set forth in Section 2.5(a) as soon as
practicable following WMC Holding's or its stockholders' acceptance of the
offer referred to in Section 2.5(a). The Drag-Along Notice will set forth
the number of shares of Common Stock proposed to be so Transferred, the name
and address of the Third Party, the proposed amount and form of
consideration (and if such consideration consists in part or in whole of
property other than cash, WMC Holding will provide such information, to the
extent reasonably available to WMC Holding, relating to such consideration as
Glenayre and its Permitted Transferees may reasonably request in order to
evaluate such non-cash consideration), the number of shares of Common Stock
sought and the other terms and conditions of the offer; provided that none of
Glenayre or any Permitted Transferee shall be obligated to accept pursuant to
this Section 2.5 any consideration other than cash, cash equivalents,
marketable securities, securities with registration rights similar to those
contemplated in Section 3.1 or securities which may be Transferred pursuant
to Rule 144 or 145 (or any successor rules) under the Securities Act. WMC
Holding will endeavor to notify Glenayre and its Permitted Transferees at
least 20 days (and in any event shall notify Glenayre and its Permitted
Transferees at least 10 Business Days) in advance of entering into a
definitive agreement in connection with such offer. In any such agreement,
Glenayre and its Permitted Transferees will be required (i) to make or agree
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to the same representations, warranties and indemnities as WMC Holding so
long as they are made severally and not jointly (provided that Glenayre and
its Permitted Transferees will not be required to make representations,
warranties or covenants or provide indemnification with respect to any matter
other than their respective ownership of the shares of Common Stock to be
Transferred, their respective ability to Transfer such shares free and clear
of all encumbrances and their respective authority and due authorization to
Transfer such shares), and (ii) to pay their proportionate share of the costs
incurred in connection with such WMC Holding Sale to the extent not paid or
reimbursed by the Company or the Transferee or Third Party. If the Transfer
referred to in the Drag-Along Notice is not consummated within 90 days from
the date of the Drag-Along Notice, WMC Holding must deliver another
Drag-Along Notice in order to exercise its rights under this Section 2.5 with
respect to such Transfer or any other Transfer.
III. REGISTRATION RIGHTS
3.1. Piggyback Rights. (a) Each time the Company is planning to
file a registration statement under the Securities Act in connection with the
sale of Common Stock by (i) the Company (other than in connection with a
registration statement on Forms S-4 or S-8 or any similar or successor form)
or (ii) WMC Holding (the Company or WMC Holding in such case, the "Initiating
Party"), the Company will give prompt written notice thereof to Glenayre and
its Permitted Transferees at least 20 Business Days prior to the anticipated
filing date of such registration statement. Upon the written request of
Glenayre and any Permitted Transferee made within 10 Business Days after the
receipt of any such notice from the Company, which request will specify the
Registrable Securities (such securities, together with any other shares of
Common Stock requested to be included in such registration statement by any
other Person pursuant to similar registration rights, the "Piggy-Back
Shares") intended to be disposed of by Glenayre or such Permitted Transferee
in such offering, the Company will use reasonable efforts to effect the
registration under the Securities Act of all Piggy-Back Shares which the
Company has been so requested to register by Glenayre or such Permitted
Transferee to the extent required to permit the disposition of the Piggy-Back
Shares so registered; provided, that (x) if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the registration statement filed in connection with such
registration, any Initiating Party determines for any reason not to proceed
with the proposed registration, the Company may at its election give written
notice of such determination to each holder of Piggy-Back Shares and
thereupon will be relieved of its obligation to register any Piggy-Back
Shares in connection with such registration, (y) if such registration
involves an underwritten offering, each such holder must sell its shares to
the underwriters on the same terms and conditions as apply to the Initiating
Parties and (z) the Company shall have no obligation to register Class B
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Common Stock and may instead cause all such shares of Class B Common Stock
that are Piggy-Back Shares to be converted into or exchanged for an equal
number of shares of Class A Common Stock immediately prior to such
registration (after giving effect to any adjustment that may be necessary or
appropriate as a result of any conversion or exercise of any warrant, right,
option or other convertible security issuable in respect of Class A Common
Stock or Class B Common Stock or as a dividend or other distribution with
respect to, or in exchange for, or in replacement of, or by way of a stock
split of, such Common Stock).
(b) If a registration pursuant to this Section 3.1 involves an
underwritten offering and the managing underwriter or underwriters advise the
Company in writing that, in their opinion, (i) the number of securities which
the Initiating Party intends to include in such registration, together with
the Piggy-Back Shares, exceeds the largest number of such securities which
can be sold in such offering without having an adverse effect on such
offering (including, but not limited to, the price at which such securities
can be sold) or (ii) the inclusion of the Piggy-Back Shares in such
registration would have an adverse effect on such offering, then the Company
will include in such registration (A) first, 100% of the securities proposed
to be sold by the Company and (B) second, to the extent that the number of
securities requested to be included in such registration can, in the opinion
of such managing underwriter, be sold without having the adverse effect
referred to above, the number of securities which WMC Holding and the holders
of Piggy-Back Shares have requested to be included in such registration, such
amount to be allocated pro rata among WMC Holding and all such holders on the
basis of the relative number of securities requested to be registered by WMC
Holding and each such holder (provided that any securities thereby allocated
to WMC Holding or any such holder that exceed the request of WMC Holding or
such holder will be reallocated among WMC Holding and the remaining
requesting holders in like manner).
3.2. Other Registration Related Matters. (a) If the Board
determines that the registration and distribution of Registrable Securities
(A) could impede, delay or interfere with any pending material financing,
acquisition, corporate reorganization or other significant transaction
involving the Company or (B) could require disclosure of non-public material
information, the disclosure of which could adversely affect the Company, the
Company will promptly give the requesting holders written notice of such
determination and will be entitled to postpone the filing or effectiveness of
a registration statement for a reasonable period of time not to exceed 180
calendar days in any calendar year (a "Section 3.2(a) Period"); provided,
however, that in connection therewith the Company will be required to deliver
to the requesting holders a general statement, signed by the chief financial
officer of the Company, describing in reasonable detail the reasons for such
postponement or restriction on use and an estimate of the anticipated delay.
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The Company will promptly notify the requesting holders of the expiration or
earlier termination of a Section 3.2(a) Period.
(b) The Company may require any Person that is selling shares of
Common Stock in a Public Offering pursuant to Section 3.1 (each a "Holder")
to furnish to the Company in writing such information regarding such Person
and the distribution of the shares of Common Stock which are included in a
Public Offering as may from time to time reasonably be requested in writing
in order to comply with the Securities Act.
(c) The Company will pay all Registration Expenses in connection
with each registration or proposed registration of Registrable Securities
pursuant to Section 3.1. Notwithstanding the foregoing, (i) the fees or
expenses of counsel to the Holders or of any other expert hired directly by
the Holders will be the sole responsibility of the Holders and (ii) the
Holders will be responsible for their respective pro rata shares (determined
by reference to the number of shares included in the applicable registration)
of all underwriting discounts and commissions and transfer taxes.
(d) No later than ten days before filing any registration
statement or prospectus, or any amendments or supplements thereto, in
connection with any registration or proposed registration of Registrable
Securities pursuant to Sections 3.1, the Company will furnish to counsel of
the Holders copies of all documents proposed to be filed.
(e) The Company will furnish to each Holder such number of copies
of the applicable registration statement and of each amendment or supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such registration statement (including each
preliminary prospectus and summary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as such Holder
may reasonably request in order to facilitate the disposition of Registrable
Securities by such Holder.
(f) The Company will use reasonable efforts to register or qualify
Registrable Securities covered by a registration statement under such other
securities or blue sky laws of such jurisdictions as each Holder reasonably
requests, and do any and all other acts and things which may be reasonably
necessary or advisable to enable such Holder to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such Holder, except
that the Company will not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction where,
but for the requirements of this Section 3.2(f), it would not be obligated to
be so qualified, to subject itself to taxation in any such jurisdiction, or
to consent to general service of process in any such jurisdiction.
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(g) The Company will use reasonable efforts to cause the
Registrable Securities covered by a registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the Holder thereof to consummate the disposition thereof.
(h) The Company will notify each Holder of Registrable Securities
covered by a registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act promptly after
the Company becomes aware that the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits 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 then existing, and at the request of any such Holder, prepare
and furnish to such Holder a reasonable number of copies of an amended or
supplemental prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will 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 than existing.
(i) The Company will enter into such customary agreements
(including an underwriting agreement in customary form) and take such other
actions as sellers of a majority of securities covered by a registration
statement or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities.
(j) The Company will make available for inspection by any Holder
of Registrable Securities covered by a registration statement, by any
underwriter participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent
retained by any such Holder or any such underwriter, all pertinent financial
and other records, pertinent corporate documents and properties of the
Company, and cause all of the Company's officers, directors and employees to
supply all information reasonably requested by any such Holder, underwriter,
attorney, accountant or agent in connection with such registration statement.
(k) The Company will obtain a "cold comfort" letter or letters
from the Company's independent public accountants in customary form and
covering matters of the type customarily covered by "cold comfort" letters as
the sellers of a majority of the securities covered by the registration
statement reasonably request.
(l) Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
3.2(h), such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Holder's receipt of the copies of the amended or
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supplemented prospectus contemplated by Section 3.2(h) and, if so directed by
the Company, such Holder will deliver to the Company (at the Company's
expense) all copies, other than permanent file copies then in such Holder's
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice. In the event the Company gives any such
notice, the period for which the Company will be required to keep the
registration statement effective will be extended by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 3.2(h) to and including the date when each Holder has
received the copies of the supplemented or amended prospectus contemplated by
Section 3.2(h).
(m) Each Holder will, in connection with an offering of the
Company's securities, upon the request of the Company or of the underwriters
managing any underwritten offering of the Company's securities, agree in
writing not to effect any sale, disposition or distribution of Registrable
Securities (other than those included in the registration or in a private
sale to a third party that is otherwise in accordance with the terms of this
Agreement if such third party agrees to be bound by this Agreement, including
this clause (m)) without the prior written consent of the managing
underwriter for such period of time (not to exceed 180 days) from the
effective date of such registration as the Company or the underwriters may
specify.
3.3. Indemnification. (a) Indemnification by the Company. In the
event of any registration of any securities of the Company under the
Securities Act pursuant to Section 3.1, the Company hereby indemnifies and
agrees to hold harmless, to the extent permitted by law, each Holder of
Registrable Securities covered by such registration statement, each Affiliate
of such Holder and their respective directors and officers or general and
limited partners (and the directors, officers, Affiliates and controlling
Persons thereof), each other Person who participates as an underwriter in the
offering or sale of such securities and each other Person, if any, who
controls such Holder or any such underwriter within the meaning of the
Securities Act (collectively, the "Indemnified Parties"), against any and all
losses, claims, damages or liabilities, joint or several, and expenses to
which such Indemnified Party may become subject under the Securities Act,
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof, whether or not
such Indemnified Party is a party thereto) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement thereto, or (ii)
any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing, and the Company will
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reimburse such Indemnified Party for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, that the Company will not
be liable to any Indemnified Party in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, in any such preliminary, final or summary prospectus,
or any amendment or supplement thereto in reliance upon and in conformity
with written information with respect to such Indemnified Party furnished to
the Company by such Indemnified Party for use in the preparation thereof; and
provided, further, that the Company will not be liable to any Person who
participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within
the meaning of the Securities Act, under the indemnity agreement in this
Section 3.3 with respect to any preliminary prospectus or the final
prospectus or the final prospectus as amended or supplemented, as the case
may be, to the extent that any such loss, claim, damage or liability of such
underwriter or controlling Person results from the fact that such underwriter
sold Registrable Securities to a Person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the final
prospectus or of the final prospectus as then amended or supplemented,
whichever is most recent, if the Company has previously furnished copies
thereof to such underwriter. Such indemnity will remain in full force and
effect regardless of any investigation made by or on behalf of such Holder or
any Indemnified Party and will survive the Transfer of such securities by
such Holder.
(b) Indemnification by the Holders and Underwriters. The Company
may require, as a condition to including any Registrable Securities in any
registration statement filed in accordance with Section 3.1, that the Company
shall have received an undertaking reasonably satisfactory to it from the
Holder of such Registrable Securities to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 3.3(a)) the
Company, all other Holders or any prospective underwriter, as the case may
be, and any of their respective Affiliates, directors, officers and
controlling Persons, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment
or supplement, if (and only if) such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information with respect to such Holder furnished to the Company by
such Holder expressly for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or
supplement, or a document incorporated by reference into any of the
foregoing. Such indemnity will remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any of the Holders,
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or any of their respective Affiliates, directors, officers or controlling
Persons and will survive the Transfer of such securities by such Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any
action or proceeding with respect to which a claim for indemnification may be
made pursuant to this Section 3.3, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give written
notice to the latter of the commencement of such action; provided, that the
failure of the indemnified party to give notice as provided herein will not
relieve the indemnifying party of its obligations under Section 3.3(a) or
3.3(b), except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, the indemnifying party will be
entitled to participate in and to assume the defense thereof, jointly with
any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other than
reasonable costs of investigation. If, in such indemnified party's
reasonable judgment, having common counsel would result in a conflict of
interest between the interests of such indemnified and indemnifying parties,
then such indemnified party may employ separate counsel reasonably acceptable
to the indemnifying party to represent or defend such indemnified party in
such action, it being understood, however, that the indemnifying party will
not be liable for the reasonable fees and expenses of more than one separate
firm of attorneys at any time for all such indemnified parties (and not more
than one separate firm of local counsel at any time for all such indemnified
parties) in such action. No indemnifying party will consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation.
(d) Other Indemnification. Indemnification similar to that
specified in this Section 3.3 (with appropriate modifications) will be given
by the Company and each Holder of Registrable Securities with respect to any
required registration or other qualification of securities under any federal
or state law or regulation or governmental authority other than the
Securities Act.
(e) Contribution. If recovery is not available under the
foregoing indemnification provisions of this Section 3.3 for any reason other
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than as expressly specified therein, the parties required to provide
indemnification by the terms thereof will contribute to liabilities and
expenses of the indemnified party except to the extent that contribution is
not permitted under Section 11(f) of the Securities Act. In determining the
amount of contribution to which the respective parties are entitled,
consideration will be given to the relative benefits received by each party
from the offering of the Registrable Securities (taking into account the
portion of the proceeds realized by each), the parties' relative knowledge
and access to information concerning the matter with respect to which the
claim was asserted, the opportunity to correct and prevent any misstatement
or omission and any other equitable considerations appropriate under the
circumstances.
(f) Non-Exclusivity. The obligations of the parties under this
Section 3.4 will be in addition to any liability which any party may
otherwise have to any other party.
IV. ADDITIONAL AGREEMENTS
4.1. Right to Purchase Additional Common Stock. (a) Subject to
paragraph 4.1(d), in the event the Company proposes to issue Common Stock to
WMC Holding, Ripplewood or any other Affiliate of WMC Holding at any time
prior to the second anniversary hereof and that such issuance would have the
effect of reducing Glenayre's and its Permitted Transferees percentage
ownership of the Fully Diluted Shares below the lesser of 5.1% or the
percentage owned by Glenayre and its Permitted Transferees at such time, the
Company hereby grants to Glenayre the right to purchase in lieu of WMC
Holding, Ripplewood or such other Affiliate, in accordance with Section
4.1(b), a number of shares of any Common Stock which the Company issues equal
to the product of (a) the total number of shares of such Common Stock which
the Company issues at such time and (b) a fraction, the numerator of which
shall be the total number of Fully Diluted Shares then outstanding and
beneficially owned by Glenayre, and the denominator of which shall be the
total number of Fully Diluted Shares then outstanding. If Glenayre does not
purchase any or all of its pro rata portion of Common Stock, WMC Holding,
Ripplewood or any other Affiliate of WMC Holding shall be free to purchase
Glenayre's pro rata portion of Common Stock. The rights of Glenayre under
this Section 4.1 shall terminate if unexercised within 20 days after receipt
of the Notice of Issuance referred to in Section 4.1(b).
(b) In the event that the Company proposes to undertake an
issuance that is subject to Glenayre's rights under Section 4.1(a), it shall
give Glenayre written notice (a "Notice of Issuance") of its intention,
describing all material terms of the Common Stock, the price and all material
terms upon which the Company proposes to issue such Common Stock. Glenayre
shall have 20 days from the date of the Notice of Issuance to agree to
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purchase all or any portion of Glenayre's pro rata share of such Common
Stock (as determined pursuant to Section 4.1(a)) for the same consideration,
if such consideration shall consist solely of cash, or for cash, Cash
Equivalents or Marketable Securities having an equivalent value to the
consideration payable by WMC Holding or such other Affiliate of the Company
at the time of payment as determined pursuant to the valuation procedures set
forth in the Notice of Issuance by giving written notice to the Company, with
a copy to WMC Holding, and stating therein the quantity of Common Stock to be
purchased by such Stockholder; provided, however, to the extent a payment of
non-cash consideration by WMC Holding or such other Affiliate of the Company,
as contemplated by this Section 4.1(b), consists of any assets, securities or
capital stock acquired from a non-Affiliate substantially contemporaneously
with such payment, then the value of such assets, securities or capital stock
for purposes of this Section 4.1(b) shall equal the price paid or to be paid
by WMC Holding or such other Affiliate to the non-Affiliate; provided,
further, that any capital stock issued by WMC Holding or such other Affiliate
of the Company to acquire assets, securities or capital stock from a non-
Affiliate shall be valued at the same time as it is valued under the terms of
any agreement with such non-Affiliate.
(c) Except as otherwise agreed by Glenayre and WMC Holding,
the price payable for any shares of Common Stock to be issued by the Company
prior to the first anniversary hereof shall be based upon an equity value for
the Company equal to the Purchase Price for the Purchased Common Shares (as
such terms are defined in the Acquisition Agreement).
(d) It is expected that whenever WMC Holding issues any WMC
Holding Common Stock (or options, warrants or other rights to purchase WMC
Holding Common Stock) following the date hereof, the Company will issue a
equivalent number of shares of Common Stock (or options, warrants or other
rights to purchase Common Stock). Notwithstanding anything to the contrary
contained in Section 4.1, Section 4.1(a),(b) and (c) shall not be applicable
to any such issuance of Common Stock by the Company to WMC Holding in
connection with the issuance by WMC Holding to any officer, director or
employee of WMC Holding or the Company or to any Person not an Affiliate of
Ripplewood, including, without limitation, in connection with any acquisition
by WMC Holding or the Company of assets, securities or capital stock from a
non-Affiliate in which WMC Holding is issuing WMC Holding Common Stock to
such non-Affiliate; provided that WMC shall notify Glenayre in writing of all
material terms of the Common Stock, the price and all material terms upon
which the Company proposes to issue any Common Stock to which the exceptions
set forth in this Section 4.1(d) applies.
4.2. Transactions With Affiliates. (a) Except for
transactions subject to Glenayre's rights under Section 4.1 (which shall be
governed by such Section and not by this Section 4.2(a)), the Company shall
not, and WMC Holding shall not permit the Company to, directly or indirectly,
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enter into any single transaction or series of related transactions with any
Affiliate of the Company (other than the Company or any of its Subsidiaries)
unless such transaction or series of related transactions, including the
issuance of shares of Common Stock to an Affiliate of the Company, is on
terms that are no less favorable to the Company or any such Subsidiary, as
the case may be, than would be available in a comparable transaction or
transactions with an unrelated third party.
(b) WMC Holding and its Affiliates may provide administrative
or cash management services in the ordinary course of the Company's
businesses and may receive compensation therefor and reimbursement for its
costs and expenses in connection therewith on no less favorable terms than
such services are provided to any other Affiliate of WMC Holding.
(c) Notwithstanding anything to the contrary contained in this
Section 4.2, (i) WMC shall have the right to cause the merger of Western
Multiplex Corporation, a California corporation, with and into the Company,
with the Company as the surviving corporation, (ii) WMC shall have the right
to cause the Class B Common Stock to be converted into Class A Common Stock,
and (iii) WMC Holding shall have the right to convert into a limited
liability company and distribute its assets (including the shares of Common
Stock) to its stockholders, merge or consolidate with the Company, with
either party as the surviving corporation, or to cause the liquidation of the
Company and distribution of all of its assets to the Stockholders, or to
amend the certificate of incorporation of the Company to provide for the
conversion of all shares of Common Stock into shares of WMC Holding Common
Stock, or any similar transaction that combines the ownership of WMC Holding
and the Company, in the case of (i), (ii) and (iii), without Glenayre's
consent or affirmative vote; provided that, the rights and ownership interest
of Glenayre are not adversely affected by any such transaction (except that
to the extent WMC Holding ceases to exist, the obligations of WMC Holding set
forth in Article III shall be assumed only by Ripplewood and not the other
shareholders of WMC Holding, and except for the difference in the votes per
share of Class A Common Stock and Class B Common Stock); and provided,
further, that WMC Holding shall notify Glenayre in writing of all material
terms of any such transaction to which this Section 4.2(c) applies no less
than 20 days prior to effecting any such transaction.
4.3. Restrictions on Certain Fees. Except as previously
disclosed to Glenayre, neither WMC Holding nor any other Affiliate of WMC
Holding (other than the Company) shall accept from the Company, and the
Company shall not pay to WMC Holding or any other Affiliate of the Company
(other than the Company), any management, consulting, investment banking or
similar fee without the prior written consent of Glenayre, which shall not be
unreasonably withheld.
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V. MISCELLANEOUS
5.1. Additional Securities Subject to Agreement. Each of Glenayre
and its Permitted Transferees agrees that any other equity securities of the
Company which it hereafter acquires by means of a stock split, stock
dividend, or distribution will be subject to the provisions of this Agreement
to the same extent as if held on the date hereof.
5.2. Covenant by GTI. GTI hereby covenants to cause Glenayre and
any other Stockholder that is an Affiliate of GTI to comply with the terms of
this Agreement and not to take any action directly or indirectly through any
Affiliate that is expressly prohibited by this Agreement or has the purpose
or effect of circumventing the express terms of this Agreement.
5.3. Termination. The provisions of this Agreement specified below
will terminate and be of no further force and effect (other than with respect
to prior breaches) as follows: (i) with respect to Sections 2.1, 2.2, 2.3,
2.4, 2.5, 5.15 and Article IV upon completion of an IPO; (ii) with respect to
Sections 3.1 and 3.2 and Article IV, at such time as Glenayre or any of its
Permitted Transferees owns no Registrable Securities; (iii) with respect to
Section 3.3, upon the expiration of the applicable statutes of limitations;
and (iv) with respect to all other Sections of this Agreement, at such time
as all Sections of this Agreement other than such other Sections have
terminated.
5.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by courier service, by cable, by telecopy, by telegram, by telex or
registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the addresses set forth in Section 9.2 of the
Acquisition Agreement (or at such other address for a party as shall be
specified in a notice given in accordance with this Section 5.4).
5.5. Further Assurances. The parties hereto will sign such further
documents, cause such meetings to be held, resolutions passed, exercise their
votes and do and perform and cause to be done such further acts and things as
may be necessary in order to give full effect to this Agreement and every
provision hereof.
5.6. Non-Assignability. This Agreement will inure to the benefit
of and be binding on the parties hereto and their respective successors and
permitted assigns. This Agreement may not be assigned by any party hereto
without the express prior written consent of the other parties, and any
attempted assignment, without such consents, will be null and void; provided,
however, that WMC Holding may assign or delegate its rights hereunder to any
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Affiliate of WMC Holding so long as such Affiliate executes and delivers to
the Company an Assumption Agreement satisfactory to the Company.
5.7. Amendment; Waiver. This Agreement may be amended,
supplemented or otherwise modified only by a written instrument executed by
the parties hereto. No waiver by any party of any of the provisions hereof
will be effective unless explicitly set forth in writing and executed by the
party so waiving. Except as provided in the preceding sentence, no action
taken pursuant to this Agreement, including any investigation by or on behalf
of any party, will be deemed to constitute a waiver by the party taking such
action of compliance with any covenants or agreements contained herein. The
waiver by any party hereto of a breach of any provision of this Agreement
will not operate or be construed as a waiver of any subsequent breach.
5.8. Third Parties. This Agreement does not create any rights,
claims or benefits inuring to any person that is not a party hereto nor
create or establish any third party beneficiary hereto.
5.9. Governing Law. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
5.10. Specific Performance. Without limiting or waiving in any
respect any rights or remedies of the parties hereto under this Agreement now
or hereinafter existing at law or in equity or by statute, each of the
parties hereto will be entitled to seek specific performance of the
obligations to be performed by the other in accordance with the provisions of
this Agreement.
5.11. Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter
hereof.
5.12. Titles and Headings. The section headings contained in
this Agreement are for reference purposes only and will not affect the
meaning or interpretation of this Agreement.
5.13. Severability. If any provision of this Agreement is
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement will not be affected
and will remain in full force and effect.
5.14. Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed to be an original and
all of which together will be deemed to be one and the same instrument.
5.15. Reporting Requirements. (a) So long as the Company is
not subject to the reporting requirements under Section 12 or 15 of the
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Securities Exchange Act of 1934, as amended, as promptly as practicable, but
in no event later than 120 days after the end of each fiscal year ending
after the date hereof or 60 days after the end of each fiscal quarter ending
after the date hereof, as the case may be, the Company shall furnish to
Glenayre true and correct copies of (i) in the case of any such fiscal year,
the audited consolidated balance sheets and the related audited consolidated
statements of income and cash flows of the Company and its subsidiaries as of
the last day of and for the fiscal year then ended, together with the
accompanying report of the Company's auditors thereon, and (ii) to the extent
available, in the case of each fiscal quarter, the unaudited consolidated
balance sheets and related unaudited consolidated statements of income and
cash flows of the Company and its subsidiaries for the fiscal quarter then
ended, which financial statements shall be prepared in accordance with United
States generally accepted accounting principles (in each case, together with
any notes relating thereto); provided, that notwithstanding the foregoing,
for so long as Glenayre and its Permitted Transferees own shares of Common
Stock, the Company shall deliver to Glenayre and each of its Permitted
Transferees true and complete copies of such financial and other information
as is provided from time to time to any financing source of the Company or
WMC Holding and, provided, further, that if the Company ceases to be required
to provide financial and other information to its financing sources during
such time, the Company shall nonetheless thereafter continue to provide to
Glenayre such financial and other information in the form and on the schedule
previously provided to such financing sources.
(b) In the event that the Company is not preparing financial
statements described in clause (ii) of paragraph (a) above, then as promptly
as practicable, the Company will deliver to Glenayre true and complete copies
of such other regularly-prepared financial statements, reports and analyses
as may be prepared by the Company or any subsidiary thereof relating to the
business or operations of the Company or any subsidiary thereof.
(c) Glenayre agrees to keep confidential all nonpublic information
made available to Glenayre pursuant to this Section 5.15; provided, however,
that Glenayre will not be required to maintain as confidential any such
information that (a) becomes generally available to the public other than as
a result of a disclosure by Glenayre or (b) is required to be disclosed
pursuant to the terms of a valid subpoena or order by governmental authority
or other legal requirement.
5.16. Representations. Each of the parties hereto represents
that this Agreement has been duly executed and delivered by such party and
constitutes a legal, valid and binding obligation of such party enforceable
against it in accordance with the terms of this Agreement.
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IN WITNESS WHEREOF, each of the undersigned has executed this
Agreement or caused this Agreement to be executed on its behalf as of the
date first written above.
WESTERN MULTIPLEX CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Secretary
WMC HOLDING CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
GTI ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxx
-------------------------
Name: Xxxx X. Xxxxxx
Title: President
GLENAYRE TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chairman
Stockholders Agreement
