EXHIBIT 4.2
AMENDMENT NO. 1 TO
STOCKHOLDERS' AGREEMENT
This AMENDMENT NO. 1 TO STOCKHOLDERS' AGREEMENT (the "Amendment") is made
as of November 8, 1996, by and among Powerwave Technologies, Inc., a Delaware
corporation formerly called Milcom International, Inc. (the "Company"), the
persons named as Investors on Exhibit A hereto (the "Investors") and the persons
named as Stockholders on Exhibit B hereto (the "Stockholders").
WHEREAS, the parties entered into a Stockholders' Agreement as of October
10, 1995 (the "Original Agreement");
WHEREAS, since the date of the Original Agreement, the Company effected a 3
for 2 stock split (the "Stock Split");
WHEREAS, in connection with a Settlement and Release Agreement by and among
the Company and the Stockholders other than Xxxxxx Xxxxxxx on the one hand and
Xxxxxx Xxxxxxx on the other hand, of even date herewith, the Stockholders other
than Xxxxxx Xxxxxxx have agreed to transfer to Xxxxxx Xxxxxxx an aggregate of
45,000 shares (after giving effect to the Stock Split) of Common Stock of the
Company (the "Settlement Shares") which are currently held by the Corporate
Secretary pursuant to the Original Agreement;
WHEREAS, in consideration of the Stockholders entering into the Settlement
and Release Agreement which the Investors believe will benefit the Company, the
Investors have agreed to allow the Settlement Shares to be transferred out of
escrow and thus no longer be subject to Section 4 of the Original Agreement; and
WHEREAS, Section 5.4 of the Original Agreement provides that the Original
Agreement may be amended by the written consent of the persons holding or having
the right to acquire more than 75% of (i) the Series A Preferred Stock, (ii) the
Voting Stock, and (iii) shares of Voting Stock held by the Stockholders or their
permitted transferees pursuant to Section 3 of the Original Agreement.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. The Corporate Secretary is hereby directed, subject to the terms and
conditions of the Settlement and Release Agreement, to transfer the Settlement
Shares to Xxxxxx Xxxxxxx, from the Stockholders other than Xxxxxx Xxxxxxx as set
forth on Exhibit C hereto, and is hereby appointed attorney-in-fact to transfer,
or cause to be transferred, said Settlement Shares on the stock transfer books
of the Company. The Company, the Stockholders and the Investors consent to the
transfer of Settlement Shares in accordance with the terms and conditions of the
Settlement and Release Agreement and further agree that the Settlement Shares
shall not be deemed Repurchase Shares and shall not be subject to Section 4 of
the Original Agreement, as amended hereby.
2. The Company, Investors and the Stockholders acknowledge and agree that
the transfer of the Settlement Shares to Xxxxxx Xxxxxxx as set forth on Exhibit
A, shall constitute a full and final release of any and all claims, known or
unknown, against or between any of the
parties hereto or any other shareholder of the Company, related to ownership of
or entitlement to shares of stock of the Company. Without limiting the
generality of the foregoing, each of the parties hereto hereby releases each of
the other parties hereto from any claim, commitment, obligation or requirement
to restore, replenish or contribute any shares to or to otherwise compensate or
make whole, any such person or entity as a result of the transfer of shares to
Xxxxxx Xxxxxxx or for any other reason relating to the transactions which are
the subject of this Amendment. The parties hereto acknowledge of agree to the
terms and conditions of the Original Agreement, as amended or supplemented
hereby, and agree to be bound thereby. This Section shall in no way limit or
otherwise affect any release or other provisions set forth in the Settlement and
Release Agreement or this Amendment.
3. The specific releases set forth in paragraph 2 above are not intended
to, and shall not, constitute general releases within the meaning of Section
1542 of the Civil Code. HOWEVER, TO THE EXTENT APPLICABLE TO THE CLAIMS BEING
RELEASED IN PARAGRAPH 2 ABOVE, THE COMPANY, THE STOCKHOLDERS AND THE INVESTORS,
AND EACH OF THEM, DO HEREBY MUTUALLY WAIVE AND RELINQUISH ANY AND ALL RIGHTS
WHICH ANY OF THEM MAY HAVE UNDER THE PROVISIONS OF (S) 1542 OF THE CIVIL CODE OF
THE STATE OF CALIFORNIA, WHICH SECTION READS AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
4. Section 4 of the Original Agreement is hereby amended and restated in
its entirety as follows:
"4. Transfers Upon Exercise of Certain Options.
------------------------------------------
Substantially concurrently herewith, the Company has established its
1995 Stock Option Plan (the "Plan") covering 1,938,615 shares of Common Stock.
The Company, the Investors and the Stockholders have agreed that the first
1,095,000 options exercised pursuant to the Plan (whether or not such options
represent the first 1,095,000 options granted under such Plan) (the "Dilutive
Options") shall be equally dilutive to all such parties, and that the exercise
of any other options under the Plan (the "Non-Dilutive Options") shall only
dilute the holdings of the Stockholders.
Therefore, the parties acknowledge and agree that upon exercise of any
Non-Dilutive Option, the Stockholders shall sell to the Company, and the Company
shall purchase from the Stockholders, a number of shares of Common Stock equal
to the number of shares of Common Stock issued upon the exercise of such Non-
Dilutive Option (the "Repurchase Shares"). Each Stockholder shall sell to the
Company his or her pro rata share (based upon such Stockholder's percentage
ownership of Common Stock held by all Stockholders on the date hereof) of the
Repurchase Shares. The aggregate purchase price for the Repurchase Shares shall
be equal to the exercise price paid upon exercise of the Non-Dilutive Options
and shall be paid out to the Stockholders in proportion to the percentage of
Repurchase Shares sold by each Stockholder.
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The aggregate 843,615 shares of Common Stock of the Stockholders which
initially are subject to becoming Repurchase Shares shall be represented by
separate stock certificates (each a "Repurchase Certificate" and together the
"Repurchase Certificates"). The Repurchase Certificates shall be held by the
Secretary of the Company (the "Corporate Secretary") until such time as all of
the Non-Dilutive Options have been exercised or lapsed (the "Termination Date").
Each Stockholder has executed and delivered, substantially concurrently with the
execution of the Original Agreement, a power of attorney in favor of the
Corporate Secretary, which power of attorney remains in full force and effect,
pursuant to which the Corporate Secretary has the power, upon exercise of a Non-
Dilutive Option, to execute on behalf of such Stockholder a stock power
transferring the appropriate number of shares of such Stockholder's Common Stock
to the Company. Each such power of attorney states that it is irrevocable until
the Termination Date, coupled with an interest and not to be affected by the
disability or incapacity of the Stockholder. If and when Non-Dilutive Options
are exercised, new Repurchase Certificates representing the shares of Common
Stock still subject to becoming Repurchase Shares shall be issued in the
respective names of the Stockholders and delivered to the Corporate Secretary to
be held pursuant to the terms of this Section 4. If and when Non-Dilutive
Options lapse or upon the cancellation of the portion of the Plan pertaining to
the Non-Dilutive Options (which cancellation may be effected in the sole
discretion of Xx Xxxxxxx), (i) new Repurchase Certificates representing the
shares of Common Stock still subject to becoming Repurchase Shares shall be
issued in the respective names of the Stockholders and delivered to the
Corporate Secretary to be held pursuant to the terms of this Section 4 and (ii)
new stock certificates representing the shares of Common Stock no longer subject
to becoming Repurchase Shares shall be issued in the respective names of the
Stockholders and delivered to the Stockholders to be held pursuant to the other
terms of this Agreement. In recognition of the fact that issuance of stock
certificates on each lapse of Dilutive or Non-Dilutive Options may become
cumbersome, the Company may wait a reasonable period of time before issuing the
Repurchase Certificates and new stock certificates referenced in the immediately
preceding sentence."
5. The Company, Stockholders and Investors agree that, upon the written
demand of the Company or the Investors, the Repurchase Certificates shall be
transferred to an independent escrow agent (which escrow agent may be the
Company's transfer agent) and such new escrow agent shall be deemed the
Corporate Secretary for purposes of Section 4 of the Original Agreement. The
new escrow agent shall have all of the rights and powers of the Corporate
Secretary pursuant to the Special Power of Attorney granted to the Corporate
Secretary by each Stockholder in connection with the Original Agreement.
6. Effective upon the closing of a Qualified Public Offering, for
purposes of the Original Agreement, as amended hereby, the maximum number of
options that may be deemed Dilutive Options (and thus trigger the redemption
provisions of Section 4 of the Original Agreement, as amended hereby) shall be
843,615, which number shall be subject to adjustment in the event of a stock
split, reverse stock split, stock dividend, reorganization or recapitalization
affecting the number of shares of Common Stock of the Company outstanding.
7. This Amendment is and shall remain strictly confidential and shall not
be disclosed by any party except to enforce such party's rights under the
Amendment or as required by law or applicable federal securities or other
regulations.
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8. Except as amended herein, all terms and conditions of the Original
Agreement shall remain in full force and effect.
9. Unless the context otherwise requires, all capitalized terms not
defined herein shall be defined as set forth in the Original Agreement.
10. This Amendment may be executed in counterparts, each of which shall be
an original, but all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have executed this Amendment as the first
date set forth above.
COMPANY
POWERWAVE TECHNOLOGIES, INC., a Delaware
corporation
By: /s/ XXXXX X. XXXXXXX
---------------------------------------------
Xxxxx X. Xxxxxxx, Chief Executive Officer
STOCKHOLDERS
/s/ XXXXXXX X. XXXXXXX
-------------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ KI NAM
-------------------------------------------------
Ki Nam
/s/ XXXXXXXX XXXXXXXX
-------------------------------------------------
Xxxxxxxx Xxxxxxxx
/s/ XXXXXX XXXXXXX
-------------------------------------------------
Xxxxxx Xxxxxxx
/s/ XXXXXXX XXXXXXX
-------------------------------------------------
Xxxxxxx Xxxxxxx
/s/ XXXX X. DOI
-------------------------------------------------
Xxxx X. Doi
4
[continuation of signature page
to Amendment No. 1 to Stockholders'
Agreement]
/s/ XXXXXX XXXX
--------------------------------------------------
Xxxxxx Xxxx
/s/ XXXXXX XX
--------------------------------------------------
Xxxxxx Xx
INVESTORS
SUMMIT VENTURES IV, L.P.
By: Summit Partners IV, L.P., its General
Partner
By: Stamps, Xxxxxxx & Co. IV, its General
Partner
By: /s/ XXXXXXX X. XXXX
---------------------------------------
General Partner
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P., its General
Partner
By: Stamps, Xxxxxxx & Co. III, its General
Partner
By: /s/ XXXXXXX X. XXXX
---------------------------------------
General Partner
SUMMIT INVESTORS II, L.P.
By: /s/ XXXXXXX X. XXXX
---------------------------------------
General Partner
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[continuation of signature page
to Amendment No. 1 to Stockholders'
Agreement]
CROSSPOINT VENTURE PARTNERS 1993
By: /s/ XXXX XXXXXXX
---------------------------------------
CROSSPOINT VENTURE PARTNERS
ENTREPRENEURS 1993
By: /s/ XXXX XXXXXXX
---------------------------------------
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EXHIBIT A
---------
LIST OF INVESTORS
-----------------
Summit Ventures IV, L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Summit Ventures III, L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Summit Investors II, L.P.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Crosspoint Venture Partners 0000
Xxx Xxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Crosspoint Venture Partners Entrepreneurs 0000
Xxx Xxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
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EXHIBIT B
---------
LIST OF STOCKHOLDERS
--------------------
Xxxxxxx X. Xxxxxxx
00000 Xxxxxxx Xxxxx
Xxx Xxxx Xxxxxxxxxx, XX 00000
Ki Nam
00000 Xxxxxxxx
Xxxxxxx, 00000
Xxxxxxxx Xxxxxxxx
00000 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Xxxxxx Xxxxxxx
X.X. Xxx 0000
Xxxxxxx Xxxxx, XX 00000
Xxxxxxx Xxxxxxx
000X Xxxx Xxxxxx
Xxxx Xxxxxxxxx, XX 00000
Xxxx X. Doi
00000 Xxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxx Xxxx
00 Xxxxxxxxxx
Xxxxxx, XX 00000
Xxxxxx Xx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
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EXHIBIT C
---------
Settlement Shares to be transferred to Xxxxxx Xxxxxxx
Stockholder Transferor No. of Shares
---------------------- -------------
Xxxxxxx X. Xxxxxxx 28,325
Ki Y. Nam 8,681
Xxxxxxxx Xxxxxxxx 686
Xxxxxxx Xxxxxxx 3,883
Xxxx X. Doi 1,371
Xxxxxx Xxxx 1,142
Xxxxxx Xx 912
------
Total: 45,000
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