EXHIBIT 14
WESTERN MULTIPLEX CORPORATION
STOCKHOLDERS AGREEMENT
JANUARY 16, 2002
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT, dated as of January 16, 2002 (this
"AGREEMENT") is entered into between Western Multiplex Corporation a Delaware
corporation (the "COMPANY"), Ripplewood Partners, L.P. a Delaware limited
partnership (together with its successors and assigns, "PARTNERS"), Ripplewood
Employee Co-Investment Fund, L.P., a Delaware limited partnership (together with
its successors and assigns, "CO-INVESTMENT FUND"), and WMC Holding L.L.C.
(together with its successors and assigns, "HOLDING," and collectively with
Partners and Co-Investment Fund, "STOCKHOLDER").
RECITALS
The Company, Proxim, Inc., a Delaware corporation ("PROXIM"), and the
Walnut-Pine Merger Corp., a Delaware corporation ("MERGER SUB"), are,
contemporaneously herewith, entering into an Agreement and Plan of
Reorganization (the "MERGER AGREEMENT") providing for the merger of Merger Sub
with and into Proxim upon the terms and subject to the conditions set forth in
the Merger Agreement. Capitalized terms used but not defined in Section 3.1 or
elsewhere herein shall have the meanings set forth in the Merger Agreement.
As an inducement and a condition to Proxim's agreement to execute and
deliver the Merger Agreement, Proxim has required that the Stockholder agree,
and the Stockholder has agreed, to enter into this Agreement.
AGREEMENT
To implement the foregoing and in consideration of the mutual agreements
contained herein and in the Merger Agreement, the parties, subject to Section
3.7, agree as follows:
SECTION 1
REGISTRATION RIGHTS
1.1 Company Registration.
(a) If the Company shall determine to register any of its
securities either for its own account or the account of a security holder or
holders exercising their respective demand registration rights (other than
pursuant to Section 1.2 hereof), other than a registration relating solely to
employee benefit plans, a registration relating solely to the offer and sale of
debt securities, a registration relating solely to a corporate reorganization or
other transaction subject to Rule 145 on Form S-4, a registration on any
registration form that does not permit secondary sales, a registration related
to any obligation of Proxim or the Company to register securities existing as of
the date hereof and described in Section 2.3 or Section 3.3 of the Merger
Agreement, Section 2.3 the Proxim Disclosure Letter or Section 3.3 of the
Western Multiplex Disclosure Letter (any such registration, a "COMPANY
REGISTRATION"), the Company will:
(i) promptly give to each Holder written notice
thereof; and
(ii) use its commercially reasonable best efforts to
include in such registration (and any related qualification under blue sky laws
or other compliance), except as set forth in Section 1.1(b) below, and in any
underwriting involved therein, the Registrable Securities specified in a written
request or requests made by any Holder and received by the Company within
fifteen (15) days after the written notice from the Company described in clause
(i) above is received by such Holder, which written request may specify all or a
part of a Holder's Registrable Securities.
(b) (i) If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
1.1(a)(i). In such event, the right of any Holder to registration pursuant to
this Section 1.1 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
the Other Stockholders that are participating in such registration) enter into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company. If any person does not
agree to the terms of any such underwriting, such person shall be excluded
therefrom by notice from the Company or the underwriters. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration. If shares are so withdrawn from the
registration and if the number of shares of Registrable Securities to be
included in such registration was previously reduced as a result of marketing
factors in the manner set forth in Section 1.1(b)(ii),
-2-
the Company shall then offer to all Holders who have retained the right to
include securities in the Company Registration the right to include additional
securities in such Company Registration in an aggregate amount equal to the
number of shares so withdrawn, with such shares to be allocated among the
persons requesting additional inclusion in accordance with Section 1.1(b)(ii)
hereof.
(ii) Notwithstanding any other provision of this
Section 1.1, in the event that a Company Registration is underwritten, if a
representative of the underwriters advises the Company in writing that marketing
factors require a limitation of the number of securities to be underwritten
(including Registrable Securities) in an offering subject to this Section 1.1
because the number of securities to be underwritten is likely to have an adverse
effect on the price, timing or the distribution of securities to be offered,
then the Company shall so advise all Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and, subject to the terms of
any registration rights agreements existing as of the date hereof between Other
Stockholders and the Company, the number of shares that may be included in the
underwriting shall be allocated, first, to the Company, second, to the Holders
on a pro rata basis based on the total number of Registrable Securities held by
the Holders and, third, to the Other Stockholders in accordance with the
agreements pursuant to which the Other Stockholders have registration rights.
Any Registrable Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration. If the underwriting
agreement executed in connection with such offering provides for an
overallotment option to be granted to the underwriters, and if such option is
exercised by the underwriters, the allocation priority established above shall
govern the allocation with respect to the sale of any shares of securities
(including Registrable Securities) pursuant to such exercise by the
underwriters. No such reduction pursuant to this Section 1.1(b)(ii) shall reduce
the amount of securities of the selling Holders included in the registration
below twenty-five percent (25%) of the total amount of securities included in
such registration, unless such offering does not include shares of any Other
Stockholders, in which event any or all of the Registrable Securities of the
Holders may be excluded in accordance with the first sentence of this Section
1.1(b)(ii).
(iii) To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriter(s) may
round the number of shares allocated to any Holder to the nearest 100 shares.
(c) Subject to Section 1.3, the Company shall have the right to
terminate or withdraw any registration described under this Section 1.1 prior to
the effectiveness of such registration whether or not any Holder has elected to
include Registrable Securities in such registration. The Registration Expenses
of such withdrawn registration shall be borne by the Company in accordance with
Section 1.3 hereof.
1.2 Registration on Form S-3.
(a) The Company shall use commercially reasonable efforts to
remain qualified for registration on Form S-3 or any comparable or successor
form or forms. So long as the Company is qualified for the use of Form S-3, in
addition to the rights contained in Section 1.1, the Initiating Holders shall
have the right to request registrations of Registrable Securities on Form S-3 (a
"Requested Registration") (such requests shall be in writing and shall state the
number of shares of
-3-
Registrable Securities to be disposed of and the intended methods of disposition
of such shares by such Holder or Holders, whether pursuant to an underwritten
offering or otherwise), provided, however, that the Company shall not be
obligated to effect any such Requested Registration (i) if the Holders propose
to sell Registrable Securities and such other securities (if any) on Form S-3 at
an aggregate offering price to the public of less than $l0,000,000 (such price
to be determined as of the filing of the registration statement on Form S-3),
(ii) in the circumstances described in Section 1.2(c), (iii) if the Company
shall furnish the certification described in Section 1.2(b)(ii) (but subject to
the limitations set forth therein), or (iv) if the Company has effected one (1)
such Requested Registration within the preceding six months and such Requested
Registration has been declared effective by the Securities and Exchange
Commission and remained effective for 60 days (which number of days need not be
successive) or such lesser amount of time necessary to sell all of the
Registrable Securities registered thereby.
(b) If a request complying with the requirements of Section
1.2(a) hereof is delivered to the Company, the Company shall:
(i) promptly after receipt of a request from
Initiating Holders pursuant to Section 1.2(a) give written notice of the
proposed registration to all other Holders;
(ii) use its commercially reasonable best efforts to
effect such Requested Registration on Form S-3 as soon as practicable
(including, without limitation, filing post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with the Securities Act) so as would permit or facilitate
the sale and distribution of all or such portion of such Registrable Securities
as are specified in the request of the Initiating Holders, together with all or
such portion of the Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by the Company
within twenty (20) days after such written notice from the Company is received;
provided, however, that if, (i) in the good faith judgment of the Company's
board of directors, such registration would be seriously detrimental to the
Company and the Company reasonably concludes, as a result, that it is in the
best interests of the Company to defer the filing of such registration statement
at such time, and (ii) the Company shall furnish to such Holders a certificate
signed by the Chief Executive Officer of the Company stating that, in the good
faith judgment of the Company, it would be seriously detrimental to the Company
for such registration statement to be filed at such time and that it is,
therefore, in the best interests of the Company to defer the filing of such
registration statement, then the Company shall have the right to defer such
filing for a period not to exceed 90 days after the receipt of such certificate
by such Holders; provided that the Company shall not defer filings pursuant to
this Section 1.2(b)(ii) more than more than one hundred twenty (120) days during
any twelve (12) month period; and
(iii) unless such registration is for an underwritten
offering, keep such registration effective for a period of sixty (60) days or
until the Holder or Holders have completed the distribution described in the
registration statement relating thereto, whichever first occurs; provided,
however, that at any time, the Company may, upon notice to the Holders
participating in such registration, suspend the use or effectiveness of any
registration statement for a period not to
-4-
exceed 90 days after the receipt of the certificate referenced in clause (ii)
below by such Holders (and the Holders hereby agree not to offer or sell any
Registrable Securities pursuant to such registration statement during the period
of such suspension) if in the good faith judgment of the Company's Board of
Directors, such registration or the continued effectiveness of such registration
would be seriously detrimental to the Company and the Company reasonably
concludes, as a result, that it is in the best interests of the Company to
suspend the effectiveness of such registration statement at such time, and (ii)
the Company shall furnish to such Holders a certificate signed by the Chief
Executive Officer of the Company stating that, in the good faith judgment of the
Company, the continued effectiveness of such registration would be detrimental
to the Company and that it is, therefore, in the best interests of the Company
to suspend the effectiveness of such registration; provided that the Company may
not suspend any registration for more than one hundred twenty (120) days during
any 12-month period.
(c) The Company shall not be obligated to effect, or to take any
action to effect, any such Requested Registration pursuant to this Section 1.2:
(i) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, qualification, or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(ii) Before the date that is six months after the
Effective Time;
(iii) After the Company has initiated four (4) such
registrations pursuant to Section 1.2(a) (counting for these purposes only
registrations that have been declared or ordered effective and pursuant to which
securities have been sold and registrations that have been withdrawn by the
Holders as to which the Holders have not elected to bear the Registration
Expenses pursuant to Section 1.3 hereof); or
(iv) During the period starting with the date sixty
(60) days prior to the Company's good faith estimate of the date of filing of,
and ending on a date ninety (90) days after the effective date of, a the
Company-initiated registration; provided that the Company is actively employing
in good faith commercially reasonable efforts to cause such registration
statement to become effective.
(d) (i) The registration statement filed pursuant to the request
of the Initiating Holders, subject to the provisions of this Section 1.2(d), may
include securities being sold for the account of the Company or any Other
Stockholder. If the Requested Registration shall be pursuant to an underwritten
offering, the right of any Holder, any Other Stockholder or the Company to
registration pursuant to Section 1.2 shall be conditioned upon such person's
participation in the underwriting related to such Requested Registration and the
inclusion of such person's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such person with respect to such participation and inclusion) to the extent
provided herein. In connection with such an underwritten Requested Registration,
the Company shall (together with all Holders and the Other Stockholders
proposing to distribute their securities
-5-
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected by the
Initiating Holders (which underwriter shall be reasonably acceptable to the
Company). If a person who has requested inclusion in such registration as
provided above does not agree to the terms of any such underwriting, such person
shall be excluded therefrom by written notice from the Company, the underwriter
or the Initiating Holders. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall also be withdrawn from such
registration (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders with respect to such participation and inclusion).
(ii) Notwithstanding any other provision of this
Section 1.2, if the representative(s) of the underwriters advises the Initiating
Holders in writing that marketing factors require a limitation of the number of
securities to be underwritten (including Registrable Securities) because the
number of securities to be underwritten is likely to have an adverse effect on
the price, timing or the distribution of the securities to be offered, then the
Company shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares that may be
included in the underwriting shall be allocated among participating Holders, (i)
first among the participating Holders on a pro rata basis based on the total
number of Registrable Securities held by such Holders, and (ii) second to the
extent all Registrable Securities requested to be included in such underwriting
by the Holders have been included, among the Company and the Other Stockholders
on a pro rata basis based on the total number of securities requested for
inclusion by them in such underwritten offering. The securities so excluded
shall also be withdrawn from registration.
1.3 Registration Expenses.
All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Sections 1.1 or 1.2 hereof shall be
borne by the Company; provided, however, that the Holders of a majority of the
Registrable Securities included or proposed to be included in any registration
begun pursuant to Section 1.2 that is withdrawn may elect to require the Holders
to pay all Registration Expenses. If such Holders pay all such Registration
Expenses, then such registration shall not be counted as a requested
registration for purposes of Section 1.2(c)(iii). All Selling Expenses relating
to securities so registered shall be borne by the holders of such securities pro
rata on the basis of the number of shares of Registrable Securities so
registered on their behalf.
1.4 Registration Procedures.
(a) In the case of each registration effected by the Company
pursuant to Section 1, the Company will (x) keep each Holder advised in writing
as to the initiation of each registration and as to the completion and
effectiveness thereof, (y) if requested by the Holders holding a majority of the
Registrable Securities registered thereunder (in connection with a Requested
Registration but not a Company Registration), keep such registration statement
effective for up to sixty (60) days (subject to the Company's rights in Section
1.2(b)(iii)) or until the Holder or Holders have completed the distribution of
Registrable Securities registered thereunder and (z)
-6-
notify each Holder participating in such registration promptly upon the
happening of any event as a result of which a prospectus included in a
registration statement including Registrable Securities, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Company will use its
commercially reasonable efforts, as expeditiously as possible, to:
(i) Prepare and file with the Commission such
amendments and supplements to the registration statement related to such
registration and the prospectus used in connection with such registration
statement as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement.
(ii) Furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as a Holder or underwriter, if applicable, from time to time may
reasonably request, in each case in conformance with the requirements of the
Securities Act.
(iii) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
(b) In the case of each Requested Registration effected by the
Company pursuant to Section 1.2 that is underwritten, the Company will, as
expeditiously as possible:
(i) Enter into such customary agreements (including an
underwriting agreement in customary form), which may include indemnification
provisions in favor of underwriters and other persons in addition to the
provisions of Section 1.5 hereof.
(ii) Obtain a "cold comfort" letter or letters from
the Company's independent public accountants and furnish a signed counterpart of
a customary opinion of counsel of the Company, in each case, addressed to each
Holder and the underwriters in customary form and substance, dated the effective
date of the Registration Statement (in the case of such "cold comfort" letter)
and dated the date of the closing under the underwriting agreement (in the case
of such opinion).
(iii) Make available for reasonable inspection by, or
give reasonable access to, each Holder, each underwriter and any attorney,
accountant or other agent retained by such Holder or underwriter, all pertinent
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to supply all
information reasonably requested by any Holder, any underwriter or any such
other person in connection with the offering thereunder.
-7-
(iv) Arrange for the management of the Company to
participate in customary road show meetings reasonably requested (and reasonable
in scope in light of the size of the offering) upon reasonable prior notice by
the lead managing underwriter of such offering.
1.5 Indemnification.
(a) The Company will indemnify each Holder, each of its officers,
directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Section 1, and each underwriter, if any, and each
person who controls within the meaning of Section 15 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, or based on 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, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling such Holder, each such
underwriter, and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability, or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability, or expense arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Company by such Holder or underwriter and stated to be specifically for use
therein. It is agreed that the indemnity agreement contained in this Section
1.5(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld).
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification, or compliance is being effected, indemnify the Company, each of
its directors, officers, partners, legal counsel, and accountants and each
underwriter, if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter within the
meaning of Section 15 of the Securities Act, each other such Holder and Other
Stockholder, and each of their officers, directors, and partners, and each
person controlling such Holder or Other Stockholder, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular, or
other document, or 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, and will reimburse the Company and such Holders, Other
Stockholders, directors, officers, partners, legal counsel, and accountants,
persons, underwriters, or control persons for any
-8-
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability, or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular, or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein; provided, however, that the
obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages, or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld); and provided that in
no event shall any indemnity under this Section 1.5 exceed the net proceeds from
the offering received by such Holder.
(c) Each party entitled to indemnification under this Section 1.5
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that 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 to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 1.5 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
-9-
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
1.6 Information by Holder.
Each Holder of Registrable Securities shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification, or compliance
referred to in this Section 1.
1.7 Transfer or Assignment of Registration Rights.
The rights to cause the Company to register securities granted to a
Holder by the Company under this Section 1 may be transferred or assigned by a
Holder only (a) to fewer than thirty (30) (in the aggregate) of its affiliates
(as defined in Rule 144, an "AFFILIATE") provided such Affiliate agrees to be
bound by the terms of this Section 1 or (b) with the prior written consent of
the Company.
1.8 "Market Stand-Off" Xxxxxxxxx.Xx connection with any underwritten
offering of Securities in which a Holder participates pursuant to Section 1.1 or
Section 1.2, if requested by the managing underwriter of such offering, such
Holder shall agree to enter into a market stand-off agreement in customary form
with such underwriter pursuant to which such Holder will agree not to Transfer
or offer to Transfer any Securities (other than those included in the
registration) during a period not to exceed ninety (90) days following the
effective date of the registration statement of Western Multiplex filed under
the Securities Act with respect to such underwritten offering.
1.9 Termination of Registration Rights.The right of any Holder to
request registration or inclusion in any registration pursuant to this Section 1
shall terminate on such date as all shares of Registrable Securities held or
entitled to be held upon conversion by such Holder (a) may immediately be sold
under Rule 144 during any ninety (90)-day period (including, without limitation,
pursuant to Rule 144(k)) and (b) represent less than 5% of the outstanding
Western Multiplex Common Stock.
SECTION 2
RESTRICTIONS ON SALE OR OTHER DISPOSITION
2.1 Restriction. Except as otherwise permitted pursuant to this Section
2, Stockholder hereby agrees that during the period beginning on the Closing
Date (inclusive) and ending on the date this Section 2
-10-
terminates, Stockholder will not Transfer any Securities (a "RESTRICTED
TRANSACTION"), without the prior written consent of the Company. For purposes of
clarification, subject to this Section 2, Stockholder agrees that any Transfer
or distribution of Securities by Stockholder to its current or former partners,
stockholders, affiliates, members or other equity owners or any similar
distributions will constitute Transfers subject to this Section 2. In
furtherance of the foregoing, Stockholder agrees that the Company and its
transfer agent and registrar are hereby authorized to decline to make any
Transfer of Securities if such Transfer would constitute a violation or breach
of the terms of this Section 2.
2.2 Exceptions.
(a) Affiliate Transfers. As long as Ripplewood Holding L.L.C.
controls the Stockholder, a Transfer to an Affiliate of the Stockholder will not
constitute a Restricted Transaction and shall be permitted pursuant to this
Section 2 as long as (i) such Transfer is a private transaction exempt from the
registration requirements of the Securities Act and (ii) such Affiliate agrees
in writing to become subject to the terms of this Agreement as if such Affiliate
were the Stockholder.
(b) Transfers of Registrable Securities. Any Transfer effected
pursuant to a registration to which Section 1.1 or Section 1.2 applies will not
constitute a Restricted Transaction and shall be permitted pursuant to this
Section 2.
(c) Initial 30-Day Window. During the period (i) beginning on the
Closing Date (and including such date) (the "INITIAL RELEASE DATE"), and (ii)
ending on and including the 30th day following the Initial Release Date,
Transfers by Stockholder of up to an aggregate of 5,000,0000 shares of the
Company Common Stock (as such number is adjusted for stock splits, dividends,
combinations, recapitalizations or similar events after the date hereof, the
"INITIAL RELEASE") will not constitute Restricted Transactions and shall be
permitted pursuant to this Section 2. Also, (x) after 5,000,000 shares of the
Company Common Stock have been Transferred pursuant to this Section 2.2(c) and
(y) if X.X. Xxxxxx Securities Inc. advises the Company and Stockholder that,
because of then current and expected market demand, an increase of the Initial
Release would be reasonably absorbed by the trading market and would not
significantly negatively affect the Company's Common Stock price, then the
Company will agree, by written notice to Stockholder, to increase the Initial
Release to such number of shares advised by X.X. Xxxxxx Securities Inc.
(d) Tender Offers. Any Transfer pursuant to a tender offer (as
such term is interpreted under the Exchange Act) for at least 25% of the
outstanding Western Multiplex Common Stock shall not constitute a Restricted
Transaction and shall be permitted pursuant to this Section 2.
(e) Trading Windows. On any day during a Trading Window,
Transfers of up to the Trading Window Amount applicable to such day will not
constitute Restricted Transactions and shall be permitted pursuant to this
Section 2.
-11-
2.3 Lockups and Securities Laws, etc. (a) Nothing in this Agreement
shall affect any restrictions on Transfers otherwise imposed under the
Securities Act, under other applicable securities laws or pursuant to Section
1.8 (or any agreement executed by Stockholder or any affiliate thereof that is
similar to the agreement set forth in Section 1.8).
(b) The Stockholder agrees that any Transfer made by it will
comply with all applicable federal, state and foreign securities laws.
2.4 60 Day Trading Requirement. All Transfers by Stockholder (other than
Distributions of Securities and any Transfers pursuant to Section 2.2(b) or
Section 2.2(d)) effected on any date that is before the 61st day after the
Initial Release Date must be effected through the trading desk of X.X. Xxxxxx
Securities Inc. Furthermore, Stockholder agrees to use its commercially
reasonable best efforts to cause all persons to whom Stockholder Distributes
shares of the Company's Common Stock (each, a "DISTRIBUTEE") to effect all
subsequent Transfers by Distributees on any date that is before the 61st day
after the Initial Release Date through the trading desk of X.X. Xxxxxx
Securities Inc., which efforts shall include, among other things, a
recommendation to each Distributee to effect Transfers in such manner; provided,
however that in no event shall such efforts require Stockholder to (a) expend
greater than de minimus amounts of cash (provided, however that the payment of
salary and compensation in the ordinary course to employees of the Stockholder
shall not be deemed a cash expenditure), (b) amend, supplement or otherwise
modify any agreement between Stockholder and the Distributee in existence as of
the date hereof, (c) violate any applicable laws, rules or regulations or (d)
breach or contravene any of the terms of any agreement between Stockholder and
the Distributee in existence as of the date hereof. Stockholder represents and
warrants to the Company that a recommendation by Stockholder to each Distributee
to effect Transfers in the manner set forth above will not breach or contravene
any of the terms of any agreement between Stockholder and the Distributee in
existence as of the date hereof.
2.5 Termination of Section 2.
This Section 2 will terminate on the earlier of (i) the one-year
anniversary of the Closing Date and (ii) the date on which the Stockholder and
its Affiliates cease to beneficially own, in the aggregate, at least 10% of the
outstanding shares of Western Multiplex Common Stock.
2.6 Aggregation.
Transfers by all persons deemed to be a "Stockholder" for purposes
hereof will be aggregated for purposes hereof.
-12-
SECTION 3
MISCELLANEOUS
3.1 Rule 144.
The Company covenants that it will use its reasonable best efforts to
timely file the reports required to be filed by the Company under the Securities
Act and the Exchange Act so as to enable each Holder to sell Registrable
Securities pursuant to Rule 144. In connection with any sale, transfer or other
disposition by an Investor of any Registrable Securities pursuant to Rule 144
under the Securities Act, the Company shall cooperate with such Holder to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any Securities Act legend, and
enable certificates for such Registrable Securities to be for such number of
shares and registered in such names as such Holder may reasonably request at
least ten (10) business days prior to any sale of Registrable Securities
hereunder.
3.2 Certain Definitions.
As used in this Agreement, the following terms have the meanings set
forth below:
(a) "CARRYOVER AMOUNT" means, with respect any Trading Window,
the number of shares of the Company Common Stock that Stockholder was eligible
to have Transferred, by virtue of Section 2.2(e), on the final day of the
immediately preceding Trading Window, but that Stockholder did not Transfer
pursuant to Section 2.2(e) on such day; provided, however, that such number of
shares shall be reduced by the number of shares of the Company Common Stock, if
any, Transferred by the Stockholder before such day pursuant to Section 1, but
only to the extent such Transfers have not previously reduced a Carryover Amount
applicable to a prior Trading Window.
(b) "COMMISSION" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
(c) "DISTRIBUTIONS" means a distribution of Securities by
Stockholder to its members pro rata in accordance with such members' interest in
Stockholder.
(d) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
(e) "HOLDER" means the Stockholder (as long as the Stockholder
holds Registrable Securities) and any holder of Registrable Securities to whom
the registration rights conferred by this Agreement have been transferred in
compliance with Section 1.7 hereof.
(f) "INDEMNIFIED PARTY" has the meaning set forth in Section
1.5(c) hereto.
(g) "INDEMNIFYING PARTY" has the meaning set forth in Section
1.5(c) hereto.
-13-
(h) "INITIATING HOLDERS" means any Holder or Holders who in the
aggregate hold not less than fifty percent (50%) of the outstanding Registrable
Securities.
(i) "NASDAQ" means The Nasdaq Stock Market, Inc.
(j) "OTHER STOCKHOLDERS" means persons other than Holders who, by
virtue of agreements with the Company, are entitled to include their securities
in certain registrations of the Company.
(k) "REGISTRABLE SECURITIES" means (i) each of the shares of the
Company Common Stock held by Stockholder as of the date hereof and (ii) any
Common Stock issued as a dividend or other distribution with respect to or in
exchange for or in replacement of the shares referenced in (i) above; provided,
however, that Registrable Securities shall not include any shares of Common
Stock that have previously been registered, that have been sold to the public
either pursuant to a registration statement or Rule 144, that have been sold or
otherwise transferred in a private transaction in which the transferor's rights
under this Agreement are not assigned.
(l) The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
(m) "REGISTRATION EXPENSES" means all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, up to $20,000 of
reasonable fees and disbursements of one counsel for the Holders participating
in such registration (which counsel shall be chosen by the Holders of a majority
of the Registrable Securities being registered), blue sky fees and expenses, and
expenses of any regular or special audits incident to or required by any such
registration, but shall not include the compensation of regular employees of the
Company, which shall be paid in any event by the Company, and shall not include
Selling Expenses.
(n) "RULE 144" means Rule 144 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
(o) "RULE 145" means Rule 145 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
(p) "SECURITIES" means shares of the Company Common Stock or
securities convertible, into or exchange or exercisable for any shares the
Company's Common Stock.
-14-
(q) "SECURITIES ACT" means the Securities Act of 1933, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
(r) "SELLING EXPENSES" means all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities and, to the extent not explicitly within the definition of
"Registration Expenses," fees and disbursements of counsel for any Holder,
including, without limitation, legal fees and expenses.
(s) "TRADING WINDOW" means each successive 30 day period
beginning (and including) on the 31st day after the Effective Date of the Merger
until the date when all of the Securities have been Transferred by Stockholder
(i.e., days 31-60 constitute a "Trading Window," days 61-90 constitute a
"Trading Window," etc.).
(t) "TRADING WINDOW AMOUNT," for any day during a Trading Window,
means the number of shares of the Company's Common Stock (as such number of
shares is appropriately adjusted for stock splits, dividends, combinations,
recapitalizations or similar events after the date hereof) equal to the sum of
(i) the Trading Volume Amount and (ii) the Carryover Amount, minus (iii) the
number of shares of the Company's Common Stock that Stockholder has previously
Transferred pursuant to Section 2.2(e) during such Trading Window before such
day.
(u) "TRADING VOLUME AMOUNT," as calculated on any day during any
Trading Window, means the number of shares of Common Stock equal to the average
weekly trading volume in the Company Common Stock on NASDAQ during the four
weeks preceding the first day of such Trading Window.
(v) "TRANSFER" means any sale, Distribution (or other
distribution), contract to sell, pledge or other disposition of, or transaction
that has the same effect, or swap, hedge or other arrangement that transfers, in
whole or in part, any of the economic consequences of ownership of the
Securities.
3.3 Amendment; Termination.
(a) Except as expressly provided herein, neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument referencing this Agreement and signed by the Company and
the Holders holding a majority of the Registrable Securities; provided, however,
that Section 2 may not be amended, waived, discharged or terminated unless such
instrument is signed by the Stockholder, and the signature of other Holders will
not be required for any such amendment, waiver, discharge or termination. Any
such amendment, waiver, discharge or termination effected in accordance with
this paragraph shall be binding upon each Holder and each future holder of all
such securities of Holder. In the event that an underwriting agreement contains
terms differing from this Agreement, as to any Holder that is bound by such
underwriting agreement the terms of such underwriting agreement shall govern.
-15-
(b) If the Merger Agreement terminates in accordance with its
terms pursuant to Article VII thereto, this Agreement will immediately terminate
and the Prior Agreement will be reinstated in full force and effect. Otherwise,
unless this Agreement terminates earlier pursuant to this Section 3.2, this
Agreement will terminate when both Section 1 and Section 2 have terminated in
accordance with their provisions.
3.4 Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, sent by facsimile or otherwise delivered by hand or by
messenger addressed:
(a) if to an Holder, at such Holder's facsimile number or address
as shown in the Company's records, as may be updated in accordance with the
provisions hereof, with a copy to Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxx & Xxxxxxxx,
0000 Xxxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, facsimile number (650)
251-5002; or
(b) if to the Company, one copy should be sent to and addressed
to the attention of the President, or at such other address or facsimile number
as the Company shall have furnished to the Holders, with a copy to Xxxxxx X.
Day, Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxx, facsimile number (000) 000-0000.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained receptacle for
the deposit of the United States mail, addressed and mailed as aforesaid or, if
sent by facsimile, upon confirmation of facsimile transfer with a confirming
phone call.
3.5 Governing Law. This Agreement shall be governed in all respects by
the internal laws of the State of New York as applied to agreements entered into
among New York residents to be performed entirely within New York.
3.6 Successors and Assigns. This Agreement, and any and all rights,
duties and obligations hereunder, shall not be assigned, transferred, delegated
or sublicensed by any Holder except in accordance with Section 1.7 or Section
2.2(a). Except as set forth in Section 2.2(a), Stockholder may not assign its
obligations or rights under Section 2 without the prior written consent of the
Company. The Company may assign or transfer its rights and obligations hereunder
without the consent of any other party hereto, but only in connection with a
sale of all or substantially all of the Company's assets, whether by merger,
consolidation, asset sale or otherwise. Except as provided in this Section 3.6,
any attempt to assign, transfer, delegate or sublicense any rights, duties or
obligations that arise under this Agreement shall be void. Subject to the
foregoing and except as otherwise provided herein, the provisions of this
-16-
Agreement shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties.
3.7 Effective Date; Entire Agreement. This Agreement shall not be
effective unless and until the Closing, in which case the parties hereto hereby
agree that the Registration Rights Agreement, dated as of June 8, 2000 (the
"EXISTING AGREEMENT"), shall be terminated. Prior to the Closing and/or if the
Merger Agreement shall be terminated according to its terms, this Agreement
shall be of no force and effect and the parties hereto shall continue to be
subject to the Existing Agreement pursuant to the terms thereof as existing on
the date hereof. Upon the Closing, this Agreement shall constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and supersede in its entirety the Existing Agreement (as well as
all other agreements, written or unwritten, between the Company and Stockholder
or any of its affiliates, members, former merger or other current or former
equity owners (including, without limitation, registration rights)) with respect
to the matters set forth herein, which agreements shall thereafter have no
further force and effect. No party hereto shall be liable or bound to any other
party in any manner with regard to the subjects hereof or thereof by any
warranties, representations or covenants except as specifically set forth
herein.
3.8 Delays or Omissions. Except as expressly provided herein, no delay
or omission to exercise any right, power or remedy accruing to any party to this
Agreement upon any breach or default of any other party under this Agreement
shall impair any such right, power or remedy of such non-defaulting party, nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring, nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any party to this Agreement, shall be cumulative and not
alternative.
3.9 Severability. Unless otherwise expressly provided herein, the rights
of the Holders hereunder are several rights, not rights jointly held with any of
the other Holders. In the event that any provision of this Agreement becomes or
is declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision, and the parties agree to negotiate, in good faith, a legal and
enforceable substitute provision that most nearly effects the parties' intent in
entering into this Agreement.
-17-
3.10 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. All references in this Agreement to
sections, paragraphs and exhibits shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits attached hereto.
3.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties that
execute such counterparts, and all of which together shall constitute one
instrument.
3.12 Telecopy Execution and Delivery. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto,
and an executed copy of this Agreement may be delivered by one or more parties
hereto by facsimile or similar electronic transmission device pursuant to which
the signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original
of this Agreement as well as any facsimile, telecopy or other reproduction
hereof.
3.13 JURY TRIAL EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT
OF OR RELATED TO THIS AGREEMENT.
3.14 Further Assurances. Each party hereto agrees to execute and
deliver, by the proper exercise of its corporate, limited liability company,
partnership or other powers, all such other and additional instruments and
documents and do all such other acts and things as may be necessary to more
fully effectuate this Agreement.
-18-
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement effective as of the day and year first above written.
WESTERN MULTIPLEX CORPORATION
a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Chief Executive Officer
STOCKHOLDER:
WMC HOLDING L.L.C.
a Delaware limited liability company
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title:
RIPPLEWOOD PARTNERS, L.P.
a Delaware limited partnership
By: Ripplewood Holdings, L.L.C., its
general partner
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title:
RIPPLEWOOD EMPLOYEE CO-INVESTMENT FUND, L.P.
a Delaware limited partnership
By: Ripplewood Holdings, L.L.C., its general
partner
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title:
