Endwave Corp., a provider of high frequency RF modules for telecommunications networks, defense electronics and homeland security systems, announced that it has entered into a Preferred Stock and Warrant Purchase Agreement, effective as of April 24, 2006, with Oak Investment Partners XI, Limited Partnership. Pursuant to the purchase agreement, Oak has purchased 300,000 shares of Series B Preferred Stock for $150 per preferred share for gross proceeds of $45 M. The preferred shares are convertible into 3,000,000 shares of common stock, for an effective purchase price of $15 per common share equivalent and an approximate 12 percent premium to the closing price of Endwave's common stock on April 24, 2006. As part of the transaction, Endwave issued a three-year warrant granting Oak the right to purchase an additional 90,000 preferred shares at an exercise price of $150 per preferred share, which are convertible into 900,000 shares of common stock at $15 per share.


"We are extremely happy to welcome Oak Investment Partners back to the Endwave family. Oak was one of our early venture capital investors as a private start-up company and one of their Managing Partners, Bandel Carano, served on our board for several years prior to our IPO," said Ed Keible, Endwave's president and chief executive officer. "Oak has long been a leader in investing in the wireless market and brings an extensive network of industry contacts and knowledge. We look forward to working with them as Endwave continues to grow both organically and through acquisition."

"I have followed Endwave's technology and market development for over a decade and am enthusiastic about the company's prospects," said Bandel Carano, a Managing Partner at Oak. "As an investor in several other companies in the wireless market, we believe Endwave is well-positioned in both the telecom and non-telecom segments. We look forward to helping the company apply its advanced technology to new applications and products."

Pursuant to the purchase agreement, Oak has agreed not to sell or otherwise transfer the preferred shares (and warrant and the underlying common stock) for 18 months from the date the shares were purchased, subject to certain exceptions. After 18 months have passed, Oak may sell or transfer up to 25 percent of the shares per quarter. In addition, Oak has agreed not to acquire any additional shares of the capital stock of Endwave without the company's consent for two years.