EXHIBIT 99.3
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
dated as of September 8, 1998
between
AERIAL COMMUNICATIONS, INC.
and
SONERA LTD.
TABLE OF CONTENTS
Page
Section 1. Definitions and Usage............................................2
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Section 2. Demand Registration..............................................8
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Section 3. Piggyback Registration..........................................12
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Section 4. Registration Procedures.........................................13
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Section 5. Holder's Obligations............................................18
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Section 6. Expenses of Registration........................................19
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Section 7. Indemnification; Contribution...................................20
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Section 8. Holdback........................................................26
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Section 9. Amendment, Modification and Waivers; Further Assurances.........27
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Section 10. Assignment and Assumption.......................................27
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Section 11. Miscellaneous...................................................29
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
September 8, 1998, between AERIAL COMMUNICATIONS, INC., a Delaware corporation
(the "Company"), and SONERA LTD., a limited liability company organized under
the laws of the Republic of Finland and formerly known as Sonera Corporation
(the "Holder").
RECITALS
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WHEREAS, the parties hereto hereby desire to set forth the
Holder's rights and the Company's obligations to cause the registration of the
Registrable Securities pursuant to the Securities Act;
NOW, THEREFORE, in consideration of the investment by the
Holder in the AOC Common Stock pursuant to the Purchase Agreement and the
Investment Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Definitions and Usage. As used in this Agreement:
1.1. Definitions.
Agent. "Agent" means the principal placement agent on an
agented placement of securities of the Company.
AOC Common Stock. "AOC Common Stock" shall mean (i) the common
stock, par value $0.001 per share, of Aerial Operating Co., Inc. ("AOC"), and
(ii) shares of capital stock of AOC issued by AOC in respect of or in exchange
for shares of such common stock in connection with any stock dividend or
distribution, stock split-up, recapitalization, recombination or exchange by AOC
of shares of such common stock.
Commission. "Commission" shall mean the Securities and
Exchange Commission.
Common Stock. "Common Stock" shall mean (i) the common stock,
par value $1.00 per share, of the Company, and (ii) shares of capital stock of
the Company issued by the Company in respect of or in exchange for shares of
such common stock in connection with any stock dividend or distribution, stock
split-up, recapitalization, recombination or exchange by the Company generally
of shares of such common stock.
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Continuously Effective. "Continuously Effective", with respect
to a specified registration statement, shall mean that it shall not cease to be
effective and available for Transfers of Registrable Securities thereunder for
longer than either (i) any ten (10) consecutive business days, or (ii) an
aggregate of fifteen (15) business days during the period specified in the
relevant provision of this Agreement.
Demand Registration. "Demand Registration" shall have the
meaning set forth in Section 2.1(a).
Exchange Act. "Exchange Act" shall mean the Securities
Exchange Act of 1934.
Investment Agreement. "Investment Agreement" means the
Investment Agreement, dated as of September 8, 1998, by and among the Company,
AOC, Telephone and Data Systems, Inc. and the Holder.
Person. "Person" shall mean any individual, corporation,
partnership, joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or other agency or
political subdivision thereof.
Piggyback Registration. "Piggyback Registration" shall have
the meaning set forth in Section 3.1.
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Purchase Agreement. "Purchase Agreement" shall mean the
Purchase Agreement, dated as of June 1, 1998, by and among the Company, AOC,
Telephone and Data Systems, Inc. and the Holder.
Purchased Shares. "Purchased Shares" shall mean the 2,410,482
shares of AOC Common Stock initially acquired by the Holder pursuant to the
Purchase Agreement.
Register, Registered and Registration. "Register",
"registered", and "registration" shall refer to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities Act, and the declaration or ordering by the Commission of
effectiveness of such registration statement or document.
Registrable Securities. "Registrable Securities" shall mean
(i) the Shares owned by the Holder on the date of determination or (ii) any
securities of any Person issued in exchange for or on conversion of Shares in
any merger or reorganization of the Company owned by the Holder on the date of
determination whether pursuant to Section 11.8 of the Investment Agreement or
otherwise; provided, however, that Registrable Securities shall not include any
securities which have theretofore been registered and sold pursuant to the
Securities Act or which have been sold to the public pursuant to Rule 144 or any
similar rule promulgated by the Commission pursuant to the Securities Act, and,
provided further, the Company shall have no obligation under Sections 2 and 3 to
register any Registrable Securities of the Holder if the Company shall deliver
to the Holder an opinion of counsel reasonably satisfactory to such Holder and
its counsel to the effect that the
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proposed sale or disposition by the Holder of all of the Registrable Securities
for which registration was requested does not require registration under the
Securities Act, and offers to remove any and all Transfer restrictions and
legends restricting Transfer from the certificates evidencing such Registrable
Securities.
Registration Expenses. "Registration Expenses" shall have the
meaning set forth in Section 6.1.
Registration Rights Period. "Registration Rights Period" means
the period commencing on the fifth anniversary hereof and terminating on the
earliest to occur of (i) the twentieth anniversary hereof, (ii) if the Holder or
any Permitted Affiliate Transferee (as defined in the Investment Agreement) has
Transferred any Purchased Shares or any securities acquired in exchange for or
on conversion of such Purchased Shares, then the date, if any, on which the
Holder and the Permitted Affiliate Transferees, in the aggregate, fail to
maintain an Aggregate Converted Percentage (as determined pursuant to the
Investment Agreement) equal to at least 5.3%, or (iii) if neither the Holder nor
any Permitted Affiliate Transferee has Transferred any Purchased Shares, or any
securities acquired in exchange for or on conversion of such Purchased Shares,
then the date, if any, on which the Holder and the Permitted Affiliate
Transferees, in the aggregate, fail to maintain an Aggregate Converted
Percentage equal to at least 2.1%.
Securities Act. "Securities Act" shall mean the Securities Act
of 1933.
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Selling Holder. "Selling Holder" shall mean, with respect to a
specified registration of securities pursuant to this Agreement, the Holder if
any of the Holder's Registrable Securities are included in such registration.
Shares. "Shares" shall mean any or all of the shares of Common
Stock held by the Holder that are acquired by the Holder from the Company
pursuant to the Investment Agreement, whether such acquisition by the Holder is
by the purchase of Common Stock or by the exchange of AOC Common Stock for
Common Stock.
Transfer. "Transfer" shall mean and include the act of
selling, giving, transferring, creating a trust (voting or otherwise), assigning
or otherwise disposing of to an unaffiliated third party (other than pledging,
hypothecating or otherwise transferring as security) (and correlative words
shall have correlative meanings); provided however, that any transfer or other
disposition upon foreclosure or other exercise of remedies of a secured creditor
after an event of default under or with respect to a pledge, hypothecation or
other transfer as security shall constitute a "Transfer".
Underwriters' Representative. "Underwriters' Representative"
shall mean the managing underwriter or, in the case of a co-managed
underwriting, the managing underwriter designated as the Underwriters'
Representative by the co-managers for the sale of securities of the Company.
Violation. "Violation" shall have the meaning set forth in
Section 7.1.
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1.2. Usage. (a) References to a Person are also references to
its assigns and successors in interest (by means of merger, consolidation or
sale of all or substantially all the assets of such Person or otherwise, as the
case may be).
(b) References to Registrable Securities "owned" by the Holder
shall include Registrable Securities beneficially owned by such Person but which
are held of record in the name of a nominee, trustee, custodian, or other agent.
(c) References to a document are to it as amended, waived and
otherwise modified from time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified from time to time
(and references to any provision thereof shall include references to any
successor provision).
(d) References to Sections are to sections hereof unless the
context otherwise requires.
(e) The definitions set forth herein are equally applicable
both to the singular and plural forms and the feminine, masculine and neuter
forms of the terms defined.
(f) The term "including" and correlative terms shall be deemed
to be followed by "without limitation" whether or not followed by such words or
words of like import.
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(g) The term "hereof" and similar terms refer to this
Agreement as a whole.
(h) The "date of" any notice or request given pursuant to this
Agreement shall be determined in accordance with Section 11.2.
Section 2. Demand Registration.
2.1. (a) If at any time during the Registration Rights Period,
the Holder shall make a written request to the Company to register Registrable
Securities then held by the Holder, the Company shall cause there to be filed
with the Commission a registration statement meeting the requirements of the
Securities Act (a "Demand Registration") and the Holder shall be entitled to
have included therein all or such number of such Holder's Registrable
Securities, as the Holder shall specify in writing; provided, however, that no
request may be made pursuant to this Section 2.1 if within twelve (12) months
prior to the date of such request a registration statement in connection with
either a Demand Registration pursuant to this Section 2.1 or a Piggyback
Registration pursuant to Section 3.1 shall have been declared effective by the
Commission. Any request made pursuant to this Section 2.1 shall be addressed to
the attention of the Secretary of the Company, and shall specify the number of
Registrable Securities to be registered, the intended methods of disposition
thereof and that the request is for a Demand Registration pursuant to this
Section 2.1(a).
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(b) The Company shall be entitled to (i) postpone the filing
of any Demand Registration statement otherwise required to be prepared and filed
pursuant to this Section 2.1, and (ii) after effectiveness of any Demand
Registration statement prepared and filed pursuant to this Section 2.1, suspend
the use of such Demand Registration statement and require the Selling Holder to
suspend sales pursuant to the prospectus contained therein, if, in either case,
the Board determines, in its good faith reasonable judgment (with the
concurrence of the managing underwriter, if any), that such registration and the
Transfer of Registrable Securities contemplated thereby would materially
interfere with, or require premature disclosure of, any financing, acquisition,
divestiture, reorganization or other material transaction involving the Company
or any of its majority-owned subsidiaries and the Company promptly gives the
Holder notice of such determination; provided, however, that any such
postponement and/or suspension pursuant to this Section 2.1(b) shall not, in the
aggregate, exceed 180 days with respect to any one Demand Registration
statement.
2.2. Following receipt of a request for a Demand Registration,
the Company shall:
(a) File a registration statement with the Commission as
promptly as practicable, and shall use the Company's reasonable best efforts to
have the registration declared effective under the Securities Act as soon as
reasonably practicable, in each instance giving due regard to the need to
prepare current financial statements, conduct due diligence and complete other
actions that are reasonably necessary under applicable federal and state law to
effect a registered public offering.
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(b) Subject to Section 2.1(b), use the Company's reasonable
best efforts to keep the registration statement relating to the Demand
Registration Continuously Effective for up to 180 days or until such earlier
date as of which all the Registrable Securities under the Demand Registration
statement shall have been disposed of in the manner described in such
registration statement. Notwithstanding the foregoing, if for any reason the
effectiveness of a registration statement pursuant to this Section 2 is
suspended, the foregoing period shall be extended by the aggregate number of
days of such suspension.
2.3. During the Registration Rights Period, the Company shall
be obligated to effect no more than three (3) Demand Registrations. For purposes
of the preceding sentence, registration shall not be deemed to have been
effected (i) if after such registration statement has become effective, such
registration or the related offer, sale or distribution of Registrable
Securities thereunder is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court for
any reason not attributable to the Selling Holder and such interference is not
thereafter eliminated, (ii) if, during the period that a Demand Registration
Statement is effective immediately following a postponement or suspension by the
Company pursuant to Section 2.1(b), the Selling Holder is unable to reasonably
complete the offering and sale of Registrable Securities registered pursuant to
such registration statement due to adverse market conditions and could have
reasonably completed such offering and sale but for such postponement or
suspension, or (iii) if the conditions to closing specified in the underwriting
agreement, if any, entered into in connection with such registration are not
satisfied or waived, other than by reason of a failure on the part of the
Selling Holder. If the Company shall have complied
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with its obligations under this Agreement, a right to demand a registration
pursuant to this Section 2 shall be deemed to have been satisfied upon the
earlier of (x) the date as of which all of the Registrable Securities included
therein shall have been disposed of pursuant to the Registration Statement, and
(y) the date as of which such Demand Registration shall have been Continuously
Effective for a period of 180 days, provided no stop order or similar order, or
proceedings for such an order, is thereafter entered or initiated.
2.4. A registration pursuant to this Section 2 shall be on
such appropriate registration form of the Commission as shall (i) be selected by
the Company and be reasonably acceptable to the Selling Holder, and (ii) permit
the disposition of the Registrable Securities in accordance with the intended
method or methods of disposition specified in the request pursuant to Section
2.1(a).
2.5. If any registration pursuant to this Section 2 involves
an underwritten offering (whether on a "firm", "best efforts" or "all reasonable
efforts" basis or otherwise), or an agented offering, the Selling Holder shall
have the right to select the underwriter or underwriters and manager or managers
to administer such underwritten offering or the placement agent or agents for
such agented offering; provided, however, that each Person so selected shall be
reasonably acceptable to the Company.
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Section 3. Piggyback Registration.
3.1. If at any time during the Registration Rights Period the
Company proposes to register (including for this purpose a registration effected
by the Company for shareholders of the Company other than the Holder) equity
securities under the Securities Act in connection with the public offering
solely for cash on Form X-0, X-0 or S-3 (or any replacement or successor forms),
the Company shall promptly give the Holder of Registrable Securities written
notice of such registration (a "Piggyback Registration"). Upon the written
request of the Holder given within 30 days following the date of such notice,
the Company shall cause to be included in such registration statement and use
its reasonable best efforts to be registered under the Securities Act all the
Registrable Securities that such Holder shall have requested to be registered;
provided, however, that such right of inclusion shall not apply to any
registration statement covering an underwritten offering of convertible debt
securities; provided further, that, if Telephone and Data Systems, Inc. ("TDS"),
the parent corporation of the Company, has assumed the rights and obligations of
the Company under this Agreement and the Registrable Securities consist of a
class of tracking stock of TDS, then such right of inclusion shall only apply to
a registration statement covering an underwritten offering of such class of
tracking stock; and provided further, that no request may be made pursuant to
this Section 3.1 if within twelve (12) months prior to the date of such request
a registration statement in connection with either a Demand Registration
pursuant to Section 2.1 or a Piggyback Registration pursuant to this Section 3.1
shall have been declared effective by the Commission. The Company shall have the
absolute right to withdraw or cease to prepare or file any registration
statement for any offering referred to in this Section 3 without any obligation
or liability to the Holder.
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3.2. If the Underwriters' Representative or Agent shall advise
the Company in writing (with a copy to the Selling Holder) that, in its opinion,
the amount of Registrable Securities requested to be included in such
registration would materially adversely affect such offering or the timing
thereof, then the Company will include in such registration, to the extent of
the amount which the Company is so advised can be sold without such material
adverse effect: (i) first, all securities proposed to be sold by the Company for
its own account; (ii) second, the Registrable Securities requested to be
included in such registration by the Holder pursuant to this Section 3, and all
other securities being registered pursuant to the exercise of contractual rights
comparable to the rights granted in this Section 3, pro rata based on the
estimated gross proceeds from the sale thereof; and (iii) third, all other
securities requested to be included in such registration.
3.3. During the Registration Rights Period, the Holder shall
be entitled to have its Registrable Securities included in up to five (5)
Piggyback Registrations pursuant to this Section 3.
Section 4. Registration Procedures. Whenever required under
Section 2 or Section 3 to effect the registration of any Registrable Securities,
the Company shall, as promptly as practicable:
4.1. Prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use the Company's
reasonable best efforts to cause such registration statement to become
effective; provided, however, that before filing a registration statement or
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prospectus or any amendments or supplements thereto, including documents
incorporated by reference after the initial filing of the registration statement
and prior to effectiveness thereof, the Company shall furnish to one firm of
counsel for the Selling Holder copies of all such documents in the form
substantially as proposed to be filed with the Commission prior to filing for
review and comment by such counsel.
4.2. Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act and rules thereunder with respect to the
disposition of all securities covered by such registration statement. If the
registration is for an underwritten offering, the Company shall amend the
registration statement or supplement the prospectus whenever required by the
terms of the underwriting agreement entered into pursuant to Section 4.5.
Pending such amendment or supplement the Holder shall cease making offers or
Transfers of Registerable Shares pursuant to the prior prospectus. In the event
that any Registrable Securities included in a registration statement subject to,
or required by, this Agreement remain unsold at the end of the period during
which the Company is obligated to use its reasonable best efforts to maintain
the Continuously Effective status of such registration statement, the Company
may file a post-effective amendment to the registration statement for the
purpose of removing such securities from registered status.
4.3. Furnish to the Selling Holder, without charge, such
numbers of copies of the registration statement, any pre-effective or
post-effective amendment thereto, the prospectus,
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including each preliminary prospectus and any amendments or supplements thereto,
in each case in conformity with the requirements of the Securities Act and the
rules thereunder, and such other related documents as the Selling Holder may
reasonably request in order to facilitate the disposition of all Registrable
Securities included in the registration.
4.4. Use the Company's reasonable best efforts (i) to register
and qualify the securities covered by such registration statement under such
other securities or Blue Sky laws of such states or jurisdictions of the United
States as shall be reasonably requested by the Underwriters' Representative or
Agent (as applicable, or if inapplicable, in those states designated by the
Selling Holder), and (ii) to obtain the withdrawal of any order suspending the
effectiveness of a registration statement, or the lifting of any suspension of
the qualification (or exemption from qualification) of the offer and transfer of
any of the Registrable Securities in any jurisdiction, at the earliest possible
moment; provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
4.5. In the event of any underwritten or agented offering,
enter into and perform the Company's obligations under an underwriting or agency
agreement (including indemnification and contribution obligations of
underwriters or agents), in usual and customary form, with the managing
underwriter or underwriters of or agents for such offering. The Company shall
also cooperate with the Selling Holder and the Underwriters' Representative or
Agent for such offering in the marketing of the Registrable Securities,
including making reasonably available the Company's officers,
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accountants, counsel, premises, books and records for such purpose, but the
Company shall not be required to incur any significant out-of-pocket expense
pursuant to this sentence.
4.6. Promptly notify the Selling Holder of any stop order
issued or threatened to be issued by the Commission in connection therewith (and
take all reasonable actions required to prevent the entry of such stop order or
to remove it if entered).
4.7. Make available for inspection by the Selling Holder, any
underwriter participating in such offering and the representatives of the
Selling Holder and Underwriter (but not more than one firm of counsel to the
Selling Holder), all financial and other information as shall be reasonably
requested by them, and provide the Selling Holder, any underwriter participating
in such offering and the representatives of the Selling Holder and Underwriter
the reasonable opportunity to discuss the business affairs and financial
statements of the Company with its principal executives and independent public
accountants who have certified the audited financial statements included in such
registration statement, in each case all as necessary to enable them to exercise
their due diligence responsibility under the Securities Act; provided, however,
that information that the Company determines, in good faith, to be confidential
and which the Company advises such Person in writing is confidential shall not
be disclosed unless such Person signs a confidentiality agreement reasonably
satisfactory to the Company or the Selling Holder agrees to be responsible for
such Person's breach of confidentiality on terms reasonably satisfactory to the
Company.
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4.8. Use the Company's reasonable best efforts to obtain a
so-called "comfort letter" from its independent public accountants, and legal
opinions of counsel to the Company addressed to the Selling Holder, in customary
form and covering such matters of the type customarily covered by such letters,
and in a form that shall be reasonably satisfactory to the Selling Holder. The
Company shall furnish to the Selling Holder a signed counterpart of any such
comfort letter or legal opinion. Delivery of any such opinion or comfort letter
shall be subject to the recipient furnishing such written representations or
acknowledgments as are customarily provided by selling shareholders who receive
such comfort letters or opinions.
4.9. Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement.
4.10. Use the Company's reasonable best efforts to cause the
Registrable Securities covered by such registration statement (i) to be listed
on a securities exchange or included for quotation in a recognized trading
market to the extent that the Common Stock is so listed or included, and (ii) to
be registered with or approved by such other United States or state governmental
agencies or authorities as may be necessary by virtue of the business and
operations of the Company to enable the Selling Holder lawfully to consummate
the disposition of such Registrable Securities.
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4.11. Use the Company's reasonable best efforts to provide a
CUSIP number for the Registrable Securities prior to the effective date of the
first registration statement filed hereunder including Registrable Securities.
4.12. Take such other actions as are reasonably required in
order to expedite or facilitate the disposition of Registrable Securities
included in each such registration.
Section 5. Holder's Obligations. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Agreement with respect to the Registrable Securities of the Selling Holder that
the Selling Holder shall:
5.1. Furnish to the Company such information regarding the
Selling Holder, the number of the Registrable Securities owned by it and the
intended method of disposition of such securities as shall be required to effect
the registration of the Selling Holder's Registrable Securities, and to
cooperate with the Company in preparing such registration;
5.2. Agree to sell its Registrable Securities to the
underwriters at the same price and on substantially the same terms and
conditions as the Company or the other Persons, if any, on whose behalf the
registration statement is being filed have agreed to sell their securities, and
to execute the underwriting agreement agreed to by the Selling Holder (in the
case of a registration
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under Section 2) or the Company and the Selling Holder (in the case of a
registration under Section 3).
Section 6. Expenses of Registration. Expenses in connection
with registrations pursuant to this Agreement shall be allocated and paid as
follows:
6.1. With respect to each Demand Registration, the Selling
Holder shall bear and pay all expenses incurred in connection with any
registration, filing, or qualification of Registrable Securities with respect to
such Demand Registration, including all registration, filing and National
Association of Securities Dealers, Inc. fees, all fees and expenses of complying
with securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the reasonable fees and disbursements
of counsel for the Company, and of the Company's independent public accountants,
including the expenses of "cold comfort" letters required by or incident to such
performance and compliance, the fees and disbursements of counsel for the
Selling Holder, and the management fees, underwriting discounts and commissions
relating to the Selling Holder's Registrable Securities included in such
registration (collectively, the "Registration Expenses").
6.2. The Company shall bear and pay all Registration Expenses
incurred in connection with any Piggyback Registrations pursuant to Section 3;
provided, however, that the Selling Holder shall pay (i) the fees and
disbursements of counsel for the Selling Holder and (ii) the
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management fees, underwriting discounts and commissions relating to the Selling
Holder's Registrable Securities included in such registration.
6.3. Any failure of the Selling Holder or the Company to pay
any Registration Expenses as required by this Section 6 shall not relieve the
Selling Holder or the Company, as applicable, of its obligations under this
Agreement.
Section 7. Indemnification; Contribution. If any Registrable
Securities are included in a registration statement under this Agreement:
7.1. To the extent permitted by applicable law, the Company
shall indemnify and hold harmless the Selling Holder, each Person, if any, who
controls the Selling Holder within the meaning of the Securities Act, and each
officer, director, partner, and employee of the Selling Holder and such
controlling Person, against any and all losses, claims, damages, liabilities and
expenses (joint and several), including attorneys' fees and disbursements and
expenses of investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any of the
foregoing Persons may become subject under the Securities Act, the Exchange Act
or other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"):
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(i) Any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein, any
amendments or supplements thereto or any documents incorporated by
reference therein (collectively, the "Registration Statement");
(ii) The omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein,
or necessary to make the statements therein not misleading; or
(iii) Any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any applicable state securities law
or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any applicable state securities law;
provided, however, that the indemnification required by this Section 7.1 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in any such case for any such loss, claim, damage, liability or
expense to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished to
the Company by the indemnified party expressly for use in connection with such
registration.
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7.2. To the extent permitted by applicable law, the Selling
Holder shall indemnify and hold harmless the Company, each of its directors,
each of its officers who shall have signed the registration statement, and each
Person, if any, who controls the Company within the meaning of the Securities
Act, against any and all losses, claims, damages, liabilities and expenses
(joint and several), including attorneys' fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, or to which any of the foregoing
Persons may become subject under the Securities Act, the Exchange Act or other
federal or state laws, insofar as such losses, claims, damages, liabilities and
expenses arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by the Selling Holder expressly
for use in connection with such registration; provided, however, that (x) the
indemnification required by this Section 7.2 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or expense if settlement
is effected without the consent of the Selling Holder, which consent shall not
be unreasonably withheld, and (y) in no event shall the amount of any indemnity
under this Section 7.2 exceed the gross proceeds from the applicable offering
received by the Selling Holder.
7.3. Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified party
may make a claim under this Section 7, such indemnified party shall deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in and, to the extent the
indemnifying party so
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desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and disbursements and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time following the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 7 but shall not relieve the
indemnifying party of any liability that it may have to any indemnified party
otherwise than pursuant to this Section 7. Any fees and expenses incurred by the
indemnified party (including any fees and expenses incurred in connection with
investigating or preparing to defend such action or proceeding) shall be paid to
the indemnified party, as incurred, within thirty (30) days of written notice
thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder). Any such indemnified party shall have the right to employ separate
counsel in any such action, claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be the expenses
of such indemnified party unless (i) the indemnifying party has agreed to pay
such fees and expenses or (ii) the indemnifying party shall have failed to
promptly assume the defense of such action, claim or proceeding or (iii) the
named parties to any such action, claim or proceeding (including any impleaded
parties) include both such indemnified party and the indemnifying party, and
such indemnified party shall have been advised by counsel that there may be one
or more legal defenses
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available to it which are different from or in addition to those available to
the indemnifying party and that the assertion of such defenses would create a
conflict of interest such that counsel employed by the indemnifying party could
not faithfully represent the indemnified party (in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one firm of attorneys (together with appropriate
local counsel) separate from its own counsel at any time for all such
indemnified parties, unless in the reasonable judgment of such indemnified party
a conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such action, claim or proceeding, in
which event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels). No indemnifying party shall be
liable to an indemnified party for any settlement of any action, proceeding or
claim without the written consent of the indemnifying party, which consent shall
not be unreasonably withheld.
7.4. If the indemnification required by this Section 7 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to in
this Section 7:
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(a) The indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to,
among other things, whether any Violation has been committed by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such Violation. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 7.1 and Section 7.2, any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
(b) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7.4 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in Section 7.4(a). No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
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7.5. If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this Section 7 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 7.4.
7.6. The obligations of the Company and the Selling Holder
under this Section 7 shall survive the completion of any offering of Registrable
Securities pursuant to a registration statement under this Agreement.
Section 8. Holdback. The Holder, if so requested by the
Underwriters' Representative or Agent in connection with an offering of any
securities covered by a registration statement filed by the Company, whether or
not the Holder's securities are included therein, shall not effect any public
sale or distribution of shares of Common Stock or any securities convertible
into or exchangeable or exercisable for shares of Common Stock, including a sale
pursuant to Rule 144 under the Securities Act (except as part of such
underwritten or agented registration), during the 15- day period prior to, and
during the 180-day period beginning on, the date such registration statement is
declared effective under the Securities Act by the Commission, provided that
such Holder is timely notified of such effective date in writing by the Company
or such Underwriters' Representative or Agent. In order to enforce the foregoing
covenant, the Company shall be entitled to impose stop-transfer instructions
with respect to the Registrable Securities of the Holder until the end of such
period.
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Section 9. Amendment, Modification and Waivers; Further
Assurances. (a) This Agreement may not be amended, modified or supplemented
except by an agreement in writing executed by each of the Company and the
Holder.
(b) No waiver of any terms or conditions of this Agreement
shall operate as a waiver of any other breach of such terms and conditions or
any other term or condition, nor shall any failure to enforce any provision
hereof operate as a waiver of such provision or of any other provision hereof.
No written waiver hereunder, unless it by its own terms explicitly provides to
the contrary, shall be construed to effect a continuing waiver of the provisions
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision.
(c) Each of the parties hereto shall execute all such further
instruments and documents and take all such further action as any other party
hereto may reasonably require in order to effectuate the terms and purposes of
this Agreement.
Section 10. Assignment and Assumption.
Section 10.1. Assignment; Benefit. This Agreement and all of
the provisions hereof shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs,
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assigns, executors, administrators or successors; provided, however, that
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned or delegated by the Holder to any person who purchases such
Registrable Securities from the Holder, except (i) as provided in the Investment
Agreement or (ii) to one or more "affiliates" of the Holder within the meaning
of Rule 144(a)(1) adopted by the Commission pursuant to the Securities Act.
10.2 Assumption Upon Merger, Consolidation or Reorganization.
The Company shall not, directly or indirectly, enter into any merger,
consolidation or reorganization in which the Company shall not be the surviving
corporation unless the proposed surviving corporation shall, before such merger,
consolidation or reorganization, agree in writing to assume the obligations of
the Company under this Agreement, and for that purpose references hereunder to
"Registrable Securities" shall be deemed to be references to the securities
which the Holder would be entitled to receive in exchange for Registrable
Securities under any such merger, consolidation or reorganization; provided,
however, that the provisions of this Agreement shall not apply in the event of
any merger, consolidation or reorganization in which the Company is not the
surviving corporation if the Holder is entitled to receive in exchange for its
Registrable Securities (i) cash or (ii) securities which may be sold without
registration or other restriction under the Act.
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Section 11. Miscellaneous.
11.1. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
11.2. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be made by hand delivery, facsimile, or
overnight air courier guaranteeing next day delivery, as follows:
(a) If to the Company, at:
Aerial Communications, Inc.
0000 Xxxx Xxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Telephone and Data Systems, Inc.
00 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: XxXxx X. Xxxxxxx, Xx.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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and a copy (which shall not constitute notice) to:
Sidley & Austin
One First Xxxxxxxx Xxxxx
00xx Xxxxx - XX
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to the Holder, at:
SONERA LTD.
X.X. Xxx 000
XXX-00000-XXXX
Xxxxxxxxxxxxxx 00, XXXXXXXX
Attention: Xxxxx Xxxxxxxx, Esq.
Telephone: 000-00-0-0000-0000
Facsimile: 011-35-8-2040-3414
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxx, L.L.P.
0000 X. Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as any party may from time to time furnish to the other
parties by a notice given in accordance with the provisions of this Section
11.2. All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; when receipt
confirmed, if sent by facsimile; and the next business day after timely delivery
to the courier, if sent by an overnight air courier service guaranteeing next
day delivery.
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11.3. Entire Agreement; Integration. This Agreement supersedes
all prior agreements between or among either of the parties hereto with respect
to the subject matter contained herein and embodies the entire understanding
among the parties relating to such subject matter.
11.4. Injunctive Relief. Each of the parties hereto
acknowledges that in the event of a breach by any of them of any material
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. Each of the parties therefore agrees that in the event of such a
breach hereof the aggrieved party may elect to institute and prosecute
proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach hereof. By seeking or obtaining
any such relief, the aggrieved party shall not be precluded from seeking or
obtaining any other relief to which it may be entitled.
11.5. Section Headings. Section headings are for convenience
of reference only and shall not affect the meaning of any provision of this
Agreement.
11.6. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, and all of which
shall together constitute one and the same instrument. All signatures need not
be on the same counterpart.
11.7. Severability. If any provision of this Agreement shall
be invalid or unenforceable, such invalidity or unenforceability shall not
affect the validity and enforceability of
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the remaining provisions of this Agreement, unless the result thereof would be
unreasonable, in which case the parties hereto shall negotiate in good faith as
to appropriate amendments hereto.
11.8. Filing. A copy of this Agreement and of all amendments
thereto shall be filed at the principal executive office of the Company with the
corporate recorder of the Company.
11.9. Termination. This Agreement may be terminated at any
time by a written instrument signed by the parties hereto. Unless sooner
terminated in accordance with the preceding sentence, this Agreement (other than
Section 7 hereof) shall terminate in its entirety on the earlier to occur of (i)
the expiration of the Registration Rights Period or (ii) such date as there
shall be no Registrable Securities outstanding, provided that any shares of
Common Stock previously subject to this Agreement shall not be Registrable
Securities following the sale of any such shares in an offering registered
pursuant to this Agreement.
11.10. Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees (including any fees incurred in any appeal) in
addition to its costs and expenses and any other available remedy.
11.11. No Third Party Beneficiaries. Nothing herein expressed
or implied is intended to confer upon any person, other than the parties hereto
or their respective permitted assigns,
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successors, heirs and legal representatives, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
11.12. Compliance with Rule 144. With a view to making
available to the Holder the benefits of Rule 144 promulgated under the
Securities Act, the Company agrees to use its reasonable best efforts during the
Registration Rights Period to:
(a) if the Company is required to file reports pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), file with the
Commission, as and when applicable, on a timely basis, all reports required to
be filed by the Company under the Exchange Act; or
(b) if the Company is not required to file reports pursuant to
the Exchange Act, upon the request of any Holder of Registrable Securities, the
Company shall make publicly available the information specified in subparagraph
(c)(2) of Rule 144 of the Securities Act, and take such further action as may be
reasonably required from time to time and as may be within the reasonable
control of the Company, to enable the Holder to Transfer Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act or any similar rule or
regulation hereafter adopted by the Commission.
* * * * *
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IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the date first written above.
AERIAL COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
SONERA LTD.
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
----------------------------
Title: President and CEO
----------------------------
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT,
DATED AS OF SEPTEMBER 8, 1998,
BETWEEN AERIAL COMMUNICATIONS, INC. AND SONERA LTD.
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