1
EXHIBIT 10.21
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of October 15,
1999 (the "Effective Date"), is by and among NexGen Technologies, L.L.C., a
Maryland limited liability company ("NexGen"), 3Com Corporation, a Delaware
corporation ("3Com"), Pyramid Ventures, Inc., a Delaware Corporation
("Pyramid"), Telcom-ATI Investors, L.L.C., a Delaware limited liability company
("Telcom"), Reuters MarketClip Holdings Sarl, a limited liability company formed
under the laws of Switzerland ("Reuters"), Transettlements, Inc., a Georgia
corporation ("Transettlements") and Aether Systems, Inc., a Delaware corporation
(the "Company"). Each of NexGen, 3Com, Pyramid, Telcom, Reuters and
Transettlements is referred to as an "Original Holder," and collectively they
are referred to as "Original Holders."
W I T N E S S E T H:
WHEREAS, the Original Holders, Xxxx X. Ein and J. Xxxxxx Xxxxx, Xx. (the
Original Holders, Ein and Xxxxx, together the "Members") are parties to the
Amended and Restated Limited Liability Company Agreement, dated as of October
29, 1998, as amended (the "LLC Agreement"), of Aether Systems LLC, a Delaware
limited liability company (the "LLC");
WHEREAS, the Original Holders, entered into a Plan of Conversion, dated as
of October 12, 1999 (the "Plan of Conversion"), which provides that immediately
prior to the closing of the Company's initial public offering of Common Stock
(the "IPO") (i) the LLC shall be converted into a corporation by the Members
contributing their interests in the LLC (the "Contributions") to the Company in
exchange for shares of common stock, par value $.01, in the Corporation ("Common
Stock") pursuant to the terms and conditions of an Agreement and Plan of
Contribution in the form attached as Exhibit A to the Plan of Conversion, and
(ii) immediately thereafter the LLC will be merged with and into the Company
pursuant to an Agreement and Plan of Merger (the "Merger Agreement") in the form
attached as Exhibit B to the Plan of Conversion; and
WHEREAS, the Merger Agreement provides that as a result of the Merger the
units of the LLC held by the Holders will be converted into shares of Common
Stock of the Company as set forth on Exhibit A hereto, as the entity surviving
the Merger.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
and other consideration, the receipt and adequacy of which hereby is
acknowledged, the parties agree as follows:
1. Definitions; Certain Rules of Construction. Certain capitalized terms are
used in this Agreement with the specific meanings defined below in this Section
1. Except as otherwise explicitly specified to the contrary or unless the
context clearly requires otherwise, (a) the capitalized term "Section" refers to
sections of this Agreement, (b) the capitalized term "Exhibit"
2
refers to exhibits to this Agreement, (c) references to a particular Section
include all subsections thereof, (d) the word "including" shall be construed as
"including without limitation", (e) references to a particular statute or
regulation include all rules and regulations thereunder and any successor
statute, regulation or rules, in each case as from time to time in effect, (f)
words in the singular or plural form include the plural and singular form,
respectively, and (g) references to a particular Person include such Person's
successors and assigns to the extent not prohibited by this Agreement.
1.1. "1933 Act" means the Securities Act of 1933, as amended and all
regulations thereunder.
1.2. "1934 Act" means the Securities Exchange Act of 1934, as amended
and all regulations thereunder.
1.3. "Board of Directors" means the Board of Directors of the Company.
1.4. "Common Stock" means the Company's common stock, par value $.01 per
share and other securities issued in respect of shares of Common Stock.
1.5. "Company" is defined in the recitals to this Agreement.
1.6. "Company Indemnitees" is defined in Section 2.8(b).
1.7. "Effective Period" means the period from the date on which a shelf
registration becomes effective to the date on which all of the Registrable
Securities cease to be Registrable Securities.
1.8. "Form S-1", "Form S-3", "Form S-4", and "Form S-8" mean such
respective registration forms in effect on the date hereof (or any successor
registration forms subsequently adopted by the SEC) under the 1933 Act.
1.9. "Holder" means (a) any Person that owns, or has the right to acquire,
Registrable Securities and (b) any assignee thereof in accordance with Section
2.11.
1.10. "Holder Indemnitee" is defined in Section 2.8(a).
1.11. "Indemnitee" means each of the Company Indemnitees and the Holder
Indemnitees.
1.12. "Initiating Holders" is defined in Section 2.1(a).
1.13. "Original Holders" is defined in the recitals to this Agreement.
2
3
1.14. "Person" means any present or future natural person or any
corporation, association, partnership, joint venture, limited liability, joint
stock or other company, business trust, trust, organization, business or
government or any governmental agency or political subdivision thereof.
1.15. "register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the 1933 Act and the automatic effectiveness, or the declaration
or ordering of effectiveness, of such registration statement or document.
1.16. "Registrable Securities" means (i) shares of Common Stock received
by an Original Holder upon conversion of Units in the LLC in the Merger; (ii)
any Common Stock of the Company or other securities issued or issuable in
respect of shares of the shares described in (i) in any corporate
reorganization, merger or consolidation; and (iii) shares of the Company's
Common Stock or other securities issued or issuable in respect of the shares
described in clause (i) or (ii) upon any stock split, stock dividend,
recapitalization, or similar event; provided, however, that any share of Common
Stock previously sold to the public pursuant to a registered public offering or
pursuant to an exemption from the registration requirements of the 1933 Act
shall not be a Registrable Security.
1.17. "Rule 144" is defined in Section 2.9(a).
1.18. "Rule 144 Information" is defined in Section 2.9(b).
1.19. "SEC" means the Securities and Exchange Commission.
1.20. "Shelf Registration" means a registration statement for an offering
of Common Stock to be made on a delayed or continuous basis pursuant to Rule 415
promulgated under the 0000 Xxx.
1.21. "Violation" means, with respect to any registration statement
which includes any Registrable Securities:
(a) 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 or any amendments or
supplements thereto;
(b) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading; or
(c) any violation or alleged violation by the Company of the 1933
Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the 1933
3
4
Act, the 1934 Act or any state securities law in connection with any
matter relating to such registration statement.
2. Registration Rights.
2.1. Demand Registration.
(a) At any time after the first anniversary of the closing of the
IPO, if the Company shall receive a written request from the Holders of
not less than 20% of the Registrable Securities then outstanding and
entitled to registration rights under this Section 2 (the "Initiating
Holders") that the Company effect the registration under the 1933 Act of
an amount of Registrable Securities set forth in the written request
provided that such registration shall have a minimum anticipated aggregate
net offering price of Twenty Five Million Dollars ($25,000,000) based on
the then current trading price of the Common Stock, then the Company
shall, within ten days of the receipt thereof, give written notice of such
request to all Holders. Such Holders shall have the right, by giving
written notice to the Company within 20 days from receipt of the Company's
notice, to elect to have included in such registration such of their
Registrable Securities as such Holders may request in such notice of
election. Subject to the limitations of this Section 2.1, the Company
shall use commercially reasonable efforts to effect such a registration
statement as soon as practicable and in any event to file within
seventy-five (75) days of the receipt of such initial request a
registration statement under the 1933 Act covering all the Registrable
Securities which the Holders shall in writing request to be included in
such registration and to use commercially reasonable efforts to have such
registration statement become effective.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they
shall so advise the Company as part of their request made pursuant to this
Section 2.1 and the Company shall include such information in the written
notice referred to in Section 2.1(a). In such event, the right of any
Holder to include its Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall (together with the Company as provided in Section 2.3(d)) enter into
an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by a majority in interest of
the Initiating Holders and approved by the Board of Directors, which
approval shall not be unreasonably withheld. Notwithstanding any other
provision of this Section 2.1, if, in the case of a registration requested
pursuant to Section 2.1(a), the underwriter advises the Initiating Holders
in writing that marketing factors require a limitation of the number of
shares to be underwritten, then the Initiating Holders shall so advise the
Company and all Holders of Registrable Securities which would otherwise be
underwritten pursuant hereto, and all
4
5
securities other than Registrable Securities sought to be included in the
underwriting shall first be excluded. To the extent that further
limitation is required, the number of Registrable Securities that may be
included in the underwriting shall be allocated pro rata among all Holders
thereof desiring to participate in such underwriting (according to the
number of Registrable Securities then held by each such Holder). No
Registrable Securities requested by any Holder to be included in a
registration pursuant to Section 2.1(a) shall be excluded from the
underwriting unless all securities other than Registrable Securities are
first excluded.
(c) The Company is obligated to effect only three (3) registrations
pursuant to Section 2.1(a), counting for this purpose only registrations
which have been declared effective and registrations which have been
withdrawn by the Holders; provided, however, that no registration pursuant
to Section 2.1(a) shall be deemed to be a registration for any purpose of
this sentence if (i) the number of Registrable Securities included in the
registration statement does not equal or exceed 30% of the number of
Registrable Securities proposed by the Holders to be included in the
offering;.
(d) Notwithstanding the provisions of this Section 2.1 or 2.12, in
the event that the Company is requested to file any registration statement
pursuant to Section 2.1(a) or 2.12:
(i) the Company shall not be obligated to effect the filing of
such registration statement during the period starting with the date
sixty (60) days prior to the date of the Company's good faith
estimate of the filing of, and ending on a date one hundred eighty
(180) days following the effective date of any other registration
statement pertaining to a public offering of securities for the
account of the Company;
(ii) the Company shall not be obligated to effect more than
one (1) registration pursuant to Section 2.1(a) in any twelve (12)
month period; and
(iii) if the Company shall furnish to the Initiating Holders a
certificate signed by the president of the Company stating that, in
the good faith judgment of the Board of Directors, it would not be
in the best interests of the Company and its shareholders generally
for such registration statement to be filed, the Company shall have
the right to defer such filing for a period of not more than one
hundred twenty (120) days after receipt of the request of the
relevant Initiating Holders; provided, however, that the Company may
not utilize the right set forth in this Section 2.1(d)(iii) more
than once in any 12-month period.
(e) Each registration requested pursuant to Section 2.1(a) shall be
effected by the filing of a registration statement on Form S-3 (if
applicable) (or if such form is not available, any other form which
includes substantially the same information (other than information which
is incorporated by reference) as would be required to be included in a
5
6
registration statement on such form as currently constituted), or unless
another form would be equally effective.
2.2. Incidental Registration. If the Company proposes to register any of
its capital stock under the 1933 Act, whether for its own account or for the
account of shareholders other than the Holders (other than a registration on
Form S-8 relating solely to the sale of securities to participants in a Company
stock plan or a registration on Form S-4), the Company shall, each such time,
promptly give each Holder written notice of such registration. Upon the written
request of any Holder given within twenty (20) days after mailing of such notice
by the Company, the Company shall, subject to the provisions of Section 2.7, use
commercially reasonable efforts to cause a registration statement covering all
of the Registrable Securities that each such Holder has requested to be
registered to become effective under the 1933 Act. The Company shall be under no
obligation to complete any offering of its securities it proposes to make and
shall incur no liability to any Holder for its failure to do so.
2.3. Obligations of the Company. Whenever required under this Section 2 to
use commercially reasonable efforts to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible, prepare and file with the SEC a registration statement with respect to
such Registrable Securities and use commercially reasonable efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities to be registered thereunder,
keep such registration statement effective for up to one hundred twenty (120)
days or until such Holders have informed the Company in writing that the
distribution of their Registrable Securities has been completed. In addition,
the Company shall:
(a) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with
such registration statement, and use commercially reasonable efforts to
cause each such amendment and supplement to become effective, as may be
necessary to comply with the provisions of the 1933 Act with respect to
the disposition of all securities covered by such registration statement;
(b) furnish to the Holders such reasonable number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them;
(c) use commercially reasonable efforts to register or qualify the
securities covered by such registration statement under such other
securities or blue sky laws of such states and jurisdictions as shall be
reasonably requested by the Holders, except that the Company shall not be
required in connection therewith or as a condition thereto to qualify to
do business or file a general consent to service of process in any such
state or jurisdiction;
6
7
(d) in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering, and
generally provide its cooperation with such managing underwriter,
including making available members of senior management for the
underwriters' "road show" presentations, except in the case of a Shelf
Registration pursuant to Section 2.12; provided, however, that each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an underwriting agreement, including furnishing any
opinion of counsel or entering into a lock-up agreement reasonably
requested by the managing underwriter;
(e) notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered under
the 1933 Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing and promptly file such amendments and supplements which may be
required pursuant to Section 2.3(b) on account of such event and use
commercially reasonable efforts to cause each such amendment and
supplement to become effective;
(f) furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 2, on the date that such
Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 2, except in the
case of a Shelf Registration pursuant to Section 2.12, if such securities
are being sold through underwriters, or, if such securities are not being
sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion or
opinions, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily
given by company counsel to the underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities and (ii) a letter dated
such date, from the independent certified public accountant of the
Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities;
(g) apply for listing and use commercially reasonable efforts to
list the Registrable Securities being registered on any national
securities exchange on which a class of the Company's equity securities is
listed or, if the Company does not have a class of equity securities
listed on a national securities exchange, apply for qualification and use
commercially reasonable efforts to qualify the Registrable Securities
being registered for inclusion on the automated quotation system of the
National Association of Securities Dealers, Inc.; and
7
8
(h) without in any way limiting the types of registrations to which
this Section 2 shall apply, in the event that the Company shall effect a
Shelf Registration, take all necessary action, including the filing of
post-effective amendments, to permit the Holders to include their
Registrable Securities in such registration in accordance with the terms
of this Section 2.
2.4. Furnish Information.
(a) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section 2
in respect of the Registrable Securities of any selling
Holder that such selling Holder shall furnish to the
Company such information regarding itself, the Registrable
Securities held by it, and the intended method of
disposition of such Registrable Securities as shall be
required to effect the registration of such Registrable
Securities. The Company shall have no responsibility to
the Holders, to the extent such Holder fails to provide
such information in a timely manner, and if the Company
determines it appropriate, the Company may delay the filing
of any such registration statement until the Holder
provides such information.
(b) No Holder shall distribute any prospectus or make any
offer to sell (or solicit any offer to purchase) or sell
any Registrable Securities in a transaction covered by a
prospectus from and after the time that the Company
notifies the Holder that the prospectus fails to state a
material fact, contains a material misstatement or fails to
state a fact necessary in order to make the statements
included in the prospectus not misleading until the Company
has provided a revised, amended or supplemented prospectus
that corrects the misstatement or omission.
(c) Each Holder shall comply with the prospectus delivery
requirements of the Securities Act in connection with offers
to sell, solicitations of offers to purchase, and sales of
Registrable Securities in connection with any offer or sale
pursuant to a registration statement.
2.5. Expenses of Demand Registration. The Company shall bear all expenses
relating to Registrable Securities incurred in connection with each
registration, filing or qualification pursuant to Sections 2.1(a) and 2.12,
including all registration, filing and qualification fees, printing and
accounting fees, fees and disbursements of counsel for the Company. All
underwriting discounts and commissions relating to Registrable Securities
included in any registration effected pursuant to Sections 2.1 and 2.12 and the
fees and disbursements of counsel for the selling Holders will be borne and paid
ratably by the Holders of such Registrable Securities and the Company.
8
9
2.6. Expenses of Company Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to any registration pursuant to Section
2.2 for each Holder, including all registration, filing and qualification fees,
printing and accounting fees, fees and disbursements of counsel for the Company
and the reasonable fees and disbursements of one counsel for the selling
Holders. All underwriting discounts and commissions relating to Registrable
Securities included in any registration effected pursuant to Section 2.2 will be
borne and paid ratably by the Holders of such Registrable Securities and the
Company.
2.7. Underwriting Requirements. In connection with any offering involving
an underwriting of securities being issued by the Company, the Company shall not
be required under Section 2.2 to include any of the Holders' securities in such
underwriting unless such Holders accept the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it, and then only in
such quantity, if any, as will not, in the opinion of the underwriters,
jeopardize the success of the offering by the Company. If the managing
underwriter for the offering shall advise the Company in writing that the total
amount of securities, including Registrable Securities, requested by
shareholders to be included in such offering exceeds the amount of securities to
be sold other than by the Company that can be successfully offered, then the
Company shall be required to include in the offering only that number of such
securities, including Registrable Securities, which the managing underwriter
believes will not jeopardize the success of the offering. The securities so
included in the offering will be reduced as follows:
(a) first, all securities which shareholders other than the
Company and the Holders seek to include in the offering shall be excluded
from the offering to the extent limitation on the number of shares
included in the underwriting is required; and
(b) if further limitation on the number of shares to be included
in the offering is required, then the number of shares held by Holders
that may be included in the underwriting shall be reduced pro rata among
the selling Holders in accordance with the number of shares of Registrable
Securities held by each such Holder;
provided, however, that in no event shall the amount of securities of the
selling Holders included in the offering be reduced below 30% of the total
amount of securities included in such offering, except if the managing
underwriter makes the determination described above and no securities other than
those of the Company are included. For purposes of the preceding sentence
concerning apportionment, for any selling shareholder which is a Holder of
Registrable Securities and which is a partnership or a corporation, the
partners, retired partners and shareholders of such Holder, or the estates and
family members of such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall collectively be deemed to be a
"selling Holder," and any pro rata reduction with respect to such "selling
Holder" shall be based upon the aggregate amount of shares carrying registration
rights owned by all entities and individuals included in such "selling Holder,"
as defined in this sentence.
9
10
2.8. Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 2:
(a) The Company will indemnify and hold harmless each Holder, the
officers, directors, partners, agents and employees of each Holder, any
underwriter (as defined in the 0000 Xxx) for such Holder and each Person,
if any, who controls such Holder or underwriter within the meaning of the
1933 Act or the 1934 Act (collectively, the "Holder Indemnitees"), against
any losses, claims, damages or liabilities (joint or several) to which
they may become subject under the 1933 Act, the 1934 Act or any other
federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any Violation. The Company will reimburse each Holder Indemnitee for any
legal or other expenses reasonably incurred by such Holder Indemnitee in
connection with investigating or defending any such loss, claim, damage,
liability or action. The indemnity agreement contained in this Section
2.8(a) shall not apply to amounts paid in settlement of any loss, claim,
damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable to any Holder Indemnitee in any such case
for any such loss, claim, damage, liability or action (i) 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
expressly for use in connection with such registration by or on behalf of
such Holder Indemnitee; or supplied by another Holder or (ii) in the case
of a sale directly by a Holder of Registrable Securities (including a sale
of such Registrable Securities through any underwriter retained by such
Holder engaging in a distribution solely on behalf of such Holder), such
untrue statement or alleged untrue statement or omission or alleged
omission was contained in a preliminary prospectus and corrected in a
final or amended prospectus, and such Holder failed to deliver a copy of
the final or amended prospectus at or prior to the confirmation of the
sale of the Registrable Securities to the Person asserting any such loss,
claim, damage or liability in any case in which such delivery is required
by the 0000 Xxx.
(b) Each Holder which includes any Registrable Securities in any
registration statement (i) will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the
registration statement, each Person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act, each agent and any
underwriter for the Company, and any other Holder or other shareholder
selling securities in such registration statement or any of its directors,
officers, partners, agents or employees or any Person who controls such
Holder or such other shareholder or such underwriter (collectively, the
"Company Indemnitees"), against any losses, claims, damages or liabilities
(joint or several) to which any Company Indemnitee may become subject
under the 1933 Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereto) 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 or on behalf
of such Holder expressly for use in connection with such registration and
10
11
(ii) will reimburse any legal or other expenses reasonably incurred by any
Company Indemnitee in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the
liability of any Holder hereunder shall be limited to the amount of net
proceeds (after deduction of all underwriters' discounts and commissions
paid by such Holder in connection with the registration in question)
received by such Holder in the offering giving rise to the Violation; and
provided, further, that the indemnity agreement contained in this Section
2.8(b) 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 such Holder (which consent shall not be unreasonably
withheld) nor, in the case of a sale directly by the Company of its
securities (including a sale of such securities through any underwriter
retained by the Company to engage in a distribution solely on behalf of
the Company), shall such Holder be liable to the Company in any case in
which such untrue statement or alleged untrue statement or omission or
alleged omission was contained in a preliminary prospectus and corrected
in a final or amended prospectus, and the Company failed to deliver a copy
of the final or amended prospectus at or prior to the confirmation of the
sale of the securities to the Person asserting any such loss, claim,
damage or liability in any case in which such delivery is required by the
1933 Act.
(c) Promptly after receipt by any Company Indemnitee or Holder
Indemnitee (collectively, the "Indemnitees") under this Section 2.8 of
notice of the commencement of any action (including any governmental
action), such Indemnitee will, if a claim in respect thereof is to be made
against any indemnifying party under this Section 2.8, 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 desires, jointly with any other
indemnifying party similarly noticed, to assume and control the defense
thereof with counsel mutually satisfactory to the parties; provided,
however, that such Indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party,
if representation of such Indemnitee by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
differing interests, as reasonably determined by either party, between
such Indemnitee 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 of the commencement of any such action, if
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the Indemnitee under this Section
2.8 to the extent of such prejudice, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any
liability that it may have to such Indemnitee otherwise than under this
Section 2.8.
(d) The obligations of the Company and the Holders under this
Section 2.8 shall survive the completion of any offering of Registrable
Securities in a registration statement whether under this Section 2 or
otherwise.
11
12
(e) If the indemnification provided for in this Section 2.8 is
unavailable to a party that would have been an Indemnitee under this
Section 2.8 in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to herein, then each
party that would have been an indemnifying party hereunder shall, in lieu
of indemnifying such Indemnitee, contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative fault of such
indemnifying party, on the one hand, and such Indemnitee, on the other
hand, in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof). The relative fault shall be determined by reference to,
among other things, whether the Violation relates to information supplied
by such indemnifying party or such Indemnitee and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such Violation. The parties agree that it would not be just and
equitable if contribution pursuant to this Section 2.8(e) were determined
by pro rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in the preceding
sentence. The amount paid or payable by a contributing party as a result
of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this Section 2.8(e) shall include
any legal or other expenses reasonably incurred by such Indemnitee in
connection with investigating or defending any such action or claim. No
Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation. The
liability of any Holder of Registrable Securities in respect of any
contribution obligation of such Holder (after deduction of all
underwriters' discounts and commissions paid by such Holder in connection
with the registration in question) arising under this Section 2.8(e) shall
not in any event exceed an amount equal to the net proceeds to such Holder
from the disposition of the Registrable Securities disposed of by such
Holder pursuant to such registration.
2.9 Reports Under Securities Exchange Act of 1934.
(a) With a view to making available to the Holders the benefits of
Rule 144 promulgated under the 1933 Act ("Rule 144") and any other rule or
regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration, the Company
agrees to:
(i) use commercially reasonable efforts to make and keep
public information available, as those terms are understood and
defined in Rule 144, at all times; and
(ii) use commercially reasonable efforts to file with the SEC
in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act.
12
13
2.10. Lock-up Agreements. If reasonably requested by the Company and the
managing underwriter, the Holders agree to enter into lock-up agreements
pursuant to which they will not, for a period of no longer than ninety days (90)
(or one hundred eighty (180) days in the case of the Company's initial public
offering) following the effective date of a registration statement for the
Company's public offering of the Company's securities, offer, sell or otherwise
dispose of any Registrable Securities (except Registrable Securities sold
pursuant to such registration statement) without the prior consent of the
Company and the underwriter, provided that the executive officers and directors
of the Company enter such lock-up agreements for the same period and on the same
terms.
2.11. Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 may be assigned by
any Holder to a permitted transferee, and by such transferee to a subsequent
permitted transferee, but only if not less than 25% of such rights are
transferred to a transferee; provided, however, that such transfer does not
constitute a "distribution" within the meaning of the 1933 Act. Any transferee
to which rights under this Agreement are transferred shall: (i) as a condition
to such transfer, deliver to the Company a written instrument by which such
transferee agrees to be bound by the obligations imposed upon Holders under this
Agreement to the same extent as if such transferee were a Holder under this
Agreement; and (ii) be deemed to be a Holder hereunder.
2.12. Shelf Registration. In addition to the rights set forth above, if
the Holder(s) holding at least 20% of the Registrable Securities request in
writing that the Company file a shelf registration under Rule 415 of the
Securities Act (a "Shelf Registration") for a sale of Registrable Securities the
reasonably anticipated aggregate price to the public of which would exceed
$10,000,000, and the Company is entitled to use Form S-3 (or a successor form)
to register securities for such an offering, the Company shall use commercially
reasonable efforts to effect such registration (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) and to maintain the effectiveness of the Shelf Registration
throughout the term of this agreement. The Company will include all Registrable
Securities of any Holder or Holders. The Company shall have no obligation under
Sections 2.3(d) and (f) to facilitate any underwritten offering of shares sold
pursuant to the Shelf Registration.
3. Termination. The right of any Holder to request registration or inclusion
in any registration pursuant to this Agreement shall terminate on the earlier of
(a) such date that all shares of Registrable Securities held or entitled to be
held upon conversion by such Holder may immediately be sold under Rule 144
during any 90-day period; or (b) the eighth (8th) year anniversary of the
Closing Date.
4. Specific Performance. The parties recognize that their respective rights
under this Agreement are unique, and, accordingly, each party shall, in addition
to such other remedies as
13
14
may be available to it at law or in equity, have the right to enforce its rights
hereunder by actions for injunctive relief and specific performance to the
extent permitted by law. This Agreement is not intended to limit or abridge any
rights of either party which may exist apart from this Agreement.
5. Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if in writing and delivered in Person,
transmitted by facsimile transmission (fax) or sent by registered or certified
mail (return receipt requested) or recognized overnight delivery service,
postage pre-paid, addressed addressed (a) if to a Holder to such address as such
holder shall have furnished the Company in writing, or, until any such Holder so
furnishes an address to the Company, then to and at the address of the last
Holder of such securities who has so furnished an address to the Company or (b)
if to the Company, to 00000 Xxxxxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx 00000 to the
attention of the Corporate Secretary, or to such other address has such party
may notify to the other parties in writing. A notice or communication will be
effective (i) if delivered in Person or by overnight courier, on the business
day it is delivered, (ii) if transmitted by telecopier, on the business day of
actual confirmed receipt by the addressee thereof, and (iii) if sent by
registered or certified mail, three (3) business days after dispatch.
6. Binding Effect; Assignment. This Agreement shall be binding upon, and
inure to the benefit of, the parties and their respective personal
representatives, successors and permitted assigns; provided, however, that the
Company shall not have the right to assign its rights and obligations hereunder,
or any interest herein, without the prior written consent of the holders of a
majority of the Registrable Securities then outstanding.
7. Course of Dealing; Amendments, Waivers and Consents. No course of dealing
between the parties shall operate as a waiver of any party's rights under this
Agreement. Each party acknowledges that if any party, without being required to
do so by this Agreement, gives any notice or information to, or obtains any
consent from, the other party, such party shall not by implication have amended,
waived or modified any provision of this Agreement, or created any duty to give
any such notice or information or to obtain any such consent on any future
occasion. No delay or omission on the part of any party in exercising any right
under this Agreement shall operate as a waiver of such right or any other right
hereunder or thereunder. A waiver on any one occasion shall not be construed as
a bar to or waiver of any right or remedy on any future occasion. No amendment,
waiver or consent with respect to this Agreement shall be binding unless it is
in writing and signed by each of the Company and the holders of a majority of
the Registrable Securities then outstanding, except that an amendment to add to
the definition of Registerable Securities shares (the "Merrill Warrant Shares")
issued in respect of warrants (the "Merrill Warrants") issued to Xxxxxxx Xxxxx &
Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and to add Xxxxxxx Xxxxx
& Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated or any permitted
assign of the Merrill Warrants or the Merrill Warrant Shares may be adopted by
the Company without the consent of any other Holder.
14
15
8. Miscellaneous. If any provision of this Agreement shall be found by any
court of competent jurisdiction to be invalid or unenforceable, the parties
hereby waive such provision to the extent that it is found to be invalid or
unenforceable. Such provision shall, to the maximum extent allowable by law, be
modified by such court so that it becomes enforceable, and, as modified, shall
be enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect. The headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation hereof. This Agreement constitutes the entire understanding of
the parties with respect to the subject matter hereof and supersedes any and all
prior understandings and agreements, whether written or oral, with respect to
such subject matter. This Agreement may be executed in counterparts, which
together shall constitute one and the same instrument. This Agreement shall be
governed by and construed in accordance with the laws (other than the conflict
of laws rules) of the State of Delaware.
[Signature pages follow]
15
16
REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
Effective Date.
AETHER SYSTEMS, INC.
By: ______________________________________
Name: Xxxxx X. Xxxx
Title: President and CEO
Address: 00000 Xxxxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Fax No. 000-000-0000
3COM CORPORATION
By: ______________________________________
Name:
Title:
Address: 0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Fax No. [_________________]
NEXGEN TECHNOLOGIES, L.L.C.
By: ______________________________________
Name: Xxxxx X. Xxxx
Title: Member
Address: 00000 Xxxxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Fax No. 000-000-0000
16
17
TELCOM-ATI INVESTORS, L.L.C.
By: ______________________________________
Name:
Title:
Address: 000 X. Xxxxx Xxxxxx,
Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax No. 703-[________________]
REUTERS MARKETCLIP HOLDINGS SARL
By: ______________________________________
Name:
Title:
Address: c/o Reuters America, Inc.
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Fax No. [________________]
PYRAMID VENTURES, INC.
By: ______________________________________
Name:
Title:
Address: One Bankers Trust Plaza
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No. [__________________]
17
18
TRANSETTLEMENTS, INC.
By: ______________________________________
Name:
Title:
Address: c/o Transus, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Fax No. [__________________]
18
19
EXHIBIT A
List of Original Holders
NexGen Technologies L.L.C. 6,791,668
Telcom ATI Investors, L.L.C. 5,151,948
Reuters MarketClip Holdings Sarl 2,828,055
Pyramid Ventures, Inc. 1,995,325
Transettlements, Inc. 625,000
3Com Corporation 2,500,000
