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PROXIM, INC.
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (this "Agreement") is made and entered into
as of April 27, 1999, by and between Proxim, Inc., a Delaware corporation (the
"Company"), and Intel Corporation, a Delaware corporation (the "Investor").
RECITALS
WHEREAS, the Company desires to sell to the Investor, and the Investor
desires to purchase from the Company, shares (the "Purchased Shares") of Common
Stock, par value $0.001 per share, of the Company (the "Common Stock") and a
Warrant (the "Warrant") to purchase additional shares (the "Warrant Shares") of
the Company's Common Stock on the terms and conditions set forth in that certain
Common Stock and Warrant Purchase Agreement, dated of even date herewith by and
between the Company and the Investor (the "Purchase Agreement"); and
WHEREAS, the Purchase Agreement provides that the Investor shall be
granted certain information rights, registration rights and other rights, all as
more fully set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. INFORMATION RIGHTS.
(a) Financial Information. The Company covenants and agrees
that, commencing on the date of this Agreement and continuing for so long as the
Investor holds at least 40,000 Purchased Shares or shares of Common Stock issued
or issuable pursuant to exercise of the Warrant, the Company shall:
(i) Annual Reports. Furnish to the Investor promptly
following the filing of such report with the SEC a copy of the Company's
Annual Report on Form 10-K for each fiscal year, which shall include a
consolidated balance sheet as of the end of such fiscal year, a
consolidated statement of income and a consolidated statement of cash
flows of the Company and its subsidiaries for such year, setting forth in
each case in comparative form the figures from the Company's previous
fiscal year, all prepared in accordance with generally accepted accounting
principles and practices and audited by nationally recognized independent
certified public accountants. In the event the Company shall no longer be
required to file Annual Reports on Form 10-K, the Company shall, within
ninety (90) days following the end of each respective fiscal year, deliver
to the Investor a copy of such balance sheets, statements of income and
statements of cash flows.
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(ii) Quarterly Reports. Furnish to the Investor promptly
following the filing of such report with the SEC, a copy of each of the
Company's Quarterly Reports on Form 10-Q, which shall include a
consolidated balance sheet as of the end of the respective fiscal quarter,
consolidated statements of income and consolidated statements of cash
flows of the Company and its subsidiaries for the respective fiscal
quarter and for the year to-date, setting forth in each case in
comparative form the figures from the comparable periods in the Company's
immediately preceding fiscal year, all prepared in accordance with
generally accepted accounting principles and practices (except, in the
case of any Form 10-Q, as may otherwise be permitted by Form 10-Q), but
all of which may be unaudited. In the event the Company shall no longer be
required to file Quarterly Reports on Form 10-Q, the Company shall, within
forty-five (45) days following the end of each of the first three (3)
fiscal quarters of each fiscal year, deliver to the Investor a copy of
such balance sheets, statements of income and statements of cash flows.
(b) SEC Filings. The Company shall deliver to the Investor
copies of each other document filed with the SEC on a non-confidential basis
promptly following the filing of such document with the SEC.
2. REGISTRATION RIGHTS.
(a) Definitions. For purposes of this Section 2:
(i) Registration. The terms "register," "registered,"
and "registration" refer to a registration effected by preparing and
filing a registration statement in compliance with the Securities Act of
1933, as amended, (the "Securities Act"), and the declaration or ordering
of effectiveness of such registration statement
(ii) Registrable Securities. The term "Registrable
Securities" means: (x) the Purchased Shares, and any shares of Common
Stock of the Company issued or issuable upon exercise of the Warrant; (y)
any other shares of Common Stock of the Company acquired by the Investor
[from the Company] after the date hereof; and (z) any shares of Common
Stock of the Company or other securities of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other
security that is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, any of the securities
described in the immediately preceding Clauses (x) or (y). Notwithstanding
the foregoing, "Registrable Securities" shall exclude any Registrable
Securities sold by a person in a transaction in which rights under this
Section 2 are not assigned in accordance with this Agreement or any
Registrable Securities sold in a public offering, whether sold pursuant to
Rule 144 promulgated under the Securities Act, or in a registered
offering, or otherwise.
(iii) Registrable Securities Then Outstanding. The
number of shares of "Registrable Securities then outstanding" shall mean
the number of shares of Purchased Shares, shares of Common Stock and other
securities that are Registrable Securities and are then issued and
outstanding.
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(iv) Holder. For purposes of this Section 2, the term
"Holder" means Investor or any subsidiary or affiliate of Investor owning
of record Registrable Securities that have not been sold to the public or
pursuant to Rule 144 promulgated under the Securities Act or any permitted
assignee of record of such Registrable Securities to whom rights under
this Section 2 have been duly assigned in accordance with Section 4 of
this Agreement.
(v) Form S-3. The term "Form S-3" means such form under
the Securities Act as is in effect on the date hereof or any successor
registration form under the Securities Act subsequently adopted by the SEC
that permits inclusion or incorporation of substantial information by
reference to other documents filed by the Company with the SEC.
(b) Demand Registration.
(i) Request by Holders. If, at any time following the
first anniversary of the Closing, as defined in the Purchase Agreement,
during which the Company is not eligible to file a registration statement
on Form S-3, the Company receives a written request from the Holders of
twenty-five percent (25%) of the Purchased Shares issued as of the Closing
that the Company file a registration statement under the Securities Act on
Form S-1 or such other form as such Holders may request covering the
registration of Registrable Securities, then the Company shall, within ten
(10) business days of the receipt of such written request, give written
notice of such request ("Request Notice") to all Holders, and use
commercially reasonable efforts to effect, as soon as practicable, the
registration under the Securities Act of all Registrable Securities that
Holders request to be registered and included in such registration by
written notice given by such Holders to the Company within twenty (20)
days after receipt of the Request Notice; provided that the Company shall
not be obligated to effect any such registration if the Company has,
within the six (6) month period preceding the date of such request,
already effected a registration under the Securities Act pursuant to this
Section 2(b) or Section 2(c) or (d), other than a registration from which
the Registrable Securities of Holders have been excluded with respect to
all or any portion of the Registrable Securities the Holders requested be
included in such registration; provided, further, that the Company shall
have no obligation to file any registration statement contemplated by this
Section 2(b) if the expected gross proceeds of the sale of Registrable
Securities under such registration statement, based on the market price of
the Common Stock as of the date of the initial request for such
registration delivered by the Holders, does not exceed Three Million
Dollars ($3,000,000). If requested by such Holders, the Company shall
register such Registrable Securities on Form S-1 or any successor
registration form.
(ii) Underwriting. If the Holders initiating the
registration request under this Section 2(b) ("Initiating Holders") intend
to distribute the Registrable Securities covered by their request by means
of an underwriting, then they shall so advise the Company as a part of
their request, and the Company shall include such information in the
written notice referred to in Section 2(b)(i). In such event, the right of
any Holder
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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 determined based on the number of
Registrable Securities held by such Holders being registered). All Holders
proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the managing
underwriter or underwriters selected for such underwriting by the Holders
of a majority of the Registrable Securities being registered and
reasonably acceptable to the Company (including a market stand-off
agreement of up to 180 days if required by such underwriters).
Notwithstanding any other provision of this Section 2(b), if the
underwriter(s) advise(s) the Company in writing that marketing factors
require a limitation of the number of securities to be underwritten then
the Company shall so advise all Holders of Registrable Securities that
would otherwise be registered and underwritten pursuant hereto, and the
number of Registrable Securities that may be included in the underwriting
shall be reduced as required by the underwriter(s) and allocated among the
Holders of Registrable Securities on a pro rata basis according to the
number of Registrable Securities then outstanding held by each Holder
requesting registration (including the initiating Holders); provided,
however, that the number of shares of Registrable Securities to be
included in such underwriting and registration shall not be reduced unless
all other securities of the Company and any selling securityholder other
than the Holders are first entirely excluded from the underwriting and
registration. Any Registrable Securities excluded and withdrawn from such
underwriting shall be withdrawn from the registration.
(iii) Maximum Number of Demand Registrations. The
Company shall be obligated to effect only three (3) such registrations
pursuant to this Section 2(b).
(iv) Deferral. Notwithstanding the foregoing, if the
Company shall furnish to Holders requesting the filing of a registration
statement pursuant to this Section 2(b), a certificate signed by the Chief
Executive Officer of the Company stating that in the good faith judgment
of the Board, it would be materially detrimental to the Company and its
stockholders for such registration statement to be filed, then the Company
shall have the right to defer such filing for a period of not more than
ninety (90) days after receipt of the request of the initiating Holders;
provided, however, that the Company may not utilize this right more than
once in any twelve (12) month period.
(v) Expenses. All expenses incurred in connection with
any registration pursuant to this Section 2(b), including all federal and
"blue sky" registration, filing and qualification fees, printer's and
accounting fees, and fees and disbursements of counsel for the Company
(but excluding underwriters' discounts and commissions relating to shares
sold by the Holders and any fees and disbursements of counsel to the
Holders), shall be borne by the Company. Each Holder participating in a
registration pursuant to this Section 2(b) shall bear such Holder's
proportionate share (based on the total number of shares sold in such
registration other than for the account of the
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Company) of all discounts, commissions or other amounts payable to
underwriters or brokers in connection with such offering by the Holders.
Notwithstanding the foregoing, the Company shall not be required to pay
for any expenses of any registration proceeding begun pursuant to this
Section 2(b) if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered, unless the Holders of such majority agree that such
registration constitutes the use by the Holders of one (1) demand
registration pursuant to this Section 2(b) (in which case such
registration shall also constitute the use by all Holders of Registrable
Securities of one (l) such demand registration); provided further,
however, that if at the time of such withdrawal, the Holders have learned
of a material adverse change relating to the business or operations of the
Company not known to the Holders at the time of their request for such
registration and have withdrawn their request for registration after
learning of such material adverse change, then the Holders shall not be
required to pay any of such expenses and such registration shall not
constitute the use of a demand registration pursuant to this Section 2(b).
(c) Piggyback Registrations. The Company shall notify all
Holders of Registrable Securities in writing at least twenty (20) days prior to
filing any registration statement under the Securities Act for purposes of
effecting a public offering of securities of the Company (including registration
statements relating to secondary offerings of securities of the Company, but
excluding registration statements relating to any employee benefit plan or any
merger or other corporate reorganization) and will afford each such Holder an
opportunity to include in such registration statement all or any part of the
Registrable Securities then held by such Holder. Each Holder desiring to include
in any such registration statement all or any part of the Registrable Securities
held by such Holder shall within twenty (20) days after receipt of the
above-described notice from the Company, so notify the Company in writing, and
in such notice shall inform the Company of the number of Registrable Securities
such Holder wishes to include in such registration statement. If a Holder
decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, such Holder shall nevertheless
continue to have the right to include any Registrable Securities in any
subsequent registration statement or registration statements as may be filed by
the Company with respect to offerings of its securities, all upon the terms and
conditions set forth herein.
(i) Underwriting. If a registration statement under
which the Company gives notice under this Section 2(c) is for an
underwritten offering, then the Company shall so advise the Holders of
Registrable Securities. In such event, the right of any such Holder's
Registrable Securities to be included in such a registration pursuant
shall be conditioned upon such Holder's participation in such underwriting
and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall
enter into an underwriting agreement in customary form with the managing
underwriter or underwriters selected for such underwriting (including a
market stand-off agreement of up to 180 days if required by such
underwriters); provided, however, that it shall not be considered
customary to require any of the Holders to provide representations and
warranties regarding the Company or indemnification of the
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underwriters for material misstatements or omissions in the registration
statement or prospectus for such offering. Notwithstanding any other
provision of this Agreement, if the managing underwriter determine(s) in
good faith that marketing factors require a limitation of the number of
shares to be underwritten, then the managing underwriter(s) may exclude
shares from the registration and the underwriting; provided; however, that
the securities to be included in the registration and the underwriting
shall be allocated, (A) first to the Company (provided, however, that a
minimum of fifteen percent (15%) of the number of Registrable Securities
that each Holder (where any Registrable Securities that are not shares of
Common Stock but are exercisable or exchangeable for, or convertible into,
shares of Common Stock, shall be deemed to have been so exercised,
exchanged or converted for such purpose) must also in any event be
included), (B) second, to the extent the managing underwriter determines
additional securities can be included after compliance with Clause (A), to
each of the Holders (to the extent not included pursuant to Clause (A))
requesting inclusion of their Registrable Securities in such registration
statement on a pro rata basis based on the total number of Registrable
Securities and other securities entitled to registration then held by each
such Holder, and (C) third, to the extent the managing underwriter
determines additional securities can be included after compliance with
Clauses (A) and (B), any other shares of Common Stock or other securities
of the Company. Any Registrable Securities excluded or withdrawn from such
underwriting shall be excluded and withdrawn from the registration. For
any Holder that is a partnership, the Holder and the partners and retired
partners of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons, and for any Holder that is a corporation, the Holder
and all corporations that are affiliates of such Holder, shall be deemed
to be a single "Holder," and any pro rata reduction with respect to such
"Holder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"Holder," as defined in this sentence.
(ii) Expenses. All expenses incurred in connection with
a registration pursuant to this Section 2(c) (excluding underwriters' and
brokers' discounts and commissions relating to shares sold by the Holders
and any fees and disbursements of counsel to the Holders), including all
federal and "blue sky" registration, filing and qualification fees,
printers' and accounting fees, and fees and disbursements of counsel for
the Company, shall be borne by the Company.
(iii) Not Demand Registration. Registration pursuant to
this Section 2(c) shall not be deemed to be a demand registration as
described in Section 2(b) above. Except as otherwise provided herein,
there shall be no limit on the number of times the Holders may request
registration of Registrable Securities under this Section 2(c).
(d) Form S-3 Registration. If, at any time after the first
anniversary of the Closing, as defined in the Purchase Agreement, the Company is
so requested by any Holder, the Company shall use all reasonable commercial
efforts to cause to be filed and become effective with the SEC a registration
statement on Form S-3, if available, relating to all of the
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Registrable Securities; provided, however, that the Company shall have no
obligation to file any registration statement contemplated by this Section 2(d)
if the expected gross proceeds of the sale of Registrable Securities under such
registration statement, based on the market price of the Common Stock as of the
date of such request, does not exceed Three Million Dollars ($3,000,000). The
Company shall use commercially reasonable efforts to cause any such registration
statement to become effective as promptly as practicable after such filing and
shall also use commercially reasonable efforts to obtain any related
qualifications, registrations or other compliances that may be necessary under
any applicable "blue sky" laws. In connection with such registration, the
Company will:
(i) Notice. Promptly give written notice to the
Holders of the proposed registration and any related qualification or
compliance; and
(ii) Registration. Effect such registration and all such
qualifications and compliances and as would permit or facilitate the sale
and distribution of all or such portion of such Holders or Holders'
Registrable Securities; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance
pursuant to this Section 2(d) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.
(iii) Number of Form S-3 Registrations. The Company
shall be obligated to effect only three (3) registrations upon the request
of the Holders under this Section 2(d).
(iv) Expenses. The Company shall pay all expenses
incurred in connection with each registration requested pursuant to this
Section 2(d), excluding underwriters' or brokers' discounts and
commissions relating to shares sold by the Holders and any fees and
disbursements of counsel to the Holders, but including federal and "blue
sky" registration, filing and qualification fees, printers' and accounting
fees, and fees and disbursements of counsel.
(v) Deferral. Notwithstanding the foregoing, if the
Company shall furnish to Holders requesting the filing of a registration
statement pursuant to this Section 2(d), a certificate signed by the Chief
Executive Officer of the Company stating that in the good faith judgment
of the Board, it would be materially detrimental to the Company and its
stockholders for such registration statement to be filed, then the Company
shall have the right to defer such filing for a period of not more than
ninety (90) days after receipt of the request of the initiating Holders;
provided, however, that the Company may not utilize this right more than
once in any twelve (12) month period, and the period of time that the
Company is obligated to maintain the effectiveness of any registration
statement under Clause (vii) below shall be extended for the length of any
such period of deferral.
(vi) Not Demand Registration. Form S-3 registrations
shall not be deemed to be demand registrations as described in Section
2(b) above.
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(vii) Maintenance. The Company shall use all reasonable
commercial efforts to maintain the effectiveness of any Form S-3
registration statement filed under this Section 2(d) until the earlier of:
(a) the date on which all of the Registrable Securities have been sold;
and (b) sixty (60) days after the effective date of such registration
statement; provided, however, that unless all of the Registrable
Securities held by the Investor as of such anniversary date could then be
sold in a single transaction in accordance with Rule 144 under the
Securities Act without exceeding the volume limitations thereof, if the
Company receives written notice from the Investor that the Investor may be
deemed to be an "affiliate" of the Company for purposes of the Securities
Act, the date in this Clause (b) shall be extended until the Investor
advises the Company that it no longer believes it may be deemed such an
"affiliate."
(e) Obligations of the Company. Whenever required to effect
the registration of any Registrable Securities under this Agreement the Company
shall, as expeditiously as reasonably possible:
(i) Registration Statement. 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; provided, however, that, except as
otherwise required in this Section 2, the Company shall not be required to
keep any such registration statement effective for more than sixty (60)
days.
(ii) Amendments and Supplements. Prepare and file with
the SEC 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 with
respect to the disposition of all securities covered by such registration
statement.
(iii) Prospectuses. Furnish to the Holders such number
of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by them that are included
in such registration.
(iv) Blue Sky. Use commercially reasonable efforts to
register and qualify the securities covered by such registration statement
under such other securities or Blue Sky laws of such jurisdictions as
shall be reasonably requested by the Holders, provided 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.
(v) Underwriting. In the event of any underwritten
public offering, enter into and perform its obligations under an
underwriting agreement in usual and customary form (including customary
indemnification of the underwriters by the Company), with the managing
underwriter(s) of such offering. Each Holder participating in such
underwriting shall also enter into and perform its obligations under such
an
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agreement; provided, however, that it shall not be considered customary to
require any of the Holders to provide representations and warranties
regarding the Company or indemnification of the underwriters for material
misstatements or omissions in the registration statement or prospectus for
such offering.
(vi) Notification. Notify each Holder of Registrable
Securities covered by such registration statement at any time when a
prospectus relating thereto is required to be delivered under the
Securities 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.
(f) Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Sections 2(b), (c)
or (d) that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as shall be required to timely effect
the registration of their Registrable Securities.
(g) Indemnification. In the event any Registrable Securities
are included in a registration statement under Sections 2(b), (c) or (d):
(i) By the Company. To the extent permitted by law, the
Company will indemnify and hold harmless each Holder, the partners,
officers, shareholders, employees, representatives and directors of each
Holder, any underwriter (as determined in the Securities Act) for such
Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of
1934, as amended, against any losses, claims, damages, or Liabilities
(joint or several) to which they may become subject under the Securities
Act, the Exchange Act or 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 of the following statements, omissions
or violations (collectively a "Violation"):
(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 not misleading, or
(C) any violation or alleged violation by
the Company of the Securities Act, the Exchange Act, any federal or state
securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any
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federal or state securities law in connection with the offering covered by
such registration statement;
and the Company will reimburse each such Holder, partner, officer, shareholder,
employee, representative, director, underwriter or controlling person for any
legal or other expenses reasonably incurred by them, as incurred, in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
subsection shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon a
Violation that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
such Holder, partner, officer, shareholder, employee, representative, director,
underwriter or controlling person of such Holder.
(ii) By Selling Holders. To the extent permitted by law,
each selling Holder 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 Securities Act, any underwriter and any other Holder
selling securities under such registration statement or any of such other
Holder's partners, officers, shareholders, employees, representatives and
directors and any person who controls such Holder within the meaning of
the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities (joint or several) to which the Company or any such
officer or director, controlling person, underwriter or other such Holder,
partner, officer, shareholder, employee, representative, director or
controlling person of such other Holder may become subject under the
Securities Act, the Exchange 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 such Holder
expressly for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by
the Company or any such officer or director, controlling person,
underwriter or other Holder, partner, officer, shareholder, employee,
representative, director or controlling person of such other Holder in
connection with investigating or defending any such loss, claim, damage,
liability or action: provided, however, that the indemnity agreement
contained in this subsection shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder, which consent shall not be
unreasonably withheld; and provided, further, that the total amounts
payable in indemnity by a Holder under this subsection or otherwise in
respect of any and all Violations shall not exceed in the aggregate the
net proceeds received by such Holder in the registered offering out of
which such Violations arise.
(iii) Notice. Promptly after receipt by an indemnified
party under of notice of the commencement of any action (including any
governmental action),
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such indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this section, 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 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 expenses to be paid by the indemnifying party, to the extent that
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential
conflict of 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 of the
commencement of any such action shall not relieve such indemnifying party
of liability under this Section 2(g) except to the extent the indemnifying
party is prejudiced as a result thereof.
(iv) Defect Eliminated in Final Prospectus. The
foregoing indemnity agreements of the Company and Holders are subject to
the condition that, insofar as they relate to any Violation made in a
preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the SEC at the time the registration statement in
question becomes effective or the amended prospectus filed with the SEC
pursuant to SEC Rule 424(b) (the "Final Prospectus"), such indemnity
agreement shall not inure to the benefit of any person if a copy of the
Final Prospectus was timely furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at
or prior to the time such action is required by the Securities Act.
(v) Contribution. In order to provide for just and
equitable contribution to joint liability under the Securities Act in any
case in which either (A) any Holder exercising rights under this
Agreement, or any controlling person of any such Holder, makes a claim for
indemnification pursuant to this section, but it is judicially determined
(by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in
such case notwithstanding the fact that this section provides for
indemnification in such case, or (B) contribution under the Securities Act
may be required on the part of any such selling Holder or any such
controlling person in circumstances for which indemnification is provided
under this section; then, and in each such case, the Company and such
Holder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others)
in such proportion so that such Holder is responsible for the portion
represented by the percentage that the public offering price of its
Registrable Securities offered by and sold under the registration
statement bears to the public offering price of all securities offered by
and sold under such registration statement, and the Company and other
selling Holders are responsible for the remaining portion; provided,
however, that, in any such case: (X) no such Holder will be required to
contribute any amount in excess of the public offering price of all such
Registrable Securities offered
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and sold by such Holder pursuant to such registration statement; and (Y)
no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
(vi) Survival. The obligations of the Company and
Holders under this Section 2(g) shall survive until the third anniversary
of the completion of any offering of Registrable Securities in a
registration statement, regardless of the expiration of any statutes of
limitation or extensions of such statutes.
(h) Termination of the Company's Obligations. The Company
shall have no obligations pursuant to this Section 2 with respect to any
Registrable Securities proposed to be sold by a Holder in a registration
pursuant to Section 2(b), (c) or (d) more than five (5) years after the date of
this Agreement or if, in the opinion of counsel to the Company, all such
Registrable Securities to be sold by any Holder may then be sold under Rule 144
in a single transaction without exceeding the volume limits thereunder.
(i) No Superior Registration Rights to Third Parties. Without
the prior written consent of Investor, the Company covenants and agrees that it
shall not grant, or cause or permit to be created, for the benefit of any person
or entity any registration rights of any kind (whether similar to the demand,
"piggyback" or Form S-3 registration rights described in this Section 2, or
otherwise) relating to shares of the Company's Common Stock or any other
securities of the Company that are superior to the rights granted under this
Section 2. The Company reserves the right to grant registration rights relating
to the Company's Common Stock or any other securities of the Company that are
pari passu with the rights granted to Investor under this Section 2.
(j) Suspension Provisions. Notwithstanding the foregoing
subsections of this Section 2, the Company shall not be required to take any
action with respect to the registration or the declaration of effectiveness of
the registration statement following written notice to the Holders from the
Company (a "Suspension Notice") of the existence of any state of facts or the
happening of any event (including pending negotiations relating to, or the
consummation of, a transaction, or the occurrence of any event that the Company
believes, in good faith, requires additional disclosure of material, non-public
information by the Company in the registration statement that the Company
believes it has a bona fide business purpose for preserving confidentiality or
that renders the Company unable to comply with the published rules and
regulations of the SEC promulgated under the Securities Act or the Securities
Exchange Act, as in effect at any relevant time (the "Rules and Regulations"))
that would result in (i) the registration statement, any amendment or
post-effective amendment thereto, or any document incorporated therein by
reference containing an untrue statement of a material fact or omitting to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) the prospectus issued under the
registration statement, any prospectus supplement, or any document incorporated
therein by reference including an untrue statement of material fact or omitting
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
provided that the
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Company (X) shall not issue a Suspension Notice more than once in any 12 month
period, (Y) shall use its best efforts to remedy, as promptly as practicable,
but in any event within 90 days of the date on which the Suspension Notice was
delivered, the circumstances that gave rise to the Suspension Notice and deliver
to the Holders notification that the Suspension Notice is no longer in effect
and (Z) shall not issue a Suspension Notice for any period during which the
Company's executive officers are not similarly restrained from disposing of
shares of the Company's Common Stock. Upon receipt of a Suspension Notice from
the Company, all time limits applicable to the Holders under this Section 2
shall automatically be extended by an amount of time equal to the amount of time
the Suspension Notice is in effect, the Holders will forthwith discontinue
disposition of all such shares pursuant to the registration statement until
receipt from the Company of copies of prospectus supplements or amendments
prepared by or on behalf of the Company (which the Company shall prepare
promptly), together with a notification that the Suspension Notice is no longer
in effect, and if so directed by the Company, the Holders will deliver to the
Company all copies in their possession of the prospectus covering such shares
current at the time of receipt of any Suspension Notice.
3. RIGHTS IN THE EVENT OF A CORPORATE EVENT.
(a) Corporate Events. A "Corporate Event" shall mean any of
the following, whether accomplished through one or a series of related
transactions: (i) any transaction, other than an issuance of securities in
connection with the acquisition of an unaffiliated third party in an arms length
transaction, that results in a greater than thirty percent (30%) change in the
total outstanding number of voting securities (which, for purposes of this
Agreement, shall mean all securities of the Company that presently are, or would
be upon conversion, exchange or exercise, entitled to vote in the election of
directors) of the Company immediately prior to such issuance (other than any
such change solely as a result of a stock split, stock dividend or other
recapitalization affecting holders of Common Stock and other classes of voting
securities of the Company on a pro rata basis); (ii) an acquisition of the
Company or any of its "Significant Subsidiaries" (as defined in the SEC's Rule
1-02(w) of Regulation S-X) by consolidation, merger (regardless of whether the
Company is the survivor of such merger or not), share purchase or exchange or
other reorganization or transaction in which the holders of the Company's or
such Significant Subsidiary's outstanding voting securities immediately prior to
such transaction own, immediately after such transaction, securities
representing less than fifty percent (50%) of the voting power of the Company,
any such Significant Subsidiary or the person issuing such securities or
surviving such transaction, as the case may be, provided that this clause (ii)
shall not apply to the pro rata distribution by the Company to its shareholders
of all the voting securities of any of its subsidiaries; (iii) the acquisition
of all or substantially all the assets of the Company or any Significant
Subsidiary; (iv) the grant by the Company or any of its Significant Subsidiaries
of an exclusive license for any material portion of the Company's or such
Significant Subsidiary's intellectual property to a person other than the
Investor or any of its subsidiaries; and (v) any transaction or series of
related transactions that results in the failure of the majority of the members
of the Board immediately prior to the closing of such transaction or series of
related transactions failing to constitute a majority of the Board (or its
successor) immediately following such transaction or series of related
transactions.
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(b) Notice of Corporate Events. Until the expiration of the
second anniversary of the Closing, as defined in the Purchase Agreement, (such
period from the date hereof through such second anniversary being referred to
herein as the "Initial Rights Period"), the Company shall provide the Investor
with written notice of the existence of any offer (written or oral) from any
Person for a proposed Corporate Event. Any notice shall be delivered to the
Investor within two (2) business days after the date the Company first becomes
aware of such offer or proposed Corporate Event.
4. ASSIGNMENT. The rights of the Investor under Sections 1 and 2 are
transferable to any purchaser or transferee of the Purchased Shares, the Warrant
or the Warrant Shares; provided, however, that Investor shall only be permitted
to assign its rights under Section 1 and 2 appurtenant to the Warrant and/or the
Warrant Shares to any person or entity that is a permitted transferee of the
Warrant under Section 8 of the Warrant; and provided, further, that any such
assignee shall receive such assigned rights subject to all the terms and
conditions of this Agreement.
5. MISCELLANEOUS.
(a) Successors and Assigns. The terms and conditions of this
Agreement will inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties.
(b) Governing Law. This Agreement will be governed by and
construed under the internal laws of the State of Delaware, without reference to
principles of conflict of laws or choice of laws.
(c) Counterparts. This Agreement may be executed in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
(d) Headings. The headings and captions used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules will, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.
(e) Notices. Any notice required or permitted under this
Agreement shall be given in writing, shall be effective when received, and shall
in any event be deemed received and effectively given upon personal delivery to
the party to be notified or three (3) business days after deposit with the
United States Post Office, by registered or certified mail, postage prepaid, or
one (1) business day after deposit with a nationally recognized courier service
such as Federal Express for next business day delivery under circumstances in
which such service guarantees next business day delivery, or one (1) business
day after facsimile with copy delivered by registered or certified mail, in any
case, postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof or at such other
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address as the Investor or the Company may designate by giving at least ten (10)
days advance written notice pursuant to this Section 5(e).
(f) Amendments and Waivers. This Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the holders of Purchased Shares and
Warrant Shares representing at least a majority of the total aggregate number of
Purchased Shares and Warrant Shares then outstanding (excluding any of such
shares that have been sold in a transaction in which rights under Section 2 are
not assigned in accordance with this Agreement or sold to the public pursuant to
SEC Rule 144 or otherwise). Any amendment or waiver effected in accordance with
this Section 5(f) will be binding upon the Investor, the Company and their
respective successors and assigns. Notwithstanding the foregoing, the provisions
of Sections 2 and 3 may not be amended without the written consent of the
Company and the Investor, which may be withheld in either of their sole and
absolute discretions.
(g) Severability. If any provision of this Agreement is held
to be unenforceable under applicable law, such provision will be excluded from
this Agreement and the balance of the Agreement will be interpreted as if such
provision were so excluded and will be enforceable in accordance with its terms.
(h) Entire Agreement. This Agreement, together with the
Purchase Agreement and all exhibits and schedules hereto and thereto constitutes
the entire agreement and understanding of the parties with respect to the
subject matter hereof and supersedes any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties with respect to the subject matter hereof.
(i) Further Assurances. From and after the date of this
Agreement upon the request of the Company or the Investor, the Company and the
Investor will execute and deliver such instruments, documents or other writings,
and take such other actions, as may be reasonably necessary or desirable to
confirm and carry out and to effectuate fully the intent and purposes of this
Agreement.
(j) Meaning of Include and Including. Whenever in this
Agreement the word "include" or "including" is used, it shall be deemed to mean
"include, without limitation" or "including, without limitation," as the case
may be, and the language following "include" or "including" shall not be deemed
to set forth an exhaustive list.
(k) Fees, Costs and Expenses. All fees, costs and expenses
(including attorneys' fees and expenses) incurred by either party hereto in
connection with the preparation, negotiation and execution of this Agreement and
the Purchase Agreement and the consummation of the transactions contemplated
hereby and thereby (including the costs associated with any filings with, or
compliance with any of the requirements of, any governmental authorities), shall
be the sole and exclusive responsibility of such party.
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(l) Competition. Nothing set forth herein shall be deemed to
preclude, limit or restrict the Company's or the Investor's ability to compete
with the other.
(m) Stock Splits, Dividends and other Similar Events. The
provisions of this Agreement (including the number of shares of Common Stock and
other securities described herein) shall be appropriately adjusted to reflect
any stock split, stock dividend, reorganization or other similar event that may
occur with respect to the Company after the date hereof.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
PROXIM, INC. INTEL CORPORATION
By: /s/ βββββ β. ββββ By: /s/ ββββββ βββββββ
------------------------------- ------------------------------------
Name: βββββ β. ββββ Name: ββββββ βββββββ
---------------------------- ---------------------------------
Title: Chairman of the Board of Title: Vice President and Treasurer
Directors, President and ---------------------------------
Chief Executive Officer Date Signed: April 28, 1999
--------------------------- --------------------------
Date Signed: April 28, 1999 Address: ββββ βββββββ βββββββ ββββ
----------------------------- βββββ βββββ, ββ βββββ
Address: βββ βββββ ββββββββ ββββββ
ββββββββ ββββ, ββ βββββ Telephone No.: (βββ) βββ-ββββ
Facsimile No.: (βββ) βββ-ββββ
Telephone No: (βββ) βββ-ββββ
Facsimile No: (βββ) βββ-ββββ with copies to:
with copies to: Intel Corporation
Attention: M&A Portfolio Manager
Proxim, Inc. ββββ βββββββ βββββββ ββββ
Attention: βββββ β. ββββββ βββββ βββββ, ββ βββββ
Chief Financial Officer
βββ βββββ ββββββββ ββββββ βββ
ββββββββ ββββ, ββ βββββ
ββββββ, ββββ & ββββββββ LLP
and Attention: ββββββββ β. βββββββ
βββ βββββ βββββ ββββββ, βββββ
ββββββ, βββββββ, ββββββββ & ββββββ 4700
Attention: βββββββ β. βββββ βββ βββββββ, ββββββββββ βββββ
βββ ββββ ββββ ββββ Telephone No.: (βββ) βββ-ββββ
ββββ ββββ, ββββββββββ βββββ-ββββ Facsimile No.: (βββ) βββ-ββββ
Telephone No.: (βββ) βββ-ββββ
Facsimile No.: (βββ) βββ-ββββ
{Signature page to Investor Rights Agreement between Intel Corporation and
Proxim, Inc.}
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