AMATI COMMUNICATIONS CORPORATION
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of October 3, 1996, among
the investors listed on the signature pages hereto (the "Investors") and Amati
Communications Corporation, a Delaware corporation (the "Company").
R E C I T A L S
WHEREAS, the Investors have, pursuant to the terms of the
Investment Agreement, dated as of the date hereof, by and among the Company and
the Investors (the "Agreement"), agreed to purchase shares of Common Stock, par
value $0.20 per share, of the Company (the "Common Stock") and Warrants to
purchase shares of Common Stock; and
WHEREAS, the Company has agreed, as a condition precedent to the
Investors' obligations under the Agreement, to grant the Investors certain
registration rights; and
WHEREAS, the Company and the Investors desire to define the
registration rights of the Investors on the terms and subject to the conditions
set forth herein and in Section 1.6 of the Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the
respective meaning set forth below:
Commission: shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934, as
amended;
Holder: shall mean any holder of Registrable Securities;
Initiating Holder: shall mean any Holder or Holders who in the
aggregate are Holders of more than 50% of the then outstanding Registrable
Securities;
Person: shall mean an individual, partnership, joint-stock
company, corporation, trust or unincorporated organization, and a government or
agency or political subdivision thereof;
register, registered and registration: shall mean to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;
Registrable Securities: shall mean (A) shares of Common Stock
issued or issuable under the Agreement, (B) any additional shares of Common
Stock acquired by the Investors pursuant to the Warrants and (C) any stock of
the Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the shares of Common Stock referred to in
clause (A) or (B);
Registration Expenses: shall mean all expenses incurred by the
Company in compliance with Sections 2(a) and (b) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company);
Security, Securities: shall have the meaning set forth in Section
2(1) of the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as
amended; and
Selling Expenses: shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities.
2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company shall receive from
an Initiating Holder, at any time following the time that the shelf
registration statements filed by the Company pursuant to Section 1.6
under the Agreement (a "Shelf Registration Statement") are no longer
in effect with respect to all of the Registrable Securities, a written
request that the Company effect any registration covering the
registration of 20% or more of the Registrable Securities (or such
lesser percent which (I) the Company then owns or (II) results in an
anticipated aggregate offering price of $1,000,000 or more), the
Company will:
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(A) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders;
and
(B) as soon as practicable, use its diligent best efforts to
effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other
state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as may be so
requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written
request received by the Company within 10 business days after
written notice from the Company is given under Section 2(a)(i)(A)
above; provided that the Company shall not be obligated to
effect, or take any action to effect, any such registration
pursuant to this Section 2(a):
(x) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of
process in effecting such registration, qualification or
compliance, unless the Company is already subject to service
in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations
thereunder; or
(y) After the Company has effected three (3) such
registrations pursuant to this Section 2(a) and such
registrations have been declared or ordered effective and
the Company has satisfied its obligations under Section 2(d)
hereof.
The registration statement filed pursuant to the request of the
Initiating Holders may not include other securities of the Company which are
held by Persons other than the Holders ("Other Stockholders"), without the prior
consent of Holders registering at least 50% of the Registrable Securities.
(ii) Underwriting. If the Initiating Holder intends to distribute
the Registrable Securities covered by its request by means of an
underwriting, it shall so advise the Company as a part of its request
made pursuant to this Section 2(a), and the Company shall include such
information in the written notice referred to in Section 2(a)(i)(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 to the extent
provided
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herein. All Holders proposing to distribute their securities
through such underwriting shall 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 Holder.
(iii) Company's Right to Defer. Notwithstanding the foregoing, if
the Company shall furnish to the Initiating Holder a certificate
signed by the President of the Company stating that, in the good faith
judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such
registration statement to be filed in the near future and it is
therefore essential to defer the filing of such registration
statement, the Company shall have the right to defer such filing for a
period of not more than 30 calendar days after receipt of the request
of the Initiating Holder (a "Suspension Period"); provided that no
Suspension Period may commence less than ninety (90) days after the
expiration of the then most recent Suspension Period, and the Company
may establish no more than two (2) Suspension Periods in any twelve
(12) consecutive months.
(iv) Transfer of Rights. The registration rights set forth in
this Section 2 may be transferred or assigned to a transferee or
assignee of any Registrable Securities not sold to the public
acquiring at least 10,000 shares of Registrable Securities, equitably
adjusted for any recapitalization, stock split, combination and the
like (hereinafter referred to in this Section 2 as the "Transferee");
provided, however, that:
(A) the Company must receive written notice prior to the
time of said transfer, stating the name and address of the
Transferee and identifying the securities with respect to which
such registration rights are being transferred or assigned, and
(B) the Transferee must not be a person deemed by the Board
of Directors of the Company, in good faith, to be a competitor or
potential competitor of the Company.
Notwithstanding the limitation set forth in the foregoing
sentence respecting the minimum number of shares which must be
transferred, any Holder which is a partnership or limited liability
company may transfer such Holder's registration rights to such
Holder's constituent partners or members without restriction as to the
number or percentage of shares acquired by any such constituent
partner or member.
(b) Company Registration.
(i) If the Company shall determine to register any of its equity
securities either for its own account or
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for the account of Other Stockholders, other than a registration
relating solely to employee benefit plans, or a registration relating
solely to a Commission Rule 145 transaction, or a registration on any
registration form which does not permit secondary sales or does not
include substantially the same information as would be required to be
included in a registration statement covering the sale of Registrable
Securities, the Company will:
(A) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which
the Company intends to attempt to qualify such securities under
the applicable blue sky or other state securities laws); and
(B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made by the Holders
within fifteen (15) days after receipt of the written notice from
the Company described in clause (i) above, except as set forth in
Section 2(b)(ii) below. Such written request may specify all or a
part of the Holders' Registrable Securities.
(ii) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting,
the Company shall so advise each of the Holders as a part of the
written notice given pursuant to Section 2(b)(i)(A). In such event,
the right of each of the Holders to registration pursuant to this
Section 2(b) shall be conditioned upon such Holders' participation in
such underwriting and the inclusion of such Holders' Registrable
Securities in the underwriting to the extent provided herein. The
Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing
their securities through such underwriting) enter into an underwriting
agreement in customary form with the representative of the underwriter
or underwriters selected for underwriting by the Company.
Notwithstanding any other provision of this Section 2(b), if the
representative determines that marketing factors require a limitation
on the number of shares to be underwritten, the representative may
(subject to the allocation priority set forth below) limit the number
of Registrable Securities to be included in the registration and
underwriting to not less than twenty five percent (25%) (or ten
percent (10%) with respect to the first registered offering effected
by the Company after the date hereof) of the shares included therein
(based on the number of shares). The Company shall so advise all
holders of securities requesting registration, and the number of
shares of securities that are entitled to be included in the
registration and underwriting shall be allocated in the following
manner: The securities of the Company held by officers, directors and
Other Stockholders of the Company
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(other than Registrable Securities and other than securities held by
holders who by contractual right demanded such registration
("Demanding Holders")) shall be excluded from such registration and
underwriting to the extent required by such limitation, and, if a
limitation on the number of shares is still required, the number of
shares that may be included in the registration and underwriting by
each of the Holders and Demanding Holders shall be reduced, on a pro
rata basis (based on the number of shares held by such Holder), by
such minimum number of shares as is necessary to comply with such
limitation. If any of the Holders or any officer, director or Other
Stockholder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded
or withdrawn from such underwriting shall be withdrawn from such
registration.
(c) Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
this Section 2 shall be borne by the Company, and all Selling Expenses shall be
borne by the Holders of the securities so registered pro rata on the basis of
the number of their shares so registered; provided, however, that if, as a
result of the withdrawal of a request for registration by any of the Holders, as
applicable, the registration statement does not become effective, the Holders
and Other Stockholders requesting registration may elect to bear the
Registration Expenses (pro rata on the basis of the number of their shares so
included in the registration request, or on such other basis as such Holders and
Other Stockholders may agree), in which case such registration shall not be
counted as a registration pursuant to Section 2(a)(i)(B)(y).
(d) Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 2, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company will:
(i) keep such registration effective for a period of one hundred
twenty (120) days or until the Holders, as applicable, have completed
the distribution described in the registration statement relating
thereto, whichever first occurs; provided, however, that such 120-day
period shall be extended for a period of time equal to the period
during which the Holders, as applicable, refrain from selling any
securities included in such registration during a Suspension Period in
accordance with provisions in Section 1.6(b)(iv) of the Agreement; and
(ii) furnish such number of prospectuses and other documents
incident thereto as each of the Holders, as applicable, from time to
time may reasonably request.
(e) Indemnification.
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(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors and partners, and each
person controlling each of the Holders, with respect to each
registration which has been effected pursuant to this Section 2 or
pursuant to Section 1.6 of the Agreement, and each underwriter, if
any, and each person who controls any underwriter, against all claims,
losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration
statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission
(or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or
the Exchange Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company
in connection with any such registration, qualification or compliance,
and will reimburse each of the Holders, each of its officers,
directors and partners, and each person controlling each of the
Holders, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred
in connection with investigating and defending any such claim, loss,
damage, liability or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the
Company by the Holders or underwriter and stated to be specifically
for use therein.
(ii) Each of the Holders will, if Registrable Securities held by
it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company,
each of its directors and officers and each underwriter, if any, of
the Company's securities covered by such a registration statement,
each person who controls the Company or such underwriter, each Other
Stockholder and each of their officers, directors, and partners, and
each person controlling such Other Stockholder against all claims,
losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document made by
such Holder, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statements by such Holder therein not misleading, and will reimburse
the Company and such Other Stockholders, directors, officers,
partners, persons, underwriters or control persons for any legal or
any other expenses reasonably incurred in connection with
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investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity with
written information furnished to the Company by such Holder and stated
to be specifically for use therein; provided, however, that the
obligations of each of the Holders hereunder shall be limited to an
amount equal to the net proceeds to such Holder of securities sold as
contemplated herein.
(iii) Each party entitled to indemnification under this Section
2(e) (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after
such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting
therefrom; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld) and the Indemnified Party may
participate in such defense at such party's expense (unless the
Indemnified Party shall have reasonably concluded that there may be a
conflict of interest between the Indemnifying Party and the
Indemnified Party in such action, in which case the fees and expenses
of counsel shall be at the expense of the Indemnifying Party), and
provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 2 unless the Indemnifying Party is
materially prejudiced thereby. No Indemnifying Party, in the defense
of any such claim or litigation shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation.
Each Indemnified Party shall furnish such information regarding itself
or the claim in question as an Indemnifying Party may reasonably
request in writing and as shall be reasonably required in connection
with the defense of such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(e) is
held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage
or expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault
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of the Indemnifying Party on the one hand and of the Indemnified Party
on the other in connection with the statements or omissions which
resulted in such loss, liability, claim, damage or expense, as well as
any other relevant equitable considerations. The relative fault of the
Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue (or alleged
untrue) statement of a material fact or the omission (or alleged
omission) to state a material fact relates to information supplied by
the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any
underwritten public offering contemplated by this Agreement are in
conflict with the foregoing provisions, the provisions in such
underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and Holders
is subject to the condition that, insofar as they relate to any loss,
claim, liability or damage made in a preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the
Commission at the time the registration statement in question becomes
effective or the amended prospectus filed with the Commission pursuant
to Commission Rule 424(b) (the "Final Prospectus"), such indemnity or
contribution agreement shall not inure to the benefit of any
underwriter or Holder if a copy of the Final Prospectus was furnished
to the underwriter 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.
(f) Information by the Holders. It shall be a condition
precedent to the Company's obligation to file any registration statement
pursuant to this Registration Rights Agreement that each of the Holders
holding securities included in any registration shall furnish to the Company
such information regarding such Holder and the distribution proposed by such
Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Section 2 or Section 1.6 of the Agreement.
(g) Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
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(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule
144"), at all times from and after ninety (90) days following the
effective date of the first registration under the Securities Act
filed by the Company for an offering of its securities to the general
public;
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act at any time after it has
become subject to such reporting requirements; and
(iii) so long as the Holder owns any Registrable Securities,
furnish to the Holder upon request, a written statement by the Company
as to its compliance with the reporting requirements of Rule 144 (at
any time from and after ninety (90) days following the effective date
of the first registration statement filed by the Company for an
offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and
documents so filed as the Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing the Holder
to sell any such securities without registration.
(h) Termination. The registration rights set forth in this
Section 2 shall not be available to any Holder if, in the opinion of counsel to
the Company, all of the Registrable Securities then owned by such Holder could
be sold in any 90-day period pursuant to Rule 144.
3. INTERPRETATION OF THIS AGREEMENT
(a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed entirely within such State.
(c) Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof.
4. MISCELLANEOUS
(a) Notices.
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(i) All communications under this Agreement shall be in writing
and shall be delivered by hand or mailed by overnight courier or by
registered or certified mail, postage prepaid:
(A) if to the Company, at the address set forth in the
Agreement, or at such other address as it may have furnished in
writing to the Investors;
(B) if to the Investors, at the address set forth in the
Agreement or at such other address as may have been furnished to
the Company in writing.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier,
on the first business day following the date of such mailing; and if
mailed by registered or certified mail, on the third business day
after the date of such mailing.
(b) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Investor
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Investors may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Investors in the regular course
of business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement, the
Investment Agreement and the Warrants constitute the entire understanding of the
parties hereto and supersedes all prior understanding among such parties with
respect to the subject matter hereof. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Investors holding a majority of the then
outstanding Registrable Securities.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first set forth above.
AMATI COMMUNICATIONS CORPORATION
By:/s/ Xxxxx Xxxxxxxxxxx
Name: Xxxxx Xxxxxxxxxxx
Title: President, CEO, CFO
Date: October 3, 1996
INVESTORS:
QUANTUM INDUSTRIAL PARTNERS LDC
By:/s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Attorney-in-Fact
S-C PHOENIX HOLDINGS, L.L.C.
By:/s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Manager
WINSTON PARTNERS, L.P.
By: Chatterjee Fund Management,
its general partner
By:/s/ Xxxxx Xxxxxxx
Name:
Title:
WINSTON PARTNERS II LDC
By:/s/ Xxxxx Xxxxxxx
Name:
Title:
WINSTON PARTNERS II L.L.C.
By: Chatterjee Fund Management,
its general partner
By:/s/ Xxxxx Xxxxxxx
Name:
Title:
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